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China’s social credit system won’t tell you what you can do right

Published January 28, 2019

For the past few years, China has been rolling out a Black Mirror / Harry Potter-esque social rating policy known as the Social Credit System (SCS). Far from just a credit score in the financial sense, an SCS score can determine whether a person can buy business class tickets on trains (or take the train at all) or have access to flights. Apps are rumored to exist that would tell users whether they are standing near someone with a debt listed in the system, so … they can walk away I guess.

This is a massive undertaking, and researchers are finally starting to collect good data on the system’s operation, such as a MERICS report looking at the implementation of this complex system, which involves companies and all levels of the Chinese government. Westerners have also increasingly explored the generally positive reception of the system by Chinese citizens, which would seem at odds with typical desires for privacy.

Yet, one of the biggest and most obvious open questions is what exactly will get you rewarded or punished by the SCS? Now, we are finally starting to get answers.

In a new paper that will be presented this week at the ACM FAT* Conference on algorithmic transparency, a group of researchers investigated how positive and negative points were assessed by downloading a large corpus of hundreds of thousands of entries from the Beijing SCS website and analyzing it with content analysis machine learning tools.

They found that Beijing was remarkably clear about what will get you punished, but vague about what will get you positive points. For instance, the vast majority of the blacklist was made up by people who had failed to pay their debts, or who had committed a traffic violation. Meanwhile, the people on the redlist (the positive list) were there because they were, say, great volunteers, but with no criteria on how to get that status or why they were listed at all.

“It’s very difficult to pinpoint the exact degree of transparency,” of SCS said Severin Engelmann, one of the lead researchers based at the Technical University of Munich. Far from being just an experimental startup, SCS is already quite advanced. “Blacklisting and redlisting are already in place, and they clearly indicate what behavior is bad … but not what behavior is actually good,” he said.

Even more interesting, there are more companies on the blacklist and redlist than there are individuals within the Beijing corpus, indicating that while the government is certainly concerned about citizens, it’s bringing its social control mechanism onto companies perhaps more aggressively.

Jens Grossklags, another of the researchers, noted that this level of transparency — while inconsistent — was unusual in the West. “It is really fascinating from a data science perspective to see how much information is being made available not just to individuals but to the general public,” he said. He noted that public shaming has been common with the Chinese system, while Western consumers have a hard time accessing their own scores let alone the scores of others.

The study is one of the first to look at the actual implementation of SCS and reverse engineer its algorithm, and the researchers are potentially following up by investigating regional variations and further changes to the system.

TechCrunch is experimenting with new content forms. This is a rough draft of something new – provide your feedback directly to the author (Danny at danny@techcrunch.com) if you like or hate something here.

Share your feedback on your startup’s attorney

My colleague Eric Eldon and I are reaching out to startup founders and execs about their experiences with their attorneys. Our goal is to identify the leading lights of the industry and help spark discussions around best practices. If you have an attorney you thought did a fantastic job for your startup, let us know using this short Google Forms survey and also spread the word. We will share the results and more in the coming weeks.

Stray Thoughts (aka, what I am reading)

Short summaries and analysis of important news stories

Hustling to nothing

Erin Griffith has a great piece on the increasing pervasiveness of hustle culture. This is part of a long-running debate in Silicon Valley between the work-your-ass-off crowd and the productivity-peaks-at-35-hours crowd. The answer in my mind is that we should see work in phases — running at 100 MPH all the time is most definitely not sustainable, but neither frankly is working a very stable number of hours per week. The vagaries of life and work mean that we need to surge and recede our efforts as dictated, and always track our own health.

Nvidia’s troubles continue

We’ve talked a lot about Nvidia over the past few months (Part 1, Part 2, Part 3). Well, the bad news train just continues. As my colleague Romain Dillet reports, Nvidia is cutting its revenue outlook, and now the stock is falling again (another 14% as I write this). It cites lowered demand particularly from China, which is experiencing a major slowdown in its economy.

Can Chinese startups subsidize customers forever?

The Financial Times asks an important question about the “China model” of startups: should founders heavily subsidize customers in order to buy market share and fight competitors? They point to bike sharing startup Ofo’s collapse, although I would point to the expensive rise of Luckin Coffee as perhaps the latest example. It’s a lesson that Munchery’s investors also have had to learn: at the end of the day, those unit economics better turn positive if a company is to survive.

What’s next

More work on societal resilience

This newsletter is written with the assistance of Arman Tabatabai from New York

The new Parsley Health Center in NYC doesn’t feel like a doctor’s office

Published January 28, 2019

Parsley Health has just opened a new, fully redesigned space on Fifth Avenue in New York City, marking the first true Parsley Health Center.

Since launch, the startup has been operating out of clinics in New York, San Francisco and Los Angeles. But TechCrunch got the chance to check out Parsley’s new Fifth Avenue location, which marks the company’s first space designed from the ground up as Parsley Health.

Founded by Dr. Robin Berzin, Parsley Health is a healthcare membership, where customers are offered a holistic approach to their health by a team of doctors and health coaches, complete with 24/7 unlimited messaging.

