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New story in Technology from Time: Facebook’s WhatsApp Fined $266 Million Over Data Transparency Breaches

Facebook Inc.’s WhatsApp was ordered to pay a €225 million ($266 million) penalty for failing to be transparent about how it handled personal information, its first fine under beefed-up European Union data protection law.

The Irish Data Protection Commission—Silicon Valley’s main privacy watchdog in Europe—said it found violations in the way WhatsApp explained how it processed users’ and non-users’ data, as well as how data was shared between WhatsApp and other Facebook companies.

The fine comes weeks after Amazon.com Inc. was hit with a record €746 million penalty in Luxembourg, where it has its European base, for processing personal data in violation of the EU’s General Data Protection Regulation.
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Under the three-year-old GDPR law, authorities have powers to fine companies as much as 4% of their annual sales. The rules put watchdogs based in a company’s chosen EU hub in charge of supervising them. But the Irish regulator, which has at least 28 privacy probes open targeting tech giants such as Apple Inc. and Alphabet Inc.’s Google, has faced mounting criticism for taking too long to wrap up its cases.

“We disagree with the decision today regarding the transparency we provided to people in 2018 and the penalties are entirely disproportionate,” a WhatsApp spokesperson said. “We will appeal this decision.”

The Irish authority said that it would also order the messaging service to take remedial action to bring its data processing communication into compliance. This includes making it clearer how users can lodge a complaint with a supervisory authority.

WhatsApp announced in an Irish regulatory filing in November it set aside €77.5 million to pay potential fines from at least two probes by Ireland’s data-protection watchdog.

The European Data Protection Board, a panel of EU data authorities, said in a statement Thursday that it pushed for a higher privacy fine for WhatsApp leading to the penalty imposed by Ireland.

An initial draft of the fining decision by the Irish watchdog stumbled amid several objections by EU counterparts, including “the appropriateness of the envisaged corrective measures.”

Thursday’s fine also comes amid added pressure on WhatsApp over policy changes it announced in January. It was forced to delay the overhaul until May after a backlash from users and regulators over what data the messaging service collects and how it shares that information with its parent Facebook.

The European Data Protection Board, a panel of EU authorities, said in July that Facebook’s practices linked to WhatsApp data should be examined “as a matter of priority” by the Irish privacy watchdog.

The Irish authority in turn said it would consider any regulatory follow-up where needed, but that its most advanced WhatsApp probe had already included “an in-depth inquiry into WhatsApp’s privacy policy.”

—With assistance from Aoife White.

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New story in Technology from Time: Amazon Plans to Add 40,000 Workers to U.S. Corporate Ranks

Amazon says it plans to add more than 40,000 people to its corporate ranks in the U.S., a hiring spree the company is calling its biggest-ever recruiting and training event.

The world’s largest online retailer and cloud-computing company said in a statement that it plans to hold a career fair Sept. 15, continuing a pattern in recent years of inviting job seekers en masse to learn about the company’s open roles. Amazon didn’t specify where the positions would be located, but the company’s job posting site on Wednesday listed Seattle, Arlington, Virginia, New York, Bellevue, Washington and Sunnyvale, California, with the most open roles.

Amazon employed 950,000 people in the U.S. at the end of June, out of 1.3 million worldwide. Most of those people work in the company’s massive logistics division, primarily in the warehouses that store and pack items.

The company’s ranks have swelled during the pandemic, as stay-at-home orders made the case for online shopping. Former Chief Executive Officer Jeff Bezos earlier this year pledged Amazon would focus more on the welfare of its workers, a statement that followed an unprecedented union drive in the company’s warehouse ranks and activism among corporate employees at its Seattle headquarters.

New story in Technology from Time: Here’s What to Know About China’s Sweeping Tech Crackdown—and Why It Could Make U.S. Big Tech Regulation More Likely

In the latest sign that the unfettered growth enjoyed by China’s tech giants is coming to an end, Beijing has unveiled a raft of new regulations that reasserts the ruling Chinese Communist Party’s authority over every aspect of its citizens’ digital lives.

Among the new regulations: a law that reduces the amount of time that children and teens are allowed to spend playing video games to just three hours per week, and a directive banning online celebrity fan clubs.

The new rules are part of a broader crackdown by Beijing against domestic tech tech titans like Tencent and Alibaba. “The story of Chinese tech companies over the last 15 years is, they grew quickly and became innovative because they existed in this space that the state did not regulate and did not fundamentally understand,” says Adam Segal, the director of the digital and cyberspace policy program at the Council on Foreign Relations. “Now it has clearly laid down the marker and said: That era is over.”
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Read more: How China Is Cracking Down on Its Once-Untouchable Tech Titans

Some of the new rules, like regulating social media algorithms and bringing in new privacy laws, bear similarities to proposals from progressive critics of Big Tech in the U.S.—at least on the surface.

