Fake Tweet And Algorithmically Twitchy Financial Markets Lead To Market Swing; But Is That So Bad?

from the how-to-create-momentary-financial-havoc dept

Lots of people have been rightfully concerned about just how much of the trading in the financial markets is done algorithmically via high frequency trading systems that execute trades faster than any of us can comprehend, based on various algorithms, trying to shave little bits and pieces of profit. The key worry, of course, is that these algorithms can get into something of an infinite loop problem that spins the markets out of control. We've had momentary blips, at times, that happened so quickly it wasn't even clear why they happened. And now we have a case where overreacting to a fake tweet may have briefly cost the financial markets $136 billion (yes, with a b).

The story is that the Associated Press's twitter feed was hacked and a bogus tweet was posted, reading: "Breaking: Two Explosions in the White House and Barack Obama is injured." And off went Wall Street, sending the stock markets down quite rapidly. Of course, after the report was quickly corrected and shown to be false, the market rapidly recovered -- though, in the down and upswings, it's likely some people lost a fair bit of money while others made out quite well. Still, this raises a different set of questions even on top of the worries about high frequency trading, pertaining to the various inputs it receives. Reacting to stories on Twitter is an interesting way to try to beat the news cycle. Since so many stories break on Twitter first, it's no surprise that Wall Street is eagerly scanning the service for market-impacting news. The real question is if anything can or should be done about this. One argument is that we can leave it alone because it's self defeating. If your system jumped the gun and traded down on this report, well, good, you deserve to lose money for trading on a bogus tweet. Similarly, the fact that the market bounced back showed that it can self-correct fairly quickly, even if there are billions to be made and lost in between.

For those who think this is a problem, the bigger question might just be: and, so, what do you do about it? I'm just as worried as the next guy about the problems of such inter-connected, algorithmic trading systems spinning out of control, but I can't think of any way to prevent it that doesn't also lead to great collateral damage for more efficient or reasonable markets. That doesn't necessarily mean there isn't an answer, but it doesn't appear that there's an obvious response, seeing as no one has introduced any. In the end, it may be that this is just a fact of life. People are always going to seek out ways to beat the market by being first. And many times that will lead to great profits. But sometimes, when a story like this comes out, you get burned. Maybe that's perfectly reasonable.

Companies: associated press, twitter

Meltwater Response To Associated Press Lawsuit: AP Is Misusing Copyright Law

from the indeed,-they-are dept

We were somewhat surprised by the Associated Press' decision to sue news search engine Meltwater, because we couldn't see how the AP -- even with its absurdist interpretation of copyright law -- had any case. Meltwater works with companies to help them track news about themselves. While it's similar to a clipping service, it doesn't actually "clip" the news. Instead, just like Google News or other news search engines, it provides a headline, a snippet and a link to the full story. In other words, if the AP's argument gains traction, the AP may have effectively outlawed search engines. That's ridiculous. Among the AP's silly claims in the lawsuit (and there are many), is one that says because users can cut and paste AP stories from their original websites and "save" them in a Meltwater archive, Meltwater is guilty of violating copyright law. Under that argument, so is any email program or word processing program.

Either way, Meltwater has hit back with a response (embedded below) that pushes back on all of these points, explains pretty clearly how it doesn't actually infringe... and also claims that the AP's arguments amount to "copyright misuse":

Plaintiff’s claims are barred in whole or in part by the doctrine of copyright misuse. Through this Complaint and through other means, Plaintiff seeks to misuse its limited copyright monopoly to extend its control over the Internet search market more generally, thereby improperly expanding the protections afforded by U.S. copyright law. Among other things, AP has misused its copyright monopoly by demanding that third parties take licenses for search results, which do not require a license under U.S. copyright law, and AP has also formed a consortium (called NewsRight) with the purpose of further misusing its copyright monopoly to extract licensing fees that exceed what the law allows.

Meltwater also brings up multiple other defenses, including a bunch of defenses highlighting how the AP failed to bring its lawsuit in a timely manner. They also point out that since the AP posts these articles freely on the web, there's an implied license that you can link to it and point people to the content.

There is, of course, also the AP's attempt to bring back the bogus "hot news" doctrine, which some companies like the AP have been trying to revive after it was considered a completely dead concept. So far, the courts aren't buying these hot news claims, and hopefully they get rejected here as well. Meltwater attacks the hot news claims head on with two interesting arguments. First, it claims that Section 230 protects it from any hot news claim. That's an interesting argument, though I'm not sure it really applies here. Separately, however, they argue (correctly, in my view) that hot news doesn't exist any more, effectively, because it's really a form of a copyright claim, and all state copyright claims (hot news is a state law issue) are preempted by federal copyright law. It would be nice to have a court officially kill off hot news as a concept, so here's a chance for that to happen.

