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Facebook Rebuked for Failing to Disclose Data-Sharing Deals

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Facebook and some of the other largest technology firms in the world faced sharp criticism on Wednesday for failing to disclose the extent of the social network’s data-sharing deals, many of which went back to the company’s early years.

Details of the deals, revealed in a New York Times report on Tuesday, set in motion a fresh round of rebukes from legislators who had singled out Facebook’s sharing practices in the recent past. And they came at a moment when the Trump administration, Congress and even some Silicon Valley executives are calling for stricter privacy laws that would govern Facebook and other businesses that trade in huge amounts of personal information.

Lawmakers in the United States and Britain on Wednesday called for greater oversight of Facebook, the world’s dominant social media platform. But critics also focused on statements that Facebook’s chief executive, Mark Zuckerberg, had made in recent months while defending the company.

Senator John Kennedy, the Louisiana Republican, said the revelations made him question Mr. Zuckerberg’s decision making. “I know he’s smart, but sometimes I think he’s got no sense,” Mr. Kennedy told Fox News, adding that the disclosures were cause to consider stricter privacy laws. “Congress is going to have to regulate them and stop this, and I hate to do it, but by God I will if they can’t clean up their act.”

The outcry came in response to The Times’s findings that Facebook had granted business partners, including Microsoft, Amazon and Spotify, more intrusive access to user data than it had divulged — allowing some partners access without users’ permission. Last June, The Times uncovered a subset of Facebook’s partners, all of them device makers, that pulled user data onto smartphones and tablets.

Facebook officials said the deals did not violate user privacy — or a 2011 consent agreement with the Federal Trade Commission that barred it from sharing data without permission — because the companies were acting on Facebook’s behalf.

In a post published on Facebook on Tuesday, Konstantinos Papamiltiadis, the company’s director of developer platforms and programs, defended the partnerships, saying the company entered into the agreements to let users interact with Facebook friends across devices and popular websites.

“None of these partnerships or features gave companies access to information without people’s permission,” Mr. Papamiltiadis wrote, asserting that most partners did not have to seek consent before obtaining users’ data because they were serving as extensions of Facebook.

But he also acknowledged that Facebook had made mistakes in managing some of the deals. “We recognize that we’ve needed tighter management over how partners and developers can access information,” he wrote.

Facebook was already dealing with fallout from reports that a political consulting company, Cambridge Analytica, obtained the personal data of tens of millions of Facebook users. Cambridge used the information to build tools later deployed in President Trump’s election campaign. The F.T.C. launched an inquiry into Facebook’s practices after the data leak became public, and the Justice Department and Securities and Exchange Commission are also investigating the social network.

News of the deals on Wednesday further roiled the technology industry as policymakers and privacy advocates directed anger at Facebook’s leaders and its partners.

Senator Ron Wyden, the Oregon Democrat, attacked Mr. Zuckerberg for not disclosing the full scope of the agreements during a Senate hearing in the spring, when Mr. Zuckerberg assured officials that users had complete control of their data.

“Mark Zuckerberg had a lot of chutzpah telling Congress that Americans could control their data, when seemingly every other week Facebook faces a new privacy scandal for abusing our personal information,” Mr. Wyden said.

Senator Richard Blumenthal, the Connecticut Democrat, called for the F.T.C. to police the company more aggressively. “Facebook’s seemingly unrestrained sharing of user data is the privacy equivalent of the BP oil spill,” Mr. Blumenthal wrote on Twitter. “Ongoing, uncontained & toxic. We will be paying the price for decades.”

Damian Collins, a British lawmaker whose parliamentary committee is investigating online disinformation, said Facebook officials should answer for why they had not been more forthcoming. “I feel that we have been given misleading responses by the company when we have asked these questions during previous evidence sessions.”

And Barbara Underwood, the New York attorney general, said her office would examine the deals as part of a continuing investigation into Facebook. “The news that Facebook struck data-sharing partnerships with other corporations reflects the many unanswered questions to which New Yorkers deserve clear answers,” said Amy Spitalnick, a spokeswoman for Ms. Underwood’s office.

