Jumat, 30 Mei 2014

Right to Be Forgotten? Not That Easy

LONDON — Eoin McKeogh knows how hard it can be to make the Internet forget.

He started waging a court battle against the likes of Google, Facebook and Yahoo after a Dublin cabdriver posted a video in 2011 that showed someone who looked like him — but wasn't — bailing on his cab fare. Mr. McKeogh, a university student who was in Japan at the time, was pilloried on the Internet after an anonymous user falsely named him as the fare dodger.

While the original video was taken down long ago, Mr. McKeogh continues to fight in court to expunge the digital trail. He is among the thousands of Europeans trying to erase their online histories.

In France, a mother recently sought to remove photos of her scantily clad teenage daughter from a website. In Romania, a woman tried to curtail online access to records of her divorce. In Britain, a former politician wanted to delete Google links to a book he viewed as defamatory toward him.

Such efforts have accelerated after a landmark decision by the European high court this month that will require Google and other search providers to consider individuals' requests to remove links that they say infringe on their privacy.

In the first few days after the ruling, about 1,000 Europeans asked Google to take down links, with about half having criminal convictions and half not, according to people briefed on the requests. The requests included an actor seeking to expunge links to articles about an affair with an underage girl and a doctor seeking to take down negative reviews.

Search companies will face a considerable challenge in responding to the requests. Google alone handled more than 23 million requests in the last month to remove links to copyrighted material around the world. But much of those efforts are automated and address straightforward issues like taking down a link to a stolen movie.

Dealing with individuals who bring complaints in Europe promises to be more complex because it would most likely require additional employees to grapple with less clear-cut decisions. Google now has a web form for Europeans to request that links be removed. The company also said it plans to create an advisory committee to "cultivate a public conversation about these issues."

While the ruling appears to newly enshrine a "right to be forgotten," Europe has long taken an aggressive stance on individual rights in the digital age. Each nation in the European Union already has a data protection agency through which citizens can appeal for help in erasing their online histories.

The court decision stems from a case brought by a Spaniard, Mario Costeja González, who was concerned about the prominence given by Google to a short newspaper notice from the 1990s about a house he owned being sold off to pay debts. "I was never worried about my online image, I was worried about the impact on my work," Mr. Costeja González, a lawyer, said in a brief interview. "I have always been in favor of freedom of expression."

But the tech industry has portrayed the decision as a blow against the free flow of information on the web and a victory for those who want to cover up past misdeeds — including pedophiles, corrupt politicians and unscrupulous businesspeople.

"A simple way of understanding what happened here is that you have a collision between a right to be forgotten and a right to know. From Google's perspective that's a balance," Eric Schmidt, Google's executive chairman, said in recent comments on the decision. "Google believes, having looked at the decision, which is binding, that the balance that was struck was wrong."

Historically, many requests have been aimed at blocking wider access to what many would view as part of the public domain.

Indaco Systems, a Romanian company, operates a website that publishes Romanian court proceedings, which are released by the government. The company has received hundreds of complaints this year from citizens who are concerned about public access to court filings that involve them. Many of the complaints are spurred by Google links leading to the case records.

Adrian Nicolaide, a lawyer for Indaco, said "the information is either public — and in this case anyone should have access to it — or it is not public, and the public should have no free access."

"Google indexing official public information leads that information to a whole new level of publicity, but it does not infringe the very purpose of public information," he added.

The ruling also reflects the historically divergent views on privacy between the United States and Europe, and it comes alongside deep mistrust of American technology spurred by the revelations about the United States government's mass surveillance practices.

The court ruling "echoes what we identify as a social trend, which is the will of the individuals to master their online life," said Isabelle Falque-Pierrotin, the chairwoman of the French data protection agency. Her agency is already taking in about 2,000 complaints a year from people who want Internet content or links taken down, she said.

She said the recent ruling was almost immediately cited in complaints coming into her agency.

"It's much too early to say it's going to lead to an automatic increase, but I was surprised that within 24 hours some people who were complaining were mentioning this court ruling," she said. "Lawyers are very efficient."

