European Regulators Fine Google $5 Billion For 'Breaching EU Antitrust Rules'

On Wednesday, European anti-trust regulators fined Google 4.34 billion Euros (U.S. $5 billion) and ordered the tech company to stop using its Android operating system software to block competition. ComputerWorld reported:

"The European Commission found that Google has abused its dominant market position in three ways: tying access to the Play store to installation of Google Search and Google Chrome; paying phone makers and network operators to exclusively install Google Search, and preventing manufacturers from making devices running forks of Android... Google won't let smartphone manufacturers install Play on their phones unless they also make its search engine and Chrome browser the defaults on their phones. In addition, they must only use a Google-approved version of Android. This has prevented companies like Amazon.com, which developed a fork of Android it calls FireOS, from persuading big-name manufacturers to produce phones running its OS or connecting to its app store..."

Reportedly, less than 10% of Android phone users download a different browser than the pre-installed default. Less than 1% use a different search app. View the archive of European Commission Android OS documents.

Yesterday, the European Commission announced on social media:

European Commission tweet. Google Android OS restrictions graphic. Click to view larger version

European Commission tweet. Vestager comments. Click to view larger version

And, The Guardian newspaper reported:

"Soon after Brussels handed down its verdict, Google announced it would appeal. "Android has created more choice for everyone, not less," a Google spokesperson said... Google has 90 days to end its "illegal conduct" or its parent company Alphabet could be hit with fines amounting to 5% of its daily [revenues] for each day it fails to comply. Wednesday’s verdict ends a 39-month investigation by the European commission’s competition authorities into Google’s Android operating system but it is only one part of an eight-year battle between Brussels and the tech giant."

According to the Reuters news service, a third EU case against Google, involving accusations that the tech company's AdSense advertising service blocks users from displaying search ads from competitors, is still ongoing.


The DIY Revolution: Consumers Alter Or Build Items Previously Not Possible. Is It A Good Thing?

Recent advances in technology allow consumers to alter, customize, or build locally items previously not possible. These items are often referred to as Do-It-Yourself (DIY) products. You've probably heard DIY used in home repair and renovation projects on television. DIY now happens in some unexpected areas. Today's blog post highlights two areas.

DIY Glucose Monitors

Earlier this year, CNet described the bag an eight-year-old patient carries with her everywhere daily:

"... It houses a Dexcom glucose monitor and a pack of glucose tablets, which work in conjunction with the sensor attached to her arm and the insulin pump plugged into her stomach. The final item in her bag was an iPhone 5S. It's unusual for such a young child to have a smartphone. But Ruby's iPhone, which connects via Bluetooth to her Dexcom monitor, allowing [her mother] to read it remotely, illustrates the way technology has transformed the management of diabetes from an entirely manual process -- pricking fingers to measure blood sugar, writing down numbers in a notebook, calculating insulin doses and injecting it -- to a semi-automatic one..."

Some people have access to these new technologies, but many don't. Others want more connectivity and better capabilities. So, some creative "hacking" has resulted:

"There are people who are unwilling to wait, and who embrace unorthodox methods. (You can find them on Twitter via the hashtag #WeAreNotWaiting.) The Nightscout Foundation, an online diabetes community, figured out a workaround for the Pebble Watch. Groups such as Nightscout, Tidepool and OpenAPS are developing open-source fixes for diabetes that give major medical tech companies a run for their money... One major gripe of many tech-enabled diabetes patients is that the two devices they wear at all times -- the monitor and the pump -- don't talk to each other... diabetes will never be a hands-off disease to manage, but an artificial pancreas is basically as close as it gets. The FDA approved the first artificial pancreas -- the Medtronic 670G -- in October 2017. But thanks to a little DIY spirit, people have had them for years."

CNet shared the experience of another tech-enabled patient:

"Take Dana Lewis, founder of the open-source artificial pancreas system, or OpenAPS. Lewis started hacking her glucose monitor to increase the volume of the alarm so that it would wake her in the night. From there, Lewis tinkered with her equipment until she created a closed-loop system, which she's refined over time in terms of both hardware and algorithms that enable faster distribution of insulin. It has massively reduced the "cognitive burden" on her everyday life... JDRF, one of the biggest global diabetes research charities, said in October that it was backing the open-source community by launching an initiative to encourage rival manufacturers like Dexcom and Medtronic to open their protocols and make their devices interoperable."

Convenience and affordability are huge drivers. As you might have guessed, there are risks:

"Hacking a glucose monitor is not without risk -- inaccurate readings, failed alarms or the wrong dose of insulin distributed by the pump could have fatal consequences... Lewis and the OpenAPS community encourage people to embrace the build-your-own-pancreas method rather than waiting for the tech to become available and affordable."

Are DIY glucose monitors a good thing? Some patients think so as a way to achieve convenient and affordable healthcare solutions. That might lead you to conclude anything DIY is an improvement. Right? Keep reading.

DIY Guns

Got a 3-D printer? If so, then you can print your own DIY gun. How did this happen? How did the USA get to here? Wired explained:

"Five years ago, 25-year-old radical libertarian Cody Wilson stood on a remote central Texas gun range and pulled the trigger on the world’s first fully 3-D-printed gun... he drove back to Austin and uploaded the blueprints for the pistol to his website, Defcad.com... In the days after that first test-firing, his gun was downloaded more than 100,000 times. Wilson made the decision to go all in on the project, dropping out of law school at the University of Texas, as if to confirm his belief that technology supersedes law..."

