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Facebook today announced it has filed suit in California against a domain registrar OnlineNIC and its proxy service ID Shield for registering domain names that pretend to be associated with Facebook, like www-facebook-login.com or facebook-mails.com, for example. Facebook says these domains are intentionally designed to mislead and confuse end users, who believe they’re interacting with Facebook.
These fake domains are also often associated with malicious activity, like phishing.
While some who register such domains hope to eventually sell them back to Facebook at a marked up price, earning a profit, others have worse intentions. And with the launch of Facebook’s own cryptocurrency, Libra, a number of new domain cybersquatters have emerged. Facebook was recently able to take down some of these, like facebooktoken.org and ico-facebook.org, one of which had already started collecting personal information from visitors by falsely touting a Facebook ICO.
Facebooks’ new lawsuit, however, focuses specifically on OnlineNIC, which Facebook says has a history of allowing cybersquatters to register domains with its privacy/proxy service, ID Shield. The suit alleges that the registered domains, like hackingfacebook.net, are being used for malicious activity, including “phishing and hosting websites that purported to sell hacking tools.”
The suit also references some 20 other domain names that are confusingly similar to Facebook and Instagram trademarks, it says.
OnlineNIC has been sued before for allowing this sort of activity, including by Verizon, Yahoo, Microsoft, and others. In the case of Verizon (disclosure: TechCrunch parent), OnlineNIC was found liable for registering over 600 domain names similar to Verizon’s trademark, and the courts awarded $33.15 million in damages as a result, Facebook’s filing states.
Facebook is asking for a permanent injunction against OnlineNIC’s activity as well as damages.
The company says it took this issue to the courts because OnlineNIC has not been responsive to its concerns. Facebook today proactively reports instances of abuse with domain name registrars and their privacy/proxy services, and often works with them to take down malicious domains. But the issue is widespread — there are tens of millions of domain names registered through these services today. Some of these businesses are not reputable, however. Some, like OnlineNIC, will not investigate or even respond to Facebook’s abuse reports.
The news of the lawsuit was previously reported by Cnet and other domain name news sources, based on courthouse filings.
Attorney David J. Steele, who previously won the $33 million judgement for Verizon, is representing Facebook in the case.
“By mentioning our apps and services in the domain names, OnlineNIC and ID Shield intended to make them appear legitimate and confuse people. This activity is known as cybersquatting and OnlineNIC has a history of this behavior,” writes Facebook, in an announcement. “This lawsuit is one more step in our ongoing efforts to protect people’s safety and privacy,” it says.
OnlineNIC has been asked for comment and we’ll update if it responds.
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1. Jack Dorsey says Twitter will ban all political ads
Arguing that “internet political ads present entirely new challenges to civic discourse,” CEO Jack Dorsey announced that Twitter will be banning all political advertising — albeit with “a few exceptions” like voter registration.
Not only is this a decisive move by Twitter, but it also could increase pressure on Facebook to follow suit, or at least take steps in this direction.
2. Apple beats on Q4 earnings after strong quarter for wearables, services
Apple’s iPhone sales still make up over half of its quarterly revenues, but they are slowly shrinking in importance as other divisions in the company pick up speed.
3. Facebook shares rise on strong Q3, users up 2% to 2.45B
More earnings news: Despite ongoing public relations crises, Facebook kept growing in Q3 2019, demonstrating that media backlash does not necessarily equate to poor business performance.
4. Driving license tests just got smarter in India with Microsoft’s AI project
Hundreds of people who have taken the driver’s license test in Dehradun (the capital of the Indian state of Uttarakhand) in recent weeks haven’t had to sit next to an instructor. Instead, their cars were affixed with a smartphone that was running HAMS, an AI project developed by a Microsoft Research team.
5. Crunchbase raises $30M more to double down on its ambition to be a ‘LinkedIn for company data’
Good news for our friends at Crunchbase, which got its start as a part of TechCrunch before being spun off into a separate business several years ago. CEO Jager McConnell also says the site currently has tens of thousands of paying subscribers.
6. Deadspin writers quit after being ordered to stick to sports
The relationship between new management at G/O Media (formerly Gizmodo Media Group/Gawker Media) and editorial staff seems to have been deteriorating for months. This week, it turned into a full-on revolt over auto-play ads and especially a directive that Deadspin writers must stick to sports.
7. What Berlin’s top VCs want to invest in right now
As we gear up for our Disrupt Berlin conference in December, we check in with top VCs on the types of startups that they’re looking to back right now. (Extra Crunch membership required.)
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Twitter founder and CEO Jack Dorsey announced abruptly — though the timing was certainly not accidental — that the platform would soon disallow any and all political advertising. This is the right thing to do, but it’s also going to be hard as hell for a lot of reasons. As usual in tech and politics, no good deed goes unpunished.
