Exclusive: investigation suggests Washington Post owner was targeted five months before murder of Jamal Khashoggi
The Amazon billionaire Jeff Bezos had his mobile phone “hacked” in 2018 after receiving a WhatsApp message that had apparently been sent from the personal account of the crown prince of Saudi Arabia, sources have told the Guardian.
The encrypted message from the number used by Mohammed bin Salman is believed to have included a malicious file that infiltrated the phone of the world’s richest man, according to the results of a digital forensic analysis.
This analysis found it “highly probable” that the intrusion into the phone was triggered by an infected video file sent from the account of the Saudi heir to Bezos, the owner of the Washington Post.
The two men had been having a seemingly friendly WhatsApp exchange when, on 1 May of that year, the unsolicited file was sent, according to sources who spoke to the Guardian on the condition of anonymity.
Large amounts of data were exfiltrated from Bezos’s phone within hours, according to a person familiar with the matter. The Guardian has no knowledge of what was taken from the phone or how it was used.
The extraordinary revelation that the future king of Saudi Arabia may have had a personal involvement in the targeting of the American founder of Amazon will send shockwaves from Wall Street to Silicon Valley.
It could also undermine efforts by “MBS” – as the crown prince is known – to lure more western investors to Saudi Arabia, where he has vowed to economically transform the kingdom even as he has overseen a crackdown on his critics and rivals.
The disclosure is likely to raise difficult questions for the kingdom about the circumstances around how US tabloid the National Enquirer came to publish intimate details about Bezos’s private life – including text messages – nine months later.
It may also lead to renewed scrutiny about what the crown prince and his inner circle were doing in the months prior to the murder of Jamal Khashoggi, the Washington Post journalist who was killed in October 2018 – five months after the alleged “hack” of the newspaper’s owner.
Saudi Arabia has previously denied it targeted Bezos’s phone, and has insisted the murder of Khashoggi was the result of a “rogue operation”. In December, a Saudi court convicted eight people of involvement in the murder after a secret trial that was criticised as a sham by human rights experts.
Digital forensic experts started examining Bezos’s phone following the publication last January by the National Enquirer of intimate details about his private life.
The story, which included his involvement in an extramarital relationship, set off a race by his security team to uncover how the CEO’s private texts were obtained by the supermarket tabloid, which was owned by American Media Inc (AMI).
While AMI insisted it was tipped off about the affair by the estranged brother of Bezos’s girlfriend, the investigation by the billionaire’s own team found with “high confidence” that the Saudis had managed to “access” Bezos’s phone and had “gained private information” about him.
Bezos’s head of security, Gavin de Becker, wrote in the Daily Beast last March he had provided details of his investigation to law enforcement officials, but did not publicly reveal any information on how the Saudis accessed the phone.
He also described “the close relationship” the Saudi crown prince had developed with David Pecker, the chief executive of the company that owned the Enquirer, in the months before the Bezos story was published. De Becker did not respond to calls and messages from the Guardian.
The Guardian understands a forensic analysis of Bezos’s phone, and the indications that the “hack” began within an infected file from the crown prince’s account, has been reviewed by Agnès Callamard, the UN special rapporteur who investigates extrajudicial killings. It is understood that it is considered credible enough for investigators to be considering a formal approach to Saudi Arabia to ask for an explanation.
Callamard, whose own investigation into the murder of Khashoggi found “credible evidence” the crown prince and other senior Saudi officials were responsible for the killing, confirmed to the Guardian she was still pursuing “several leads” into the murder, but declined to comment on the alleged Bezos link.
When asked by the Guardian whether she would challenge Saudi Arabia about the new “hacking” allegation, Callamard said she followed all UN protocols that require investigators to alert governments about forthcoming public allegations.
Saudi experts – dissidents and analysts – told the Guardian they believed Bezos was probably targeted because of his ownership of the Post and its coverage of Saudi Arabia. Khashoggi’s critical columns about Mohammed bin Salman and his campaign of repression against activists and intellectuals rankled the crown prince and his inner circle.
Andrew Miller, a Middle East expert who served on the national security council under President Obama, said if Bezos had been targeted by the crown prince, it reflected the “personality-based” environment in which the crown prince operates.
“He probably believed that if he got something on Bezos it could shape coverage of Saudi Arabia in the Post. It is clear that the Saudis have no real boundaries or limits in terms of what they are prepared to do in order to protect and advance MBS, whether it is going after the head of one of the largest companies in the world or a dissident who is on their own.”
The possibility that the head of one of America’s leading companies was targeted by Saudi Arabia could pose a dilemma for the White House.
Trump and his son-in-law Jared Kushner have maintained close ties with the crown prince despite a US intelligence finding – reportedly with a medium–to–high degree of certainty – that Mohammed bin Salman ordered Khashoggi’s murder.
Both Saudi Arabia and AMI have denied that the kingdom was involved in the publication of the Bezos story.