The idea stemmed from the troublesome reality that the average American spends less than 20 minutes a year with their doctor, who more often than not treat symptoms instead of the root problem.

Parsley members spend around four hours/year with medical professionals, including five doctor visits a year and five health coach visits. Plus, Parsley offers 24/7 communication with your doctor and health coach. The hope is that Parsley doctors can better diagnose and treat their patients’ issues if they have the time to get the full story. Plus, Parsley doctors have the benefit of advanced biomarker testing alongside their focus on functional medicine, where root issues are prioritized for treatment rather than symptoms.

Part of giving the highest-quality treatment is creating an open relationship between doctor and patient. That, in many ways, can be influenced by the physical space.

The new Parsley Health Center takes into account the principles of biophilic design. In other words, the space is designed specifically to make people feel healthier and better. The lighting, for example, is built to mimic natural light by using ribbed glass partition systems in the smaller rooms of the space. The space is also full of plants, as being in connection with nature reduces stress and improves mood.

The company even paid attention to the details of designing a main hallway where the halls that sprawl off the main corridor are somewhat hidden by overhanging walls. This pattern, of visually implying a mystery waits around the corner, is supposed to provoke a strong pleasure response.

Beyond the design itself, Parsley also took into account the look and feel of the waiting room.

Rather than a sterile room with old magazines and no light, the Parsley waiting room is more of a communal living room, with plenty of couches and a kitchen, complete with draught kombucha and healthy snacks for purchase.

The hope is that Parsley can use this room for community events around learning how to optimize health across all parts of life, including food, sleep and behavior.

Doctors’ offices and exam rooms are rethought to ensure a more comfortable relationship between doctor and patient. There are no desks that separate patient from doctor, instead featuring a couch with a small side table to write on.

Observation tables have been redesigned to fit in with the room instead of standing out like a giant piece of “medical equipment.” Doctors’ instruments all fit into a small set of drawers off to the side.

Even the lab is built adjacent to a restroom where patients can pass their specimen through a small compartment in the wall instead of walking it through the hallways.

In 2017, Parsley raised $10 million led by FirstMark Capital, with participation from Amplo, Trail Mix Ventures, Combine and The Chernin Group. Individual investors such as Dr. Mark Hyman, M.D., director of the Cleveland Clinic Center for Functional Medicine; Nat Turner, CEO of Flatiron Health; Neil Parikh, co-founder of Casper; and Dave Gilboa, co-founder of Warby Parker, also invested in the round.

Membership to Parsley costs $150/month.

Lack of transparency in healthcare startups risks another Theranos implosion

Published January 28, 2019

Are more Theranos -style scandals looming for investors in healthcare startups?

A team of researchers associated with the Meta-Research Innovation Center at Stanford thinks so. They’ve published a paper warning investors in life sciences startups that a systemic lack of transparency exists in their portfolio companies — creating the possibility for more multi-billion-dollar implosions and scandals like the one that toppled Theranos and its charismatic founder, Elizabeth Holmes.

Indeed, one of the study’s authors, Dr. John Ioannidis, the co-director of the Meta-Research Innovation Center at Stanford and director of the University’s PhD program in Epidemiology and Clinical Research, was among the first people to identify the risks associated with Theranos and its “stealth research.”

Now Dr. Ioannidis and his co-authors, Ioana A. Cristea and Eli M. Cahan, have published a study surveying the publicly available research from the largest privately held companies in the healthcare space, and found them lacking.

Most of the highest-valued startups in healthcare have not published any significant scientific literature, the study found. Nearly half of the publications from companies worth more than $1 billion came from only two startups — 23andMe and Adaptive Biotechnologies, according to the paper.

“Many years ago I was the first person to say that Theranos had a problem,” says Ioannidis. “The problem that I had then was that Theranos did not have any peer-reviewed evidence to show.”

In an interview and in their paper, Ioannidis and Cahan warn that investors have overlooked systemic problems created by the lack of transparency among healthcare startups.

They write:

It would be tempting to dismiss the Theranos case as just one rotten apple. However, we worry that the focus on fraud puts aside a more fundamental concern. Fraud is making waves in the news, but stealth research may have a more detrimental impact.

According to the study’s findings, more than half of the healthcare startups that are worth more than $1 billion have published no highly cited papers at all. For companies that were acquired or are publicly traded that number is around 40 percent.

In all, healthcare startups that are currently valued at more than $1 billion published 425 Pubmed papers. And of those papers only 34 (8 percent, including two reviews) were highly cited. For companies with valuations of more than $1 billion that had been acquired or are publicly traded on stock exchanges, the researchers counted 413 papers, of which 47 (11 percent, including nine reviews) were highly cited.

Digging deeper into some of the companies that had high valuations but little or no published research revealed scores of operational and technological issues for the researchers.

For instance, StemCentrx, which was bought for $10.2 billion in 2016 by AbbVie, had published 16 papers — and only one highly cited paper. Since the acquisition, the Food and Drug Administration had imposed a delay on the readout of the company’s phase II trial for its Rova T targeted antibody drug for cancer treatment. In December, a Phase III trial for Rova T as a second-line treatment for patients with advanced small cell lung cancer was halted because the treatment wasn’t working, according to a report in Targeted Oncology.

