Speaker 1: Welcome to Text Stuff, a production of I Heart Radios
Speaker 1: How Stuff Works. Hey there, and welcome to text Stuff.
Speaker 1: I'm your host job in Strickland. I'm an executive producer
Speaker 1: with iHeart Radio and a lot of all things tech.
Speaker 1: And boy feels good to say those words, because you know,
Speaker 1: I've been running around traveling doing lots of stuff for
Speaker 1: another show called The Restless Ones, which you may have heard, uh,
Speaker 1: And it means that I've had a lot of time
Speaker 1: away from the studio. But I'm back today, and it's
Speaker 1: that time of year when I take a look back
Speaker 1: at the previous twelve months and consider some of the
Speaker 1: biggest text stories to come out over the course of
Speaker 1: the year. Now, this year, twenty nineteen, it was a
Speaker 1: pretty darn packed one when it comes to news, and
Speaker 1: things changed so quickly, and there are so many high
Speaker 1: level stories that it can actually be pretty easy to
Speaker 1: good stuff that happened earlier in the year. So I'm
Speaker 1: gonna walk us through some of the big themes of
Speaker 1: the year and some of the stories that center on
Speaker 1: those themes. And there are so many things to talk
Speaker 1: about that I'm actually gonna have to do two episodes
Speaker 1: about it. I originally was going to really try and
Speaker 1: cram it into one, but that just wasn't very practical.
Speaker 1: I would just be rattling off headlines, and what good
Speaker 1: is that. So this one's going to be filled with
Speaker 1: a lot of stories about mistakes and things going wrong
Speaker 1: in the world of tech. So I'm calling this episode
Speaker 1: the Bummers of twenty nineteen. But um, here's the bad news.
Speaker 1: There were a lot of bummer stories, So some of
Speaker 1: those are gonna probably spill into the next episode two,
Speaker 1: but I'll do my best to to to lighten the
Speaker 1: mood of it in the next one occasionally. Now, one
Speaker 1: of the big themes has actually become a pretty common
Speaker 1: one over the last several years is the theme of
Speaker 1: data breaches. Like I have previously called earlier years like
Speaker 1: the Year of the Data Breach, but I think the
Speaker 1: same thing can be said of twenty nineteen. So a
Speaker 1: couple of years ago, the credit reporting company Equifax dealt
Speaker 1: with a massive data breach that resulted in a host
Speaker 1: of investigations in the United States both the state and
Speaker 1: federal levels, and the company ultimately agreed to pay out
Speaker 1: somewhere between five and seven hundred million dollars as a
Speaker 1: result in fines. They were also giving people the opportunity
Speaker 1: to lay a claim for at least some sort of
Speaker 1: compensation for this data breach. People were invited to apply
Speaker 1: for a payout of one hundred twenty five dollars, not
Speaker 1: exactly a princely sum when you consider having your personal
Speaker 1: information rated due to insufficient protections on a corporate level.
Speaker 1: In September two tho nineteen, Equifax announced that people claiming
Speaker 1: a payout would need to provide proof that they had
Speaker 1: also enrolled in a credit monitoring service by October, because
Speaker 1: that would show that the people had concern about their
Speaker 1: own credit rating and their own personal information, that they
Speaker 1: weren't just looking for money to get money, but that
Speaker 1: they actually were actively trying to keep track of this stuff,
Speaker 1: or else the claim could be denied, and the FTC
Speaker 1: had previously already warned that due to the number of claims,
Speaker 1: people were likely to get far less than a hundred
Speaker 1: twenty five dollars because there was only a pool of
Speaker 1: around thirty one million dollars that had been set aside
Speaker 1: for these payouts. You know that five d seventy five
Speaker 1: to seven million dollars that wasn't set aside for payouts.
Speaker 1: Only thirty one million was set aside for payouts. And
Speaker 1: I know it's crazy to say only thirty one million,
Speaker 1: but when you look at the scale of this data breach,
Speaker 1: you realize that that means if everyone who was affected
Speaker 1: lays claim to a payout, you don't get very much.
Speaker 1: But this whole mess has prompted more conversations about data
Speaker 1: secure and corporate accountability, which is a good thing. It's
Speaker 1: sad that it comes at the expense of this terrible mistake,
Speaker 1: but at least people are talking more seriously about this.
Speaker 1: Hopefully something will actually happen because of it. Now, we've
Speaker 1: seen lots of these stories over the last several years,
Speaker 1: and they really do show no sign of slowing down
Speaker 1: right now, which is unfortunate. In twenty nineteen, there were
Speaker 1: some truly notable examples across different industries. I pulled data
Speaker 1: from Norton, the information security company to look at some
Speaker 1: of the big ones. One of those would be Capital One,
Speaker 1: the financial company, reported that hackers were able to access
Speaker 1: a large amount of data, affecting one hundred six million
Speaker 1: records in the company's files. Most of those records were
Speaker 1: for a credit card applications rather than established accounts. So
Speaker 1: it wasn't like the hackers necessarily got a lot of
Speaker 1: credit card info, but they got a lot of application information.
Speaker 1: And when you think about the info you need to
Speaker 1: provide hide when you apply for a credit card, it
Speaker 1: includes stuff like, you know, personal information that is really
Speaker 1: important to you. And it might be mundane stuff like
Speaker 1: your name, which, hey, you know, no big deal, someone
Speaker 1: knows your name, okay, But it might include your email,
Speaker 1: which again maybe that's more frustrating or or irritating. But
Speaker 1: then there's also your physical address, which gets a little
Speaker 1: more spooky scary, your credit score, your income, maybe your
Speaker 1: Social Security number, essentially all the stuff it would take
Speaker 1: for someone to steal your identity and sell it off
Speaker 1: on the dark web, which is not very cool. Capital
Speaker 1: one hacker named Page Thompson targeted a third party cloud
Speaker 1: computing company that Capital One had relied upon to host
Speaker 1: the credit application services. She exploited a vulnerability in a
Speaker 1: web at firewall to get illegal access to the data.
