net.wars

The arc of surveillance

“What is the point of introducing contestability if the system is illegal?” a questioner asked at this year’s Compiuters, Privacy, and Data Protection, or more or less.

This question could have been asked in any number of sessions where tweaks to surface problems leave the underlying industry undisturbed. In fact, the questioner raised it during the panel on enforcement, GDPR, and the newly-in-force Digital Markets Act. Maria Luisa Stasi explained the DMA this way: it’s about business models. It’s a step into a deeper layer.
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The key question: will these new laws – the DMA, the recent Digital Services Act, which came into force in November, the in-progress AI Act – be enforced better than GDPR has been?

The frustration has been building all five years of GDPR’s existence. Even though this week, Meta was fined €1.2 billion for transferring European citizens’ data to the US, Noyb reports that 85% of its 800-plus cases remain undecided, 58% of them for more than 18 months. Even that €1.2 billion decision took ten years, €10 million, and three cases against the Irish Data Protection Commissioner to push through – and will now be appealed. Noyb has an annotated map of the various ways EU countries make litigation hard. The post-Snowden political will that fueled GDPR’s passage has had ten years to fade.

It’s possible to find the state of privacy circa 2023 depressing. In the 30ish years I’ve been writing about privacy, numerous laws have been passed, privacy has become a widespread professional practice and area of study in numerous fields, and the number of activists has grown from a literal handful to tens of thousands around the world. But overall the big picture is one of escalating surveillance of all types and by all sorts of players. At the 2000 Computers, Freedom, and Privacy conference, Neal Stephenson warned not to focus on governments. Watch the “Little Brothers”, he said. Google was then a tiny self-funded startup, and Mark Zuckerberg was 16. Stephenson was prescient.

And yet, that surveillance can be weirdly patchy. In a panel on children online, Leanda Barrington-Leach noted platforms’ selective knowledge: “How do they know I like red Nike trainers but don’t know I’m 12?” A partial answer came later: France’s CNIL has looked at age verification technologies and concluded that none are “mature enough” to both do the job and protect privacy.

In a discussion of deceptive practices, paraphrasing his recent paper, Mark Leiser pinpointed a problem: “We’re stuck with a body of law that looks at online interface as a thing where you look for dark patterns, but there’s increasing evidence that they’re being embedded in the systems architecture underneath and I’d argue we’re not sufficiently prepared to regulate that.”

As a response, Woody Hartzog and Neil Richards have proposed the concept of “data loyalty”. Similar to a duty of care, the “loyalty” in this case is owed by the platform to its users. “Loyalty is the requirement to make the interests of the trusted party [the platform] subservient to those of the trustee or vulnerable one [the user],” Hartzog explained. And the more vulnerable you are the greater the obligation on the powerful party.

The tone was set early with a keynote from Julie Cohen that highlighted structural surveillance and warned against accepting the Big Tech mantra that more technology naturally brings improved human social welfare..

“What happens to surveillance power as it moves into the information infrastructure?” she asked. Among other things, she concluded, it disperses accountability, making it harder to challenge but easier to embed. And once embedded, well…look how much trouble people are having just digging Huawei equipment out of mobile networks.

Cohen’s comments resonate. A couple of years ago, when smart cities were the hot emerging technology, it became clear that many of the hyped ideas were only really relevant to large, dense urban areas. In smaller cities, there’s no scope for plotting more efficient delivery routes, for example, because there aren’t enough options. As a result, congestion is worse in a small suburban city than in Manhattan, where parallel routes draw off traffic. But even a small town has scope for surveillance, and so some of us concluded that this was the technology that would trickle down. This is exactly what’s happening now: the Fusus technology platform even boasts openly of bringing the surveillance city to the suburbs.

Laws will not be enough to counter structural surveillance. In a recent paper, Cohen wrote, “Strategies for bending the arc of surveillance toward the safe and just space for human wellbeing must include both legal and technical components.”

And new approaches, as was shown by an unusual panel on sustainability, raised by the computational and environmental costs of today’s AI. This discussion suggested a new convergence: the intersection, as Katrin Fritsch put it, of digital rights, climate justice, infrastructure, and sustainability.

