Start Up: Uber in hot water, sugar’s secret studies, net neutrality considered, vanishing bikers and more


Make you think of a song? Now read about its genesis. Photo by jnthorp on Flickr.

A selection of 9 links for you. To American readers: Happy Antacid day! I’m @charlesarthur on Twitter. Observations and links welcome.

Uber breach and response draw global government scrutiny • WSJ

Stu Woo:

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Government officials world-wide said they would look at Uber Technologies Inc.’s handling of a major data breach last year.

Uber said Tuesday that it paid hackers $100,000 in an effort to conceal a data breach that affected 57 million accounts. In addition to the names, emails and phone numbers of riders, about 600,000 U.S. drivers’ license numbers were accessed, Uber said.

A Federal Trade Commission spokesman said the agency is “closely evaluating the serious issues raised,” while Sen. Richard Blumenthal (D., Conn) said on Twitter that the Senate Commerce Committee should hold a hearing to “demand Uber explain their outrageous breach—and inexplicable delay in informing its consumers and drivers.”

San Francisco-based Uber said it would notify owners of the affected accounts in coming days. It fired its chief security officer and a deputy for their role in the breach and covering it up, and Chief Executive Dara Khosrowshahi apologized.

At least three European government agencies are looking into Uber’s handling of the breach, and the New York State Attorney General’s office has opened an investigation.

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So screwed. But just as with privacy infringements by big companies, the convenience of just ordering a cheap taxi means people will overlook it.
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Further thoughts on why the end of [US] net neutrality will be fine • Marginal REVOLUTION

Tyler Cowen:

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In the current debate, there is a common presumption that paying for slots hurts “the little guy.” During the payola debates for radio, it turned out that payola favored the independent labels over the majors; see my book In Praise of Commercial Culture. It doesn’t have to work out that way, but refusing to price scarce resources often helps the big established players, who can invest $$ to get what they want through bigger brand names or other means. Note:

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Pai says that one of the major mistakes of Net Neutrality is its pre-emptive nature. Rather than allowing different practices to develop and then having regulators intervene when problems or harms to customer arise, Net Neutrality is prescriptive and thus likely to serve the interests of existing companies in maintaining a status quo that’s good for them.

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Furthermore, are there external benefits from small web upstarts? Or are the external benefits from the big superstar internet companies? If you are a Progressive who loves stable jobs and decent wages, you might think the more significant externalities are from the superstar companies. Yet when it comes to net neutrality, all of a sudden the smaller companies are glorified and we need an ecosystem to foster them. Overall, I don’t trust the regulators to make these decisions well, so I would rather take my chances with the market, even with some monopoly power at the cable end.

As Megan McArdle points out, over the last ten years consumers have opted overwhelmingly for the non-neutral private garden of Facebook. That’s the real “threat” to net neutrality. Personally, both as internet writer and user, I much preferred the older, semi-open, more neutral architecture of RSS and related systems. The masses have spoken, however, and quite decisively in favor of less open systems and apps.

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Cowen’s argument seems hopeful more than pragmatic. It’s the small companies – Google was one once – which change the landscape and unseat monopolies. (Meanwhile, the UK does have net neutrality enshrined in law – EU law.)
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FCC ignored your net neutrality comment, unless you made a ‘serious’ legal argument • The Verge

Jacob Kastrenakes:

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The FCC received a record-breaking 22 million comments chiming in on the net neutrality debate, but from the sound of it, it’s ignoring the vast majority of them. In a call with reporters yesterday discussing its plan to end net neutrality, a senior FCC official said that 7.5 million of those comments were the exact same letter, which was submitted using 45,000 fake email addresses.

But even ignoring the potential spam, the commission said it didn’t really care about the public’s opinion on net neutrality unless it was phrased in unique legal terms. The vast majority of the 22 million comments were form letters, the official said, and unless those letters introduced new facts into the record or made serious legal arguments, they didn’t have much bearing on the decision. The commission didn’t care about comments that were only stating opinion.

