Year: 2018

There’s nothing like a great new toy to make you mourn the ghost of bygone youth. I don’t have the opportunity to try many out at this job, but when I do, there’s an invariable pang of jealousy for kids today who have much broader access to sophisticated playthings than we did in our day.

Nerf Laser Ops Pro is a pretty solid example of this. It finds the company combining a solid bit of nostalgic IP with some modern technology, to good effect. The new toys, which hit virtual store shelves next Monday, look like a Nerf, play like a Lazer Tag and incorporate your smartphone to help take them a step beyond what either line has offered in the past.

Arguably the most compelling bit in all of this is the price point, with none of the sets running more than $50. I have a vague memory of the original Lazer Tag system being prohibitively expensive in my youth — or maybe that’s just what my parents told me because they didn’t want any fake guns lying around the house.

There was, after all, some controversy with the line from the outset. Here’s a pretty depressing story from the height of Lazer Tag’s success that no doubt caused its manufacturers to rethink the product’s presentation. In 1998, the brand was purchased by Hasbro, and in 2012, it was rolled into the Nerf line.

The foam gun brand has always offered a warmer, fuzzier take on toy weapons, and that’s very much at play here. The likelihood of ever mistaking Nerf Laser Ops Pro for a real gun is slim to none. That said, true diehards will likely miss the Knight Rider-esque black and red vibe of the original product. But if that’s enough to ruin your childhood, it was probably already on shaky ground to begin with.

The more important question is whether Laser Ops Pro is fun. I only played with it briefly today (reminder: I’m an adult with a job), but I can unequivocally state “yes” on that front. Habro’s done a good job marrying the new with the old here. The guns are big and plasticky and hearty, combining digital technology with mechanical haptic feedback.

Smartphone use is optional, which is good for the little ones. When you add that in, however, you get the benefit of things like leaderboards, states and GPS tracking (all secure and private, the company assures me). There’s also a fun little AR shooting game you can play when you’re all by your lonesome.

The blasters will be available online July 16, with retail availability next month. They’re a solid summer purchase for parents looking for ways to get their video game-obsessed offspring up off the couch while the weather’s still nice.

A former Apple employee that downloaded a plan for a self-driving car circuit board and booked a flight to China was arrested at the San Jose airport on July 7th. The man, Xiaolang Zhang, had made known that he was going to go work for a Chinese self-driving car startup and was bouncing with the secrets, perhaps as a bounty or shortcut.

The charges were reported earlier today by Reuters. An Apple spokesperson provided a statement to TechCrunch.

“Apple takes confidentiality and the protection of our intellectual property very seriously. We’re working with authorities on this matter and will do everything possible to make sure this individual and any other individuals involved are held accountable for their actions.”

Apple has been chiseling away at various angles on the self-driving problem for a few years now. An initial effort, project Titan, was significantly altered and some of the employees involved left Apple. Many on that project remain though and are working on other projects inside the company including computer vision, mapping and AI. There are still many opportunities for Apple to be involved in self-driving, whether that’s by providing a software platform or certain hardware components. Whatever they are doing it’s unlikely they’re happy about anyone stealing the work they’ve done so far.

A chain of California shopping centers is sharing its license plate reader data with a well-known U.S. Immigration and Customs Enforcement (ICE) contractor, giving that agency the ability to track license plate numbers it captures in near real-time.

A report from the Electronic Frontier Foundation revealed that real estate group the Irvine Company shares that data with Vigilant Solutions, a private surveillance tech company that sells automated license plate recognition (ALPR) equipment to law enforcement and government agencies. The Irvine Company owns nearly 50 shopping centers across California with locations in Irvine, La Jolla, Newport Beach, Redwood City, San Jose, Santa Clara and Sunnyvale. ICE finalized its contract with Vigilant Solutions in January of this year.

EFF Investigative Researcher Dave Maass discovered Irvine Group’s data sharing activities in a page detailing its ALPR policy, a disclosure required by California law. Ironically, while Irvine Group’s ALPR usage and privacy policy does describe its own practice of deleting the license data it collects once transmitted, it admits that it does in fact transmit all of it straight to Vigilant Solutions, which has no such qualms.

