Inside Project “Jedi Blue”

Here’s what you need to know this week:

• State affairs: More details emerged of Facebook and Google’s covert “Jedi Blue” alliance 

State-by-state:

• Apple may be close to a smart watch holy grail: blood glucose monitoring
• Amazon claimed it had fixed serious leave and pay system problems
• Microsoft reported accelerating cyberattacks from Russia
• Tencent rebranded its controversial NFT markets

Facebook’s PR difficulties continue: a few weeks after the Wall Street Journal published a series of explosive reports based on documents leaked by whistleblower Frances Haugen, Haugen has now taken her dossier wider, releasing tens of thousands of internal documents to other press organisations – as well as to US senators. 

Many articles have appeared as a result. Highlights include this piece by the Atlantic’s Ellen Cushing – on Facebook’s failures to tackle abuse, and this one, uncovering internal turmoil at the company, by NBC News. 

The Facebook Files have cast a long shadow. But what if they’re obscuring an even more important story: one which goes to the economic heart of not one but two tech states?

This week a New York judge unsealed previously redacted documents in an antitrust lawsuit brought against Google by Ken Paxton, the Texas Attorney General. For anyone concerned about Google’s dominance, the new information makes for startling reading. It details alleged collusion between Google and Facebook to squash competition in the online ad space – worth $150bn and $84bn to these tech states respectively.

Here are the main points from the unredacted complaint (the redacted version was released last December): 

• Google contacted Facebook after it emerged as a powerful online ad rival in 2017. The suit alleges the two companies struck an “unlawful agreement” to give Facebook “information, speed, and other advantages” in its ad auctions in exchange for Facebook backing down from its competitive threats. 

• As we knew before, the agreement was codenamed “Jedi Blue”. But the unredacted complaint exposes how sensitive Google allegedly knew it was: it considered that the “Jedi program” ran “risks of negative media coverage if exposed externally,” the suit details.

• In making the decision to commit to Jedi Blue, Facebook had three options, the unredacted suit alleges. “Invest in hundreds more engineers” and spend billions of dollars to lock up inventory to compete, exit the business… or do a deal with Google”.

• One senior Google employee admitted that its control over the online advertising space had become excessive, stating that “the analogy would be if Goldman or Citibank owned the New York Stock Exchange”. Google’s dominance was so strong it allegedly extracted an extraordinary 22- 42 per cent of all the ad spend flowing through its system. 

The allegations – which Facebook and Google both deny and which are reported well here – aren’t perhaps as sexy as the Facebook Files. But in terms of risk, if lawmakers and regulators concentrate on advertising and the structures behind it, they’re much more likely to scare the tech giants than a few bad headlines.

Why does Apple care about blood glucose monitoring? Wearables that can track glucose levels in the blood in a non-invasive way have become a holy grail in the tech industry. They would provide a number of important benefits not currently possible in the convenient package of a smart watch. Blood glucose monitoring could help optimise fueling during races, monitor a diabetic condition or give insight into daily nutrition. In the longer term it could also provide data for researchers looking at the broad health impact of diet, becoming a valuable resource for a tech state like Apple. Rumours are circulating that Apple Watch 7 could include this massive leap in functionality, saving millions of people an annoying prick in the finger, and giving Tim Cook’s “Public Health Department” a big leg up on the competition.

Amazon claims it doesn’t deserve a reputation as a dreadful employer. A damning investigation by the New York Times this week suggests otherwise. The paper alleged that for a year and a half Amazon had systematically been shortchanging new parents, patients dealing with medical crises, and other vulnerable workers. It interviewed one Amazon employee whose car was repossessed over just two weeks of missed wages, and others who struggled to get the disability leave they were entitled to. Kelly Nantel, a spokesperson for Amazon, issued a response yesterday: “The NYT’s article suggests these issues are widespread and ongoing. They are not. In fact, the controls we’ve implemented over the last 18 months have resulted in less than 1 per cent of people experiencing an issue while being on paid leave.” If that’s worldwide, it’s 1 per cent of about 1.3 million, which is a lot of people.

Russian hackers have launched another flurry of attacks against US companies. Microsoft wrote in a blog this week that Russia was “trying to gain long-term, systematic access to the global technology supply chain” as it registered another wave of attacks by the Nobelium agency, which was also responsible for the SolarWinds cyberattack last year. Microsoft has identified hundreds of victims, although only a small percentage of the attacks were successful in compromising the target system. Tom Burt, VP of Customer Security and Trust, said 22,868 Nobelium attacks had been recorded in a few recent months. (All other non-Russian actors combined were responsible for 20,500 attacks in the past three years.)

Tencent has rebranded its non-fungible tokens (NFTs) as “digital collectibles”. NFTs – unique digital assets that can be owned and valued like physical goods due to their authenticated tokens – are becoming increasingly controversial in China. As regulators close in on practices that allow the internet sector to continue the “irrational expansion of capital”, cryptocurrencies and blockchain-based trading have been in the firing line. NFTs look to be next as Tencent and Alibaba rebrand in an attempt to put more emphasis on their collectibility, as opposed to their block-chain authentication. It seems like a thin piece of wool over the eyes of China’s regulators, with state-run news outlets already warning of the dangers of a bubble in NFT value that would allow big tech companies to make considerable short-term earnings.

What if the technology we need to deliver our Net Zero commitments already exists? 

Join us for a ThinkIn at the New York Times Climate Hub during Cop26 over the next two weeks. 08:00-09:00 GMT, 8 November 2021.

Thanks for reading,

Alexi Mostrous
@AlexiMostrous

Luke Gbedemah
@LukeGbedemah