A lawyer for Bezos who was contacted by the Guardian said: “I have no comment on this except to say that Mr Bezos is cooperating with investigations.”
The Guardian asked the Saudi embassy in Washington about the claims. It did not immediately return a request for comment.
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Mark’s influence is staggering, far beyond that of anyone else in the private sector or in government. He controls three core communications platforms — Facebook, Instagram and WhatsApp — that billions of people use every day. Facebook’s board works more like an advisory committee than an overseer, because Mark controls around 60 percent of voting shares. Mark alone can decide how to configure Facebook’s algorithms to determine what people see in their News Feeds, what privacy settings they can use and even which messages get delivered. He sets the rules for how to distinguish violent and incendiary speech from the merely offensive, and he can choose to shut down a competitor by acquiring, blocking or copying it.
Mark is a good, kind person. But I’m angry that his focus on growth led him to sacrifice security and civility for clicks. I’m disappointed in myself and the early Facebook team for not thinking more about how the News Feed algorithm could change our culture, influence elections and empower nationalist leaders. And I’m worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them.
The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive. Any day now, the Federal Trade Commission is expected to impose a $5 billion fine on the company, but that is not enough; nor is Facebook’s offer to appoint some kind of privacy czar. After Mark’s congressional testimony last year, there should have been calls for him to truly reckon with his mistakes. Instead the legislators who questioned him were derided as too old and out of touch to understand how tech works. That’s the impression Mark wanted Americans to have, because it means little will change.
Facebook’s dominance is not an accident of history. The company’s strategy was to beat every competitor in plain view, and regulators and the government tacitly — and at times explicitly — approved. In one of the government’s few attempts to rein in the company, the F.T.C. in 2011 issued a consent decree that Facebook not share any private information beyond what users already agreed to. Facebook largely ignored the decree. Last month, the day after the company predicted in an earnings call that it would need to pay up to $5 billion as a penalty for its negligence — a slap on the wrist — Facebook’s shares surged 7 percent, adding $30 billion to its value, six times the size of the fine.
The F.T.C.’s biggest mistake was to allow Facebook to acquire Instagram and WhatsApp. In 2012, the newer platforms were nipping at Facebook’s heels because they had been built for the smartphone, where Facebook was still struggling to gain traction. Mark responded by buying them, and the F.T.C. approved.
Neither Instagram nor WhatsApp had any meaningful revenue, but both were incredibly popular. The Instagram acquisition guaranteed Facebook would preserve its dominance in photo networking, and WhatsApp gave it a new entry into mobile real-time messaging. Now, the founders of Instagram and WhatsApp have left the company after clashing with Mark over his management of their platforms. But their former properties remain Facebook’s, driving much of its recent growth.
.. When it hasn’t acquired its way to dominance, Facebook has used its monopoly position to shut out competing companies or has copied their technology.
The News Feed algorithm reportedly prioritized videos created through Facebook over videos from competitors, like YouTube and Vimeo. In 2012, Twitter introduced a video network called Vine that featured six-second videos. That same day, Facebook blocked Vine from hosting a tool that let its users search for their Facebook friends while on the new network. The decision hobbled Vine, which shut down four years later.
Snapchat posed a different threat. Snapchat’s Stories and impermanent messaging options made it an attractive alternative to Facebook and Instagram. And unlike Vine, Snapchat wasn’t interfacing with the Facebook ecosystem; there was no obvious way to handicap the company or shut it out. So Facebook simply copied it.
Facebook’s version of Snapchat’s stories and disappearing messages proved wildly successful, at Snapchat’s expense. At an all-hands meeting in 2016, Mark told Facebook employees not to let their pride get in the way of giving users what they want. According to Wired magazine, “Zuckerberg’s message became an informal slogan at Facebook: ‘Don’t be too proud to copy.’”
(There is little regulators can do about this tactic: Snapchat patented its “ephemeral message galleries,” but copyright law does not extend to the abstract concept itself.)
As a result of all this, would-be competitors can’t raise the money to take on Facebook. Investors realize that if a company gets traction, Facebook will copy its innovations, shut it down or acquire it for a relatively modest sum. So despite an extended economic expansion, increasing interest in high-tech start-ups, an explosion of venture capital and growing public distaste for Facebook, no major social networking company has been founded since the fall of 2011.
As markets become more concentrated, the number of new start-up businesses declines. This holds true in other high-tech areas dominated by single companies, like search (controlled by Google) and e-commerce (taken over by Amazon). Meanwhile, there has been plenty of innovation in areas where there is no monopolistic domination, such as in workplace productivity (Slack, Trello, Asana), urban transportation (Lyft, Uber, Lime, Bird) and cryptocurrency exchanges (Ripple, Coinbase, Circle).
