Today in the Annals of the Criminal Enterprise Formerly Known as Facebook™

Literally a sketch from the 1970s movie The Groove Tube

In a move that seems to have been foretold by the 1974 sketch comedy film The Groove Tube, Facebook (Meta) decided that the appropriate response to its inundation by scammers and fraud was to sabotage the tools used by government regulators to find fraudulent advertising.

No attempt to protect the users, no attempt to protect its legitimate advertisers, just lobby to allow for business as usual. 

I'm not surprised, but I am disappointed. 

Japanese regulators last year were upset by a flood of ads for obvious scams on Facebook and Instagram. The scams ranged from fraudulent investment schemes to fake celebrity product endorsements created by artificial intelligence. 

Meta, owner of the two social media platforms, feared Japan would soon force it to verify the identity of all its advertisers, internal documents reviewed by Reuters show. The step would likely reduce fraud but also cost the company revenue. 

To head off that threat, Meta launched an enforcement blitz to reduce the volume of offending ads. But it also sought to make problematic ads less “discoverable” for Japanese regulators, the documents show.

The documents are part of an internal cache of materials from the past four years in which Meta employees assessed the fast-growing level of fraudulent advertising across its platforms worldwide. Drawn from multiple sources and authored by employees in departments including finance, legal, public policy and safety, the documents also reveal ways that Meta, to protect billions of dollars in ad revenue, has resisted efforts by governments to crack down.

………

Meta’s internal documents cast new light on the central role played by fraudulent advertising in the social media giant’s business model – and the steps the company takes to safeguard that revenue. Reuters reported in November that scam ads Meta considers “high risk” generate as much as $7 billion in revenue for the company each year. This month, the news agency found that Meta tolerates rampant fraud from advertisers in China.

If there is any justice in the world, (s[poiler, there isn't) we will see Mark Zuckerberg frog-marched out of Meta's corporate offices in handcuffs. 

“Fake It till You Make It,” Huh?

In any other line of work, the driving philosophy of tech startups would be better defined as fraud.

As we saw with Elizabeth Holmes and Theranos, this is basically fraud premised on the idea with a sprinkling of fairy dust (or VC funding) you can actually make something that resembles an ongoing business.

The thing is, when you are dealing with meat space, things like diagnostic tests (Theranos) or military autonomous drones simply do not work.

When defense procurement wonks say that systems should be developed on the Silly-Con Valley model, they miss this. 

In this case, I am referring to Anduril, a company that is aggressively selling autonomous autonomous vehicles with little success.

The company founder, Palmer Luckey, made his money by creating VR goggles company Oculus (borrowing tech from another company) and then selling out to Facebook, who wanted the technology for their incredibly abortive foray into the, "Metaverse."

How this makes him qualified for anything beyond technology hype is beyond me, as the string of failures of his company projects show.  (Actually, I do know how this makes him qualified, he has been a Donald Trump supporter since at least 2016)

The Navy was attempting to launch and recover more than 30 drone boats from a combat ship off the coast of California in May when more than a dozen of the uncrewed vessels failed to carry out their missions. The boats had rejected their inputs and automatically idled as a fail-safe, making them “dead” in the water. 

The botched experiment quickly became a potential hazard to other vessels in the exercise. Military personnel scrambled overnight to clean up the mess, towing the boats to shore until 9 a.m. the next day. 

The drone boats were relying on autonomy software called Lattice, made by California-based Anduril Industries. The Navy said the exercise was handled safely, but the incident alarmed Navy personnel, who said in a routine follow-up report that company representatives had misguided the military. In comments that were unusual for such a report, which was viewed by The Wall Street Journal, four sailors warned of “continuous operational security violations, safety violations, and contracting performer misguidances (Anduril Industries).” If the software configuration wasn’t immediately corrected and vetted, they wrote, there would be “extreme risk to force and potential for loss of life.”

(emphasis mine)

BTW, this behavior is classic, "Fake it till you make it." 

Since its founding in 2017, Anduril Industries has become one of the hottest companies in a crowded field of defense-tech startups, promising to deliver hardware and software that will usher in a new era of autonomous warfare and equip the U.S. military with the speed that only a startup can offer. The privately held company was valued at more than $30 billion in its last funding round and has scored an impressive number of military contracts to build prototypes of everything from unmanned jet fighters to mixed-reality headsets to battlefield-management systems.

Yeah, this is gonna end well. 

………

The startup’s fast-moving approach comes with its share of setbacks—during closed military exercises, at private drone ranges and even on the battlefield in Ukraine.

In California, a mechanical issue damaged the engine in Anduril’s unmanned jet fighter Fury in a ground test over the summer ahead of a critical first flight for the Air Force. In August, a test involving its Anvil counterdrone system caused a 22-acre fire in Oregon. And in the exercises with unmanned boats over the summer off the coast of California, Anduril’s Lattice software struggled to command and control vessels. 

Anduril’s only real battlefield experience—in Ukraine—has been marred by problems as well, including vulnerability to enemy jamming, according to former employees and others familiar with the systems in Ukraine. Some front-line soldiers of Ukraine’s SBU security service, for instance, found that their Altius loitering drones crashed and failed to hit their targets. The drones were so problematic that they stopped using them in 2024 and haven’t fielded them since, according to people familiar with the matter.

That the Ukrainians were unwilling to continue to use the drones is telling.  They are grabbing onto any system that works at all, but Andruil's crap was below the level of their desparation. 

To quote Richard Feynmann, "For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled." 

As an FYI, Feynmann's quote comes from the last line of his report on the Space Shuttle Challenger explosion.  He was commenting on how NASA (and the rest of the investigation board) was choosing public relations over the reality behind the accident.

Dissing the Cult of the Founder

It's time to acknowledge that Sam Altman is a fraud (snollygoster?) who is running a con that has allowed him to raise billions of dollars.

Large language model "Artificial Intelligence" in general, and OpenAI in particular have nothing of value to deliver at their current state, and likely will never have anything to deliver, because they are bullsh%$ generators that have no understanding at all:

OpenAI announced this week that it has raised $6.6 billion in new funding and that the company is now valued at $157 billion overall. This is quite a feat for an organization that reportedly burns through $7 billion a year—far more cash than it brings in—but it makes sense when you realize that OpenAI’s primary product isn’t technology. It’s stories.

