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Facebook moves to limit spread of extremist ‘boogaloo’ pages and groups

Facebook is limiting the spread of pages and groups linked with the word “boogaloo,” an internet slang term used in some far-right extremist circles to refer to the idea of an impending second American Civil War, as first reported by Reuters. The boogaloo term has since evolved into a disjointed anti-government movement with various and at times conflicting views.

Facebook says it will no longer recommend boogaloo pages and groups to users and is demoting them in search results, Facebook tells The Verge. The change was made on June 2nd. On May 1st, Facebook updated its Violence and Incitement policy to ban boogaloo and similar terms when used with images or statements depicting armed violence.

On Thursday, the FBI arrested three men in Nevada who self-identified with the boogaloo movement on terrorism-related charges for plotting to incite violence at an anti-police protest in Las Vegas. More and more self-described boogaloo members, many of which are also gun rights advocates, are using protests against racism and police brutality as cover to to promote anti-government demonstrations involving displays of firearms, CNN reports.

An April 22nd Tech Transparency Project (TTP) report found 125 boogaloo Facebook groups with more than 72,000 members combined. More than 60 percent of the groups were created in the three months before the report was published.

“In several private boogaloo Facebook groups that TTP was able to access, members discussed tactical strategies, combat medicine, and various types of weapons, including how to develop explosives and the merits of using flame throwers,” the report said.

“Some members appeared to take inspiration from President Donald Trump’s recent tweets calling on people to ‘liberate’ states where governors have imposed stay-at-home orders,” the report continued. And a Network Contagion Institute report found that “since November of 2019, mentions of boogaloo/boog have more than doubled [on Reddit] and show sustained and increasing activity over the COVID-19 period.”

The term “boogaloo” draws inspiration from the title of the 1984 movie Breakin’ 2: Electric Boogaloo, according to a separate Network Contagion Institute report. “As adopted by meme culture, the [boogaloo] term is often used by libertarians, gun enthusiasts, and anarchists to describe an uprising against the government or left-wing political opponents that is a near-mirror copy, or sequel to, the American Civil War,” the report states.

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Mark Zuckerberg says Facebook will ‘review’ policies on speech promoting state violence

Facebook CEO Mark Zuckerberg released a lengthy statement on his personal page on Friday saying he supports the Black Lives Matter movement and will begin engaging in a series of reviews of company policy. Specifically, Zuckerberg says he and company leadership will review its controversial stance around “threats of state use of force,” following President Donald Trump’s statement about shooting protesters that sparked outrage and various levels of response from both Facebook and Twitter.

The post largely repeated points Zuckerberg made in an all-hands meeting earlier this week, the details of which were reported in The Verge.

“We’re going to review our policies allowing discussion and threats of state use of force to see if there are any amendments we should adopt. There are two specific situations under this policy that we’re going to review,” Zuckerberg writes. “The first is around instances of excessive use of police or state force. Given the sensitive history in the US, this deserves special consideration. The second case is around when a country has ongoing civil unrest or violent conflicts.”

He also ended the note by writing, “To members of our Black community: I stand with you. Your lives matter. Black lives matter,” making him Zuckerberg one of the few tech leaders to personally avow support for the movement outside company statements and donations. Shortly after Zuckerberg’s post, Amazon CEO Jeff Bezos shared a post on his Instagram account also pledging support for the movement and detailing an email exchange in which he explains the meaning of the phrase to a customer who complained about Amazon’s Black Lives Matter website banner.

Zuckerberg has spent the last few days defending his decision not to take action against a Trump post in which the president wrote, “When the looting starts, the shooting starts.” Twitter, which had just prior fact-checked the president’s false statements about mail-in ballots, restricted the tweet in an unprecedented move, ensuring it would be labeled as “glorifying violence” and disabling the ability to retweet or comment on it. Facebook, on the other hand, left up the post containing identical language.

“I know many people are upset that we’ve left the President’s posts up, but our position is that we should enable as much expression as possible unless it will cause imminent risk of specific harms or dangers spelled out in clear policies,” Zuckerberg said late last week in a Facebook post clarifying his position. The public and employee response has been widespread outrage, with employees staging their first ever walkout on Monday of this week and dozens of former employees writing an open letter condemning Zuckerberg’s decision. The situation has even led to some high-profile resignations.

In his new Friday evening post, Zuckerberg says the company will “review our policies around voter suppression to make sure we’re taking into account the realities of voting in the midst of a pandemic.” He specifically cites potential misinformation, like the kind Trump tweeted out that led to Twitter’s fact-checking note, around mail-in voting and trying to better clarify what the line is “between a legitimate debate about the voting policies and attempts to confuse or suppress individuals about how, when or where to vote.”

Zuckerberg also says Facebook will be reviewing how it handles violating content that depart from its binary, leave-it-up or take-it-down approach. “I know many of you think we should have labeled the President’s posts in some way last week. Our current policy is that if content is actually inciting violence, then the right mitigation is to take that content down — not let people continue seeing it behind a flag,” Zuckerberg writes. “There is no exception to this policy for politicians or newsworthiness. I think this policy is principled and reasonable, but I also respect a lot of the people who think there may be better alternatives, so I want to make sure we hear all those ideas.”

