Everyone and their mother wrote about the recent Facebook user data leak. If you didn’t notice or decided not to care because it’s yet another fuck-up by the blue app, who can blame you? But what is interesting, as Wired reports, is that it’s hard to find where this data actually came from. Facebook just says it’s from 2019 leak and now it just got published. Nothing to see here. But there were a couple that year. Surprise.
In short, the leak available online contains data on roughly 533 million users. E-mails, phone numbers, Facebook IDs and a lot of other information. The leak included information on various politicians and Mark Zuckerberg himself.
You can easily check if you are affected on HaveIBeenPwned website. It’s actually a good resource to keep at hand because it checks all the available leaks. My data wasn’t in this one, but there were a couple of others to worry about.
Regardless of the result I started wandering, what information Facebook has on me. I went to Facebook settings (actually opened Facebook for the first time since November) and requested a download of all the information from my profile. After a couple of hours I got a link for around 500 MB of data.
It starts with the obvious — all your posts, friends, likes, comments, photos and videos. There are also devices, IP addresses and locations you’ve logged into Facebook. If you’ve used voice features, there would be recordings (not for me).
There are also some things that Facebook tries to guess about you, like for example your interests (which were pretty meh for me):
Or life stage description of your friends:
It also keeps every profile you’ve visited and when, what you were searching for and what languages you might speak.
Then there is a list of companies who uploaded your contact information to Facebook to spam you with their offers — almost every popular app or store you’ve registered in.
The most interesting is your activity outside of Facebook. In my case, among others there was a local bank Luminor which reports to Facebook every time I open the app.
I know it’s automatic, but let it just sink in, a bank in Latvia is telling a social networking company in the US about every time I’ve opened their app. Just why?
There is much more activity from another bank — Citadele, but I found it hard to understand what it corresponds to.
You can actually turn off this activity outside Facebook “feature”, but as Facebook itself warns before you do, it’s not actually turning it off.
Although I know it’s hard to actually delete information from the Internet and there are shadow profiles on Facebook, I still think this is the only logical step. As I mentioned, I wasn’t using the social network for six months, so I don’t think I will miss it.
Surprisingly, the process of deleting the account looks fairly straightforward, you just choose Delete:
It even reminds you to download all the information (which I already did):
After that, you have 30 days to reinstate your account, which I did once accidentally.
If you log in to Facebook by mistake in those 30 days, it will just … log you in, without even asking and the “deletion” process will be stopped. So, you have to be careful. I had to go through the deletion procedure for the second time.
There are still Instagram and WhatsApp installed on my phone. I’ll have to decide about those later. Although moving from WhatsApp is impossible now because of work, I already started minimizing the number of chats I have there. Instagram on the other hand I think will have the same trajectory as Facebook, I will use it for some time and at some point I just won’t.
First of all, as it often is with those types of stories – The Verge did a great job with presenting the article. Audio clips integrated into the story, so you can hear Zuckerberg’s voice, not only read the redacted quote is an interesting choice and I would actually like to see more of that.
Regarding the story itself. I think social media platforms, especially one as big as Facebook should be neutral. It is a rare thing that I agree with Zuckerberg, but here we are. A couple of quotes from him:
“That basically asked whether Joel can be in this role, or can be doing this role, on the basis of the fact that he is a Republican, or has beliefs that are more conservative than the average employee at the company. And I have to say that I find that line of questioning to be very troubling.
If we want to actually do a good job of serving people, [we have to take] into account that there are different views on different things, and that if someone disagrees with a view, that doesn’t necessarily mean that they’re hateful or have bad intent.”
Reading the US Twitter, I don’t know how anyone can remain sane. People are almost willing to kill one another because of the political affiliation. And I also find the way the question is asked regarding the Republican employee very troubling.
I also don’t get the walking out part of employees. If you don’t like the way the company is being run – leave. This “virtual walk out” for a day, when you have a nice job with pretty high salary is nothing more than a virtue signaling.
You shouldn’t work for a manager that you so strongly disagree with. Otherwise it is hard to believe your believes.
Can we build a quarantined Facebook city? an employee had asked ahead of the July 31st Q&A. Like, buying an island and all of us working there?
Zuckerberg read the question out loud, laughing gently.
“Gosh, I don’t think that that would be good long-term,” he responded. “I think it’s good to maintain connection to the rest of society.”
Fascinating answer. It shows how Zuckerberg really feels like something more than people at large. And I’m not sure how someone who bought out all the houses around his can say something about maintaining connection with the rest the society.