Case in point: Last week, CEO Sam Altman published an online manifesto titled “The Intelligence Age.” In it, he declares that the AI revolution is on the verge of unleashing boundless prosperity and radically improving human life. “We’ll soon be able to work with AI that helps us accomplish much more than we ever could without AI,” he writes. Altman expects that his technology will fix the climate, help humankind establish space colonies, and discover all of physics. He predicts that we may have an all-powerful superintelligence “in a few thousand days.” All we have to do is feed his technology enough energy, enough data, and enough chips.

Maybe someday Altman’s ideas about AI will prove out, but for now, his approach is textbook Silicon Valley mythmaking. In these narratives, humankind is forever on the cusp of a technological breakthrough that will transform society for the better. The hard technical problems have basically been solved—all that’s left now are the details, which will surely be worked out through market competition and old-fashioned entrepreneurship. Spend billions now; make trillions later! This was the story of the dot-com boom in the 1990s, and of nanotechnology in the 2000s. It was the story of cryptocurrency and robotics in the 2010s. The technologies never quite work out like the Altmans of the world promise, but the stories keep regulators and regular people sidelined while the entrepreneurs, engineers, and investors build empires. (The Atlantic recently entered a corporate partnership with OpenAI.)

As an aside here, the fact that The Atlantic has partnered with OpenAI is not a surprise.  Enthusiastic support of bad ideas is core branding for them. 

Despite the rhetoric, Altman’s products currently feel less like a glimpse of the future and more like the mundane, buggy present. ChatGPT and DALL-E were cutting-edge technology in 2022. People tried the chatbot and image generator for the first time and were astonished. Altman and his ilk spent the following year speaking in stage whispers about the awesome technological force that had just been unleashed upon the world. Prominent AI figures were among the thousands of people who signed an open letter in March 2023 to urge a six-month pause in the development of large language models ( LLMs) so that humanity would have time to address the social consequences of the impending revolution. Those six months came and went. OpenAI and its competitors have released other models since then, and although tech wonks have dug into their purported advancements, for most people, the technology appears to have plateaued. GPT-4 now looks less like the precursor to an all-powerful superintelligence and more like … well, any other chatbot.

I call it a slightly improved ELIZA program, but basically it's the same thing. 

Short version:  A parrot has speech, but it does not have language, and LLMs are much the same.

………

In Altman’s rendering, this moment in time is just a waypoint, “the doorstep of the next leap in prosperity.” He still argues that the deep-learning technique that powers ChatGPT will effectively be able to solve any problem, at any scale, so long as it has enough energy, enough computational power, and enough data. Many computer scientists are skeptical of this claim, maintaining that multiple significant scientific breakthroughs stand between us and artificial general intelligence. But Altman projects confidence that his company has it all well in hand, that science fiction will soon become reality. He may need $7 trillion or so to realize his ultimate vision—not to mention unproven fusion-energy technology—but that’s peanuts when compared with all the advances he is promising.

There’s just one tiny problem, though: Altman is no physicist. He is a serial entrepreneur, and quite clearly a talented one. He is one of Silicon Valley’s most revered talent scouts. If you look at Altman’s breakthrough successes, they all pretty much revolve around connecting early start-ups with piles of investor cash, not any particular technical innovation.

Actually, if you look at Altman's career, he's not even a particularly good rainmaker.  He created a failed social network (Loopt) whose "Special Sauce" was that it would spy on you even more intensely than Facebook,  he was fired from YCombinator for not showing up to work and personally trading in companies that they backed, etc.

He's just a bunco artist.

Elections Have Consequences

The Department of Justice, and 8 states, have sued the RealPage platform, arguing that its whole business model is supporting illegal pricing collusion.

First, RealPage's model has clearly been to function as an intermediary to foment collusion, and second, I am a bit surprised that the DoJ decided to sue over this:

The United States today sued RealPage, alleging that the software maker distorts competition in rental housing by helping landlords collectively set prices.

"To ensure they secure the greatest value for their needs, renters rely on robust and fierce competition between landlords. RealPage distorts that competition," said the lawsuit filed by the US government and eight state attorneys general. In a press release, the Justice Department said that "RealPage's pricing algorithm violates antitrust laws."

Attorney General Merrick Garland delivered remarks on the lawsuit. "When the Sherman Act was passed, an anticompetitive scheme might have looked like robber barons shaking hands at a secret meeting," he said. "Today, it looks like landlords using mathematical algorithms to align their rents. But antitrust law does not become obsolete simply because competitors find new ways to unlawfully act in concert."

RealPage's commercial revenue management software "enable[s] landlords to sidestep vigorous competition to win renters' business," the lawsuit alleged. "Landlords, who would otherwise be competing with each other, submit on a daily basis their competitively sensitive information to RealPage. This nonpublic, material, and granular rental data includes, among other information, a landlord's rental prices from executed leases, lease terms, and future occupancy. RealPage collects a broad swath of such data from competing landlords, combines it, and feeds it to an algorithm."

It's more than this/.  RealPage also strong-arms its clients to follow its recommendations:

………

RealPage recently argued that its software "benefits both housing providers and residents," and "makes price recommendations in all directions—up, down, or no change—to align with property-specific objectives of the housing providers using the software." Landlords don't have to follow the recommendations, the company says.

The US said RealPage takes a more direct role in setting prices. RealPage "reviews and weighs in on landlords' other policies, including trying to—and often succeeding in—ending renter-friendly concessions (like a free month's rent or waived fees) to attract or retain renters," the lawsuit said. Garland alleged that "a large number of landlords effectively agree to outsource their pricing decisions to RealPage by using an 'auto accept' setting, which effectively permits RealPage to determine the price a renter will pay."

When one looks at tech in the US today, it seems that most of it is stalking, (Facebook, Google, Amazon, etc.), pursuit of monopoly rents (RealPage, Uber, Lyft, Alibaba, WeWork, etc), or outright fraud (Cryptocurrency, LLM Artificial Intelligence, etc).

If the DoJ would actually prosecute this sort of sh%$ criminally, it would make the world a better place, particularly San Francisco, which can survive earthquakes, but not, it seems, tech bros.