In the deception panel, Roseamunde van Brakel similarly said we need to adopt a broader conception of surveillance harm that includes social harm and risks for society and democracy and also the impact on climate of use of all these technologies. Surveillance, in other words, has environmental costs that everyone has ignored.

I find this convergence hopeful. The arc of surveillance won’t bend without the strength of allies..

Illustrations: CCTV camera at 22 Portobello Road, London, where George Orwell lived.

Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. Follow on Mastodon or Twitter.

Cryptocurrency winter

There is nowhere in the world, Brett Scott says in his recent book, Cloudmoney, that supermarkets price oatmeal in bitcoin. Even in El Salvador, where bitcoin became legal tender in 2021, what appear to be bitcoin prices are just the underlying dollar price refracted through bitcoin’s volatile exchange rate.

Fifteen years ago, when bitcoin was invented, its adherents thought by now it would be a mainstream currency instead of a niche highly speculative instrument of financial destruction and facilitator of crime. Five years ago, the serious money people thought it important enough to consider fighting back with central bank digital currencies (CBDCs).

In 2019, Facebook announced Libra, a consortium-backed cryptocurrency that would enable payments on its platform, apparently to match China’s social media messaging system WeChat, which are used by 1 billion users monthly. By 2021, when Facebook’s holding company renamed itself Meta, Libra had become “Diem”. In January 2022 Diem was sold to Silvergate Bank, which announced in February 2023 it would wind down and liquidate its assets, a casualty of the FTX collapse.

As Dave Birch writes in his 2020 book, The Currency Cold War, it was around the time of Facebook’s announcement that central banks began exploring CBDCs. According to the Atlantic Council’s tracker, 114 countries are exploring CDBCs, and 11 have launched one. Two – Ecuador and Senegal – have canceled theirs. Plans are inactive in 15 more.
politico

The tracker marks the EU, US, and UK as in development. The EU is quietly considering the digital euro. In the US, in March 2022 president Joe Biden issued an executive order including instructions to research a digital dollar. In the UK the Bank of England has an open consultation on the digital pound (closes June 7). It will not make a decision until at least 2025 after completing technical development of proofs of concept and the necessary architecture. The earliest we’d see a digital pound is around 2030.

But first: the BoE needs a business case. In 2021, the House of Lords issued a report (PDF) calling the digital pound a “solution in search of a problem” and concluding, “We have yet to hear a convincing case for why the UK needs a retail CBDC.” Note “retail”. Wholesale, for use only between financial institutions, may have clearer benefits.

Some of the imagined benefits of CBDCs are familiar: better financial inclusion, innovation, lowered costs, and improved efficiency. Others are more arcane: replicating the role of cash to anchor the monetary system in a digital economy. That’s perhaps the strongest argument, in that today’s non-cash payment options are commercial products but cash is public infrastructure. Birch suggests that the digital pound could allow individuals to hold accounts at the BoE. These would be as risk-free as cash and potentially open to those underserved by the banking system.

Many of these benefits will be lost on most of us. People who already have bank accounts or modern financial apps are unlikely to care about a direct account with the BoE, especially if, as Birch suggests, one “innovation” they might allow is negative interest rates. More important, what is the difference between pounds as numbers in cyberspace and pounds as fancier numbers in cyberspace? For most of us, our national currencies are already digital, even if we sometimes convert some of it into physical notes and coins. The big difference – and part of what they’re fighting over – is who owns the transaction data.

At Rest of World, Temitayo Lawal recounts the experience in Nigeria., the first African country to adopt a CBDC. Launched 18 months ago, the eNaira has been tried by only 0.5% of the population and used for just 1.4 million transactions. Among the reasons Lawal finds, Nigeria’s eNaira doesn’t have the flexibility or sophistication of independent cryptocurrencies, younger Nigerians see little advantage to the eNaira over the apps they were already using, 30 million Nigerians (about 13% of the population) lack Internet access, and most people don’t want to entrust their financial information to their government. By comparison, during that time Nigerians traded $1.16 billion in bitcoin on the peer-to-peer platform Paxful.

