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Facebook sues analytics firm Rankwave over data misuse – TechCrunch

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Facebook might have another Cambridge Analytica on its hands. In a late Friday news dump, Facebook revealed that today it filed a lawsuit alleging South Korean analytics firm Rankwave abused its developer platform’s data, and has refused to cooperate with a mandatory compliance audit and request to delete the data.

Facebook’s lawsuit centers around Rankwave offering to help businesses build a Facebook authorization step into their apps so they can pass all the user data to Rankwave, which then analyzes biographic and behavioral traits to supply user contact info and ad targeting assistance to the business. Rankwave also apparently misused data sucked in by its own consumer app for checking your social media “influencer score”. That app could pull data about your Facebook activity such as location checkins, determine that you’ve checked into a baseball stadium, and then Rankwave could help its clients target you with ads for baseball tickets.

The use of a seemingly fun app to slurp up user data and repurpose it for other business goals is strikingly similar to how Cambridge Analytica’s personality quiz app tempted millions of users to provide data about themselves and their friends.

Rankwave touts its Facebook data usage in this 2014 pitch deck

TechCrunch has attained a copy of the lawsuit that alleges that Rankwave misused Facebook data outside of the apps where it was collected, purposefully delayed responding to a cease-and-desist order, claimed it didn’t violate Facebook policy, lied about not using its apps since 2018 when they were accessed in April 2019, and then refused to comply with a mandatory audit of its data practices. Facebook Platform data is not supposed to be repurposed for other business goals, only for the developer to improve their app’s user experience.

“By filing the lawsuit, we are sending a message to developers that Facebook is serious about enforcing our policies, including requiring developers to cooperate with us during an investigation” Facebook’s director of platform enforcement and litigation Jessica Romero wrote. Facebook tells TechCrunch that “To date Rankwave has not participated in our investigation and we are trying to get more info from them to determine if there was any misuse of Pages data.” We’ve reached out to Rankwave for its response.

Cambridge Analytic-ish

Facebook’s lawsuit details that “Rankwave used the Facebook data associated with Rankwave’s apps to create and sell advertising and marketing analytics and models — which violated Facebook’s policies and terms” and that it “failed to comply with Facebook’s requests for proof of Rankwave’s compliance with Facebook policies, including an audit.” Rankwave apparently accessed data from over thirty apps, including those created by its clients.

Specifically, Facebook cites that its “Platform Policies largely restrict Developers from using Facebook data outside of the environment of the app, for any purpose other than enhancing the app users’ experience on the app.” But Rankwave allegedly used Facebook data outside those apps.

Rankwave describes how it extracts contact info and ad targeting data from Facebook data

Facebook’s suit claims that “Rankwave’s B2B apps were installed and used by businesses to track and analyze activity on their Facebook Pages . . . Rankwave operated a consumer app called the ‘Rankwave App.’ This consumer app was designed to measure the app user’s popularity on Facebook by analyzing the level of interaction that other users had with the app user’s Facebook posts. On its website, Rankwave claimed that this app calculated a user’s ‘Social influence score’ by ‘evaluating your social activities’ and receiving ‘responses from your friends.’”

TechCrunch has found that Rankwave still offers an Android app that asks for you to login with Facebook so it can assess the popularity of your posts and give you a “Social Influencer Score”. Until 2015 when Facebook tightened its policies, this kind of app could ingest not only a user’s own data but that about their Facebook friends. As with Cambridge Analytica, this likely massively compounded Rankwave’s total data access.

Rankwave’s Android app asks for users’ Facebook data in exchange for providing them a Social Influencer Score

Facebook Delays Coming After Rankwave

Founded in 2012 by Sungwha Shim, Rankwave came into Facebook’s crosshairs in June 2018 after it was sold to a Korean entertainment company in May 2017. Facebook assesses that the value of its data at the time of the buyout was $9.8 million.

Worryingly, Facebook didn’t reach out to Rankwave until January 2019 for information proving it complied with the social network’s policies. After receiving no response, Facebook issued a cease-and-desist order in February, which Rankwave replied to seeking more time because it’s CTO had resigned, which Facebook calls “false representations”. Later that month, Rankwave denied violating Facebook’s policies but refused to provide proof. Facebook gave it more time to provide proof, but Rankwave didn’t respond. Facebook has now shut down Rankwave’s apps.

Rankwave claims to be able to extract a wide array of ad targeting data from Facebook data

Now Facebook is seeking money to cover the $9.8 million value of the data, additional monetary damages and legal fees, plus injunctive relief restraining Rankwave from accessing the Facebook Platform, requiring it to comply with Facebook’s audit, requiring that it delete all Facebook data.