Pass the Popcorn

One of the things that the criminal enterprise formerly known as Facebook™ has been particularly aggressive about is utilities that allow users to adjust what they get from Facebook.

One case in point is a utility called "Unfollow Everything", which was withdrawn under the threat of a massive lawsuit from Mark Zuckerberg and his Evil Minions™.

Now, a professor at my alma mater has filed a lawsuit to establish that his program, called, "Unfollow Everything 2," is protected from lawsuits or criminal charges by Section 230 (c) (2) (b) of the Communications Decency Act, which explicitly states that there can be no civil or criminality for people who want to filter web content to remove objectionable material.

I hope that he wins, because we will start seeing utilities that unwind Facebook's toxic ecosystem:

A lawsuit filed Wednesday against Meta argues that US law requires the company to let people use unofficial add-ons to gain more control over their social feeds.

It’s the latest in a series of disputes in which the company has tussled with researchers and developers over tools that give users extra privacy options or that collect research data. It could clear the way for researchers to release add-ons that aid research into how the algorithms on social platforms affect their users, and it could give people more control over the algorithms that shape their lives.

The suit was filed by the Knight First Amendment Institute at Columbia University on behalf of researcher Ethan Zuckerman, an associate professor at the University of Massachusetts—Amherst. It attempts to take a federal law that has generally shielded social networks and use it as a tool forcing transparency.

Section 230 of the Communications Decency Act is best known for allowing social media companies to evade legal liability for content on their platforms. Zuckerman’s suit argues that one of its subsections gives users the right to control how they access the internet, and the tools they use to do so.

“Section 230 (c) (2) (b) is quite explicit about libraries, parents, and others having the ability to control obscene or other unwanted content on the internet,” says Zuckerman. “I actually think that anticipates having control over a social network like Facebook, having this ability to sort of say, ‘We want to be able to opt out of the algorithm.’”

Zuckerman’s suit is aimed at preventing Facebook from blocking a new browser extension for Facebook that he is working on called Unfollow Everything 2.0. It would allow users to easily “unfollow” friends, groups, and pages on the service, meaning that updates from them no longer appear in the user’s newsfeed.

………

There’s good reason to think Meta might make changes to Facebook to block Zuckerman’s tool after it is released. He says he won’t launch it without a ruling on his suit. In 2020, the company argued that the browser Friendly, which had let users search and reorder their Facebook news feeds as well as block ads and trackers, violated its terms of service and the Computer Fraud and Abuse Act. In 2021, Meta permanently banned Louis Barclay, a British developer who had created a tool called Unfollow Everything, which Zuckerman’s add-on is named after.

“I still remember the feeling of unfollowing everything for the first time. It was near-miraculous. I had lost nothing, since I could still see my favorite friends and groups by going to them directly,” Barclay wrote for Slate at the time. “But I had gained a staggering amount of control. I was no longer tempted to scroll down an infinite feed of content. The time I spent on Facebook decreased dramatically.”

The CDA, both in its text, and in Congressional debate about its provisions was very explicit in allowing the use of filtering tools that a user, or an institution such as a school or library, to filter objectionable material.

This lawsuit won't prevent Facebook from banning apps like this, and banning users of apps like this, but should this lawsuit succeed the developers would be able to operate without the threat of legal action.

The Joys of Private Equity

It turns out that Wall Street whiz kids took over a regional hospital in Florida, and turned it into a sewage and bat infested hellhole.

The Cerberus Capital Management backed Steward Healthcare Systems is circling the toilets, and medical care at the roughly three dozen medical institutions has descended into something that resembles the black hole of Calcutta:

The Rockledge Regional Medical Center reeks of raw sewage and bat guano. No one knew that bat shit was called “guano,” or that the pungent smell emanating from the fifth-floor intensive care unit had bat guano as a source, until last spring, when a delirious patient complained he was being attacked by a “giant grasshopper,” which turned out to be a bat, which turned out to be one of what four nurses told the Prospect was estimated to be at least five thousand more.

The exterminators alleged in court that Steward Health, Rockledge’s corporate owner, never paid them the $936,320 they were owed for “evicting” the bats from the hospital, which sits roughly eight miles southwest of the Cape Canaveral Space Force Station. And so when, a week or two before Christmas, the sinks on the second floor began backing up with thick, black gunk that smelled like feces of the human sort, the hospital’s in-house maintenance staff tried to handle the job themselves.

For a few frenzied days, they snaked the drain trying to find the clog, at which point they realized that one of the pipes was leaking sewage from what seemed to be a massive hole. “There was literally poop everywhere: on the walls, on the floor, I know it was on the equipment,” says a nurse, who snapped some photos of the storage room where the maintenance crew had attempted to fix the building’s aging pipes. One photo of a sink partially filled with the mysterious black liquid showed up on the “Rockledge, Florida Community Updates & News” Facebook group, posted by the granddaughter of a stroke victim who had been admitted to the ICU. Somehow the photo disappeared, and Poopageddon

Rockledge is just one of 32 hospitals operated by Steward Health, which the Democratic mayor of Haverhill, Massachusetts, recently described by saying, “I think we are, perhaps, the victims of a Ponzi scheme.” Nurses say the hospital is chronically out of heart valves, urology lasers, Impella catheters, cardiac catheterization balloons, slings for lifting heavier patients, blood and urine test reagents, and most recently, prescription paper. Medical equipment used in lifesaving treatment has been repossessed, as have Pepsi machines and even, according to one account from an alleged longtime employee posted on Reddit, a quantity of Boar’s Head deli meats. And Steward has been sued by dozens of vendors and service providers, from landscaping services to revenue cycle managers to a long list of physician and nurse staffing agencies, for failing to pay its bills.never made it onto the local TV news, the way the bat infestation had.

Rockledge is just one of 32 hospitals operated by Steward Health, which the Democratic mayor of Haverhill, Massachusetts, recently described by saying, “I think we are, perhaps, the victims of a Ponzi scheme.” Nurses say the hospital is chronically out of heart valves, urology lasers, Impella catheters, cardiac catheterization balloons, slings for lifting heavier patients, blood and urine test reagents, and most recently, prescription paper. Medical equipment used in lifesaving treatment has been repossessed, as have Pepsi machines and even, according to one account from an alleged longtime employee posted on Reddit, a quantity of Boar’s Head deli meats. And Steward has been sued by dozens of vendors and service providers, from landscaping services to revenue cycle managers to a long list of physician and nurse staffing agencies, for failing to pay its bills.