Additionally, Facebook will work to improve the transparency around how it makes these decisions and whether it can “change anything structurally to make sure the right groups and voices are at the table” when it does make a definitive choice around a controversial speech and moderation issue.

Important context here is that Facebook’s workforce is composed of less than 10 percent black and Hispanic employees. In 2018, a black employee, Mark Luckie, quit over what he publicly said was Facebook’s “black people problem,” referencing the company’s lip service regarding racial diversity and inclusion efforts that Luckie said rarely translated to meaningful change.



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Video game companies only stand for what you make them stand for

On May 25th, the police killed George Floyd, and in every state, protests against police brutality and anti-black racism have been ongoing ever since. For reasons that risk trivializing a serious moment in history, the brands have also decided to speak up, too, issuing statements of solidarity across social media platforms. This, for better or worse, is to be expected: we live in the age of the Brand Statement, and brands acknowledging people as more than just potential sales is better than pretending nothing is happening in the world.

Video game companies, however, are uniquely bad at this. Most statements made by the makers and publishers of games are boilerplate: companies like Sony, Microsoft, and Nintendo decry racism, affirm the need for inclusion and equality, and often directly address “the black community.” A few, like publishers Ubisoft and Activision, even say “black lives matter” outright, instead of rephrasing it in corporate-speak.

In a piece for Vice, Gita Jackson writes about how these statements aren’t just the bare minimum. They’re clueless and hollow, unwilling to confront their complicity and center the conversation on anti-black racism — while also lagging behind companies like luxe exercise bike brand Peloton in both timing and charitable donations.

“Even when companies name the issue, it still doesn’t hit right,” Jackson writes. “I am glad that Ubisoft specifically named George Floyd and systemic racism, but one of the largest companies in the industry is giving less money to the NAACP than a fancy exercise bike company. And how can I trust anything they say about anything while they use their license of Tom Clancy’s work to make games about DEA agents shooting up drug cartels and American ‘sleeper cell’ agents taking back the streets from looters and violent Rikers inmates?”

Statements of solidarity from corporations are not unreasonable, even if they are from for-profit institutions that benefit from the labor, patronage, and support of oppressed people. But they’re also the product of strategy, one for which there is currently no blueprint. Consider this report from Kotaku’s Ethan Gach, who compiled the statements made by prominent gaming companies and followed up to ask what actions were planned to enact meaningful change. While the best of the gathered statements commit to making donations to charitable organizations, none would give an answer when asked by Gach about further plans for direct action or lasting changes.

While these statements are, quite literally, the least a corporation could do to address the cultural moment coalescing around the confrontation of racism and police brutality, it was not that long ago where video game companies could not be bothered to do even that. We’ve been here before, specifically in August 2014, when Ferguson, Missouri police officer Darren Wilson killed Michael Brown.

From August 10th through August 25th, 2014, the first wave of protests — and the violent police response to them — swept Ferguson. These two weeks of protests mainstreamed the Black Lives Matter movement, which formed in response to the murder of Trayvon Martin by neighborhood watchman George Zimmerman the year before. During this period, the United States was rocked by live footage of the militarized police response to black protestors, and video game corporations carried on in their own little world. For video games, it was business as usual: hype for games revealed at E3 two months before; more marketing hype coming from the annual Gamescom convention in Cologne, Germany; first looks and detailed reports about upcoming games that are frequently oblivious to the world around them and occasionally astounding in their tone deafness.

Search every one of these corporate Twitter profiles from the duration of the Ferguson protests, and you’ll find absolutely nothing. Every company with a statement out now — Sony, Microsoft, Bungie, Activision Blizzard, Ubisoft, EA, Nintendo — was absolutely silent six years ago.

Instead, corporate accounts from the time promoted upcoming games like Far Cry 4 with darkly ironic blog posts about wanting a “politically unstable” setting with “a history of conflict” … a “failed state,” in the words of producer Alex Hutchinson. Companies that paid a little bit of attention to the world around them participated in the ice bucket challenge for ALS awareness that had gone viral the previous month, arriving late to the party and offering corny contributions of their own.

And then the marketing campaign for Battlefield Hardline began in earnest that August, a game that took a military first-person shooter and re-skinned it with a coat of cop paint. Hardline is perhaps the high-water mark of video game cluelessness: a game made possible because the militarization of police in the United States is blindingly obvious. But since video games are so beholden to power fantasy, the only nuance Hardline offers is the option to “arrest” “perps” (often by striking them unconscious) or kill them.

In big-budget video games, the real world is merely source material, a dry list of things that happened somewhere else, some time ago, to somebody else. Rare is the game interested in what is happening now; rarer still is the video game publisher or studio openly concerned with the state of the world. When the industry is forced to acknowledge tragedy, it often does so with weak concessions. In 2017, the Pulse nightclub shooting, which occurred days before E3, the biggest trade show of the year, was either ignored or met with moments of silence or short statements of support — right before diving into presentations often full of video game gun violence. When three people died in a mass shooting during a Jacksonville Madden tournament, the lack of security at gaming events came under scrutiny, as an industry that loves giving lip-service to its community failed to do its due diligence in a material way.

