How Amazon, Apple, Google, and Microsoft Created an Eavesdropping Explosion—Data Sheet

There’s an uncomfortable reality behind the rise of digital helpers like Apple’s Siri and the Google Assistant that’s exacerbating the public’s concern about the use of their personal data.

The amazing ability of digital assistants to instantly recognize a person’s voice or quickly translate languages isn’t just something computers learned on their own. In order to improve the machine learning-fueled technology, the tech giants that create it need actual humans to listen and manually label the data for training. And that requires a lot of human ears listening to people’s conversations.

Several media outlets have recently published reports about how Amazon, Apple, and Google are using human workers (typically contractors) to listen in on people’s commands and use that precious voice data to improve their products. On Wednesday, Motherboard had the latest revelation, revealing Microsoft used contract workers to listen to conversations on Skype, which Microsoft owns, to improve its auto-translation feature. Microsoft, like the other companies, responded that it got customers’ permission before collecting and using their voice data and that its contractors are bound by confidentiality agreements.

Users of voice assistants are unlikely to take much comfort in that explanation. Random contractors could overhear them “talking intimately to loved ones, some chatting about personal issues such as their weight loss, and others seemingly discussing relationship problems,” the Motherboard story says.

Part of the problem is that the companies don’t explicitly spell out how they will use people’s data to improve their services.

For instance, Skype’s privacy policy for its translation service says that “sentences and automatic transcripts are analyzed and any corrections are entered into our system, to build more performant services.” Because that sentence is written in the passive voice, it’s difficult to tell who or what is analyzing the voice transcripts.

U.S. and European lawmakers are already probing whether the tech giants violated privacy laws when humans listened in. And it’s likely the companies will update their privacy policies, too.

Amazon’s Alexa-related privacy policy, adjusted this summer after the uproar, now has a section that details its data-training process, described as “an industry-standard practice where humans review an extremely small sample of requests to help Alexa understand the correct interpretation of a request and provide the appropriate response in the future.”

It’s still a mouthful, but it’s a start.

Jonathan Vanian

On Twitter: @JonathanVanian

Email: jonathan.vanian@fortune.com

NEWSWORTHY

Flash to bang. In New York, Samsung held its Unpacked event to unveil the much-leaked Galaxy Note 10 (now with a 5G version), the previously-announced Galaxy Watch Active2, and a thin Windows laptop dubbed the Galaxy Book S. The real surprise was an appearance by Satya Nadella, marking closer integration between Samsung's mobile devices and Microsoft's Windows software. At rival Apple, the focus remains on health. The iPhone maker is working with Eli Lilly and startup Evidation on using mobile devices to spot early signs of dementia, according to a study published this week.

Signal to noise. Forget the streaming wars, what about the trucking wars? FedEx decided it would stop delivering packages for increasingly-doing-its-own-delivery rival Amazon. As an analyst from Morningstar put it, the Amazon orders were "insufficiently remunerative to continue."

Pi to the 10h decimal place. Oh, yeah, the streaming wars. Netflix lured Game of Thrones show runners David Benioff and Dan Weiss away from AT&T's HBO with a $200 million, multi-year contract to develop movies and TV shows, the Hollywood Reporter reports. "We are thrilled to welcome master storytellers David Benioff and Dan Weiss to Netflix," Netflix chief content officer Ted Sarandos said in a statement. I bet you are.

War and peace. And what about the taxi wars (which always remind me a little of the fabulous kids book The Pushcart War)? New York City's Taxi and Limousine Commission approved a series of limits on ride hailing services like Uber and Lyft, including cutting the amount of time drivers can circle around parts of Manhattan without a passenger. "Transporting passengers is a privilege," TLC commissioner Bill Heinzen reminded the companies.

Carte blanche. Final war metaphor of the day, I promise, but in the Trump administration's war on big tech companies, the battle could be about to get ugly. Politico on Wednesday reported vaguely of a draft Presidential executive order that would crack down on social media companies like Twitter and Google due to alleged anti-conservative bias. No word on what's actually in the draft order, however.

Teeny, tiny, eensy, weensy. In the...rivalry between chipmakers Intel and Advanced Micro Devices, AMD pulled ahead with a new CPU for servers dubbed the "Rome" Epyc that is manufactured at 7-nanometer scale. Google said it was already installing the chip in its datacenters. That helped AMD's stock, previously up 58% this year, gain another 8% in premarket trading on Thursday.

Mix and match. The relative independence of Facebook's major apps is eroding. Engineers at the company are rewriting Instagram's chat feature with code from its Messenger app, Bloomberg reports. The goal is to allow users of all three Facebook platforms–Insta, Messenger, and WhatsApp–to talk amongst themselves. In other Borg coding news, Salesforce is acquiring field service software provider ClickSoftware for $1.35 billion. Salesforce said it would add Click's biological and technological distinctiveness to–I mean add Click's software to its own Field Service Lightning product. And chipmaker Broadcom may acquire cybersecurity firm Symantec's enterprise unit, after its offer to buy the entire company fizzled out.

Tracking the numbers. On Wall Street, Roku and Lyft pleased, while Zillow lost some shine. Roku said its second quarter revenue increased 60% to $250 million as its active user base hit 30.5 million, up 39%. Roku shares, previously up a mind-blowing 230% in 2019, jumped another 18% in premarket trading on Thursday morning. Lyft surprised investors with strong revenue, better-than-expected earnings, and most importantly, an improved outlook for the year. Revenue grew 72% to $867 million. Lyft shares, which had lost 16% since it went public in March, gained 8% in premarket trading. Zillow said it might lose money even on an adjusted cash flow basis next quarter, as its program to connect agents with homebuyers will lose as much as $80 million. Zillow shares, which had been up 58% in 2019, lost 14% on Thursday morning.

FOOD FOR THOUGHT

There are many ways to pollute the online information flow. Think of the Russian bots that filled Facebook and Twitter feeds with misinformation about the 2016 election. But Buzzfeed reporter Craig Silverman has investigated a smaller scale but no less misleading scourge: the consultants who can bury unpleasant Google search results. It's a fascinating read through the dark side of search engine optimization, or SEO. Here's one crazy technique:

The desire for high-quality backlinks has also led to the rise of the SEO scholarship. For years, reputation consultants have advised clients to offer a scholarship in their name, usually for a relatively small amount such as $500 or $1,000. The goal is to secure a mention of the scholarship, and a coveted link back, from a legitimate college website with an authoritative .edu domain name. In some cases, these scholarships are created with no intention of ever paying out, according to experts who spoke to BuzzFeed News.

“Some rep management companies will go get the links on as many of the scholarship sites as possible, and then never deliver the goods. They'll never give out the scholarship,” Nick Cuttonaro, owner of the reputation management firm Link Builders, told BuzzFeed News.

IN CASE YOU MISSED IT

The Disney Plus, ESPN Plus, and Hulu Bundle Is the First Bomb Dropped in the Video Streaming War By David Z. Morris

Twitter May Have Shared User Data Without Permission By Chris Morris

Amazon Worker Wins Lottery and Quits Job, But the Company Thinks He’s Joking By Chris Morris

BEFORE YOU GO

Baby Boomers, Gen X, Millennials, Gen Z...and what comes next? Australian research firm McCrindle has tabbed the next bunch of kids "Generation Alpha." Born starting in 2010, they are mainly the children of millennials. Why alpha? They're the first generation to be born entirely in the 21st century. I'm guessing we'll see a wave of Gen Alpha screen addiction issues in a few years. Just you wait.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.