Honestly, I still can't figure out what the AP thinks its doing here, other than trying to shake money out of a search engine because its execs remain too clueless on how to run the organization in this modern era.

Filed Under: aggregation, hot news, search engine
Companies: associated press, meltwater

Meltwater Partially Wins One Lawsuit, Gets Sued By AP In Another For Daring To Aggregate News

from the don't-promote-us! dept

It's been an interesting day for Meltwater News -- a news aggregator that has been fighting in the UK over claims that it has to pay to aggregate news from the Newspaper Licensing Association. It originally lost its case last year, but successfully got the court today to slash the fees the NLA wanted to charge by 90% (showing just how much some gateekeepers overvalue their own content). Still, as Meltwater notes, the really ridiculous situation is that anyone who aggregates news and links to sources in the UK may now risk having to get a license to do so (even if the licenses won't be nearly as expensive as the NLA would like).

And... merely hours after this ruling in the UK, the Associated Press sued Meltwater over the same basic thing in the US. The AP has always been confused about aggregators and insisted they were illegal -- and has successfully pressured many other ones (including Google and Yahoo) to pay up. Now it's suing Meltwater, claiming that the site is "a parasitic distribution service" and that it "has a significant negative impact on the ability of AP to continue providing the high-quality news reports." To put it mildly, that's ridiculous. If the AP can't continue providing news because Meltwater is aggregating their stories, then the AP deserves to die.

The full lawsuit is embedded below (it's a long one). The AP insists that it's not against aggregators in general (though it suggests that it's really just not against aggregators who pay them). The lawsuit seems to want to pin the general decline of the AP's business model almost entirely on services like Meltwater. Where the AP's argument is stronger is in highlighting that Meltwater does archive full works for subscribers (not for the public). But the details aren't as crazy as the AP would like to suggest they are. It does not appear to make those archived works fully available -- but it does two things. First it just keeps an index so that if you search on terms for AP articles that are no longer online, it tells you that they once existed. That shouldn't be seen as infringement as it's an index and the full articles themselves are not being displayed.

The second archiving issue is that Meltwater lets customers, at their own discretion, archive the text of articles they find. This is no different than tons of other online archiving services like ReadItLater or Instapaper. They don't even make this that easy. A user has to literally cut and paste the content into a box to archive it -- just as they could cut and paste it into an email or a text file. It's difficult to see how that should be pinned on Meltwater, rather than its users.

On top of that, it seems like there's a reasonable fair use argument to be made here: archiving these works for research purposes, not unlike a library would. While the AP does highlight the UK ruling discussed above... it doesn't happen to mention that the UK does not have fair use, while the US does.

While many of the charges are about copyright infringement, the complaint also drags back out a "hot news" claim -- which has suddenly become popular again after years of being considered a totally dormant concept. Of course, so far, hot news claims haven't fared well in court, and I doubt this case will be any different.

Filed Under: aggregation, journalism
Companies: associated press, meltwater news

AP Finally Launches NewsRight... And It's Righthaven Lite?

from the really? dept

A few years back, the Associated Press announced plans to try to DRM the news, with an announcement that was mostly astounding for its technical cluelessness. It took nearly three years, but the project (now officially spun off from the AP -- who is still the largest shareholder) has been announced as "NewsRight," and is being described as an attempt to get bloggers and aggregators to pay up for "profiting" off the work of the AP or the other newspaper partners of NewsRight (including the NYT, McClatchy and others). Of course, the devil is in the details, and no matter how many details I read, this whole thing still doesn't make any sense at all.

At best, it appears to be Righthaven Lite. It doesn't sound like they'll totally pull a Righthaven, where their first move is to sue, but rather (from the various vague descriptions) it sounds like NewsRight will be going around simply trying to get blogs and aggregators to buy a license. But here's the thing: on what legal basis? That's the part that's not clear. Much of what blogs and newspapers do is simply not infringing (even if the AP likes to pretend it is). There may be some extreme cases where there is infringement, but most standard cases seem like classic fair use. And that's where it gets worrisome that this turns into a legal shakedown -- whereby sites are pressured to pay up just to avoid a legal fight, no matter how strong the legal position of these sites might be.

