Facebook Would Suffer From User Data Ban in Germany – Bloomberg

Germany is about to remind Facebook Inc. that the tribulations of 2018 are far from over. In fact, they’re about to get even more real.

The country’s Federal Cartel Office intends to ban Facebook from collecting user data from third parties, the newspaper Bild am Sonntag reported. This will also prohibit data sharing between WhatsApp and Instagram, which Facebook owns. Germany is concerned that Facebook users didn’t know they agreed to be tracked across the internet when they signed up for the firm’s offerings.

The regulator’s move could be a major obstacle to the social networking giant’s plans. With user growth and engagement stagnating, Facebook is increasingly focusing on improving the value of what it offers advertisers. That means doing a better job targeting ads to individual users in order to generate a better return on investment for brands.

Logging Off

Facebook user growth has stagnated in North America and shrunk in Europe

Source: Bloomberg

Right now, any website hosting a Facebook “like” button or a link to “Share on Facebook” sends a cookie to the Menlo Park, California-based firm whenever a browser visits that site. Because engagement on its core platform is softening, those cookies can help the social media company build more complete user profiles. That in turn improves ad targeting.

The German measures will likely prohibit the sharing of those cookies, BamS reported. Significantly, if the case made by the regulator is compelling, a wider investigation by the European Union could follow. Germany is very much the leader on the continent for countries deciding how to approach regulation, and any big change it makes could be the thin end of the wedge.

Which all seems to indicate that CEO Mark Zuckerberg could face as difficult a 2019 as he did 2018. The firm’s shares fell 26 percent last year as the ramifications of the Cambridge Analytica scandal started to play out. But so far, there has been very little actual regulation. The decision in Germany will be one of the first moves to change that.

The German investigation on third-party data sharing started in March 2016, predating the Cambridge Analytica story. Although skepticism towards Facebook has always been strong in Germany, the fallout from the affair has spread the antipathy globally, making other nations more open to tighter rules.

More Bang Per User

Facebook has offset stagnating user growth by eking out more revenue per user

Source: Bloomberg

It’s still likely to take some time for the regulator’s decision to force change. Facebook told BamS it would appeal, and follow-up investigations at the European level would probably also require at least a year. That might explain why, despite the mounting regulatory hurdles, analysts remain remarkably bullish on Facebook shares. Of the 53 analysts surveyed by Bloomberg, 41 recommend buying the stock. The average 12-month target price of $185.83 is still almost 30 percent above its Friday closing price.

The likely regulation could be a major spanner in the works of Facebook’s advertising machine. Investors would do well to note that the regulatory battles are only just beginning.

Source: Facebook Would Suffer From User Data Ban in Germany – Bloomberg

NATO summit: Trump calls Germany a ‘captive of Russia,’ slams other European allies – The Washington Post

President Trump unleashed a blistering attack Wednesday on Germany and other NATO allies, wasting no time to take the offensive before a week of high-stakes diplomacy on both sides of the former Cold War divide.

The series of meetings — beginning with NATO and capped by a summit with Russian President Vladi­mir Putin — has been largely framed around Trump’s claims that Washington bears an unfair burden to help protect its allies.

“Germany, as far as I’m concerned, is captive to Russia because it’s getting so much of its energy from Russia,” Trump told NATO Secretary General Jens Stoltenberg, in a fiery on-camera exchange that was among the harshest in the history of the post-World War II alliance.

“We have to talk about the billions and billions of dollars that’s being paid to the country we’re supposed to be protecting you against,” Trump said, referring to European purchases of Russian natural gas.

Trump has complained bitterly about Europe’s lagging defense spending, saying that NATO nations were taking advantage of U.S. military largesse at the same time they were offering unfair trade terms to U.S. businesses.

A favorite target of his ire has been Germany, which has not met its NATO spending commitments and is beginning construction on a second natural gas pipeline to Russia. Germany and other European NATO partners argue, however, that they have boosted contributions to the military alliance and plan to kick in even more in coming years.

The accusation of Russian influence may have been particularly biting to German Chancellor Angela Merkel, who grew up in Communist-controlled East Germany.

“I myself experienced that a part of Germany that was controlled by the Soviet Union, and I am very happy today that we are united in freedom as the Federal Republic of Germany,” Merkel told reporters as she entered NATO. “We decide our own policies and make our own decisions.”

The U.S. leader traveled to Europe saying that a Monday summit with Putin will be the easiest of his week of diplomacy — an unusual assertion that upended NATO leaders’ belief that the alliance should project a strong and united front against a strategic rival.

Trump has preferred to take aim at allies.

Even Stoltenberg — a mild-mannered former Norwegian prime minister who has cultivated a positive relationship with Trump — appeared reduced to spluttering as Trump cut him off after he started to explain that allies traded with Russia even during the Cold War. Earlier in the exchange, Trump demanded credit from Stoltenberg for forcing an increase of NATO defense budgets.

“It was also because of your leadership,” Stoltenberg told Trump. Budget increases started after Russia’s 2014 annexation of Ukraine’s Crimean Peninsula, and they have accelerated in the Trump era in response to the U.S. president’s criticism.

“We’re supposed to protect Germany but they’re getting their energy from Russia,” Trump told Stoltenberg, as aides on both the U.S. and NATO side of a long table shifted in their seats and sat stonefaced. Chief of Staff John Kelly jerked his head away as U.S. Ambassador to NATO Kay Bailey Hutchison looked up at the ceiling. “So explain that,” Trump said. “And it can’t be explained and you know that.”

Trump’s criticism set off immediate anxiety in Germany. Munich’s Süddeutsche Zeitung headlined its story: “It is not only bad, it is catastrophic.”