………

In Steward’s early days, de la Torre told investors the company would disrupt health care by promoting a new business model that would “integrate” patients’ medical needs under one roof (and according to lawsuits and federal regulations, evade certain federal laws banning physician kickbacks and self-referrals). But by the time Steward bought Rockledge, a former administrator says, integrating networks was no longer a priority. The company immediately sold the hospital’s brand-new hospice center and home health care business and began shutting down or outsourcing the management of other departments to service providers. “It was pretty clear they were just there to move money around,” the former administrator, who left Steward less than a year ago, told the Prospect.

Gee, private equity and regulatory arbitrage destroying people's lives.  Sounds a lot like PayPal, or Theranos, or college financial planning outfit Frank, or various cryptocurreny firms.

If the business model is based on evading regulations, the business is probably a fraud.

Break Out the Red Cape and Goggles, I'm Celebrating

So, I'm minding my own business on Ecch (Twitter), and I reply to an Ecch (Tweet) which notes that self regulation does not work.

I respond with a line that I have been using for some time, I say that, "Self-Regulation is to Regulation as Self-Importance is to Importance."

It gets a fair number of likes, which amuses me, because I am insecure and I need validation.

Self regulation is to regulation as self-importance is to importance.

— Not the Apartheid Emerald Heir Pedo Guy/MG Saroff (@40_Years) January 24, 2024

I think that it's important to savor life's little victories, and this one is exceedingly small.

Then I discover that journalist, S.F. author, activist, and IP and privacy activist Cory Doctorow quoted me in the conclusion of today's post on Pluralistic, his ad free and tracker free blog. (slightly reformatted to fit my style or lack thereof, Doctorow puts out "naked" links in order to demonstrate that there are no URL shenanigans)

One of the weirdest aspect of end-stage capitalism is the collapse of auditing, the lynchpin of investing. Auditors – independent professionals who sign off on a company's finances – are the only way that investors can be sure they're not handing their money over to failing businesses run by crooks.

………

Attentive readers will have noticed that there is an intrinsic tension in an arrangement where someone is paid by a company to certify its honesty. The company gets to decide who its auditors are, and those auditors are dependent on the company for future business. To manage this conflict of interest, auditors swear fealty to a professional code of ethics, and are themselves overseen by professional boards with the power to issue fines and ban cheaters.

Enter monopolization. Over the past 40 years, the US government conducted a failed experiment in allowing companies to form monopolies on the theory that these would be "efficient." From Boeing to Facebook, Cigna to InBev, Warner to Microsoft, it has been a catastrophe. The American corporate landscape is dominated by vast, crumbling, ghastly companies whose bad products and worse corporate conduct are locked in a race to see who can attain the most depraved enshittification quickest.

………

And of course, crooked auditors were behind the Enron fraud, a rare instance in which a fraud triggered a serious attempt to prevent future crimes, including the destruction of accounting giant Arthur Andersen. After Enron, Congress passed Sarbanes-Oxley (SOX), which created a new oversight board called the Public Company Accounting Oversight Board (PCAOB).

The PCAOB is a watchdog for watchdogs, charged with auditing the auditors and punishing the incompetent and corrupt among them. Writing for The American Prospect and the Revolving Door Project, Timi Iwayemi describes the long-running failure of the PCAOB to do its job.

For example: from 2003-2019, the PCAOB undertook only 18 enforcement cases – even though the PCAOB also detected more than 800 "seriously defective audits" by the Big Four. And those 18 cases were purely ornamental: the PCAOB issued a mere $6.5m in fines for all 18, even though they could have fined the accounting companies $1.6 billion 

………

But though these improvements are decidedly moderate, they are grounded in a truly radical break from business-as-usual in the age of monopoly auditors. It's a transition from self-regulation to regulation. As @40_Years on Twitter so aptly put it: "Self regulation is to regulation as self-importance is to importance".

Needless to say, I'm going to be feeling smug about this for about a week.

After that, I'll probably go back to uninformed and very poorly written rants.

Fraud is the Goal

I am referring, of course to the H1-B program, whose real goal is to lower the wages and power of domestic workers.  Phony recruiting and low wages are a part and parcel of the whole program.

Now it appears that the fraud is becoming even more blatant:

H-1B visa fraud is rampant and growing, and the US Citizenship and Immigration Service (USCIS) has yet to demonstrate that it can deal with the situation.

"The H-1B program applies to employers seeking to hire nonimmigrant aliens as workers in specialty occupations or as fashion models of distinguished merit and ability," the US Department of Labor explains. "A specialty occupation is one that requires the application of a body of highly specialized knowledge and the attainment of at least a bachelor’s degree or its equivalent."

Technology companies rely on the program to bring foreign workers into America, ostensibly to fill positions for which US-based workers cannot be found. The firms that sponsor and import H-1B workers may also appreciate being able to hire people at below-market wages as well as the barriers that make it difficult for H-1B workers to change jobs or unionize. That said, the visa is attractive to foreign techies as it gives them a route to eventual permanent residency and citizenship, if they choose to go down that road.

Most importantly, over the past two years at least, interest in the program has outpaced Uncle Sam's ability to police it.

………

Would-be workers are not supposed to register multiple times and the USCIS has interpreted these figures to suggest there's been a surge in fraud.

………

A member of the Indian community in the US who asked not to be identified contacted The Register to confirm that H1-B fraud is on the rise. He said he sees members of his community involved in deceptive practices and is concerned because abuse harms those who play by the rules.

………

Our source provided us with a list of 25 companies in various US states that he claimed were abusing the lottery system as well as screenshots of H-1B discussions in public and private Facebook groups where both legitimate and unlawful approaches get discussed.

………

Our source said these consultancy companies are largely run by Indian-born CEOs.

There is an entire industry of H1B fraud masquerading as consultancy in South Asia.  this is not a surprise.

The solution is remarkably simple though, as opposed to setting a fee to apply for an H1-B Visa, auction the off the applications.