It is telling that the developers of Call of Duty have only just now pledged to do something about racism in its player base, after years of complaints from its community.

Acknowledging the necessity of action in response to the protests against anti-black racism and police brutality in this country right now means contradicting decades of careful messaging on the part of game publishers and studios designed to do just the opposite. It’s abject cowardice in the service of capitalism, where a white supremacist’s dollar is just as good as yours or mine.

No corporation should be applauded for making a statement or even a donation. Actions like these are not a measure of the moral character of billion-dollar companies; they’re another form of negotiation under capitalism. Every company that has a game it wants you to play is now measuring your tolerance for silence or inaction the way they measure where to line-step with the implementation of loot boxes. The public, lacking the luxury of ignoring the real world around them, does not have to accept these minimal gestures as sufficient.

Is Rockstar Games’ decision to shut down servers for two hours with no substantial commitment to doing anything else enough for you? The bar set by its competitors seems sufficiently low, and this does not attempt to clear it. Video game companies, an industry uniquely sensitive to the “passion” of entitled fans, are often more than happy to listen to a vocal minority. So they can do some more listening, if they’re made to.

Progress is infuriatingly slow and frustratingly incremental. The wheels of management, governed by wealth and whiteness, do not turn for the sake of black employees or audiences. It took nearly six years and a second eruption of public indignation over the murder of black people by law enforcement to move to where we are now, where every major company and publication that covers them is finally having the same conversation as the public.

And still, video games lag behind the rest of the world. Ben & Jerry’s, the ice cream brand, was downright speedy in comparison, releasing a forceful, thorough statement on the Tuesday after protests began. Lego, of all companies, has set one of the strongest examples, donating $4 million and suspending advertising of all its police-themed sets. Video games want to know what you’ll settle for. It’s an industry that loves trumpeting its astonishing revenue and importance to the culture, where a single free-to-play hit can make nearly $2 billion in profits, and is frequently positioned as a balm for troubled times. They should act like the cultural force they claim to be.



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How to hide faces and scrub metadata when you photograph a protest

While showing up at a protest can demonstrate your opinion to the world, you may not want your face — or the faces of other protesters — to be included, especially when there is the possibility that authorities will collect and use that information (as they have for tracking movements during COVID-19 social distancing). As a result, many consider it vital to obscure the faces of people in any photos you may post on social media and other online sources. (For additional information, here’s a toolkit produced by the Authority Collective, offering information and advice on this subject.)

What follows are some strategies for removing facial features from your photos. Of course, you can open up your images on a desktop or laptop using Photoshop or Preview to blur or scrub, but we’re going to assume you aren’t carrying around a laptop with you. So with mobile in mind, you still have some solid options.

What needs to be done

When removing faces, you want to use a method that can’t be reversed. It is possible to de-blur a photo, especially using neural networks. It’s not possible to completely reverse the blurring, since it is lossy (in other words, some data will be permanently lost), but a lot can be “restored.” So why take the risk? Painting over faces, or using mosaic blur techniques, will prevent any possibility of reversing the effect.

You also want to remove any and all metadata from your images. They can carry GPS location, timestamps, and details about the type of phone used — basically, lots of things that can be used to pinpoint where you were and when.

Built-in methods

While there are a plethora of apps that will help blur or cover faces and remove metadata for both iOS and Android devices (some of which I mention below), there are ways you can do both without using a third-party app.

First, you can use your built-in photo editor to individually block out faces. On iOS, open Photos, tap on your photo and select the Edit option (in the top right corner). Tap on the three dots in that same corner to access Markup. With that, create solid circles or squares to block out faces.

It’s not quite as easy using an Android phone. Android also has a native markup tool — in the Photos app, select the photo, tap on the Edit tool (second from the left on the bottom) and choose Markup (second from the right on the bottom). You can then use the center-bottom Pen tool to scribble over anything you want to cover.

Hiding faces using the iOS Photo app.

Hiding faces using the iOS Photo app.

Hiding faces using the Android photo app.

Hiding faces using the Android photo app.

You then want to get rid of the metadata. When you take a photo on your device, meta is going to be attached automatically. The easiest way to avoid this is to take screenshots of your photos so that meta and geotagging won’t carry over. Also make sure to view your photo fullscreen, and ensure you don’t have any notifications or other identifying features in the screenshot.

The same can be done for video — at least, using an iPhone. Instead of just using the Camera app, start a screen record while you’re making your video, and use that recording instead.

If you have an LG or Samsung Android phone, you may also have a built-in screen recorder — look for it in your Quick Settings shade by swiping down twice from the top. If it’s not there, or if you have a different phone model, you’ll have to download a third-party app such as AZ Screen Recorder.

