The Department of Justice is investigating Boeing following two crashes of its 737 Max 8 plane six months apart—the first a LionAir flight out of Jakarta, and the second an Ethiopian Airlines flight out of Addis Ababa.

The investigation of the world’s largest commercial airline manufacturer relates to Boeing’s business decisions regarding its nearly 400 737 Max 8 models operating around the world. More specifically, the investigation will likely focus on the ways in which Boeing cut costs and skirted FAA scrutiny to expedite its production of 737 Max 8 planes using a slightly modified original design save for a bigger engine. This decision—to only slightly modify the design of the 737 Max 8 so as to accommodate bigger, and more fuel-efficient, engines, rather than re-designing the plane completely—was allegedly the product of fear that Airbus would capture the market. In 2010, Airbus, Boeing’s only real competitor in the market for narrow-body commercial planes, had released its new A320neo model with efficient engines that presented a real competitive advantage over Boeing’s existing 737 models.

Because the bigger engines in the slightly modified 737 Max 8 design changed the aerodynamics of the plane, Boeing installed a special Maneuvering Characteristics Augmentation System (MCAS), which could override pilot decision-making. The current theory as to why the LionAir and Ethiopian Airlines flights crashed is that faulty sensors overreacted to the normally high angles of attack the planes assumed for takeoff, triggering the planes’ MCAS systems, which forced the noses of the planes down, and ultimately, into the ground.

If these preliminary findings are borne out, Boeing’s shortsighted decision to take shortcuts in its pursuit of more fuel-efficient engines—which has already cost the company $40 billion in market capitalization and has mired it in a public relations nightmare—could expose it to massive criminal liability.

Boeing’s Shortcuts Prove Shortsighted

The minority business community mourns an influential and monumental businessman who passed away last Sunday in the community he worked hard to redevelop. Grammy-nominated artist and Los Angeles native Nipsey Hussle, born Ermias Asghedom, was a pillar who laid the foundation for the change breeding in the Crenshaw district, change wrought with technological advances and financial freedom.

Nipsey has lived out the potential for change he once sought as a youth in inner-city Los Angeles, an environment that gang culture dominated. Hussle saw no outlets for youth to develop interests beyond entertaining or playing sports. Calling attention to the lack of diversity in the science, technology, engineering, and mathematics fields, Nipsey and his business partner David Gross launched Vector 90, a combination co-working space and STEM center, in the Crenshaw District. The 2-story center will serve as a conduit between young talent from impoverished neighborhoods and corporate partners in Silicon Valley and beyond.

Emphasizing the importance of financial freedom and economic mobility through his voice and actions, Hussle pioneered a number of innovative measures in marketing and self-promotion. His strong entrepreneurial spirit led him to employ what he dubbed a “Proud2Pay model,” making two of his mixtapes available for free download and selling a limited number of physical copies at a premium. He continued to leverage the relationship between culture and commerce through his business strategies. In achieving vertical integration, a business concept that combines multiple stages of production into one company, Nipsey controlled the musical fine-tuning from production to consumption, allowing his storytelling to yield authentic experiences that resonated with listeners instead of being controlled by “radio gatekeepers” or record labels.

His smart store, The Marathon Clothing, part of a sect of a strip mall he purchased and was working to redevelop into community-integrated commercial units, was only a start to his bridging the gap between culture, technology, and communities that so desperately need champions of their interests. Nipsey was one who understood the needs, struggles, and values that connected communities on both sides of the class system, having lived experiences on the street and in the boardroom, and his ability to communicate that through his brand is what made him genius. Hussle once said that the highest human act is to inspire.

Hustle & Motivate- Nipsey Hussle’s Work to Bridge the Gap between Hip-Hop, Technology, Business, and Minority Communities

On March 26, 2019, Uber announced its agreement to acquire its Middle East competitor Careem Networks for $3.1 billion. Careem is a technology platform extending from “Morocco to Pakistan, Turkey to Sudan.” The app is popular among countries that prefer to use cash over credit. Careem’s success comes from its in-depth local knowledge and expertise, which caters to young tech-savvy populations.

Mapping is a vital aspect to ride-sharing apps because it allows drivers to know where to pick up and drop off customers. While Uber uses various mapping resources, the company relies on Google Maps the most. Google Maps falls short in its mapping efforts throughout the Middle East, which pushed Careem to take over. Google Maps falls short because it lacks the precision needed for a ride-sharing app. Meanwhile, Careem had already mapped over 45,000 miles for its taxi service.

Mapping requires a significant investment because it is primarily a manual process where each block in each neighborhood is documented. Uber’s acquisition of Careem will benefit both companies while still allowing them to operate separately. Careem will continue as an independent brand, which will enable both companies to build new products and try new ideas. As the companies progressively integrate, they hope to operate more efficiently. Uber hopes the integration will produce lower wait times, stimulate innovation in the region, and allow for an expansion of new products like high-capacity vehicles and payments.