Germany’s energy relationship with Russia has long frustrated Washington and Eastern Europe, who fear that the Nordstream pipeline that bypasses the Baltic nations and Poland could be used to cut them off from crucial energy supplies. Former German chancellor Gerhard Schroeder is a top executive at the Russian-government-controlled company that runs the Nordstream pipeline.

Trump’s laser-focus on Germany has unsettled Berlin, which had grown accustomed to a strong relationship with then-president Obama. Trump plans to meet one-on-one Wednesday afternoon with Merkel, where he will reiterate the same tough message to her face, White House spokeswoman Sarah Huckabee Sanders said.

 Trump is in Brussels for two days of NATO meetings. Following that, he will travel to England to meet with British Prime Minister Theresa May, spend the weekend at one of his private golf clubs in Scotland. Finally, he will head to Helsinki for a summit with Putin.

NATO members have agreed to a long list of efforts they believe will strengthen the alliance against Russia and other rivals, making it easier to speed military forces across Europe and toughen its counterterrorism initiatives.

But many diplomats fear Trump’s anger over defense spending will overshadow the summit. Some even worry that he might withhold his signature from an agreement that has already been approved by national security adviser John Bolton, repeating a move he made last month at the Group of Seven summit in Canada.

That would send the alliance into a tailspin, damaging security by opening the question of whether NATO’s most powerful member is still willing to defend its allies if one were attacked.

NATO leaders also fear what concessions Trump could make to Putin.

Trump has raised the possibility of pulling U.S. troops from Germany. At the G-7 summit, he told leaders that he believed Crimea belonged with Russia because most of its residents are Russian-speaking, another position that would upend much of the West’s security decisions against Russia since 2014.

After meeting with Trump, Stoltenberg tried to paper over the differences, saying that the bottom line is that NATO is getting stronger.

“President Trump has plain speaking, sometimes very direct pointing at specific allies, but when it comes to the whole message we all agree that NATO has to share the burden in a fair way,” Stoltenberg said during a conference at NATO headquarters that is running alongside the summit.

“My main task is to keep all of our allies together,” Stoltenberg added.


Source: NATO summit: Trump calls Germany a ‘captive of Russia,’ slams other European allies – The Washington Post

Nazi Sympathizers Pushing to Take Over Europe’s Spy Agencies

A slow-simmering scandal in Austria has brought into public view potentially disastrous divisions among Western intelligence agencies. As far-right politicians have joined coalition governments in Austria and Italy and taken ministerial positions in charge of security and law enforcement, concerns have grown among intelligence professionals that they will ignore or even encourage the threat of violent ultra-right extremists.

The extreme right is now in charge of the interior ministries in both Vienna and Rome, putting conspicuous pressure on the intelligence services. In Austria, there have even been police raids on the homes and offices of top intelligence service staffers.

Already, at least some intelligence sharing between Germany and Austria appears to have been curtailed, and the relationship between Italy’s extreme-right-wing interior minister Matteo Salvini and other major European countries is severely , publicly strained. French President Emmanuel Macron last week likened the rise of such populists to “leprosy all across Europe.”

At the same time, these far-right politicians’ open friendliness toward Russia’s President Vladimir Putin, the KGB veteran who may have helped some of them get elected, raises grave security issues for the NATO alliance. And the fact that right-wing U.S. President Donald Trump appears to be playing a similar game—trying to discredit U.S. intelligence professionals while flirting with Putin—greatly heightens the sense of alarm.

“ It’s like the fox guarding the henhouse. It doesn’t make any sense. ”

— Mike Carpenter to The Daily Beast

The rise of far-right parties across Europe and their control of intelligence agencies is a real cause for concern, says Mike Carpenter, a former deputy assistant secretary of defense and now the senior director of the Biden Center for Diplomacy and Global Engagement at the University of Pennsylvania.

Far-right groups and political parties across Europe have close ties to Russia and may be sponsored by the Kremlin. Some even have close links to Russian intelligence services, said Carpenter. So for these groups to head the intelligence services charged with protecting their countries from foreign meddling is “like the fox guarding the henhouse,” said Carpenter. “It doesn’t make any sense.”

It also has implications for the U.S. government. “On the intelligence side, it raises alarms because of the nature of the sensitive information we share with our allies and partners,” said Carpenter. “That’s something that could potentially compromise sources and methods.

“Take a look at some of these politicians who have now been put in front of intelligence services and ministries of the interior, dig into their backgrounds and see if any of them have links to Russia,” said Carpenter.

Affinity for Russia is a well-known feature of far-right groups across Europe. “There is a tendency among European far-right parties to idealize Russia as a white supremacist far-right state, though that’s not accurate,” said Olga Oliker, director of the Russia and Eurasia program at the Center for Strategic and International Studies. “But it is something that Russia has been happy to take advantage of.

“If there are people who like Russia in these organizations, there is an increased risk that this information could be passed to Russia,” said Oliker. But, she added, “There are all sorts of reasons to be concerned about far-right groups taking control of intel that have nothing to do with Russia. They tend to be high on repression and low on citizens’ rights.”

“ This is about ultra-nationalist leaders with authoritarian leanings hijacking the institutions of state. ”

— A former senior military commander and U.S. intelligence official

All this comes at an extremely delicate political moment. At a European Union summit at the end of this week, the big issue will be immigration, as the EU tries to devise a coherent policy after years of conflicting positions in the face of a flood of refugees from the Middle East and Africa. Then, next month, Trump will likely meet Putin in Europe at roughly the same time he attends a NATO summit.

In the past, even when there were major political differences among allies (as there were, for instance, between the Americans and the French in the run-up to the 2003 invasion of Iraq), the cooperation among the professional intelligence agencies remained strong. But that may no longer be the case, according to several veteran intelligence sources.