The fact that Rankwave was openly promoting these services that blatantly violate Facebook’s policies casts further doubt on how the social network was policing its platform. And the six month delay between Facebook identifying a potential issue with Rankwave and it even reaching out for information, plus another several months before it blocked Rankwave’s app shows a failure to move swiftly to enforce its policies. These blunders might explain why Facebook buried the news by announcing it on a Friday afternoon when many reporters and readers have already signed off for the weekend.

For now there’s no evidence of wholesale transfer of Rankwave’s data to other parties or its misuse for especially nefarious purposes like influencing an election as with Cambridge Analytica. The lawsuit merely alleges data was wrongly harnessed to make money, which may not spur the same level of backlash. But the case further proves that Facebook was too busy growing itself thanks to the platform to properly safeguard it against abuse.

You can learn more about Rankwave’s analytics practices from this 2014 presentation.

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Musk says Twitter will offer “amnesty” to suspended accounts • TechCrunch

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Elon Musk said Thursday Twitter will grant “a general amnesty” to accounts that had been suspended from the platform beginning next week. The CEO posted a poll the day earlier over whether the platform should restore affected accounts.

The news comes within a week of Musk also ending former president Donald Trump’s ban from the platform after running a similar poll. Trump was banned after the January 6, 2021 attack on the U.S. Capitol, but said he doesn’t intend to return to the platform.

Musk’s poll to users included a caveat that suspended account holders could rejoin the platform “provided they have not broken the law or engaged in egregious spam.” Around 3.2 million users responded to the poll, which voted 72.4% in favor of amnesty.

“The people have spoken. Amnesty begins next week. Vox Populi, Vox Dei,” Musk said, using a Latin phrase that means “The voice of the people is the voice of god.”

Historically, Twitter has banned accounts that glorify hate and harassment, have the potential to incite violence or rampantly spread misinformation that can lead to harm. Some high profile individuals who were banned include MyPillow CEO Mike Lindell after he made a series of claims that Trump actually won the 2020 presidential election; former Trump advisor and former executive chairman of Breitbart Steve Bannon after he said Anthony Fauci and FBI Director Christopher Wray should be beheaded; and Proud Boys founder Gavin McInnes for violating the site’s policy of prohibiting violent extremist groups.

It’s unclear from Musk’s brief tweet how Twitter will deal with content moderation in the future, now that more potentially problematic voices will be returning to the platform. These concerns have only been exacerbated by Musk’s mass layoffs and the general exodus of employees who’d rather quit than be “hardcore.”

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Amazon is working on a TV series about FTX drama with Russo Brothers • TechCrunch

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The FTX drama is not over yet — and Amazon wants a piece of it. The company is partnering with Russo Brothers, best known for Marvel movies, to make a show on the spectacular collapse of the giant cryptocurrency empire.

Amazon has partnered with the duo’s production house AGBO to make the show, which will go into production in Spring 2023, Variety first reported. Amazon is also trying to rope in the brothers to direct the show, the report added.

The company confirmed the news in a statement and said “Hunters” creator David Weil will write the pilot.

“We are excited to be able to continue our great working relationship with David, Joe, Anthony, and the AGBO team with this fascinating event series I can’t think of better partners to bring this multifaceted story to our global Prime Video audience,” Amazon Studios head Jennifer Salke said.

The Russos are also working with Amazon to create a multinational international spy series called “Citadel.”

“This is one of the most brazen frauds ever committed. It crosses many sectors — celebrity, politics, academia, tech, criminality, sex, drugs, and the future of modern finance,” the Russos said of the upcoming show surrounding FTX in a statement. “At the center of it all sits an extremely mysterious figure with complex and potentially dangerous motivations. We want to understand why.”

FTX collapse

FTX and its former CEO Sam Bankman-Fried have been at the center of media coverage across the world after the celebrated cryptocurrency exchange imploded earlier this month.

Coindesk reported earlier about the concerning finances of Alameda Research, the trading firm founded by Bankman-Fried and intertwined closely with the exchange. The report triggered a set of events, culminating in Binance chief executive Changpeng “CZ” Zhao unveiling plans to sell FTX’s native token FTT that it had received as part of an investment exit from the firm.

The move shook the confidence of retail investors and prompted a bank run on FTX and unraveled fraudulent misuse of FTX customers’ data.

Bankman-Fried, who along with his firm have attracted regulatory scrutiny in recent weeks, attempted to salvage FTX by signing a deal to be acquired by Binance, its chief rival then. Binance pulled out of the deal after finding FTX had dug too deep of a hole in its balance sheet. Within days, FTX filed for bankruptcy with Bankman-Fried stepping down from the CEO post.

In the aftermath of this chaos, Bankman-Fried gave a Vox reporter an interview over Twitter direct messages in which he criticized regulators and expressed regrets about filing for bankruptcy and walked back on many of the long-believes he had portrayed about himself to the world. Reports have since also found that FTX used corporate funds to purchase houses for employees and owes the top 50 creditors over $3 billion.