This will filter out the bottom feeders, because it will be too expensive for them to make a profit.

The companies that really need specific highly skilled people will be willing to drop the 10 or 20 grand to get them in the office.  The companies that are looking for cheap workers won't.

This is Interesting

If this story is correct, and the WSJ  has a pretty good record on such things, it appears that Google has been routinely violating the standards that it promised to its advertisers, basically promising to show the ads on high quality sites and then not doing so.

This means that tens of billions of dollars in payments may have to be refunded:

Google violated its promised standards when placing video ads on other websites, according to new research that raises questions about the transparency of the tech giant’s online-ad business.

Google’s YouTube runs ads on its own site and app. But the company also brokers the placement of video ads on other sites across the web through a program called Google Video Partners. Google charges a premium, promising that the ads it places will run on high-quality sites, before the page’s main video content, with the audio on, and that brands will only pay for ads that aren’t skipped.

Google violates those standards about 80% of the time, according to research from Adalytics, a company that helps brands analyze where their ads appear online. The firm accused the company of placing ads in small, muted, automatically-played videos off to the side of a page’s main content, on sites that don’t meet Google’s standards for monetization, among other violations.

Adalytics compiled its data by observing campaigns from more than 1,100 brands that got billions of ad impressions between 2020 and 2023. The company shared its findings with The Wall Street Journal.

………

Some ad buyers who have reviewed the research say they want their money back.

“This is an unacceptable breach of trust by YouTube,” said Joshua Lowcock, global chief media officer at ad agency UM Worldwide. “Google must fix this and fully refund clients for any fraud and impressions that failed to meet Google’s own policies.”

………

Among the major brands whose Google video-ad placements weren’t in line with the promised standards were Johnson & Johnson, American Express, Samsung, Sephora, Macy’s, Disney+ and The Wall Street Journal, according to Adalytics. It also affected ads for government agencies, including Medicare, the U.S. Army, the Social Security Administration, and the New York City municipal government.

“CMS is concerned with reports of invalid ad placements by YouTube,” said a spokeswoman for the Centers for Medicare and Medicaid Services.

YouTube accounts for 8.3% of U.S. digital-video ad spending, according to research company Insider Intelligence. Marketers feel obligated to advertise on YouTube because of its size, several ad buyers said.

………

Ad placements appeared on low-quality sites that trafficked in misinformation or “clickbait” content, as well as those that appeared to publish pirated content, contrary to the promises of the Google Video Partners program, the researchers found.

………

At least 23% of the $88 billion spent annually by marketers on automated digital ad buying on the open web is wasted, according to the Association of National Advertisers. 

You cannot run the numbers on this, because we don't know the total turnover on YouTube ads, nor do we know the portion of these ads that are purchased through this program, but Google Video Partners and its predecessor Google Preferred have been around since 2015, so it is pretty clear that the numbers can run into the 10 figure, and perhaps the 11 figure range.

This is not a surprise.  As I have noted before (with a focus on the criminal enterprise formerly known as Facebook™), see also here, here, and here, the internet giants are not just unethical and evil, they have been engaging in systematic fraud.

Now is the time to frog march senior executives out of their offices in handcuffs .

Linkage

•  The United States Couldn’t Stop Being Stupid if It Wanted To (Foreign Policy) A nice takedown of the Blob and its interventionism.
• Ukraine and the end of "Europe." - by Aurelien On the incoherence of "Europe" as defined by the EU.  Money quote, "We are the enemy, in other words, and “Europe” must be protected against against its citizens."
• Can an AI Chatbot Replace the Washington Blob? (N.S. Lyons) Yes, it can.  Not a surprise.  The blob is an exercise in stupidity and group think, not intelligence.
• The rise and fall of peer review (Adam Mastroianni) Peer review was introduced after WWII, and has not caught fraud and error, nor has it improved the general quality of science.
  
• “Metaverse” means “pivot to video” (Cory Doctorow) Facebook's "Pivot to Video" was a scam perpetrated by the criminal enterprise formerly known as Facebook™ on publishers using fraudulent data. Doctorow argues that Metaverse is the same thing.
  
• No Union? You Still Have a Right to Strike (Labor Notes)
• The ‘Perpetual Broths’ That Simmer For Decades (Gastro Obscura) Yum.
  
• How to Start a Banned Book Club (ACLU) I think that this is an excellent idea.
  
• Ban the Phillips Curve (Claudia Sahm) This curve posits a inverse relationship between inflation and unemployment.  The real world shows that it rarely works.
  
• The mud-dwelling clam Meretrix petechialis secretes endogenously synthesized erythromycin (Proceedings of the National Academy of Science) Some clams secrete their own antibiotics, a first for the animal world.  Science is amazing.

A Lifesize Verion of the Mousetrap Game: (Too much free time)

Frog March Zuckerberg Out of His Offices in Handcuffs

Remember when the criminal enterprise formerly known as Facebook™ was caught collecting sensitive personally identifying medical information?

Well, now we find that they did the same thing on income tax preparation sites.

The short version is that the criminal enterprise formerly known as Facebook™ provided web tools to allow the tax preparation companies to identify how their users used the sites, with the goal of improving the user experience.

What Meta did not do was tell these companies that with the default settings, information like, their names, filing status, gross income, student loan status, number of dependents, and amount of refund.

Consent decrees and do not cut it.  We need to start criminally prosecuting executives at places like Meta and Google for their blatant and willful violation of their users' privacy:

Major tax filing services such as H&R Block, TaxAct, and TaxSlayer have been quietly transmitting sensitive financial information to Facebook when Americans file their taxes online, The Markup has learned.

The data, sent through widely used code called the Meta Pixel, includes not only information like names and email addresses but often even more detailed information, including data on users’ income, filing status, refund amounts, and dependents’ college scholarship amounts.

The information sent to Facebook can be used by the company to power its advertising algorithms and is gathered regardless of whether the person using the tax filing service has an account on Facebook or other platforms operated by its owner, Meta.

………

When users sign up to file their taxes with the popular service TaxAct, for example, they’re asked to provide personal information to calculate their returns, including how much money they make and their investments. A pixel on TaxAct’s website then sent some of that data to Facebook, including users’ filing status, their adjusted gross income, and the amount of their refund, according to a review by The Markup. Income was rounded to the nearest thousand and refund to the nearest hundred. The pixel also sent the names of dependents in an obfuscated, but generally reversible, format.