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“I don’t think it is just about the intelligence agencies and their relationships waxing or waning,” a former senior military commander and leader in the field of U.S. intelligence said in an email to The Daily Beast. “We’ve had challenges in the past when agencies persisted in keeping their heads in the sand over issues we thought quite clearly evident but which our counterparts found uncomfortable politically.

“Rather, this is about ultra-nationalist leaders with authoritarian leanings hijacking the institutions of state that used to provide checks and balances. And nothing fuels that better than an ‘external’ threat to one’s existence as a national culture, with all that follows. Needless to say, Hitler perfected this. And other would-be authoritarians are doing likewise.

“But the truth is that European countries really do need to come to grips with the unprecedented influx of refugees and immigrants of different ethnic and sectarian groupings and determine how to turn some away humanely and accept others without the country’s own sense of identity and culture being eroded.”

“ We are on the verge of a civil war. ”

— DGSI Chief Patrick Calvar in 2016

Two years ago, Patrick Calvar, the then-head of France’s General Directorate of Internal Security (DGSI), warned a commission at the National Assembly in Paris that European society was at a tipping point after the January 2015 massacres at the Paris offices of the satirical magazine Charlie Hebdo and at a kosher supermarket, the November 2015 carnage at Paris cafés and the Bataclan concert hall and other incidents. And the problem was not just with Muslim terrorists, but with anti-Muslim, anti-immigrant extremists on what he called the “ultra-right.”

Calvar’s closed-door session with the parliamentary committee reportedly painted an extremely bleak picture: “We are on the verge of a civil war,” he said. His public testimony was hardly more optimistic. “Europe is in great danger,” Calvar said. “Extremism is rising all over and we are—we, the internal security services—are in the process of redeploying resources to focus on the ultra-right that is waiting for nothing but a confrontation.”

Also in 2016, German spy chief Hans-Georg Maassen warned that right-wing extremists in Germany were now networking with similar groups across Europe.

Just last weekend, 10 people were arrested in France under suspicion they were planning attacks on mosques, radical muslim leaders, and women wearing veils picked at random. Their website, called “Guerre de France,” or war for France, advocates preparation for the war to come, and not only against Muslims but against Jews as well.

“ Salvini previously has called for ‘mass cleansing, street by street, quarter by quarter’ to get rid of migrants. ”

In Italy, far-right politician Matteo Salvini now serves as head of Italy’s interior ministry, which handles internal security and terrorism. Salvini, who assumed office on June 1, previously has called for “mass cleansing, street by street, quarter by quarter” to get rid of migrants. One of his first acts as interior minister was to announce a census for the Roma minority, declaring that Roma without Italian citizenship would have to leave the country.

In Austria, the specific incident that has crystallized wider concerns in the world of espionage and counterespionage as well as counterterror was a series of raids ordered by the far-right interior minister earlier this year on the offices of the professional domestic intelligence chief, whose organization had in the past conducted and coordinated with Germany its surveillance of right-wing extremists.

Although there is no official confirmation, several reports indicate Germany has since quit sharing such sensitive information with Austria. And as one long-time security adviser to several French presidents told The Daily Beast, “The Austrian operation against the intelligence service by the ministry of interior had an impact on every other intelligence service in the West.” It was seen as, potentially, the shape of things to come.

Austria’s far-right Freedom Party (FPÖ) gained control of the interior ministry in December, after the center-right party agreed to form a ruling coalition with the once-scorned FPÖ.

Founded in 1956, the FPÖ has a strong Nazi pedigree. Its first leader was a former SS officer and the party has never really strayed far from its roots.

“ A nostalgia-fest for former SS officers. ”

The annual Ulrichsberg gathering for the “reconciliation” of World War II veterans in the southern Austrian province of Carinthia was for a long time a nostalgia-fest for former SS officers and other Nazi collaborators from across Europe. In recent years a new generation of right-wing extremists have joined in, too.

The golden days of Ulrichsberg featured the charismatic but self-destructive leader of Austria’s far-right Freedom Party (FPÖ), Jörg Haider, who gave an infamous speech in 1995 praising SS veterans as “decent men of character” who “stand by their convictions even in the strongest headwinds.” To say otherwise, according to Haider, was to be “politically correct.”

Haider was killed in a car crash in 2010, but the gathering in Ulrichsberg already had been canceled the year before because one of the organizers was caught trading Nazi memorabilia on the internet (a swastika and various medals, all advertised as being “original and in excellent condition”). By 2012 it was starting to make a comeback, however, and one participant is among the most notorious figures of the German-speaking neo-Nazi scene: Gottfried Küssel was twice imprisoned in Austria for “Nazi revivalism” and his rotund body, it has to be said, is rather reminiscent of the late Hermann Göring’s.

The first time the FPÖ entered government, in 2000, it caused a major continent-wide crisis. The European Union levied sanctions on Austria. Amid international pressure, Haider ceded the chancellorship to a less controversial figure. The sanctions were lifted only after the FPÖ demonstrated that it met certain human rights standards.

But the political winds have changed dramatically since then. The FPÖ joined the ruling coalition in December 2017, after political star Sebastian Kurz revitalized Austria’s failing center-right party by diluting far-right policies to make them more palatable for the general populace. When the FPÖ came in second, a coalition with Kurz’s party seemed natural. And with far-right populist parties advancing across the continent, Europe was in no position to sanction Austria this time around.

Since December, the FPÖ’s Herbert Kickl has been Austria’s interior minister. Kickl , whose lean, grizzled face and wire-rim glasses make him look like a radical conspirator out of central casting, used to write speeches and gags for Haider. The former president of the Viennese Jewish community, Ariel Muzicant, said in 2009 that Kickl’s texts reminded him of Joseph Goebbels.