I don’t blame Mark for his quest for domination. He has demonstrated nothing more nefarious than the virtuous hustle of a talented entrepreneur. Yet he has created a leviathan that crowds out entrepreneurship and restricts consumer choice. It’s on our government to ensure that we never lose the magic of the invisiblehand. How did we allow this to happen?
Since the 1970s, courts have become increasingly hesitant to break up companies or block mergers unless consumers are paying inflated prices that would be lower in a competitive market. But a narrow reliance on whether or not consumers have experienced price gouging fails to take into account the full cost of market domination. It doesn’t recognize that we also want markets to be competitive to encourage innovation and to hold power in check. And it is out of step with the history of antitrust law. Two of the last major antitrust suits, against AT&T and IBM in the 1980s, were grounded in the argument that they had used their size to stifle innovation and crush competition.
As the Columbia law professor Tim Wu writes, “It is a disservice to the laws and their intent to retain such a laserlike focus on price effects as the measure of all that antitrust was meant to do.”
Facebook is the perfect case on which to reverse course, precisely because Facebook makes its money from targeted advertising, meaning users do not pay to use the service. But it is not actually free, and it certainly isn’t harmless.
Facebook’s business model is built on capturing as much of our attention as possible to encourage people to create and share more information about who they are and who they want to be. We pay for Facebook with our data and our attention, and by either measure it doesn’t come cheap.
I was on the original News Feed team (my name is on the patent), and that product now gets billions of hours of attention and pulls in unknowable amounts of data each year. The average Facebook user spends an hour a day on the platform; Instagram users spend 53 minutes a day scrolling through pictures and videos. They create immense amounts of data — not just likes and dislikes, but how many seconds they watch a particular video — that Facebook uses to refine its targeted advertising. Facebook also collects data from partner companies and apps, without most users knowing about it, according to testing by The Wall Street Journal.
Some days, lying on the floor next to my 1-year-old son as he plays with his dinosaurs, I catch myself scrolling through Instagram, waiting to see if the next image will be more beautiful than the last. What am I doing? I know it’s not good for me, or for my son, and yet I do it anyway.
The choice is mine, but it doesn’t feel like a choice. Facebook seeps into every corner of our lives to capture as much of our attention and data as possible and, without any alternative, we make the trade.
The vibrant marketplace that once drove Facebook and other social media companies to compete to come up with better products has virtually disappeared. This means there’s less chance of start-ups developing healthier, less exploitative social media platforms. It also means less accountability on issues like privacy.
Just last month, Facebook seemingly tried to bury news that it had stored tens of millions of user passwords in plain text format, which thousands of Facebook employees could see. Competition alone wouldn’t necessarily spur privacy protection — regulation is required to ensure accountability — but Facebook’s lock on the market guarantees that users can’t protest by moving to alternative platforms.
The most problematic aspect of Facebook’s power is Mark’s unilateral control over speech. There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people.
Facebook engineers write algorithms that select which users’ comments or experiences end up displayed in the News Feeds of friends and family. These rules are proprietary and so complex that many Facebook employees themselves don’t understand them.
In 2014, the rules favored curiosity-inducing “clickbait” headlines. In 2016, they enabled the spread of fringe political views and fake news, which made it easier for Russian actors to manipulate the American electorate. In January 2018, Mark announced that the algorithms would favor non-news content shared by friends and news from “trustworthy” sources, which his engineers interpreted — to the confusion of many — as a boost for anything in the category of “politics, crime, tragedy.”
Facebook has responded to many of the criticisms of how it manages speech by hiring thousands of contractors to enforce the rules that Mark and senior executives develop. After a few weeks of training, these contractors decide which videos count as hate speech or free speech, which images are erotic and which are simply artistic, and which live streams are too violent to be broadcast. (The Verge reported that some of these moderators, working through a vendor in Arizona, were paid $28,800 a year, got limited breaks and faced significant mental health risks.)
As if Facebook’s opaque algorithms weren’t enough, last year we learned that Facebook executives had permanently deleted their own messages from the platform, erasing them from the inboxes of recipients; the justification was corporate security concerns. When I look at my years of Facebook messages with Mark now, it’s just a long stream of my own light-blue comments, clearly written in response to words he had once sent me. (Facebook now offers a limited version of this feature to all users.)
The most extreme example of Facebook manipulating speech happened in Myanmar in late 2017. Mark said in a Vox interview that he personally made the decision to delete the private messages of Facebook users who were encouraging genocide there. “I remember, one Saturday morning, I got a phone call,” he said, “and we detected that people were trying to spread sensational messages through — it was Facebook Messenger in this case — to each side of the conflict, basically telling the Muslims, ‘Hey, there’s about to be an uprising of the Buddhists, so make sure that you are armed and go to this place.’ And then the same thing on the other side.”
Mark made a call: “We stop those messages from going through.” Most people would agree with his decision, but it’s deeply troubling that he made it with no accountability to any independent authority or government. Facebook could, in theory, delete en masse the messages of Americans, too, if its leadership decided it didn’t like them.