Speaker 1: She was arrested for the data intrusion, and then she
Speaker 1: was held in a men's detention center. Uh, she's transgender,
Speaker 1: and this gets into a whole thing with criminal justice
Speaker 1: systems and the treatment of people who are transgender, which
Speaker 1: honestly goes way beyond the scope of this podcast. But
Speaker 1: I'll just say that when I read that she was
Speaker 1: held in a men's detention center, that really upset me. Now,
Speaker 1: I don't disagree with her being detained she broke the law,
Speaker 1: or allegedly broke the law. She denies this. I more
Speaker 1: object that it wasn't in a more appropriate setting. Anyway,
Speaker 1: She's awaiting trial for the case. That trial is scheduled
Speaker 1: right now for March twenty. She has pled not guilty
Speaker 1: to the charges. Another company to experience a data breach
Speaker 1: was door Dash, the food delivery service. The company experienced
Speaker 1: the breach in May, but didn't disclose it until September
Speaker 1: twenty nineteen. A third party access the information of nearly
Speaker 1: five million drivers and customers without permission. The information they
Speaker 1: were able to access included personal information, including the last
Speaker 1: few digits of credit card and bank account numbers, but
Speaker 1: not the whole number. It was just that last little string.
Speaker 1: It also included the hashed passwords of many account holders,
Speaker 1: so it's always good to change your password if you
Speaker 1: make use of services that later reveal that they've been hacked,
Speaker 1: it's always a good idea to change that information. And also, well,
Speaker 1: I'll get to it, but don't use the same password everywhere.
Speaker 1: It's a little spoiler alert for a future discussion. So
Speaker 1: early in the year, the service Evite had a data
Speaker 1: breach that affected one hundred million records, again exposing customer
Speaker 1: information like names, addresses, phone numbers, and the password that
Speaker 1: they used for the account. And again the exposure of
Speaker 1: passwords drives home that importance right use unique passwords with
Speaker 1: different services. That way, if one service is compromised, you
Speaker 1: don't have to worry about the hackers accessing everything else
Speaker 1: you use using the same password. If you're using one
Speaker 1: password for everything, then you're essentially opening up the door.
Speaker 1: As soon as one breach is effective, all of your
Speaker 1: services have been breached. So don't use the same password
Speaker 1: for everything. Use a password vault, UH, use stuff like
Speaker 1: two factor authentication. All of that will help minimize your risk.
Speaker 1: It doesn't eliminate it, but it minimizes it. And if
Speaker 1: you find out one of the services you use was compromised,
Speaker 1: change all that log and information right away. Now. The
Speaker 1: medical industry also saw its share of data breaches the
Speaker 1: American Medical Collection Agency, which is a company that collects
Speaker 1: overdue payments for various medical labs. So essentially, these are
Speaker 1: the folks who come after you if you haven't paid
Speaker 1: certain medical bills. They also had a breach. Hackers access
Speaker 1: more than twenty million records, and the information included not
Speaker 1: just personal information, but even stuff like credit card information.
Speaker 1: The actual breach began back in the summer of eighteen,
Speaker 1: but the vulnerability remain unpatched until Arch twenty nineteen. In
Speaker 1: June of this year, the company filed for bankruptcy protection.
Speaker 1: So you know, things are just going great for them.
Speaker 1: And close to home, Georgia Tech suffered a data breach
Speaker 1: when some third party gained access to a university owned database.
Speaker 1: The database had tons of personal information on current and
Speaker 1: former students, as well as staff and faculty at the college,
Speaker 1: including things like social security numbers. In total, one point
Speaker 1: to six five million people were affected by that data breach.
Speaker 1: The college is reaching out to offer credit monitoring and
Speaker 1: identity theft protection services for those affected by it, but
Speaker 1: still yikes. The U. S Government also was not immune
Speaker 1: to data breaches. The Federal Emergency Management Agency, or FEMA
Speaker 1: had a data breach, not because some hacker broke into
Speaker 1: the system, but because the agency accidentally released files containing
Speaker 1: sensitive information, such as the personal info of more than
Speaker 1: two million people. So ad trombone noise insert here now.
Speaker 1: According to the US Inspector General, FEMA violated the Privacy
Speaker 1: Act of nineteen seventy four by releasing this data to
Speaker 1: a third party contractor. The contractor was in charge of
Speaker 1: securing temporary lodging for people who are affected by emergencies
Speaker 1: and disasters, so like a fire or a flood. But
Speaker 1: the data FEMA provided was far more extensive than what
Speaker 1: was actually needed for this contractor to do its job,
Speaker 1: and so that data included stuff like banking information and
Speaker 1: bank transit numbers and stuff like that, stuff that did
Speaker 1: not need to be shared. Now, considering that this breach
Speaker 1: affected people who are already dealing with emergency situations that
Speaker 1: were bad enough to necessitate a relocation, that's a that's
Speaker 1: a big, big ouch. Making matters worse is that even
Speaker 1: some of the companies that are dedicated towards security and
Speaker 1: privacy have had data breaches in twenty nineteen. Take nord
Speaker 1: VPN for example. That was a service that I've used
Speaker 1: in the past. A VPN is a virtual private network,
Speaker 1: and the purpose of a VPN is to allow a
Speaker 1: user to log into a remote server and then use
Speaker 1: various internet services so that they can't be traced back
Speaker 1: to the end user. Now, at first glance, that might
Speaker 1: sound like it's shady, but it's actually a really useful service.
Speaker 1: If you're concerned about your own data security, you can
Speaker 1: use a VPN when you're in areas where you can't
Speaker 1: be certain of the security of the network, and that
Speaker 1: helps improve your own security. But then this year, word
Speaker 1: came out that nord vpn had an internal private key
Speaker 1: exposed back in which created the possibility for hackers to
Speaker 1: create a server and host it on the nord vpn
Speaker 1: service as if it were a valid Nord VPN server. Now,
Speaker 1: that would mean that an end user who was relying
Speaker 1: on nord vpn might end up logging into one of
Speaker 1: the hackers computers thinking it was a secure VPN server,
Speaker 1: and the hacker we get to see all the traffic
Speaker 1: coming through that computer. Nord vpn has stated that since
Speaker 1: the breach, the company has patched this problem and that
Speaker 1: the company doesn't keep a log of any user activity,
Speaker 1: So hackers would only capture any traffic that happened on
Speaker 1: their own server during that breach. They wouldn't have gotten
Speaker 1: traffic information from any other servers on the nord VPN network.