Privacy became somewhat of a theme here, so continuing on this subject – with the release of iOS 13, a lot of apps are asking for the permission to use Bluetooth. Among them are Netflix, YouTube, Waze, Spotify and of course Facebook.
When it asks for the permission, in the little explanation there is it usually tells, that it will help connecting to other Bluetooth devices. Especially with media apps, users could think, that it is necessary to listen through Bluetooth headphones or speakers, but it has nothing to do with that.
Developers have access to those via other means and don’t need permissions for those. The real reason they ask for Bluetooth is location tracking. Using the Bluetooth and WiFi devices around you, app can figure out your location pretty accurately.
This has been happening for quite some time, but only this year Apple added the ability to disallow the permission. It probably tells you something that a lot of developers pulled this functionality from their apps during beta process.
The one legitimate use I did find, was for navigation apps, like Waze. They use Bluetooth in tunnels to navigate you where there is no GPS and mobile signal. But if like me, you live in a place without any tunnels even in farther proximity, you can safely deny the prompt.
As we’ve seen last week with Spotify, the use of location tracking can be explained with business interest – they want users to stop abusing the Family Premium plan. What Facebook is doing after all the scandals it had with our data, is unexplainable.
In the recent Newsroom article titled “Understanding Updates to Your Device’s Location Settings”, the social network company explains how updates to Android and iOS will prevent them from abusing the constant location tracking.
Facebook is better with location. It powers features like check-ins and makes planning events easier. It helps improve ads and keep you and the Facebook community safe. Features like Find Wi-Fi and Nearby Friends use precise location even when you’re not using the app to make sure that alerts and tools are accurate and personalized for you.
Just read the fucking quote. Facebook tracking your location to keep you safe. How delirious are they? Article further explains, that now there will be the ability in OS to allow location sharing with the app only once and if the app is tracking your location in the background with the app closed, iOS will prompt you with notification, showing map of the location data and explanation why the app uses it (to keep you safe, of course).
This article shows how bad these changes are for Facebook. Right now location tracking is the best data they can get on users. Knowing where you’ve been can give a lot of insights. Which neighborhood do you live in, where do you work, which type of restaurants you go to, if you are sick, how often do you travel. All of this information can be gathered using the background location tracking, without users even noticing.
I’m glad both Google and Apple are making changes to the location tracking in theirs OS’s. I’m sure Facebook will find a way to track it anyway, they say so in the article:
We may still understand your location using things like check-ins, events and information about your internet connection.
This article shows how out of touch Facebook is, but the more scary thing is – people believe them. I hope those changes will educate people more on the type of data they are sending to those companies.
You come to the store, fill up your basket with food and go to the counter. Cashier scans everything, it’s 103.59 EUR, the screen lights up, you look at it and smile – transaction is accepted and your account is charged.
Next morning you look at your watch – 8:47, you can still make it. You run up the stairs and get outside – just a couple of blocks left. Finally the office building is near, but it is on the other side of the road and the light is red. It’s 8:56, you don’t have time, you look left and right, let the last car pass and cross the street. 8:59 you’ve punched your card at work – pure luck.
You get to your desk, get your phone out of the pocket – there are two recent notifications. First, your credit score has been lowered, second – the fine for jaywalking was charged from your account.
This might sound like a utopian future or a conspiracy theory, but this is a reality, at least in China. It started with publicly shaming people using CCTV cameras, facial recognition and billboards to show faces and names of jaywalkers.
As you jaywalk across the street, CCTV picks up your face and sends it to the servers where AI is matching it against the database. This database is also tied up to the credit scoring system – that’s how your score is lowered, and also to the payment system – which lets the government to bill your account for the amount of the fine.
What helps – all of this technology can be provided by just one company – Ant Financial.
Ant Financial
It all started with the square. In 2011 Ant Financial launched a new version of the Alipay app, with a built-in QR code reader. QR codes can help you with the simplest functions, like scan it and open the website, but in this case it had a monetary function. Waiter could print QR code, so you can tip her, beggars could print it out, so you couldn’t dismiss them with a simple “I don’t have cash on me”. It started to propagate all over China. From high-end restaurants and hotels, to fast-food chains and mom and pop shops. Quickly cash became unnecessary in China. Young and old used mobile phones to pay for things offline.