As Vigilant describes, the key offering in its “advanced suite” of license reading tech is unfettered access to a massive trove of license plate data:

“A hallmark of Vigilant’s solution, the ability for agencies to share real-time data nationwide amongst over 1,000 agencies and tap into our exclusive commercial LPR database of over 5 billion vehicle detections, sets our platform apart. “

The Irvine Group is only one example of this kind of data sharing, but it illustrates the ubiquity of the kind of privately owned modern surveillance technology at the fingertips of anyone willing to pay for it. While we’re likely to see more state level legal challenges to license plate tracking technology, for now the powerful pairing of license plate numbers and location data is mostly fair game for anyone who wants to make money off of collecting and aggregating it.

Over the weekend, word broke that Univision was planning to sell off Fusion Media, the brand portfolio containing a chunk of The Onion and various media properties purchased in a Gawker fire sale less than two years back. Today, the company confirmed with TechCrunch that it has “initiated a formal process to explore the sale” of both the Gizmodo Media Group and The Onion.

The company isn’t offering much information beyond what’s currently available in the press release, but the proposed sale includes a bevy of strong media brands, including Gizmodo, Jezebel, Deadspin, Lifehacker, Splinter, The Root, Kotaku, Jalopnik, The Onion, Clickhole, The A.V. Club and The Takeout.

The Spanish language broadcaster purchased the Gizmodo assets from Gawker Media for $135 million back in 2016, after the company was rocked by a Peter Thiel-backed Hulk Hogan lawsuit. The portfolio was rolled up along with Fusion TV into Fusion Media, a millennial-focused pivot into digital by a brand that had traditionally had issues keeping up with the times.

But Univision’s year has been seen a CEO shuffle and on-going restructuring with multiple rounds of layoffs. Univision reportedly attempted to sell a stake in the company last year, but ultimately failed due to “skittish” investors.

This time out, it seems Univision is all in, though it notes that a sale is anything but guaranteed, writing, “There is no assurance that the process to explore the sale of these assets will result in any transaction or the adoption of any other strategic alternative.”

Over the weekend, word broke that Univision was planning to sell off Fusion Media, the brand portfolio containing a chunk of The Onion and various media properties purchased in a Gawker fire sale less than two years back. Today, the company confirmed with TechCrunch that it has “initiated a formal process to explore the sale” of both the Gizmodo Media Group and The Onion.

The company isn’t offering much information beyond what’s currently available in the press release, but the proposed sale includes a bevy of strong media brands, including Gizmodo, Jezebel, Deadspin, Lifehacker, Splinter, The Root, Kotaku, Jalopnik, The Onion, Clickhole, The A.V. Club and The Takeout.

The Spanish language broadcaster purchased the Gizmodo assets from Gawker Media for $135 million back in 2016, after the company was rocked by a Peter Thiel-backed Hulk Hogan lawsuit. The portfolio was rolled up along with Fusion TV into Fusion Media, a millennial-focused pivot into digital by a brand that had traditionally had issues keeping up with the times.

But Univision’s year has been seen a CEO shuffle and on-going restructuring with multiple rounds of layoffs. Univision reportedly attempted to sell a stake in the company last year, but ultimately failed due to “skittish” investors.

This time out, it seems Univision is all in, though it notes that a sale is anything but guaranteed, writing, “There is no assurance that the process to explore the sale of these assets will result in any transaction or the adoption of any other strategic alternative.”

For the last decade, the largest technology companies have increasingly looked outside of tech to grow their operations. From automotive to retail to groceries, these companies use massive competitive advantages in the form of data, consumer relationships and software engineers to fundamentally change markets.

Now, companies like Apple and Google and Amazon are eyeing innovation across the insurance landscape. For example, Amazon is teaming with JPMorgan and Berkshire Hathaway to create a new way to approach health insurance, focusing first on the group’s own employees. On the retail side, Amazon is selling product insurance and extended warranties at the point of sale and investing in insurtech startups. Meanwhile, Tesla is developing an insurance product specific to the Model S. Waymo, Uber and Lyft are certainly having similar conversations internally.

Obviously, these are all preliminary steps. Insurance is a complex, multifaceted and, yes, risky business. In the end, whether or not companies like Amazon become insurers themselves depends on their appetite for risk, their ability to innovate and the potential pay off.

