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Countries Crack Down on Speech Online, Says Report

Around the world, Internet freedom is deteriorating, with some governments taking down their mobile Internet service, restricting live video streaming and employing a digital army of pro-government commentators. These are some of the findings of “Freedom on the Net 2017,” an annual report by Freedom House, a global non-profit that tracks democracy and freedom around the world. According to the report, which covered June 2016 to May 2017, about half of the 65 countries assessed – which covers about 87 percent of all the people online globally - saw their Internet freedoms decline, with the Ukraine, Egypt and Turkey showing the most notable one-year erosion of freedoms. China remained the world’s worst abuser of Internet freedom, followed by Syria and Ethiopia, the report said. Sanja Kelly, director of the Freedom on the Net project at Freedom House, said the decline of Internet freedoms has coincided with the rise of Internet access worldwide and people increasingly turning to the Internet to promote democratic reforms and greater human rights. “One of the reasons why we are seeing greater restrictions is precisely because some of the leaders in authoritarian countries, in particular, have discovered the power of the Internet and are trying to come up with innovative methods to suppress that,” she said. Until recently, some governments in Africa and other parts of the world didn’t pay much attention to the Internet, focusing instead on traditional media, such as broadcast. That focus shifts when Internet penetration reaches 20 to 30 percent of the population, she said. “Suddenly the governments start taking note and we start seeing propaganda actions,” she said. Countries such as Zambia and Gambia have shut down mobile access to the Internet, particularly around elections. “Shutting down mobile Internet is such a blunt measure,” she said. “It really signals the government is willing to take it to the next level.” Some other key findings of the report: • Online manipulation tactics played a role in elections in 18 countries. • Governments in 30 countries promoted distorted online information, up from 23 the previous year, employing tools such as paid commentators and false news sites. • Half of all Internet shutdowns were focused on mobile connectivity, with most shutdowns happening in areas populated with ethnic or religious minorities. In October 2016, the Ethiopian, government shut down mobile networks for nearly two months as part of a state of emergency amid antigovernment protests. Belarus disrupted mobile connectivity to prevent livestreamed images from reaching mass audience. Bahrain has issued a specific law that news websites are prohibited from using live video on their websites. • In 30 countries, there have been physical reprisals for online speech, up from 20 countries in the prior year. Not long ago, some of these online suppression techniques were mostly employed by China and Russia. “The extent to which these techniques are being used and the number of countries where they are present is something in itself new,” said Kelly. “It seems like these techniques are spreading and some of the authoritarian countries like China and Russia are actually exporting these techniques,” Kelly said. “And some of the authoritarian regimes around the world are learning from example.”

Rohingya Exodus

Rohingya refugees from Myanmar are arriving in Malaysia, which could signal a dangerous new wave of people smuggling.

Silicon Valley Blasts US Senate Proposal to Tax Startup Options

A proposal by the U.S. Senate to change the way shares in startup companies are taxed incited panic and dread in Silicon Valley on Monday, with startup founders and investors warning of nothing less than the demise of their industry should the proposal become law. The provision in the Senate's tax reform plan, which appeared to catch the industry by surprise, involves the treatment of employee stock options. These options give the holder the right to purchase shares in the future at a set price and can be very valuable if a company does well and the share price increases. Options are often a major portion of the compensation for startup employees and founders, who take lower salaries in anticipation of a big payout if their startup takes off. Options typically vest over a four-year period. Senate Republicans have now proposed taxing those stock options as they vest and before startup employees have the opportunity to cash them in, resulting in annual tax bills that could easily climb into the tens of thousands of dollars, say startup founders and venture capitalists. "If there were a single piece of legislation to adversely affect startups, it would be this," said Venky Ganesan, managing director at venture capital firm Menlo Ventures. "Everyone is freaked out." Justin Field, vice president of government affairs at the National Venture Capital Association, said that the Senate's proposed tax change would be "crippling" to the startup industry. How far the provision gets remains to be seen. The National Venture Capital Association was successful in getting a similar proposal removed from the House tax bill, although it "didn't fully appreciate" the Senate's intention to add the tax provision, Field said. The association also helped to steer lawmakers away from a proposal discussed late last year to tax venture capitalists' profits on investments at a higher rate. Republican Senator Rob Portman of Ohio, a member of the Senate Committee on Finance, has filed an amendment to repeal the provision in the tax bill, according to his spokesman. A new proposal Under current tax code, employees are taxed only when they exercise their options. Options are exercised when the price they were granted at--known as the strike price--is lower than the share price, and some shares can then be sold to pay the taxes. But the Senate proposal would require startup employees to pay regular income tax on the value gain of their stock options even before they are exercised. These options are illiquid assets, and cannot be spent or saved. "What this would mean is every month, when your equity compensation vests a little bit, you will owe taxes on it even though you can't do anything with that equity compensation," Fred Wilson, a venture capitalist with Union Square Ventures, wrote on his blog Monday. For instance, if a startup employee receives stock options at a dollar per share, and the shares increase in value by $1 every year during the four-year vesting period, the employee would have to pay income tax on $1 per share after the first year, pay again on the $1 increase in value after the second year, and so on. When that employee owns hundreds of thousands and even millions of shares, that is a hefty bill to pay. And there is always the risk the startup will eventually fail. "This reform will force the average employee to pay taxes on that bet well before they even know if it's a winning ticket," said Amanda Kahlow, founder and executive chairman of marketing data startup 6sense. For startup founders in particular, such a tax bill could be ruinous. "It would mean that I would have to sell the company," said Shoaib Makani, founder and chief executive of long-haul trucking startup KeepTruckin. "I have zero net worth aside from the common stock I hold in the company. It would be impossible. I would be in default." Some executives in the startup industry, however, have pushed for companies to move toward bigger salaries so employees are not so dependent on options to buy a house or pay for other large expenses. And when startups suffer valuation cuts, employees can end up with worthless options. The Senate's proposal came as a revenue-generating measure to help offset tax breaks in the bill. A spokesman for Senator Orrin Hatch, a Republican and chairman of the Senate Committee on Finance, did not respond to requests for comment and other Republicans on the committee were not immediately available. A spokeswoman for Senator Ron Wyden, the committee's ranking member and a Democrat, said he was aware of concerns that the provision would limit startups' ability to attract talent.