The regulations are part of a global trend of states wresting power out of the arms of tech companies. China’s intervention, as the second-largest economy in the world, could set a new template for how authoritarian states deal with tech giants.

The new Chinese rules could also potentially make it harder for companies like Facebook and Google to fend off efforts by authorities in the U.S. and Europe to regulate them more heavily. “One of the arguments that we shouldn’t be going after Big Tech so strongly in the U.S. was that China has analog firms for every one of these companies, and they would be able to roll over U.S. companies because the government was supporting them,” says Scott Wallsten, president of the Technology Policy Institute, a D.C.-based think tank. “Well, overnight, that argument just went up in smoke.”

“China’s recent moves support the idea that the choice is not between regulation and no regulation,” says Segal. “The new question is: Who’s going to do the smartest regulation?”

Here’s a look at what the new Chinese tech regulations mean for China—and the attempts to rein in Big Tech around the world.

Limits on gaming and celebrity culture

Chinese regulators announced on Monday that they would reduce the number of hours that children under 18 would be allowed to play online video games to three hours per week—only Fridays and weekends, plus an extra hour on public holidays. The rules previously allowed children a maximum of 90 minutes gaming time per day, and double on holidays.

On Friday, the government also released a list of new rules banning online celebrity fan clubs. The rules say celebrities must not “induce fans to consume” and must prevent minors from engaging in online gatherings.

The crackdown on celebrity fan culture comes after authorities have criticized its “chaotic” presence, online—with reported incidents of fan groups doxxing and bullying members of other celebrity fan clubs, as well as flooding comments sections with coordinated spam.

The Chinese Communist Party said the regulations are meant to protect children and adolescents. “Teenagers are the future of our motherland,” the state news agency Xinhua quoted an unnamed official as saying. “Protecting the physical and mental health of minors is related to the people’s vital interests, and relates to the cultivation of the younger generation in the era of national rejuvenation.”

But according to some tech watchers outside China, the moves tie into anxieties within the Chinese government that the rapid growth of the technology sector has led to urban young people becoming distanced from the party and its ideology. “It’s part of a larger effort to rein in what the party sees as the excesses of Chinese internet culture and its negative impacts on society,” says Segal. “The party sees [gaming and celebrity culture] as a waste of time, and extreme addiction-like behavior. They want to see what they would consider as more moderate, more cultured, more productive behavior.”

Chinese celebrities are also increasingly seen as a risk by the CCP, just like gaming and large tech companies, says Xiaomeng Lu, the director of the Eurasia Group consultancy’s geo-technology practice. “If you are a delivery guy making below minimum wage and working 14 hours per day with barely any protections from your employer, and you are looking at celebrities making millions of dollars per day, what would you think?” she says. Lu believes such a visible imbalance risks fueling anti-government sentiment, and that the CCP saw it as a threat.

Reining in algorithms

The Cyberspace Administration of China (CAC) released a draft copy of rules on Friday that would place limits on the artificial intelligence algorithms used by tech companies to rank content in social media feeds.

When they come into effect, these rules would be the first in any major country to force tech companies to change how they recommend and rank content, Segal says.

The E.U. has proposed a law that would force companies like Facebook and YouTube to be transparent about how their algorithms work, and allow lawmakers to demand they be changed. But it still faces years of legislative hurdles, which could include efforts to water it down, before it comes into force.

Read more: How the E.U’s Sweeping New Regulations Against Big Tech Could Have an Impact Beyond Europe

Both the Chinese and E.U. rules seek to return power from tech companies into the hands of the government. But while the E.U. regulations seek to safeguard individual rights, the Chinese rules are aimed at curbing the proliferation of what the CCP sees as pernicious “Western values.”

The draft Chinese rules say algorithm providers should ensure their products “adhere to the mainstream value orientation,” and prohibit users from “disseminat[ing] information prohibited by laws and administrative regulations”—for example content that endangers national security or disrupts “economic and social order.”

In the U.S. and Europe, much of the discussion around algorithmic transparency centers around the role of the platforms amplifying misinformation and disinformation and other online harms. In China, “it’s more to do with what they see as the extremes of Internet culture—live streams of people eating, and excesses like that,” Segal says. “They’re worried about national security, too.”

The rules could have huge ramifications for companies like ByteDance, the owner of TikTok and its Chinese equivalent Douyin, according to Lu. “The Chinese government had already developed a very sophisticated regime to target content in web pages or videos,” she says. “This is confirmation that the existing content regime will be extended to content promoted by artificial intelligence.”

TikTok has become the most-downloaded app in the world, driven by the strength of its content suggestion algorithm.

Data privacy rules

China also passed a new data protection law on Friday that offers citizens increased privacy protections while also creating new barriers for companies.