The law intervened. Wilson stopped, took down his site, and then pursued a legal remedy:

"Two months ago, the Department of Justice quietly offered Wilson a settlement to end a lawsuit he and a group of co-plaintiffs have pursued since 2015 against the United States government. Wilson and his team of lawyers focused their legal argument on a free speech claim: They pointed out that by forbidding Wilson from posting his 3-D-printable data, the State Department was not only violating his right to bear arms but his right to freely share information. By blurring the line between a gun and a digital file, Wilson had also successfully blurred the lines between the Second Amendment and the First."

So, now you... anybody with an internet connection and a 3-D printer (and a computer-controlled milling machine for some advanced parts)... can produce their own DIY gun. No registration required. No licenses nor permits. No training required. And, that's anyone anywhere in the world.

Oh, there's more:

"The Department of Justice's surprising settlement, confirmed in court documents earlier this month, essentially surrenders to that argument. It promises to change the export control rules surrounding any firearm below .50 caliber—with a few exceptions like fully automatic weapons and rare gun designs that use caseless ammunition—and move their regulation to the Commerce Department, which won't try to police technical data about the guns posted on the public internet. In the meantime, it gives Wilson a unique license to publish data about those weapons anywhere he chooses."

As you might have guessed, Wilson is re-launching his website, but this time with blueprints for more DIY weaponry besides pistols: AR-15 rifles and semi-automatic weaponry. So, it will be easier for people to skirt federal and state gun laws. Is that a good thing?

You probably have some thoughts and concerns. I do. There are plenty of issues and questions. Are DIY products a good thing? Who is liable? How should laws be upgraded? How can society facilitate one set of DIY products and not the other? What related issues do you see? Any other notable DIY products?


Facial Recognition At Facebook: New Patents, New EU Privacy Laws, And Concerns For Offline Shoppers

Facebook logo Some Facebook users know that the social networking site tracks them both on and off (e.g., signed into, not signed into) the service. Many online users know that Facebook tracks both users and non-users around the internet. Recent developments indicate that the service intends to track people offline, too. The New York Times reported that Facebook:

"... has applied for various patents, many of them still under consideration... One patent application, published last November, described a system that could detect consumers within [brick-and-mortar retail] stores and match those shoppers’ faces with their social networking profiles. Then it could analyze the characteristics of their friends, and other details, using the information to determine a “trust level” for each shopper. Consumers deemed “trustworthy” could be eligible for special treatment, like automatic access to merchandise in locked display cases... Another Facebook patent filing described how cameras near checkout counters could capture shoppers’ faces, match them with their social networking profiles and then send purchase confirmation messages to their phones."

Some important background. First, the usage of surveillance cameras in retail stores is not new. What is new is the scope and accuracy of the technology. In 2012, we first learned about smart mannequins in retail stores. In 2013, we learned about the five ways retail stores spy on shoppers. In 2015, we learned more about tracking of shoppers by retail stores using WiFi connections. In 2018, some smart mannequins are used in the healthcare industry.

Second, Facebook's facial recognition technology scans images uploaded by users, and then allows users identified to accept or decline labels with their name for each photo. Each Facebook user can adjust their privacy settings to enable or disable the adding of their name label to photos. However:

"Facial recognition works by scanning faces of unnamed people in photos or videos and then matching codes of their facial patterns to those in a database of named people... The technology can be used to remotely identify people by name without their knowledge or consent. While proponents view it as a high-tech tool to catch criminals... critics said people cannot actually control the technology — because Facebook scans their faces in photos even when their facial recognition setting is turned off... Rochelle Nadhiri, a Facebook spokeswoman, said its system analyzes faces in users’ photos to check whether they match with those who have their facial recognition setting turned on. If the system cannot find a match, she said, it does not identify the unknown face and immediately deletes the facial data."

Simply stated: Facebook maintains a perpetual database of photos (and videos) with names attached, so it can perform the matching and not display name labels for users who declined and/or disabled the display of name labels in photos (videos). To learn more about facial recognition at Facebook, visit the Electronic Privacy Information Center (EPIC) site.

Third, other tech companies besides Facebook use facial recognition technology:

"... Amazon, Apple, Facebook, Google and Microsoft have filed facial recognition patent applications. In May, civil liberties groups criticized Amazon for marketing facial technology, called Rekognition, to police departments. The company has said the technology has also been used to find lost children at amusement parks and other purposes..."

You may remember, earlier in 2017 Apple launched its iPhone X with Face ID feature for users to unlock their phones. Fourth, since Facebook operates globally it must respond to new laws in certain regions:

"In the European Union, a tough new data protection law called the General Data Protection Regulation now requires companies to obtain explicit and “freely given” consent before collecting sensitive information like facial data. Some critics, including the former government official who originally proposed the new law, contend that Facebook tried to improperly influence user consent by promoting facial recognition as an identity protection tool."

Perhaps, you find the above issues troubling. I do. If my facial image will be captured, archived, tracked by brick-and-mortar stores, and then matched and merged with my online usage, then I want some type of notice before entering a brick-and-mortar store -- just as websites present privacy and terms-of-use policies. Otherwise, there is no notice nor informed consent by shoppers at brick-and-mortar stores.

So, is facial recognition a threat, a protection tool, or both? What are your opinions?


New Jersey to Suspend Prominent Psychologist for Failing to Protect Patient Privacy

[Editor's note: today's guest blog post, by reporters at ProPublica, explores privacy issues within the healthcare industry. The post is reprinted with permission.]