Mark used to insist that Facebook was just a “social utility,” a neutral platform for people to communicate what they wished. Now he recognizes that Facebook is both a platform and a publisher and that it is inevitably making decisions about values. The company’s own lawyers have argued in court that Facebook is a publisher and thus entitled to First Amendment protection.
No one at Facebook headquarters is choosing what single news story everyone in America wakes up to, of course. But they do decide whether it will be an article from a reputable outlet or a clip from “The Daily Show,” a photo from a friend’s wedding or an incendiary call to kill others.
Mark knows that this is too much power and is pursuing a twofold strategy to mitigate it.
- He is pivoting Facebook’s focus toward encouraging more private, encrypted messaging that Facebook’s employees can’t see, let alone control.
- Second, he is hoping for friendly oversight from regulators and other industry executives.
Late last year, he proposed an independent commission to handle difficult content moderation decisions by social media platforms. It would afford an independent check, Mark argued, on Facebook’s decisions, and users could appeal to it if they disagreed. But its decisions would not have the force of law, since companies would voluntarily participate.
In an op-ed essay in The Washington Post in March, he wrote, “Lawmakers often tell me we have too much power over speech, and I agree.” And he went even further than before, calling for more government regulation — not just on speech, but also on privacy and interoperability, the ability of consumers to seamlessly leave one network and transfer their profiles, friend connections, photos and other data to another.
I don’t think these proposals were made in bad faith. But I do think they’re an attempt to head off the argument that regulators need to go further and break up the company. Facebook isn’t afraid of a few more rules. It’s afraid of an antitrust case and of the kind of accountability that real government oversight would bring.
We don’t expect calcified rules or voluntary commissions to work to regulate drug companies, health care companies, car manufacturers or credit card providers. Agencies oversee these industries to ensure that the private market works for the public good. In these cases, we all understand that government isn’t an external force meddling in an organic market; it’s what makes a dynamic and fair market possible in the first place. This should be just as true for social networking as it is for air travel or pharmaceuticals.
In the summer of 2006, Yahoo offered us $1 billion for Facebook. I desperately wanted Mark to say yes. Even my small slice of the company would have made me a millionaire several times over. For a 22-year-old scholarship kid from small-town North Carolina, that kind of money was unimaginable. I wasn’t alone — just about every other person at the company wanted the same.
It was taboo to talk about it openly, but I finally asked Mark when we had a moment alone, “How are you feeling about Yahoo?” I got a shrug and a one-line answer: “I just don’t know if I want to work for Terry Semel,” Yahoo’s chief executive.
Outside of a couple of gigs in college, Mark had never had a real boss and seemed entirely uninterested in the prospect. I didn’t like the idea much myself, but I would have traded having a boss for several million dollars any day of the week. Mark’s drive was infinitely stronger. Domination meant domination, and the hustle was just too delicious.
Mark may never have a boss, but he needs to have some check on his power. The American government needs to do two things: break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.
First, Facebook should be separated into multiple companies. The F.T.C., in conjunction with the Justice Department, should enforce antitrust laws by undoing the Instagram and WhatsApp acquisitions and banning future acquisitions for several years. The F.T.C. should have blocked these mergers, but it’s not too late to act. There is precedent for correcting bad decisions — as recently as 2009, Whole Foods settled antitrust complaints by selling off the Wild Oats brand and stores that it had bought a few years earlier.
There is some evidence that we may be headed in this direction. Senator Elizabeth Warren has called for reversing the Facebook mergers, and in February, the F.T.C. announced the creation of a task force to monitor competition among tech companies and review previous mergers.
How would a breakup work? Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded. Facebook shareholders would initially hold stock in the new companies, although Mark and other executives would probably be required to divest their management shares.
Until recently, WhatsApp and Instagram were administered as independent platforms inside the parent company, so that should make the process easier. But time is of the essence: Facebook is working quickly to integrate the three, which would make it harder for the F.T.C. to split them up.
Some economists are skeptical that breaking up Facebook would spur that much competition, because Facebook, they say, is a “natural” monopoly. Natural monopolies have emerged in areas like water systems and the electrical grid, where the price of entering the business is very high — because you have to lay pipes or electrical lines — but it gets cheaper and cheaper to add each additional customer. In other words, the monopoly arises naturally from the circumstances of the business, rather than a company’s illegal maneuvering. In addition, defenders of natural monopolies often make the case that they benefit consumers because they are able to provide services more cheaply than anyone else.
Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.
Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.
Still others worry that the breakup of Facebook or other American tech companies could be a national security problem. Because advancements in artificial intelligence require immense amounts of data and computing power, only large companies like Facebook, Google and Amazon can afford these investments, they say. If American companies become smaller, the Chinese will outpace us.