Many of these factors play out the same way elsewhere. From 2014 to 2018, Ecuador operated Dinero Electrónico, a mobile payment system that allowed direct transfer of US dollars and aimed to promote financial inclusion. In a 2020 paper, researchers found DE never reached critical mass because it didn’t offer enough incentive for adoption, was opposed by the commercial banks, and lacked a sufficient supporting ecosystem for cashing in and out. In China, which launched its CBDC in August 2020, the e-CNY is rarely used because, the Economist reports Alipay and We Chat work well enough that retailers don’t see the need to accept it. The Bahamanian sand dollar has gained little traction. Denmark and Japan have dropped the idea entirely, as has Finland, although it supports the idea of a digital euro.

The good news, such as it is, is that by the time Western countries are ready to make a decision either some country will have found a successful formula that can be adapted, or everyone who’s tried it will have failed and the thing can be shelved until it’s time to rediscover it. That still leaves the problem that Scott warns of: a cashless society will give Big Tech and Big Finance huge power over us. We do need an alternative.

Illustrations: Bank of England facade.

Review: Tracers in the Dark

Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency
By Andy Greenberg
Doubleday
ISBN: 978-0-385-548/09-0

At the 1997 Computers, Freedom, and Privacy conference, the computer scientist Timothy C. May, a co-founder of the influential Cypherpunks mailing l|ist, presented the paper Untraceable Digital Cash, Information Markets, and BlackNet. In it, he suggested that the combination of the Internet, anonymous digital cash, and the possibility that anyone could be a “mint” (in the money sense) created the conditions for BlackNet, a market in stolen secrets, assassinations, and other illegal goods and services. In trying to stop it, he said, regulators and governments would invoke the “Four Horsemen of the Infocalypse”: nuclear terrorists, child pornographers, money launderers, and drug dealers.

Like all futurists, May was building on existing trends. Digital cash already existed in an early form, and governments were already invoking the Four Horsemen in opposing widespread access to strong encryption (they still are, in debates about the UK’s Online Safety bill. Still, his paper also imagined Wikileaks.

Almost certainly the unknown creator of bitcoin, Satoshi Nakomoto, knew the cypherpunks list. In any event, at the beginning, bitcoin appeared to be – and the community surrounding it sometimes billed it as – sufficiently anonymous and untraceable to enable May’s BlackNet. Tl;dr: not for long.

In the highly readable Tracers in the Dark, veteran Wired journalist Andy Greenberg tells the story of step-by-step technical advances that enabled law enforcement, tax authorities, and others to identify and arrest the owners and users of sites dealing in illegal goods like Silk Road, AlphaBay, and Welcome to Video, and take the sites down.

The essential problem for criminals seeking secrecy is, of course, that the public blockchain indelibly records every transaction for all to see for all time. Not only that, but the bigger the pile of data gets the more useful information it yields to analysis. Following the money works.

Greenberg’s series of detective stories begins and ends with Sarah Meiklejohn, now a professor in cryptography and security at University College London. As a graduate student circa 2012, she began studying how bitcoin was being used, and developed clustering techniques that ultimately made it possible to understand what was happening inside the network and identify individual users and owners. Following in her footsteps are an array of interested detectives: the fledgling company Chainalysis, Internal Revenue Service, the Drug Enforcement Agency, and international police. She herself declined a well-paid offer to join them; she sees her role as that of an impartial researcher issuing a public advisory.

At every step the investigators had help from the criminals themselves, who over and over again were remarkably sloppy about their own security. Ross Ulbricht, was identified as the administrator of Silk Road because he’d once posted his real email address to a coding forum. Alexandre Cazes, the owner of AlphaBay, was successfully arrested because he kept helpfully posting details of his many female conquests to an online forum, helping the agents following him build a detailed understanding of his whereabouts.

Each takedown has been followed by efforts to improve blockchain privacy. But even so, investigators have years’ worth of leads they can still follow up. And by then, as Danish entrepreneur Michael Gronager says toward the end of the book, referring to the then new, more resistant technologies Monero and Zcash, “Any of these systems, anything that’s developed, you always see a couple of years alter, someone finds something.” Nothing’s perfect.

Appropriate privacy

At a workshop this week, one of the organizers posed a question that included the term “appropriate”. As in: “lawful access while maintaining appropriate user privacy”. We were there to think about approaches that could deliver better privacy and security over the next decade, with privacy defined as “the embedding of encryption or anonymization in software or devices”.