Malicious actors state-sponsored and otherwise have and will continue to attempt to influence the outcome of U.S. elections via online means including political ads and astroturfing. Banning such ads outright is an obvious, if rather heavy-handed solution — but given that online platforms seem to have made little progress on more targeted measures, it’s the only one realistically available to deploy now.
“Not allowing for paid disinformation is one of the most basic, ethical decisions a company can make,” wrote Representative Alexandria Ocasio-Cortez (D-NY) in a tweet following the news. “If a company cannot or does not wish to run basic fact-checking on paid political advertising, then they should not run paid political ads at all.”
One of the reasons Facebook has avoided restricting political ads and content is that by doing so it establishes itself as the de facto arbiter between “appropriate” and “inappropriate,” and the fractal-complex landscape that creates across thousands of cultures, languages, and events. Don’t cry for Mark Zuckerberg, though — this is a monster of his own creation. He should have retired when I suggested it.
But Twitter’s decision to use a sledgehammer rather than a scalpel doesn’t remove the inherent difficulties in the process. Twitter is just submitting itself for a different kind of punishment. Because instead of being the arbiter of what is appropriate, it will be the arbiter of what is political.
This is slightly less fraught than Facebook’s task, but Twitter will not be able to avoid accusations — perhaps even true ones — of partisanship and bias.
For instance, the fundamental decision to disallow political advertising seems pretty straightforward and nonpartisan. Incumbents rely on traditional media more and progressives tend to be younger and more social media–savvy. So is this taking away a tool suited to left-leaning challengers? But incumbents tend to have bigger budgets and their spend on social media has been increasing, so could this be considered a way to curb that trend? Who this affects and how is not a clear-cut fact but something campaigns and pundits will squabble about endlessly.
Or consider the announcement Dorsey made right off the bat that “ads in support of voter registration will still be allowed.” Voter registration is a good nonpartisan goal, right? In fact it’s something many conservative lawmakers have consistently opposed, because unregistered voters, for a multitude of reasons, skew toward the liberal side. So this too will be considered a partisan act.
Twitter will put out official guidelines in a few weeks, but it’s hard to see how they can be satisfactory. Will industry groups be able to promote tweets about how their new factory is thriving because of a government grant? Will an advocacy organization be able to promote a tweet about a serious situation on the border? Will news outlets be able to promote a story about the election? What about a profile of a single candidate? What about an op-ed on an issue?
The difference between patrolling the interior of the politics world, and patrolling its borders, so to speak, may appear significant — but it’s really just a different kind of trouble. Twitter is entering a world of pain.
But at least it’s moving forward. It’s the right decision, even if it’s a hard one and could hit the bottom line pretty hard (not that Twitter has ever cared about that). The decision to do this while Facebook is dismantling its credibility with a series of craven, self-interested actions is a canny one. Even if Twitter fails to get this right, it can at least say it’s trying.
And lastly it should be said that it also happens to be a good choice for users and voters, a rare exception to the parade of user-hostile decisions coming out of the big tech and media companies. Going into an election year, we can use all the good news we can get.
As Jack Dorsey announced his company Twitter would drop all political ads, Facebook CEO Zuckerberg doubled-down on his policy of refusing to fact check politicians’ ads. “At times of social tension there has often been an urge to pull back on free expression . . . We will be best served over the long term by resisting this urge and defending free expression.”
Still, Zuckerberg failed to delineate between freedom of expression, and freedom of paid amplification of that expression which inherently favors the rich.
During today’s Q3 2019 earnings call where Facebook beat expectations and grew monthly users 2% to 2.45 billion, Zuckerberg spent his time defending the social network’s lenient political ad policy.
One clear objective was to dispel the idea that Facebook was motivated by greed to keep these ads. Zuckerberg explained “We estimate these ads from politicians will be less than 0.5% of our revenue next year.” For reference, Facebook earned $66 billion in the 12 months ending Q3 2019, so Facebook might earn around $330 million to $400 million in political ads next year.
Zuckerberg also said that given Facebook removed 50 million hours per day of viral video watching from its platform to support well-being which hurt ad viewership and the company’s share price, Facebook clearly doesn’t act solely in pursuit of profit.
Facebook’s CEO also tried to bat down the theory that Facebook is allowing misinformation in political ads to cater to conservatives or avoid calls of bias from them. “Some people say that this is just all a cynical political calculation and that we’re acting in a way that we don’t really believe because we’re just trying to appease conservatives” he said, responding that “frankly, if our goal was that we’re trying to make either side happy then we’re not doing a very good job because I’m pretty sure everyone is frustrated.”
Instead of baning political ads, Zuckerberg voiced support for increasing transparency about how ads look, how much is spent on them, and where they’re run. “I believe that the better approach is to work to increase transparency. Ads on Facebook are already more transparent than anywhere else. We have a political ads archive so anyone can scrutinize every ad that’s run.”