Facebook has sought to contain the damage in part by winding down many of its data-sharing partnerships. Facebook said on Wednesday that it had brought more than 60 of its agreements to a close.

But deals with two giants of the technology world — Amazon and Apple — remain in place. Facebook officials said the deals must continue because of contracts the social network signed with the companies.

Records obtained by The Times showed that the social network granted Apple devices broad access to people’s personal data, even when users had disabled sharing. Facebook gave Amazon access users’ email addresses without permission, among other things, the records revealed.

An Amazon spokesman did not respond to a request for comment. An Apple spokesman said that the company stopped integrating Facebook into its operating systems earlier this year, but that the access continued to accommodate users of older systems.

In addition to those partnerships, Facebook will continue allowing special access for Tobii Technology, a company that makes devices allowing people with neuromuscular diseases to use the social network, a Facebook spokeswoman said.

Facebook also had a deal to share the data of users’ friends with Microsoft, and agreements that gave Spotify and Netflix full access to users’ private messages. Users were especially incensed at the Spotify and Netflix deals, which appeared to go far beyond what the companies required for their integrations.

Spotify’s Facebook feature, still active, allowed users to share music with friends; Netflix’s integration, discontinued in 2015, let users share movie and TV recommendations. A Netflix spokesman on Wednesday said the company did not view personal messages for any other reason.

“This story exposes the myth of control,” Kate Crawford, a founder of the A.I. Now Institute at New York University, wrote in a tweet referring to Facebook’s partnerships with Spotify, Netflix and other companies.

“The total lack of respect for user wishes is the infinitely repeating scandal of 2018,” she added.

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A big test of reusable packaging for groceries comes to Canada

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An online store has launched in Ontario selling groceries and household items from Loblaws in containers it will take back and refill — a test of whether Canadian consumers are ready to change their habits. Industry-watchers say it is breaking ground for reusable packaging.

The store, called Loop, launched in Canada on Feb. 1, in partnership with supermarket giant Loblaws, and offers items like milk, oats, ice cream and toothpaste for delivery in most of Ontario. Loop is already operating in the continental U.S., the U.K and France. 

Included so far are some products from well-known brands such as PC sauces and oils, Häagen-Dazs ice cream, Heinz ketchup, Chipits chocolate chips and Ocean Spray cranberries. 

“The goal is really validating that this is something the Canadian public is interested in,” said Tom Szaky, founder and CEO of Loop and its parent company TerraCycle.

Unlike existing small no-waste retailers, they want to offer “your favourite product at your favourite retailer in a reusable and convenient manner.”

The involvement of a huge retailer makes the launch notable in terms of scale and who it will reach, said Tima Bansal, Canada Research Chair in business sustainability at Western University in London, Ont. 

“I think it’s at the scale that’s needed to create the change in the community in Canada more generally,” she said.

How it works for customers

Szaky likens Loop to the reusable bottle system for beer in Canada “but expanding it to any product that wants to play in the [North American] ecosystem.”

The ultimate goal, he said, is to give people a greener way to consume that limits the amount of mining and farming needed to produce packaging.

“This allows us to greatly reduce the need to extract new materials, which is the biggest drain on our environment.

Loopstore.ca currently lists just 98 products, although many are sold out or “coming soon.” 

As with other online grocery stores, customers fill their virtual shopping cart, but in addition to the cost of the item itself, they pay a deposit for its container. That can range from 50 cents for glass President’s Choice salsa jars like the ones that are normally at the supermarket to $5 for a stainless steel Häagen-Dazs ice cream tub. 

The items are delivered to a customer’s home by courier FedEx for a $25 fee, although the fee is waived for orders over $50.

Once you’ve spooned out all the salsa or ice cream or squeezed out all the toothpaste, the container doesn’t go in the recycling bin. Instead, you toss them into the tote bag they came in — even if they’re dented or damaged — and they get picked up.

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This wearable device beeps when workers get too close to each other

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It’s a device that emits a high-pitched beep, buzzes and lights up if your coworker steps too close.