I had to ask: What work is “appropriate” doing in that sentence?

I had to ask because last weekend’s royal show was accompanied by preemptive arrests well before events began – at 7:30 AM. Most of the arrested were anti-monarchy protesters armed with luggage straps and placards, climate change protesters whose T-shirts said “Just Stop Oil”, and volunteers for the Night Stars on suspicion that the rape whistles they hand out to vulnerable women might be used to disrupt the parading horses. All of these had coordinated with the Metropolitan Police in advance or actually worked with them…which made no difference. All were held for many hours. Since then, the news has broken that an actual monarchist was arrested, DNA-sampled, fingerprinted, and held for 13 hours just for standing *near* some protesters.

It didn’t help the look of the thing that several days before the Big Show, the Met tweeted a warning that: “Our tolerance for any disruption, whether through protest or otherwise, will be low.”

The arrests were facilitated by the last-minute passage of the Public Order Act just days before with the goal of curbing “disruptive” protests. Among the now-banned practices is “locking on” – that is, locking oneself to a physical structure, a tactic the suffragettes used. among many others in campaigning for women’s right to vote. Because that right is now so thoroughly accepted, we tend to forget how radical and militant the Suffragists had to be to get their point across and how brutal the response was. A century from now, the mainstream may look back and marvel at the treatment meted out to climate change activists. We all know they’re *right*, whether or not we like their tactics.

Since the big event, the House of Lords has published its report on current legislation. The government is seeking to expand the Public Order Act even further by lowering the bar for “serious disruption” from “significant” and “prolonged” to “more than minor” and may include the cumulative impact of repeated protests in the same area. The House of Lords is unimpressed by these amendments via secondary legislation, first because of their nature, and second because they were rejected during the scrutiny of the original bill, which itself is only days old. Secondary legislation gets looked at less closely; the Lords suggest that using this route to bring back rejected provisions “raises possible constitutional issues”. All very Polite for accusing the government of abusing the system.

In the background, we’re into the fourth decade of the same argument between governments and technical experts over encryption. Technical experts by and large take the view that opening a hole for law enforcement access to encrypted content fatally compromises security; law enforcement by and large longs for the old days when they could implement a wiretap with a single phone call to a major national telephone company. One of the technical experts present at the workshop phrased all this gently by explaining that providing access enlarges the attack surface, and the security of such a system will always be weaker because there are more “moving parts”. Adding complexity always makes security harder.

This is, of course, a live issue because of the Online Safety bill, a sprawling mess of 262 pages that includes a requirement to scan public and private messaging for child sexual abuse material, whether or not the communications are encrypted.

None of this is the fault of the workshop we began with, which is part of a genuine attempt to find a way forward on a contentious topic, and whose organizers didn’t have any of this in mind when they chose their words. But hearing “appropriate” in that way at that particular moment raised flags: you can justify anything if the level of disruption that’s allowed to trigger action is vague and you’re allowed to use “on suspicion of” indiscriminately as an excuse. “Police can do what they want to us now,” George Monbiot writes at the Guardian of the impact of the bill.

Lost in the upset about the arrests was the Met’s decision to scan the crowds with live facial recognition. It’s impossible to overstate the impact of this technology. There will be no more recurring debates about ID cards because our faces will do the job. Nothing has been said about how the Met used it on the day, whether its use led to arrests (or on what grounds), or what the Met plans to do with the collected data. The police – and many private actors – have certainly inhaled the Silicon Valley ethos of “ask forgiveness, not permission”.

In this direction of travel, many things we have taken for granted as rights become privileges that can be withdrawn at will, and what used to be public spaces open to all become restricted like an airport or a small grocery store in Whitley Bay. This is the sliding scale in which “appropriate user privacy” may be defined.

Illustrations: Protesters at the coronation (by Alisdair Hickson at Wikimedia .

Strike two

Whatever happens with the Hollywood writers’ strike that began on Tuesday, the recent golden era of American TV, which arguably began with The Sopranos, is ending for viewers as well as creators.

A big reason for that golden era was that Hollywood’s loss of interest in grown-up movies pushed actors and writers who formerly looked down on TV to move across to where the more interesting work was finding a home. Another was the advent of streaming services, which competed with existing channels by offering creators greater freedom – and more money. It was never sustainable.

