A clip of Sen. Richard Blumenthal (D-Ct.) asking a Facebook exec if the company would “commit to ending finsta,” which he described as a “product or service” of the company, has now been viewed online more than 6 million times.
Lawmakers: Instagram for Kids Should Be Scrapped
The Senate Commerce Subcommittee on Consumer Protection interrogated Facebook on Thursday over its plans to expand how kids utilize Instagram, one of its social media platforms.
In perhaps their clearest bipartisan message, the lawmakers agreed that Facebook should not revive newly-paused plans to build an “Instagram for Kids.”
“If we’re dealing with Facebook’s real world, where the safeguards are more illusory than real, there should be no Instagram for kids, period,” Committee Chair Richard Blumenthal (D-Ct.) said ahead of a hearing with Facebook’s Global Head of Safety Antigone Davis. “If they were really committed to kids’ safety, if there were real-world evidence of it, I might think differently about it. But Instagram for kids is plainly just more of the same.”
During the meeting, Davis, unsurprisingly, would not commit to the company fully scrapping Instagram for Kids.
In an experiment to directly see how Instagram promotes to teens, Blumenthal said his office created an account posing as a 13-year-old, then followed other accounts that were associated with diet extremism and eating disorders. After a single day, Blumenthal said the profile was only recommended accounts for self-harm and eating disorders.
The hearing was spurred by Blumenthal and ranking Republican Marsha Blackburn (Tn.) following the Wall Street Journal’s posting of multiple internal Facebook documents on Sep. 14. The same whistleblower who provided the documents to the WSJ later handed over a copy directly to Congress ahead of the hearing.
Those documents — published as a series of statistics on slideshow presentations — detail a number of disturbing data sets, including that 6% of American teens and 13% of British teens who told Facebook researchers that they had suicidal thoughts were able to directly trace those thoughts back to Instagram.
Facebook has repeatedly played down the leaked slide decks, arguing that they fail to capture the positive effects also presented within those slides. For example, the company has since stated that “more than half of respondents self-report that Instagram makes their feelings of loneliness better.”
Upon releasing two of the decks in full Wednesday night, Facebook again tried to diminish the results of its less than positive research by suggesting that the company itself “may [have] sensationaliz[ed] the negative impact on the graph.” In response, the WSJ published four additional slide decks in full, likely revealing much more information than Facebook had planned to make public.
Facebook’s Tactics Compared to Big Tobacco
During the hearing, Blumenthal likened Facebook’s model for attracting minors to its platforms as similar to that of Big Tobacco.
“[Facebook] has hidden its own research on addiction and the toxic effects of its products, it has attempted to deceive the public and us in Congress about what it knows, and it has weaponized childhood vulnerabilities against children themselves,” he said.
Echoing Blumenthal, Sen. Ed Markey (D-Ma.) compared Instagram to “that first childhood cigarette, meant to get teens hooked early, exploiting the peer pressure of popularity and ultimately endangering their health.” He’s also vowed to reintroduce a bill that would ban features like autoplay, push alerts, and accomplishment badges from being available to minors.
Davis refuted such claims and offered the counterargument that Facebook’s “products actually add value and… enrich teen’s lives.”
“They enable them to connect with their friends, with their family,” especially during the ongoing pandemic, she argued.
Blumenthal’s “Finsta” Blunder
During what has become easily the most viral moment of the hearing, Blumenthal asked Davis if Facebook would “commit to ending finsta,” which he described as a “product or service” of the company.
“We don’t actually do finsta,” Davis replied. “What finsta refers to is young people setting up accounts where they may want to have more privacy. You refer to it as privacy from their parents. In my interaction with teens, what I’ve found is that they sometimes like to have an account where they can interact just with a smaller group of friends.”
“Finsta is slang for a type of account, it’s not a product,” she later added.
“Okay, will you end that type of account?” Blumenthal said, continuing to press Davis.
“I’m not sure I understand exactly what you’re asking,” Davis said. “What I can say is that based on what we’ve seen in terms of teens using those kinds of accounts, we’ve actually given them additional privacy options, to address those kinds of issues, where they want more privacy so that they can have more privacy.”
