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New WhatsApp Policy: Facebook’s Quest for User-Data May Cripple the World Largest Chat App

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WhatsApp’s new policy which is forcing users to agree to share user information with Facebook, its parent company, has drawn serious concern from both WhatsApp users and antitrust bodies around the world.

On January 4, the chat messaging app announced that the new policy will require collecting some private information for ad and marketing purposes, and any user who declines to provide the information will not be able to create an account.

“You must provide your mobile phone number and basic information (including a profile name of your choice) to create a WhatsApp account. If you don’t provide us with this information, you will not be able to create an account to use our Services. You can add other information to your account, such as a profile picture and “about” information,” the new policy says.

The new rule which is billed to take effect from February 8 also said that the use of some features of WhatsApp will require additional personal information. And a user who chooses not to provide the information will not be able to use the feature. For example, you cannot share your location with your contacts if you do not permit us to collect your location data from your device, the policy says.

Tesla founder and CEO Elon Musk was among the first to respond to the development, urging people to switch to Signal, a non-profit chat app that cares less about user data. And Signal has promptly responded by condemning Facebook’s private data-driven business model.

“Facebook is probably more comfortable selling ads than buying them, but they’ll do what they have to do in order to be the top result when some people search for ‘Signal’ in the App Store,” Signal said in a statement on Sunday.

Facebook founder and properties

Twitter founder and CEO Jack Dorsey shared a screenshot of Signal topping the App Store, in the wake of the uproar generated by WhatsApp’s new policy.

Other instant messaging apps have also ceased the event to promote their services. On Sunday, Telegram tweeted a GIF of pallbearers, in a mock campaign against WhatsApp as the messaging app trends on Twitter.

When a Twitter user said: “Some of us clicked agree already, [talking about the new WhatsApp policy] should I burn my phone?” Telegram responded: “No, that’s bad for the environment. Simply uninstall it and move on with your life. Just like your exes, it wasn’t good enough for you – you deserve better.”

Many WhatsApp users are not on Facebook. The new rule means your WhatsApp personal information will be shared with third parties on Facebook, and that many people like Musk are not ready to do so.

Musk has always been critical of Facebook founder and CEO Zuckerberg’s user-data driven business model, but this time, he got the support of many.

Last year, Apple introduced new privacy rules that denied Facebook access to iPhone users’ private data. The new policy which came with iOS 14 prevents apps from tracking users using their unique device identifier without their explicit permission.

Facebook has been using IDFA to personalize ads in third-party apps, and Zuckerberg said the change in iOS 14 will greatly hurt his social media platform’s earnings. His efforts to get Apple to review the policy failed.

This new WhatsApp policy means that Zuckerberg is looking for alternatives to the restricted iPhone IDAF, and sees the chat app as another way to generate user data for targeted ads. But it is a dangerous move that may backfire.

With the number of users indicating interest in making a switch to other chat apps, WhatsApp is on the verge of losing the vast majority of its close to 2 billion users.

As the momentum garners, regulators around the world are studying the new policy to see if it violates the use of any private data rules, as it means sharing user information with businesses and third party services providers that transact business on both WhatsApp and Facebook.

Twitter Shares Fell 7% As the Heat of Trump’s Ban Rages Around the World

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Twitter shares fell 7% following its decision to permanently ban outgoing US president Donald Trump on Friday. The ban, which has attracted divided uproar globally since it came into effect, is stoking another social media regulatory debate which has brought its bearing on Twitter stocks.

The social media app announced the decision to ban Trump in a blog post on Friday, saying his tweets breach its policies as they are liable to incite further violence.

“After close review of recent Tweets from the @realDonaldTrump account and the context around them – we have permanently suspended the account due to the risk of further incitement of violence,” the blog post said.

Twitter had earlier restricted Trump’s account for 12 hours after the US capitol was invaded on January 6 by his supporters aiming to halt the certification of President-elect Joe Biden’s Electoral College votes.

Trump had made a video condemning the insurrection but turned around as soon the restriction on his account was lifted to tweet in support of the rioters.

“The 75,000,000 great American Patriots who voted for me, AMERICA FIRST, and MAKE AMERICA GREAT AGAIN, will have a Giant Voice long into the future. They will not be disrespected or treated unfairly in any way, shape or form!!!”

Shortly after, he tweeted again: “To all of those who have asked, I will not be going to the inauguration on January 20th.”

Twitter said it assessed the ‘language’ in these tweets against its Glorification of Violence policy, after reading them in the context of broader events in the country and the ways in which the president’s statements can be mobilized by different audiences, including to incite violence, as well as in the context of the pattern of behavior from his account in recent weeks. The assessment led to the determination that Trump’s further tweets could “encourage and inspire” people to “replicate the criminal acts” that took place at the US Capitol on January 6.

Facebook was the first to announce indefinite suspension of Trump’s account, until at least, after the January 20th inauguration.

The social media platforms have faced a moment of watershed arising from conflicting pressures on one hand to restrict misinformation and hate speech, and on the other, defend free speech. Caught across a divided throng leaning on each side of reason, the big tech companies appear to have decided not spare anyone, in the moral fight to tame hate speech.

Apple, Amazon and Google have removed Parler, a pro-GOP communication platform from their services, forcing it to go offline.

Twitter was Trump’s megaphone for heralding conspiracy theories, amplifying attacks on his rivals and provoking other nations during his four-year rule, due to his fight with mainstream media. Now the ban has taken his voice away in his final days in office.

Miraband analyst Neil Campling said the ban shows Twitter is making editorial decisions, and opens the door to more regulation of social media under the next administration.