Third-party apps that hide faces & remove meta

Recently, there have been a plethora of apps that will help hide faces and remove metadata for both iOS and Android devices. You may find it easier to use one of these.

For example, encrypted messaging app Signal has announced a new face-blurring tool that will be incorporated into the latest Android and iOS versions of the software.

There are also grassroots efforts like Image Scrubber, which you can use in a browser on your device to upload images to blur and scrub, and then to save the anonymous version back to your device. This is great because it works on all devices, mobile and desktop.

If you already use apps to edit and enhance photos, you might be able to use those to blur as well. Apps like Glitche (iOS) and Glitch Lab (Android) let you pixelate over selected areas, and Trigraphy (iOS) lets you create mosaic effects. If you want to take photos now and remove the meta later, you can use the apps mentioned above or photo apps like Halide (iOS) and Snapseed (Android).

In the end, the method you choose will depend on how much work you want to do during or after the fact. For me, I would take photos, edit them in the phone Photo app, take a screenshot — and then delete the originals. Because if your device is unlocked and you have the originals sitting there, then you may have done all that work for nothing.

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Big tech companies are responding to George Floyd in a way they never did for Michael Brown

In the days since the death of George Floyd, technology’s biggest companies and their leaders have made public statements expressing solidarity with Black communities. The communications — which, really, are press releases — condemn racism and call for unity. Some at least name George Floyd, Breonna Taylor, and Ahmaud Arbery. Few say “Black Lives Matter” outright.

More meaningfully, many companies have committed donations to causes fighting racial injustice in the millions of dollars.

So some of the wealthiest businesses in the world are showing up in a moment when the national attention has turned to racial injustice. But surely, they must have shown up before? It hasn’t even been six years since the deaths of Eric Garner and Michael Brown spurred the protests in Ferguson, Missouri. Many of those companies’ CEOs found time to publicly participate in the Ice Bucket Challenge to raise money for ALS, so surely they spared a moment to show solidarity with Black Lives Matter in 2014, right?

Let’s compare the corporate response today with what was said six years ago. We researched responses to the events of 2014 through online searches, checking company newsrooms, and sweeping social media accounts:


Amazon

2020

“We believe Black lives matter,” reads a blog post published on June 3rd. Amazon committed to donating “a total of $10 million to organizations that are working to bring about social justice and improve the lives of Black and African Americans.” Amazon’s Black Employee Network will also be given a grant to “fund local organizations that support education and racial equality initiatives in communities across the country where our employees live and work.”

Here is Amazon’s tweet committing to solidarity with the Black community.

On Instagram, Amazon CEO Jeff Bezos encouraged his followers to read a Medium essay by Shenequa Golding.

2014

We could not find public responses from Amazon regarding the deaths of Eric Garner and Michael Brown or the Ferguson protests.


Apple

2020

Apple CEO Tim Cook published an open letter, “Speaking up on racism,” on Apple’s website on June 4th. In the letter, Cook made a number of commitments:

We commit to continuing our work to bring critical resources and technology to underserved school systems. We commit to continuing to fight the forces of environmental injustice — like climate change — which disproportionately harm Black communities and other communities of color. We commit to looking inward and pushing progress forward on inclusion and diversity, so that every great idea can be heard. And we’re donating to organizations including the Equal Justice Initiative, which challenge racial injustice and mass incarceration.

Cook shared a similar version of this letter to Apple employees on May 31st, where he committed Apple to matching all employee donations made for the month of June.

Cook has also tweeted twice about Minneapolis:

2014

CEO Tim Cook shared a tweet from Pope Francis on the day of Michael Brown’s death.

We could not find other public responses from Apple regarding the deaths of Eric Garner and Michael Brown or the Ferguson protests. In fact, here’s what the Apple newsroom looks like during those dates:


Facebook

2020

Facebook CEO Mark Zuckerberg committed to giving “additional $10 million to groups working on racial justice” in a Facebook post on May 31st. He also noted that his philanthropic arm, the Chan Zuckerberg Initiative, has invested $40 million annually for “several years” to organizations fighting racial injustice.

2014

In a December town hall Q&A, Zuckerberg was asked about social media’s role in helping strengthen communities in the wake of Ferguson and other protests against the use of excessive police force. He shared his response publicly in a video. “I believe we do two things: give everyone a voice and provide greater diversity of perspectives,” Zuckerberg said in his post accompanying the video.

We could not find other public responses from Facebook regarding the deaths of Eric Garner and Michael Brown or the Ferguson protests.


Google

2020

Google CEO Sundar Pichai published an email sent to Google employees on June 3rd, titled “Standing with the Black community,” where he made the following “initial” commitments:

We’ll be giving $12 million in funding to organizations working to address racial inequities. Our first grants of $1 million each will go to our long-term partners at the Center for Policing Equity and the Equal Justice Initiative. And we’ll be providing technical support through our Google.org Fellows program. This builds on the $32 million we have donated to racial justice over the past five years. We’ll also offer $25 million in Ad Grants to help organizations fighting racial injustice provide critical information.

