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Sheryl Sandberg is shocked, shocked that there is bad behavior on Facebook

September 24, 2017 Comments off

This has been a bad few weeks for two out of the four members of the FANG cartel–Facebook and Google.  Their problems can all be summed up in a post by former Googler and current Facebook COO Sheryl Sandberg–yes, that Sheryl Sandberg, who is a leading contender for beatification by the Congregation for the Causes of the Commercial Saints and former defendant in the Google shareholder derivative suit over Google’s violation of the Controlled Substances Act.

According to Ms. Sandberg:

Last week we temporarily disabled some of our ads tools following news reports that slurs or other offensive language could be used as targeting criteria for advertising. If someone self-identified as a ‘Jew-hater’ or said they studied ‘how to burn Jews’ in their profile, those terms showed up as potential targeting options for advertisers.

Seeing those words made me disgusted and disappointed – disgusted by these sentiments and disappointed that our systems allowed this.

Could the problem be that Facebook’s “systems” are designed to “allow this”?  Just like Google’s “systems” were designed and optimized to allow selling advertising keywords for pirated recordings derived from artist names?

Luke Sample

And as was demonstrated by the FBI and Department of Justice sting operation, Google perfected selling search terms for illegal drugs?  As Wired reported in 2013, Sheryl Sandberg is no stranger to the issue of state of the art “systems” mysteriously allowing bad acts:

At one point during a meeting with [then inmate and former online illegal drug impresario David] Whitaker and his lawyer, the Feds asked him how he had grown his online enterprise. Whitaker’s answer was immediate: He had used Google AdWords. In fact, he claimed, Google employees had actively helped him advertise his business, even though he had made no attempt to hide its illegal nature. It was reasonable to assume, Whitaker said, that Google was helping other rogue Internet pharmacies too.

If true, this would be a bombshell. This was Google, after all. Since its founding, the search giant had prided itself on being a different kind of corporation, the “don’t be evil” company. And for almost as long, its open-to-all-comers ad policy had come under scrutiny. Online pharmacies were a particular sticking point; in 2003, three separate congressional committees initiated inquiries into the matter.

On July 22, 2004, a month before Google went public [and she cashed out big time], Sheryl Sandberg—at the time Google vice president of global online sales and operations—testified before the Senate Permanent Subcommittee on Investigations. Legislators had proposed two bills that would regulate online pharmaceutical sales, but Sandberg argued that the measures would be unduly burdensome. [Kind of like stopping child sex trafficking–too much trouble for elites in the Internet Associations membership.] She said that Google employed a third-party verification service to vet online pharmacies. She also described Google’s own automated monitoring system and the creation of a team of Google employees dedicated to enforcing all of the company’s pharmaceutical ad policies. “Google has taken strong voluntarily [sic] measures—going beyond existing legal requirements—to ensure that our advertising services protect our users by providing access to safe and reliable information,” she testified. Neither bill made it out of committee. (Sandberg, now Facebook’s chief operating officer, declined to comment or be interviewed for this story.) [I bet.]

However–at the same time that Ms. Sandberg’s people were crowing about their verification service, other Googlers were selling advertising keywords to criminals selling illegal drugs into the United States.  Google subsequently negotiated a non-prosecution agreement (kind of like a plea bargain) pursuant to which Google paid a $500,000,000 fine, evidently with the approval of Eric Holder, then Attorney General of the United States.  Google was represented in that deal by one Jamie Gorelick (Amazon board member and former Deputy Attorney General in the Clinton Administration, replaced by…Eric Holder.  Ms. Gorelick is employed by Washington DC swamp powerhouse law firm Wilmer Cutler Pickering Hale (former employer of Senator Elizabeth Warren).).

As Google (referred to as “the Company”) expressly acknowledged in the non prosecution agreement (which you can read here):

Non Prosecution Excerpt

So–Sheryl Sandberg has a very great deal of experience going back well over a decade with big rich Silicon Valley companies profiting from debased behavior.  Some might argue profits that she enjoyed herself in the form of stock awards, salaries and cash bonuses.

This is no doubt one reason why she was sued as a defendant in the stockholder derivative suit against Google (read the complaint here) that arose out of the $500,000,000 payment of the stockholders money to keep Google executives like her from being prosecuted criminally and potentially going to prison for facilitating the sale of illegal drugs to kids among other people.  (See also The Ryan Haight Online Pharmacy Consumer Protection Act of 2007, legislation sponsored by Senator Diane Feinstein and then-Senator now Attorney General Jeff Sessions.)

Remember–there’s no public evidence that I can find (and I’ve looked) that any of this bad behavior ever cost her a penny of her own money.

Shareholder Suite

Whether it’s drugs, hate groups, human trafficking or the Russians, Sheryl Sandberg has made lots of money exploiting human misery if you ask me.  I don’t quite see how she couldn’t have.

Given her carefully sanitized checkered past, should we accept the wringing of hands, wailing and mourning and rending of garments by an unimaginably rich power player like Ms. Sandberg?

I think not.  But that doesn’t mean there isn’t a different law for the Silicon Valley elites than there is for the hoi polloi.  Trust me, Sheryl Sandberg will never be held to account and will be able to buy her way out of prosecution yet again probably using the stockholders’ money yet again.

If $500 million is “nonmaterial” then why does royalty deadbeat Facebook refuse to pay artists and songwriters?

February 8, 2017 Comments off

MTP readers may have seen that Facebook’s Oculus virtual reality division lost a copyright infringement case in a $500,000,000 jury verdict for a variety of claims.  While that seems like a lot of money to me, the verdict was far short of what was at stake. What is interesting about the case for our purposes was not the details (covered by the Hollywood Reporter and a bunch of other outlets if you want to read up on it).

What is interesting is how Facebook reacted to having to pay $500,000,000 for rights.  Particularly since Facebook currently pays zero for music.

According to the Hollywood Reporter:

Facebook COO Sheryl Sandberg on Wednesday told CNBC, “The verdict is non-material to our business.”

A $500,000,000 rights payment is “non-material to our business.”  This really is how the other half lives.  Without going down the rabbit hole on materiality (see the SEC statement on materiality in financial statements here), let us take Ms. Sandberg’s rather breathtaking statement as true, or at least truthy.

What Ms. Sandberg suggests to me is that any rights payment that Facebook might make for songwriters and artists is also likely to me “non-material” to their business, even if that payment were hundreds of millions annually on an industry-wide basis.

It also makes you wonder why a public company for whom a $500,000,000 copyright infringement verdict is “non-material” prefer to be unlicensed royalty deadbeats rather than pay their fair share?  People who have enriched themselves in the public markets that protect their property rights in securities transactions just as the law protects intellectual property–as demonstrated by the Oculus verdict.

Who are these people?

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