Facebook is under fire again this morning in the latest instalment of a saga that is nowhere near ending: its pretense that it is not a media company.
The latest organ to take up the cudgels is Norway’s biggest-selling newspaper Aftenposten, which fell foul of Facebook’s algorithm/code of conduct/call-it-what-you-will-just-don’t-call-it-an-editorial-policy when it ran a story on how photographs had changed the history of warfare.
The article used one of the most powerful news photographs ever taken: the iconic picture of Vietnamese girl Kim Phuc running away, naked, from a village destroyed by a napalm attack by the South Vietnamese air force (trained and supplied by the U.S.). Facebook removed the article from Aftenposten’s feed and suspended its author when he tried to repost it. It appears Phuc had expressly urged Facebook to allow her image to be used.
The open letter by Aftenposten’s editor-in-chief Espen Egil Hansen, available in full here, is worth quoting at length:
“First you create rules that don’t distinguish between child pornography and famous war photographs. Then you practice these rules without allowing space for good judgement. Finally you even censor criticism against and a discussion about the decision – and you punish the person who dares to voice criticism…
“…We don’t really wish to avoid you, because you are offering us a great channel for distributing our content. We want to reach out with our journalism.
“However, even though I am editor-in-chief of Norway’s largest newspaper, I have to realize that you are restricting my room for exercising my editorial responsibility. This is what you and your subordinates are doing in this case…
“The napalm-girl is by far the most iconic documentary photography from the Vietnam war. The media played a decisive role in reporting different stories about the war than the men in charge wanted them to publish. They brought about a change of attitude which played a role in ending the war. They contributed to a more open, more critical debate. This is how a democracy must function…
“Facebook’s Mission Statement states that your objective is to “make the world more open and connected”. In reality you are doing this in a totally superficial sense. If you will not distinguish between child pornography and documentary photographs from a war, this will simply promote stupidity and fail to bring human beings closer to each other.”
More news below.
Alan Murray is out.
• Wells Fargo’s Halo Slips
Wells Fargo was ordered to pay $185 million to settle charges that staff had fraudulently signed customers up for deposit and credit card accounts to hit sales targets and receive bonuses, according to regulators. The settlement included the biggest fine yet imposed by the Consumer Financial Protection Bureau, which was set up after the 2008 financial crisis to protect ordinary bank customers. CFPB director Richard Cordray said the fine “should serve notice to the entire industry.” Regulators had found that Wells Fargo employees opened deposit and credit card accounts without consent from consumers. They would then transfer funds from the consumers’ legitimate accounts temporarily into the new, unauthorized accounts. California-based Wells Fargo had emerged from the 2008 fiasco with less damage to its reputation than many of its Wall Street rivals, and is now the world’s most valuable bank with a market capitalization of $251 billion. But much of that valuation is down to a business model that relies heavily on cross-selling: according to the Financial Times, as of May, Wells Fargo had sold an average of 6.27 products to each household that has a current account with the bank. The ruling will put that business model under some severe scrutiny. Fortune
• North Korea’s Nuke Program Advances
North Korea continued its seemingly unstoppable progress to being a nuclear state, carrying out what was (at least according to its own state news agency KCNA) its fifth and largest nuclear test to date. With that test, KCNA boasted, North Korea is now able to produce a nuclear warhead small enough to fit onto a ballistic missile. There is no way of verifying the claims down to the last detail, but South Korea’s defense ministry estimated the yield from the device at 10 kilotons (compared to 15 for the Hiroshima bomb). The blast caused an earthquake measured at 5.3 on the Richter scale. China, North Korea’s only ally, joined Japan and South Korea (the two most likely targets) in condemning the test, but the fact is that the one country best placed to stop Pyongyang has effectively done nothing to do so. Nor was there any indication from Beijing that it intended to take any firmer measures to rein in its ally. Fortune
• FCC Yields to Cable Industry Concerns
Federal Communications Commission chairman Tom Wheeler backed away from plans for harsh new regulation of the cable industry as he released the latest version of his proposal to open up the TV set-top box business. Wheeler’s revised proposals to encourage more competition looked very different from his original plan and a lot more like the industry’s “Ditch the Box” counter-proposals, a move to an app-based delivery system that still satisfies cable companies about control of content and piracy. Even so, pay-TV providers will be required to provide apps – free of charge – that consumers can download to the device of their choosing to access all the programming and features they already paid for, Wheeler said. Fortune
• VW, Bosch CEOs Under Fire
The CEOs of Volkswagen and components supplier Robert Bosch met to discuss the workings of defeat devices nearly 18 months before VW admitted to using them, according to an amended class-action lawsuit. The Wall Street Journal cites materials alleging that suggest Martin Winterkorn and Volkmar Denner met in May 2014, only days after a U.S. environmental group published a report documenting the excess emissions from VW’s diesel engines. The alleged meeting would also have come soon after an internal investigator at VW wrote to Winterkorn to alert him to the extent of the problem. If proven, the allegations would severely undermine Winterkorn’s claims that he knew nothing of the scandal, and VW’s strategy of blaming it on a handful of rogue engineers. It would also appear to undermine Bosch’s repeated denials of having helped VW to evade U.S. law. Neither company commented for the WSJ’s story. WSJ, subscription required
Around the Water Cooler
• The ECB Is Tired of Heavy Lifting
The European Central Bank sat on its hands and dialed down rhetoric about further monetary easing, in what financial markets took as a signal that the institution may be giving up on the idea. The euro rose and stocks were broadly sluggish after Mario Draghi stayed in wait-and-see mode despite signs that the Eurozone economy is weakening again. The need for fiscal stimulus and higher pay raises–especially in Germany–was the core of Draghi’s lament. German export data for July, out this morning, confirm the picture of a poor start to the third quarter created by manufacturing orders and industrial output figures earlier this week. Meanwhile, the Eurozone’s finance chief Jeroen Dijsselbloem noted this morning that “the pressure is back on” Greece, which is no closer to a debt relief deal with its creditors than it was six months ago. Fortune
• SpaceX Could Be Grounded for a Year
Elon Musk’s SpaceX likely will be grounded for nine to 12 months while it investigates the cause of last week’s launch pad accident and makes any repairs, his biggest U.S. competitor said Thursday. Tory Bruno, chief executive of United Launch Alliance, told Reuters that “It typically takes nine to 12 months for people to return to flight. That’s what the history is.” A SpaceX Falcon 9 booster exploded on the launch pad on Sept. 1 as it was being fueled for a routine pre-launch test. A $200 million Israeli communications satellite was destroyed in the blast, which abruptly ended a string of impressive launches and landings of the company’s revolutionary reusable rockets. Fortune
• Willis Pays $120 Million to Settle Ponzi Scheme Claims
Insurance brokerage Willis Towers Watson agreed to pay $120 million to settle lawsuits that claimed it facilitated a Ponzi scheme run by the now-imprisoned Texan financier Allen Stanford. Willis didn’t admit wrongdoing. The suits had alleged that Willis provided letters touting the credentials of Stanford’s Antigua-based Stanford International Bank, helping him to attract investment into bogus offshore certificates of deposit. The scheme defrauded around 18,000 largely U.S. investors. Total settlements in the case now top $300 million, while many lawsuits are still pending. Stanford was jailed in 2012. Fortune