But, much more to the point, nothing in this plan appears to be about adding value. That's the key way to determine if a business model is heading in the right direction, or if it's really just someone trying to "free ride" on the work of someone else. NewsRight appears to be the worst kind of free rider, honestly. They're not adding any value -- they're just demanding people pay up to avoid a negative cost (the legal threat). Also telling? The company admits that half the staff is... lawyers, and that appears to include the company's CEO. When your 11-person company employs multiple full-time lawyers, you're not innovating. You're abusing the law. This seems like a complete disaster in the making -- and not because "information wants to be free." But because NewsRight doesn't appear to provide anything of actual value to sites. All it does is carry a big stick around and say, "pay us if you don't want to get whacked." I'm sure some sites will pay, but it's difficult to see how this adds anything of value to the world.

Filed Under: aggregators, bloggers, journalism
Companies: associated press, newsright

AP Scolds Reporters For Breaking News On Twitter

from the the-scarcity-mentality dept

Every time the Associated Press does something concerning the internet, it seems to just reinforce how out of touch it is. The latest is the bizarre and ridiculous decision to scold AP reporters for daring to tweet out the "news" that they had been arrested. You see, in the minds of AP bosses, they haven't quite figured out that artificial scarcity isn't a the same thing as real scarcity. So they think that if a reporter is arrested, the reporter should keep that news hoarded up until the AP itself can release it. But, as anyone who is a frequent Twitter user knows, that's crazy in a situation like this. Reporter gets arrested, reporter tweets about it. That's a perfectly reasonable response. But the AP wanted the story for "itself."

The problem is that the AP is apparently dreadful at chess. It doesn't think beyond the single move ahead. So, yes, perhaps they don't get the "break" on the news that an AP reporter was arrested -- that goes on Twitter. But is it really that bad? Let's just play out the scenario. Assume the story goes viral on Twitter. Remember, this is 140 characters, not a full blown article. If the message goes viral, then tons more people are seeing that short message and are curious about the details -- the details that aren't going to show up on Twitter anyway. But having that tweet out there, so it can go viral, means building interest in the story, and from that, it seems like any story would end up receiving more traffic, because the Twitter messages "primed the pump." I honestly can't fathom a scenario in which people see the tweets and decide that it acts as a full replacement for the eventual news article.

Mathew Ingram makes a key point on all of this. If a single 140-character tweet is acting as a suitable replacement for your reporting... you've got bigger problems:

The other thing the Associated Press needs to think about is that if a 140-character post or two by one of your reporters on Twitter is a threat to your news service, then you have a problem that can’t be fixed by simply enforcing your social-media policies more stringently. This argument feels very similar to the debates that newspapers used to have when they first put up websites — about whether to post breaking news to their site, or “save” it for the paper. This was fundamentally a lose-lose situation, as most newspapers discovered, since saving it often involved others breaking the news first on their websites.

Filed Under: journalism, news, social media
Companies: associated press

Fox News Tells AP Not To Use Clips From GOP Debate; AP Apparently Unfamiliar With Fair Use

from the no-surprise dept

The Associated Press has a history that suggests it doesn't like fair use, even though its reporters and staff rely on it constantly. Yet, perhaps the AP is finally putting its money where its mouth is and will no longer rely on fair use at all. As Tim Lee points out, in this video clip the AP put together of the GOP presidential candidates' debate, there is no footage of the actual debate shown, and the AP says (at about 28 seconds) that "Fox News Channel did not allow AP to select excerpts of the debate for use in this online video story." But, of course, short clips from debates are always used by competing news channels and they know that it's protected by fair use. There's so much that's bizarre about that single line in the story when you think about it. Why would AP ask permission in the first place? The whole point of fair use is that you don't need permission. Why would Fox deny the permission? Fox relies on fair use just as much as others do, and "denying" another news provider seems likely to come back and haunt them. Why didn't the AP use the video clips anyway and stand up for their basic fair use rights?

Filed Under: copyright, debate, fair use, fox news, gop
Companies: associated press, fox, news corp.

Associated Press Carelessness Reaches Boiling Point

from the forget-fact-checkers,-we-need-laugh-testers dept

Recently, we were all very proud when the Associated Press finally figured out how to use hyperlinks (sort of). But perhaps we shouldn't have been surprised that it took them so long to master such advanced technology, since it turns out they are still struggling with thermometers:

Northeast braces for temps near boiling point

NEW YORK (AP) — The extreme heat that's been roasting the eastern U.S. is only expected to get worse, and residents are bracing themselves for temperatures near and above boiling point. Weather service heat warnings and advisories have been issued Friday from Ohio to Maine.

The high temperatures and smothering humidity will force up the heat indexes. Boston's 99 degrees on Friday could feel like 105 degrees; Philadelphia's 102 degrees like 114 degrees and Washington, D.C.'s 103 degrees may seem the same as a melting 116 degrees.