Time for the show

All of this makes for a good TV, for sure. It also helps that startup founders doing things has become a sleeper hit of a genre in recent years as evidenced by hits like “WeCrashed” (Apple TV+) on the WeWork and Adam Neumann fiasco, “Dropout” (Hulu) on the Theranos-Elizabeth Holmes saga, and “Super Pumped” (Showtime) on Uber led by Travel Kalanick. So Amazon is keen to get a hit show centering on a controversial tech founder on its catalog. But we could see more adoption of the FTX story.

Earlier this week, Deadline reported that buyers — including Apple — are chasing to sign celebrated author Michael Lewis’ yet-to-be-published book. Lewis — who has previously written hits that were later adapted into movies such as “The Big Short,” “Moneyball,” and “The Blind Side” — had been closely following Bankman-Fried for over six months before the recent implosion.

Amazon’s show will be based on “insider reporting” from various journalists who have covered the issue extensively, according to Variety.

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Mark Cuban-backed streaming app Fireside acquires Stremium to bring live, interactive shows to your TV • TechCrunch

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Mark Cuban-backed streaming app Fireside, which today offers podcasters and other creators a way to host interactive, live shows with audience engagement, will soon expand to the TV’s big screen. Variety reported, and Fireside confirmed, it’s acquired the open streaming TV platform Stremium, which will allow Fireside’s shows to become available to a range of connected TV devices, including Amazon Fire TV, Roku, smart TVs and others.

Deal terms were not disclosed. Cuban retweeted Variety’s reporting but made no other public comment.

A company spokesperson confirmed the deal to TechCrunch, noting it was for a combination of IP and talent.

“Fireside has acquired all of Stremium including its full team and intellectual property,” the spokesperson said. “The company is the first interactive web3 streaming platform and the acquisition will help Fireside accelerate delivering on being the only platform that turns creators, celebrities, brands, and IP owners into the studio, networks, and streaming services of the future. Expect other major announcements coming soon on this front,” they added.

Launched just over a year ago, Fireside arrived on the heels of the pandemic-fueled demand for startups offering live entertainment as well as a growing number of startups catering to the creator economy.

Despite some early — and erroneous — comparisons between Fireside and other live audio platforms like Twitter Spaces or Clubhouse, the startup gained traction due to a differentiated feature set that also prioritizes video content. Shows on Fireside’s platform could be streamed live to its app, recorded, saved, or even simulcast to other social networks. The app additionally includes audience engagement tools and other features to aid creators with promotion, editing, measurement, distribution, monetization, and audience growth, all of which are part of Fireside’s end-to-end content production experience. More recently, the company had been exploring web3 technologies, including NFTs.

Co-founded by Cuban, early Yammer employee Mike Ihbe, and former Googler, YouTuber and Node co-founder Falon Fatemi, who sold her last company to SugarCRM, Fireside has managed to attract some high-profile creators like Jay Leno, Michael Dell, Melissa Rivers, Craig Kilborn, and screenwriter and Entourage creator Doug Ellin over the past year.

In a letter to Fireside investors published by Variety, Fatemi shared that the Stremium acquisition would help Fireside to offer a “second screen experience where the audience can use their phones to engage and interact in real-time while watching on their TVs.”

“Imagine watching a live cookalong show with your favorite chef simultaneously on your TV and your phone where you can interact and get invited to talk directly to them and even show them what you are cooking from the palm of your hand,” Fatemi explained. Plus, Stremium’s infrastructure would allow creators to upload, publish, program and distribute their live shows across both mobile and TV, she added. (Stremium confirmed to us the letter’s accuracy.)

TechCrunch this February reported Fireside was in talks to raise a $25 million Series A that valued its business at $125 million. That round has since closed, but Fireside hasn’t yet made a formal announcement about raise, investors, or its valuation. We understand this may be because Fireside is still adding some additional strategic investors to the deal, and it plans to detail the fundraise soon. Of course, the funding may have helped pave the way for Fireside to make this new acquisition.

Other investors in Fireside include the Chainsmokers, HBSE, Goodwater, Animal Capital, and NFL stars Larry Fitzgerald and Kelvin Beachum and former NBA star Baron Davis, in addition to Cuban. Ahead of its Series A, Fireside had raised around $8 million.

Stremium had been developing a service that allowed consumers to aggregate all their favorite channels using their “TV Everywhere” credentials and use a cloud DVR instead of downloading separate streaming apps. It also included a selection of free streaming channels. But the service faced an increasingly competitive landscape where there are now numerous ways to watch free streaming content, like Tubi, Pluto TV, The Roku Chanel, Freevee (formerly IMDb TV), Plex, and more. Meanwhile, cord-cutting is accelerating leaving fewer people with cable TV logins for Stremium to market its services to.

The Stremium website is now pointing visitors to Fireside and confirms the acquisition. Fireside is aiming to release its TV product sometime next year as a result of the deal.

 

 

 

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