In 2016, Kickl appeared at an extreme-right congress dubbed “Defenders of Europe.” The attendees were a mix of pan-Germanist frat-boy types who work for the Freedom Party, “new right” bloggers with university degrees who call themselves “identitarians,” and editors from various German and Austrian alternative news outlets. One was a publishing company from Graz that described National Socialism (that is, Nazi ideology) as “Europe’s attempt to prove itself against international superpowers in the east and west.” Kickl gave the keynote speech and told the crowd: “I see the audience that I wish for here, better than in the parliament.”

Today, Kickl often is described as the “mastermind” behind the electoral successes of the FPÖ that allowed it to enter into a coalition government with the somewhat more mainstream Christian Democratic Party of Prime Minister Kurz.

“ The FPÖ has a friendship contract with Putin’s ruling United Russia party. ”

As junior coalition partner, the Freedom Party now controls the defense, interior and foreign ministries. Kurz has been credited by some with besting the far right by embracing its agenda, which is a dubious proposition when talking about a party that has never really shaken off its Nazi heritage. (Hackers discovered that the party’s chairman, Johann Gudenus, who is not in the current government, once had the Facebook password “ heilheil ”). The party also has a friendship contract with Putin’s ruling United Russia party, which it signed two years ago when it was not in power and Putin already was the go-to guy for would-be right-wing authoritarians.

In March this year, a police unit headed by a Freedom Party member raided the homes of four staffers and an office of the domestic intelligence agency known as the BVT (Bundesamt für Verfassungsschutz und Terrorismus Bekämpfung, i.e., Federal Bureau for the Protection of the Constitution and for Counterterrorism). The bureau deals with, among other things, right-wing extremism.

The raids were justified as part of an investigation into alleged corruption in the BVT. But this “investigation” was based on dubious “insider info”: documents that contained embarrassing tales of sex parties and cliquishness but hardly any legally relevant information about actual operations of the BVT. The material, supposedly written by a BVT employee, was first offered around to the press in Vienna a year ago, but no one was interested—until Kickl took over the interior ministry. Since he took over, he has appeared intent on discrediting the BVT and replacing its leadership with people loyal to the FPÖ.

Peter Gridling, known as the stubborn but politically colorless head of the BVT for the last 10 years, was fired several days after the raids. He had been the object of a virulent campaign by the website unzensuriert.at (known as “the Austrian Breitbart”). The former editor in chief of unzensuriert.at is now Kickl’s communications director.

Gridling, along with intelligence chiefs Calvar in France and Maasen in Germany, warned in 2016 about a “dramatic rise” in right-wing extremist crime. Sibylle Geissler, who directed the BVT’s operation watching right-wing extremism, wrote a report about unzensuriert.at and the 2016 “Defend Europe” conference mentioned earlier.

Geissler reported that the Defend Europe congress is a “networking for the extreme right scene” and that unzensuriert.at publishes content which is “in part extremely xenophobic” and has “anti-Semitic tendencies.” She also wrote that unzensuriert.at “represents conspiratorial approaches and a pro-Russian ideology.” Apparently by mistake, Geissler’s report was made public and quoted in the media.

Some of Geissler’s files were taken in the police raids launched by Kickl this year. And last month she wrote in an email, which was leaked to the Austrian weekly magazine Falter, that she is now subject to a “witch hunt” by the interior ministry, which prevents her from continuing to do her job effectively.

The police raids were clumsy, but Kickl’s interior ministry still appears to have succeeded in obstructing the surveillance of right-wing extremism in Austria.

“ No sane intelligence service in the world will continue to share information with us, apart from maybe the weather forecast. ”

— Jan Krainer, from the Austrian Social Democrat opposition.

After the news went public, the German intelligence service (BfV) asked the Austrian service if the prosecutors had seized any of Germany’s shared intelligence during the raids. The German interior ministry told the German Left Party politician Andrej Hunko that if this is the case, then “there needs to be a new inquiry about how cooperation with the BVT can be continued in the future.”

Austria and Germany also trade intel via international forums like the CTG (Counter Terrorism Group). In a more recent inquiry by Hunko about the CTG, the German interior ministry confirmed that a foreign intelligence agency that passes on German intel to a third party, domestic or foreign, without Germany’s permission is a likely deal breaker, but said that one concern about ceasing cooperation was that the leak or sharing with undesirable third parties could be made worse.

Hunko tells The Daily Beast he is specifically concerned that Kickl and his people would be able to acquire intelligence about leftist activists who oppose right-wing extremism: “It is unthinkable what would happen if secret information about anti-fascist activities falls into the hands of the extreme right via Austria’s conservative-far right government.”

He adds: “The same applies for Italy, above all with the neo-fascist Salvini. I know that the German intelligence has written reports on the sea rescuers, some of whom are left-wing activists. It is a big problem, if the heirs of fascist parties and movements now control the intelligence services and can pursue these activists with this information.”

A few days after the BfV’s request in March for more information about what the police took from the intelligence agency, Christian Pilnacek, the secretary general of the Austrian Ministry of Justice, denied that any German intel was taken in the raids. But last week, Pilnacek admitted that officers took a DVD labeled “Photos Ulrichsberg 2015,” which came originally from the BfV. The disc apparently shows which people took part at the 2015 Ulrichsberg gathering in Carinthia. Pilnacek said that, from the DVD’s title, it was not clear that this was Germany’s information. And he said that the DVD has now been returned to the BVT extremism department. But of course the police under Kickl may now know details about German sources and methods they might not have known before.

In the raid, the prosecutors also took data from the “Neptune” network, which the BVT uses to communicate with other European intelligence agencies.