It also worked online, when Jack Ma decided to launch e-commerce site Taobao, the company faced a major problem – although the user activity was high, there were very few transactions – people didn’t trust each other with money. That’s when Alipay was added to the mix.
At first it worked like an escrow mechanism. Buyer would send money to the Taobo bank account and only after confirming receiving the item, Taobao released the funds to the seller. There were two issues with this. First, Alibaba didn’t have any sort of financial license, but Jack Ma decided to risk it. Second, there were errors. Chinese banking system was very antiquated with a lot of manual work. So Alibaba started to cooperate with Chinese banks, together with the first partner – the Commercial Bank of China, Alipay created online version of the process that was once manual. Banks started to partner with Alipay and by the year 2010, the company had connections with more than 200 of them in China.
The next logical step and the one users also asked for – keeping balances in the Alipay account. This would allow to use those funds on Taobao and lower the friction for making the transaction and potentially cheaper. Alipay introduced virtual accounts, which allowed the company to provide more financial services in the future.
In its portfolio Ant Financial also has Yu’e Bao – the worlds largest money market fund. Sesame Credit – a private credit scoring company. ZOLOZ – biometric-based identity verification platform. Ant Cash Now – consumer loan service. Insurance services, banks, credit card products and a couple of joint ventures in India, Thailand, South Korea, Philippines, Indonesia, Hong Kong and more.
Ant Financial has well over 700 million users in China (which is about half of the population of the country), it also has passed the 1 billion user mark worldwide. That is one of the factors which allowed it to raise $14 billion with a valuation of $150 billion, which is about the same as the combined market capitalization of Morgan Stanley and Goldman Sachs or all of the FinTech unicorns in US and Europe – combined.
Data Collection
Alipay has everything in its app. You can order food, pay your bills, pay for parking and car insurance, buy movie tickets, it knows about your fines and how well you tip. In Western Internet we are concerned with privacy policies of companies one by one. Facebook has information on you, so does Google, Netflix, Amazon, eBay. Some data brokers try to collect all of it together, buying up everything they can, but there are no incentives for tech giants to sell it. Facebook has to buy information from credit card companies to know what you’ve bought. But here, all of this information is in one app. As you have financial data, social circle and add to that behavioral data and you can “rank” the person pretty easily.
That’s why, when Chinese government decided to issue licenses for the social credit scoring companies, Alibaba was first in line. It was one out of 8 companies who got the license in the beginning of the 2015. With it at hand and all the data it started the development of Sesame Credit.
Sesame Credit
Sesame Credit is a credit scoring system, which analyses all the data available and shows you the score. The range of the Sesame score is between 350-950 points, with 700 and up being excellent credit score and range between 350 and 550 is considered the worst, which will give you more of a punishment than perks.
As this is still an experiment, Sesame Credit is optional, but nobody knows if it still calculates your score even if you didn’t signup.
It is reported that credit score consists of your general credit history (35%), financial status (25%)- the amount of money on users Alipay account, online behavior and preference (20%), personal characteristics (15%) and relationships (5%).
Two years ago Sesame Credit launched a program called “Credit Medical Treatment”, which is available to those with the score of 650 or higher. It allows to cut lines and pay for treatment upfront in the app. If the normal waiting time in the hospital is more than 2 hours, with “Credit Medical Treatment” it drops below 1 hour mark.
Try out before buying
On Alibaba’s e-commerce platform Tmall, users with high credit score can try out items before buying them. That way you don’t have a risk of regretting buying decision. Not only that, but there are also frequent promotions, such as the ability to try out the new Ford or some new smartphone for 30 days without the need to buy it afterwards. This is only available to the people with the highest score.
No Deposits
If you have high enough credit score in many instances you won’t need a deposit when you otherwise would have. One example is bike renting platforms which allow users with credit score of 650 or higher to rent bicycles in the bigger cities in China without deposit.
Not only that, but you don’t need the deposit in other places, like using shared umbrella, or public phone charger. Going back to hospitals and “Credit Medical Treatment”, with the score of over 600 you don’t need a deposit when renting a wheelchair.
It goes even further, in some instances you don’t need a deposit even when you are renting the apartment if you have high enough score.
Libraries
There are even perks in Public Libraries for people with higher scores. If you are eligible, you don’t need to pay a down payment and can set up library card for free. In some libraries you don’t even have to set up a card and just borrow books using your ID.
Lounges at Train Stations
As China’s train stations sometimes can get very crowded, especially in peak seasons, for members with high credit score there are now special lounges, where they can relax. In this case though, you not only need a high credit score, but you need to buy a higher fair ticket or have a platinum status.