Once a contested item is online, however, the genie will not easily go back in the bottle.

In Mr. McKeogh's case, an Irish judge indicated the taxi video could still be found, and compelled the technology companies to take steps to remove "tags, threads and other means by which the material remains accessible and viewable."

"All manner of nasty and seemingly idle minds got to work on the plaintiff, and as seems to happen with apparent impunity nowadays on social media sites, said whatever things first came into their vacant, idle and meddlesome heads," Judge Michael Peart of Dublin wrote last year, when he granted Mr. McKeogh an injunction in a case.

Mr. McKeogh's lawyer declined requests for comment, citing the litigation. The case is now being considered by the Irish Supreme Court.

Judge Peart, in one of his rulings, noted the complexities of Mr. McKeogh's quest. "This court does not have a magic wand," he wrote. "The damage has already been done, and it is impossible to 'unring' the bell that has sounded so loudly."

Europeans have a long history of trying to reclaim their privacy.

Consider the case of Alexandre Dumas. In 1867, Dumas, the 65-year-old French author of "The Count of Monte Cristo," posed for a series of what were seen as racy pictures with Adah Menken, a much younger American actress who was rumored to be his mistress. She posed in her underwear in some of the photos and cuddled with Dumas in others. A scandal followed when some of the pictures were published, and Dumas went to the French courts to try to get them back.

"Privacy is deeply connected with the protection of personal honor in Europe," said James Q. Whitman, a Yale law professor who wrote a detailed study contrasting European and American privacy policies.

"The European understanding is that public dissemination of embarrassing facts about one's past could undermine one's sense of honor and standing in society," he added. "American privacy law isn't really dedicated in the same way to protecting personal honor or social standing."

In 1867, the French courts ruled that a "right to privacy" superseded the photographer's property rights, and ordered the photos be sold back to Dumas. Still, some of them can be seen today. On the Internet.


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Kamis, 29 Mei 2014

Business Briefing: Abercrombie’s Results Exceed Expectations

The teenage-clothing retailer Abercrombie & Fitch reported a wider first-quarter loss on Thursday, but its shares rose as its results beat expectations. Abercrombie has been facing weak sales in the face of tough competition and fickle teenage tastes. It has been cutting costs and closing underperforming stores to shore up results. It is facing criticism from investors for inability of the longtime chief executive, Mike Jeffries, to turn around results fast enough. The retailer lost $23.7 million, or 32 cents a share, for the three-month period to May 3, but forecasts were lower than that. That compares with a loss of $7.2 million, or 9 cents a share, a year ago. But its adjusted loss amounted to 17 cents a share. Revenue fell 2 percent to $822 million. Analysts expected revenue of $797 million. Revenue in stores open at least one year, a crucial retail metric, fell 11 percent. The company said it still expected full-year earnings of $2.15 to $2.35 per share. Analysts expect earnings of $2.34 per share.


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An 1ncrease 1n Recalls Goes Beyond Just G.M.

The growing number of recalls is spreading beyond General Motors.

Ford Motor said on Thursday that it was recalling about 1.3 million vehicles, including about 1.1 million in the United States, mostly because of steering problems. So far this year, Ford has recalled more than 2.9 million vehicles in the United States, far surpassing last year's 1.2 million vehicles.

There is now heightened sensitivity among automakers and regulators over safety, ever since G.M. in February began recalling millions of smaller cars with a defective ignition switch that it has linked to 13 deaths. This month, regulators fined G.M. a record $35 million, the maximum allowed, for not reporting the defect in a timely manner.

"This recall could be driven by the heightened sense of concern all automakers are feeling right now," said Karl Brauer, senior analyst at Kelley Blue Book.

A Ford spokeswoman, Kelli Felker, said, "These recalls are part of our normal processes."

Other automakers are reporting higher recall numbers as well. In one action in March, Nissan recalled 990,000 vehicles in the United States, about 30,000 more than in all of last year. And Toyota is already more than halfway to exceeding its total from last year, when it led all automakers with 5.3 million vehicles recalled.

