Dec 312013
understanding data with computers

As society and business drown in big data we’re relying on algorithms and computer programs to helps us wade through a flood of information, could that reliance be a weakness?

British Archeology site Digital Digging discusses how Google displays Manchester United winger Ryan Giggs in the results search for Cnut, the ancient king of Denmark better known in the English speaking world as King Canute.

Apparently Giggs appears in the search results for Canute because of the footballer’s futile attempt to hold back a tide of information about his love life.

While Google’s algorithm seems to have made a mistake, it’s only doing what it’s been programmed to do. A lot of trusted websites have used the term ‘Canute’ or ‘Cnut’ in relation to Giggs so the machine presents his picture as being relevant to the search.

Confusing Ryan Giggs and King Canute is mildly amusing until we consider how critical algorithms like Google Search have become to decision making, there are no shortage of stories about people being wrongly billed, detained or even gaoled on the basis of bad information from computers.

The stakes in making mistakes based on bad information are being raised all the time as processes become more automated, a chilling technology roadmap for the US military in Vice Magazine describes the future of ‘autonomous warfare’.

By the end 2021, just eight years away, the Pentagon sees “autonomous missions worldwide” as being one of their objectives.

Autonomous missions means local commanders and drones being able to make decisions to kill people or attack communities based on the what their computers tell them. The consequences of a bad result from a computer algorithm suddenly become very stark indeed.

While most decisions based on algorithms may not have the life or death consequences that a computer ordered drone strike on a family picnic might have, mistakes could cost businesses money and individuals much inconvenience.

So it’s worthwhile considering how we build the cultural and technological checks and balances into how we use big data and the algorithms necessary to analyze it so that we minimise mistakes.

Contrary to legend, King Canute didn’t try to order the tide not to come in. He was trying to demonstrate to obsequious court that he was fallible and a subject to the laws of nature and god as any other man.

Like the court of King Canute, we should be aware of the foibles and weaknesses of the technologies that increasingly guides us. The computer isn’t always right.

Nov 242013
The law applies online to social media and other web services

One of the long running scandals of modern journalism is how media organisations have misused social media.

Haitian photographer Daniel Moran’s victory over Agence France Press and Getty Images is a reminder to journalists and media organisations that when something is posted to social media it doesn’t mean it’s free to use.

Since the rise of social media sites it’s become common for journalists to grab images or videos from them to illustrate stories. At best, the media organisations have credited the sites they’ve stolen the content to allay copyright concerns.

The problem is media companies and journalists don’t have the right to do that; users don’t give away their rights when they post to Twitter or Facebook — they grant a license to the company to use those that content as they wish.

If a photographer, writer, computer programmer or musician wants to give away their work for free then there’s a range of ways they can do it and many are happy to make their efforts available to the community without charge. It just happens posting to a social media site isn’t one of those ways.

Hopefully journalists and media organisations will learn a lesson from Daniel Moran’s case, social media doesn’t mean open slather.

Jul 042013

Early this week I attended the media launch of Data Sovereignty and the Cloud – a white paper from the University of New South Wales’ Cyberspace Law and Policy centre.

The event was refreshingly free of a lot of the hype or hysteria that cloud computing events usually lead to. I’ve covered some of the panel session’s discussion for Business Spectator.

One thing that stood out in the presentation was the Ten Commandments of Cloud Computing which are a good guide to what businesses owners, directors and executives need to consider when looking at online services.

ten-commandments-of-cloud-security copy

Another refreshing aspect of the UNSW launch was the mature attitude towards risk – the overwhelming view of the panel, which included insurers, lawyers and academics, was that all technologies have an element of business risk and it’s a matter of identifying and managing those hazards.

Hopefully, we’ve moved on from the 1980s management view that risk is something to be eliminated at all costs. The result of that philosophy was just to shift risks into other, unforeseen areas.

The UNSW report on cloud risks is a weighty read, but it’s worthwhile if you want to get a realistic handle on exactly what the hazards are in moving to the cloud.