“In the U.S., it’s about how are these companies being regulated, are they regulated, should they be regulated?” Campling said by phone, adding that “Trump is the most popular character on the platform.”

German Chancellor Angela Merkel called the decision “problematic” and said via his spokesman Steffen Seibert that operators of social media platforms bear great responsibility for political communication not being poisoned by hatred, by lies and incitement to violence.

Twitter CEO

EU Commissioner Thierry Breton said by blocking Trump’s accounts, social media companies had finally recognized their responsibility, duty and means to prevent the spread of illegal viral content.

Following the ban, Trump had used the official account of President of United States @POTUS, which has about 33 million followers to voice his concern about Twitter once again.

“As I have been saying for a long time, Twitter has gone further and further in banning free speech, and tonight, Twitter employees have coordinated with the Democrats and the Radical Left in removing my account from their platform, to silence me,” he said, adding that he will do something about it.

Trump had last year moved to ban Twitter for affixing notice on one of his claims about COVID-19, and has been calling on the Congress to repeal section 230 that will help hold social media platforms more accountable.

Twitter has maintained that it suspended Trump’s account not to silence dissent but to prevent him from instigating further violence that will undermine American democracy and result in further harm. Until now, the Capitol has never been attacked since the invasion of the British on August 24, 1814.

Why the Rich Keep Getting Richer – IMF

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For years, the ‘richer getting richer’ mantra has reechoed the widening gap between the rich and poor, and the inequality that the concept has been birthing.

Over the years, education, business and economic policies designed to bridge the economic inequality gap have failed, fueling the concern about why the rich keep getting richer and the poor poorer.

The International Monetary Fund (IMF) delved into the mechanism of wealth and analyzed the concept of riches to provide an answer to the puzzling question.

Wealth begets wealth. This simple concept of privilege has added to growing discontent with inequality that has escalated under the shadow of the COVID-19 pandemic.

A paper co-authored this year by economists from the IMF and other institutions confirms that wealthier people are more likely to earn higher returns on their investments. It also shows that the children of wealthy people, while likely to inherit that wealth, aren’t necessarily going to make the same high returns on investments.

Detailed data on wealth are extremely rare, but 12-years of tax records (2004-2015) from Norway have opened a new window into wealth accumulation for individuals and their offspring. The Nordic country has a wealth tax that requires assets to be reported by employers, banks and other third parties in order to reduce errors from self-reporting. The data, which are made public under certain conditions, also make it possible to match parents with their children.

The data show that an individual in the 75th percentile of wealth distribution who invested $1 in 2004 would have yielded $1.50 by the end of 2015—a return of 50 percent. A person in the top 0.1 percent would have yielded $2.40 on the same invested dollar—a return of 140 percent.

Another significant finding: High returns both bring individuals to the top of the wealth scale and prevent them from leaving it. Controlling for age, parental background and earnings, moving from the 10th percentile to 90th percentile of wealth distribution increases the probability of making it to the top 1 percent by 1.2 percentage points compared to an average probability of 0.89 percent.

Why do rich people earn high returns? Conventional wisdom suggests that richer individuals put more of their assets toward high risk investments, which can result in higher returns. But our research finds that wealthy people often earn a higher return even on more conservative investments. Richer individuals enjoy pure “returns to scale” to their wealth.

Specifically, for given portfolio allocation, individuals who are wealthier are more likely to get higher risk-adjusted returns, possibly because they have access to exclusive investment opportunities or better wealth managers. Financial sophistication, financial information, and entrepreneurial talent are also important. These characteristics make the returns to wealth persistent over time. This research is the first to quantify this mechanism and show that it is likely to matter empirically.

Do high returns persist across generations? The answer is a qualified yes. Wealth has a high degree of intergenerational correlation, but there are important differences in how returns to wealth accrue across generations.

The children of the richest are likely to be very rich, but unlikely to get as high returns from this wealth as their parents did. This suggests that while money is perfectly inheritable, exceptional talent is not.

Fintechnolization: The One Oasis of Digital Platforms

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Ndubuisi Ekekwe Kampala Fintech award
Ndubuisi Ekekwe receiving award in Kampala . Uganda

I just accepted to deliver a speech in Silicon Valley on “Fintechnolization: The One Oasis of Digital Platforms”. A venture capital firm here read my postulation that the steady state of all digital platforms is fintechnolization. In other words, most digital platforms will offer a type of financial services (read fintech) since fintech delivers a relatively higher value, compared with other sectors, and with demand already within the platforms, executing the playbooks may not be hard. It would be a great talk as I connect the framework to the One Oasis Strategy. 

I made a big fintech speech (not on the same topic) in Kampala Uganda where I was  honoured by the tech community therein. That was in Oct 2019, and it seems like an eternity when you look at what covid-19 has done to accelerate the redesign of digitizing financial services.

No worries Members, I am updating my courseware and adding many things including fintechnolization in Tekedia Mini-MBA. So, while this talk is not going to be public, in  our class, we will attain a steady state knowledge equilibrium within the nexus. We just have to wait for Feb 8 to come.

Register for Tekedia Mini-MBA, And Schedule for Ndubuisi Ekekwe

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Click to register for Tekedia Mini-MBA (Feb 8 – May 3, 2021): online, self-paced, $140 (or N50,000 naira). Full curriculum here – and early bird ends soon.

For companies sending a minimum required staff, my availability is now open for scheduling in your event, meeting, board meeting, etc. Get in touch with Admin to block the date.

I had a great one with a Lagos firm this morning, sharing and answering questions with the team. 2021 is the year of accelerated growth; let’s make it amazing. Join us at Tekedia Institute.

Tekedia Mini-MBA Edition 4