To start, let’s look at the reasons why tech giants are well-suited to upend the space.

They have direct consumer relationships

Like many businesses, a large aspect of a successful insurance business is distribution. Just look at brokers, which are a major means of distribution for insurers today — their cut can be up to 30 percent of the cost of an insurance policy. Brokers also see better margins than insurers themselves, usually around 10 percent net margins. Facebook, Amazon, Apple, Microsoft and Google (FAAMG) possess direct relationship with billions of consumers and could, over time, disrupt the broker business.

They have deep data and analytics

The big secret in insurance is that insurers are actually terrible at using their data. Different departments (marketing, underwriting, claims) rarely work together, and their data tends to be siloed. FAAMG, on the other hand, has put data at the core of their offering; they know how to leverage analytics and AI to create better products.

They also have access to data that insurers can only dream of having: global geospatial imagery of homes, infrastructure and buildings; location, browsing and advertising data; even real-world behavioral data from smartphones and IoT devices. Combining all these signals can create a very complete picture of human behavior, interests and risk profile.

They have an army of software engineers and a monopoly of AI talent

Tech innovation has long been a challenge for insurance incumbents. Old systems are difficult to displace in any industry, but the complexity of insurance, tradition of relying on the past to predict the future and silos of data can make it a Herculean effort. Tech giants, on the other hand, regularly cannibalize their own revenue with new products and can enlist tens of thousands of engineers to develop fantastic digital customer experiences and bring large-scale efficiencies to back-end insurance systems through better software and AI.

So, yes, FAAMG has a number of major advantages over insurance incumbents. But for tech giants, new verticals and initiatives are also longer-term decisions around margins and market scope. It’s an obvious point, but if FAAMG wants to jump into insurance, they’ll want a decent return. Can they find that in insurance?

There are a number of reasons why it might be a tough sell.

Ultra-low margins

Average insurance net margins are 3-8 percent, and 25-30 percent gross margins, which are meager for tech standards. Software companies average around 80 percent gross margins and around 15 percent net margins. Even consumer hardware like the iPhone — a costly endeavor by software standards — sees 55-60 percent gross margins.

Within insurance, health tends to have the highest margins, followed by property and casualty (i.e. home and auto insurance), followed by life insurance. So if anything, healthcare is probably the closest thing to “low-hanging fruit” — but it’s not exactly attractive to most companies outside insurance.

High risk

Such low margin also means that one major event can destroy a company’s balance sheet for an entire fiscal year (think disasters like hurricanes, fire, flood, etc.). In addition, tech companies don’t have the historical data and actuarial scientists that insurers have spent decades building up, so they might be more prone to misjudging their overall risk exposure.

Complex administration

For insurers, evaluating and underwriting policies is an expensive endeavor. Claims, customer support and back-end are costly and complex. That said, most insurance companies are already outsourcing the development of core administration software to companies like GuideWire and Duck Creek, and then customizing the software to meet their specific needs at the last mile. So it’s not as huge of a leap as it once was to think that the likes of Amazon or Google could develop similar infrastructure in-house to rival incumbent systems. Or, they could easily buy one of the development companies outright and subsume that expertise.

Amazon makes a big move

Still, the creation and underwriting of policies is something tech giants have avoided to date. Amazon has been working on warranties for certain products as an add-on to their margins — but these were backed and administered by The Warranty Group rather than Amazon itself. Before that, Amazon acted as a sales channel for SquareTrade and built up an understanding of the warranty business before diving in deeper. Tesla, as another example, announced it was selling Tesla-branded tailor-made policies for its vehicle owners, but those policies were backed by Liberty Mutual.

Then, in January, Amazon made a well-publicized announcement, in tandem with Berkshire Hathaway and JPMorgan, around its intention to create a private healthcare option for their workers. We don’t know much about the initiative, but Amazon has been working on a healthcare technology project codenamed 1492 for some time. Rumors point to a “platform for electronic medical record data, telemedicine, and health apps.” Amazon’s technology paired with Berkshire Hathaway’s insurance knowledge and JPMorgan’s financial expertise makes the creation of a new health insurance entity more likely. If so, this would be a significant shot across the bow of U.S. healthcare insurers.