While some introverts would have bought this device before the pandemic to stave off chatty colleagues near the coffee machine, ZeroKey designed the product with a more important purpose — helping employees physically distance to reduce the risk of spreading coronavirus. 

The Calgary tech company’s “Safe Space” device looks like a small plastic badge that can be worn on a wrist or clipped to a shirt pocket or belt. 

“Our products, in a nutshell, localize or figure out where things are in 3D space and our big claim to fame is we do it very precisely, more precisely than anyone else in the world,” said Matt Lowe, co-founder and CEO of ZeroKey.

The company says its location-tracking technology passively monitors the distance between each device and is accurate down to 1.5 millimetres. The distance on devices can be set — so if, say, science determines three metres apart is actually safer that two, that can be tweaked. 

Lowe says the company came from humble beginnings — he and a co-founder, working out of a room in his house. The company has grown from two to 30 employees and has more openings it’s looking to fill.

Inspired by sci-fi

Their inspiration comes, as so many technological innovations have, from sci-fi. 

Lowe recalls watching Minority Report, and being transfixed with the gesture-based user interface Tom Cruise’s character operates. 

“Wouldn’t it be awesome if we had an interface that was more in tune with how humans operate naturally with their hands. So if you could just walk up to a new piece of technology … and just immediately be proficient,” he said. 

But applying that tech to the COVID-19 era wasn’t something the company had anticipated.

Lowe said some of the company’s clients in the manufacturing industry approached ZeroKey with a request.

“They came to us and said, ‘hey … we have the data where people are, can you build some sort of system so that we can do contact tracing and we can let people know if they’re closer than two metres?’ And we said, ‘absolutely … that’s easier than what we normally do,'” he said.

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Blistering rallies spur Canadian tech world to repeat equity sales

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Canadian technology companies have been making multiple trips to the equity market over the past year, capitalizing on a rally in tech shares that’s helping them raise cash at ever higher valuations.

Dye & Durham Ltd., which makes software used by law firms, took advantage of a more than sixfold rally in its shares since its July IPO to raise $500 million (US$394 million) in a bought deal of stock and convertible debentures, the company said Tuesday. Dye & Durham, which went public at $7.50 a share, received $50.50 per share in the private placement. Peers including Lightspeed POS Inc. and Docebo Inc. have made similar moves.

Shares of technology companies have gained since the onset of the pandemic as their corporate customers increasingly turned to cloud-based applications to support their remote workforces, said Anurag Rana, an analyst at Bloomberg Intelligence. The technology sector was one of the few places investors could look for growth during the crisis, with huge swaths of the economy including retailers, restaurants, airlines, hotels and casinos hammered by lockdowns, he said.

“Issuers and private-equity investors are not stupid, and they know somewhere down the road that valuations may come back,” Rana said. “So this is the time when they sell.”

Canada’s S&P/TSX Information Technology Index has risen 82 per cent in the past year, fuelled by rallies in Lightspeed and Shopify Inc. That compares with a 36 per cent advance for the U.S. S&P 500 Information Technology Index.

Those gains are giving early investors in tech companies an opportunity to take some profits. In conjunction with Dye & Durham’s private deal announced Tuesday, some investors agreed with the underwriters to sell 1.98 million shares at the $50.50 price as well.

Lightspeed, which provides cloud-based point-of-sale systems for retailers and restaurants, has also seized the moment. The company went public in Canada in February 2019 and last year followed that up with a U.S. IPO, selling shares for US$30.50 apiece. The deal raised US$332.3 million for the company and US$65.4 million for some shareholders.

After Lightspeed’s share price more than doubled, it went back to the market again last week with a public offering of shares for US$70 each, raising US$620.2 million for the company and US$56 million for other shareholders.

Docebo, which sells cloud-based learning software, has tapped the market multiple times over the past year. The firm, which went public in Canada in October 2019, completed a bought deal of shares atC$50 apiece in August. The move raised $25 million for the company and $50 million for investors including founder and Chief Executive Officer Claudio Erba, Chief Revenue Officer Alessio Artuffo and top outside investor Intercap Equity Inc.

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