The Middle East is growingly becoming an essential market for technology innovation and investment. Last year, $3 billion in technology investments were raised in the region. Ala’ Alsallal, the founder and CEO of Jamalon, a bookselling and buying platform, stated, “My mission is to … get connected, and [close] the gap between what we have access to and what the West has access to.” For several reasons, like war, widespread corruption, and conservative ideals, the Middle East is a difficult place to live and start a business. Technology platforms play an important role in providing access to services.

The Middle East is not the only region in the world where people fall behind in access to services that folks in “the West” have an abundance of. If successful in increasing technology innovation, I believe the region will be an influential example to other areas in the world, like Latin American. Increased technological innovation and access in the Middle East means more connectivity with the region and the rest of the world. I hope this increased access to services and connectivity will lead to an increase in positive narratives of the Middle East and its people.

Uber Has Acquired Careem to Expand in the Middle East

President Trump turned to Twitter to comment on the historic Lordstown, Ohio, plant. General Motors operated the Lordstown plant for 52 years until the company opted to shut it down in March. The decision cost 1,500 jobs and landed GM in a lawsuit against the United Auto Workers.

President Trump urged GM to either sell the plant or reopen it. But, there is not much hope of either happening soon. GM is a zombie. It was destined to disappoint the moment its management went begging on Capitol Hill in 2008. The reorganization was a political decision, not a financial one. GM survived the last financial crisis because of TARP bailouts. That GM required taxpayer funds means nobody in the private sector — who would have skin in the game — thought it made sense to preserve GM as it now stands.

Maybe the Obama administration exercised the sort of foresight that only wise politicians possess. But, it was not their money they ponied up. They had no skin in the game and no real incentive to judge the economic merits of GM’s reorganization plan. GM ultimately sold a few of its subsidiaries and renegotiated some of its obligations to stakeholders. But, there was no “rebirth” of GM.

GM’s failure in 2008 was partly due to labor disputes. The company is now embroiled in a lawsuit against the United Auto Workers. Things have not changed for GM.

In the wake of the Christchurch shooting, The French Council of the Muslim Faith (CFCM) filed legal papers against the French branches of Facebook and YouTube for failing to remove related content fast enough. Under French law “broadcasting a message with violent content abetting terrorism, or a nature likely to seriously violate human dignity and liable to be seen by a minor” is punishable by up to three years jail time and $85,000 fine.

The shooting, which was initially live streamed on Facebook for seventeen minutes, was undetected by the platform’s AI system and remained up for twelve more minutes. By the time Facebook removed the video, it had been uploaded to 8chan, a cite known for its white supremacist postings. From there, the video was disseminated across the internet, where both Facebook and YouTube failed to identify footage that remained up for hours.

CFCM’s stance that tech companies have a responsibility to better prevent the upload of terrorist content was echoed by the chairman of the U.S. House Committee on Homeland Security, Bennie G. Thompson. In a letter to the executives of Facebook, YouTube, Twitter, and Microsoft, Thompson tells the tech giants they “must prioritize responding to these toxic and violent ideologies with resources and attention.”

But unlike the European union, where Facebook’s responsibility stems from public sentiment and corresponding legal liability, the US differs dramatically. American ideals of free speech and individual responsibility are distorted by political rhetoric that frames legal liability as a slippery slope to quashing free expression. This view is confirmed by our own legal system, which insulates Tech companies from facing recourse for the hateful content and subsequent violence enticed, in part, by users and content on their platforms.

American Courts have repeatedly dismissed lawsuits similar to the CFCM complaint at the pleading stage, ruling that Section 230 of the Communications Decency Act of 1996 bars these complaints. Section 230 states that providers of interactive computer services cannot be treated as publishers of user postings. This gives tech companies sweeping immunity from violent acts that are directly linked to user content. For instance, victims of the Pulse Nightclub shooting were barred from bringing a lawsuit against Facebook, Twitter, and Google for allowing violent and hateful videos that radicalized the shooter to remain on their platforms.

In some ways, this is a good thing. Sparing interactive internet companies from liability focuses fault on the individual perpetrator. Moreover, people are validity concerned about policing speech and narrowing viewpoints. However, the flip side is a lack of civil recourse to address substantial wrongs and the resurgence of violent far-right ideologies.

Given that over 1.5 million attempts were made to reupload the video to Facebook alone, AI detection is the most viable way to stop violent content from being disbursed across the internet. Expanding legal liability has already proven to effectively block harmful user content. As shown by the FOSTA-SESTA ACT, making websites liable for illicit sexual activities taking place on their platform incentivized companies to develop effective technology to identify child pornography. A similar legislative act that expands liability to encompass the distribution of violent content could incentivize tech companies to develop more effectual preventative AI tech.