Speaker 1: They wouldn't be able to look at historic data because
Speaker 1: the company doesn't keep any Still, that might come as
Speaker 1: a little comfort to a community of users who presumably
Speaker 1: have subscribed to the service out of a desire to
Speaker 1: maintain privacy and security. Now, these stories are pretty discouraging,
Speaker 1: and to be honest, it's just the tip of a
Speaker 1: huge iceberg. According to a report from Javelin Strategy and Research,
Speaker 1: there were five thousand, one hundred eighty three reported data
Speaker 1: breaches in the first nine months of two thousand nineteen alone.
Speaker 1: Now keep in mind those are reported data breaches. There
Speaker 1: are likely many more that have either gone discovered or unreported.
Speaker 1: Now those breaches represent nearly eight billion records exposed. The
Speaker 1: rate shows a thirty three increase in breaches compared to
Speaker 1: two thousand eighteen. Most of those breaches happened to companies
Speaker 1: with fewer than one employees, so these weren't like the
Speaker 1: big big news items like Capital One or door Dash.
Speaker 1: There were some good news items in the report. However,
Speaker 1: not everything was dour. Credit Card security has improved thanks
Speaker 1: to chip technology, so there was actually a decline in
Speaker 1: credit card frauds. That's something to be thankful for. Now.
Speaker 1: It can be a hassle just to practice good secure
Speaker 1: internet habits, as I've covered in previous episodes of tech Stuff.
Speaker 1: As users, we all have a responsibility to protect our
Speaker 1: data as best we can, But if we want to
Speaker 1: do useful stuff with that data, ultimately we eventually have
Speaker 1: to hand it over to other entities, and when these
Speaker 1: other entities have data breaches, it's also a breach of trust.
Speaker 1: If we don't trust in the systems, things fall apart. Now,
Speaker 1: I think it highly unlikely that we're going to see
Speaker 1: fewer attempts at data breaches as time goes on. It
Speaker 1: only makes sense we're gonna keep seeing them and probably
Speaker 1: see efforts increase over time. So hopefully we'll have more
Speaker 1: success stories revolving around foiling a data breach. But the
Speaker 1: world of information security is typically a see saw type
Speaker 1: of thing. The hackers get better at cracking systems and
Speaker 1: exploiting vulnerabilities, companies get better at patching the holes, but
Speaker 1: then the hackers look for different holes, and the entire
Speaker 1: cycle repeats itself. Meanwhile, people like you and me get
Speaker 1: caught up with our data potentially at risk, which is
Speaker 1: kind of gross. Well, let's stick with some more bummers.
Speaker 1: Um I figured if I frontload the episodes with bummers,
Speaker 1: then I can make some space in the back half
Speaker 1: for some more fun stuff. But first, let's talk about
Speaker 1: financial performance. So two thousand nineteen saw some pretty rough
Speaker 1: quarters for a you companies. One of those was Uber.
Speaker 1: Now I mentioned this in an earlier episode this year
Speaker 1: about fake it until you Make it, but Uber leads
Speaker 1: the way among ride hailing companies in a category you
Speaker 1: don't want to appear in, which is the most money
Speaker 1: lost per quarter. Now, to be clear, all ride hailing
Speaker 1: companies are losing money. None of them are profitable. No
Speaker 1: one has figured out how to make a business model
Speaker 1: that has a profitable side as of yet. But Uber
Speaker 1: is losing money on a scale that's pretty monumental. During
Speaker 1: the second quarter of twenty nineteen, the company posted revenues
Speaker 1: of three billion dollars, which, come on, that's that's a
Speaker 1: lot of chadder, But they posted losses of five billion dollars.
Speaker 1: Wolf Uber CEO stated that a large part of those
Speaker 1: losses came from the I P O process that Uber
Speaker 1: went through the initial public offering. The company had bought
Speaker 1: back shares that belonged to employees, which posted in the
Speaker 1: company records as an expense, but that was a one
Speaker 1: time expen Uber won't be buying back shares again in
Speaker 1: the future. Still, analysts say that even taking into account
Speaker 1: the stock compensation cost, Uber would have lost more than
Speaker 1: a billion dollars. And that's just one quarter. That's not
Speaker 1: all of twenty nineteen, So if my math is right,
Speaker 1: there are four quarters every year. So the question is,
Speaker 1: can Uber find a way to be profitable in the
Speaker 1: right hailing and related businesses or will it have to
Speaker 1: bank on investors bailing the company out again. I'm worried
Speaker 1: we're looking at another bubble that's just about to burst.
Speaker 1: But I hold out hope that companies like Uber Left
Speaker 1: and other right hailing services are able to turn things
Speaker 1: around preferably while also treating their employees well and ensuring
Speaker 1: the safety of their customers, which are also ongoing issues
Speaker 1: with many of these right hailing companies. More to say
Speaker 1: about that in just a moment, but first let's take
Speaker 1: a quick break now. Speaking of safety and right inhaling,
Speaker 1: it's also important to hold up Lift to the magnifying
Speaker 1: glass and not give that company a free pass while
Speaker 1: raking Uber over the coals. Numerous women have come forward
Speaker 1: in lawsuits against Lift, stating that they were the victims
Speaker 1: of assault. They also say the company did nothing to
Speaker 1: prevent those assaults, and they didn't do enough to ensure
Speaker 1: passengers safety. And on top of all that, they say
Speaker 1: that Lift ignored complaints filed after the assaults took place
Speaker 1: and then downplayed the events to the media. One lawyer
Speaker 1: states that there's evidence that Lift purposefully withheld cooperation from
Speaker 1: law enforcement officers who are investigating these claims. Now Lift
Speaker 1: is not the only right hailing company to come under
Speaker 1: scrutiny due to safety concerns and reports of assault, and
Speaker 1: there are also cases in which drivers have been assaulted
Speaker 1: by passengers. This is an ongoing story, and there are
Speaker 1: a lot of discussions about measures that could help protect
Speaker 1: passengers and drivers alike. But the rollout is likely to
Speaker 1: be re regional and staggered over weeks or months, so
Speaker 1: it's not exactly the super fast response you would hope for. Necessarily,
Speaker 1: all right, let's keep that bummer train of moving. In
Speaker 1: January two thousand, nineteen, the utility company Pacific Gas and
Speaker 1: Electric or pg n E, declared bankruptcy. Now, this company
Speaker 1: serves customers along the West Coast, and in twenty seventeen,
Speaker 1: it was found guilty of starting a series of wildfires
Speaker 1: in California, which then put the company thirty billion dollars
Speaker 1: in debt. That's billion with a b P. G n
Speaker 1: E emerged from bankruptcy in September twenty nineteen after agreeing
Speaker 1: on an eleven billion dollar settlement with insurance companies. Now,
Speaker 1: this is the same utility company that would shut down
Speaker 1: power to California residents in a series of planned blackouts
Speaker 1: during a particularly windy season in order to avoid a
Speaker 1: similar situation and which perhaps a broken power line might
Speaker 1: start a wildfire. The blackouts affected more than half a
Speaker 1: million people in the San Francisco region. So that was
Speaker 1: not a great story, and the tech sector obviously covered
Speaker 1: it quite a bit, with so many tech companies located
Speaker 1: in the Bay Area. Now, at least seven coal mining
Speaker 1: companies in the United States have declared bankruptcy in twenty nineteen,
Speaker 1: which marked the first year in which more US citizens
Speaker 1: got electricity from renewable sources than from coal powered plants.
