John Naughton: Like fossil fuel in the ground, customer data may soon be a liability, not an asset | John Naughton

The massive fines imposed on companies such as BA and the Marriott group are a warning to big data hoarders

A hedge, says Wikipedia, is “an investment position intended to offset potential losses or gains that may be incurred by a companion investment”. Most stock market investors (and pension funds) buy shares in the hope that they will go up in value, and are distressed if they don’t. In the 1940s a genius called Arthur Winslow Jones invented an investment fund that could place bets on both rising and falling share prices and therefore make money no matter what happened. Thus was born the hedge fund, the defining characteristic of which is that it eschews optimism and profits from well-informed pessimism. Hedge funds are thus the predators of the capitalist jungle, constantly on the lookout for prey.

A few years ago some hedge-fund guys, pondering the threat of climate change, came on a campaign conceived and orchestrated by the Guardian, Keep it in the Ground. As the then editor, Alan Rusbridger, described it: “There are trillions of dollars’ worth of fossil fuels currently underground which, for our safety, simply cannot be extracted and burned. All else is up for debate: that much is not. We need to keep it in the ground”.

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John Naughton: Money’s no object for Facebook, so hit it where it hurts | John Naughton

When a £4bn fine can be shrugged off with a share price rise, normal rules no longer apply

If you want a measure of the problem society will have in controlling the tech giants, then ponder this: as it has become clear that the US Federal Trade Commission is about to impose a fine of $5bn (£4bn) on Facebook for violating a decree governing privacy breaches, the company’s share price went up!

This is a landmark moment. It’s the biggest ever fine imposed by the FTC, the body set up to police American capitalism. And $5bn is a lot of money in anybody’s language. Anybody’s but Facebook’s. It represents just a month of revenues and the stock market knew it. Facebook’s capitalisation went up $6bn with the news. This was a fine that actually increased Mark Zuckerberg’s personal wealth.

Related: Facebook to be fined $5bn for Cambridge Analytica privacy violations – reports

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John Naughton: Warning: free hotel wifi is a hacker’s dream

Hotel systems are so leaky it’s worth investing in your own virtual private network

You’ve just arrived at the hotel after a delayed flight and a half-hour wrangle with the car-hire firm. And then you remember that you’ve forgotten to pay last month’s credit card bill, and there’ll be an interest charge if you wait until you’re back at base. But – hey! – you can do it online and help is at hand. The receptionist is welcoming and helpful. They have wifi and it’s free. Relieved, you ask for the password. “Oh, you don’t need one,” he replies. “Just type in your room number and click the box.”

Phew! Problem solved. Er, not necessarily. At this point the human race divides into two groups. Call them sheep and goats. Sheep are sweet, trusting folks who like to think well of their fellow humans. Surely that helpful receptionist would not knowingly offer a dangerous service. Also, they find digital technology baffling and intimidating. And they cannot imagine why anything they do online might be of interest to anyone.

Any intelligence service that hasn’t been inside the systems of Trump’s Washington hotel ought to be fired for incompetence

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John Naughton: The robots are definitely coming and will make the world a more unequal place | John Naughton

New studies show that the latest wave of automation will make the world’s poor poorer. But big tech will be even richer

So the robots are coming for our jobs, are they? Yawn. That’s such an old story. Goes back to Elizabeth I and the stocking frame, if my memory serves me right. Machines have been taking our jobs forever. But economists, despite their reputation as practitioners of the “dismal science”, have always been upbeat about that. Sure, machines destroy jobs, they say. But hey, the new industries that new technology enables create even more new jobs. Granted, there may be a bit of “disruption” between destruction and creation, but that’s just capitalist business as usual. Besides, it’s progress, innit?

We have now lived through what one might call Automation 1.0. The paradigmatic example is car manufacturing. Henry Ford’s production line metamorphosed into Toyota’s “lean machine” and thence to the point where few humans, if any, are visible on an assembly line. Once upon a time, the car industry employed hundreds of thousands of people. We called them blue-collar workers. Now it employs far fewer. The robots did indeed take their jobs. In some cases, those made redundant found other employment, but many didn’t. And sometimes their communities were devastated as a result. But GDP went up, nevertheless, so economists were happy.

One of the things we are learning about digital technology is that it has become an amplifier of inequality

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John Naughton: We Have Been Harmonised: Life in China’s Surveillance State by Kai Strittmatter – review

A remarkable analysis identifies ‘Mao 2.0’ as the west’s new cold war adversary

Kai Strittmatter is a German journalist who writes for Süddeutsche Zeitung and is currently based in Copenhagen. From 1997 until recently, he had been a foreign correspondent in Beijing. Prior to those postings, he had studied sinology and journalism in Munich, Xi’an and Taipei. So he knows China rather well. Having read his remarkable book, it’s reasonable to assume that he will not be passing through any Chinese airport in the foreseeable future. Doing so would not be good for his health, not to mention his freedom.