As modern day monopolies, Tech companies such as Facebook and YouTube have a responsibility to protect users from violent content. And as threatened by Thompson, if they are unwilling to make this goal a priority, our legal system should.

Preventing Terrorist Content- Using Legal Liability to Incentivize Tech Companies to Develop More Effective AI

After a joint investigation with the National Highway Traffic Safety Administration, Honda confirmed that it was to blame for the death of a driver in a June 2018 crash in Arizona.  This is the sixteenth death in the United States arising from faulty Takata airbag inflators.  The potentially lethal defect occurs when Takata air bag inflators on the driver’s side rupture during a crash, sending metal fragments careening towards the driver.

The fourteen deaths in Honda vehicles and two in Ford Motor Company vehicles has sparked the largest recall effort in U.S. history.  Honda is recalling 56 million Takata inflators in 41.6 million vehicles in the United States alone. Earlier in March, Honda stated that it would recall another 1.2 million Honda and Acura vehicles in North America to replace the Takata airbag inflators. Worldwide, the Takata inflators have been linked to more than 290 injuries and over 100 million still ongoing recalls made by nineteen car companies.

In a statement Honda explained that it was unable to issue recall notifications to the latest victim of the Takata airbag inflators because the driver had purchased the car less than three months prior to the accident and there is no requirement that Honda be notified of a change in ownership.

The United States Department of Justice has fined Takata over $1 billion in criminal penalties, following the revelation that the company had been withholding vital information about the safety of its airbag inflators for over a decade. Takata also plead guilty to a felony charge of wire fraud, committed in an attempt to resolve a U.S. Department of Justice investigation into the company’s knowledge of its potentially defective airbag inflators. Takata was one of the world’s foremost providers of automobile safety equipment worldwide prior to filing for bankruptcy in 2017.

Honda Confirms Sixteenth U.S. Death Linked to Takata Airbag Inflators

Lyft, Inc. made their long anticipated NASDAQ debut on Friday, March 29th and shares rose 23% in their first day. After the initial surge, the stock settled back down toward the end of the day, finishing up 8.7%. Prior to the debut, Lyft had faced major losses, as well as criticism of their company strategy involving autonomous driving paired with new laws aiming to get drivers higher pay. Despite the modest gains seen on the first day of trading, the stock found itself in much murkier waters on day two as the stock price dipped below its I.P.O. price. In the end, it faltered 12% and sounded a few investor alarms, as the market begins to gauge investor “appetite for fast-growing but unprofitable tech companies.”

This bumpy start is especially pertinent this year as other major companies plan to go public, including Uber, Slack, Pinterest, Peloton, and Postmates. While the initial surge bodes well for Lyft’s biggest rival, Uber, the subsequent fall may be cause for some tempered concern. The main issue for investors is that they must weigh the chance of missing out as early investors of a so-called tech “Unicorn” with the fears of investing in companies with shaky and unproven economics.

Though the second day losses for Lyft were by no means a positive sign, it was also not at all uncommon for new tech giants, as the same occurred for Snap, Twitter, and Groupon. Many investors have pointed out that the real test for Lyft is to watch its gains in the coming months, especially once Uber debuts alongside them in the market. Lyft announced almost $1 billion in losses in 2018 and Uber sales have slowed down, while losses continue to pile up as well. The questions for investors continue to pile up, as they will be forced to risk missing out on a possibly great opportunity with the subsequent risk of investing in companies with no track record of profitability and uncertain future sustainability.

Tech Unicorn Investments

In the world of ecommerce and technology, multinational retail chain Walmart continues to innovate in order to capture consumer mindshare. This past week, the retailer announced its plans to release its own Android tablet. Walmart is nesting its new product under its ONN store brand and hopes the tablet will compete on a lower price and a more kid-friendly design. According to Walmart’s application with the U.S. Federal Communications Commission, a Chinese supplier will be partnering with Walmart in this venture. Apple debuted its iPad in 2010, and Amazon quickly followed with its Fire tablet in 2011. While Walmart boasts other tablet models on its shelves and could easily have utilized the technology to do this sooner, it is intriguing why Walmart is now finally deciding to take a piece of the tablet pie nine years later.

While it seems like Walmart is often playing catch-up with Amazon, the move to build and sell its own branded tablet further affirms that Walmart is a force to be reckoned with. In the ecommerce and technology landscape that Amazon dominates, consumers should not overlook Walmart’s ability to establish itself on par with Amazon. Over the past several years, Walmart has dedicated significant resources in its ecommerce efforts to mitigate Amazon’s influence. On the mergers and acquisitions front, Walmart has made crucial strides. In 2016, Walmart acquired Jet.com for more than $3 billion. Now, Jet.com is offering three-hour, same-day scheduled grocery delivery in New York. Furthermore, in 2018, Walmart made a string of acquisitions in order to boost its ecommerce presence. From Bare Necessities (an online retailer of lingerie, swimwear, and intimates) to Flipkart (an Indian e-commerce company), Walmart is signaling that it is ready to position itself next to Amazon and to compete side-by-side.