In light of the BVT affair, opposition parties tried unsuccessfully to pass a motion of no confidence against Kickl . “No sane intelligence service in the world will continue to share information with us, apart from maybe the weather forecast,” said Jan Krainer from the Social Democrats.

BVT boss Peter Gridling, now reinstated, told the Ö1 Morgenjournal (the morning news) on Monday that “without a doubt” cooperation with foreign intelligence has become “difficult.”

Kickl has tried to assure everyone that he still has the trust of foreign security services. His evidence: that Vienna is being considered as the location for Trump and Putin to meet. This shows, according to Kickl, that “all the talk about security and international isolation is a purely party politically motivated show.”

Source: Nazi Sympathizers Pushing to Take Over Europe’s Spy Agencies

Pressure mounts as Merkel fine-tunes immigration compromise – The Washington Post

 The fallout was swift the morning after German Chancellor Angela Merkel reached an uneasy late-night immigration compromise with hard-line coalition allies, an agreement that appears to have saved her fragile government, at least for now.

To keep her government intact, Merkel was essentially forced to abandon the “Willkommenskultur,” or culture of welcoming, that she had preached in 2015, when she welcomed nearly 1 million migrants and refugees into Germany. With stricter border controls, transit camps and discretionary identification checks soon to be imposed on the nation’s southern border, the future of the freedom of movement, a core European principle, may now be at stake in the heart of the Schengen zone, a 26-nation area where border controls have been abolished.

Facing a potential insurrection from Horst Seehofer, her interior minister and leader of her Bavarian sister party, the Christian Social Union, or CSU, Merkel agreed that migrants will no longer be able to enter Germany from Austria without any checks, that they will be processed in “transit centers” at the border, and that an agreement would be made with Austria in the event that migrants ineligible for asylum are not accepted back by the European Union countries where they first arrived.

Early Tuesday, the Austrian government, headed by the right-wing, anti-migrant Sebastian Kurz, announced that it had no interest in becoming embroiled in German politics. In the event that Merkel’s compromise becomes law, “we will be obliged to take measures to avoid disadvantages for Austria and its people,” the government declared in a statement.

Merkel’s compromise still depends on approval from her other coalition partner, the Social Democrats, or SPD. Party representatives have said they have “many questions” about the notion of camps along the border. But they appear unlikely to reject the proposal out of hand and trigger a new round of elections, in which they would stand to lose.

Talks between Merkel, the CSU and SPD continued Tuesday evening.

German Chancellor Angela Merkel attends a session of the Bundestag the day after she and Interior Minister Horst Seehofer reached a compromise over migration policy on July 3, 2018 in Berlin. (Sean Gallup/Getty Images)


In Vienna, Kurz’s government also said that if Germany approves this plan, Austria would have no choice but to respond with a version of its own, taking “measures to protect our southern borders in particular.” Controls between Germany and Austria, as well between Austria and Italy, where hundreds of thousands of migrants initially arrived, could trigger a domino effect inside an E.U. already on edge over the migrant question.

Source: Pressure mounts as Merkel fine-tunes immigration compromise – The Washington Post

Unions Did Great Things for the Working Class – Bloomberg

Politically and economically, unions are sort of an odd duck. They aren’t part of the apparatus of the state, yet they depend crucially on state protections in order to wield their power. They’re stakeholders in corporations, but often have adversarial relationships with management. Historically, unions are a big reason that the working class won many of the protections and rights it now enjoys, but they often leave the working class fragmented and divided — between different companies, between union and non-union workers, and even between different ethnic groups.

Economists, too, have long puzzled about how to think about unions. They don’t fit easily into the standard paradigm of modern economic theory in which atomistic individuals and companies abide by rules overseen by an all-powerful government. Some economists see unions as a cartel, protecting insiders at the expense of outsiders. According to this theory, unions raise wages but also drive up unemployment. This is the interpretation of unions taught in many introductory courses and textbooks.

If this were really what unions did, it might be worth it to simply let them slip into oblivion, as private-sector unions have been doing in the U.S.:

But there are many reasons to think that this theory of unions isn’t right — or, at least, is woefully incomplete.

First, even back in the 1970s, some economists realized that unions do a lot more than just push up wages. In a 1979 paper entitled “The Two Faces of Unionism,” economists Richard Freeman and James Medoff argued that “by providing workers with a voice both at the workplace and in the political arena, unions can and do affect positively the functioning of the economic and social systems.”

Freeman and Medoff cite data showing that unions reduced turnover, which lowers costs associated with constantly finding and training new workers. They also show that unions engaged in political activity that benefitted the working class more broadly, rather than just union members. And they showed that contrary to popular belief, unions actually decreased racial wage disparities. Finally, Freeman and Medoff argue that by defining standard wage rates within industries, unions actually reduced wage inequality overall, despite the cartel-like effect emphasized in econ textbooks.

But the world didn’t listen to Freeman and Medoff, and private-sectors unions declined into near-insignificance. Now, four decades later, economists are again starting to suspect that unions were a better deal than the textbooks made them out to be. A recent paper by economists Henry Farber, Daniel Herbst, Ilyana Kuziemko and Suresh Naidu concludes that unions were an important force reducing inequality in the U.S.
QuicktakeIncome Inequality

Since past data tends to be patchy, Farber et al. combine a huge number of different data sources to get a detailed picture of unionization rates going all the way back to 1936, the year after Congress passed a law letting private-sector employees form unions. The authors find that as unionization rises, inequality tends to fall, and vice versa. Nor is this effect driven by greater skills and education on the part of union workers; during the era from 1940 through 1970, when unionization rose and inequality fell, union workers tended to be less educated than others. In other words, unions lifted the workers at the bottom of the distribution. Black workers, and other nonwhite workers, tended to benefit the most from the union boost.

