TikTok faces a hefty fine in Europe from a regulator for past shortcomings in protecting the privacy of younger users, a development that experts say could have implications for Canadian regulators and young people using the popular platform here.
News broke on Friday that Ireland’s Data Protection Commission (DPC) — the lead privacy regulator for Big Tech companies whose European headquarters are largely in Dublin — was handing TikTok a fine of 345 million euros (roughly $500 million Cdn), following a two-year investigation into its compliance with privacy rules in the latter half of 2020.
The investigation found that the sign-up process for teen users resulted in settings that made their accounts public by default, allowing anyone to view and comment on their videos. Those default settings also posed a risk to children under 13 who gained access to the platform even though they’re not allowed.
It was also found that a “family pairing” feature designed for parents to manage settings wasn’t strict enough, allowing adults to turn on direct messaging for users aged 16 and 17 without their consent. And it nudged teen users into more “privacy intrusive” options when signing up and posting videos, the commission said.
That included making all accounts for teens under 16 private by default and disabling direct messaging for 13- to 15-year-olds, before the DPC probe began. TikTok also says that forthcoming accounts set up by 16- and 17-year-old users will be pre-selected to private account settings — a change rolling out on a global basis, starting later this month.
The platform took issue with aspects of the watchdog’s decision — “particularly the level of the fine imposed” — and indicated that it’s evaluating “next steps” as a result.
TikTok is on a charm offensive, trying to prove it’s not a threat. CBC’s Ellen Mauro gets access to its new Transparency and Accountability Centre in L.A. and asks the company’s head of public policy what it’s doing to protect user data.
Karen Louise Smith, an associate professor in the department of communication, popular culture and film at Brock University in St. Catharines, Ont., said that privacy rulings from like-minded regulators tend to get followed closely in other jurisdictions.
“They typically kind of work in co-ordination,” said Smith, who researches openness, privacy and participation in digital society. “Any kind of ruling like that, that comes out anywhere in the world, has potentially positive impacts for Canadian youth.”
The Canadian probe continues, a spokesperson for the Office of the Privacy Commissioner of Canada confirmed Friday.
Warning about ‘dark patterns’
The DPC in Ireland has been criticized for not moving fast enough in its investigations into Big Tech companies since European Union privacy laws took effect in 2018. For TikTok, German and Italian regulators disagreed with parts of a draft decision issued a year ago, delaying it further.
To avoid new bottlenecks, the Brussels headquarters of the 27-nation bloc has been given the job of enforcing new regulations to foster digital competition and clean up social media content — rules aimed at maintaining its position as a global leader in tech regulation.
TikTok is facing tough questions from many western democracies about the personal data it gathers and who has access to it. The app’s parent company is based in China and now US politicians want to make sure the country’s government can’t get access to Americans’ personal information. They aren’t liking the answers they’re getting. For transcripts of this series, please visit: https://www.cbc.ca/radio/frontburner/transcripts
In response to initial German objections, Europe’s top panel of data regulators said TikTok nudged teen users with pop-up notices that failed to lay out their choices in a neutral and objective way. The DPC described them as a form of “dark patterns” — a term describing design practices aimed at steering people toward making choices they otherwise wouldn’t.
Anu Talus, chair of the European Data Protection Board, said that “social media companies have a responsibility to avoid presenting choices to users, especially children, in an unfair manner — particularly if that presentation can nudge people into making decisions that violate their privacy interests.
This particular finding caught the attention of Brock University’s Smith, who believes it may benefit Canadians, as TikTok and other tech companies, platform operators and app providers see the negative consequences of employing dark patterns.
“This hopefully is an incentive to stay away from those dark patterns,” she says
A U.S. regulator sued Amazon last month for allegedly duping customers into buying Prime memberships using a web design trick called ‘dark patterns.’ Here’s what Canada is doing about the practice.
The Irish watchdog, meanwhile, also examined TikTok’s measures to verify whether users are at least 13 years of age, but it found that no rules were broken.
Smith said that “privacy issues associated with age online are definitely a thorny issue,” but social media companies nonetheless must remain compliant with relevant laws and regulations.
But she said companies like TikTok have a special responsibility to safeguard the data of younger users, who may have “less capacity to make decisions about their digital footprints that may follow them for the rest of their lives.”
A need to be safe but also confident
Jenna Shapka, a professor and head of the department of educational and counselling psychology, and special education, at the University of British Columbia in Vancouver, said she doesn’t see a great deal of difference in how TikTok functions versus other social platforms.
“There isn’t anything special about TikTok that I see that’s different, that parents need to be more worried about TikTok than Snapchat or Instagram or anything like that,” she said, when discussing some of the steps the platform said it had taken to tighten protections for its teenage users.