Speaker 1: At least thirty three oil and gas producers have gone
Speaker 1: bankrupt as well, and the Zoo might imagine this has
Speaker 1: made lots of folks in the coal and oil industries upset.
Speaker 1: And while I definitely don't want to see people face
Speaker 1: hardship as companies closed down, I don't want to see
Speaker 1: people out of work. I also think the move away
Speaker 1: from fossil fuels is a necessity. So it's my hope
Speaker 1: that employees of these companies can find work in the
Speaker 1: renewable energy sector. I think it's imperative we rid ourselves
Speaker 1: of our dependence upon fossil fuels. But we also have
Speaker 1: to make sure that the people who were employed by
Speaker 1: that into tree can find good work elsewhere and they're
Speaker 1: not just left in the lurch. We have to make
Speaker 1: sure that whatever plans we have to transition away from
Speaker 1: fossil fuels also take into account the people whose livelihoods
Speaker 1: depend upon those industries. Now, speaking of going elsewhere, what
Speaker 1: do you do when your company is in financial crisis
Speaker 1: and the company's main product is renting out office space
Speaker 1: to tech startups. That's the question that we Work has
Speaker 1: been trying to answer for much of twenty nineteen. So
Speaker 1: we Work was launched back in. The company leases out
Speaker 1: office space to tenants and markets around the globe, So
Speaker 1: essentially at leases out space and buildings and then sublets
Speaker 1: that space to smaller companies. And in that regard, it's
Speaker 1: not really a tech company in of itself, but it's
Speaker 1: clients are in largely the startup tech space. It's kind
Speaker 1: of the market that we Work targets. Specifically, we Work
Speaker 1: offices tend to have amenities that you might find in
Speaker 1: a art up that has a lot of venture capital
Speaker 1: and angel investors behind it. So, you know, a lot
Speaker 1: of tech journals have covered the company's rather tumultuous twenty nineteen.
Speaker 1: We Work initially planned to hold an initial public offering
Speaker 1: in September twenty nineteen, when it would become a publicly
Speaker 1: traded company on the stock market. Only things did not
Speaker 1: go quite as planned. First, something that would have made
Speaker 1: my eyebrows go up was that the founder or co founder,
Speaker 1: Adam Newman, liquidated around seven hundred million dollars worth of
Speaker 1: we Work stock before it went into its initial public offering. Now,
Speaker 1: that does not necessarily mean that Newman lacked confidence about
Speaker 1: how the stock market would treat his company, but a
Speaker 1: lot of folks tend to interpret those types of moves
Speaker 1: as kind of a message that the founder doesn't think
Speaker 1: things are gonna go well, so they're cashing out before
Speaker 1: the value of their stock tanks. Now, when the I
Speaker 1: p O paperwork became public in August twenty nineteen, journalists
Speaker 1: pointed out that the company had been experiencing some pretty
Speaker 1: massive losses, not unlike the right hailing businesses I talked
Speaker 1: about earlier in this episode, there were questions about whether
Speaker 1: or not we Work would ever be profitable, so also
Speaker 1: like the right hailing services. In fact, I think there
Speaker 1: are a lot of parallels between the two. There's also
Speaker 1: a report that in some we Work offices the company
Speaker 1: had included stuff like these little phone cubbies or phone
Speaker 1: booths that had equipment in them that was emitting for
Speaker 1: malde hyde fumes, which isn't a great thing either. We
Speaker 1: Work ended up scuttling its plans for an I p
Speaker 1: O and postponed those plans UH to late twenty nineteen, which,
Speaker 1: as far as this recording is concerned, UH still hasn't
Speaker 1: happened those those I p O plans. Newman actually would
Speaker 1: step down as CEO shortly thereafter. He reportedly got a
Speaker 1: one point seven billion dollar buyout from soft Bank, which
Speaker 1: effectively controls we Work. Now, we Work began to all
Speaker 1: off some other companies it had acquired over recent years,
Speaker 1: and it also laid off about twenty percent of its workforce.
Speaker 1: Reporters noted that the company had also started to explore
Speaker 1: ways it might back out of some leases in various regions,
Speaker 1: while simultaneously announcing plans about opening news space in different cities. Also,
Speaker 1: just here's a personal note to soft Bank. You can
Speaker 1: pay me a billion dollars and I won't even settle
Speaker 1: you with a company that has no known pathway to profitability.
Speaker 1: It's a bargain. Just show me the money now. Not
Speaker 1: to get too sidetracked by all this, but I feel
Speaker 1: like we Work and the ride hailing services really fall
Speaker 1: into that fake it until you make it category I
Speaker 1: covered on a recent episode of Tech Stuff, you know,
Speaker 1: the one where I ranted for like forty five minutes.