While serious, these concerns do not justify inaction. Even after a breakup, Facebook would be a hugely profitable business with billions to invest in new technologies — and a more competitive market would only encourage those investments. If the Chinese did pull ahead, our government could invest in research and development and pursue tactical trade policy, just as it is doing today to hold China’s 5G technology at bay.
The cost of breaking up Facebook would be next to zero for the government, and lots of people stand to gain economically. A ban on short-term acquisitions would ensure that competitors, and the investors who take a bet on them, would have the space to flourish. Digital advertisers would suddenly have multiple companies vying for their dollars.
Even Facebook shareholders would probably benefit, as shareholders often do in the years after a company’s split. The value of the companies that made up Standard Oil doubled within a year of its being dismantled and had increased by fivefold a few years later. Ten years after the 1984 breakup of AT&T, the value of its successor companies had tripled.
But the biggest winners would be the American people. Imagine a competitive market in which they could choose among one network that
- offered higher privacy standards, another that
- cost a fee to join but had little advertising and another that would allow users to
- customize and tweak their feeds as they saw fit.
No one knows exactly what Facebook’s competitors would offer to differentiate themselves. That’s exactly the point.
The Justice Department faced similar questions of social costs and benefits with AT&T in the 1950s. AT&T had a monopoly on phone services and telecommunications equipment. The government filed suit under antitrust laws, and the case ended with a consent decree that required AT&T to release its patents and refrain from expanding into the nascent computer industry. This resulted in an explosion of innovation, greatly increasing follow-on patents and leading to the development of the semiconductor and modern computing. We would most likely not have iPhones or laptops without the competitive markets that antitrust action ushered in.
Adam Smith was right: Competition spurs growth and innovation.
Just breaking up Facebook is not enough. We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy.
The Europeans have made headway on privacy with the General Data Protection Regulation, a law that guarantees users a minimal level of protection. A landmark privacy bill in the United States should specify exactly what control Americans have over their digital information, require clearer disclosure to users and provide enough flexibility to the agency to exercise effective oversight over time. The agency should also be charged with guaranteeing basic interoperability across platforms.
Finally, the agency should create guidelines for acceptable speech on social media. This idea may seem un-American — we would never stand for a government agency censoring speech. But we already have limits on
- yelling “fire” in a crowded theater,
- child pornography,
- speech intended to provoke violence and false statements to manipulate stock prices.
We will have to create similar standards that tech companies can use. These standards should of course be subject to the review of the courts, just as any other limits on speech are. But there is no constitutional right to harass others or live-stream violence.
These are difficult challenges. I worry that government regulators will not be able to keep up with the pace of digital innovation. I worry that more competition in social networking might lead to a conservative Facebook and a liberal one, or that newer social networks might be less secure if government regulation is weak. But sticking with the status quo would be worse: If we don’t have public servants shaping these policies, corporations will.
Some people doubt that an effort to break up Facebook would win in the courts, given the hostility on the federal bench to antitrust action, or that this divided Congress would ever be able to muster enough consensus to create a regulatory agency for social media.
But even if breakup and regulation aren’t immediately successful, simply pushing for them will bring more oversight. The government’s case against Microsoft — that it illegally used its market power in operating systems to force its customers to use its web browser, Internet Explorer — ended in 2001 when George W. Bush’s administration abandoned its effort to break up the company. Yet that prosecution helped rein in Microsoft’s ambitions to dominate the early web.
Similarly, the Justice Department’s 1970s suit accusing IBM of illegally maintaining its monopoly on computer sales ended in a stalemate. But along the way, IBM changed many of its behaviors. It stopped bundling its hardware and software, chose an extremely open design for the operating system in its personal computers and did not exercise undue control over its suppliers. Professor Wu has written that this “policeman at the elbow” led IBM to steer clear “of anything close to anticompetitive conduct, for fear of adding to the case against it.”
We can expect the same from even an unsuccessful suit against Facebook.
Finally, an aggressive case against Facebook would persuade other behemoths like Google and Amazon to think twice about stifling competition in their own sectors, out of fear that they could be next. If the government were to use this moment to resurrect an effective competition standard that takes a broader view of the full cost of “free” products, it could affect a whole host of industries.
The alternative is bleak. If we do not take action, Facebook’s monopoly will become even more entrenched. With much of the world’s personal communications in hand, it can mine that data for patterns and trends, giving it an advantage over competitors for decades to come.
I take responsibility for not sounding the alarm earlier. Don Graham, a former Facebook board member, has accused those who criticize the company now as having “all the courage of the last man leaping on the pile at a football game.” The financial rewards I reaped from working at Facebook radically changed the trajectory of my life, and even after I cashed out, I watched in awe as the company grew. It took the 2016 election fallout and Cambridge Analytica to awaken me to the dangers of Facebook’s monopoly. But anyone suggesting that Facebook is akin to a pinned football player misrepresents its resilience and power.