We Have Been Harmonised is the most accessible and best informed account we have had to date of China’s transition from what scholars such as Rebecca MacKinnon used to call “networked authoritarianism” to what is now a form of networked totalitarianism. The difference is not merely semantic. An authoritarian regime is relatively limited in its objectives: there may be elections, but they are generally carefully managed; individual freedoms are subordinate to the state; there is no constitutional accountability and no rule of law in any meaningful sense.

The more one reads, the more pressing one conclusion becomes: almost everything we thought we knew about China is wrong

Related: China wants us to forget the horrors of Tiananmen as it rewrites its history | Louisa Lim and Ilaria Maria Sala

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John Naughton: Libra cryptocurrency: dare you trust Facebook with your money? | John Naughton

The social media giant’s foray into bitcoin territory – with some financial big hitters on board – should prompt suspicion

We’ve known for ages that somewhere in the bowels of Facebook people were beavering away designing a cryptocurrency. Various names were bandied about, including GlobalCoin and Facebook Coin. The latter led some people to conclude that it must be a joke. I mean to say, who would trust Facebook, of Cambridge Analytica fame, with their money?

Now it turns out that the rumours were true. Last week, Facebook unveiled its crypto plans in a white paper. It’s called Libra and it is a cryptocurrency, that is to say, “a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets”.

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John Naughton: How Silicon Valley’s whiz-kids finally ran out of friends | John Naughton

The tech founders said they were not like the evil capitalists of old. We should have known better

Remember the time when tech companies were cool? So do I. Once upon a time, Silicon Valley was the jewel in the American crown, a magnet for high IQ – and predominately male – talent from all over the world. Palo Alto was the centre of what its more delusional inhabitants regarded as the Florence of Renaissance 2.0. Parents swelled with pride when their offspring landed a job with the Googles, Facebooks and Apples of that world, where they stood a sporting chance of becoming as rich as they might have done if they had joined Goldman Sachs or Lehman Brothers, but without the moral odium attendant on investment backing. I mean to say, where else could you be employed by a company to which every president, prime minister and aspirant politician craved an invitation? Where else could you be part of inventing the future?

But that was then and this is now. It’s taken an unconscionable length of time, but the tide of approbation has turned. Tech has suddenly lost its halo. Everywhere one looks, we find groups sharpening knives for a critique or an attack on big tech. In an interesting essay in the Atlantic, for example, the commentator Alexis Madrigal identifies no fewer than 15 different groups preparing ambushes. They include angry conservatives and progressive politicians, disillusioned tech luminaries, competition lawyers, privacy advocates, European regulators, mainstream media, scholarly critics, other corporations (telecoms firms, for example, plus Oracle and other business-software companies, for example), consumer-protection organisations and, last but not least, Chinese internet companies. With enemies like these, the US tech companies are suddenly discovering that they really need some friends.

They were cool, young, idealist, smart and never, ever wore suits

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John Naughton: Farewell then, iTunes, and thanks for saving the music industry from itself | John Naughton

Apple’s announcement that it is to close the software is a reminder of its role in reconciling music and the internet

Last Monday, at Apple’s Worldwide Developers Conference, the company’s head of software engineering, Craig Federighi, announced that it was terminating iTunes. In one way, the only surprising thing was that Apple had taken so long to reach that decision. It’s been obvious for years that iTunes had become baroquely bloated, a striking anomaly for a company that prides itself on elegant and functional design. So the decision to split the software into three functional units – dealing with music, podcasts and TV apps – seemed both logical and long overdue. But for internet users d’un certain âge (including this columnist) the announcement triggered reflections on personal and tech history.

There’s been music on the internet for a long time. The advent of the compact disc in the early 1980s meant that recorded music went from being analogue to digital. But CD music files were vast – a single CD came in at about 700MB – and for most people, the network was slow. So transferring music from one location to another was not a practical proposition. But then, in 1993, researchers at the Fraunhofer Institute in Germany came up with a way of shrinking audio files by a factor of 10 or more, so that a three-minute music track could be reduced to 3MB without much perceptible loss in quality. They called their new standard MP3 and in July 1994, released the first MP3 encoder, software that could take in CD tracks and compress them using the MP3 filter.

Related: iTunes is over: what this means for you

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John Naughton: Trump’s banning of Huawei could be the beginning of the biggest trade war ever | John Naughton

Don’t expect the Chinese government to roll over in the fight against the tech giant

Until recently, the only thing the average citizen could have told you about Huawei, the Chinese tech giant, was that s/he hadn’t the faintest idea of how to pronounce it (it’s “hwa-wei” btw, according to Wikipedia). And then, suddenly, this unpronounceable company seemed to be all over the news. Now it’s at the centre of a burgeoning geopolitical row. How did that happen?

I blame the Australians, who have a government only marginally less dysfunctional than our own. According to a Reuters report, in early 2018 they asked their top spooks a question: “With all the offensive cyber tools at their disposal, what harm could they inflict if they had access to equipment installed in the 5G network, the next generation mobile communications technology, of a target nation?” The spooks came back with a sombre assessment: the offensive potential of 5G was so great, they reported, that if Australia were on the receiving end of such attacks, the country’s critical infrastructure could be seriously sabotaged.

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