Data, penalties and dominance: QMN002

The Quartermaster, Thursday, 25 April (apologies on lateness - it took three hours for Substack to verify that KS isn't a Russian bot)

Data, penalties and dominance (today’s newsletter is a 4 minute read):

Brady here. Last month Google was fined millions for, among other EU antitrust violations, violating the General Data Protection Regulation (GDPR) (an EU law on data protection and privacy, governing processing and movement of personal data, for all individuals within the EU). This month, Facebook expects fines in the billions for its violation of data privacy laws here in the US. Given the nature of American media and big tech these last few years, none of this surprises anyone. GDPR governs so much of information technology in Europe today, and big tech gets hammered for the way data was used on platforms in the US 2016 election, that many expect a US equivalent sometime in the next few years.

The reason this matters is because of what data means to technology today. In 2017 The Economist laid out pretty well what’s really happening with data:

Data are to this century what oil was to the last one: a driver of growth and change. Flows of data have created new infrastructure, new businesses, new monopolies, new politics and - crucially - new economics. Digital information is unlike any previous resource; it is extracted, refined, valued, bought and sold in different ways. It changes the rules for markets and it demands new approaches from regulators. Many a battle will be fought over who should own, and benefit from, data.

Those battles are real, and bigger armies have bigger treasuries with which to prosecute their wars. And data is as critical to the most important cognitive services offered by Microsoft, Google, AWS and IBM as gas is to cars. Axios reports how big a dent billions in fines is making to profitability in Google and Facebook - and it’s not much at all. What restrictive regulations and the fines that come with them are, however, is a significant limit to smaller companies. The market will adapt, to be sure, but when one watches Google or Facebook shrug off $5B in fines, one wonders if your small-to-midsize software integrator could survive at hit of similar scale. Or what kind of innovations are being prevented with startups. One also wonders how a sharp drop in public trust really even matters to big tech companies - or how much coming out on top regarding public trust really gains you.

TECH BURDENS: The rise of ‘privacy fatigue’: 1 in 3 people don’t know how to protect their online privacy (2 min read) “The increase in data breaches, coupled with the difficulty in managing online personal data, leads to consumers feeling a loss of control and making them weary of having to think about digital privacy.” But when put in perspective, 9/10 citizens polled elsewhere say their own tax code is too complicated and many fail to understand some of its most important political and economic concepts. Which matters more, in most cases?(BJM)

AI SPOOFING: Engineers Develop Ingenious Method to Defeat AI Surveillance... With a Color Printout (2 min read) “If you're not considering your security – whether physical, technological, or otherwise – with the same creativity of someone with an incentive to breach it, then it's not a question of if, but rather when your systems will fail.” It warms the heart that some Belgians with a piece of paper can defeat millions of dollars of research and programming.(KSA)

COGNITION: Scientists have found a way to decode brain signals into speech (3 min read) It’s a step towards a system that would let people send texts straight from their brains. “The effort doesn’t pick up on abstract thought, but instead listens for nerves firing as they tell your vocal organs to move. Previously, researchers have used such motor signals from other parts of the brain to control robotic arms.”(KSA)

THANKS INTERNET: Warren Buffett Sees Most Newspapers as ‘Toast’ After Ad Decline (2 min read) A loss of utility, and therefore a loss of eyeballs for ads. “Readers sought out newspapers when they were packed with ads about bargains, jobs and apartments, Buffett said. But Craigslist and other sites have taken over that role.” But if Craigslist is going to be our substitute for a good local paper, though, where does that leave us as a people? And will not having the paper mean a retreat to cable news & blogs that lead to more social division?(BJM)

HACKING EVOLVES: Supply Chain Hackers Snuck Malware Into Videogames (6 min read) Impressive. “Just weeks after revealing the Asus incident—in which hackers hijacked the computer company's software update process to silently infect customers with malicious code—Kaspersky researchers have connected it to another set of breaches. The same hackers appear to have corrupted versions of the Microsoft Visual Studio development tool, which three different videogame companies then used in their own development. The hackers could then plant malware in certain games, likely infecting hundreds of thousands of victims with a backdoored version of the programs.”

“Rather than indiscriminately planting crimeware on as many machines as possible, the videogame hackers appear to be performing reconnaissance. The malware seems to be a first-stage trojan that simply gains a foothold and uploads a unique identifier for the machine back to the hackers' server, so they can decide which computers to target later with a second-stage tool. The linked Asus attack was similarly exacting, designed to install its payload malware on just 600 specific computers out of the hundreds of thousands it could have infected.”(BJM)

We submit today’s report with thanks to Nick Parish (@paryshnikov) for actionable feedback on format. We love feedback. We love action. We love Nick.

Remarks complete. Nothing follows.

KS Anthony (KSA) & Brady Moore (BJM)