An era of accountability for Facebook and other monopolies may be beginning. Collective anger is growing, and a new cohort of leaders has begun to emerge. On Capitol Hill, Representative David Cicilline has taken a special interest in checking the power of monopolies, and Senators Amy Klobuchar and Ted Cruz have joined Senator Warren in calling for more oversight. Economists like Jason Furman, a former chairman of the Council of Economic Advisers, are speaking out about monopolies, and a host of legal scholars like Lina Khan, Barry Lynn and Ganesh Sitaraman are plotting a way forward.
This movement of public servants, scholars and activists deserves our support. Mark Zuckerberg cannot fix Facebook, but our government can.
All social apps grow until you need a newsfeed
All newsfeeds grow until you need an algorithmic feed
All algorithmic feeds grow until you get fed up of not seeing stuff/seeing the wrong stuff & leave for new apps with less overload
All those new apps grow until…
A pessimist might say this looks like slash & burn agriculture, or perhaps the old joke ‘No-one goes there anymore – it’s too crowded.’ That is, for social, Metcalfe’s Law might look more like a bell curve. I don’t know what the next product here will be (I didn’t create Snap, after all). But tech like this tends to move in cycles – we swing from one kind of expression to another and back again, and we might be swinging away from the feed.
Finally, any such changes have consequences for the traffic that sharing creates. ‘Like’ buttons made it frictionless to post any web page you want into your feed and push it to (some arbitrarily calculated percentage of) your friends, and many hands have been wrung about how much traffic this can drive and how Facebook moves things up and down the feed ranking. But sharing links inside Stories isn’t the same, today, and a link you share in a WhatsApp or iMessage group with 5 friends will only be seen by them, and Facebook has no lever to pull to make this more or less visible. On the other hand, the ‘WhatsApp forward’ can take such a link and send it viral across a country, and where Facebook can ultimately kill a link or an entire source across the whole site if it really wants to, it’s very different for a P2P messaging app to make that call (outside China, of course). That is, the plea from many media companies to ‘up-rank’ their posts in the newsfeed – to make people eat their greens – and to kill ‘fake news’ links is at least theoretically possible on Facebook. It’s not possible in iMessage – with end-to-end encryption, Apple has no idea what you’re sharing.
Knitting together Facebook’s apps is a stark reversal of Mr. Zuckerberg’s previous stance toward WhatsApp and Instagram, which were independent companies that Facebook acquired. At the time of the acquisitions, Mr. Zuckerberg promised WhatsApp and Instagram plenty of autonomy from their new parent company. (Facebook Messenger is a homegrown service spun off the main Facebook app in 2014.)
WhatsApp and Instagram have grown tremendously since then, prompting Mr. Zuckerberg to change his thinking, one of the people said. He now believes integrating the services more tightly will benefit Facebook’s entire “family of apps” in the long term by making them more useful, the person said. Mr. Zuckerberg floated the idea for months and began to promote it to employees more heavily toward the end of 2018, the people said.
.. The effort has caused strife within Facebook. Instagram’s founders, Kevin Systrom and Mike Krieger, left the company abruptly last fallafter Mr. Zuckerberg began weighing in more. WhatsApp’s founders, Jan Koum and Brian Acton, departed for similar reasons. More recently, dozens of WhatsApp employees clashed with Mr. Zuckerberg over the integration plan on internal message boards and during a contentious staff meeting in December, according to four people who attended or were briefed on the event.
The integration plan raises privacy questions because of how users’ data may be shared between services. WhatsApp currently requires only a phone number when new users sign up. By contrast, Facebook and Facebook Messenger ask users to provide their true identities. Matching Facebook and Instagram users to their WhatsApp handles could give pause to those who prefer to keep their use of each app separate.
It was probably not Stone himself, but rather his electronic devices... the true target of Friday’s F.B.I. actions was not Mr. Stone himself, but his electronic devices.
Mr. Stone’s early-morning arrest at his Florida home unsurprisingly dominated coverage, but reports also noted that federal agents were “seen carting hard drives and other evidence from Mr. Stone’s apartment in Harlem, and his recording studio in South Florida was also raided.” The F.B.I., in other words, was executing search warrants, not just arrest warrants. Even the timing and manner of Mr. Stone’s arrest — at the absolute earliest moment allowed under federal rules of criminal procedure without persuading a judge to authorize an exceptional nighttime raid — suggests a concern with preventing destruction of evidence: Otherwise it would make little sense to send a dozen agents to arrest a man in his 60s before sunrise...the document places great emphasis on Mr. Stone’s denial that he had any written communications with two associates — associates with whom he had, in fact, regularly exchanged emails and text messages. That’s precisely the sort of behavior one might focus on in seeking to convince a recalcitrant judge that an investigative target could not be trusted to turn over documents in response to a subpoena, requiring the more intrusive step of seizing Mr. Stone’s devices directly...Mr. Stone made a habit of moving sensitive conversations to encrypted messaging platforms like WhatsApp — meaning that, unlike ordinary emails, the messages could not be obtained directly from the service provider... The clear implication is that any truly incriminating communications would have been conducted in encrypted form — and thus could be obtained only directly from Mr. Stone’s own phones and laptops. And while Mr. Stone likely has limited value as a cooperating witness — it’s hard to put someone on the stand after charging them with lying to obstruct justice — the charges against him provide leverage in the event his cooperation is needed to unlock those devices by supplying a cryptographic passphrase.