Acerta Pharma, another healthcare-focused startup focused on cancer treatments, was bought by AstraZeneca for $7.3 billion. That company published nine articles and had one highly cited paper for a very early study of a potential treatment for relapsed chronic lymphocytic leukemia. Acerta received accelerated approval for a drug called acalabrutinib, which treats a rare form of lymphoma called mantle cell lymphoma. Two years ago, AstraZeneca had to retract data and admit that Acerta falsified preclinical data for its drug.

Then there’s Intarcia, the developer of a device for diabetes treatment that’s worth $5.5 billion. That company had its device rejected by the FDA and was forced to lay off staff and halt a couple of later-stage trials. It had only published six papers — none of them very highly cited.

Ultimately, the researchers concluded that highly valued healthcare startups don’t contribute to published research and that the valuation of these companies by investors is divorced from any externally validated data.

For the researchers (and for investors) this should present a problem.

“Many unicorns may be overvalued [21] and subject to unrealistic scientific expectations,” the study’s authors write. And they reject the argument that simply applying for — and receiving — patents is enough to prove that a technology in the healthcare space has been thoroughly vetted. “[Patents] do not offer the same level of documentation as peer-reviewed articles. For example, Theranos had over 100 patents [1], but these were unable to supplant the vacuum in their evidence,” the researchers wrote.

Even if companies want to protect their technology, there are still ways for them to be more transparent about the results or benefits of their technology. The authors acknowledge that publishing isn’t the primary mission of startups. They can, however publish a few high-value articles, secure their technology through patents and then work with researchers, universities or hospitals to validate the technology and have those organizations publish results of the tests, the authors argue.

As the authors conclude:

Start-ups are key purveyors of innovation and disruption. Consequently, holding them to a minimal standard of evaluation from the scientific community is crucial. Participation in peer review, with all its limitations, is the best way we have to uphold this standard. We are not arguing that start-ups should divert excessive resources to having peer-reviewed papers. However, when their products are destined to affect patient health, they should neither be solely doing marketing. Confidential data sharing with potential investors or regulators cannot replace more open scrutiny by the scientific community.

Scribd has more than 1M paying subscribers

Published January 28, 2019

Subscription e-book and audiobook service Scribd says it’s grown to more than 1 million subscribers.

It still has a long way to go before reaching the heights of Netflix (nearly 150 million subscribers) or Spotify (87 million paying subscribers), but the announcement should help put any lingering doubts to rest around whether there’s a sizable audience willing to pay an $8.99 subscription fee for books.

The company also says it’s been profitable since early in 2017, and that it’s currently bringing in $100 million in annual recurring revenue.

Scribd started as a document-sharing service before moving into the subscription e-book business in 2013, when it signed its first deal with a major publisher — namely, HarperCollins. Since then, the service has added other big publishers and moved beyond older “backlist” titles. In fact, last year HarperCollins released the latest book from “Divergent” author Veronica Roth on Scribd, on launch day.

Chantal Restivo-Alessi has been chief digital officer at HarperCollins for the duration of the Scribd partnership. Via email, she praised the company’s “willingness to monitor, analyze, learn and adjust – something that clearly it has been doing in the past years.”

“We have continued to learn and adapt together,” Restivo-Alessi said. “We expected the digital ebook market to be a bigger part of our and their business now, and we have been positively surprised by the uptake in digital audio. We have continued to calibrate our catalog offer in line with the evolution of Scribd’s platform and customer base. And we continue to be pleasantly surprised by the depth of exposure that the platform provides to our backlist.”

Trip Adler

The adjustments to which Restivo-Alessi alludes include Scribd’s pricing model — it initially offered subscribers unlimited access to its library, then capped them at three e-books and one audiobook per month, then went back to a modified version of its unlimited plan last year. (Apparently the most voracious readers and listeners might still encounter a cap.)

Asked whether we can expect the Scribd offering to continue changing, co-founder and CEO Trip Adler said, “I don’t think there will be any big changes. We’re always optimizing … We’re constantly improving the way we find the right balance for readers and for publishers.”

Adler credited audiobooks as a key ingredient to the service’s growth, with engagement growing 100 percent year over year. Surprisingly, he also said Scribd’s old document-sharing business continues to be crucial, because it helps the service attract between 100 million and 200 million visitors each month (mostly from search engines), who can then be converted into paying subscribers.

“That’s kind of the key thing we’ve figured out,” Adler said. “We use the [user-generated content] to attract users and use premium content to retain them.”

Scribd’s new unlimited plan for audiobooks and e-books might be an avid reader’s dream

Scribd has raised a total of $47.8 million in funding, according to Crunchbase.

Investors include Khosla Ventures, with Khosla’s Keith Rabois on the Scribd board. In an emailed statement, Rabois said, “Scribd has one of the largest libraries of content in the world — which reaches millions of readers every month, giving the company exceptional data and the unique ability to help readers discover content uniquely suited to them. Scribd hitting one million subscribers is just the beginning of Scribd transforming how we choose what books to read and how we read them.”