“Well, I don’t think that’s an answer to my question,” Blumenthal said, ending the conversation.
The clip, which was viewed over 6 million times in the 24 hours after it was recorded, led to many mocking Blumenthal for seemingly not understanding that “finstas” — AKA, “fake Instagrams” — are a type of secondary account created by users, not an explicit feature offered by the platform.
However, earlier comments from Blumenthal show that he is more aware of the reality of what finstas are than the viral clip suggests.
“Facebook describes these secret accounts as ‘a unique value proposition,’” he said after correctly describing what finstas are. “It’s a growth strategy, a way to boost its monthly active user metric. That active user metric is of great interest to your investors, to the markets, and it looks to me like it’s another case of prioritizing growth over children’s safety.”
Still, Blumenthal has continued to be criticized for claiming that finstas are a “product” of Facebook or that “Facebook has done… finstas.” While finstas are indeed likely a valuable prospect for boosting Facebook’s metrics, their origin does not originate from and has not been publicly promoted by the company itself.
See what others are saying: (Axios) (The New York Times) (Ars Technica)
NFL Reaches Agreement to End Race-Norming, New Testing Formula Remains Unclear
The practice, which was adopted by the league in the ’90s, assumes that Black players operate with a lower cognitive function than players of other races.
NFL Ends Race-Norming
The U.S. District Court of Philadelphia uploaded a confidential proposed settlement between the NFL and former players on Wednesday that confirms the league’s plans to abolish race norming.
The NFL previously halted the use of race-norming in June as part of a$1 billion settlement with retirees Kevin Henry and Najeh Davenport, but details of the deal weren’t supposed to be released until it underwent review from a federal judge.
In fact, it currently seems as if someone in the court accidentally uploaded the document, as it was deleted hours later.
Among the details reaped from the settlement, it was revealed that the league plans to modify cognitive tests over the next year as part of a short-term change regarding how it verifies dementia-related brain injury claims. Previously, it used race-norming — the practice of assuming Black players have a lower cognitive function than players of other races — to test whether retirees seeking financial compensation had sustained brain injuries from the sport.
Black retirees who were denied access to compensation originally will also have their tests automatically re-evaluated over the course of the next year, if the settlement pushes through.
The NFL has additionally agreed to develop a long-term replacement system with the help of experts and players’ lawyers.
Still, the exact formula behind these new testing metrics, which will be designed as race-neutral per the agreement, is unknown. For example, retirees don’t know how the new changes will affect their scores or if they might potentially need to take additional tests before becoming eligible for compensation.
The Issue With Race-Norming
Race-norming was first adopted by the league back in the ’90s, and in theory, it was meant to help offer better treatment to Black retirees who had developed dementia from brain injuries related to football.
Essentially, the thought process was to take socioeconomic factors into account since Black people come from disadvantaged communities at higher rates; however, that quickly became a major issue since Black players were held to a higher standard of proof than players of other races.
For example, since the tests assumed Black people have less cognitive skill, Black retirees seeking claims needed to score lower to be granted compensation. That then led to many having their claims denied because they tested too high — even if they would have tested within the range to receive compensation had they been white.
See what others are saying: (Associated Press) (The Washington Post) (ABC News)
Facebook Plans Name Change as Part of Rebrand
News of the alleged rebrand came the same day Facebook was fined nearly $70 million for breaching U.K. orders related to the company’s 2020 acquisition of Giphy, as well as the same day it reached a $14 million discrimination settlement with the U.S. Justice Department.
Facebook Allegedly Plans To Debut New Name
Facebook, Inc. is planning to announce a new company name next week, according to a Tuesday report from The Verge.
The rebrand would reportedly align with CEO Mark Zuckerberg’s vision to shape the company into a full-fledged “metaverse” — AKA a virtual reality space where users can interact with one another in real-time.
The new name is currently unknown, but it would likely not affect the social media platform Facebook. Instead, the change would target its parent company, Facebook, Inc. — similar to how Alphabet became the parent company of Google following a 2015 restructure.
On Monday, Facebook said it is currently planning to hire 10,000 people in the European Union to help make its metaverse goal a reality.