After all, if you don’t know what the risks are then you can’t identify, understand or manage them.

May 132013
The law applies online to social media and other web services

“The biggest risk for Australian business journalists is being sued into oblivion” said Paddy Manning at a Walkley Media Talks Panel in Sydney last Thursday.

Joining Paddy on the panel was The Australian’s Anthony Klan, the ABC’s Tikki Fullerton and moderator Peter Ryan who looked at the challenges facing business journalists seeking to separate truth from business PR spin.

Business superinjunctions

The problem facing Australian business journalists is a legal system that favours those who want to suppress facts – it’s a game only the wealthy can play and rich fraudsters use it well as we’ve seen over the years in corporate Australia.

Manning described one occasion where he obtained information on a prominent businessman’s affairs and, within hours of asking the gentleman for comment, found he and the Fairfax had been hit with a court injunction with such vague wording it may have any of his employer’s outlets from mentioning the man at all.

These injunctions were the rule, not the exception. Manning went on to tell how Sydney Morning Herald business writer Michael West spends one day a week on legal matters while his colleague Adele Ferguson was even preventing from writing about documents that were on the public record.

Klan trumped that with the seventy injunctions he’s received over stories on the mortgage debenture scandals, an ongoing sore on Australia’s investment industry which threatens to steal many retirees’ savings.

The problem of pre-emptive injunctions stemmed from the ethical requirement of giving a ‘fair opportunity for reply.’ In seeking comment from those engaged in shoddy – or downright – illegal practices, it gives those with something to hide the opportunity to run to the courts who are all to willing to issue wide ranging orders.

An advantage for bloggers?

Interestingly, Justice Leveson of the UK inquiry into press conduct made an observation about the disadvantage mainstream media has before the law during his visit to Australia earlier this year.

online bloggers or tweeters are not subject to the financial incentives which affect the print media, and which would persuade the press not to overstep society’s values and ethical standards.

While Leveson had it wrong about financial incentives, it’s actually the media’s ethical standards which are the restraining influence. Professional journalists quite rightly don’t like breaching their trade’s code of conduct.

As Leveson opined, bloggers don’t necessary hold themselves to the same standards so they are more likely to publish and be damned.

Where Leveson was utterly and totally wrong is bloggers’ immunity to the law.

Bloggers rejoice in placing their servers outside the jurisdiction where different laws apply. the writ of the law is said not to run. It is believed therefore that the shadow of the law is unable to play the same role it has played with the established media.

That’s nonsense and it’s a matter of time before a blogger goes to gaol for disobeying a court. When that does happen it will be interesting to see how the established media reacts to this.

From the panel discussion it was quite clear that professional business journalists have no intention of breaking the law or their code of ethics, although all are united in their determination to protect sources if they were order to divulge by a court.

The cost of suppressing news

What really stood out from the panel was how the law is being used to stifle examination of Australian business behaviour. In the audience Q&A, veteran reporter Colin Chapman pointed out Australia sits at 26th on the World Press Freedom Index.

The lack of a truly free press could just be seen as journalistic hand wringing, but there’s a real world effect of this – those retirees who will be ripped off by crooked financial advisers and mortgage funds would have a better chance of protecting themselves were they able to see Anthony Khan’s articles on the topic.

Just as crooks have been able to prosper in the absence of press scrutiny, so too have supine, incompetent and lazy regulators.

All too often agencies – such as the ACCC, ASIC, ASX or ATO – have only been woken from their slumbers when prodded by a media scandal, lack of scrutiny has allowed government regulators to get away with not doing their jobs.

This poor enforcement is reflected in international comparisons. The World Bank ranked Australia as 70th in the world for protecting investors, way below Colombia, Thailand or Kazakhstan.Australian business reporters find themselves in a difficult position being caught between the tightening economics of the media industry and a legal system that is more focused on protecting knaves rather allowing society to be informed.That problem facing journalists is a problem for every Australian who’s being kept in the dark about their investments.

