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When to put data pipelines out to pasture

Protocol Policy

Hello, and welcome to Protocol Policy! Privacy by Design legislation is forcing tech companies to answer tough questions on whether to ditch their data pipelines; NetChoice and CCIA filed an emergency application asking the Supreme Court to block the Texas social media law for violating the First Amendment; and Samsung reportedly warned its clients to expect higher chip manufacturing prices.

It’s never the right time …

When is it time to say goodbye to your data pipelines? For a long time, the answer was “almost never.” But Privacy by Design legislation could force tech companies to make a choice: either start from scratch or try to fix data pipelines that are old, extraordinarily complex and already noncompliant.

Researchers already have a firm grasp on ways to make existing algorithms more privacy-preserving.

  • K-anonymization, for example, is a user privacy technique that ensures data is sufficiently aggregated such that no individual can be identified by combined factors such as hometown and employment.
  • Differential privacy, a standard that has been studied for over a decade, guarantees that someone observing the outputs of an algorithm cannot know whether it included data from a particular individual.
  • For many years now, Big Tech engineers have studied, applied and occasionally advanced these privacy standards.

Adding privacy protections doesn’t necessarily make systems worse. “We shouldn’t be surprised that accuracy also depends on the context,” Ben Fish, an assistant professor of computer science and engineering at the University of Michigan, told Protocol. “But it is far from guaranteed that privacy techniques will make a system worse — they can make a system better.”

But the problem extends way beyond trying to layer privacy mechanisms on top of existing algorithms. Companies often don’t have visibility into where their data is being used and stored, according to Balaji Ganesan, CEO and co-founder of data governance startup Privacera. “The challenge is really understanding where that subject data is,” Ganesan said.

  • As Meta engineers put it in a leaked internal document: “We do not have an adequate level of control and explainability over how our systems use data, and thus we can’t confidently make controlled policy changes or external commitments.” (Meta told Motherboard the document “was never intended to capture all of the processes we have in place to comply with privacy regulations” — see the full response here.)
  • “I’m sure all the major tech companies like Google and Twitter — the big tech giants — are facing this issue just because [of] the scale of their operations,” Hana Habib, a postdoctoral researcher at Carnegie Mellon University, told Protocol.

To comply with user privacy regulations, companies need to build data pipelines from the ground up, said Jane Im, a Ph.D. candidate in computer science and engineering at the University of Michigan.

  • Of course, that’s easier said than done. For tech companies, starting over would require engineers to roll out critical data infrastructure changes without disrupting day-to-day operations.
  • Executives must choose between allocating resources to privacy initiatives and other business priorities, according to Ganesan. “It always boils down to, at the top level: If you have 10 things to do and if you have resources to spend on three, which ones would you pick?” he said.
  • Assigning those resources is obviously costly, so the challenge for regulators is making the penalties for violators costly enough to push privacy up on the priority list.
— Hirsh Chitkara (email | twitter)

In Washington

NetChoice and CCIA filed an emergency application asking the Supreme Court to toss Texas social media law HB 20, which prohibits social media platforms from moderating content on the basis of viewpoint. The two tech industry groups argue HB 20 violates their members’ First Amendment rights. The emergency application asks the Supreme Court to reinstate an injunction while an appeals case goes through the Fifth Circuit.

Sen. Elizabeth Warren and Reps. Alexandria Ocasio-Cortez and Cori Bush sent a second letter to Amazon reprimanding the ecommerce giant for its handling of worker safety issues during the Edwardsville tornado. The letter follows up on an OSHA report from April that found flaws in Amazon’s response to the tornado, though OSHA declined to issue any fines. Six workers died in the incident, including one who texted his girlfriend, “Amazon won’t let us leave.”


New polling shows that American voters do not see regulating tech companies as a priority. Their top concerns are strengthening the national economy (38%), followed by controlling inflation (37%). By contrast, only 5% of respondents prioritized regulating tech companies.

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On Protocol

Texas’ social media “censorship” law could give Supreme Court Justice Clarence Thomas the opportunity he’s been seeking to curb Section 230. Thomas has in the past argued that tech platforms are "sufficiently akin" to common carriers, which means the court must adjust how it applies legal doctrines to “highly concentrated, privately owned information infrastructure.”

Last week’s Braintrust seeks to answer, “What can make even the best AI strategy fail?” From Oracle CIO Jae Evans: “A lot of people would be surprised at the extent to which AI is inherently domain-specific — at times even organization-specific — and definitions of terms can vary greatly.”

The era of easy VC money appears to be nearing an end as the markets adjust to a tighter money supply. One investor told Protocol’s Biz Carson: “The firehose of money that has been pointed at these companies is going to be 70[%}-80% smaller.”

Around the world

The U.S. and EU plan on announcing a joint effort to boost semiconductor investments without encouraging a subsidy race, according to Reuters. More details are expected to emerge at the U.S.-EU Trade and Technology Council meeting, which concludes today.

Since March, Alibaba Group laid off around 40% of employees in AliExpress Russia, its joint venture in Russia,according to Nikkei Asia. AliExpress Russia had been the most visited ecommerce site in Russia; prior to the wave of layoffs, it had around 1,000 employees.

Indonesian President Joko Widodo and Elon Musk have been discussing a potential investment in Indonesia’s nickel industry, which could help Tesla build its supply of EV batteries.

In Q1 2022 earnings, more than 180 companies mentioned China’s COVID-19 lockdowns as a source of disruption,according to analysis performed by Bloomberg News. The list included Tesla, Arizona-based chipmaker Microchip Technology Inc. and computer components manufacturer MSI.

In the C-suite

Jeff Bezos accused President Biden of “misdirection” after Biden suggested making wealthy corporations pay “their fair share” would bring down inflation. Bezos responded: “Raising corp taxes is fine to discuss. Taming inflation is critical to discuss. Mushing them together is just misdirection.”

“The bitcoin network is not a payments network and it is not a scaling network,” FTX founder Sam Bankman-Fried told the Financial Times. He added: “It has to be the case that we don’t scale this up to the point where we’re spending 100 times as much eventually as we are today on energy costs for mining.” He recently purchased a 7.6% stake in Robinhood that set off rumors of an eventual acquisition attempt.

In data

15%-20%: That’s the anticipated price hike for Samsung’s semiconductor manufacturing services, according to Bloomberg. The report found that Samsung’s business planning had been hampered by macroeconomic factors such as the war in Ukraine, lockdowns in China and inflation.


New polling shows voters' top tech policy concerns are cybersecurity and data privacy. Only 7% of respondents prioritized antitrust action and 1% prioritized changes to app store rules. In fact, the majority (58%) believe the pending tech antitrust legislation would cause more harm than help to consumers.

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Coinbase signed its letter to shareholders with “#wagmi” (we’re all gonna make it) in an attempt to strike an optimistic note on what has been a decidedly difficult period for the company. COIN is now trading for about 20 cents on the dollar relative to all-time highs. I can’t be the only one who can only think of Randi Zuckerberg’s admittedly catch “#WAGMI” rock anthem music video, which has now accumulated over 3.8 million views.

Thanks for reading — see you Wednesday!

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