The Personal Information Protection Law (PIPL) is similar in scope to the European Union’s General Data Protection Regulation (GDPR), but with broad carve-outs for “national security” requiring companies that process Chinese people’s data to keep that data inside China, and preventing companies from transferring citizen’s sensitive personal data abroad.

“If you’re doing business in China, get legal advice. They’re not playing around,” Omar Tene, the vice president of the International Association of Privacy Professionals, wrote on Twitter.

The law does not restrict the Chinese government accessing data on its own citizens, however.

PIPL may increase pressure on the U.S. to pass its own federal privacy law. “With PIPL, three of the world’s top four economies will have omnibus data privacy laws—EU, China and Japan,” Tene wrote on Twitter. “The U.S. still doesn’t.”

New story in Technology from Time: This Startup Sees a New Business Opportunity: Teaching Gen Z About Money

Julieta Silva has a lot of questions about money as she starts college this fall: How do you build credit? How do you keep a budget? What’s the best way to start investing?

“This world revolves around money,” says Silva, 18, an incoming first-year student at Northeastern University in Boston and the first in her family to attend college in the United States. “I want to make sure that I have all of the basics set.”

That’s a need the startup Mos is hoping to fill when it launches a banking app for students on Sept. 1. Since 2018, some 400,000 students, including Silva, have used Mos to garner an annual average of $16,430 in college financial aid. Now, the company hopes students who use its financial aid services will stick with the app to manage their savings and investments, take out home mortgages, compare options on auto and other loans, and search for jobs.
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“The goal is not to just become a student bank. The goal is to be like a financial super app,” says Amira Yahyaoui, Mos’s founder and CEO. Yahyaoui, 37, knows how it feels to be a young person struggling to master the often-confusing hurdles of personal finance. The Tunisian human rights activist fled her country as a young adult and lived in exile in France for years without access to a bank account or steady work. (The name “Mos” comes from the Star Wars city of Mos Espa, which was filmed in the Tunisian village where Yahyaoui is from.) “I understand the frustration of not being allowed in because you can’t afford it,” says Yahyaoui, whose goal is to help prevent students like Silva from being dragged into the United States’ $1.7 trillion student-debt crisis. “We are working and targeting and interested in solving the first years of adulting,” she says.

In the face of rising college costs, soaring consumer debt and less confidence in banks since the 2008 financial crisis, Mos is one of several fintech startups that see a need to reimagine banking for a younger generation.

Courtesy Amira Yahyaoui Mos founder and CEO Amira Yahyaoui

<strong>“I understand the frustration of not being allowed in because you can’t afford it.”</strong>

Much of Generation Z, born from 1997 to 2012, endured the financial stresses of the pandemic while trying to enter college or the workforce and now face rising education, housing and health care costs. Yet just 21 states require high school students to take a course in personal finance before they graduate, according to a 2020 survey by the Council for Economic Education. That has created an opening for entrepreneurs more in tune with the needs of people like Silva.

The market for digital-only banks or challenger banks—new companies trying to compete with larger, more traditional banks—is projected to grow to $471 billion by 2027, up from $20 billion in 2019, according to a 2020 report by Allied Market Research, along with the rise of digital banking and the closure of more brick-and-mortar bank branches.

“Every single financial product and every type of financial institution is going to be reimagined for Gen Z,” says Anish Acharya, general partner at Andreessen Horowitz who previously worked at Credit Karma, because “they just face much bleaker prospects” than older generations. “Yes, banks offer student loans, but where are the products that help Gen Z to save and to invest, and actually, you know, make an intelligent decision about what loans to take on?” says Acharya, who is not an investor in Mos, but who has advised Yahyaoui.

Read more: Erasing Student Debt Makes Economic Sense. So Why Is It So Hard to Do?

Mos is among a handful of recent startups aiming to capitalize on Gen Z’s combined need for banking services and financial guidance. In May 2020, it raised $13 million in Series A funding, backed by the venture firm Sequoia Capital, with other investors including NBA player Stephen Curry and Zoom founder Eric Yuan.

Greenlight, a kid-friendly debit card that serves 3 million parents and children, hit a $2.3 billion valuation in April with its latest fundraising round. The company promises to help parents “raise financially-smart kids” and includes an educational component where kids can learn about spending and investing. Current, which offers a teen debit card and checking accounts with no overdraft fees up to $100, boasts more than 2 million users and a $2.2 billion valuation.

Akhil Reddy is currently raising seed funding for Bloom, a digital, fee-free bank targeted at Gen Z users, aiming to launch in 2022. The 25-year-old co-founded Bloom with his former college roommate in April, seeing a market in young people frustrated by overdraft fees and by the process of trying to build credit.

“There’s only a few milestones in someone’s life that they will look to change banks. And I think college is a great opportunity,” says Reddy, who got his own bank account for the first time when he started college. “I think Gen Z is starting to realize that if they want to have financial well-being, they need to get on top of their finances and learn how to save, budget and invest.”