Of all the tech giants, it would not be a surprise if Amazon were the first to jump into insurance. Amazon has mastered the art of building massive businesses off of razor-thin margins. They’re also targeting health insurance, which presents the best margin opportunity. They can test their offering within the company first and then scale across their massive consumer base. Finally, they have a history of building out complex back-end services for their own purposes before offering it to their customers — just look at AWS.

Will other tech companies follow Amazon’s lead?

Signs point to yes. Recently, Google’s sister company, Verily, “has been in talks with insurers about jointly bidding for contracts that would involve taking on risk for hundreds of thousands of patients.” In addition, Apple will be opening a network of medical clinics for its employees.

It may not stop at health insurance. There’s no question technology is changing human behavior and society, and as the developers of much of this new tech, FAAMG will inevitably be pushed closer to other sectors of insurance, as well, including home and auto.

Autonomous vehicle fleets will make companies like Tesla, Google and Uber the owners of tens of thousands of cars, subjecting them to the risk that comes with that. Meanwhile, IoT hardware and accompanying services are bringing tech giants into the living room. That’s a literal statement when it comes to Amazon Key. Nest, Google Home and Amazon Echo are more innocuous, but provide all sorts of data about what’s going on inside the home and could, someday, help inform the creation of real-time home insurance policies.

East Asia as a leading indicator?

It also can be instructive to look at markets outside the U.S. In East Asia, businesses are taking a more aggressive posture vis-à-vis insurance. Baidu, Alibaba, Rakuten, Tencent and LINE have all shown some level of appetite for offering their own insurance products. These companies can verify identities, enforce trust and access the behavioral and financial data necessary to provide better policies than many insurance incumbents in those countries.

They also are exploring new ways of looking at risk and changing user behavior: Tencent’s WeSure is paying users to stay healthy by walking more, while Yongqianbao, a lending company, tracks unconventional digital data to determine credit risk, such as phone brand (iPhone users are less likely to default) and whether they let their phone batteries run down.

Still, the question remains: What role will tech giants in the U.S. play in the insurance landscape? Will they act as a channel for existing insurers, as a provider of data and analytics to those insurers or even as a provider of direct insurance themselves?

Insurance may not be lucrative-enough for tech giants in the short-term, but as real-time data and analytics are used to create insurance policies, tech giants may be tempted to use their troves of data to compete with insurers directly. Until then, we can expect insurers and tech giants to form alliances, as they have in East Asia, with tech companies using insurance and warranties as a value-add for their customers, and insurers using tech companies as a sales channel. Regardless, the story of FAAMG (and others) in insurance is undoubtedly just getting started, and we’ll have to check back in as the landscape develops.

For the last decade, the largest technology companies have increasingly looked outside of tech to grow their operations. From automotive to retail to groceries, these companies use massive competitive advantages in the form of data, consumer relationships and software engineers to fundamentally change markets.

Now, companies like Apple and Google and Amazon are eyeing innovation across the insurance landscape. For example, Amazon is teaming with JPMorgan and Berkshire Hathaway to create a new way to approach health insurance, focusing first on the group’s own employees. On the retail side, Amazon is selling product insurance and extended warranties at the point of sale and investing in insurtech startups. Meanwhile, Tesla is developing an insurance product specific to the Model S. Waymo, Uber and Lyft are certainly having similar conversations internally.

Obviously, these are all preliminary steps. Insurance is a complex, multifaceted and, yes, risky business. In the end, whether or not companies like Amazon become insurers themselves depends on their appetite for risk, their ability to innovate and the potential pay off.

To start, let’s look at the reasons why tech giants are well-suited to upend the space.

They have direct consumer relationships

Like many businesses, a large aspect of a successful insurance business is distribution. Just look at brokers, which are a major means of distribution for insurers today — their cut can be up to 30 percent of the cost of an insurance policy. Brokers also see better margins than insurers themselves, usually around 10 percent net margins. Facebook, Amazon, Apple, Microsoft and Google (FAAMG) possess direct relationship with billions of consumers and could, over time, disrupt the broker business.

They have deep data and analytics

The big secret in insurance is that insurers are actually terrible at using their data. Different departments (marketing, underwriting, claims) rarely work together, and their data tends to be siloed. FAAMG, on the other hand, has put data at the core of their offering; they know how to leverage analytics and AI to create better products.