Of course, Mr. Mueller is likely interested in his communications with Trump campaign officials, but the detailed charges filed against the Russian hackers alleged to have broken into the Democratic National Committee’s servers also show the special counsel’s keen interest in Mr. Stone’s communications with the hacker “Guccifer 2.0,” an identity said to have been used as a front for the Russian intruders. By Mr. Stone’s own admission, he had a brief exchange with “Guccifer” via private Twitter messages. On Mr. Stone’s account, Guccifer enthusiastically offered his assistance — at the same time we now know Mr. Stone was vigorously pursuing advance knowledge of what other embarrassing material stolen from Mr. Trump’s opponents might soon be released — and Mr. Stone failed to even dignify the offer with a reply. With no easy way of getting hold of “Guccifer’s” cellphone, searching Mr. Stone’s devices might be the only reliable way for the special counsel to discover whether the conversation in fact continued on a more “secure line.”
.. Yet if Mr. Mueller is indeed less interested in Mr. Stone than the potential evidence on his phones and computers, the conventional wisdom that the special counsel probe is wrapping up — and could issue a final report as soon as next month — seems awfully implausible. Digital forensics takes time, and a single device could easily hold many thousands of messages to sift through. And if this really is the first time Mr. Mueller’s office is seeing the most sensitive communications from a key figure like Mr. Stone, it’s likely they’ll come away with new leads to follow and new questions to pose to other witnesses.
We may ultimately look back on Mr. Stone’s arrest not as the beginning of the special counsel’s endgame, but the point when the investigation began to really heat up.
Now he’s talking publicly for the first time. Under pressure from Mark Zuckerberg and Sheryl Sandberg to monetize WhatsApp, he pushed back as Facebook questioned the encryption he’d helped build and laid the groundwork to show targeted ads and facilitate commercial messaging.
Acton also walked away from Facebook a year before his final tranche of stock grants vested. “It was like, okay, well, you want to do these things I don’t want to do,” Acton says. “It’s better if I get out of your way. And I did.” It was perhaps the most expensive moral stand in history. Acton took a screenshot of the stock price on his way out the door—the decision cost him $850 million.
.. “As part of a proposed settlement at the end, [Facebook management] tried to put a nondisclosure agreement in place,” Acton says. “That was part of the reason that I got sort of cold feet in terms of trying to settle with these guys.”
.. That kind of answer masks the kind of issues that just prompted Instagram’s founders to abruptly quit. Kevin Systrom and Mike Krieger reportedly chafed at Facebook and Zuckerberg’s heavy hand. Acton’s account of what happened at WhatsApp—and Facebook’s plans for it—provides a rare founder’s-level window into a company that’s at once the global arbiter of privacy standards and the gatekeeper of facts, while also increasingly straying from its entrepreneurial roots.
.. Despite a transfer of several billion dollars, Acton says he never developed a rapport with Zuckerberg. “I couldn’t tell you much about the guy,” he says. In one of their dozen or so meetings, Zuck told Acton unromantically that WhatsApp, which had a stipulated degree of autonomy within the Facebook universe and continued to operate for a while out of its original offices, was “a product group to him, like Instagram.”
.. So Acton didn’t know what to expect when Zuck beckoned him to his office last September, around the time Acton told Facebook brass that he planned to leave. Acton and Koum had a clause in their contract that allowed them to get all their stock, which was being doled out over four years, if Facebook began “implementing monetization initiatives” without their consent.
.. The Facebook-WhatsApp pairing had been a head-scratcher from the start. Facebook has one of the world’s biggest advertising networks; Koum and Acton hated ads. Facebook’s added value for advertisers is how much it knows about its users; WhatsApp’s founders were pro-privacy zealots who felt their vaunted encryption had been integral to their nearly unprecedented global growth.
.. This dissonance frustrated Zuckerberg. Facebook, Acton says, had decided to pursue two ways of making money from WhatsApp. First, by showing targeted ads in WhatsApp’s new Status feature, which Acton felt broke a social compact with its users. “Targeted advertising is what makes me unhappy,” he says. His motto at WhatsApp had been “No ads, no games, no gimmicks”—a direct contrast with a parent company that derived 98% of its revenue from advertising. Another motto had been “Take the time to get it right,” a stark contrast to “Move fast and break things.”