Now, however, private-sector unions are mostly a faded memory and their power to raise wages has waned — Farber et al. find that although there’s still a union wage premium, it’s now much more due to the fact that higher-skilled workers tended to be the ones who stayed unionized. A 2004 paper by economists John DiNardo and David Lee found that by 1984-1999, unions had lost much of their ability to force wages higher.

Given the contrast between the golden age of 1940-1970 and the current age of spiraling inequality, wouldn’t it make sense to bring unions back? Perhaps. The key question is why private-sector unions mostly died out. Policy changes — right-to-work laws, and the appointment of anti-union regulators, probably played a key role in reducing unionization. But globalization may have also played a big part. Competition from companies in countries like Germany — where unions often bargain to hold down wages in order to increase their companies’ competitiveness — might have made the old American model of unionization unsustainable. Now, with even stiffer competition from China, the challenge of re-unionizing the U.S. might be an insurmountable one.

But it might be worth it to try. Other than massive government redistribution of income and wealth, there’s really no other obvious way to address the country’s rising inequality. Also, there’s the chance that unions might be an effective remedy for the problem of increasing corporate market power — evidence suggests that when unionization rates are high, industry concentration is less effective at suppressing wages. Repealing right-to-work laws and appointing more pro-union regulators could be just the medicine the economy needs.

So supporters of free markets should rethink their antipathy to unions. As socialism gains support among the young, both economists and free-market thinkers should consider the possibility that unions — that odd hybrid of free-market bargaining and government intervention — were the vaccine that allowed the U.S. and other rich nations to largely escape the disasters of communism in the 20th century.

It looks like it’s time for a booster shot.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Noah Smith at [email protected]

To contact the editor responsible for this story:
James Greiff at [email protected]


Source: Unions Did Great Things for the Working Class – Bloomberg

Child abuse imagery found within bitcoin’s blockchain | Technology | The Guardian

German researchers have discovered unknown persons are using bitcoin’s blockchain to store and link to child abuse imagery, potentially putting the cryptocurrency in jeopardy.

The blockchain is the open-source, distributed ledger that records every bitcoin transaction, but can also store small bits of non-financial data. This data is typically notes about the trade of bitcoin, recording what it was for or other metadata. But it can also be used to store links and files.

Researchers from the RWTH Aachen University, Germany found that around 1,600 files were currently stored in bitcoin’s blockchain. Of the files least eight were of sexual content, including one thought to be an image of child abuse and two that contain 274 links to child abuse content, 142 of which link to dark web services.

“Our analysis shows that certain content, eg, illegal pornography, can render the mere possession of a blockchain illegal,” the researchers wrote. “Although court rulings do not yet exist, legislative texts from countries such as Germany, the UK, or the USA suggest that illegal content such as [child abuse imagery] can make the blockchain illegal to possess for all users.”

“This especially endangers the multi-billion dollar markets powering cryptocurrencies such as bitcoin.”

While the spending of bitcoin does not necessarily require a copy of the blockchain to facilitate, some processes, such as some mining techniques, require the downloading of the full blockchain or chunks of it.

“Since all blockchain data is downloaded and persistently stored by users, they are liable for any objectionable content added to the blockchain by others. Consequently, it would be illegal to participate in a blockchain-based systems as soon as it contains illegal content,” the researchers wrote.

Since mining is essential for the function of bitcoin, as the process records the transactions into the blockchain to verify trades and generates new bitcoin in the process, having illegal content such as child abuse imagery within the blockchain could cause significant issues for the currency.

“We anticipate a high potential for illegal blockchain content to jeopardise blockchain-based systems such as bitcoin in the future,” the researchers wrote.

This is not the first time warnings over the ability to store non-financial data within the blockchain have been issued. Interpol sent out an alert in 2015 saying that “the design of the blockchain means there is the possibility of malware being injected and permanently hosted with no methods currently available to wipe this data”.

The agency warned that the technology could be used in the “sharing of child sexual abuse images where the blockchain could become a safe haven for hosting such data”.

But this is the first time such content has been shown to actually exist, creating a moral and legal quandary around possession and the blockchain.

Source: Child abuse imagery found within bitcoin’s blockchain | Technology | The Guardian

German officials celebrate doubled Twitter character limit

BERLIN (AP) — German bureaucrats — notorious for their ability to create lengthy tongue twisters consisting of one single word — are celebrating the doubling of Twitter’s character limit.

Twitter announced Tuesday it’s increasing the limit for almost all users of the messaging service from 140 to 280 characters, prompting a mix of delighted and despairing reactions.

Waking up to the news Wednesday, Germany’s justice ministry wrote that it can now tweet about legislation concerning the transfer of oversight responsibilities for beef labeling.

The law is known in German as the Rindfleischetikettierungsueberwachungsaufgabenuebertragungsgesetz.

Munich police, meanwhile, said that “at last” they won’t need abbreviations to tweet about accidents involving forklift drivers, or Niederflurfoerderfahrzeugfuehrer.

Government spokesman Steffen Seibert made clear he’ll keep it short, quoting Anton Chekhov: “Brevity is the sister of talent.”


Source: German officials celebrate doubled Twitter character limit

Mass Deportation Is a Lose-Lose Proposition – Bloomberg

In its zeal to deport unauthorized immigrants, the U.S. risks turning itself into a quasi-police state — all for little or no benefit to the native-born.

First of all, net illegal immigration to the U.S. ended a decade ago:

But there are still about 11 million to 12 million unauthorized immigrants remaining in the U.S. A large and growing majority of Americans want to provide these people with a path to citizenship:

But to a minority of Americans, the continued existence of so many unauthorized immigrants represents a huge problem. Not satisfied with stemming the inflow, they want to take dramatic measures to deport those who already came.