They also have access to data that insurers can only dream of having: global geospatial imagery of homes, infrastructure and buildings; location, browsing and advertising data; even real-world behavioral data from smartphones and IoT devices. Combining all these signals can create a very complete picture of human behavior, interests and risk profile.

They have an army of software engineers and a monopoly of AI talent

Tech innovation has long been a challenge for insurance incumbents. Old systems are difficult to displace in any industry, but the complexity of insurance, tradition of relying on the past to predict the future and silos of data can make it a Herculean effort. Tech giants, on the other hand, regularly cannibalize their own revenue with new products and can enlist tens of thousands of engineers to develop fantastic digital customer experiences and bring large-scale efficiencies to back-end insurance systems through better software and AI.

So, yes, FAAMG has a number of major advantages over insurance incumbents. But for tech giants, new verticals and initiatives are also longer-term decisions around margins and market scope. It’s an obvious point, but if FAAMG wants to jump into insurance, they’ll want a decent return. Can they find that in insurance?

There are a number of reasons why it might be a tough sell.

Ultra-low margins

Average insurance net margins are 3-8 percent, and 25-30 percent gross margins, which are meager for tech standards. Software companies average around 80 percent gross margins and around 15 percent net margins. Even consumer hardware like the iPhone — a costly endeavor by software standards — sees 55-60 percent gross margins.

Within insurance, health tends to have the highest margins, followed by property and casualty (i.e. home and auto insurance), followed by life insurance. So if anything, healthcare is probably the closest thing to “low-hanging fruit” — but it’s not exactly attractive to most companies outside insurance.

High risk

Such low margin also means that one major event can destroy a company’s balance sheet for an entire fiscal year (think disasters like hurricanes, fire, flood, etc.). In addition, tech companies don’t have the historical data and actuarial scientists that insurers have spent decades building up, so they might be more prone to misjudging their overall risk exposure.

Complex administration

For insurers, evaluating and underwriting policies is an expensive endeavor. Claims, customer support and back-end are costly and complex. That said, most insurance companies are already outsourcing the development of core administration software to companies like GuideWire and Duck Creek, and then customizing the software to meet their specific needs at the last mile. So it’s not as huge of a leap as it once was to think that the likes of Amazon or Google could develop similar infrastructure in-house to rival incumbent systems. Or, they could easily buy one of the development companies outright and subsume that expertise.

Amazon makes a big move

Still, the creation and underwriting of policies is something tech giants have avoided to date. Amazon has been working on warranties for certain products as an add-on to their margins — but these were backed and administered by The Warranty Group rather than Amazon itself. Before that, Amazon acted as a sales channel for SquareTrade and built up an understanding of the warranty business before diving in deeper. Tesla, as another example, announced it was selling Tesla-branded tailor-made policies for its vehicle owners, but those policies were backed by Liberty Mutual.

Then, in January, Amazon made a well-publicized announcement, in tandem with Berkshire Hathaway and JPMorgan, around its intention to create a private healthcare option for their workers. We don’t know much about the initiative, but Amazon has been working on a healthcare technology project codenamed 1492 for some time. Rumors point to a “platform for electronic medical record data, telemedicine, and health apps.” Amazon’s technology paired with Berkshire Hathaway’s insurance knowledge and JPMorgan’s financial expertise makes the creation of a new health insurance entity more likely. If so, this would be a significant shot across the bow of U.S. healthcare insurers.

Of all the tech giants, it would not be a surprise if Amazon were the first to jump into insurance. Amazon has mastered the art of building massive businesses off of razor-thin margins. They’re also targeting health insurance, which presents the best margin opportunity. They can test their offering within the company first and then scale across their massive consumer base. Finally, they have a history of building out complex back-end services for their own purposes before offering it to their customers — just look at AWS.

Will other tech companies follow Amazon’s lead?

Signs point to yes. Recently, Google’s sister company, Verily, “has been in talks with insurers about jointly bidding for contracts that would involve taking on risk for hundreds of thousands of patients.” In addition, Apple will be opening a network of medical clinics for its employees.

It may not stop at health insurance. There’s no question technology is changing human behavior and society, and as the developers of much of this new tech, FAAMG will inevitably be pushed closer to other sectors of insurance, as well, including home and auto.