Apr 142013
understanding data with computers

If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him said the 17th Century French politician Cardinal Richelieu.

Today those six lines could be written on a social media site or be six disparate points drawn from a database. Without context those six lines could condemn us.

Something that’s missed when we talk about Big Data is the risk of false positives – if you dip into the stream, you can prove anything against person.

The world isn’t black or white, there are fifty trillion shades of gray and that’s why it’s important to think before posting an image on the web, firing someone or calling the cops.

In an era where we’re quick to judge and condemn people, the stakes are very high.

Jan 062013
Australian business and the nanny state

It’s becoming popular to describe Australia as a ‘Nanny State’ as governments respond to moral panics and the need to do something about anything from bicycle helmets to unpasteurized cheese.

Unquestionably Australia has changed in the last quarter century as governments of all persuasions have found it easier to legislate rather than lead. This has had effects on business and society in general.

A good example of how the regulations have built up over the last twenty years in Australia is a sign at my local beach.

the Australian nanny state is shown in signs at balmoral beachThat’s a fine welcome and it compliments the $7 an hour parking fees the local council levies. In itself, those parking fees are a good example of the price pressures driving Australia’s high cost quandary.

Drinking on Sydney ferries is banned in Australia's nanny state

Possibly the saddest regulation is the alcohol ban on ferries. Twenty years ago it was normal to see a group of friends unwinding on the way home from work with a cold beer or wine. Today you can’t do that because some bureaucrat decided drunks were a problem and rather than enforce existing laws it was easier to ban drinking entirely.

The press and moral panic

Much of this nannyism is being driven by the media who drum up hysterical reports demanding ministers do something. In turn the government’s panicky PR obsessed apparatchiks respond with pointless and unnecessary laws and rules. Often duplicating those that already exist.

A good example of cynical media hysteria was the story of Malea, a Sydney mum minding her own business while legally cycling with her child in a trailer.

While out riding a discredited journalist filmed Malea and passed the footage onto a current affairs TV show which portrayed her as a reckless mum and demanded such behaviour be banned.

Fortunately in that case the politicians ignored the confected outrage, but that’s the exception rather than the rule.

Doing something

The media though doesn’t have to force Australian politicians into adopting the nanny reflex. Often governments will create their own outrage in order for attention deprived politicians to get press coverage.

A good example of this was the incompetent Carr government which decided its contribution to the War On Terror after the 9/11 attacks would be to turn the Sydney Harbour Bridge into something similar to what welcomes Guantanamo Bay detainees.

The Australian nanny state is shown by the Sydney Harbour BridgeIt’s worthwhile comparing the same view on San Francisco’s Golden Gate Bridge and ask which is the greater terrorist target?

San Francisco's Golden Gate BridgeWhen Sydney genuinely was a larrikin city, climbing the Harbour Bridge in the dead of night was a rite of passage. Today, if you can get around the security guards, barbed wire, CCTV and motion detectors you risk a $3,300 fine and being branded a terrorist.

If you try to climb the bridge and get caught, the fine is only half that of stepping on the hallowed turf of the Sydney Cricket Ground.

At the cricket, if you’re foolish enough to bounce a beach ball, start a Mexican Wave or sing out of tune and you’ll be out before you can say “Shane Warne is a safe driving ambassador.”

The Age newspaper gave a good example of Australian sports administrators’ Stalinist mindset in this fawning article which gloats over the efforts MCG staff go to in harassing their customers.

On level three of the Members’ wing is a secure room with the best seats in the house, although the occupants only manage an occasional glance at the game on hand. It is the MCG command post, where ground security, police and Securecorp officers constantly watch a bank of computer monitors and camera screens.

Dohnt says the camera operators will check the froth on a punter’s cup of Coke to see if it has been topped up with smuggled grog.

Forcing cricket fans to buy overpriced drinks or visitors to spend over $200 to climb the Harbour Bridge brings us to the core motivation behind many of Australia’s nanny state regulations – protectionism.