As a result of last week’s internal giving campaign, I‘m pleased to share that you all have contributed an additional $2.5 million in donations that we’re matching. This represents the largest Googler giving campaign in our company’s history, with both the largest amount raised by employees and the broadest participation.

“We’ll work closely with our Black community to develop initiatives and product ideas that support long-term solutions—and we’ll keep you updated,” Pichai added. “As part of this effort, we welcome your ideas on how to use our products and technology to improve access and opportunity.”

Pichai also tweeted Google’s solidarity with the Black community.

2014

We could not find public responses from Google regarding the deaths of Eric Garner and Michael Brown or the Ferguson protests.


Microsoft

2020

Microsoft CEO Satya Nadella’s May 28th remarks to employees about the protests in Minneapolis were published on LinkedIn. As part of those remarks, Nadella discussed Microsoft’s Criminal Justice Reform Initiative, which was formally launched in 2019.

“This initiative invests in partnerships and programs working to drive reforms, focusing on policing,” Merisa Heu-Weller, director of the initiative, said in a March 3rd blog post. “While we recognize that disparities exist throughout the system, we believe that by focusing on policing, and building positive relationships between police and communities, we can help keep people out of the system and reduce the disparities within it.”

Heu-Weller also said that “teams across Microsoft have partnered with organizations across the United States working on criminal justice improvements” since 2014.

Nadella tweeted his support for the Black and African American community on June 1st. He has also retweeted many statements from Black Microsoft employees shared on Microsoft’s official Twitter account.

2014

We could not find public responses from Microsoft regarding the deaths of Eric Garner and Michael Brown or the Ferguson protests.


Twitter

2020

Twitter CEO Jack Dorsey called for “police policy reform now” in a June 1st tweet.

Dorsey also tweeted #startsmall grants to benefit Black and Brown communities, support ex-offenders, and more. Dorsey first began making #startsmall grants in April after moving $1 billion of his Square equity to an LLC to be used to fund COVID-19 relief. All of the grants made so far are tracked here.

Dorsey’s Twitter thread with his most recent grants begins here:

Twitter’s @TwitterTogether account posted a Twitter thread about how people can practice allyship.

2014

Dorsey went to Ferguson, Missouri shortly after Michael Brown’s death to participate in protests, and tweeted extensively while there. At the time, he was Twitter’s executive chairman, not its CEO.

We could not find other public responses from Twitter regarding the deaths of Eric Garner and Michael Brown or the Ferguson protests.


These companies may not have shown up in 2014, but given the very low bar, the fact that they have in 2020 is an encouraging sign of progress. Still, a statement of solidarity and a few donations should be just the beginning. There is the acknowledgment of racism, and then there is the ongoing work of being anti-racist.

Amazon, Apple, Facebook, Google, Microsoft, and Twitter—these companies are proud of being some of the most powerful institutions in the world, and often tout that they are making the world a better place. If they commit to their pledges of “pushing progress forward” and taking on “the fight against systemic racism and injustice,” that effort could really help the Black community — or at the very least, amount to more than just promises and platitudes in a press release.



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Instacart tweaks tipping system after tip-baiting outcry

Instacart is adjusting how it handles customer tips following the announcement last week of a congressional inquiry into the practice of tip-baiting, in which Instacart allows customers to promise big tips for shoppers only for those customers to later rescind the tip after the order is dropped off.

Instacart now says it will shorten the window a customer can alter their tip from three days down to 24 hours. It’s also now requiring customers leave feedback for removing tips and pledging to deactivate any customer who “consistently and egregiously engages in this type of behavior.” The company claims “only 0.25 percent of orders had a tip adjusted after 24 hours,” and that, “less than 0.5 percent of orders have tips removed after delivery.” Instacart is also expanding its in-app cash-out feature to include tips, so shoppers can now receive the extra earned money from an order 24 hours after a completed order.

Instacart, like many other on-demand apps, has long had a controversial and at times exploitative approach to tipping. The company was accused in 2019 of tip stealing by counting customer tips toward a shopper’s guarantee payment minimum. It has since changed that policy to ensure more transparent allocation of tips.

But amid the pandemic, a new customer-side behavior, tip-baiting, on the Insatacart platform, tip-baiting, began posing serious risks to Instacart shoppers. Many Instacart shoppers began relying on the company as their only source of income during COVID-19-induced lockdowns and putting their health at risk to venture into grocery stores and delivery food to customers. Some Instacart users discovered they could promise large tips to ensure efficient service, only to reduce the tip amount to zero after receiving the order.

A recent Verge investigation into the human cost of Instacart’s rapidly expanding role during COVID-19 found that tip-baiting was a central complaint of many workers, some of whom said Instacart was making it difficult to receive promised sick pay. (Instacart this week expanded its sick pay policy as part of an agreement with Washington, DC Attorney General Karl Racine.) A group of senators led by Sen. Brian Schatz (D-HI) last week called for a potential investigation into Instacart’s tipping system in a letter to the Federal Trade Commission.