Autonomous vehicle fleets will make companies like Tesla, Google and Uber the owners of tens of thousands of cars, subjecting them to the risk that comes with that. Meanwhile, IoT hardware and accompanying services are bringing tech giants into the living room. That’s a literal statement when it comes to Amazon Key. Nest, Google Home and Amazon Echo are more innocuous, but provide all sorts of data about what’s going on inside the home and could, someday, help inform the creation of real-time home insurance policies.

East Asia as a leading indicator?

It also can be instructive to look at markets outside the U.S. In East Asia, businesses are taking a more aggressive posture vis-à-vis insurance. Baidu, Alibaba, Rakuten, Tencent and LINE have all shown some level of appetite for offering their own insurance products. These companies can verify identities, enforce trust and access the behavioral and financial data necessary to provide better policies than many insurance incumbents in those countries.

They also are exploring new ways of looking at risk and changing user behavior: Tencent’s WeSure is paying users to stay healthy by walking more, while Yongqianbao, a lending company, tracks unconventional digital data to determine credit risk, such as phone brand (iPhone users are less likely to default) and whether they let their phone batteries run down.

Still, the question remains: What role will tech giants in the U.S. play in the insurance landscape? Will they act as a channel for existing insurers, as a provider of data and analytics to those insurers or even as a provider of direct insurance themselves?

Insurance may not be lucrative-enough for tech giants in the short-term, but as real-time data and analytics are used to create insurance policies, tech giants may be tempted to use their troves of data to compete with insurers directly. Until then, we can expect insurers and tech giants to form alliances, as they have in East Asia, with tech companies using insurance and warranties as a value-add for their customers, and insurers using tech companies as a sales channel. Regardless, the story of FAAMG (and others) in insurance is undoubtedly just getting started, and we’ll have to check back in as the landscape develops.

Samsung’s got a new smartwatch on the way. That much seems certain. It’s been about a year since the last big announcement, and the company is about to have two large platforms in the form of August’s Note 9 Unpacked event and Berlin’s IFA trade show the following month.

A couple of new tidbits, however, are fueling speculation that things might be a little different this time around. First, a trademark filing in Korea for a Samsung Galaxy Watch logo. The company dropped the Galaxy bit from its Gear line between the first and second generation watches, back in 2014.

Among the more notable changes on that device was the move from Android to Tizen, an open-source mobile operating system Samsung has continued to bear the torch for on subsequent watches. The company never really looked back on that decision, even after the arrival of Android Wear.

But 2018 has found Google making a more aggressive push around its wearable operating system. I/O saw some upgrades, following a name change to Wear OS. That, along with a smattering of online rumors, point to Samsung potentially giving Google’s other mobile OS a big go.

It’s hard to make the case that Google has done much to warrant another look at the operating system. The smartwatch category has largely stagnated for everyone but Apple and Fitbit, and the last couple of updates haven’t brought a lot to the table. But perhaps there’s something to be said for increased compatibility across the Galaxy line.

Last year’s Gear Sport found Samsung offering up a more universal piece of hardware than its traditional restrictively large devices, but a ground-up rethink of the line certainly couldn’t hurt.

Samsung’s got a new smartwatch on the way. That much seems certain. It’s been about a year since the last big announcement, and the company is about to have two large platforms in the form of August’s Note 9 Unpacked event and Berlin’s IFA trade show the following month.

A couple of new tidbits, however, are fueling speculation that things might be a little different this time around. First, a trademark filing in Korea for a Samsung Galaxy Watch logo. The company dropped the Galaxy bit from its Gear line between the first and second generation watches, back in 2014.

Among the more notable changes on that device was the move from Android to Tizen, an open-source mobile operating system Samsung has continued to bear the torch for on subsequent watches. The company never really looked back on that decision, even after the arrival of Android Wear.

But 2018 has found Google making a more aggressive push around its wearable operating system. I/O saw some upgrades, following a name change to Wear OS. That, along with a smattering of online rumors, point to Samsung potentially giving Google’s other mobile OS a big go.

It’s hard to make the case that Google has done much to warrant another look at the operating system. The smartwatch category has largely stagnated for everyone but Apple and Fitbit, and the last couple of updates haven’t brought a lot to the table. But perhaps there’s something to be said for increased compatibility across the Galaxy line.