By Charles Ornstein, ProPublica

A prominent New Jersey psychologist is facing the suspension of his license after state officials concluded that he failed to keep details of mental health diagnoses and treatments confidential when he sued his patients over unpaid bills.

The state Board of Psychological Examiners last month upheld a decision by an administrative law judge that the psychologist, Barry Helfmann, “did not take reasonable measures to protect the confidentiality of his patients’ protected health information,” Lisa Coryell, a spokeswoman for the state attorney general’s office, said in an e-mail.

The administrative law judge recommended that Helfmann pay a fine and a share of the investigative costs. The board went further, ordering that Helfmann’s license be suspended for two years, Coryell wrote. During the first year, he will not be able to practice; during the second, he can practice, but only under supervision. Helfmann also will have to pay a $10,000 civil penalty, take an ethics course and reimburse the state for some of its investigative costs. The suspension is scheduled to begin in September.

New Jersey began to investigate Helfmann after a ProPublica article published in The New York Times in December 2015 that described the lawsuits and the information they contained. The allegations involved Helfmann’s patients as well as those of his colleagues at Short Hills Associates in Clinical Psychology, a New Jersey practice where he has been the managing partner.

Helfmann is a leader in his field, serving as president of the American Group Psychotherapy Association, and as a past president of the New Jersey Psychological Association.

ProPublica identified 24 court cases filed by Short Hills Associates from 2010 to 2014 over unpaid bills in which patients’ names, diagnoses and treatments were listed in documents. The defendants included lawyers, business people and a manager at a nonprofit. In cases involving patients who were minors, the lawsuits included children’s names and diagnoses.

The information was subsequently redacted from court records after a patient counter-sued Helfmann and his partners, the psychology group and the practice’s debt collection lawyers. The patient’s lawsuit was settled.

Helfmann has denied wrongdoing, saying his former debt collection lawyers were responsible for attaching patients’ information to the lawsuits. His current lawyer, Scott Piekarsky, said he intends to file an immediate appeal before the discipline takes effect.

"The discipline imposed is ‘so disproportionate as to be shocking to one’s sense of fairness’ under New Jersey case law," Piekarsky said in a statement.

Piekarsky also noted that the administrative law judge who heard the case found no need for any license suspension and raised questions about the credibility of the patient who sued Helfmann. "We feel this is a political decision due to Dr. Helfmann’s aggressive stance" in litigation, he said.

Helfmann sued the state of New Jersey and Joan Gelber, a senior deputy attorney general, claiming that he was not provided due process and equal protection under the law. He and Short Hills Associates sued his prior debt collection firm for legal malpractice. Those cases have been dismissed, though Helfmann has appealed.

Helfmann and Short Hills Associates also are suing the patient who sued him, as well as the man’s lawyer, claiming the patient and lawyer violated a confidential settlement agreement by talking to a ProPublica reporter and sharing information with a lawyer for the New Jersey attorney general’s office without providing advance notice. In court pleadings, the patient and his lawyer maintain that they did not breach the agreement. Helfmann brought all three of these lawsuits in state court in Union County.

Throughout his career, Helfmann has been an advocate for patient privacy, helping to push a state law limiting the information an insurance company can seek from a psychologist to determine the medical necessity of treatment. He also was a plaintiff in a lawsuit against two insurance companies and a New Jersey state commission, accusing them of requiring psychologists to turn over their treatment notes in order to get paid.

"It is apparent that upholding the ethical standards of his profession was very important to him," Carol Cohen, the administrative law judge, wrote. "Having said that, it appears that in the case of the information released to his attorney and eventually put into court papers, the respondent did not use due diligence in being sure that confidential information was not released and his patients were protected."

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Researchers Find Mobile Apps Can Easily Record Screenshots And Videos of Users' Activities

New academic research highlights how easy it is for mobile apps to both spy upon consumers and violate our privacy. During a recent study to determine whether or not smartphones record users' conversations, researchers at Northeastern University (NU) found:

"... that some companies were sending screenshots and videos of user phone activities to third parties. Although these privacy breaches appeared to be benign, they emphasized how easily a phone’s privacy window could be exploited for profit."

The NU researchers tested 17,260 of the most popular mobile apps running on smartphones using the Android operating system. About 9,000 of the 17,260 apps had the ability to take screenshots. The vulnerability: screenshot and video captures could easily be used to record users' keystrokes, passwords, and related sensitive information:

"This opening will almost certainly be used for malicious purposes," said Christo Wilson, another computer science professor on the research team. "It’s simple to install and collect this information. And what’s most disturbing is that this occurs with no notification to or permission by users."

The NU researchers found one app already recording video of users' screen activity (links added):

"That app was GoPuff, a fast-food delivery service, which sent the screenshots to Appsee, a data analytics firm for mobile devices. All this was done without the awareness of app users. [The researchers] emphasized that neither company appeared to have any nefarious intent. They said that web developers commonly use this type of information to debug their apps... GoPuff has changed its terms of service agreement to alert users that the company may take screenshots of their use patterns. Google issued a statement emphasizing that its policy requires developers to disclose to users how their information will be collected."