And now that Scribd has reached the 1 million subscriber milestone, Adler said he’s already thinking about how it can get to 10 million. His plans include further international expansion in markets like Latin America, Europe and India (apparently half of Scribd’s subscriber base is already outside the United States), working with publishers and authors to create original content, and continuing to add new formats.

“We started out by offering documents, then e-books, and then audiobooks, magazines and sheet music,” he said. “We’re just getting started. There’s going to be a lot more new types of content in the coming years.”

Contentsquare, the digital experience insights platform, raises $60M Series C

Published January 28, 2019

Contentsquare, the cloud-based software that helps businesses understand how and why users are interacting with their app, mobile and web sites, has raised $60 million in further funding.

Leading the Series C round is global investment company Eurazeo. It adds to $42 million in Series B funding raised around a year ago, and includes participation from existing investors Canaan, Highland Europe and H14.

Described as a “fully automated digital experience insights platform,” Contentsquare’s SaaS analyses customer behavior through the tracking of “billions of digital touch and mouse movements” to provide brands with insights into how to increase engagement, reduce operational costs and maximise conversion rates.

In other words, Contentsquare claims it can tell a company why conversion rates are low and, most importantly, what can be done to improve them. This can include making changes to specific page or content elements, or a combination of the two.

Related to this, Contentsquare has developed an AI engine to analyse behavioural data and offer automatic insights. In addition, the “AutoZone” feature replaces content tagging and tag configuration with automatic element identification. This means that Contentsquare automatically recognises different page or app elements and can therefore track changes more easily to feed into the aforementioned AI engine.

More recently, the company has released two new solutions for customers: CS Live and AI Alerts, which deliver customer experience information in real time. CS Live provides Contentsquare’s clients with a way to immediately identify consumer metrics on their websites without the need for a dashboard. AI Alerts, Contentsquare’s newest monitoring system, enables businesses to “detect and react to improve customer engagement without manual effort.”

To that end, Contentsquare is used by digital, content, product, analytics, acquisition, IT and UX teams inside numerous companies. Its customers include Walmart, Samsung, Sephora, Tiffany, LVMH, AccorHotels, Goldman Sachs, Avis, GoPro, Ikea, Nissan and others.

Meanwhile, Contentsquare says the new capital will help Contentsquare increase research and development focused on AI and predictive analytics. It also will be deployed for further expansion across the Americas, Europe, Asia and Middle East.

Curve, the all-your-cards-in-one app, adds support for Amex

Published January 28, 2019

Curve, the London fintech that lets you consolidate all of your bank cards into a single Curve card and app to make it easier to manage your spending, has added support for Amex cards.

In effect, the feature is being re-instated, having existed fleetingly when Curve was in testing back in 2016 before being unceremoniously blocked by American Express. The two companies appear to have finally settled their differences, which is undoubtedly good news for Curve customers who also have a U.K. Amex card.

Technically in beta, the new Amex feature lets Curve customers add their Amex cards to Curve and spend with Amex anywhere the Curve Mastercard is accepted. This, says the fintech startup, solves the annoyance Amex card members face with some retailers not accepting Amex cards due to the card’s higher fees.

Presumably, Curve is happy to swallow these fees to better serve its customers, although we don’t know the specific terms of any commercial agreement, if indeed there is one.

In further good news, Curve says that Amex card members will continue to earn American Express Membership Rewards points when they spend with their Curve card linked to Amex, and will simultaneously earn Curve Rewards points, too. Curve itself offers rewards at 50 major brands, including Amazon, Uber, Tesco, Sainsbury’s, Waitrose, Ocado, Selfridges, BP and more.

This should mean that Curve customers who switch the Curve app to charge their Amex card under the hood will receive twice the rewards — once from Curve and once from Amex, per qualifying transaction.

Curve says it has been trialing Amex compatibility with its platform in closed beta since November. During beta testing, at least 500 Curve users spent more than £1 million on their Amex cards by paying with Curve, apparently.

Adds Curve founder and CEO, Shachar Bialick, in a telling statement: “Ensuring Amex compatibility with Curve was one of our priorities and most asked for features by our customers. However, bringing Amex back to Curve was not an easy feat. There were challenges around brand and commercials, some of which still exists.”

In a brief call, Bialick paid tribute to his team for getting Amex support across the line and to the “progressive regulatory and competitive landscape” in Europe and the U.K., which he says is fostering competition in the payments and financial space and enabled Curve to bring Amex into its platform. “We hope Amex will continue to support the interest of their customers,” adds the Curve founder.

In other words, this is likely evidence of a startup pushing up against the boundaries of open banking and PSD2 to innovate on behalf of customers and finding that the regulation holds water. Hopefully we’ll see more innovation to come in the months and years ahead as other fintech startups do the same.

Monzo teams up with Flux to add itemised receipts and loyalty points

Published January 28, 2019

Monzo, the U.K. challenger bank that now boasts 1.5 million current account customers, has partnered with fintech startup Flux to bring itemised receipts and loyalty points to its banking app.

Due to be officially unveiled at a joint event in London on Wednesday, the new functionality means that if you’re a customer of Monzo — and once you’ve opted in — Flux will deliver digital receipts, rewards and loyalty to the Monzo app in real time, whenever you spend at a Flux partner merchant. Currently this includes EAT, Costa Coffee (announced but not yet live), itsu, pod and pure, while I understand a number of other major merchants are in the pipeline and could be announced quite soon.