Speaker 1: I find it perplexing that the motivating factor for investment
Speaker 1: isn't profitability but just company growth, as in, a company
Speaker 1: doesn't need to show it can be profitable if it
Speaker 1: can continue to expand rapidly. But in my mind, that
Speaker 1: just means that now instead of a small, unprofitable company,
Speaker 1: you've got a large, more complex, unprofitable company. And I
Speaker 1: suppose the hope is that you will eventually quote unquote
Speaker 1: make it up in volume, meaning that whenever you achieve
Speaker 1: some predetermined magical scale, your operations will become profitable. But
Speaker 1: from my perspective, it seems that that very rarely happens,
Speaker 1: and that you're more likely to find yourself pouring money
Speaker 1: into a sinking ship, and then people like Newman get
Speaker 1: the benefit of a lifeboat that's loaded down with cash. Anyway,
Speaker 1: I'm not an expert in corporate finance, so it's entirely
Speaker 1: possible that I'm overlooking something obvious. It's just to me,
Speaker 1: this model doesn't make much sense. I get the desire
Speaker 1: to grow year over year, although I'm not crazy about it,
Speaker 1: but without the profitability part in there, and growth is unsustained,
Speaker 1: bowl you'll eventually collapse in on yourself because no one's
Speaker 1: gonna keep giving you money just to grow. All right,
Speaker 1: how about we chat a bit about everyone's favorite social
Speaker 1: media platform that continues to play an increasingly pivotal role
Speaker 1: in how we access information and misinformation. So it's time
Speaker 1: to check in on what Facebook was up to in
Speaker 1: twenty nineteen. And boy howdy, there was a lot going on.
Speaker 1: I'm not even going to cover all of it, because
Speaker 1: you could do a full episode on just the shenanigans
Speaker 1: Facebook got up to in nineteen, But anyway, let's look
Speaker 1: at some of the big ones. For one thing, the
Speaker 1: company received a hefty fine for the Cambridge Analytica scandal,
Speaker 1: in which Facebook's app permissions allowed a data collection company
Speaker 1: to access not just the information of people who downloaded
Speaker 1: the app or who installed the app, but also the
Speaker 1: data of all of their contacts on Facebook who did
Speaker 1: not opt in. The fine was five billion dollars of
Speaker 1: princely some no doubt about it, But there are critics
Speaker 1: who said that's not nearly severe enough of a penalty
Speaker 1: considering the scope of the betrayal of trust and user information.
Speaker 1: After all, Facebook as a company earned twenty two billion
Speaker 1: dollars in revenue in so yeah, five billions a lot
Speaker 1: of cash, But when you're looking at numbers like twenty
Speaker 1: two billion dollars in revenue, a five billion dollar fine
Speaker 1: might not be enough to make Facebook actually take greater
Speaker 1: steps towards ensuring user security. In June two thousand nineteen,
Speaker 1: Facebook announced the launch of Libra, the cryptocurrency project. Facebook
Speaker 1: also announced the Libra Association, a consortium of twenty eight
Speaker 1: companies that would form the initial group responsible for bringing
Speaker 1: this cryptocurrency into reality, with a promise that more companies
Speaker 1: would soon follow to join the consortium. So think of
Speaker 1: it as a digital currency, not too different from something
Speaker 1: like bitcoin, although the Libra cryptocurrency would be based on
Speaker 1: real world assets and not just its own own uh
Speaker 1: sense of value among the community. However, this announcement Facebook
Speaker 1: made was met with scrutiny, particularly on the part of
Speaker 1: various governmental agencies around the world, and to be fair,
Speaker 1: it's more accurate to say Facebook is the leading voice
Speaker 1: in this project UH and is not the only entity
Speaker 1: behind it, but for the purposes of most reporting, people
Speaker 1: tend to simplify it by saying Facebook now. Governments began
Speaker 1: to call for regulations and rules to guide any sort
Speaker 1: of cryptocurrency effort, particularly in the wake of some high
Speaker 1: profile missteps by Facebook, like the aforementioned Cambridge Analytica scandal.
Speaker 1: By October twenty nineteen, more than of those original companies
Speaker 1: had walked away from the Libra consortium. The first to
Speaker 1: leave was PayPal, and in an interview with Forbes, PayPal
Speaker 1: CEO Dan Shulman said that when they were able to
Speaker 1: see how far the project needed to go before it
Speaker 1: could roll out, and they heard that with the amount
Speaker 1: of work that PayPal needed to do to meet its
Speaker 1: own internal goals that were not related to Libra, they said, oh, well,
Speaker 1: just it makes sense for us to be part of
Speaker 1: the consortium. We needed to focus on us first. Now,
Speaker 1: whether that was the same justification for the other companies
Speaker 1: that bailed on the Libra association, I can't say, but
Speaker 1: companies like Visa, Stripe, MasterCard, and eBay also left the association.
Speaker 1: With the increased interest among various governments to create rules
Speaker 1: to minimize the risk of something like a new cryptocurrency,
Speaker 1: it seems like Libra has a long way to go
Speaker 1: before it becomes a practical currency, if it ever does.
Speaker 1: Another big Facebook story revolves around these social media platforms
Speaker 1: role in disseminating information and misinformation. This was a big
Speaker 1: theme throughout twenty nineteen, Mark Zuckerberg stated before the US
Speaker 1: government that he feels Facebook shouldn't play a role in
Speaker 1: fact checking stuff like political ads. So if a politician
Speaker 1: wanted to post an ad to face Book that contained
Speaker 1: incorrect or outright false information, they could do that and
Speaker 1: Facebook would not intervene. As the company continues to deal
Speaker 1: with accusations that it is profiting from efforts of political
Speaker 1: manipulation and deception, this has been an area of focus
Speaker 1: for a lot of folks. Moreover, Facebook's algorithm favors posts
Speaker 1: that drive a lot of engagement, so likes, shares comments
Speaker 1: that kind of thing. Now, in turn, that generates more
Speaker 1: screen time for Facebook and us more revenue for the company.