Shapka said she also thinks children growing up today need to learn how these platforms work and how to thrive on them, as opposed to how to avoid any contact with them.
Some of the parent-involved tools and controls that TikTok and other platforms have developed may be of some benefit for younger users who are starting out in the digital world and learning their way, but less so for older teenagers, she said.
“I don’t think parents can use them to control or monitor [an older] teenager’s online activities,” Shapka said, and doing so could erode the relationship between parents and children.
TTC riders in Toronto’s downtown core now have access to 5G service.
In a Monday media release, representatives for Rogers said customers of all major Canadian wireless companies can connect to 5G to talk, text, and stream on Toronto’s subway system.
Service extends to all stations and tunnels in the downtown U (between Bloor-Yonge and Spadina, as well as Dupont Station), as well as in 13 stations between Keele and Castle Frank, plus the tunnels between St. George and Yonge stations.
The announcement comes a day earlier than anticipated, as the federal deadline given to Rogers to implement the extended service for all mobile customers was originally slated for Tuesday.
Rogers customers have had 5G connection in the aforementioned stations and tunnels since August, a decision that sparked ire in the telecommunications space, particularly from rivals Telus and Bell.
“Our dedicated team of technologists designed and introduced an immediate solution that added capacity, so Bell and Telus could join the network,” Ron McKenzie, chief technology and information officer for Rogers, said.
“For over 10 years, subway riders have been without mobile phone services and the Rogers team is pleased to step up and make 5G a reality for all riders today.”
In a statement shared with CP24, representatives for Telus said, “we are pleased to launch service for all our customers in connected TTC subway tunnels and stations. Now, TELUS customers can browse the Internet, talk and text, staying connected and safe on Toronto transit. We’ll be working hard to expand the number of stations and tunnels covered in the coming months.”
“We would like to thank Minister Champagne for his leadership in ensuring that all wireless carriers have the ability to serve their customers in Toronto’s subway system, and that Rogers can no longer delay the deployment of wireless service for all TTC riders regardless of their choice of carrier,” representatives for Bell shared in an afternoon statement.
“Bell looks forward to working collaboratively with our partners to build out the remainder of the TTC’s wireless network.”
Toronto Mayor Olivia Chow responded to today’s news in a tweet.
“Happy to hear that all 3 major telecoms have unrolled service to downtown stations,” she wrote.
“The work continues to expand service to the rest of the TTC subway system. François-Philippe Champagne and I will work to make sure it happens quickly.”
CP24 and CTV News Toronto are owned by Bell Media.
TORONTO — A week after a system crash blacked out much of the services offered by Laurentian Bank (TSX:LB), the financial institution announced on Monday the departures of president and CEO Rania Llewellyn and board of directors chair Michael Mueller.
The bank said Monday that Eric Provost, most recently head of personal and commercial banking, has moved into the role of president and chief executive with immediate effect.
Provost replaces Llewellyn, who became the first woman to lead a major Canadian bank when she took on the role three years ago.
Montreal-based Laurentian also said director Michael Boychuk has been appointed chair of its board of directors, replacing Mueller, who resigned from the board.
The bank said on Monday that it had restored most services, but that access might still be slow or intermittent because of the number of people trying to access services. It said it was also still working to restore some functions.
In a letter to customers, Provost said the bank would be reversing monthly service fees for September, and opening some branches on Monday despite the statutory federal holiday as the bank tries to resolve the issues.
“We understand how precious your trust is, and we recognize that we have not delivered on it,” said Provost in the letter.
“My sincerest apologies for the inconvenience this outage may have caused you, your family, and your company.”
The bank said it would also work with clients who may have missed payments because of the outage, including help if someone’s credit score was affected because they couldn’t access their money.
For a while, Sam Bankman-Fried tried to convince politicians and the public that he was the next J.P. Morgan. Now, he has to convince a jury that he wasn’t, in reality, the next Bernie Madoff.
The trial of Bankman-Fried, the founder of the failed cryptocurrency brokerage FTX, will begin Tuesday with jury selection. Prosecutors from the Southern District of New York are expected to lay out a case against Bankman-Fried that alleges he stole billions of dollars in FTX customer deposits and used the money to fund his hedge fund, buy real estate, and make millions of dollars of illegal campaign donations to Democrats and Republicans in an attempt to buy influence over cryptocurrency regulation in Washington.
While the case will involve the complicated world of cryptocurrencies, prosecutors are expected to try to boil it down to the simplest of terms for jurors: Bankman-Fried took money from customers and used it in ways he wasn’t supposed to.
“Prosecutors are going to say, ‘look at where the money went and how it was spent,'” said Michael Zweiback, co-founder of the law firm Zweiback, Fiset & Zalduendo LLP, and a former federal prosecutor. “This case is less about the complicated investments and all about garden-variety fraud.”