In the long-term, Flux wants to become the proprietary technology platform for the interchange of item-level digital receipt data, but has always faced a chicken and egg problem: It needs bank integrations to sign up merchants and it needs merchant integrations to sign up banks. As I wrote when the company raised its Series A in December, cracking this problem has clearly started to gather momentum.

Noteworthy is that Monzo had actually been trialing Flux in a very small closed beta since 2017, but progress had stalled while the challenger bank built out its current account offering and figured out its “marketplace banking” strategy. Related to this is the question of how deep third-party integration should go and how wide the Monzo marketplace should cast its net in terms of the number of competing third-party products vying for attention.

To that end, the Flux integration feels pretty wholehearted. This includes a call-to-action within the Monzo app to link your account to Flux when you spend in a Flux partner merchant. On-boarding users to Flux in context — i.e. right after the point of purchase — and therefore unlocking itemised digital receipts immediately and retroactively will very likely make opting into the feature a no-brainer.

Flux’s integration with the Barclays Launchpad app works in a similar fashion. However, within challenger bank Starling, the other Flux bank partner, no such call-to-action exists. Instead, it can only be enabled within the Starling Marketplace, which at two taps deep feels slightly buried for now.

Meanwhile, although the current focus is building receipt infrastructure, the Flux vision is much broader. By bridging the gap between the itemised receipt data captured by a merchant’s point-of-sale (POS) system and what little information typically shows up in your bank statement or mobile banking app, the startup can not only power loyalty schemes and card-linked offers, as well as give merchants much deeper POS analytics, it could also offer new types of enriched experiences for consumers.

This could in the future include letting you easily track your eating out habits, right down to item-level rather than just merchant category, as part of your general health goals. Or providing much deeper spending analytics to help you improve financial well-being. In other words, there’s a great deal more latent value in item-level receipt data to be unlocked yet.

Cue Matty Cusden-Ross, CEO and founder at Flux: “Flux’s mission is to liberate the worlds’ receipt data in order to enrich trillions of experiences globally. Today we’re excited to be expanding our partnership with Monzo to bring automated receipts and rewards to even more people. Monzo shares our vision of the future and as Flux continues to scale across bigger and bigger merchants we can’t wait to make Flux available everywhere.”

Has the fight over privacy changed at all in 2019?

Published January 26, 2019

Few issues divide the tech community quite like privacy. Much of Silicon Valley’s wealth has been built on data-driven advertising platforms, and yet, there remain constant concerns about the invasiveness of those platforms.

Such concerns have intensified in just the last few weeks as France’s privacy regulator placed a record fine on Google under Europe’s General Data Protection Regulation (GDPR) rules which the company now plans to appeal. Yet with global platform usage and service sales continuing to tick up, we asked a panel of eight privacy experts: “Has anything fundamentally changed around privacy in tech in 2019? What is the state of privacy and has the outlook changed?”

This week’s participants include:

Albert Gidari – Consulting Director of Privacy at Stanford’s Center for Internet and Society; Professor at Stanford Law School
Gabriel Weinberg – CEO and Founder of DuckDuckGo
Melika Carroll -Senior VP of Global Government Affairs at The Internet Association
Johnny Ryan – Chief Policy and Industry Relations Officer at Brave
John Miller – VP of Global Policy and Law at the Information Technology Industry Council
Nuala O’Connor – President and CEO of the Center for Democracy & Technology
Chris Baker – Senior VP and General Manager of EMEA at Box
Christopher Wolf – Founder and Chair of the Future Privacy Forum; Senior counsel at Hogan Lovells focusing on internet law, privacy and data protection policy

TechCrunch is experimenting with new content forms. Consider this a recurring venue for debate, where leading experts – with a diverse range of vantage points and opinions – provide us with thoughts on some of the biggest issues currently in tech, startups and venture. If you have any feedback, please reach out: Arman.Tabatabai@techcrunch.com.

Thoughts & Responses:

Albert Gidari

Albert Gidari is the Consulting Director of Privacy at the Stanford Center for Internet and Society. He was a partner for over 20 years at Perkins Coie LLP, achieving a top-ranking in privacy law by Chambers, before retiring to consult with CIS on its privacy program. He negotiated the first-ever “privacy by design” consent decree with the Federal Trade Commission. A recognized expert on electronic surveillance law, he brought the first public lawsuit before the Foreign Intelligence Surveillance Court, seeking the right of providers to disclose the volume of national security demands received and the number of affected user accounts, ultimately resulting in greater public disclosure of such requests.

There is no doubt that the privacy environment changed in 2018 with the passage of California’s Consumer Privacy Act (CCPA), implementation of the European Union’s General Data Protection Regulation (GDPR), and new privacy laws enacted around the globe.

“While privacy regulation seeks to make tech companies betters stewards of the data they collect and their practices more transparent, in the end, it is a deception to think that users will have more “privacy.””