May? A brief review of the Appsee site seems to confirm that video recordings of the screens on app users' mobile devices is integral to the service:

"RECORDING: Watch every user action and understand exactly how they use your app, which problems they're experiencing, and how to fix them.​ See the app through your users' eyes to pinpoint usability, UX and performance issues... TOUCH HEAT MAPS: View aggregated touch heatmaps of all the gestures performed in each​ ​screen in your app.​ Discover user navigation and interaction preferences... REALTIME ANALYTICS & ALERTS:Get insightful analytics on user behavior without pre-defining any events. Obtain single-user and aggregate insights in real-time..."

Sounds like a version of "surveillance capitalism" to me. According to the Appsee site, a variety of companies use the service including eBay, Samsung, Virgin airlines, The Weather Network, and several advertising networks. Plus, the Appsee Privacy Policy dated may 23, 2018 stated:

"The Appsee SDK allows Subscribers to record session replays of their end-users' use of Subscribers' mobile applications ("End User Data") and to upload such End User Data to Appsee’s secured cloud servers."

In this scenario, GoPuff is a subscriber and consumers using the GoPuff mobile app are end users. The Appsee SDK is software code embedded within the GoPuff mobile app. The researchers said that this vulnerability, "will not be closed until the phone companies redesign their operating systems..."

Data-analytics services like Appsee raise several issues. First, there seems to be little need for digital agencies to conduct traditional eye-tracking and usability test sessions, since companies can now record, upload and archive what, when, where, and how often users swipe and select in-app content. Before, users were invited to and paid for their participation in user testing sessions.

Second, this in-app tracking and data collection amounts to perpetual, unannounced user testing. Previously, companies have gotten into plenty of trouble with their customers by performing secret user testing; especially when the service varies from the standard, expected configuration and the policies (e.g., privacy, terms of service) don't disclose it. Nobody wants to be a lab rat or crash-test dummy.

Third, surveillance agencies within several governments must be thrilled to learn of these new in-app tracking and spy tools, if they aren't already using them. A reasonable assumption is that Appsee also provides data to law enforcement upon demand.

Fourth, two of the researchers at NU are undergraduate students. Another startling disclosure:

"Coming into this project, I didn’t think much about phone privacy and neither did my friends," said Elleen Pan, who is the first author on the paper. "This has definitely sparked my interest in research, and I will consider going back to graduate school."

Given the tsunami of data breaches, privacy legislation in Europe, and demands by law enforcement for tech firms to build "back door" hacks into their mobile devices and smartphones, it is startling alarming that some college students, "don't think much about phone privacy." This means that Pan and her classmates probably haven't read privacy and terms-of-service policies for the apps and sites they've used. Maybe they will now.

Let's hope so.

Consumers interested in GoPuff should closely read the service's privacy and Terms of Service policies, since the latter includes dispute resolution via binding arbitration and prevents class-action lawsuits.

Hopefully, future studies about privacy and mobile apps will explore further the findings by Pan and her co-researchers. Download the study titled, "Panoptispy: Characterizing Audio and Video Exfiltration from Android Applications" (Adobe PDF) by Elleen Pan, Jingjing Ren, Martina Lindorfer, Christo Wilson, and David Choffnes.


FTC Requests Input From The Public And Will Hold Hearings About 'Competition And Consumer Protection'

During the coming months, the U.S. Federal Trade Commission (FTC) will hold a series of meeting and seek input from the public about "Competition And Consumer Protection" and:

"... whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy."

The FTC expects to conduct 15 to 20 hearings starting in September, 2018 and ending in January, 2019. Before each topical hearing, input from the public will be sought. The list of topics the FTC seeks input about (bold emphasis added):

  1. "The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings;
  2. Competition and consumer protection issues in communication, information, and media technology networks;
  3. The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses;
  4. The intersection between privacy, big data, and competition;
  5. The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters;
  6. Evaluating the competitive effects of corporate acquisitions and mergers;
  7. Evidence and analysis of monopsony power, including but not limited to, in labor markets;
  8. The role of intellectual property and competition policy in promoting innovation; 
  9. The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics;
  10. The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices; and
  11. The agency’s investigation, enforcement, and remedial processes."

The public can submit written comments now through August 20, 2018. For more information, see the FTC site about each topic. Additional instructions for comment submissions:

"Each topic description includes issues of particular interest to the Commission, but comments need not be restricted to these subjects... the FTC will invite comments on the topic of each hearing session... The FTC will also invite public comment upon completion of the entire series of hearings. Public comments may address one or more of the above topics generally, or may address them with respect to a specific industry, such as the health care, high-tech, or energy industries... "

Comments must be submitted in writing. The public can submit comments online to the FTC, or via  postal mail to. Comments submitted via postal mail must include "‘Competition and Consumer Protection in the 21st Century Hearing, Project Number P181201," on both your comment and on the envelope. Mail comments to:

Federal Trade Commission
Office of the Secretary
600 Pennsylvania Avenue NW., Suite CC–5610 (Annex C)
Washington, DC 20580

See the FTC website for instructions for courier deliveries.

The "light touch" enforcement approach by the Federal Communications Commission (FCC) with oversight of the internet, the repeal of broadband privacy, and the repeal of net neutrality repeal, has highlighted the importance of oversight and enforcement by the FTC for consumer protection.

Given the broad range of topical hearings and input it could receive, the FTC may consider and/or pursue major changes to its operations. What do you think?


Federal Investigation Into Facebook Widens. Company Stock Price Drops

The Boston Globe reported on Tuesday (links added):

"A federal investigation into Facebook’s sharing of data with political consultancy Cambridge Analytica has broadened to focus on the actions and statements of the tech giant and now involves three agencies, including the Securities and Exchange Commission, according to people familiar with the official inquiries.