………

TaxAct wasn’t the only tax filing service using the Meta Pixel. Tax preparation giant H&R Block, which also offers an online filing option that attracts millions of customers per year, embedded a pixel on its site that gathered information on filers’ health savings account usage and dependents’ college tuition grants and expenses.

………

Megan McConnell, a spokesperson for Ramsey Solutions, said in an email that the company “implemented the Meta Pixel to deliver a more personalized customer experience.”

“We did NOT know and were never notified that personal tax information was being collected by Facebook from the Pixel,” the statement said. “As soon as we found out, we immediately informed TaxSlayer to deactivate the Pixel from Ramsey SmartTax.”

After The Markup contacted TaxSlayer, spokesperson Molly Richardson said in an email that the company had removed the pixel to evaluate its use. “Our customers’ privacy is of utmost importance, and we take concerns about our customers’ information very seriously,” she said, adding that Ramsey Solutions “decided to remove the pixel” as well.

Assuming that the statements from the tax preparation firms are not self-serving lies, (and that is a big assumption) then not only is Meta deceiving its users, who are what they sell, but it is deceiving its customers, and that is fraud.

Seriously, we need to start arresting and trying senior executives.

Elizabeth Holmes cannot be that alpha and omega of prosecution of criminal executives in the tech space.

Almost One Beelion Dollars

So, a Connecticut jury awarded $965,000,000.00 to Sandy Hook families suing Alex Jones for defamation.

They did not determine his responsibility, the judge declared a default, because Jones refused to turn over information subpoenaed by the plaintiffs, but they did determine the direct damages.

It should be noted that punitive damages have not yet been assessed, which if my knowledge of Connecticut liability caps is accurate, and I am an engineer, not a lawyer, dammit,* the punitive damages could be 4 times that of the compensatory damages, which comes to more than 4.8 beeeelion dollars!

I hope the judge goes medieval on Mr. Jones with regard to his posting a bond for this judgement:

The damages announced on Wednesday are meant to compensate the victims for reputational damage and emotional distress. A judge will decide on punitive damages next month.

Eugene Volokh, a law professor at the University of California at Los Angeles and an expert on the First Amendment, said he could not recall another defamation case with damages of this size.

“It does send a message that juries care about reputation and care about lies — especially when they’re about people who are sympathetic,” said Voklokh. “It’s hard to get more sympathetic” than the Sandy Hook families.

The Connecticut case is one of three defamation suits filed against Jones by relatives of the victims, who have said that they hope to prevent other families from enduring similar abuse.

………

Jones is a reckless purveyor of conspiracy theories and a prominent supporter of former president Donald Trump, who has returned the praise. “Your reputation is amazing,” Trump told Jones in late 2015 as he ramped up his campaign for the presidency. “I won’t let you down.”

In 2018, YouTube, Facebook, Apple, Spotify and Twitter all removed Jones from their platforms, saying he violated their policies against abusive and harmful content.

………

Jones refused to share crucial evidence — including financial records and data on traffic to his websites — with the plaintiffs in the Connecticut case in violation of his legal obligations. Judge Barbara Bellis entered a default judgment against him holding him liable for defamation. The jury’s only task, Bellis said as deliberations began, was to determine “the extent of the harm.”

The state of Jones’s finances is murky. In the Texas trial, Bernard Pettingill, a forensic economist hired by the plaintiffs, estimated that Jones and his companies have a net worth of up to $270 million. Pettingill also said Jones withdrew $62 million in 2021.

Honestly, I'd like to see the right wing broadcaster's flabby white ass thrown in jail for bankruptcy fraud, he is likely actively concealing his assets, but he's not near the top of my list.

I'd want "respectable capitalists" like late coal mine owner Robert E. "Eat Sh%$ Bob" Murray (It's a John Oliver things), steel and nickel mine owner Clive "Fatty McF%$#head" Palmer (Australian, and I'll re-post the take-down by Jordan "friendlyjordies" Shanks-Markovina  after the break, it's epic.), and Perdue Pharma and entire Sackler family to see the inside of a jail cell first.

There are way too many "respectable" people who went to the right schools and wear the right suits who routinely engage in bankruptcy fraud.

I'd also add the Sacklers and Purdue Pharma to my list.

^*I love it when I get to go all Dr. McCoy!^†

^†Am I wearing out the whole "I'm a ……… MccOY," thing? My wife and kids are getting really sick of this.

Oh, Snap!

The quest by Michigan Republicans to field a candidate to run against incumbent Democrat Gretchen Witmer is turning into a complete sh%$ show.

First, the top candidates were knocked off the ballot because of signature fraud by a contractor that they were using, and now the right wing nutjob who is the proverbial last man standing in the Governors race was just arrested for his alleged participation in the January 6 insurrection.

I don't think that even the crazy stupid Devos/Amway money can save them now:

The FBI raided the Allendale home of Michigan GOP gubernatorial candidate Ryan Kelley on Thursday and arrested him on charges related to the 2021 riot at the U.S. Capitol.

Kelley was arrested "on misdemeanor charges stemming from the Jan. 6, 2021 Capitol breach," the U.S. Department of Justice said in a statement. He was arraigned in federal court in Grand Rapids later Thursday.

Kelley, 40, is charged with entering or remaining in a restricted building or grounds without lawful authority, disorderly and disruptive conduct, knowingly engaging in an act of physical violence against a person or property, and willfully injuring property, according to a criminal complaint.

Generally, all of those misdemeanors carry penalties of up to one year in prison and fines of up to $100,000 on each charge.

Special Agent Mara Schneider, a spokeswoman for the FBI in Detroit, confirmed that federal agents used a search warrant to enter Kelley's home.

………

He is one of five Republican candidates on the August primary ballot for governor, after five other candidates were disqualified.

In an affidavit related to Thursday's complaint, an agent said Kelley was seen on video "wearing a black hat and a black coat ... in a crowd of people who are assaulting and pushing past law enforcement officers." Kelley also "climbed onto and stood on an architectural feature next to the North West stairs and indicated by waving his hand that the crowd behind him should move towards the stairs" leading into the building, the affidavit said.