For one thing, large tech companies have grown huge privacy compliance organizations to meet their new regulatory obligations. For another, the major platforms now are lobbying for passage of a federal privacy law in the U.S. This is not surprising after a year of privacy miscues, breaches and negative privacy news. But does all of this mean a fundamental change is in store for privacy? I think not.

The fundamental model sustaining the Internet is based upon the exchange of user data for free service. As long as advertising dollars drive the growth of the Internet, regulation simply will tinker around the edges, setting sideboards to dictate the terms of the exchange. The tech companies may be more accountable for how they handle data and to whom they disclose it, but the fact is that data will continue to be collected from all manner of people, places and things.

Indeed, if the past year has shown anything it is that two rules are fundamental: (1) everything that can be connected to the Internet will be connected; and (2) everything that can be collected, will be collected, analyzed, used and monetized. It is inexorable.

While privacy regulation seeks to make tech companies betters stewards of the data they collect and their practices more transparent, in the end, it is a deception to think that users will have more “privacy.” No one even knows what “more privacy” means. If it means that users will have more control over the data they share, that is laudable but not achievable in a world where people have no idea how many times or with whom they have shared their information already. Can you name all the places over your lifetime where you provided your SSN and other identifying information? And given that the largest data collector (and likely least secure) is government, what does control really mean?

All this is not to say that privacy regulation is futile. But it is to recognize that nothing proposed today will result in a fundamental shift in privacy policy or provide a panacea of consumer protection. Better privacy hygiene and more accountability on the part of tech companies is a good thing, but it doesn’t solve the privacy paradox that those same users who want more privacy broadly share their information with others who are less trustworthy on social media (ask Jeff Bezos), or that the government hoovers up data at rate that makes tech companies look like pikers (visit a smart city near you).

Many years ago, I used to practice environmental law. I watched companies strive to comply with new laws intended to control pollution by creating compliance infrastructures and teams aimed at preventing, detecting and deterring violations. Today, I see the same thing at the large tech companies – hundreds of employees have been hired to do “privacy” compliance. The language is the same too: cradle to grave privacy documentation of data flows for a product or service; audits and assessments of privacy practices; data mapping; sustainable privacy practices. In short, privacy has become corporatized and industrialized.

True, we have cleaner air and cleaner water as a result of environmental law, but we also have made it lawful and built businesses around acceptable levels of pollution. Companies still lawfully dump arsenic in the water and belch volatile organic compounds in the air. And we still get environmental catastrophes. So don’t expect today’s “Clean Privacy Law” to eliminate data breaches or profiling or abuses.

The privacy world is complicated and few people truly understand the number and variety of companies involved in data collection and processing, and none of them are in Congress. The power to fundamentally change the privacy equation is in the hands of the people who use the technology (or choose not to) and in the hands of those who design it, and maybe that’s where it should be.

Gabriel Weinberg

Gabriel Weinberg is the Founder and CEO of privacy-focused search engine DuckDuckGo.

Coming into 2019, interest in privacy solutions is truly mainstream. There are signs of this everywhere (media, politics, books, etc.) and also in DuckDuckGo’s growth, which has never been faster. With solid majorities now seeking out private alternatives and other ways to be tracked less online, we expect governments to continue to step up their regulatory scrutiny and for privacy companies like DuckDuckGo to continue to help more people take back their privacy.

“Consumers don’t necessarily feel they have anything to hide – but they just don’t want corporations to profit off their personal information, or be manipulated, or unfairly treated through misuse of that information.”

We’re also seeing companies take action beyond mere regulatory compliance, reflecting this new majority will of the people and its tangible effect on the market. Just this month we’ve seen Apple’s Tim Cook call for stronger privacy regulation and the New York Times report strong ad revenue in Europe after stopping the use of ad exchanges and behavioral targeting.

At its core, this groundswell is driven by the negative effects that stem from the surveillance business model. The percentage of people who have noticed ads following them around the Internet, or who have had their data exposed in a breach, or who have had a family member or friend experience some kind of credit card fraud or identity theft issue, reached a boiling point in 2018. On top of that, people learned of the extent to which the big platforms like Google and Facebook that collect the most data are used to propagate misinformation, discrimination, and polarization. Consumers don’t necessarily feel they have anything to hide – but they just don’t want corporations to profit off their personal information, or be manipulated, or unfairly treated through misuse of that information. Fortunately, there are alternatives to the surveillance business model and more companies are setting a new standard of trust online by showcasing alternative models.

Melika Carroll

Melika Carroll is Senior Vice President, Global Government Affairs at Internet Association, which represents over 45 of the world’s leading internet companies, including Google, Facebook, Amazon, Twitter, Uber, Airbnb and others.

We support a modern, national privacy law that provides people meaningful control over the data they provide to companies so they can make the most informed choices about how that data is used, seen, and shared.

“Any national privacy framework should provide the same protections for people’s data across industries, regardless of whether it is gathered offline or online.”

Internet companies believe all Americans should have the ability to access, correct, delete, and download the data they provide to companies.

Americans will benefit most from a federal approach to privacy – as opposed to a patchwork of state laws – that protects their privacy regardless of where they live. If someone in New York is video chatting with their grandmother in Florida, they should both benefit from the same privacy protections.