Representatives for the FBI, the SEC, and the Federal Trade Commission have joined the Justice Department in its inquiries about the two companies and the sharing of personal information of 71 million Americans... The Justice Department and the other federal agencies declined to comment. The FTC in March disclosed that it was investigating Facebook over possible privacy violations..."

About 87 million persons were affected by the Facebook breach involving Cambridge Analytica. In May, the new Commissioner at the U.S. Federal Trade Commission (FTC) suggested stronger enforcement on tech companies, like Google and Facebook.

After news broke about the wider probe, shares of Facebook stock fell about 18 percent of their value and then recovered somewhat for a net drop of 2 percent. That 2 percent drop is about $12 billion in valuation. Clearly, there will be more news (and stock price fluctuations) to come.

During the last few months, there has been plenty of news about Facebook:


Adidas Announced A 'Potential' Data Breach Affecting Online Shoppers in the United States

Adidas announced on June 28 a "potential" data breach affecting an undisclosed number of:

"... consumers who purchased on adidas.com/US... On June 26, Adidas became aware that an unauthorized party claims to have acquired limited data associated with certain Adidas consumers. Adidas is committed to the privacy and security of its consumers' personal data. Adidas immediately began taking steps to determine the scope of the issue and to alert relevant consumers. adidas is working with leading data security firms and law enforcement authorities to investigate the issue..."

The preliminary breach investigation found that contact information, usernames, and encrypted passwords were exposed or stolen. So far, no credit card or fitness information of consumers was "impacted." The company said it is continuing a forensic review and alerting affected customers.

While the company's breach announcement did not disclose the number of affected customer, CBS News reported that hackers may have stolen data about millions of customers. Fox Business reported that the Adidas:

"... hack was reported weeks after Under Armour’s health and fitness app suffered a security breach, which exposed the personal data of roughly 150 million users. The revealed information included the usernames, hashed passwords and email addresses of MyFitnessPal users."

It is critical to remember that this June 28th announcement was based upon a preliminary investigation. A completed breach investigation will hopefully determine and disclose any additional data elements exposed (or stolen), how the hackers penetrated the company's computer systems, which systems were penetrated, whether any internal databases were damaged/corrupted/altered, the total number of customers affected, specific fixes implemented so this type of breach doesn't happen again, and descriptive information about the cyber criminals.

This incident is also a reminder to consumers to never reuse the same password at several online sites. Cyber criminals are persistent, and will use the same password at several sites to see where else they can get in. It is no relief that encrypted passwords were stolen, because we don't yet know if the encryption tools were also stolen (making it easy for the hackers to de-encrypt the passwords). Not good.

We also don't yet know what "contact information" means. That could be first name, last name, phone, street address, e-mail address, mobile phone numbers, or some combination. If e-mail addresses were stolen, then breach victims could also experience phishing attacks where fraudsters try to trick victims into revealing bank account, sign-in credentials, and other sensitive information.

If you received a breach notice from Adidas, please share it below while removing any sensitive, identifying information.


Money Transfer Scams Target Both Businesses And Consumers

Money transfer scams, also called wire transfer scams, target both businesses and consumers. The affected firms include both small and large businesses.

Businesses

The Federal Bureau of Investigation (FBI) calls theses scams "Business E-mail Compromise" (BEC), since the fraudsters often target executives within a company with phishing e-mails, designed to trick victims into revealing sensitive bank account and sign-in credentials (e.g., usernames, passwords):

"At its heart, BEC relies on the oldest trick in the con artist’s handbook: deception. But the level of sophistication in this multifaceted global fraud is unprecedented... Carried out by transnational criminal organizations that employ lawyers, linguists, hackers, and social engineers, BEC can take a variety of forms. But in just about every case, the scammers target employees with access to company finances and trick them into making wire transfers to bank accounts thought to belong to trusted partners—except the money ends up in accounts controlled by the criminals."

From January, 2015 to February 2017, there was a 1,300 percent increase in financial losses due to these scams, totaling $3 billion. To trick victims, criminals use a variety of online methods including spear-phishing, social engineering, identity theft, e-mail spoofing, and the use of malware. (If these terms are unfamiliar, then you probably don't know enough to protect yourself.) Malware, or computer viruses, are often embedded in documents attached to e-mail messages -- another reason not to open e-mail attachments from strangers.

Forbes Magazine reported in April:

"Fraudsters target the CEO's and CFO's at various companies and hack their computers. They collect enough information to learn the types of billing the company pays, who the payee's are and the average balances paid. They then spoof a customer or, in other words, take their identity, and bill the company with wire transfer instructions to a scam bank account."

Some criminals are particularly crafty, by pretending to be a valid customer, client or vendor; and use a slightly altered sender's e-mail address hoping the victim won't to notice. This technique is successful more often that you might think. Example: a valid sender's e-mail address might be johnson@XYZcompany.com, while the scammer uses johnson@XYZcompamy.com. Did you spot the alteration? If you didn't, then you've just wired money directly to the criminal's offshore account instead of to a valid customer, client, or vendor.

Scammers can obtain executives' e-mail addresses and information from unprotected pages on social networking sites and/or data breaches. So, the data breaches at Under Armour, Equifax, Fresenius, Uber, the Chicago Board of Elections, Yahoo, Nationwide, Verizon, and others could have easily provided criminals with plenty of stolen personal data to do plenty of damage; impersonating coworkers, business associates, and/or coworkers. Much of the stolen information is resold by criminals to other criminals. Trading stolen data is what many cyber criminals do.