Some of the governments are starting to accept Sesame Credit. For example, users with a score over 750 can apply for Canadian visas without the need for submitting bank statements. You just download the copy of the report in the Sesame Credit app, which is generated specifically for visa application and provide it to the embassy.
The Dark Side
While the perks are nice, some of the elements of credit systems are Orwellian at best. In some areas of China, when you call person on the phone, the siren sound is played and you hear a recorded message warning that the person is on the blacklist, because they have low social credit score, it also asks you to urge the person to pay the debts.
You will have a lower score, if you don’t have friends on the platform, or if you don’t pay your bills through Alipay, or even if you don’t buy anything on Alibabas e-commerce websites. It means that to have all the perks of the high credit score you have to be all-in in the Ant Financial ecosystem. If you are someone that uses Alipay here and there, when you apply for Sesame Credit, you will see your score closer to the bottom half. This could incline you to spend more on Taobao, pay your bills through Alipay, that means having more money on the account, which can be then used for other purposes as well.
People are talking about the green bubbles and Apple ecosystem lock-in, when a student doesn’t get added to the iMessage group chats, because he has Android and the group chat goes green. Now, in China, if couple of friends decided to see, who’s credit score is higher. Their income may differ and so may their habits. When four out of five realize that their score is much higher than that of their friend, what do they do? Is it worth it to abandon the friend just to get their score get higher (or not to get lower)? For some it is. They will either shut him out of their lives or force him to make decisions he doesn’t want to make, just to improve his credit score, so he stays friends with them.
And after social credit score becomes mandatory in a year, anyone will be able to see anyone’s score. The best case scenario will be, people will try to help and encourage those with lower scores to change some habits. But most probably people will just isolate lower scoring friends, because there is a risk of your score getting lower because of such friendship.
But the biggest and probably scariest controversy about credit score in China was its implementation of the blacklist. Its official name – the List of Dishonest Persons Subject to Enforcement, the catalogue of excluded people. By the summer of 2019 there were 7.49 million names. What is a punishment? You can’t buy plane tickets, the system says our are “not qualified”, you can’t buy properties, take loans or travel on top-tier trains. You can get on the list even for stealing just a pack of cigarettes and there is no appeal mechanism, it just ruins your life.
One businessman was placed on the list after a dispute with another company, after that the banks cut him off, so he was unable to pay employees salaries, business partners abandoned him. It was like torture. Luckily he was able to pay the court the money it ordered and was removed from the blacklist.
In the west
As China is full steam ahead, the west doesn’t want to be behind forever. There is no shortage of FinTech companies in Europe and US. In 2018 American FinTech companies received $11.9 billion in funding, while European received $3.5 billion. There were 39 VC-backed unicorns in FinTech which combined were worth $147.37 billion. Those are all record numbers.
In Europe the biggest FinTech companies are N26 and Revolut. N26 as of valuation had 2.3 million users and raised $300 million with valuation of $2.7 billion, while Revoluts last valuation was $1.7 billion with more than 3 million users.
N26 has a banking license in Germany, which gives it the ability to provide credit to clients in certain markets, as it does already. Revolut up until recently had an EMI license, which prohibits crediting clients, so it was solely focused on acquiring the user base. In the end of 2018 it also got banking license in Lithuania, which will give the company the ability to issue credits – the goal of every financial company.
In the spring and later autumn of 2014, Google led two rounds of what could be described as quietest $160 million combined investment in Credit Karma. Search engine company didn’t even bother to comment the news. So what is Credit Karma? It allows you to view your credit history weekly for free, which is something unprecedented in the US. Not only does it give you the graph showing your score over time, how it compares to others by income, age and state, how certain factors impact your score, but you can also simulate how your score changes by paying off debt or applying for new credit.
It also allows users to aggregate their financial data from banks, credit cards, loans and transactions and provides information on habits that could be changed in order to improve your financial health.
In the end of 2018 Google obtained banking license in Lithuania, which allows it to provide payment services all over the Europe.
Those are only preparations, while Apple in partnership with Goldman Sachs already started its expansion into the world of credit. Using its strong stance on privacy and its clout among users it launched Apple Card. Company claims it will give you the lowest interest rate possible. It will show you how to pay off your debt so you don’t have to pay any fees, again, with stated goal of improving your financial health.
