PACIFIC • You're about to give up your privacy, again

May 25, 2018  |  Seattle
What's Next: GDPR as Y2K. Europe's General Data Protection Regulation may change the internet, but it is not going to fundamentally alter Google and Facebook's widespread data collection practices.

Tech companies are giving users a choice that effectively boils down to "let us have your data" or "lose access to our services." We believe the vast majority of users will choose to give up their data, simply because it is more convenient.

Max Schrems, an Austrian privacy activist, has accused Google and Facebook of coercion: "Facebook gave users the choice of deleting the account or pushing a button," he told the Irish Times, "that is blackmail, pure and simple."

Schrems has filed lawsuits against both for €3.9 billion and €3.7 billion, respectively. Companies that fail to comply with GDPR are potentially liable to fines of up to 4% of their annual revenue. These legal battles will create headaches for Google and Facebook but will not ultimately affect their core business model, which is profiting off your data.

If anything, GDPR will benefit Google and Facebook by boxing out smaller companies that don't have the legal teams and the resources to comply with the new rules.
The Big Picture: The most substantial effect of GDPR may be that it forces people to come to terms with the fact that they're willing to give up their privacy in exchange for services like Google and Facebook.

Elsewhere in GDPR: The Los Angeles Times and other news sites are unavailable in Europe due to their failure to comply with GDPR.
The Agenda
Welcome to PACIFIC. Happy Memorial Day Weekend.

Where we're going, there's no internet and no cell service. No Gmail, no Instagram, no Twitter. Uber can't take you, and Amazon doesn't deliver. News comes word of mouth, and "premium content" is a full deck of 52 cards.

It's the best place on earth.
Amazon Everywhere
Alexa eavesdrops, overshares

Postcard from Dystopia, via my colleague Heather Kelly: "An Amazon Echo user in Portland says she was shocked to learn her Echo had recorded a conversation with her husband without them knowing, then sent the audio file to one of his employees in Seattle."

• The user, Danielle, told Seattle's Kiro 7 News that her husband's employee called them to say she'd received a strange voice recording of them.

• Danielle "said they turned off their multiple Echo smart speakers, contacted Amazon and spoke to an Alexa engineer, who apologized multiple times."

How it happened, via Bloomberg's Spencer Soper:

• "Amazon [says] Echo woke after hearing a word in the couple's conversation that sounded like 'Alexa' -- the usual trigger to begin recording."

• "The speaker later heard 'send message' during the conversation, at which point the device asked, 'to whom?' The pair continued talking in the background and the Echo's system interpreted part of the chat to identify a name in the couple's contact list.

• "Alexa then asked aloud if they wanted to send a message to that contact and heard 'right' in more background conversation."

The Big Picture, via Wired's Lily Hay Newman:

• "Smart speakers are internet-connected microphones that could be manipulated or malfunction in privacy-infringing ways. ...  If you're a privacy purist, save your money for something without internet connectivity and a mic."

What Amazon says: "As unlikely as this string of events is, we are evaluating options to make this case even less likely."
"Walmart, Target and Kroger are spending like crazy to stop Amazon," by CNNMoney's Nathaniel Meyersohn: "They're raising minimum wages to retain and attract workers. ... Stores are being remodeled ... All three have lowered their prices."
The Cook Report
Apple's big Samsung win

Seven years after the case began, Apple has won $539 million from Samsung for damages stemming from the South Korean company's infringements on iPhone patents.

The Details, via Bloomberg's Joel Rosenblatt and Mark Gurman:

• "Apple sought about $1 billion in a retrial of a case that originally produced a verdict of that amount in 2012. Samsung argued it should pay only $28 million this time."

• "It was already established that the South Korean company infringed three of Apple's design patents -- covering the rounded corners of its phones, the rim that surrounds the front face, and the grid of icons that users view -- and two utility patents, which protect the way something works and is used."

The Big Picture: The jury's decision isn't just a win for Apple, it's a win for innovation and intellectual property. Apple said in a statement that the case "has always been about more than money. We believe deeply in the value of design, and our teams work tirelessly to create innovative products that delight our customers."
"Homeland Security has formally proposed to rescind the so-called startup visa," by CNNMoney's Sara Ashley O'Brien: "The rule aimed to help keep foreign entrepreneurs in the US by giving them a workaround to existing visas. ... The government [now] believes the program is "inadvisable, impracticable, and an unwarranted use of limited agency resources."
Talk of Tinseltown
TV's 'insane' bidding wars

How Netflix is changing Hollywood, part xxxvviii, via THR's Bryn Elise Sandberg:

• Netflix's signing of showrunners Ryan Murphy and Shonda Rhimes have left traditional studios scrambling, "looking at their tentpole players and asking, 'How do we keep them?'"

• "The mad rush for talent has not only forced studios to abandon the one-size-fits-all broadcast-focused pacts that defined the business, but it also has driven up prices, particularly for showrunners with multiple series on the air."

• "Without the seemingly bottomless pockets of their streaming counterparts, studios are getting creative, banding together the various arms of their business for deals across the corporation."

The Big Picture: "It's a marked break from the past, where media companies were heavily siloed and broadcast was the keystone of any pact."
Dub Shot
Warriors on the brink

What the Silicon Valley C-Suite is reading: "If The Warriors Are Going To Die, They Should At Least Die Pretty" by Deadspin's Tom Ley: "The Warriors can fix this, and it's time for them to start running and screening and cutting and passing and shooting like they always have, for our sake and their own."

Last night in Houston: Rockets 98, Warriors 94. The Rockets now lead the series 3-2, meaning its win or go home for Golden State.

What's Next: Game 6, Saturday at 6pm Pacific on TNT.
What Next: Mental health: My colleagues Sara Ashley O'Brien and Kaya Yurieff highlight seven start ups that want to make mental health resources more accessible than ever.

Enjoy the long weekend. See you Tuesday.
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