The same person is seen in the Capitol courtyard and moving toward the entrance to the building, according to the FBI affidavit, which does not cite video evidence of Kelley inside the building.

………

A Kelley campaign spokeswoman did not immediately respond to an email seeking comment, though the words "political prisoner" appeared Thursday on Kelley's gubernatorial Facebook page.

It sucks to be Ryan Kelley. It also sucks to be whoever is responsible for the Republican Gubernatorial campaign in Michigan.

Linkage

• Why boa constrictors don’t suffocate when they squeeze their prey to death (AAAS) Long lungs.  Nature is amazing.
  
• Facebook paid Republican strategy firm to malign TikTok (Washington Post) Seriously, these guys are evil.
  
• HOW TO READ THE WAR IN REVERSE WITHOUT OUTSMARTING YOURSELF (Dances With Bears) A valuable theory of the Western long game in the Ukraine.
  
• The Dunning-Kruger Effect is Autocorrelation (Economics from the Top Down) Researchers discover that the math has a flaw, and that completely random data shows correlation.
  
• New York Times Issues Social Media Reset for Reporters' Twitter Use (Business Insider) The Gray Lady will stop pushing reporters to tweet incessantly, because, Twitter folks were mean to them.
  
• Big Tech Isn’t Stealing News Publishers’ Content (Cory Doctorow)  Advertising fraud and price fixing.
  
• The Secret Plot To Unleash Corporate Power (Matt Stoller) The Reagan Administration's very successful operation to emasculate antitrust enforcement.
  

How an aluminum can is made: (It's cool)

Yaasssss!!!!

The Department of Justice has announced that it will return to an enforcement tactic that went away in the 1970s, and pursue criminal prosecutions and criminal punishments against executives who violate antitrust laws.

About f%$#ing time.

Until the malefactors of great wealth start seeing people like them frog marched out of their offices in handcuffed and sentenced to long terms in prison, they will not stop:

While the war in Ukraine is rightfully dominating the news, antitrust enforcers have just made several major announcements that could reshape our economy, including one related to handcuffs for corporate executives.

So today I’m writing about how the antitrust debate is getting hotter…

Right now, Google, Facebook, and Amazon are being sued for antitrust violations, with substantial amounts of evidence put forward by regulators, Congress, and policymakers that these firms harm small business and consumers. Dominant firms today take laws as mere suggestions; Facebook’s Mark Zuckerberg might have engaged in insider trading and fraud, and Google’s Sundar Pichai seems to have facilitated price-fixing over ad markets. And yet, these men, and their firms are unchastened.

Why? The answer is that these executives do not personally fear any consequences. At worst, their firms will have to budget a bit more for the legal department, and a case could come down in two to three years they might have to think through.

And this makes sense. Antitrust cases take a long time. More to the point, monopolization is often understood to be a civil infraction, something executives must watch out for or their firm will sanctioned in some way. But I’ve been pointing out that, if you read the statute, violating Section 2 of the Sherman Antitrust Act is a crime, with the possibility of jail time for executives. The only reason it’s not treated as a crime is because the government made a policy choice in the 1970s to no longer bring criminal cases. The Antitrust Division essentially handed out Get Out of Jail Free cards to corporate America. 

………

Under the leadership of new Antitrust chief Jonathan Kanter, the Department of Justice is beginning to get much more aggressive. Here’s what Richard Powers, the head of antitrust criminal enforcement, just told the American Bar Association’s conference on white collar crime.

Anything short of incarceration is just a cost of business.

I’ve Been Saying This for How Long?

It looks like Google is being sued by state Attorneys General for deceptive practices in its advertising business.  (You can see writing about this, mostly about Facebook, here, though searching for "advertising" and "fraud" generates a fair number of other posts.)

Of course, there are two sorts of fraud here: One exaggerates the effectiveness of advertising, which has been done since time immemorial, and rigging the advertising markets, which Google and Facebook have already been shown to have done. 

Google misled publishers and advertisers for years about the pricing and processes of its ad auctions, creating secret programs that deflated sales for some companies while increasing prices for buyers, according to newly unredacted allegations and details in a lawsuit by state attorneys general.

Meanwhile, Google pocketed the difference between what it told publishers and advertisers that an ad cost and used the pool of money to manipulate future auctions to expand its digital monopoly, the newly unredacted complaint alleges. The documents cite internal correspondence in which Google employees said some of these practices amounted to growing its business through “insider information.”

The unredacted filing on Friday in the U.S. District Court of the Southern District of New York came after a federal judge ruled this past week that an amended complaint filed last year could be unsealed.

The lawsuit was first filed in December 2020, with many sections of the complaint redacted. Since then, the redactions have been stripped away in a series of rulings, providing fresh details about the states’ argument that Google runs a monopoly that harmed ad-industry competitors and publishers.

………

In addition to detailing some of Google’s programs, the new complaint says that Alphabet and Google Chief Executive Sundar Pichai and Meta Platforms Inc. Chief Executive Mark Zuckerberg signed off on a 2018 business agreement that allegedly guaranteed Meta subsidiary Facebook would both bid in—and win—a fixed percentage of ad auctions. It has previously been reported that the agreement was signed by Google Chief Business Officer Philipp Schindler and Facebook Chief Operating Officer Sheryl Sandberg.

As an aside here, it should be noted that these sorts of anti-competitive agreements are not just illegal, they are actually criminal, and in the past people have been sent to jail for this sort of behavior. 

And then there is the flat out fraud:

………

In the first version, Google misled publishers and advertisers to believe they were participating in a “second-price auction,” where the winner pays the price of the second-highest bid, when using its advertising exchange, AdX, according to allegations from the complaint. However, under Google’s Bernanke program, AdX would at times knock out the second-highest bid, allowing the third-highest bid to win, thus depriving the publisher of revenue, according to the complaint. At the same time, Google would charge advertisers the price of the second-highest bid and pocket the difference, the complaint said.

Google pooled the advertisers’ overpayments and used the money to manipulate auctions on its systems, at times boosting bids from advertisers bidding through its ad-buying tools to ensure it would win an auction it otherwise wouldn’t have, the complaint said.