I guess the AP never passed AP Chemistry, because as you've probably noticed, they have made a small conversion error. As it turns out, cheesesteaks are still the meltiest things in Philadelphia, and the Gulf of Maine has not turned into the world's biggest lobster bisque. In fact, here in Toronto we've been enduring similar temperatures for the past week, and the only damage is to our beer budgets.

(Since the AP is fond of making un-noted corrections, here's a screenshot)

Filed Under: fact checking, journalism, temperatures
Companies: associated press

AP Finally Learns That On The Internet, You Can Link To Other Sites

from the about-time dept

Well, look at that. The Associated Press has reached 1993 or so, and realized that they can (and probably should) link to other sites when reporting on a story that those other sites reported first. Of course, they're still learning some of HTML's features, such as the idea that you can link to actual words in a story. Instead, they'll be putting the links (via Bitly) in parentheses right after they cite the source.

Pickups will now include a parenthetical bit.ly link to the original story, in addition to the credit. So in the fireworks story, you might see: “According to the Boston Globe report (http://bit.ly/pDHZ6h)...” The change will be most noticeable on state wires, where pickups are common.

And, of course, they're still working out the kinks. Apparently, some of the tests didn't show up as links, but instead showed the full HTML text for a link (i.e., <a href="...">). Oops. Still, we welcome the Associated Press to the world wide web. Look around, you might enjoy it. Just, please, skip over the blink tag phase.

Filed Under: journalism, linking
Companies: associated press

AP Apparently Less Concerned About Others' Copyrights; Sued For Infringing By Courtroom Artist

from the funny-how-that-works dept

Why is it always the case that the strongest defenders of copyright law seem to pop up in cases involving them being accused of violating the copyrights of others? The latest, as pointed out by Paul Alan Levy, is that a "famous" (in the right circles) courtroom sketch artist -- who has sketched people at many very famous trials, is now suing both the Associated Press and Getty Images for reselling her images without a license. The artist, Patricia Ann Lopez, who's been doing this for decades, says she always works as an independent contractor for publications and has made sure to always retain the copyrights. She does license her images regularly to news organizations, but that license doesn't include the right to then resell it. However, the Associated Press is apparently moving on and selling her images despite a lack of license.

Now, you may recall that the Associated Press is one of the more aggressive news-related organizations out there in screaming about the importance of protecting copyright. And, remember how ridiculously aggressive it's been in suing lots of people and companies over their usage of the Obama "Hope" poster images -- which were loosely based on an AP photograph. So it seems a bit ironic that the AP would then not properly clear the licenses, and then seek to profit directly from the copyrighted works of others... I guess, as we've seen before, when it comes to the copyrights of others the Associated Press has a very different standard...

Filed Under: copyright, courtroom artist
Companies: associated press

Big Media To Innovative App Maker: Stop Innovating Without Our Permission!

from the permission-nation dept

There are a bunch of different newsreader type apps out there, and for years there have been all sorts of apps that let you aggregate content into personal collections. A new one, which recently hit the market for iPads, is called Zite and, apparently, it's getting pretty good reviews. Basically, it can look at what you follow on things like Twitter and Google Reader and formats an algorithmically chosen aggregation of that content to look something like a magazine. If you're familiar with Flipboard, it's somewhat similar, but the implementation is a bit different. I remember when Flipboard came out, there were copyright questions concerning how it scraped various websites.

However, for whatever reason, this new service Zite has really set off pretty much everyone in the traditional newspaper business. A list of who's who in the newspaper/magazine world, including the Associated Press, the Washington Post, Dow Jones, Scripps, Gannett, McClatchy, Time and even National Geogrpahic, all teamed up to send a nastygram (embedded below) that effectively says "hey, we're all for innovation, but you can't innovate without first paying us."

Now, to be clear, technically these newspapers may have a point concerning the fact that Zite displays their content. But if you start to go down that path, you suddenly realize that so does a browser. Zite is really just a form of a browser, that tries to make their content more useful. Again, some may point out that Zite strips some ads from publications, but, again, so do many browsers that have ad blocking extensions installed. When viewed that way, how is Zite really anything other than a specialized browser? If they're claiming that's infringing, then is it really that different from claiming that other browsers/aggregating tools are infringing.

And, honestly, if creating an app that makes it easier to read your content is a threat to your business, you're doing business wrong.

I will say I'm a bit surprised to see the NY Times missing from the list of angry publications, since they've gotten upset about similar apps in the past, but really, this just seems like another example of publications thinking that anyone making their content more readable has to first get permission. If someone wants to make Techdirt content more readable, please go right ahead.

Filed Under: copyright, flipboard, innovation, permission, zite
Companies: associated press, down jones, gannett, mcclatchy, scripps, washington post, zite