Hidden protectionism

Many Australian Nanny state rules are to protect businessThis sign, which is attached to the back of the one at the beginning of this story, bans vendors who sell from boats. It’s questionable whether the council actually has the power or resources to enforce this ban but if it helps the local shopkeepers then so be it.

One of the hubristic traits of Australian exceptionalism is that the nation is a ‘free trade’ economy hard put upon by sneaky Japanese, American and European protectionism. The reality is Australia is just as good as Japan or the EU in introducing sneaky regulations to protect the well-connected locals.

A very good example of this is bananas where the Australian domestically produced product is substantially dearer than imported bananas sold in the US, UK or Europe.

In early 2011, Cyclone Yasi devastated Australia’s banana crop and prices soared. Not one imported banana was allowed in to ease the shortage. Remember that the next time you hear a politician or journalist boasting about Australia’s free trade credentials.

business is hurt by nanny state rules

Banana prices are another example of the costs passed onto Australian households and industry through nanny state regulations. Compliance costs are real and add to the cost of production and employment. They are another reason why Australia has become a high cost economy.

More importantly, those regulations tend to favour incumbents making it harder for entrepreneurs and new entrants into markets making the economy even less flexible.

The burden of regulation is also unfairly dropped upon the smaller business who don’t have the resources to comply with or challenge unfair rules. The Howard government was very good at this with slapping small business with the responsibilities of raising the GST and complying with draconian laws like Workchoices.

At this stage it’s worth noting that the Australian nanny state isn’t a Labor party creation, it’s come from both sides of politics and often because poorly drafted laws require mountains of regulations to overcome the legislative flaws.

Workchoices was probably the best example of badly thought out laws where the Howard government panicked into slapping a whole level of punitive rules for businesses who failed to keep log books of staff hours worked – the legislation was so bad that had it not been repealed by Rudd, the sight of bundy clocks would have become common in Australian offices.

Nanny and risk

One of the unfortunate effects of the nanny state is that it saps the entrepreneurial spirit – why take risks when nanny is there to support you?

There is an unintended effect of this though – because we think nanny will always protect us we lose the ability to evaluate risk.

Where this is most obvious is in financial matters. Too often people are fooled into investing in dodgy schemes because they think that regulators will protect them. They find out this isn’t the case when the money is long gone.

That failure to understand risk though becomes pervasive through the community as the nanny state mentality becomes established. We could argue that inability to identify risk was the core reason for the global financial crisis.

The future nanny state

While the nanny state has been rampant around the world for the last fifty years, its days are numbered as cash strapped governments find they can no longer bear the cost of maintaining armies of bureaucrats to enforce silly rules.

As society deleverages from the excesses of the credit boom, governments are going to find revenues falling short and while it won’t be the first casualty of the new austerity, the nanny state will almost certainly be a victim.

Jan 052013
online businesses like Amazon and Apple want to lock in customers

US booksellers Barnes and Noble has been struggling for years and things aren’t getting better reports the New York Times.

An important part of the New York Times story is the quote from a Forrester industry analyst,

“The problem is not whether or not the Nook is good,” said James L. McQuivey, a media analyst for Forrester Research. “What matters is whether you are locked into a Kindle library or an iTunes library or a Nook library. In the end, who holds the content that you value?”

Locking in customers lies at the heart of the Kindle and iTunes business model. Once users have a substantial investment in their book or music collections on one platform it’s unlikely they will go elsewhere as the costs, and risks, of moving are too great.

This doesn’t always end well for the customer and it gives online businesses great power which they often misuse.

Every online business tries to lock their customers into their ecosystem – Google, Amazon, Facebook and Apple are the most successful but every single social media and cloud service tries to make it hard for users take their business elsewhere.

In some respects this is no different to the phone company or bank which have historically tried to lock customers into their services, but the online social media, cloud computing and e-commerce platforms make a much more ambitious grab for their users’ data and assets like music and book collections.

The New York Times article illustrates just how critical that user lock in is to the success of online businesses. The question for us as consumers is how much we want to be locked inside the web’s walled gardens.