The FCC has been clear all year that it’s focused on “quality” over “quantity” when it comes to comments on net neutrality. In fairness to the commission, this isn’t an open vote. It’s a deliberative process that weighs a lot of different factors to create policy that balances the interests of many stakeholders. But it still feels brazen hearing the commission staff repeatedly discount Americans’ preference for consumer protections, simply because they aren’t phrased in legal terms.

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I think I’m with the FCC, at least in terms of weighing up the submissions. What’s the use of counting a ton of spam saying “YAY NET NEUTRALITY”? And equally, lots of people saying “I don’t like it” isn’t much use. It’s a legal argument, so you need legal arguments.

That said, the competitive failure of internet provision in the US (due, as Benedict Evans points out, to failing to unbundle the local loop) means that things are likely to get worse before they get better – if that happens at all. The number of ways in which the US has skewed uncompetitive markets – health provision, mobile service, internet service, banks – is remarkable for a place built on capitalism.
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Sugar industry long downplayed potential harms • The New York Times

Anahad O’Connor:

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The sugar industry funded animal research in the 1960s that looked into the effects of sugar consumption on cardiovascular health — and then buried the data when it suggested that sugar could be harmful, according to newly released historical documents.

The internal industry documents were uncovered by researchers at the University of California, San Francisco, and described in a new report in the journal PLOS Biology on Tuesday. The report’s authors say it builds on evidence that the sugar industry has long tried to mislead the public and protect its economic interests by suppressing worrisome research, a tactic used by the tobacco industry.

The documents show that in 1968 a trade group called the Sugar Research Foundation, known today as the Sugar Association, funded a research project on animals to shed light on the connection between sugar and heart health. But when the research pointed to a mechanism by which sugar might promote not only heart disease but also bladder cancer, the industry group ended the study and never published the results.

The sugar industry has long insisted that sugar has no unique role in promoting obesity, diabetes or heart disease, though numerous studies by independent researchers have concluded otherwise.

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I wonder if in 30 years’ time we’ll look at sugar added to food in the way that we look at tobacco smoking now.
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Founder of Chinese bike sharing firm Bluegogo fled, millions of user deposits at risk • China Money Network

Nina Xiang:

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A year after its foundation and having raised RMB400m (US$58m) in venture funding at a RMB1bn (US$140m) valuation, Chinese bike sharing start-up Bluegogo has collapsed, with its founder nowhere to be found and perhaps up to RMB1bn worth of user deposits unaccounted for.

After months of reports that the Beijing-based start-up was having liquidity problems and unable to repay user deposits, new pictures and reports surfaced today showing an empty Bluegogo office and personal accounts of overdue payment to vendors. Bluegogo’s founder Li Gang has reportedly been in a unspecified foreign country for “some time”, according to local media reports.

The episode highlights the risks of investing in Chinese start-ups, as well as the massive social impact of a deposit-taking “sharing economy” business. Bluegogo claims to have 20 million cumulative users. If only 10 million users paid a RMB99 deposit, it would mean the company has collected around RMB990m in deposits.

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He missed a trick not doing it with an ICO. That way people might have thought it was OK.
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No end in sight to the Brexit madness • The New Yorker

John Cassidy, getting non-British readers up to speed:

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May and Hammond are still trying to pursue a so-called soft Brexit, which would preserve as much market access as possible. But, at every turn, they and their allies are being undermined and vilified by the Little Englanders and the conservative Fleet Street newspapers. Last week, the Daily Telegraph published photographs on its front page of fifteen Conservative M.P.s who have had the temerity to suggest that the parliament should have the right to sign off on the final Brexit deal. The paper labelled them “The Brexit mutineers.” Some of these M.P.s subsequently received threats.

“How can this be happening in a country known for its pragmatism?” the Oxford economist Simon Wren-Lewis asked in a blog post. How indeed? With opinion polls suggesting that most Britons, if given a chance, would now vote to remain in the E.U., a second referendum seems like a good idea. But the opposition Labour Party, for reasons of its own, has already committed to accepting the first Brexit vote. About the only people calling for a do-over are the Liberal Democrats, who have just twelve seats in the Commons, and a few figures who are even less popular, such as Tony Blair and Lloyd Blankfein, the chief executive of Goldman.