“Congress intentionally provided broad authority… so that the FTC could address new and emerging market practices that may constitute unfair and deceptive practices,” the senators wrote. “Particularly in light of the COVID-19 pandemic and the unique risks that online delivery shoppers are taking, we believe the tipping policy at Instacart and other similar companies deserve scrutiny.”

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Nio’s future depends more on the Chinese government than ever

Chinese EV startup Nio announced its first-quarter results last week and, by most accounts, the Tencent-backed company appears to have weathered the impact of COVID-19. That argument was further bolstered on Thursday when Nio released strong May delivery figures. But Nio also recently finalized a crucially-timed $1 billion bailout from a local government in China, and the price the company had to pay to survive is becoming increasingly apparent.

Now Nio — which is billed as an independent startup with ambitions to sell cars in Europe and the US, and even has offices in London, Munich, and Silicon Valley — is more anchored to the whims of the Chinese government than before. And owners of Nio shares that trade on the New York Stock Exchange have had an extra layer of abstraction placed between them and the company’s most valuable assets.

The cost of the bailout

The major deal Nio inked was with the city of Hefei, the capital of Anhui province. Announced in February and finalized in April, it involves a group of state-owned or state-adjacent construction, economic development, and investment companies pumping about $1 billion into a subsidiary in China created by Nio called, simply, “Nio China.”

In return, Nio had to commit its “core businesses and assets in China, including vehicle research and development, supply chain, sales and services and Nio Power” (that last part being its home charging and battery swap business) into this new subsidiary. Nio also has to invest around $600 million of its own money into Nio China, and has committed to building a new headquarters specifically for the new subsidiary in Hefei.

On top of all of that, the Hefei investor group now owns 24 percent of Nio China. The other 76 percent belongs to Nio Inc., the holding company at the very top of the EV startup’s corporate structure. Nio Inc. is what trades on the NYSE, and so the company made sure to tell its shareholders on the recent earnings call that they will own the controlling stake of Nio China “for the long term.”

That reassurance is important because companies like Nio are ostensibly independent from the government in China, at least when compared to outright state-owned enterprises. Yes, they benefit from government subsidies and aggressive electric vehicle policies, but it’s not like Beijing is calling the day-to-day shots.

But that case will be slightly harder to make following this deal, because the Hefei investor group was granted “voting rights with respect to various significant corporate matters” like changes to Nio China’s corporate structure, and its “core business and … articles of association,” which, according to Nio, “may significantly limit our ability to make certain major corporate decisions with regard to” the new subsidiary. And if Nio doesn’t hit certain sales benchmarks or take the Nio China subsidiary public on its own within five years, the Hefei investors can cash in their shares at an 8.5 percent premium.

What’s more, if that happens and Nio is unable to pay them back, the Hefei investors can force Nio to sell its own stake in Nio China. “[w]e may lose control,” the company warned investors in a recent filing.

Nio didn’t have much of a choice but to make this bargain, says Michael Dunne, head of ZoZo Go, an automotive consulting group focused on the Chinese market.

“At a certain point there comes a day of reckoning where [Chinese companies] are just hungry for cash, and they look around and say, ‘what are our alternatives here?’ And the final backstop is the government,” Dunne says. “China wants to lead the world in electric vehicles, and they have the wherewithal to provide Nio with the cash lifeline to allow it to proceed with its dream.”

Still, it has some skeptics worried. One investor who is short Nio’s stock (meaning he’s essentially betting the share price will go down) has called it an “asset strip,” and that those concessions the company made in return for Hefei’s investment put shareholders at risk.

Dunne disagrees, though he admits Nio was “caught in a place where they were vulnerable and they had to lose control of some elements.”

“Do I think it’s some kind of a play? I don’t. I think it’s a short term improvisation to stay alive, with the hope they can improve performance and reassert control of the venture both inside and outside of China,” he says.

But, he adds, “anything is possible in China. When the company you’re investing in is also owned by Chinese shareholders, including the state enterprise or the government, all bets are off.”

Nio’s brush with death

The money came at a particularly crucial time for Nio, as the startup was barreling toward financial catastrophe.

Not only has Nio burned through more than $6 billion since its founding in 2014, but it stumbled repeatedly in 2019. Despite it being Nio’s first full year of sales, and the company launching a second, more affordable electric SUV, it ultimately delivered half the total number of cars it promised last year.

The company’s progress was tripped up by a number of things: a battery recall, the Chinese government’s reduction of subsidies on expensive electric vehicles, a pre-pandemic slowdown in China’s economy, and — by Nio’s own admission — five straight years of unchecked growth.

Nio went through multiple rounds of layoffs, delayed a new vehicle, and canceled plans to build its own factory as a result. The company also sold its Formula E electric racing team for $15 million, a figure that has not been previously reported, according to a recent filing.

To staunch the bleeding, Nio spent the better part of the last year trying to scare up new funding. That search did not go so well. A proposed $1.45 billion deal with the economic development agency in Beijing never materialized. Instead, Nio wound up taking a $200 million loan from its founder and Tencent in September 2019, and then took on another $435 million worth of debt in early 2020 to fund its operations, before ultimately lining up the deal with Hefei.