Getty Images for Paul Morigi—We The 45 Million/Getty ImagesA sign calling for President Joe Biden to cancel student debt hangs outside the White House on June 15, 2021.

Yahyaoui envisions Mos growing as its Gen Z users grow up and turn to it for help paying for college, landing their first jobs and buying their first homes.

Banks made an estimated $31 billion on overdraft fees in 2020. Mos—which is providing banking services through a partner bank, Blue Ridge Bank based in Virginia—is promising not to charge any fees, even after students graduate. Instead, it plans to make money by charging lenders to advertise loans in the app, companies to post jobs or internships and colleges to recruit students.

“Tomorrow, they will get their first job through Mos, first internship through Mos,” Yahyaoui says of her future customers. “They will understand saving, thanks to Mos. They will build credit.”

Silva found Mos when she was beginning the process of applying to college in 2020 and her TikTok feed was flooded with college-going videos.

<strong>“This world revolves around money.”</strong>While she’s a U.S. citizen who attended high school in Brownsville, Texas, her parents live and work just across the border in Mexico, and those foreign taxes complicated the process of filling out the Free Application for Federal Student Aid (FAFSA). “My parents didn’t go to college in the U.S., so they don’t know what the college application is like,” says Silva, who sought answers online and on social media.

She stumbled upon a TikTok video posted by Mos about how to apply for financial aid if your parents aren’t from the U.S., which answered many of her questions. It’s one of dozens of TikTok videos Mos has shared with tips about avoiding common FAFSA mistakes, applying to college for free and comparing financial aid offer letters.

From there, Silva paid to use the platform’s financial aid service and was connected with an adviser, who helped her find scholarships that matched her interests and who assisted her in appealing for financial aid from Northeastern. The university granted Silva a financial aid package covering nearly full tuition. She’s now among a group of students advising Mos on what they’re looking for in a bank, and she says she plans to open a Mos bank account.

Silva is one of many students who had little to no financial literacy education in high school. Nearly half of college students say they don’t feel prepared to manage their money, and only 11% of Gen Z students say they have the information they need to repay their college loans, according to a 2019 survey by the insurance company AIG and the online education provider Everfi. In response, lawmakers in 25 states have introduced legislation this year to expand financial education, according to a tracker by Next Gen Personal Finance.

“If [traditional] banks aren’t filling that void, if schools aren’t filling that void, then that’s an opportunity for fintech companies to come in, and that’s what we’ve seen,” says Mark Williams, a finance lecturer at Boston University’s Questrom School of Business, who teaches a class on financial technology and co-founded the nonprofit FitMoney to teach financial literacy to K-12 students in Massachusetts.

Read more: Applying to College Was Never Easy for Most Students. The Pandemic Made It Nearly Impossible

Others argue that financial literacy is an overly simple solution to much larger problems, including the high cost of college in the U.S. “We have a real problem with access to funds for low-income people to attend college. It’s not just that they don’t know what to apply for,” says Timothy Ogden, managing director of the Financial Access Initiative at New York University, who has criticized efforts to require financial literacy courses in high schools. He thinks consumers would be better served if financial education were provided by community nonprofits instead of a bank or a university financial aid office: “Let’s not pretend the banks don’t have motives.”

The most effective kind of financial education, he says, gives people specific information right at the moment they need it to make a decision — targeting high school seniors with lessons about student loans, for example.

That’s something 24-year-old Metztli Uraje could have used when she first entered a four-year university after high school and took out about $3,000 in student loans to pay for it. She later transferred to a more affordable community college to earn an associate’s degree instead and prioritized paying off those loans, squeezing in early-morning and late-night retail shifts around her class schedule.

Courtesy Mos

She resorted to Google to answer all her questions about money — What is interest? When should she sign up for a credit card? What’s required on a FAFSA form? “I think with people that come from first-generation families, it’s really hard to ask for that kind of help because you might not know how to ask, or people in your life don’t know how to do it,” says Uraje, a first-generation college student.

Now a junior at California State University, Dominguez Hills, she is using Mos to apply for financial aid and scholarships, and she wants to avoid taking out student loans again. “A lot of people really don’t know how these forms work, how banks work,” says Uraje, who is hoping a Mos account will offer her more guidance than a traditional bank. “When I first started doing this stuff, I felt like going into it without anyone really helping me.”

While Silva, in Boston, is just beginning her college journey, her interest in personal finance has a lot to do with her post-graduation plans. “I want to travel, I want to enjoy the world. I think that’s a very Gen Z thing to say. But I really, really want to experience that first and then settle down,” she says.

She hopes her newfound wisdom about budgeting, investing and building credit makes that possible. “I don’t want my personal finances or lack thereof to affect that dream that I’ve had since I was little.”