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‘The Lion Sleeps Tonight’ genealogy: what you don’t know • Rolling Stone

Rian Malan:

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Navajo Indians sing it at powwows. Japanese teenagers know it as ライオンは寝ている. The French have a version sung in Congolese. Phish perform it live. It has been recorded by artists as diverse as R.E.M. and Glen Campbell, Brian Eno and Chet Atkins, the Nylons and Muzak schlockmeister Bert Kaempfert. The New Zealand army band turned it into a march. England’s 1986 World Cup soccer squad turned it into a joke. Hollywood put it in Ace Ventura: Pet Detective. It has logged nearly three decades of continuous radio airplay in the U.S. alone. It is the most famous melody ever to emerge from Africa, a tune that has penetrated so deep into the human consciousness over so many generations that one can truly say, here is a song the whole world knows.

Its epic transcultural saga is also, in a way, the story of popular music, which limped pale-skinned and anemic into the twentieth century but danced out the other side vastly invigorated by transfusions of ragtime and rap, jazz, blues and soul, all of whose bloodlines run back to Africa via slave ships and plantations and ghettos. It was in the nature of this transaction that black men gave more than they got and often ended up with nothing. This one’s for Solomon Linda, then, a Zulu who wrote a melody that earned untold millions for white men but died so poor that his widow couldn’t afford a stone for his grave. Let’s take it from the top, as they say in the trade.

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This article is 17 years old. Who cares – it’s a great story. Your long read for today.
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Is Mic’s pivot to video spinning out of control? • Splinter News 

David Uberti:

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Mic.com’s traffic slipped further in September, to just 4.6 million unique visitors, according to comScore, down from a peak of more than 21 million in December 2015. The more specific traffic targets instituted in response to the recent dip seemed to contradict management’s defiant stance: They reached as high as a few million visitors per month for the largest of Mic’s nine topically themed verticals, staffers said. After the October editorial meeting, it also remained unclear whether such “goals” were in fact quotas that would be used on employees’ performance reviews. Lauerman could not be reached this week. A Mic spokesperson declined to comment.

“It was stressed that this was not a panic move,” one current staffer told Splinter. “So why would you issue these insane traffic goals and make the newsroom feel the pressure?”

Such tension was perhaps inevitable after the social justice-oriented news outlet unveiled its new plan in August, becoming the latest publisher to pursue video as means for survival. Interviews with eight current and former staffers, all of whom spoke on the condition of anonymity for fear of professional repercussions, suggest the newsroom was ill-prepared to execute the proverbial pivot. The shift in direction has been slowed by steady staff turnover—including on the video team—and confusion among rank-and-file employees as seen in the October editorial meeting.

As another staffer summed it up bluntly to Splinter last week: “I truly don’t know what we are supposed to be doing.”

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Giving journalists crazy pageview targets is a guarantee that quality will collapse; big stories that make your reputation don’t come from hurrying. (Well, they can, but in a bad way.)
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Facebook still lets landlords discriminate by race and disability in apartment ads • Gizmodo

Matt Novak:

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ProPublica purchased a number of different housing ads last week, but asked that they be unavailable to certain segments of the population. Ads that would exclude Jews, black people, and Americans originally from Argentina were reportedly all approved within minutes. Facebook’s targeting also allows advertisers to exclude other groups, such as people interested in wheelchair access and parents with high school-aged kids. These ads were approved quickly thanks to Facebook’s algorithmic approval process.

According to ProPublica, just one type of ad took longer than mere minutes for approval and that was a test ad excluding people who were interested in Islam. That ad was ultimately approved in just 22 minutes.

Obviously, all of these ads are in direct violation of US Fair Housing laws. But Facebook appears to have done nothing to ensure that it’s in compliance, despite swearing that it would set up safeguards. ProPublica asked Facebook about the ads and the company blamed it on a “technical failure,” rather than a systematic and inexcusable disinterest in adhering to US law.

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OK, and now wait for Facebook’s response. What do you think it will be?

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“This was a failure in our enforcement and we’re disappointed that we fell short of our commitments,” a Facebook spokesperson told Gizmodo. “…The rental housing ads purchased by ProPublica should have but did not trigger the extra review and certifications we put in place due to a technical failure,” the spokesperson said.

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