Then, of course, the COVID-19 pandemic hit. Nio’s sales briefly flatlined, as did pretty much every other automaker’s. The company went from delivering 8,224 vehicles in the fourth quarter of 2019 to 3,838 cars in the first quarter of 2020 — putting Nio roughly in line with where it was at in the first quarter of 2019 (3,989 cars delivered) when it had just one model for sale.

Nio’s first quarter numbers emphasize how existential things got. The startup generated just $177.3 million of revenue on the 3,838 cars it sold in the first quarter, and $193.8 million in total revenue for the quarter. The company ultimately posted a $238.9 million loss, and finished the quarter with just $338.6 million of cash in the bank, which the company said once again “is not adequate to provide the required working capital and liquidity for continuous operation in the foreseeable future” — marking the second consecutive quarter that Nio had to issue such a warning.

But amidst a recovering new car market in China, Nio delivered 3,436 vehicles in May — nearly as many as it shipped across the entire first quarter. Braced by the optimism around the Hefei investment, analysts at JP Morgan and Goldman Sachs have upgraded their ratings of the company’s stock. CEO William Li has said he feels confident Nio has enough funding to move forward, and it looks like things are trending back up.

If Nio builds on this momentum, the company can still follow through on its ambitions to become a global brand, Dunne says. He’s also not concerned those plans would be inhibited by the fact that the local government is now directly involved.

“The Hefei government would be absolutely 100 percent in support of that direction, to go global, and compete globally, in part because the brand value goes up if it’s not a China-only play,” he says. The central government in Beijing is also calling for more exports of Chinese vehicles, according to Dunne, which would bode well for Nio long term.

Success at that scale could be a boon to Hefei, a place that was already humming with automaker activity, and one that has only seen its status improve since the ink dried on the deal with Nio. Just last week, Volkswagen announced it’s pouring more than $2 billion into state-owned automaker JAC Motors and battery maker Guoxuan High-Tech, two companies located in the capital city of the Anhui province.

JAC Motors just so happens to be the company that makes Nio’s cars, though Dunne thinks the move will only further bolster each company’s prospects. “Anhui province, enjoying apparent powerful godfathers in Beijing, looks hell-bent on establishing itself as a core production hub in China’s EV industry,” he says.

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‘Antifa bus’ hoaxes are spreading panic through small-town America

Mythical buses full of bloodthirsty antifa protestors are causing panic in rural counties throughout the country — even though there’s no evidence they exist. The Associated Press has catalogued at least five separate rural counties where locals have warned of imminent attacks, although none of the rumors have been substantiated. Notably, the rumors are often tailored to a specific local region, a “hyperlocal” approach sometime used to boost the spread of misinformation on social media platforms.

NBC News first reported on the recent surge of antifa-related misinformation, some of which was promoted by white nationalist groups posing as antifa accounts. But even after the rumors were debunked, they continue to spread on Facebook, often inspiring real-life confrontations and instances of violence.

In Forks, Washington, a multi-racial family of four was harassed by armed locals, who believed they represented an antifa incursion. The family had arrived in town on a camping trip, traveling in a full-sized school bus. Local police say they were confronted by “seven or eight carloads” of people, who aggressively questioned them about their antifa connections. When the family attempted to drive off, locals felled trees across the roadway to prevent them from escaping. They were only able to leave after a group of students intervened.

In other cases, everyday bus charter businesses have been pulled into the confusion, treated as presumed troop convoys until proven otherwise. On Wednesday, an Idaho fleet services business was targeted by a minor panic, after a debunked rumor claimed incoming agitators were targeting the state. One local posted a picture of his bus on Facebook as evidence of the antifa incursion, claiming “this bus was full of them.”

“If anyone sees a post about my bus, please flag it,” the company owner posted on Wednesday. “Nolan was driving home from work and someone posted it saying it’s full of antifa.”

Elsewhere, the misinformation has come from sheriffs themselves. In Curry County, Oregon, Sheriff John Ward told his department’s Facebook followers, “I got information that three buss [sic] loads of Antifa protestors are making their way” into the county — although he added, “I don’t know if the rumors are true or not.”

He called on civilian volunteers to help defend the town, should the buses materialize. “Without asking I am sure we have a lot of local boys too with guns that will protect our citizens and their property.”

Ward took down the post after harsh criticism from Facebook commenters. He insists it was not intended as a call to arms. It’s unclear where Ward got his original tip about the incoming buses — including the specific location and number — but it appears to have come through a similar chain of rumors. “Our county attorney forwarded me a post from somebody,” he told local reporters, “and it was sent to him by another attorney that is kind of a private attorney.”

The rumors have been particularly lively on Facebook. One post, written by a previously unknown outlet called DC Dirty Laundry, claims to have discovered specific plans to bus large numbers of “antifa terrorists” into a small town called Sparta, Illinois, “where they will be directed to target rural white Americans by burning farm houses and killing livestock.” The article names specific routes that the buses will be taking (sourced to “highly reliable individuals”), and claims Illinois was targeted because restrictions on gun ownership have “transformed the state into a shooting gallery for Antifa terrorists.”