Immigration Reform

The Trump administration is giving the restrictionists what they want. In April, the administration opened a hotline called Victims of Immigration Crime Engagement (VOICE). The hotline is for Americans to snitch on their neighbors. Although the office was ostensibly set up to “support victims of crimes committed by criminal aliens,” it’s the place to call if you think your neighbor is in the country illegally. Immigration and Customs Enforcement (ICE) will then pay them a visit. Recent records, released under the Freedom of Information Act, paint a grim but hardly surprising picture of what society looks like when the government asks the citizens of a country to betray each other.

Meanwhile, stories of ICE overreach are multiplying. The agency has arrested people coming out of courtrooms. It snatched a man dropping off his daughter at school, and a teenager about to go to a prom. In Michigan, ICE agents ate a nice breakfast at a restaurant before nabbing three of its workers. Arrests by ICE are up by about 40 percent this year.

What happens to the people ICE spirits away from their lives and their families? Increasingly, they are not deported to their countries of origin, but held in government detention centers. The conditions are prison-like, and there are widespread reports of sexual assaults.

This system may not yet approach the epic scale of the repression in communist East Germany or the Soviet Union, or modern repressive states like North Korea or Iran. But it’s moving uncomfortably in that direction. When people are encouraged to rat out their neighbors, government agents walk around asking you for your papers, and families are disappeared off the street and whisked away to detention centers, it’s impossible to avoid the comparison.

And what is being gained by nurturing this germ of a police state? Are there substantial economic and social benefits to native-born Americans that justify a harsh enforcement regime? Probably not.

This isn’t the first time the U.S. has rounded up and deported large numbers of people. In the early years of the Great Depression, the U.S. kicked out about a half-million Mexican immigrants — about a third of the Mexican-born population living in the country at the time. Unlike today, many of those deported were U.S. citizens, who were expelled in violation of their Constitutional rights.

Obviously, the goal was to provide relief to non-Mexican-Americans, at a time when unemployment was at record highs. But did it work? A new analysis by economists Jongkwan Lee, Giovanni Peri and Vasil Yasenov finds that it did not. Comparing cities that deported lots of Mexican-born residents with those who deported fewer, Lee et al. find that the former didn’t see their unemployment rates fall. If anything, job prospects for the native-born actually got worse in cities where deportations were more common.

How could deporting people make local labor markets worse? Jobs are not a fixed commodity that get parceled out to whoever is in the neighborhood; that’s a common fallacy. The people deported to Mexico in the Depression weren’t just workers, they were also consumers — their demand supported local businesses. When the government stepped in and removed them, local businesses naturally suffered.

That wasn’t the last time the U.S. tried to support native-born workers by keeping out Mexican laborers. In 1965, the U.S. ended a program that allowed Mexican farm workers, called braceros, into the country on a temporary basis. The idea was to raise wages and provide jobs for native-born agricultural laborers.

But a recent study by economists Michael Clemens, Ethan Lewis, and Hannah Postel finds no evidence that the policy worked as designed. Wages didn’t rise in the sectors where workers were excluded, nor did more native-born Americans take the jobs. Many farmers either switched to crops that required less manpower to pick, or invested in more automation. Sometimes they simply grew less, which probably resulted in higher food prices for American consumers.

So the benefit of mass deportation to the native-born is low or even negative. Crops will rot in the field, local businesses in cities across the country will lose customers and landlords will lose tenants. These costs will cancel out whatever benefits native-born Americans see from having low-paid, low-skill jobs suddenly open to them. Taxpayers might save a little money from not paying for unauthorized immigrants’ kids to go to school, but that’s about it. Meanwhile, the U.S. government will become a more repressive, more intrusive entity, eroding the freedoms that Americans have traditionally prided themselves on.

It doesn’t seem worth it.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Noah Smith at [email protected]

To contact the editor responsible for this story:
James Greiff at [email protected]


Source: Mass Deportation Is a Lose-Lose Proposition – Bloomberg

Your ‘Anonymous’ Browsing Data Isn’t Actually Anonymous – Motherboard

Researchers said it was “trivial” to identify users and view their browsing habits in purchased ‘anonymous’ browsing data.

In August 2016, a data broker received a phone call from a woman named Anna Rosenberg, who worked for a small startup in Tel Aviv. Rosenberg claimed she was training a neural network, a type of computing architecture inspired by the human brain, and needed a large set of browsing data to do so. The startup she was working for was well-funded and purchasing the data wouldn’t be a problem. But given the number of brokers out there, Rosenberg wasn’t going to purchase the browsing data from just anyone. She wanted a free trial.

A day after originally soliciting the data broker, Rosenberg received a phone call. A salesperson representing the broker gave Rosenberg the credentials she’d need to access the browsing data that was part of her free trial. The broker agreed to allow Rosenberg access to the complete browsing history of 3 million German users for one month, with the stipulation that for a part of this period, some of the browsing data would be collected live (that is, refreshed every day or so).


There was only one problem: Neither Anna Rosenberg nor the startup she claimed to represent existed.

Rosenberg was the alias of Svea Eckert, an undercover investigative journalist with the German media organization NDR who was looking into data sales practices and how difficult it is to de-anonymize the internet browsing data that is being collected and sold in bulk by third-party browser plugins.

“I was thinking maybe we’ll get a trial for three days or something,” Eckert told me last weekend at the Def Con hacking convention in Las Vegas, the first time this report had been presented outside of Germany. “The company we founded didn’t have a real address, it wasn’t registered. It was just a website and a LinkedIn account. We were really surprised they were willing to give us this data.”