There are several things executives can do to protect themselves and their business' money. Learn to recognize money transfer scams and phishing e-mails. Often, bogus e-mails or text messages contain spelling errors (e.g., in the message body) and/or contain a request to wire immediately an unusually large amount of money. Most importantly, the FBI recommends:

"The best way to avoid being exploited is to verify the authenticity of requests to send money by walking into the CEO’s office or speaking to him or her directly on the phone. Don’t rely on e-mail alone."

That means don't rely upon text messages either.

Consumers

Wiring money is like sending cash. To avoid losing money, it is important for consumers to learn to recognize money transfer scams, too. There are several versions, according to the U.S. Federal Trade Commission (FTC):

"1. You just won a prize but you have to pay fees to get the prize
2. You need to pay for something you just bought online before they send it
3. A friend is in trouble and needs your help
4. You got a check for too much money and you need to send back the extra"

Regular readers of this blog are already familiar with #4 -- also called "check scams." Instead of paper checks, scammers have upgraded to prepaid cards and/or wire transfers. The FTC also advises consumers to pause before doing anything, and then:

  • "If the person claims (via e-mail) to need money for an emergency, call them first. Call another family member. Verify first if something truly happened.
  • If the check received is too much money, call your bank before you deposit the check.  Ask your bank what they think about wiring money back to someone.
  • If the e-mail or phone caller says you received an inheritance or prize, "you do not have to pay for a prize. Ever.  Did they say you have an inheritance? Talk to someone you trust. What does that person think?"

If you have already sent money to a scammer, it's gone and you probably won't get it back. So, file a complaint with the FTC. Chances are the scammer will contact you again, since they (or their associates) were successful already. Don't give them any more money.


Facebook’s Screening for Political Ads Nabs News Sites Instead of Politicians

[Editor's note: today's post, by reporters at ProPublica, discusses new advertising rules at the Facebook.com social networking service. It is reprinted with permission.]

By Jeremy B. Merrill and Ariana Tobin, ProPublica

One ad couldn’t have been more obviously political. Targeted to people aged 18 and older, it urged them to “vote YES” on June 5 on a ballot proposition to issue bonds for schools in a district near San Francisco. Yet it showed up in users’ news feeds without the “paid for by” disclaimer required for political ads under Facebook’s new policy designed to prevent a repeat of Russian meddling in the 2016 presidential election. Nor does it appear, as it should, in Facebook’s new archive of political ads.

The other ad was from The Hechinger Report, a nonprofit news outlet, promoting one of its articles about financial aid for college students. Yet Facebook’s screening system flagged it as political. For the ad to run, The Hechinger Report would have to undergo the multi-step authorization and authentication process of submitting Social Security numbers and identification that Facebook now requires for anyone running “electoral ads” or “issue ads.”

When The Hechinger Report appealed, Facebook acknowledged that its system should have allowed the ad to run. But Facebook then blocked another ad from The Hechinger Report, about an article headlined, “DACA students persevere, enrolling at, remaining in, and graduating from college.” This time, Facebook rejected The Hechinger Report’s appeal, maintaining that the text or imagery was political.

As these examples suggest, Facebook’s new screening policies to deter manipulation of political ads are creating their own problems. The company’s human reviewers and software algorithms are catching paid posts from legitimate news organizations that mention issues or candidates, while overlooking straightforwardly political posts from candidates and advocacy groups. Participants in ProPublica’s Facebook Political Ad Collector project have submitted 40 ads that should have carried disclaimers under the social network’s policy, but didn’t. Facebook may have underestimated the difficulty of distinguishing between political messages and political news coverage — and the consternation that failing to do so would stir among news organizations.

The rules require anyone running ads that mention candidates for public office, are about elections, or that discuss any of 20 “national issues of public importance” to verify their personal Facebook accounts and add a "paid for by" disclosure to their ads, which are to be preserved in a public archive for seven years. Advertisers who don’t comply will have their ads taken down until they undergo an "authorization" process, submitting a Social Security number, driver’s license photo, and home address, to which Facebook sends a letter with a code to confirm that anyone running ads about American political issues has an American home address. The complication is that the 20 hot-button issues — environment, guns, immigration, values foreign policy, civil rights and the like — are likely to pop up in posts from news organizations as well.

"This could be really confusing to consumers because it’s labeling news content as political ad content," said Stefanie Murray, director of the Center for Cooperative Media at Montclair State University.

The Hechinger Report joined trade organizations representing thousands of publishers earlier this month in protesting this policy, arguing that the filter lumps their stories in with the very organizations and issues they are covering, thus confusing readers already wary of "fake news." Some publishers — including larger outlets like New York Media, which owns New York Magazine — have stopped buying ads on political content they expect would be subject to Facebook’s ad archive disclosure requirement.

"When it comes to news, Facebook still doesn’t get it. In its efforts to clear up one bad mess, it seems set on joining those who want blur the line between reality-based journalism and propaganda," Mark Thompson, chief executive officer of The New York Times, said in prepared remarks at the Open Markets Institute on Tuesday, June 12th.

In a statement Wednesday June 13th, Campbell Brown, Facebook’s head of global news partnerships, said the company recognized "that news content was different from political and issue advertising," and promised to create a "differentiated space within our archive to separate news content from political and issue ads." But Brown rejected the publishers’ request for a "whitelist" of legitimate news organizations whose ads would not be considered political.