Why do those companies provide you mostly free services, try to grow the biggest user base and promise to improve your financial health, especially Goldman Sachs, who Apple partnered with – not the most beloved bank in the world? Credit is a very profitable business and when you hook the client, for many it is close to impossible to get out. Your good financial health means companies can give you more credit, to the point where your income barely covers the monthly payment. This is the ultimate lock-in.
With cash practically going away all over the world, there is hardly anything we can do in the future other than use those services, or at least one of them to function in the world. The only possibility to somehow distance yourself from all of it, is to not opt-in without thinking about the consequences to all the new features, regardless of how futuristic and fun they sound, second – try to use only services from the companies you trust at least some and third and final advice, which is very important also now – don’t get into too much debt, try to control your finances yourself, understand where you spend it. This will help you immensely going into the future.
It has been a while since Facebook announced its cryptocurrency Libra and wallet – Calibra. I’m not a crypto expert, so I won’t explain the differences between real cryptocurrency and stablecoin. I’ve only read that it would be backed by “real” global currencies and short-term government securities, thus almost removing the volatility of other crypto currencies.
With the help of a lot of companies, excluding the biggest financial ones (there are no banks in the list of partners), Facebook will become the new Federal Reserve. It will “print” and “destroy” money as it wishes.
Users will be sold on the idea of easy transfers, as almost anyone has an account with Facebook. You won’t need to think about the currency exchange, you will just use Libra instead of dollars and euro.
I’m not sure what is Facebook thinking. How anyone in the company thinks it’s a good idea. With almost every country looking into Facebook, its role in the elections and the dissemination of fake news. On the day one, a lot of politicians came out saying they want to look into this before Facebook launches it.
Also, why announce it a year in advance? Right now, I’m not sure this will ever see the light of day in its current form. This is either something Facebook will close, just to show that it is over regulated and use it in the future as an example, that it can’t do anything without the government interference. Or governments will take hold of it. Regulate it. And it won’t have an effect, that Facebook hopes to achieve.
Yesterday, after publishing the story, some personal stuff happened and got my mood lower than I thought it could possibly get. I was in a mall, and after that happened, I sat down, got my phone out of the pocket to check Twitter and there was a message from the LG community in Latvia. I had won LG G3.
That’s not the first time I’ve won something, but this is the most expensive thing. About a year ago in a similar contest I’ve won an Acer tablet. It was the most basic one for about 100$, but still, winning something is always a great experience. Before that I have won a printer, magazine subscription and some small things like tickets and CD’s. But winning the flagship phone is in another league.
The most fun thing was the reaction of friends, mostly asking, how do I manage to do that and comments like “enough is enough”. The contest was on Facebook, you had to write, what ould you like to get from the LG G Community. As I understand it’s a service for the LG G phone owners with some deals for products and services. My answer was premium subscription for Endomondo or Runkeeper. But in the end the answer didn’t matter, because it was random, which chose the winner out of 476 participants. Link to the video on Facebook.
The question now is do I keep it? I currently have HTC One (m7), I had it for a year. It’s a great phone. Design wise it’s still one of the best, even considering m8. Putting speakers in front is a genius idea. I started to listen to music and podcasts without the headphones plugged in at home more often. Two things I don’t like about it are camera and battery life. I’ve never had a camera in my life (my parents had, so I used theirs, but not too often), so all the photos I take are with my smartphone. Photos do look good on the smartphone screen, but on a bigger monitor they are quite a bit grainy. Battery life sucks. It lasts half a day at most with my use. Yes, I do use it a lot. Listening to the music or podcasts in the car, at work and at home. Twitter, Instagram – I use those services only on a smartphone. Messaging and so on, but still, half a day is unacceptable by any standard. Comparing LG G3 with my current phone I would most definitely use the LG phone, but there are other things to consider:
It’s big, at 5.5 inches it is in a phablet category, so I have to look at it in the store. Most reviewers say it’s ok, the screen goes almost edge to edge, so it’s much more a phone than Samsung Note.
This week a lot of phones will come out, including the new iPhone. Last year I had a similar experience. I’ve waited for an iPhone to come out and then decided to buy HTC One, mostly because of the screen size and resolution. This time with bigger screen iPhone and changes in iOS 8 (including most importantly custom keyboards and the ability of apps to talk to each other), buying iPhone makes much more sense. I love the feeling of iOS, but there are some great features of Android that the iPhone doesn’t offer.
I’ll get the new phone in a couple of weeks, so I have some time to think about it.