.. Facebook also wanted to sell businesses tools to chat with WhatsApp users. Once businesses were on board, Facebook hoped to sell them analytics tools, too. The challenge was WhatsApp’s watertight end-to-end encryption, which stopped both WhatsApp and Facebook from reading messages.
.. For his part, Acton had proposed monetizing WhatsApp through a metered-user model, charging, say, a tenth of a penny after a certain large number of free messages were used up. “You build it once, it runs everywhere in every country,” Acton says. “You don’t need a sophisticated sales force. It’s a very simple business.”
.. Acton’s plan was shot down by Sandberg. “Her words were ‘It won’t scale.’ ”
.. “I called her out one time,” says Acton, who sensed there might be greed at play. “I was like, ‘No, you don’t mean that it won’t scale. You mean it won’t make as much money as . . . ,’ and she kind of hemmed and hawed a little. And we moved on. I think I made my point. . . . They are businesspeople, they are good businesspeople. They just represent a set of business practices, principles and ethics, and policies that I don’t necessarily agree with.”
.. When Acton reached Zuckerberg’s office, a Facebook lawyer was present. Acton made clear that the disagreement—Facebook wanted to make money through ads, and he wanted to make it from high-volume users—meant he could get his full allocation of stock. Facebook’s legal team disagreed, saying that WhatsApp had only been exploring monetization initiatives, not “implementing” them.
.. Zuckerberg, for his part, had a simple message: “He was like, This is probably the last time you’ll ever talk to me.”
.. Acton graduated from Stanford with a bachelor’s in computer science and eventually became one of the first employees at Yahoo in 1996, making millions in the process. His biggest asset from that time at Yahoo: befriending Koum, a Ukrainian immigrant he clicked with over their similar no-nonsense style.
.. WhatsApp, persuading a handful of former Yahoo colleagues to fund a seed round while he took on cofounder status and wound up with a roughly 20% stake.
.. two things sparked Zuckerberg’s mega-offer in early 2014. One was hearing that WhatsApp’s founders had been invited to Google’s Mountain View headquarters for talks, and he did not want to lose them to a competitor.
.. He recalls Zuckerberg being “supportive” of WhatsApp’s plans to roll out end-to-end encryption, even though it would block attempts to harvest user data. If anything, he was “quick to respond” during the discussions. Zuckerberg “was not immediately evaluating ramifications in the long term.”
.. told them that they would have “zero pressure” on monetization for the next five years.
.. Facebook prepared Acton to meet with around a dozen representatives of the European Competition Commission in a teleconference. “I was coached to explain that it would be really difficult to merge or blend data between the two systems,”
.. Later he learned that elsewhere in Facebook, there were “plans and technologies to blend data.” Specifically, Facebook could use the 128-bit string of numbers assigned to each phone as a kind of bridge between accounts. The other method was phone-number matching, or pinpointing Facebook accounts with phone numbers and matching them to WhatsApp accounts with the same phone number.
.. Within 18 months, a new WhatsApp terms of service linked the accounts and made Acton look like a liar. “I think everyone was gambling because they thought that the EU might have forgotten because enough time had passed.” No such luck: Facebook wound up paying a $122 million fine for giving “incorrect or misleading information” to the EU—a cost of doing business
.. Linking these overlapping accounts was a crucial first step toward monetizing WhatsApp. The terms-of-service update would lay the groundwork for how WhatsApp could make money. During the discussions over these changes, Facebook sought “broader rights” to WhatsApp user data, Acton says, but WhatsApp’s founders pushed back, reaching a compromise with Facebook management. A clause about no ads would remain, but Facebook would still link the accounts to present friend suggestions on Facebook and offer its advertising partners better targets for ads on Facebook.
.. By then, three years since the deal, Zuckerberg was growing impatient, Acton says, and he expressed his frustrations at an all-hands meeting for WhatsApp staffers. “The CFO projections, the ten-year outlook—they wanted and needed the WhatsApp revenues to continue to show the growth to Wall Street,”
.. Internally, Facebook had targeted a $10 billion revenue run rate within five years of monetization, but such numbers sounded too high to Acton—and reliant on advertising.
.. Acton had left a management position on Yahoo’s ad division over a decade earlier with frustrations at the Web portal’s so-called “Nascar approach” of putting ad banners all over a Web page. The drive for revenue at the expense of a good product experience “gave me a bad taste in my mouth,” Acton remembers. He was now seeing history repeat.
.. He has supercharged a small messaging app, Signal, run by a security researcher named Moxie Marlinspike with a mission to put users before profit, giving it $50 million and turning it into a foundation. Now he’s working with the same people who built the opensource encryption protocol that is part of Signal and protects WhatsApp’s 1.5 billion users and that also sits as an option on Facebook Messenger, Microsoft’s Skype and Google’s Allo messenger. Essentially, he’s re-creating WhatsApp in the pure, idealized form it started: free messages and calls, with end-to-end encryption and no obligations to ad platforms.