"Removing an entire group of advertisers, in this case publishers, would go against our transparency efforts and the work we’re doing to shore up election integrity on Facebook," she wrote."“We don’t want to be in a position where a bad actor obfuscates its identity by claiming to be a news publisher." Many of the foreign agents that bought ads to sway the 2016 presidential election, the company has said, posed as journalistic outlets.

Her response didn’t satisfy news organizations. Facebook "continues to characterize professional news and opinion as ‘advertising’ — which is both misguided and dangerous," said David Chavern, chief executive of the News Media Alliance — a trade association representing 2,000 news organizations in the U.S. and Canada —and co-author of an open letter to Facebook on June 11.

ProPublica asked Facebook to explain its decision to block 14 advertisements shared with us by news outlets. Of those, 12 were ultimately rejected as political content, one was overturned on appeal, and one Facebook could not locate in its records. Most of these publications, including The Hechinger Report, are affiliated with the Institute for Nonprofit News, a consortium of mostly small nonprofit newsrooms that produce primarily investigative journalism (ProPublica is a member).

Here are a few examples of news organization ads that were rejected as political:

  • Voice of Monterey Bay tried to boost an interview with labor leader Dolores Huerta headlined "She Still Can." After the ad ran for about a day, Facebook sent an alert that the ad had been turned off. The outlet is refusing to seek approval for political ads, “since we are a news organization,” said Julie Martinez, co-founder of the nonprofit news site.
  • Ensia tried to advertise an article headlined: "Opinion: We need to talk about how logging in the Southern U.S. is harming local residents." It was rejected as political. Ensia will not appeal or buy new ads until Facebook addresses the issue, said senior editor David Doody.
  • inewsource tried to promote a post about a local candidate, headlined: "Scott Peters’ Plea to Get San Diego Unified Homeless Funding Rejected." The ad was rejected as political. inewsource appealed successfully, but then Facebook changed its mind and rejected it again, a spokeswoman for the social network said.
  • BirminghamWatch tried to boost a post about a story headlined, "‘That is Crazy:’ 17 Steps to Cutting Checks for Birmingham Neighborhood Projects." The ad was rejected as political and rejected again on appeal. A little while later, BirminghamWatch’s advertiser on the account received a message from Facebook: "Finish boosting your post for $15, up to 15,000 people will see it in NewsFeed and it can get more likes, comments, and shares." The nonprofit news site appealed again, and the ad was rejected again.

For most of its history, Facebook treated political ads like any other ads. Last October, a month after disclosing that "inauthentic accounts… operated out of Russia" had spent $100,000 on 3,000 ads that "appeared to focus on amplifying divisive social and political messages," the company announced it would implement new rules for election ads. Then in April, it said the rules would also apply to issue-related ads.

The policy took effect last month, at a time when Facebook’s relationship with the news industry was already rocky. A recent algorithm change reduced the number of posts from news organizations that users see in their news feed, thus decreasing the amount of traffic many media outlets can bring in without paying for wider exposure, and frustrating publishers who had come to rely on Facebook as a way to reach a broader audience.

Facebook has pledged to assign 3,000-4,000 "content moderators" to monitor political ads, but hasn’t reached that staffing level yet. The company told ProPublica that it is committed to meeting the goal by the U.S. midterm elections this fall.

To ward off "bad actors who try to game our enforcement system," Facebook has kept secret its specific parameters and keywords for determining if an ad is political. It has published only the list of 20 national issues, which it says is based in part on a data-coding system developed by a network of political scientists called the Comparative Agendas Project. A director on that project, Frank Baumgartner, said the lack of transparency is problematic.

"I think [filtering for political speech] is a puzzle that can be solved by algorithms and big data, but it has to be done right and the code needs to be transparent and publicly available. You can’t have proprietary algorithms determining what we see," Baumgartner said.

However Facebook’s algorithms work, they are missing overtly political ads. Incumbent members of Congress, national advocacy groups and advocates of local ballot initiatives have all run ads on Facebook without the social network’s promised transparency measures, after they were supposed to be implemented.

Ads from Senator Jeff Merkley, Democrat-Oregon, Representative Don Norcross, Democrat-New Jersey, and Representative Pramila Jayapal, Democrat-Washington, all ran without disclaimers as recently as this past Monday. So did an ad from Alliance Defending Freedom, a right-wing group that represented a Christian baker whose refusal for religious reasons to make a wedding cake for a gay couple was upheld by the Supreme Court this month. And ads from NORML, the marijuana legalization advocacy group and MoveOn, the liberal organization, ran for weeks before being taken down.

ProPublica asked Facebook why these ads weren’t considered political. The company said it is reviewing them. "Enforcement is never perfect at launch," it said.

Clarification, June 15, 2018: This article has been updated to include more specific information about the kinds of advertising New York Media has stopped buying on Facebook’s platform.

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North Carolina Provides Its Residents With an Opt-out From Smart Meter Installations. Will It Last?

Wise consumers know how smart utility meters operate. Unlike conventional analog meters which must be read manually on-site by a technician from the utility, smart meters perform two-way digital communication with the service provider, have memory to digitally store a year's worth of your usage, and transmit your usage at regular intervals (e.g., every 15 minutes). Plus, consumers have little or no control over smart meters installed on their property.