Streaming services’ business models are different. For nearly a decade, Netflix depended on massive debt to build a library to protect itself when the major studios ended their licensing deals. The company has so far gotten away with it because of (now ended) low interest rates and Wall Street’s focus on subscriber numbers in valuing its shares. Newer arrivals such as Amazon, Apple, and Disney can all finance loss-making startup streaming services from their existing businesses. All of these are members of the Alliance of Motion Picture and Television Producers, along with broadcast networks, cable providers, and motion picture studios. For the purposes of the strike, they are the “enemy”.

This landscape could not be more different than that of the last writers’ strike, in 2007-2008, when DVD royalties were important and streaming was the not-yet future. Of the technology companies refusing to bargain today, only Netflix was a player in 2007 – and it was then sending out DVDs by mail.

Essentially, what is happening to Hollywood writers is what happened to songwriters when music streaming services took over the music biz: income shrinkage. In 2021, veteran screenwriter Ken Levine, gave the detail of his persistently shrinking residuals (declining royalties paid for reuse). When American Airlines included an episode he directed of Everyone Loves Raymond in its transcontinental in-flight package for six months, his take from the thousands of airings was $1.19. He also documented, until he ended his blog in 2022, other ways writers are being squeezed; at Disconnect, Paris Marx provides a longer list. The Writers Guild of America’s declared goals are to redress these losses and bring residuals and other pay on streaming services into line with older broadcasters.

Even an outsider can see the bigger picture: broadcast networks, traditionally the biggest payers, are watching their audiences shrink and retrenching, and cable and streaming services commission shorter seasons, which they renew at a far more leisurely pace. Also a factor is the shift in which broadcast networks reair their new shows a day or two later on their streaming service. The DVD royalties that mattered in the 2007-2008 strike are dying away, and just as in music royalties from streaming are a fraction of the amount. Overall, the WGA says that in the last decade writers’ average incomes have dropped by 4% – 23% if you include inflation. Meanwhile, industry profits have continued to rise.

The new issue on the block is AI – not because large language models are good enough to generate good scripts (as if), but because writers fear the studios will use them to generate crappy scripts and then demand that the writers rewrite them into quality for a pittance. Freelance journalists have already reported seeing publishers try this gambit.

In 2007, 2007, and again in 2017, Levine noted that the studios control the situation. They can make a deal and end the strike any time they decide it’s getting too expensive or disruptive. Eventually, he said, the AMPTP will cut a deal, writers will get some of what they need, and everyone will go back to work. Until then, the collateral damage will mount to writers and staff in adjacent industries and California’s economy. At Business Insider, Lucia Moses suggests that Netflix, Amazon, and Disney all have enough content stockpiled to see them through.

Longer-term, there will be less predictable consequences. In 2007-2008, Leigh Blickley reported in a ten-years-later lookback at the Huffington Post, these included the boom in “unscripted” reality TV and the death of pathways into the business for new writers.

Underlying all this is a simple but fundamental change. Broadcast networks cared what Americans watched because their revenues depended on attracting large audiences that advertisers would pay to reach. Until VCRs arrived to liberate us from the tyranny of schedules, the networks competed on the quality and appeal of their programming in each time slot. Streaming services compete on their whole catalogue, and care only that you subscribe; ratings don’t count.

The WGA warns that the studios’ long-term goal is to turn screenwriting into gig economy work. In 2019, at BIG, Matt Stoller warned that Netflix was predatorily killing Hollywood, first by using debt financing to corner the market, and second by vertically integrating its operation. Like the the studios that were forced to divest their movie theaters in 1948, Netflix, Amazon, and Apple own content, controls its distribution, and sells retail access. It should be no surprise if a vertically integrated industry with a handful of monopolistic players cuts costs by treating writers the way Uber treats drivers: enshittification.

The WGA’s 12,000 members know their skills, which underpin a trillion-dollar industry, are rare. They have a strong union and a long history of solidarity. If they can’t win against modern corporate extraction, what hope for the rest of us?

Illustrations: WGA members picketing in 2007 (by jengod at Wikimedia).