Speaker 1: So the company has a financial incentive to give a
Speaker 1: platform for stuff that gets people riled up, which in
Speaker 1: turn contributes to things like political extremism, which I'll talk
Speaker 1: more about in our next episode. It's a pretty ugly situation,
Speaker 1: and Zuckerberg so far seems to be intent on absolving
Speaker 1: himself of any responsibility for creating a platform that can
Speaker 1: be gamed in this way, and the platform itself benefits
Speaker 1: from this. I can't stress that enough. Facebook makes money
Speaker 1: by having these sorts of posts on it because it
Speaker 1: generates a lot of activity, and that activity translates into
Speaker 1: more screen time, which translates into more money for Facebook,
Speaker 1: so they have a financial incentive to keep things going
Speaker 1: the way they are. Towards the end of twenty nineteen,
Speaker 1: the Federal Trade Commission in the United States began to
Speaker 1: take a closer look at Facebook's proposed plan to integrating
Speaker 1: its various properties together, uh those being Facebook, Messenger, WhatsApp,
Speaker 1: and Instagram. So while Facebook is trying to do this,
Speaker 1: it is also under investigation by the US government in
Speaker 1: an antitrust case. A tighter integration between the different platforms
Speaker 1: would make it more difficult to separate down the line,
Speaker 1: and it's possible that the US government will demand Facebook
Speaker 1: to break up its various properties and spin them off
Speaker 1: as independent companies. So there's a chance that by the
Speaker 1: time you hear this, the FTC will have filed an
Speaker 1: injunction against Facebook from integrating these services further. And the
Speaker 1: hits just keep on coming. Between when I started making
Speaker 1: notes for this episode and when I actually sat down
Speaker 1: in the studio to record it right now, you had
Speaker 1: another story about Facebook broke in mid December Facebook sent
Speaker 1: a letter to the United States Senate. The letter revealed
Speaker 1: that the company could locate users even if they had
Speaker 1: opted out of being tracked with location data. Now, I
Speaker 1: would argue that this isn't as big a news story
Speaker 1: as it was made out to be because Facebook stated
Speaker 1: that they could use meta data, such as tagged photos
Speaker 1: that indicated a location and time, as well as who
Speaker 1: was in the tagged photo. But that seems pretty intuitive
Speaker 1: to me. If I go to a party and I
Speaker 1: take a photo of you, you're at the party two,
Speaker 1: and then I post from the party and I tagged
Speaker 1: the location of the party and I tag you, then
Speaker 1: Facebook has data on where I am, where you are,
Speaker 1: what time we were there, and all of that that.
Speaker 1: It's all there in Facebook's data even if we don't
Speaker 1: have location information turned on regularly. Other ways Facebook could
Speaker 1: make guesses as to where people are depend less on
Speaker 1: direct user input and more and stuff like I P addresses,
Speaker 1: which aren't as exact. They can give you a general idea,
Speaker 1: but they're not full proof. Now, Facebook defended its policies
Speaker 1: by stating that it could detect suspicious logins using this approach,
Speaker 1: such as if a person in one part of the
Speaker 1: country were to suddenly appear as though they were trying
Speaker 1: to log into Facebook, but from an IP address located
Speaker 1: on the other side of the world. That would indicate
Speaker 1: that maybe somebody else had gotten hold of some log
Speaker 1: in information and they were trying to steal someone's Facebook account.
Speaker 1: Of course, stuff like VPNs could also create this scenario.
Speaker 1: You could be using a VPN to log into Facebook
Speaker 1: from the other side of the world for various reasons,
Speaker 1: and that could raise a false flag. But I do
Speaker 1: see what Facebook was trying to say. Now, one last
Speaker 1: Facebook story before I take another break. In mid November,
Speaker 1: a thief stole several hard drives from the car of
Speaker 1: a Facebook employee, and those hard drives included unencrypted payroll
Speaker 1: data for thousands of Facebook employees. The data covered about
Speaker 1: twenty nine thousand people who are working for Facebook, so
Speaker 1: some of those folks presumably no longer work for the company. Now,
Speaker 1: in this case, we're talking about physical hardware taken from
Speaker 1: a car, so this was not a data breach in
Speaker 1: the traditional sense. Now I'm surprised the data was unencrypted.
Speaker 1: I would imagine that in most cases you would want
Speaker 1: to encrypt that information, even on just a physical hard drive,
Speaker 1: but presumably it wasn't because no one ever assumed the
Speaker 1: hard drives would leave the possession of Facebook. Still, yikes,
Speaker 1: we got a few more bummers to go, but before
Speaker 1: we do, let's take another quick break. So a big
Speaker 1: story to play out over the course of twenty nineteen
Speaker 1: was the world's response to the Chinese telecom company Huawei,
Speaker 1: which I've also covered in a previous episode of tech Stuff.
Speaker 1: The company isn't that old, but it already stands to
Speaker 1: be one of the major players in rolling out the
Speaker 1: technology that will enable five G wireless connectivity around the world.
Speaker 1: In fact, with the outstanding orders the company already has
Speaker 1: in Europe, it leads the pack in terms of five
Speaker 1: G equipment sales. This is despite some hefty restrictions placed
Speaker 1: upon Huawei, mostly from the United States. In mid December
Speaker 1: twenty nineteen, it was revealed that Chinese officials had leveraged
Speaker 1: tremendous pressure on European countries to sign contracts to purchase
Speaker 1: five G equipment from Huawei or face consequences such as
Speaker 1: canceled trade agreements. You know, wider trade agreements throughout China.
Speaker 1: Now at the heart of the dispute is a concern
Speaker 1: that Huawei has close ties with the Chinese government and
Speaker 1: that as a provider of telecommunications equipment, it's possible the
Speaker 1: company could potentially build in back doors and other features
Speaker 1: that would allow China to access vital communications channels across
Speaker 1: the globe. In fact, such back doors had previously been found,
Speaker 1: although they could have been vulnerabilities not intentionally placed there,
Speaker 1: but still it raises some eyebrows. Huawei argues that it's
Speaker 1: actually a private company and it doesn't have any direction
Speaker 1: from the Chinese government, and that such fears are unfounded.
Speaker 1: But it hasn't stopped countries like the United States from
Speaker 1: eyeing Huawei with suspicion, And to be fair, China is
Speaker 1: putting some pressure on various countries that are you know,
Speaker 1: conflicted about using Huawei, and that seems to send a
Speaker 1: message that China's kind of deeply integrated with the company's
Speaker 1: you know, day to day operations. Although Huawei says, no, no, no,
Speaker 1: this is just a government looking out for a company
Speaker 1: that exists within its borders. That's it. It's not a
Speaker 1: sign that it's a Chinese government operation. So it's a
Speaker 1: complicated thing, and it all depends upon whose perspective you believe.
Speaker 1: The truth is probably somewhere in the middle. Speaking of China,
Speaker 1: the country's conflicts with Hong Kong have spilled over into
Speaker 1: the tech space in various ways. A large number of
Speaker 1: Hong Kong citizens mobilized against the Chinese government, initially protesting
Speaker 1: a policy that would allow for extradition of Hong Kong
Speaker 1: citizens accused of certain crimes and they would be extradited
Speaker 1: to mainland China. Now, given China's reputation when it comes
Speaker 1: to justice, the too long didn't read version of that is,
Speaker 1: it's a very bad reputation. Many Hong Kong citizens protested
Speaker 1: against this policy. They stated that it was undermining the
Speaker 1: independence of Hong Kong, which was something China had previously
Speaker 1: promised it wouldn't mess around with. While China would ultimately
Speaker 1: withdraw the extradition bill, this was really the push that
Speaker 1: got the ball rolling, and protests continue to this day
Speaker 1: because they extend beyond that. You could think of that
Speaker 1: as the straw that broke the camel's back. Now the
Speaker 1: tech angle of all of this, there's the video game
Speaker 1: company Blizzard that I recently covered on tech stuff. While
Speaker 1: they make a digital card battle game called Hearthstone, and
Speaker 1: during a Hearthstone tournament in Taiwan, a Hong Kong player
Speaker 1: named why Chung or blitz Chung that's his gamer handle,
Speaker 1: showed support for Hong Kong protesters on camera during an
Speaker 1: interview Blizzard band blitz Chung from the tournament. The Blizzard
Speaker 1: also banned the UH the people who were conducting the interview,
Speaker 1: even though they were doing their best to try and
Speaker 1: avoid appearing like they were enabling this UH and that
Speaker 1: band of blitz Chung would prevent him from playing in
Speaker 1: any grand Master tournament for a year, and he would
Speaker 1: have to forfeit the prize money he had accumulated up
Speaker 1: to that point in the tournament. When pressed to explain
Speaker 1: why they leveled such a harsh ban, Blizzards stated that
Speaker 1: blitz Chung had violated a policy that prohibited players from
Speaker 1: doing anything that would tarnish the company's image or within
Speaker 1: the public. Now, that raised a pretty strong counter objection
Speaker 1: among the gaming community at large. Many people hypothesized that
Speaker 1: blizzards response was largely motivated by the fact that ten Cent,
Speaker 1: a Chinese company, owns a stake of ownership in Activision.
Speaker 1: Blizzard they don't own the company outright, they just own
Speaker 1: a percentage. There was also speculation that Blizzard didn't want
Speaker 1: to endanger operations within the Chinese market. The Chinese market
Speaker 1: represents billions of dollars of potential revenue, so they didn't
Speaker 1: want to put that at risk. Critics also pointed out
Speaker 1: that Blizzards punishments toward other gamers around the world in
Speaker 1: response to vulgarity, you know, clear cut cases where someone
Speaker 1: has violated that policy. They were rarely as severe as
Speaker 1: what blitz Chung experienced. Blizzards subsequently walked back the punishment
Speaker 1: a little bit. They returned the prize winnings to blitz Chung,
Speaker 1: but they kept a ban in place for half a
Speaker 1: year rather than a full year. Interestingly, Chinese companies, namely Tencent,
Speaker 1: have partial ownership in other video game companies, not just Blizzard,
Speaker 1: and some of these companies also produce games that have
Speaker 1: a tournament circuit, and in some of those cases, there
Speaker 1: seems to be no restriction on what players can say
Speaker 1: about the situation in Hong Kong. So that raises questions
Speaker 1: about whether Blizzard was being proactively responsive for fear of
Speaker 1: upsetting the Apple cart or if possibly other companies have
Speaker 1: seen the backlash that Blizzard faced and they're setting themselves
Speaker 1: apart by taking a different approach. Oh and I should
Speaker 1: also backtrack just a little bit. So remember how I
Speaker 1: mentioned Whahwei is a leading company when it comes to
Speaker 1: five G technologies. Well, that reminds me I should quickly
Speaker 1: address that a T and T and the company's attempt
Speaker 1: to leverage the concept of five G and how that
Speaker 1: got a lot of scorn in the tech community. Okay,
Speaker 1: so part of this story hinges on the fact that
Speaker 1: five G isn't just a single technology or anything like that.
Speaker 1: You can't just say five G relates to this specific implementation.
Speaker 1: It's really more of a family of technologies and implementations
Speaker 1: that enable wireless data throughput at really impressive levels. And
Speaker 1: we typically describe it as speed, but the data is
Speaker 1: not actually moving faster than it was before. It's just
Speaker 1: that more data can travel all at once through a channel.
Speaker 1: So instead of thinking of it as like a one
Speaker 1: lane road where you can just somehow defy the laws
Speaker 1: of physics and drive faster than the speed of light,
Speaker 1: it's more like you have an ultra wide highway where
Speaker 1: all the cars can travel at the speed of light
Speaker 1: simul taneously, so you get more cars, more data, but
Speaker 1: they're not traveling faster than they were before. There's just
Speaker 1: more of them. The rollout of five G is taking
Speaker 1: time because it requires new infrastructure. You can't just send
Speaker 1: an update out to existing antenna's out there. You actually
Speaker 1: have to go install new ones and make them in
Speaker 1: a different density than older generations of wireless technology. You
Speaker 1: also need to have phones and other devices that can
Speaker 1: actually receive five G signals to take advantage of it.
Speaker 1: They can't just do that with their standard stuff, so
Speaker 1: it requires a whole lot of hardware upgrades across the board. Now,
Speaker 1: A T and T decided to kind of, you know,
Speaker 1: leap frog all of that. The company made a change
Speaker 1: and they pushed out an update that would replace the
Speaker 1: LTE indicator on certain A T and T smartphones with
Speaker 1: a symbol saying five G E, and the E stands
Speaker 1: for evolution, so is a five G evolution network device. Now.