There is some good news. Residents in North Carolina can say "no" to smart meter installations by their power company. The Charlotte Observer reported:

"Residents who say they suffer from acute sensitivity to radio-frequency waves can say no to Duke's smart meters — as long as they have a notarized doctor's note to attest to their rare condition. The N.C. Utilities Commission, which sets utility rates and rules, created the new standard on Friday, possibly making North Carolina the first state to limit the smart meter technology revolution by means of a medical opinion... Duke Energy's two North Carolina utility subsidiaries are in the midst of switching its 3.4 million North Carolina customers to smart meters..."

While it currently is free to opt out and get an analog meter instead, that could change:

"... Duke had proposed charging customers extra if they refused a smart meter. Duke wanted to charge an initial fee of $150 plus $11.75 a month to cover the expense of sending someone out to that customer's house to take a monthly meter reading. But the Utilities Commission opted to give the benefit of the doubt to customers with smart meter health issues until the Federal Communications Commission determines the health risks of the devices."

The Smart Grid Awareness blog contains more information about activities in North Carolina. There are privacy concerns with smart meters. Smart meters can be used to profile consumers with a high degree of accuracy and details. One can easily deduce the number of persons living in the dwelling, when they are home and the duration, which electric appliances are used when they are home, the presence of security and alarm systems, and any special conditions (e.g., in-home medical equipment, baby appliances, etc.).

Other states are considering similar measures. The Kentucky Public Service Commission (PSC) will hold a public meeting only July 9th and accept public comments about planned smart meter deployments by Kentucky Utilities Co. (KU) and Louisville Gas & Electric Company (LG&E). Smart meters are being deployed in New Jersey.

When Maryland lawmakers considered legislation to provide law enforcement with access to consumers' smart meters, the Electronic Privacy Information Center (EPIC) responded with a January 16, 2018 letter outlining the privacy concerns:

"HB 56 is a sensible and effective response to an emerging privacy issue facing Maryland residents. Smart meters collect detailed personal data about the use of utility services. With a smart meter, it is possible to determine when a person is in a residence, and what they are doing. Moreover the routine collection of this data, without adequate privacy safeguards, would enable ongoing surveillance of Maryland residents without regard to any criminal suspicion."

"HB 56 does not prevent law enforcement use of data generated by smart meters; it simply requires that law enforcement follow clear procedures, subject to judicial oversight, to access the data generated by smart meters. HB 56 is an example of a model privacy law that enables innovation while safeguarding personal privacy."

That's a worthy goal of government: balance the competing needs of the business sector to innovate while protecting consumers' privacy. Is a medical opt-out sufficient? Should Fourth Amendment constitutional concerns apply? What are your opinions?


The Wireless Carrier With At Least 8 'Hidden Spy Hubs' Helping The NSA

AT&T logo During the late 1970s and 1980s, AT&T conducted an iconic “reach out and touch someone” advertising campaign to encourage consumers to call their friends, family, and classmates. Back then, it was old school -- landlines. The campaign ranked #80 on Ad Age's list of the 100 top ad campaigns from the last century.

Now, we learn a little more about how extensive pervasive surveillance activities are at AT&T facilities to help law enforcement reach out and touch persons. Yesterday, the Intercept reported:

"The NSA considers AT&T to be one of its most trusted partners and has lauded the company’s “extreme willingness to help.” It is a collaboration that dates back decades. Little known, however, is that its scope is not restricted to AT&T’s customers. According to the NSA’s documents, it values AT&T not only because it "has access to information that transits the nation," but also because it maintains unique relationships with other phone and internet providers. The NSA exploits these relationships for surveillance purposes, commandeering AT&T’s massive infrastructure and using it as a platform to covertly tap into communications processed by other companies.”

The new report describes in detail the activities at eight AT&T facilities in major cities across the United States. Consumers who use other branded wireless service providers are also affected:

"Because of AT&T’s position as one of the U.S.’s leading telecommunications companies, it has a large network that is frequently used by other providers to transport their customers’ data. Companies that “peer” with AT&T include the American telecommunications giants Sprint, Cogent Communications, and Level 3, as well as foreign companies such as Sweden’s Telia, India’s Tata Communications, Italy’s Telecom Italia, and Germany’s Deutsche Telekom."

It was five years ago this month that the public learned about extensive surveillance by the U.S. National Security Agency (NSA). Back then, the Guardian UK newspaper reported about a court order allowing the NSA to spy on U.S. citizens. The revelations continued, and by 2016 we'd learned about NSA code inserted in Android operating system software, the FISA Court and how it undermines the public's trust, the importance of metadata and how much it reveals about you (despite some politicians' claims otherwise), the unintended consequences from broad NSA surveillance, U.S. government spy agencies' goal to break all encryption methods, warrantless searches of U.S. citizens' phone calls and e-mail messages, the NSA's facial image data collection program, the data collection programs included ordinary (e.g., innocent) citizens besides legal targets, and how  most hi-tech and telecommunications companies assisted the government with its spy programs. We knew before that AT&T was probably the best collaborator, and now we know more about why. 

Content vacuumed up during the surveillance includes consumers' phone calls, text messages, e-mail messages, and internet activity. The latest report by the Intercept also described:

"The messages that the NSA had unlawfully collected were swept up using a method of surveillance known as “upstream,” which the agency still deploys for other surveillance programs authorized under both Section 702 of FISA and Executive Order 12333. The upstream method involves tapping into communications as they are passing across internet networks – precisely the kind of electronic eavesdropping that appears to have taken place at the eight locations identified by The Intercept."

Former NSA contractor Edward Snowden commented on Twitter: