The Facebook whistleblower wave - Axios
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The Facebook whistleblower wave

Illustration: Lazaro Gamio / Axios

Facebook insiders with detailed knowledge of the company's priorities and operations are increasingly voicing concerns that the tech giant is putting profits ahead of its users' best interests. Their accounts come as many Silicon Valley insiders are speaking out about the negative consequences of the world they helped create.

Why it matters: The accounts put more pressure on the company to quickly and publicly address tough philosophical questions that they may not have the answers to yet. And it gives more ammunition for other Facebook alumni to come forward with their perspectives while they work their issues out.

In response to these accounts, Facebook published a blog post late last night that says: "While it's fair to criticize how we enforced our developer policies more than five years ago, it's untrue to suggest we didn't or don't care about privacy."

The latest: Former Facebook operations manager Sandy Parakilas wrote in a New York Times op-ed Sunday: "Lawmakers shouldn't allow Facebook to regulate itself. Because it won't ... [Facebook] prioritized data collection from its users over protecting them from abuse."

  • Early Facebook investor Roger McNamee, now managing director at investment firm Elevation Partners, told CNBC last week: "I don't think there is any way for us to expect them to undermine their profits ... We're going to have to give them an incentive to do so."
  • Former Facebook president Sean Parker told Axios' Mike Allen two weeks ago that the platform was designed to exploit human "vulnerability," and that "[The inventors] understood this, consciously, and we did it anyway."
  • Justin Rosenstein, co-creator of the Facebook "like" button, told The Guardian in October that there could be a case for regulating "psychologically manipulative" advertising. "If we only care about profit maximisation, we will go rapidly into dystopia," said Rosenstein, who admits to distancing himself from the platform he helped build.
  • Facebook product manager Antonio Garcia-Martinez, who's also author of Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley, told The Guardian earlier this year before the Russia scandal broke: "The hard reality is that Facebook will never try to limit such use of their data unless the public uproar reaches such a crescendo as to be un-mutable."
Sound smart: It's one thing to be criticized from lawmakers or outside people who don't understand the company's business model, capabilities and priorities. It's another to be condemned by employees and investors with more intimate knowledge of the company.

U.S. retail sales beat November expectations

A holiday sale display greets shoppers entering a JCPenney store. Photo: Elaine Thompson / AP

U.S. retail sales were higher than expected in November, the Commerce Department announced Thursday, signaling the growing strength of demand from American consumers this holiday shopping season.

Get smart: Overall sales were 0.5% higher than in October thanks to a strengthening jobs market, which helped boost demand. Bloomberg notes that "solid hiring, gains in stock prices and property values, and limited inflation" are also expected to sustain demand for the remainder of the year, after two quarters of seeing above-trend growth of around 3%.


Tavis Smiley: PBS investigation "went too far"

Tavis Smiley says he plans to "fight back" at PBS. Photo: Rich Fury / Invision via AP

Late-night talk show host Tavis Smiley, who was suspended by PBS after an internal investigation led to several allegations of sexual misconduct, said he was shocked by the way PBS handled their investigation. "Variety knew [about my suspension] before I did," he said in a Facebook post.

His side of the story: "To be clear, I have never groped, coerced, or exposed myself inappropriately to any workplace colleague in my entire broadcast career ... PBS overreacted and conducted a biased and sloppy investigation, which led to a rush to judgment, and trampling on a reputation that I have spent an entire lifetime trying to establish. This has gone too far. And, I, for one, intend to fight back."

Smiley's full statement:

“On the eve of the 15th season and 3,000th episode of my nightly talk show, I was as shocked as anyone else by PBS’ announcement today. Variety knew before I did.

I have the utmost respect for women and celebrate the courage of those who have come forth to tell their truth. To be clear, I have never groped, coerced, or exposed myself inappropriately to any workplace colleague in my entire broadcast career, covering 6 networks over 30 years.

Never. Ever. Never.

PBS launched a so-called investigation of me without ever informing me. I learned of the investigation when former staffers started contacting me to share the uncomfortable experience of receiving a phone call from a stranger asking whether, I had ever done anything to make them uncomfortable, and if they could provide other names of persons to call. After 14 seasons, that’s how I learned of this inquiry, from the streets.

Only after being threatened with a lawsuit, did PBS investigators reluctantly agree to interview me for three hours.

If having a consensual relationship with a colleague years ago is the stuff that leads to this kind of public humiliation and personal destruction, heaven help us. The PBS investigators refused to review any of my personal documentation, refused to provide me the names of any accusers, refused to speak to my current staff, and refused to provide me any semblance of due process to defend myself against allegations from unknown sources. Their mind was made up. Almost immediately following the meeting, this story broke in Variety as an ‘exclusive.’ Indeed, I learned more about these allegations reading the Variety story than the PBS investigator shared with me, the accused, in our 3 hour face to face meeting.

My attorneys were sent a formal letter invoking a contractual provision to not distribute my programming, and that was it.

Put simply, PBS overreacted and conducted a biased and sloppy investigation, which led to a rush to judgment, and trampling on a reputation that I have spent an entire lifetime trying to establish.

This has gone too far. And, I, for one, intend to fight back.

It’s time for a real conversation in America, so men and women know how to engage in the workplace. I look forward to actively participating in that conversation.”


Doug Jones' message to Roy Moore: "It's time to move on"

Doug Jones (left) beat Roy Moore in the Alabma senate race. Photos: AP

Senator-elect Doug Jones told NBC's Savannah Guthrie Thursday that he understands Roy Moore's frustration in losing in Alabama but it's time for him "to move on."

Key quote: "Every race is tough, it's bitter sometimes... the people of Alabama have now spoken... I think he would do well to go ahead and [say] let's get this behind us." Jones added that there's "no doubt" in his mind that he won, despite Moore's unwillingness to concede defeat.


Omarosa denies being fired and escorted off White House grounds

Omarosa Manigault said she resigned from the White House. Photo: Manuel Balce Ceneta / AP

Omarosa Manigault, who met Trump when she was a contestant on the first season of "The Apprentice," asserted Thursday that she resigned from the Trump administration. She called reports that she was fired for trying to break into the White House residence and escorted of the grounds "100% false."

"Certainly I had more access than most, and people had problems with that," Manigault told Good Morning America. "People had problems with my 14-year relationship with the president. I've always been loyal to him."

Manigault's version of events: She said she and chief of staff John Kelly sat down in the situation room and had "a very candid conversation" about her wanting to resign. Her resignation will take effect on January 20.

Her issues with her WH role:

  • "There were a lot of things that I observed during the last year that I was unhappy with, that I was uncomfortable with ... When I can tell my story, it is a profound story."
  • "As the only African-American woman in the White House I have seen things that have made me uncomfortable, that have upset me, that have affected me deeply and emotionally, that has affected my community and my people."

One-third of Puerto Rico still doesn't have power

In this Thursday, Oct. 12, 2017 photo, a woman left homeless by Hurricane Maria uses her cell phone at a school-turned-shelter that does not have electricity in Toa Baja, Puerto Rico. Photo: Ramon Espinosa / AP

"Today, nearly three months after Hurricane Maria., more than one-third of Puerto Rico is still without power and thousands of businesses remain closed," Bloomberg Businessweek reports.

Why it matters: "For a decade, Puerto Rico has experienced a steady erosion of economic opportunity, and now there's a fear that the storm has convinced too many residents, a critical mass, to pursue new livelihoods elsewhere."


Five years after Sandy Hook

A makeshift memorial with crosses for the victims of the Sandy Hook Elementary School shooting massacre. Photo: Robert F. Bukaty / AP

"Many relatives of the 26 children and educators killed five years ago [today] at Sandy Hook Elementary School [in Newtown, Conn.] have dedicated themselves to charity, activism and other efforts to channel their grief and, in many cases, to help prevent violence," AP's Pat Eaton-Robb writes.

More of their projects:

  • "Others have jumped into the policy fray to lobby for gun control or improved mental health care. In some cases, they have traveled the country, and even the world, as recognized experts in their fields, such as Jeremy Richman, a scientist whose Avielle Foundation for the study of brain health is named for his slain daughter.
  • "The Sandy Hook families have created a website to share each of their stories and information about the various projects they have started in memory of their family members."

Pence delaying Israel visit

Photo: Scott Applewhite / AP

Vice President Mike Pence's visit to Israel, which was to begin on Sunday, will be postponed by two days because of next week's tax-reform vote, Israeli and U.S. officials say.

  • The reason: U.S. officials tell Axios that Pence is likely to remain in Washington until Tuesday in order to be present for final Senate passage of tax reform, which he has been intimately involved in.
  • The change: Pence originally was to leave Saturday night. He is likely to add one day at the end of the trip.

According to the current schedule, Israeli officials tell me:

  • Israeli officials say Pence is due to arrive from Cairo on Wednesday evening.
  • On Thursday morning, he will have a welcoming ceremony at the prime minister's office and a working meeting with Netanyahu.
  • Afterwards Pence will visit the Israeli parliament – the Knesset — and deliver a speech to the Israeli people.
  • In the evening Pence will arrive at the prime minister's residence for dinner with Netanyahu.
  • On Friday morning Pence will meet with Israeli president Rivlin and visit the Holocaust memorial site – Yad Vashem. He will leave Israel around noon on Friday.

U.S. officials say Pence is still likely to visit the Western Wall.

  • Palestinians refused to see Pence as a result of Trump's announcement on Jerusalem from last week.

Slow rebuild after the Great Recession killed economic equality

Apple's new campus in September. Photo: Marcio Jose Sanchez / AP

"Seattle is among a fistful of cities that have flourished in the 10 years since the Great Recession officially began in December 2007, even while most other large cities — and sizable swaths of rural America — have managed only modest recoveries," per AP Economics Writer Christopher Rugaber:

Why it matters: The rebound has "failed to narrow the country's deep regional economic disparities and in fact has worsened them."

More from the report:

  • "A few cities have grown much richer, thanks to their grip on an outsize share of lucrative tech jobs and soaring home prices. Others have thrived because of surging oil and gas production."
  • "In Las Vegas, half-finished housing developments, relics of the housing boom, pockmark the surrounding desert. Families there earn nearly 20 percent less, adjusted for inflation, than in 2007."
  • "[M]any Southern and Midwestern cities — from Greensboro, North Carolina, to Janesville, Wisconsin — have yet to recover from the loss of manufacturing jobs that have been automated out of existence or lost to competition from China."

Disney to acquire most Fox assets for $52.4 billion in historic deal

Rebecca Zisser

Walt Disney Company announced Thursday that it has agreed to acquire the entertainment assets of 21st Century Fox, including Fox's movie studio and entertainment television networks, as well as Fox's international TV assets. Bob Iger will remain CEO and Chairman of Walt Disney through 2021, instead of 2019, as previously announced. Fox says it will created a "New Fox" brand that consists of highly-rated news, sports and broadcast businesses.

Why it matters: The deal would give Disney the scale to take on Netflix, but first it will need to convince regulators that it doesn't pose the same sort of monopoly risk as AT&T's proposed purchase of Time Warner.

  • The transaction would include 21st Century Fox’s film and television studios, like 20th Century Fox and its rights to popular movies like X-Men and Avatar, its cable entertainment networks, like Nat Geo TV and FX, and international TV businesses, like its 39% in UK-based Sky News and Star TV in India.
  • Disney also gets Fox's 30% stake in Hulu. Added to its existing 30% stake, Disney becomes the controlling stakeowner in the streaming property.
  • The price tag is well below earlier reports, which started out at $60 billion. Reuters last night reported "more than $75 billion."

The timing of the annoucement is strange, given that The Department of Justice recently sued to block a merger between AT&T and Time Warner, with no final decision expected until the end of April at the earliest. There had been some speculation — including from AT&T CEO Randall Stephenson — that the DOJ's action would put Disney's talks with 21st Century Fox on ice. Big mergers are disruptive to a business, and even more so when regulatory approval is in doubt.

The move could change the way Fox and Disney manage their existing sports and news outlets, like ABC News, ESPN, Fox Sports 1 and Fox Newc Channel. 21st Century Fox has been beefing up its sports distribution partnerships globally, with a mega-cricket deal in India and soccer rights in Latin America. But this deal would give Disney access for nearly two dozen regional sports networks (RSN's). Recode reports that Disney would have access to them should it want to market the sale of its sports platform to win future national deals. There already has been some criticism, however, of Disney effectively doubling down on a live sports strategy that has been flagging via ESPN.

For Disney, access to Fox's international assets is huge: Acquiring Fox's current 39% stake in Sky News gives Disney access to 23 million homes across the EU. Fox anticipates winning majority stake before the deal closes officially, which would give Disney even more leverage in that market. It would also give Disney access to Sky's streaming service, and Fox's Indian market assets, like Star TV. Netflix grew its international audience by $4.45 million subscribers last quarter.

Noticeably missing from the joint press release and 21st Century Fox's press release is information on the fate of Fox executive James Murdoch, who was rumored to be given a spot within Disney's empire to give the Murdochs some managerial control over the new venture. Bob Iger said on Good Morning America that Murdoch would help with the transition and that he would be discussing whether a role would exist for Murdoch or not at the new company.

Many legacy media players have been consolidating to be able to compete with tech giants, like Google Facebook and Netflix. Disocvery Communications acquired Scripps Inc. for $14 billion this summer.


Putin claims to care about the “lack of respect” toward Trump voters

Russian President Vladimir Putin gestures during his annual news conference. Photo: Pavel Golovkin / AP

Russian President Vladimir Putin said accusations of President Trump's collusion with the Russians have "inflicted damage to the domestic political situation" and shows a "lack of respect for voters" who went for Trump in 2016, the AP reports. Putin is speaking at his annual news conference in Moscow.

Why it matters: The U.S. intelligence community determined just months after the election that Russia meddled in the U.S. presidential election last year. Trump has conflicting beliefs — he has said he is with the intelligence community on the matter, but he has also said he believes Putin when Putin says Russia has not meddled.

What else Putin said:

  • “This is all made up by people who oppose Trump in order to make his work look illegitimate,” per the NYT.
  • Putin cast doubt on suspicions that Trump’s associates’ meetings with Russians indicate wrongdoing: "What here is out of bounds and why should this all take an atmosphere of spy-mania?" per The Telegraph.

Putin suggets U.S. meddled in Olympic Committee ban on Russia: Putin said the main whistleblower on Russian Olympic doping in 2014, Grigory Rodchenkov, is “under the control” of the FBI and “American special services,” indicating he may believe the whistleblower has been manipulated, per the AP. He pointed to “substances” the U.S. may be giving him “so that he says what’s required. The Olympic Committee has just banned Russia from participating in the Winter Games over doping issues.