The rise of Amazon has undoubtedly influenced many retailers’ key strategic decisions. Walmart, whose strategy has always been to target price-conscious consumers, has enlarged its portfolio of companies that sell products in higher price ranges in order to capture Amazon’s market share of these consumers. However, this move to build a cheaper tablet may be Walmart’s effort to remind its price-conscious consumers that Walmart is here to stay in their lives. By building a cheaper tablet, these price-conscious consumers can be a part of the tablet ecosystem that they couldn’t otherwise be in because of the higher-priced iPad and Fire tablets. As a result, Walmart is able to interface in a new way with these consumers through its tablet, influence purchases by curating the tablet home page, and empower these consumers to adopt new technologies. By tapping into its original strategy to target price-conscious consumers, Walmart could continue to have more opportunities to rally with Amazon side-by-side.

Walmart’s New Product – More Than Just a Tablet

Amazon is fueling the growth of an expanding workforce: tech economists. Although economists have long worked in the tech industry assisting with economic forecasting and market strategy, in recent years “PhD economists have started to play an increasingly central role in tech companies, tackling problems such as platform design, pricing, and policy.” Using machine-learning algorithms, economists assist with decisions ranging from selecting real estate to consumer preferences, creating systems that are used to “address fundamental business questions.”

As one of the predominant recruiters for PhD economists, Amazon hired more than 150 in the past year, making it likely the second largest employer in the U.S. for these experts behind the Federal Reserve. One of Amazon’s primary draws for economists is the massive amount of data the company has amassed in its 24 years of existence. In fact, the availability of data is the key factor driving the growing supply and demand of tech economists throughout the tech industry. According to Beatrice Cherrier, an economics historian at the university of Cergy Pontoise, the role of economists today is changing: in the past, “economists used to work on public data … now, if they want to study behavior, the tech companies have [that data], and it’s proprietary.”

However, Amazon also stands out because of its lack of transparency. The company keeps the work of its economists highly secret and protected by non-disclosure agreements, which makes it difficult to determine exactly what they do for the company. One project that we do know about is Amazon’s initiative to develop a new system for measuring inflation. By analyzing transaction data and product descriptions on its platform, Amazon’s economists have teamed up with outside researchers to build “a more accurate, up-to-date index of how much things cost.” This would be a more efficient method of measuring inflation than that used by entities like the Bureau of Labor Statistics, which sends people to stores to record prices and calls consumers to learn about how much they spend.

Although it is impossible to know for sure what Amazon’s army of PhD economists is tasked with, the company does credit economists with playing an integral role in its growth and success.

Hyper-secretive economists are transforming how Amazon does business

Just this week, it was discovered that Facebook was storing millions of users’ unencrypted personal passwords on company servers, readable by thousands of employees. Unfortunately, this has not been Facebook’s only blunder regarding user privacy. Most notably, in March of last year, it was found that user data for about 50 million Facebook users had been obtained by Cambridge Analytica. Additionally, later that year in May, a bug turned users’ private posts to “public” without warning, and in June, a bug “unblocked” users previously blocked on over 800,000 accounts.

As a result of these mishaps, the Federal Trade Commission (FTC) began to investigate Facebook for potential privacy violations, which could lead to a fine worth billions of dollars. Some people are skeptical of Facebook and argue that Facebook does not have to invest in cybersecurity because, as a society, “we no longer care if our personal data is breached.” In fact, when news broke out regarding the unencrypted passwords, the news coverage lasted a few hours; by the following day, “it was all but over.” This is troublesome because Facebook is one of the five largest companies in the world (by valuation), and it dominates the social media app sphere as the owner of Facebook Messenger, Instagram, and WhatsApp.

Nevertheless, Facebook is taking steps toward protecting user privacy as they plan to integrate all three apps and encrypt all communications that can already be found on WhatsApp. Also, governments around the world have begun to form legislation in an attempt to protect users from privacy abuses. However, others are weary that legislation will not have its intended impact. Albert Gidari, Consulting Director of Privacy at Stanford’s Center for Internet and Society, believes that privacy laws are similar to environmental laws:

“True, we have cleaner air and cleaner water as a result of environmental law, but we also have made it lawful and built businesses around acceptable levels of pollution. Companies still lawfully dump arsenic in the water and belch volatile organic compound in the air. And we still get environmental catastrophes. So don’t expect today’s “Clean privacy Law” to eliminate data breaches or profiling or abuses.”

Ultimately, whether it is legislation, fines, or companies choosing to take action themselves, mistakes will still happen, and there will always be individuals trying to gain access to user data. So, for the time being, users beware.

Privacy- Users Beware