Speaker 1: Critics said that A T and T was purposefully confusing
Speaker 1: the market, that it was positioning these phones as if
Speaker 1: they were already taking advantage of true five G networks,
Speaker 1: and we're operating on actual five G technology, when in
Speaker 1: fact they were actually relying on the older lt E
Speaker 1: four G technology. Making matters more confusing was that A
Speaker 1: T and T was actually rolling out legit five G infrastructure,
Speaker 1: but it was only available in limited areas, and sometimes
Speaker 1: that would just be a small area within an actual city.
Speaker 1: For example, according to analytics company open Signal, the A
Speaker 1: T and T five G E service did not outperform
Speaker 1: either T Mobile or Verizons LTE service, and so the
Speaker 1: general conclusion was that A T and T was trying
Speaker 1: to take advantage of an emerging technology to make it
Speaker 1: seem like their product, which according to tests wasn't superior
Speaker 1: to the competition, was somehow more capable. It was dirty
Speaker 1: pool wool, as go maz Adams would say. Now I
Speaker 1: should also add that while it looks to me like
Speaker 1: A T and T deliberately tried to fool folks with
Speaker 1: this whole five G evolution network approach, the situation does
Speaker 1: actually get pretty complicated because the generations of wireless connectivity
Speaker 1: are kind of lucy goosey. You can't point to say
Speaker 1: three G and give a set of firm specifications on
Speaker 1: how much data could be sent over a network per
Speaker 1: unit of time. The technologies within a generation evolve over
Speaker 1: the course of that generation, and if a company can
Speaker 1: upgrade hardware to take advantage of those evolutions, it can
Speaker 1: see improved data rate. So, in other words, not all
Speaker 1: four G networks or devices are equal. Some are capable
Speaker 1: of much better data transfer rates than others. It's even
Speaker 1: possible to have a really good network and a device
Speaker 1: on an earlier generation outperform a later generation. Example, so
Speaker 1: it's possible for you to have a really good four
Speaker 1: G network and device outperform a five G device on
Speaker 1: a five G network. Possibly it's that the Venn diagram
Speaker 1: is narrow, but it can happen, so it's not as
Speaker 1: simple as saying five G is faster than four G.
Speaker 1: It's definitely true that the potential of five G far
Speaker 1: outpaces that of four G. In other words, the best
Speaker 1: implementation of five G is always going to be better
Speaker 1: than the best implementation of four G as far as
Speaker 1: data throughput is concerned. But potential and reality are two
Speaker 1: different things, so it all depends on how it's implemented
Speaker 1: in the area that you are in. And yes, I
Speaker 1: find this all to be incredibly frustrating because as a consumer.
Speaker 1: I just want my stuff to work really well and
Speaker 1: for it to be really fast, and it's not always
Speaker 1: an easy thing to determine. I'll wrap up with a
Speaker 1: couple of short stories. One is the saga of these
Speaker 1: seven thirty seven Macs, which I covered in a recent
Speaker 1: tech Stuff episode. After two strop it crashes, governments around
Speaker 1: the world ordered that Boeing's seven thirty seven Max aircraft
Speaker 1: be grounded, pending a full investigation into what went wrong
Speaker 1: and any adjustments that need to be made. Boeing subsequently
Speaker 1: made changes to the aircraft's systems. The particular system at
Speaker 1: fault was meant to be a safety feature, a system
Speaker 1: that would kick in to counter this seven thirty seven
Speaker 1: Max's tendency to tilt its nose upward. The problem was
Speaker 1: that the safety feature could override pilot commands, and if
Speaker 1: you had a single sensor failure sending incorrect information to
Speaker 1: the safety system, that's what could cause tragedy. Now, as
Speaker 1: of this recording, the fleet of aircraft is still grounded
Speaker 1: and Boeing has suspended manufacturing any more of them for
Speaker 1: the time being. The last story I wanted to mention
Speaker 1: quickly is a follow up on a company that I've
Speaker 1: covered in a past episode of Tech Stuff. That company is,
Speaker 1: or rather was, movie Pass. So movie Pass aimed to
Speaker 1: create a subscription based service in which stomers could purchase
Speaker 1: a monthly pass to see first run movies in various
Speaker 1: movie theaters. But movie theater chains weren't super keen on
Speaker 1: this idea. Movie Pass had many notable ups and downs,
Speaker 1: most of which I covered in my episode on the company,
Speaker 1: but somehow managed to hang on longer than anyone really
Speaker 1: thought was possible. This was despite the company having to
Speaker 1: walk back it's unlimited movie Pass for a much more
Speaker 1: modest offering, which I imagine must have led to a
Speaker 1: pretty large number of customers canceling their subscriptions when suddenly
Speaker 1: their unlimited movie Pass became no, you can see three
Speaker 1: movies or you can get discounts on tickets. And thus
Speaker 1: movie Pass had to secure loans from various sources just
Speaker 1: to stay in business. Now, eventually the credits had to
Speaker 1: roll on this company, and in September twenty nine, team
Speaker 1: that's what happened. Movie Pass CEO Mitch Lowe released a
Speaker 1: statement that the company would cease operations immediately, and uh it,
Speaker 1: did you know? Movie Pass had failed to turn a
Speaker 1: profit and the opposition it faced was considerable. While the
Speaker 1: company tried lots of different approaches to right itself, those
Speaker 1: choices ultimately either didn't work or actively worked against the company,
Speaker 1: alienating the users and inviting various lawsuits to come in.
Speaker 1: And it was pretty ugly stuff, all right. That wraps
Speaker 1: up this episode, but in our next episode, I'll continue
Speaker 1: to look back on technology in twenty nineteen. There's still
Speaker 1: a lot of bummers left on that list, including some
Speaker 1: they go beyond bummer too outright disastrous. But there are
Speaker 1: a few cool things in there too, so we'll get
Speaker 1: to those as well. So if you guys have suggestions
Speaker 1: for future episodes of tech Stuff, reach out to me.
Speaker 1: The best place to do so's on social media over
Speaker 1: on Twitter and on Facebook. You can find us at
Speaker 1: text stuff, H s W and I'll talk to you
Speaker 1: again really soon. Text Stuff is a production of I
Speaker 1: Heart Radio's How Stuff Works. For more podcasts from I
Speaker 1: heart Radio, visit the i heart Radio app, Apple Podcasts,
Speaker 1: or wherever you listen to your favorite shows.