Still, plans for the metaverse have not gone uncriticized, especially given the recent weeks of increased scrutiny regarding Facebook’s dominance over people’s daily lives. “Metaverse” was first coined in 1992 by American author Neal Stephenson in his novel “Snow Crash,” which depicts a corporate-owned virtual world.
Twitter CEO Jack Dorsey even cited one user who referenced the novel, agreeing that Stephenson was right in his prediction of “a dystopian corporate dictatorship.”
Facebook To Pay Fine and Settlement
Also on Tuesday, regulators in the United Kingdom fined Facebook nearly $70 million for breaching orders related to its 2020 acquisition of Giphy.
While that’s only a fraction of the $400 million it paid to purchase Giphy, UK regulators warned that they could eventually order Facebook to sell off Giphy if they find proof the acquisition has damaged competition.
In the U.S., the Justice Department said the same day that Facebook has agreed to pay up to $14.25 million to settle discrimination allegations brought by the agency under the Trump administration.
In December, the department accused the company of favoring foreign workers with temporary work visas over what it described as thousands of qualified U.S. workers.
“Facebook is not above the law and must comply with our nation’s federal civil rights laws, which prohibit discriminatory recruitment and hiring practices,” Kristen Clarke, an assistant attorney general at the department, said.
Notably, this settlement is the largest ever collected by the department’s Civil Rights Division.
See what others are saying: (The Verge) (Engadget) (The New York Times)
SEC Releases Long-Awaited Report on January Memestock Frenzy, Pokes Hole in “Short Squeeze” Narrative
Among other findings, the SEC said hedge funds weren’t broadly damaged by January’s unprecedented trading event.
SEC Publishes Findings
The Securities and Exchange Commission released a long-awaited, 44-page report on Monday detailing its findings regarding this year’s “Memestock Frenzy,” which involved companies such as GameStop and AMC.
During the frenzy in late January, the share prices of those companies soared exponentially. According to one of the key narratives of the situation, smaller investors piled onto GameStop as a way to directly attack hedge funds that were actively betting against GameStop’s success and future. As CNBC reported at the time, those “hedge funds and other players had to rush in to cover their bets against the stock.”
What followed were reports that hedge funds had lost billions of dollars all at once. In fact, one notable hedge fund, Melvin Capital, received what many described as a nearly $3 billion bailout. Meanwhile, in June, it was reported that the London-based White Square Capital had shut down its main fund due to the losses it suffered in January.
However, now, the SEC has said there is no real evidence to support some of the key pillars of this narrative, including that hedge funds were substantially hurt in the long run.
“Staff believes that hedge funds broadly were not significantly affected by investments in GME and other meme stocks,” the agency said in its report. “Staff did not observe that any advisers to private funds and registered funds experienced liquidity issues or difficulties with counterparties.”
On the whole, hedge funds even saw a 1.2% increase in profits in January, according to data from the HFRI Fund Weighted Composite index.
The agency also noted that GameStop purchases to cover bets were just “a small fraction of overall buy volume,” adding that “GME share prices continued to be high after the direct effects of covering short positions would have waned.”
“The underlying motivation of such buy volume cannot be determined,” the agency concluded. “Perhaps it was motivated by the desire to maintain a short squeeze. Whether driven by [that] desire… or by belief in the fundamentals of GameStop, it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock.”
SEC Not Currently Issuing Any Recommendation
The agency did not offer any policy recommendations with this report, though it did stress that a number of small-time investors who either initially bet against GameStop’s success or tried to ride the wave of gains saw significant losses.
Given that the number of investors trading GameStop rapidly jumped from 10,000 at the beginning of January to 900,000 by the end of the month, it’s not surprising that the FTC confirmed heavy losses for many.
With that in mind, the SEC aligned its next focus on commission-free trading apps and the way in which they promote potentially excessive trading. Notably, that includes apps such as Robinhood and Webull, both of which faced controversy during the frenzy for severely restricting users’ ability to trade so-called memestocks.
“Consideration should be given to whether game-like features and celebratory animations that are likely intended to create positive feedback from trading lead investors to trade more than they would otherwise,” the SEC said in its report.
SEC Chair Gary Gensler said Tuesday that by April, the agency could propose rules limiting how those apps make money from each trade, which is known as “payment for order flow.”