It’s also important to consider that all companies – both online and offline – use and collect data. Any national privacy framework should provide the same protections for people’s data across industries, regardless of whether it is gathered offline or online.

Two other important pieces of any federal privacy law include user expectations and the context in which data is shared with third parties. Expectations may vary based on a person’s relationship with a company, the service they expect to receive, and the sensitivity of the data they’re sharing. For example, you expect a car rental company to be able to track the location of the rented vehicle that doesn’t get returned. You don’t expect the car rental company to track your real-time location and sell that data to the highest bidder. Additionally, the same piece of data can have different sensitivities depending on the context in which it’s used or shared. For example, your name on a business card may not be as sensitive as your name on the sign in sheet at an addiction support group meeting.

This is a unique time in Washington as there is bipartisan support in both chambers of Congress as well as in the administration for a federal privacy law. Our industry is committed to working with policymakers and other stakeholders to find an American approach to privacy that protects individuals’ privacy and allows companies to innovate and develop products people love.

Johnny Ryan

Dr. Johnny Ryan FRHistS is Chief Policy & Industry Relations Officer at Brave. His previous roles include Head of Ecosystem at PageFair, and Chief Innovation Officer of The Irish Times. He has a PhD from the University of Cambridge, and is a Fellow of the Royal Historical Society.

Tech companies will probably have to adapt to two privacy trends.

“As lawmakers and regulators in Europe and in the United States start to think of “purpose specification” as a tool for anti-trust enforcement, tech giants should beware.”

First, the GDPR is emerging as a de facto international standard.

In the coming years, the application of GDPR-like laws for commercial use of consumers’ personal data in the EU, Britain (post-EU), Japan, India, Brazil, South Korea, Malaysia, Argentina, and China will bring more than half of global GDP under a similar standard.

Whether this emerging standard helps or harms United States firms will be determined by whether the United States enacts and actively enforces robust federal privacy laws. Unless there is a federal GDPR-like law in the United States, there may be a degree of friction and the potential of isolation for United States companies.

However, there is an opportunity in this trend. The United States can assume the global lead by doing two things. First, enact a federal law that borrows from the GDPR, including a comprehensive definition of “personal data”, and robust “purpose specification”. Second, invest in world-leading regulation that pursues test cases, and defines practical standards. Cutting edge enforcement of common principles-based standards is de facto leadership.

Second, privacy and antitrust law are moving closer to each other, and might squeeze big tech companies very tightly indeed.

Big tech companies “cross-use” user data from one part of their business to prop up others. The result is that a company can leverage all the personal information accumulated from its users in one line of business, and for one purpose, to dominate other lines of business too.

This is likely to have anti-competitive effects. Rather than competing on the merits, the company can enjoy the unfair advantage of massive network effects even though it may be starting from scratch in a new line of business. This stifles competition and hurts innovation and consumer choice.

Antitrust authorities in other jurisdictions have addressed this. In 2015, the Belgian National Lottery was fined for re-using personal information acquired through its monopoly for a different, and incompatible, line of business.

As lawmakers and regulators in Europe and in the United States start to think of “purpose specification” as a tool for anti-trust enforcement, tech giants should beware.

John Miller

John Miller is the VP for Global Policy and Law at the Information Technology Industry Council (ITI), a D.C. based advocate group for the high tech sector. Miller leads ITI’s work on cybersecurity, privacy, surveillance, and other technology and digital policy issues.

Data has long been the lifeblood of innovation. And protecting that data remains a priority for individuals, companies and governments alike. However, as times change and innovation progresses at a rapid rate, it’s clear the laws protecting consumers’ data and privacy must evolve as well.

“Data has long been the lifeblood of innovation. And protecting that data remains a priority for individuals, companies and governments alike.”

As the global regulatory landscape shifts, there is now widespread agreement among business, government, and consumers that we must modernize our privacy laws, and create an approach to protecting consumer privacy that works in today’s data-driven reality, while still delivering the innovations consumers and businesses demand.

More and more, lawmakers and stakeholders acknowledge that an effective privacy regime provides meaningful privacy protections for consumers regardless of where they live. Approaches, like the framework ITI released last fall, must offer an interoperable solution that can serve as a model for governments worldwide, providing an alternative to a patchwork of laws that could create confusion and uncertainty over what protections individuals have.

Companies are also increasingly aware of the critical role they play in protecting privacy. Looking ahead, the tech industry will continue to develop mechanisms to hold us accountable, including recommendations that any privacy law mandate companies identify, monitor, and document uses of known personal data, while ensuring the existence of meaningful enforcement mechanisms.

Nuala O’Connor

Nuala O’Connor is president and CEO of the Center for Democracy & Technology, a global nonprofit committed to the advancement of digital human rights and civil liberties, including privacy, freedom of expression, and human agency. O’Connor has served in a number of presidentially appointed positions, including as the first statutorily mandated chief privacy officer in U.S. federal government when she served at the U.S. Department of Homeland Security. O’Connor has held senior corporate leadership positions on privacy, data, and customer trust at Amazon, General Electric, and DoubleClick. She has practiced at several global law firms including Sidley Austin and Venable. She is an advocate for the use of data and internet-enabled technologies to improve equity and amplify marginalized voices.