He mentioned that political ads are run by “Google, YouTube, and most internet platforms”, seeming to stumble for a second as he was likely prepared to cite Twitter too until it announced it would drop all political ads an hour earlier.
Dorsey had tweeted that “We’ve made the decision to stop all political advertising on Twitter globally. We believe political message reach should be earned, not bought.”
Twitter’s CEO took some clear swipes at Zuckerberg, countering his common arguments for allowing misinformation in politician’s ads. “Some might argue our actions today could favor incumbents. But we have witnessed many social movements reach massive scale without any political advertising. I trust this will only grow.” Given President Trump had outspent all Democratic candidates on Facebook ads as of March of this year, it’s clear that deep-pocketed incumbents could benefit from Facebook’s policy.
Trump continues to massively outspend Democratic rivals on Facebook ads. Via NYT
Miming Facebook’s position, Dorsey tweeted “It‘s not credible for us to say: ‘We’re working hard to stop people from gaming our systems to spread misleading info, buuut if someone pays us to target and force people to see their political ad…well…they can say whatever they want!”
Despite ongoing public relations crises, Facebook kept growing in Q3 2019, demonstrating that media backlash does not necessarily equate to poor business performance.
Facebook reached 2.45 billion monthly users, up 1.65 percent from 2.41 billion in Q2 2019 when it grew 1.6 percent, and it now has 1.62 billion daily active users, up 2 percent from 1.587 billion last quarter when it grew 1.6 percent. Facebook scored $17.652 billion of revenue, up 29 percent year-over-year, with $2.12 in earnings per share.
Facebook’s earnings beat expectations compared to Refinitiv’s consensus estimates of $17.37 billion in revenue and $1.91 earnings per share. Facebook’s quarter was mixed compared to Bloomberg’s consensus estimate of $2.28 EPS. Facebook earned $6 billion in profit after only racking up $2.6 billion last quarter due to its SEC settlement.
Facebook shares rose to 1.84% in after-hours trading to $191.71 after earnings were announced, following a day where it closed down 0.56% at $188.25.
Notably, Facebook gained 2 million users in each of its core US & Canada and Europe markets that drive its business, after quarters of shrinkage, no growth, or weak growth there in the past 2 years. Average revenue per user grew healthily across all markets, boding well for Facebook’s ability to monetize the developing world where the bulk of user growth currently comes from.
Facebook says 2.2 billion users access Facebook, Instagram, WhatsApp, or Messenger every day, and 2.8 billion use one of this family of apps each month. That’s up from 2.1 billion and 2.7 billion last quarter. Facebook has managed to stay sticky even as it faces increased competition from a revived Snapchat, and more recently TikTok. However, those rivals might more heavily weigh on Instagram, for which Facebook doesn’t routinely disclose user stats.
Facebook’s earnings announcement was somewhat overshadowed by Twitter CEO Jack Dorsey announcing it would ban all political ads — something TechCrunch previously recommended social networks do. That move flies in the face of Facebook CEO Mark Zuckerberg’s staunch support for allowing politicians to spread misinformation without fact-checks via Facebook ads. This should put additional pressure on Facebook to rethink its policy.
Overall, it was another rough quarter for Facebook’s public perception as it dealt with outages and struggled to get buy-in from regulators for its Libra cryptocurrency project. Former co-founder Chris Hughes (who I’ll be leading a talk with at SXSW) campaigned for the social network to be broken up — a position echoed by Elisabeth Warren and other presidential candidates.
The company did spin up some new revenue sources, including taking a 30% cut of fan patronage subscriptions to content creators. It’s also trying to sell video subscriptions for publishers, and it upped the price of its Workplace collaboration suite. But gains were likely offset as the company continued to rapidly hire to address abusive content on its platform, which saw headcount grow 28% year-over-year to 43,000. There are still problems with how it treats content moderators, and Facebook has had to repeatedly remove coordinated misinformation campaigns from abroad. Appearing concerned about its waning brand, Facebook moved to add “from Facebook” to the names of Instagram and WhatsApp.
While it escaped with just a $5 billion fine as part of its FTC settlement that some consider a slap on the wrist, especially since it won’t have to significantly alter its business model. But the company will have to continue to invest and divert product resources to meet its new privacy, security, and transparency requirements. These could slow its response to a growing threat: Chinese tech giant ByteDance’s TikTok.
CEO Jack Dorsey just announced, via tweet, that Twitter will be banning all political advertising — with a few exceptions like voter registration.
“We believe political message reach should be earned, not bought,” Dorsey said.
He also said the company will share the final policy by November 15, and that it will start enforcing the policy on November 22.
We’ve made the decision to stop all political advertising on Twitter globally. We believe political message reach should be earned, not bought. Why? A few reasons…
— jack
(@jack) October 30, 2019
Updating