We need to have a serious criminal investigation of the whole online advertising industry, with aggressive prosecutions and the possibility of real jail time for senior executives.

Voter Fraud in Florida

It should surprise no one that the 3 people accused of voting multiple times are all Republicans.

As I have noted, if you want to know what misdeeds Republicans are up to, just look at what they are accusing Democrats of doing:

Three residents of The Villages were recently arrested and face charges of casting more than one vote during the 2020 election, according to affidavits.

Joan Halstead, Jay Ketcik and John Rider all face felony charges of casting more than one ballot in an election, arrest reports provided by the office of Ocala-based State Attorney Bill Gladson show.

The complainant against the three was listed as the office of Sumter County Supervisor of Elections Bill Keen. When reached by the Orlando Sentinel, the office declined to comment, citing “an active investigation.”

It is unclear which candidate the three voted for. A spokesperson for Gladson’s office declined to release more details on the allegations Tuesday.

………

State voter records show Halstead, 71, and Ketcik, 63, are registered Republicans. Rider, 61, has no party affiliation.

However, posts in support of former President Donald Trump can be found on Facebook pages appearing to belong to Halstead and Rider. News 6-WKMG reported that a Facebook page appearing to belong to Ketcik also had pro-Trump posts, although the page seems to have been deleted.

Why is it that whenever there is a credible allegation of voter fraud, it's always Republicans that are doing it?

That's What, Like 4 Hours of Profit?

Facebook has just paid a $14 million fine for cheating on its H1B applications.

The law says that you have to look for , and advertise for, US employees, but, like almost every other company that avails itself of the program, did not do this in good faith.

Of course, because they are Facebook, they did not even go through the motions:

Facebook has agreed to pay penalties totaling more than $14 million under a settlement with the Justice Department over findings that the company’s hiring practices intentionally discriminated against U.S. workers in favor of foreign workers, U.S. officials said Tuesday.

The social media behemoth has also agreed in a settlement with the Labor Department to do more to recruit U.S. workers for technology jobs and be subject to federal scrutiny for up to three years, the officials said.

The agreements came after the Justice Department sued Facebook in December for allegedly failing to properly advertise at least 2,600 jobs — and consider applications from U.S. citizens — before offering the spots to foreigners whom the company was sponsoring for green cards granting permanent residency in 2018 and 2019.

The lawsuit said Facebook’s practices violated federal laws that require employers to demonstrate that there are no qualified U.S. workers available before offering positions to temporary foreign workers they are sponsoring.

Facebook has agreed to pay a civil penalty of $4.75 million to the U.S. government and up to $9.5 million to eligible victims of Facebook’s alleged discrimination, which officials said was the largest monetary settlement of its kind under the anti-discrimination provisions in U.S. immigration laws.

………

In its complaint in December, the Justice Department said the company eschewed its traditional hiring process in cases where it wanted to hire an employee on an H-1B visa for a permanent position. When a temporary visa holder sought such a job, Facebook “diverged from its normal recruiting protocols,” according to the government, opting in some cases against “advertising the position on its external website.”

If a U.S. worker applied for one of these jobs — and Facebook determined they were qualified — the company appeared to hire them in a different capacity, the lawsuit found. Federal law generally allows a company to sponsor a temporary worker for a permanent position only in cases where there is no qualified U.S. applicant.

The record-breaking penalty will have little impact on Facebook’s bottom line, as the company generated about $29 billion in revenue in the second quarter of this year alone.

Like I said, a fine equivalent to 4 hours profits, that's just a cost of doing business.  

You need a real fine, and perhaps some felony prosecutions for a racketeering and criminal conspiracy.

The fine for H1B fraud can be as high as $250,000 per individual.

2600 jobs?  That comes to $650,000,000, so the $14 million fine is about 2% of that.

We need real enforcement against the BUSINESSES who blithely violate immigration laws.

Massive fines and handcuffs is the way to go.

 

Finally, an Accusation of Fraud

Facebook whistle-blower Frances Haugen has stated something that should be obvious to anyone who makes a cursory study of Zuckerberg's monster, that the company has been profiting through fraud.

I've noted this many times, see here, here, here here, here, here, here, and here.

How about frog marching Zuckerberg and Sandberg out of Facebook's offices in handcuffs?

Companies are often slow to react to public opprobrium. Travis Kalanick did not step down as chief executive of Uber until four months after a whistleblower exposed the company’s workplace sexism. Tony Hayward did not resign as boss of BP until three months after the Deepwater Horizon oil spill. The fallout from Facebook’s latest public shaming will not be instantaneous — and may pivot on user statistics as much as hate speech.

………

But there is one complaint that should give investors pause. Haugen has written to the Securities and Exchange Commission to claim Facebook “misled investors and advertisers” about the accuracy of its user base count. This is the foundation of a business that accounts for 98 per cent of Facebook revenues.

………

She is right that Facebook should stop promoting user numbers clouded by doubts. Facebook’s own estimates suggest 16 per cent of accounts may be duplicates or false. This figure creates a huge discrepancy. Yet Facebook does not adjust important metrics such as average revenue per user (Arpu).

Arpu is a crucial number in social media. For Facebook, the figure was $10.12 in the last quarter.

There are further discrepancies. While Facebook includes all sources of revenue, it limits users to Facebook and Messenger. Last year, it created a figure for its “family” of apps, including WhatsApp and Instagram. Using this, Arpu in the last quarter was very different at $8.36.

If an aggressive criminal investigation of Facebook were conducted there would be a lot of people in the dock.

If it were expanded to online advertising in general, they would have to rent out the hangar holding the Spruce Goose for the arraignments.

Matt Tiabbi is Wrong this Time

He is right on most, if not all of the particulars, but his dissection of NPR's awful coverage of Ben Shapiro and The Daily Wire focuses almost exclusively on the navel gazing nature of both the story and NPR in particular.

The problem is, as I noted a few days ago, is that this story is not an artifact of NPR's self-absorbed hyper-woke culture, it is the result of deliberate misreporting of news.

NPR knowingly (see my link for that) covered up corruption and fraud at both Facebook and The Daily Wire.

Taibbi's essay is akin to complaining about the tunes played by the ship's orchestra as the Titanic slides beneath the waves.