Last year’s Gear Sport found Samsung offering up a more universal piece of hardware than its traditional restrictively large devices, but a ground-up rethink of the line certainly couldn’t hurt.

In a recent MIT Technology Review article, author Virginia Eubanks discusses her book Automating Inequality. In it, she argues that the poor are the testing ground for new technology that increases inequality— highlighting that when algorithms are used in the process of determining eligibility for/allocation of social services, it creates difficulty for people to get services, while forcing them to deal with an invasive process of personal data collection.

I’ve spoken a lot about the dangers associated with government use of face recognition in law enforcement, yet, this article opened my eyes to the unfair and potentially life threatening  practice of refusing or reducing support services to citizens who may really need them — through determinations based on algorithmic data.

To some extent, we’re used to companies making arbitrary decisions about our lives — mortgages, credit card applications, car loans, etc. Yet, these decisions are based almost entirely on straight forward factors of determination — like credit score, employment, and income. In the case of algorithmic determination in social services, there is bias in the form of outright surveillance in combination with forced PII share imposed upon recipients.

Eubanks gives as an example the Pittsburgh County Office of Children, Youth and Families using the Allegheny Family Screening Tool (AFST) to assess the risk of child abuse and neglect through statistical modeling. The use of the tool leads to disproportionate targeting of poor families because the data fed to the algorithms in the tool often comes from public schools, the local housing authority, unemployment services, juvenile probation services, and the county police, to name just a few — basically, the data of low-income citizens who typically use these services/interact with them regularly. Conversely, data from private services such as private schools, nannies, and private mental health and drug treatment services — isn’t available.

Determination tools like AFST equate poverty with signs of risk of abuse, which is blatant classism— and a consequence of the dehumanization of data. Irresponsible use of AI in this capacity, like that of its use in law enforcement and government surveillance, has the real potential to ruin lives.

Taylor Owen, in his 2015 article titled The Violence of Algorithms, described a demonstration he witnessed by intelligence analytics software company Palantir, and made two major points in response — the first being that oftentimes these systems are written by humans, based on data tagged and entered by humans, and as a result are “chock full of human bias and errors.” He then suggests that these systems are increasingly being used for violence.

“What we are in the process of building is a vast real-time, 3-D representation of the world. A permanent record of us…but where does the meaning in all this data come from?” he asked, establishing an inherent issue in AI and datasets.

Historical data is useful only when it is given meaningful context, which many of these datasets are not given. When we are dealing with financial data like loans and credit cards, determinations, as I mentioned earlier — are based on numbers. While there are surely errors and mistakes made during these processes, being deemed unworthy of credit will likely not lead the police to their door.

However, a system built to predict deviancy, that uses arrest data as a main factor in determination, is not only likely to lead to police involvement — it is intended to do so.

Image courtesy of Getty Images

When we recall modern historical policies which were perfectly legal in their intention to target minority groups, Jim Crow certainly comes to mind. And let’s also not forget that these laws were not declared unconstitutional until 1967, despite the Civil Rights Act of 1965.

In this context you can clearly see that according to the Constitution, Blacks have only been considered full Americans for 51 years. Current algorithmic biases, whether intentional or inherent, are creating a system whereby the poor and minorities are being further criminalized, and marginalized.

Clearly, there is the ethical issue around the responsibility we have as a society to do everything in our power to avoid helping governments get better at killing people, yet the lion’s share of this responsibility lies in the lap of those of us who are actually training the algorithms — and clearly, we should not be putting systems that are incapable of nuance and conscience in the position of informing authority.

In her work, Eubanks has suggested something close to a Hippocratic oath for those of us working with algorithms — an intent to do no harm, to stave off bias, to make sure that systems did not become cold, hard oppressors.

To this end, Joy Buolamwini of MIT,  the founder and leader of the Algorithmic Justice League, has created a pledge to use facial analysis technology responsibly.

The pledge includes commitments like showing value for human life and dignity, which includes refusing to engage in the development of lethal autonomous weapons, and not equipping law enforcement with facial analysis products and services for unwarranted individual targeting.

This pledge is an important first step in the direction of self-regulation, which I see as the beginning of a larger grass-roots regulatory process around the use of face recognition.