The post is a credited reprint of an earlier report from Natural News, a notorious anti-vaccination outlet that has been banned from posting on Facebook. But syndicating the article to a new URL seems to have completely evaded those restrictions, allowing the post to travel widely on Facebook. Links to the DC Dirty Laundry post have been shared more than 1,000 times since Thursday, including by fan groups for President Trump, Candace Owens, and Rush Limbaugh.

Sparta’s sheriff addressed the rumors on Friday, saying “we have no evidence leading us to believe this threat is at all credible.” Facebook did not immediately respond to a request for comment.

In some ways, the panic has been stoked by the federal response to protests, which continues to pose antifa groups as a primary driver of the ongoing unrest. This week, President Trump announced his intention to designate antifa as a terrorist group, but neither the FBI nor the Department of Homeland Security have any available intelligence to back up the assertion. None of the 22 criminal cases filed in connection with the protests have shown any ties to antifa groups.

But in a statement last week, Barr warned of traveling antifa cells similar to those described by Natural News. “In many places, it appears the violence is planned, organized, and driven by anarchistic and far left extremists,” Barr said, “using Antifa-like tactics, many of whom travel from out of state to promote the violence.”

It’s a more restrained version of the rhetoric used by President Trump, who has used antifa as a political foil since early in his campaign. “It’s ANTIFA and the Radical Left,” he tweeted on the same day. “Don’t lay the blame on others!”



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Instagram says sites need photographers’ permission to embed posts

Instagram says its terms of service don’t grant websites a sublicense to embed other people’s posts. Ars Technica reported yesterday that Instagram’s policies “require third parties to have the necessary rights from applicable rights holders,” according to a company spokesperson. “This includes ensuring they have a license to share this content, if a license is required by law.”

The news follows a legal defeat for Newsweek earlier this week, when a New York judge ruled that the magazine couldn’t dismiss a photographer’s complaint based on Instagram’s terms of service. A different judge previously determined that Instagram could sublicense photographs to sites that embed its posts, protecting the site Mashable from a lawsuit. The recent ruling doesn’t disagree with this conclusion, but Judge Katherine Failla said there wasn’t evidence Instagram did grant such a sublicense.

Now, Instagram is apparently clearing up the situation in photographers’ favor. It didn’t specify which part of its policy covered embedding rights, but the copyright page says users retain “the right to grant permission to use your copyrighted work, as well as the right to prevent other people from using your copyrighted work without permission,” with no mention of exceptions for embedded content. And the site forbids embedding content in a way that “violates any rights of any person,” including “intellectual property rights.”

Instagram told Ars Technica it was “exploring” more ways for users to control embedding. For now, photographers can only stop embeds by making photographs private, which strictly limits their reach on Instagram. Even the Mashable ruling expressed concern with Instagram’s “expansive transfer of rights” from users, so this would address a major underlying factor in both suits.

It doesn’t necessarily mean sites can’t use Instagram photos. Neither judge ruled on what’s called the “server test” — an argument that embedded photos aren’t copying photos in a way that could infringe on copyright because they’re simply pointing to content posted on another site (in this case, Instagram). A tentative 2018 ruling suggested that the server test might not hold up in court, but Newsweek might bring it up as a defense, producing a clearer precedent.

Newsweek still has defenses if the server test fails, including invoking fair use law, so embedding an Instagram post isn’t categorically forbidden. By removing a blanket legal protection, though, that would raise the legal stakes for embedding an Instagram post — and depending on other sites’ policies, make embedding content from any social media platform riskier.



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Alexis Ohanian asks to be replaced by a black candidate as he resigns from Reddit’s board

Serena Williams’ husband Alexis Ohanian — the co-founder of Reddit — resigned from Reddit’s board of directors today. He announced the move in a tweet, urging the company to hire a black candidate in his stead and promising his future gains on Reddit stock to serve the black community.

The move comes just two days after a number of popular subreddits went private or, in some cases, banned new posts to protest the company’s hate speech policies. Some moderators of some of the site’s largest communities specifically called out Ohanian’s co-founder, current CEO Steve Huffman, for failing to take action against racism and some of the site’s most virulent communities like r/The_Donald, its pro-Trump subreddit.

Reddit is a global forum, and one of the earliest mass gathering places online that popularized and prioritized the idea of unrestricted free speech. Its stance has changed more recently.

Over the last couple years, Reddit has started to proactively ban the kinds of communities it would have tolerated before Donald Trump’s election as president, like the QAnon subreddit or the alt-right r/MillionDollarExtreme. But it hasn’t been perfect. Just this week, former CEO Ellen Pao — who resigned after users revolted over changes to the site during her tenure — took Reddit to task over its historical tolerance of racism and white supremacist thought.

Ohanian’s desire to do some good with his power and position is admirable, but it doesn’t erase the harm Reddit has done because of its commitment to speech above all else.



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