After receiving her free trial data, Eckert partnered with Andreas Dewes, a data scientist who runs the company 7 Scientists, to see if they could identify individual users within the massive dataset. At first glance, the browsing data doesn’t look like much, just a bunch of URLs with timestamps.

A selection of the browsing data of a Dutch judge identified in the “anonymous” browsing data. Image: Svea Eckert

Eckert’s first task with the data was to find out if her browsing data was included in the dataset. To do this, she queried the data for the URL linked with her company’s login page, which generates a unique ID for each employee. Germany has a population of about 82 million, so the odds that Eckert herself was in browser data collected from 3 million Germans was small. Although it turned out her browser history wasn’t in the data set, by querying the data for her company’s login page Eckert discovered that a number of her colleagues were in the data by matching the unique login IDs from the company’s page to the individuals.


With this information, Eckert would’ve been able to see her colleagues’ entire browsing history for the last month. One of the colleagues included in the dataset was a close friend of hers, and she reached out to him to let him know that she had his browsing history. The question she had was which browser plugin was collecting and selling this data.

To answer this question, Eckert had her colleague delete one browser plugin every hour until he disappeared from the live data. On the seventh plugin, he disappeared. This suggested that the plugin collecting and selling his browser data was, ironically enough, called Web of Trust, which offers “free tools for safe search and web browsing.”

The troubling thing about Eckert and Dewes’ de-anonymization technique is that it can be used on anyone who has a public social media presence. For their report, Eckert and Dewes focused on Twitter and the German LinkedIn equivalent, Xing, to see if they could use these public profiles to de-anonymize public figures in the data.

When you click on your analytics page on Twitter, this brings you to a URL that includes your public Twitter handle—Xing has a similar feature. This means that Eckert and Dewes were able to query the database for these publicly available Twitter URLs for German politicians.


If the politicians were included in the dataset, the next step was to visit the Twitter profile of the politician and collect a few of the links they had recently posted. By using these links, coupled with the public Twitter URL, Eckert and Dewes were able to pull an individual’s entire month-long browsing history from the anonymous dataset.

As Dewes pointed out when he and I spoke at Def Con, it requires an astonishingly small amount of browsing information to identify an individual out of an anonymous dataset of 3 million people. Since everyone’s browsing habits are unique, it only takes about 10 website visits to create a “fingerprint” for an individual based on which websites they are visiting and when.

Moreover, since such a small number of websites are required to ID an individual, trying to trick this analysis technique by visiting a bunch of random websites to create noise won’t help, since only a handful of websites are needed to ID a person in the first place, Dewes added.

During their investigation, Eckert and Dewes managed to find a handful of politicians in the dataset. The web browsing habits of these public servants, such as the apparent kinky porn browsing habits of a Dutch judge, were laid bare for the researchers.

Valerie Wilms, a member of the German parliament, agreed to have her browsing habits revealed to her and was shocked by what the researchers were able to see. “This hurts,” Wilms said in the original NDR report. “It leaves people vulnerable for blackmailing.”

According to Eckert, the most worrisome part of collecting browsing data is that it is legal and relatively cheap to obtain. After contacting over 100 data brokers, Eckert said that the quoted prices she received for a month’s worth of browsing data ranged from 10,000 to 500,000 euros—chump change in the world of politics. When Eckert and Dewes approached the Web of Trust plugin responsible for the data sale, the company stated that the data sales were compliant with its terms of service and that company went to “great lengths” to anonymize the data.

As Eckert points out, it’s always important to read the terms of service and understand how a company says it uses its data. Even companies like Web of Trust, whose business model is built on safe and anonymous web browsing, are liable to unintentionally expose users browsing habits.

This also underscores the importance of net neutrality in America. In March, theUS Congress voted to eliminate broadband privacy rules that would require Internet Service Providers to get customer consent before selling their browsing data. And as Eckert and Dewes’ investigation shows, this data can be easily obtained and used to pull individual’s browsing histories from the “anonymous” data.

“I have this feeling that data brokers don’t know what’s in the data,” Eckert said. “When I made these phone calls to inquire about buying data, they spoke as if they were selling stones or apples. These companies have lost their minds when it comes to data collection.”

Source: Your ‘Anonymous’ Browsing Data Isn’t Actually Anonymous – Motherboard

No Oval Office handshake between Trump, Merkel – CNNPolitics.com

(CNN)President Donald Trump shared an awkward moment with German Chancellor Angela Merkel during her visit to the White House Friday, apparently declining to shake her hand, a traditional gesture in such settings.

During an Oval Office photo-op, a tense Trump barely looked at his German counterpart while quickly answering a few questions from the press.
“Send a good picture back to Germany, make sure,” Trump jokingly told photographers.
The President said his meeting with the Chancellor was “very good” and said the pair talked about “many things.”
However, when asked to shake hands by reporters and photographers, Trump and Merkel remained stationary. It wasn’t clear if the two heard the request, and the two had shaken hands when Merkel arrived at the White House and they shook hands again after a White House news conference.
The tense moment between the American and German leaders comes after Trump repeatedly bashed Merkel on the campaign trail and accused her of “ruining Germany,” citing the nation’s policies allowing refugees into the nation.
Merkel, who enjoyed a close relationship with former President Barack Obama, is concerned with the President’s negative comments about NATO and the European Union.
There was an equally odd moment, but for the opposite reason, when Trump met with Japanese Prime Minister Shinzo Abe in the Oval Office in February. They shook hands for a full 19 seconds.

He shook hands with Canadian Prime Minister Justin Trudeau without incident.

Source: No Oval Office handshake between Trump, Merkel – CNNPolitics.com