Google Broadens Takedown of Extremist YouTube Videos

Alphabet's Google in the last few months has begun removing from YouTube extremist videos that do not depict violence or preach hate, YouTube said Monday, a major policy shift as social media companies face increasing pressure from governments. The new policy affects videos that feature people and groups that have been designated as terrorist by the U.S. or British governments but lack the gory violence or hateful speech that were already barred by YouTube. A YouTube spokesperson, who asked not to be named for security reasons, confirmed the policy in response to questions. The company would not specify when the policy went into effect. As YouTube terms already barred "terrorists" from using the service, the new policy keeps out videos uploaded by others that militants likely would try to distribute if they could have accounts, according to the spokesperson. Hundreds of videos of slain al-Qaida recruiter Anwar al-Awlaki lecturing on the history of Islam, recorded long before he advocated violence against the United States, were among those removed under the new policy, the spokesperson said. Governments and human rights groups have pressed YouTube for years to crack down on extremist videos. They argue that the propaganda radicalized viewers and contributed to deadly terror attacks. British Home Secretary Amber Rudd amplified the pressure during visits with tech companies in Silicon Valley in July and a speech in Washington, D.C., last week. European Union and U.S. lawmakers this year have threatened consequences for tech companies if concerns are not addressed. Legislation could resemble a German law approved in June to fine social media companies 50 million euros ($57 million) if hateful postings are not promptly removed. Looking for balance YouTube said discussions with outside experts prompted the new policy, but it was unclear why the company decided to act only recently. In June, the company announced that "inflammatory religious or supremacist content" that did not violate its policies would be allowed with warning labels and a restriction making them ineligible for ad revenue. At the time, Google General Counsel Kent Walker said in a blog post, "We think this strikes the right balance between free expression and access to information without promoting extremely offensive viewpoints." The latest step goes farther and was praised by critics such as Paul Barrett, deputy director of the New York University Stern Center for Business and Human Rights. "If the terrorist is in the business of recruiting and inciting people to make violent attacks, you've got to the draw the line" against any of their content, Barrett said. Blurry lines The new policy does not affect news clips or educational videos about terrorism. But YouTube will not always have an easy time distinguishing, experts said, pointing to tactics such as overlaying extremist commentary on news footage to get around censors. YouTube has resisted imposing more editorial control because it fears making it harder for important videos to get a wide audience, Juniper Downs, YouTube's global director of public policy, told a San Francisco conference sponsored by the Anti-Defamation League on Monday. "We will lose something very valuable if we completely transform the way these platforms work," she said during a panel discussion. Internet freedom advocates such as the Electronic Frontier Foundation have urged tech companies to be cautious and transparent in responding to government pressure. YouTube is relying on government lists of terrorists and terrorist groups for enforcement. Content moderators check the listings and make removal decisions after fielding reports from an automated system, users or partner organizations such as the Anti-Defamation League and The Institute for Strategic Dialogue. Al-Awlaki, whom the U.S. killed in a 2011 drone strike, was designated a terrorist by the U.S. Treasury the year prior. The New York Times first reported the removal of al-Awlaki videos.

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