From humble beginnings to having billions on paper
Before FTX collapsed and filed for bankruptcy last November, Bankman-Fried was one of the most powerful people in the cryptocurrency industry. “SBF” had an estimated net worth of $32 billion US last year, at least on paper. He interacted with former presidents, politicians on both sides of the aisle, celebrities, and CEOs. When smaller crypto firms started imploding in early 2022, Bankman-Fried told the public he would help prop up the market, prompting the comparisons with J.P. Morgan.
The 31-year-old Bankman-Fried founded FTX in 2019, and it grew rapidly. The son of Stanford University professors, who was known to play the video game League of Legends during meetings, Bankman-Fried attracted investments from the highest echelons of Silicon Valley. FTX quickly became the second-largest crypto brokerage behind Binance.
Bankman-Fried and his inner circle of executives ran their then-growing crypto empire from The Bahamas, out of the luxury apartment complex Albany, where celebrities like Tiger Woods and Justin Timberlake have vacation homes.
FTX had effectively two lines of business: a brokerage where customers could deposit, buy, and sell cryptocurrency assets on the FTX platform, and an affiliated hedge fund known as Alameda Research, which took highly speculative positions in various cryptocurrency investments.
As Alameda started to pile up losses during last year’s cryptocurrency market declines, prosecutors allege Bankman-Fried directed funds to be moved from FTX’s customer accounts to Alameda to plug holes in the hedge fund’s balance sheet.
The U.S. government has charged Samuel Bankman-Fried, the founder of now-defunct cryptocurrency exchange FTX, with a host of financial crimes after being arrested in the Bahamas. He faces decades in prison if convicted.
The house of cards that Bankman and his lieutenants built came crashing down in early November, when reports surfaced about the condition of Alameda’s balance sheet. Spooked investors, who had already seen several crypto firms collapse during the year, quickly pulled their money out of FTX and within days the firm was bankrupt.
John Ray III, the restructuring expert who was tasked with cleaning up FTX in bankruptcy, described the conditions inside of FTX as worse than Enron, long considered the benchmark for corporate malfeasance in popular culture.
Bankman-Fried is expected come face-to-face with his former lieutenants at FTX for the first time since its collapse.
Several of them have agreed to plead guilty to lesser crimes in exchange for testifying against him. This includes Caroline Ellison, who was the CEO of Alameda and Bankman-Fried’s off-and-on girlfriend, as well as FTX co-founder Gary Wang.
Ryan Salame, another top executive at FTX, pleaded guilty on Sept. 7 to making illegal campaign contributions to Republicans on behalf of Bankman-Fried, who was publicly making contributions to Democrats. It is not known whether Salame will testify against Bankman-Fried.
Ellison is expected to be the prosecution’s central witness. Prosecutors are likely to count on her to demonstrate that the collapse of FTX was not due to a few mistakes, as Bankman-Fried alleges, but to fraud. She has previously said in a statement through her lawyers that she knew funnelling FTX customers’ money into Alameda was wrong.
“I expect the government is going to be able to show that Bankman-Fried knew what he was doing was wrong, and here are the people in the room who can corroborate that story,” said Christine Adams, a former federal prosecutor and a partner at Adams, Duerk & Kamenstein.
The defence is expected to argue that while Bankman-Fried made some mistakes, the mistakes do not amount to fraud and FTX was just the latest casualty in the broad collapse of the cryptocurrency market last year. Until he had his computer privileges taken away by the presiding judge in the case, Bankman-Fried himself spent months reaching out to reporters and posting on social media to explain his actions.
Before his bail was revoked, Bankman-Fried had been permitted to live with his parents in their Palo Alto, Calif., home with strict rules limiting his access to electronic devices. Bankman-Fried was ordered to be jailed after Judge Lewis A. Kaplan said there was probable cause to believe he was trying to tamper with potential witnesses, including Ellison, in the case.
Crypto winter underway
Broadly, the crypto industry has still not recovered since FTX’s collapse. The prices of Ethereum and Bitcoin, the two most widely used cryptocurrencies, are still down two-thirds from where they were a year ago and the volume of trading in crypto is half what it was. The market for NFTs, artificially scarce digital objects meant to create unique digital versions of memorabilia or photographs, has all but evaporated. Roughly 3,000 NFTs trade hands daily now, compared to more than 40,000 a day a year ago, according to NonFungible.com.
Even Bankman-Fried’s former competitors are facing their own legal scrutiny. This summer the Securities and Exchange Commission brought charges against Binance and its founder Changpeng Zhao similar to the allegations against FTX, including commingling of customer funds with the firm’s investments. Coinbase, the publicly traded crypto exchange, has also been charged by the SEC with securities violations.