For too long, Americans’ digital privacy has varied widely, depending on the technologies and services we use, the companies that provide those services, and our capacity to navigate confusing notices and settings.

“Americans deserve comprehensive protections for personal information – protections that can’t be signed, or check-boxed, away.”

We are burdened with trying to make informed choices that align with our personal privacy preferences on hundreds of devices and thousands of apps, and reading and parsing as many different policies and settings. No individual has the time nor capacity to manage their privacy in this way, nor is it a good use of time in our increasingly busy lives. These notices and choices and checkboxes have become privacy theater, but not privacy reality.

In 2019, the legal landscape for data privacy is changing, and so is the public perception of how companies handle data. As more information comes to light about the effects of companies’ data practices and myriad stewardship missteps, Americans are surprised and shocked about what they’re learning. They’re increasingly paying attention, and questioning why they are still overburdened and unprotected. And with intensifying scrutiny by the media, as well as state and local lawmakers, companies are recognizing the need for a clear and nationally consistent set of rules.

Personal privacy is the cornerstone of the digital future people want. Americans deserve comprehensive protections for personal information – protections that can’t be signed, or check-boxed, away. The Center for Democracy & Technology wants to help craft those legal principles to solidify Americans’ digital privacy rights for the first time.

Chris Baker

Chris Baker is Senior Vice President and General Manager of EMEA at Box.

Last year saw data privacy hit the headlines as businesses and consumers alike were forced to navigate the implementation of GDPR. But it’s far from over.

“…customers will have trust in a business when they are given more control over how their data is used and processed”

2019 will be the year that the rest of the world catches up to the legislative example set by Europe, as similar data regulations come to the forefront. Organizations must ensure they are compliant with regional data privacy regulations, and more GDPR-like policies will start to have an impact. This can present a headache when it comes to data management, especially if you’re operating internationally. However, customers will have trust in a business when they are given more control over how their data is used and processed, and customers can rest assured knowing that no matter where they are in the world, businesses must meet the highest bar possible when it comes to data security.

Starting with the U.S., 2019 will see larger corporations opt-in to GDPR to support global business practices. At the same time, local data regulators will lift large sections of the EU legislative framework and implement these rules in their own countries. 2018 was the year of GDPR in Europe, and 2019 be the year of GDPR globally.

Christopher Wolf

Christopher Wolf is the Founder and Chair of the Future of Privacy Forum think tank, and is senior counsel at Hogan Lovells focusing on internet law, privacy and data protection policy.

With the EU GDPR in effect since last May (setting a standard other nations are emulating),

“Regardless of the outcome of the debate over a new federal privacy law, the issue of the privacy and protection of personal data is unlikely to recede.”

with the adoption of a highly-regulatory and broadly-applicable state privacy law in California last Summer (and similar laws adopted or proposed in other states), and with intense focus on the data collection and sharing practices of large tech companies, the time may have come where Congress will adopt a comprehensive federal privacy law. Complicating the adoption of a federal law will be the issue of preemption of state laws and what to do with the highly-developed sectoral laws like HIPPA and Gramm-Leach-Bliley. Also to be determined is the expansion of FTC regulatory powers. Regardless of the outcome of the debate over a new federal privacy law, the issue of the privacy and protection of personal data is unlikely to recede.

The Predictive Index brings in $50M to help businesses create winning teams

Published January 25, 2019

Funding will get you a long way, but people, at the end of the day, are the key to a successful business.

The Predictive Index, which develops behavioral and cognitive employee assessments, has raised a $50 million round of growth-stage capital from venture capital firm General Catalyst to help companies choose the right talent.

Kirk Arnold, an executive-in-residence at General Catalyst and new Predictive Index board member, led the deal for the VC firm, which says the round is the largest first check they’ve ever written a company. Predictive Index declined to disclose the valuation.

The workplace analytics service was founded in 1955, making it just a bit older than your typical growth-stage business. Current chief executive officer Mike Zani (pictured, right) acquired the company in 2014 with Predictive Index president and chairman Daniel Muzquiz (pictured, left). Prior to the acquisition, the pair were clients of the business.

With the infusion of VC funding, Zani said he’ll double employee headcount, create a playbook on how to “successfully design, hire and inspire winning teams” and create a talent optimization industry conference, amongst other big plans.

“Most companies are losing the talent war, and not because of the lack of fight, but rather because strategic talent strategies are non-existent or broken,” Zani told TechCrunch. “The irony is that talent is one of the only lasting differentiators in business today. Most tools in the marketplace help with process or tactical aspects of people and ignore the strategic. At [Predictive Index] we offer the strategic talent discipline, or talent optimization, to the hands of those who want to use talent as a business performance lever.”

Headquartered in Boston, Predictive Index says it counts some 7,000 customers in 142 countries, including Nissan, DocuSign and Blue Cross Blue Shield.

“This year, low unemployment and high turnover will further magnify the importance of talent,” Arnold said in a statement. “Having a talent strategy which aligns and supports business strategy is a requirement for any business to be successful.”

Open-source leader Confluent raises $125M on $2.5B valuation