The costs of the recalls are also mounting. While G.M. has set aside $1.7 billion to pay for the more than 13 million vehicles it has recalled this year, Ford said in April that it had taken a $400 million charge in the first quarter to pay for warranty claims, including $350 million for recalls and other repair work on older model cars.

All four of the recalls announced on Thursday come several years after the automaker first knew of problems, and in three cases, only after investigations by either the National Highway Traffic Safety Administration or its counterpart Transport Canada.

The largest recall involves about 915,000 Ford Escape and Mercury Mariner sport utility vehicles from the 2008 to 2011 model years because the power steering may shut off, the automaker said. About 736,000 of the vehicles are in the United States.

Ford said a problem with a sensor could cause a switch to manual steering, making the vehicle more difficult to turn. Ford said it was aware of five accidents involving six injuries related to the steering problem.

Ford told regulators that it was aware of a problem in 2009 and made improvements in the part about a year later. But there was no recall.

Then late in 2011, Transport Canada began an investigation after receiving complaints from owners. At the time, Ford said there was no need for a recall because the vehicle could still be steered. The Canadian regulators, however, continued to push, leading to Ford's decision to recall the vehicles in both countries.

The National Highway Traffic Safety Administration website lists several hundred complaints from owners, including at least nine claims of accidents and six injuries.

"The power steering goes out while driving or parked," one owner wrote to the agency. "The car needs to be pulled over and restarted. This is very unsafe."

Another owner said that Ford wanted $1,500 for the repair.

There is no indication that the agency ever opened an investigation, but a spokeswoman said it was monitoring the situation.

The second recall action announced on Thursday covers about 195,500 Ford Explorers from the 2011-13 model years, in which a poor electrical connection in the steering could cause the loss of power assist. Almost 178,000 of the sport utility vehicles are in the United States.

Ford said it was aware of 15 accidents, which it said took place at low speeds, and two injuries, described as minor, related to the defect, Ms. Felker wrote in an email.

Ford said it began investigating "quality issues" with the steering in the summer of 2011 after noticing more warranty claims than expected. That fall, the automaker modified a part to fix the problem. But there was no recall.

In June 2012, however, American safety regulators began an investigation based on complaints from owners. As with the steering issue with the Escape and Mariner, Ford said that even if power assist was lost, the vehicle could still be controlled. But the safety agency continued to push for a recall, and this month, the automaker agreed.

The third recall covers about 196,600 2010-14 Tauruses with corrosion in the rear license plate lamps that could cause a short circuit and fire. The recall includes about 183,400 in the United States.

Ford is recalling vehicles only in places that use a lot of road salt, including New York, New Jersey and Connecticut. The recall is also taking place in Delaware, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, Wisconsin and the District of Columbia.

Ford told federal regulators that it was aware of a problem in 2011 and that it had been monitoring the problem. Ms. Felker said the automaker was aware of 18 reports of fires and one minor injury.

The fourth recall covers about 82,500 all-weather floor mats on some 2006-11 Fusions, Mercury Milans, Lincoln Zephyrs and Lincoln MKZs. The mats may have come with the vehicles or been bought from a dealer. Ford is aware of two complaints that the accelerator jammed, but no accidents, Ms. Felker wrote in an email.


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Bits Blog: Police, Pedestrians and the Social Ballet of Merging: The Real Challenges for Self-Driving Cars

Recently at a press event held to showcase Google's research in self-driving vehicles, project leader Christopher Urmson said that the problems posed by driving on city streets are between 10 and 100 times more difficult than freeway driving. Robot vehicles confronted with other vehicles, pedestrians and bicyclists do seemingly random things, and the roadway can change at a moment's notice.

By dramatically slowing the speed of its robot car – limiting it to 25 miles per hour – and by removing the human driver entirely, Google is attempting to simplify the problem as well as mitigate any damage that the machines might cause should they fail.

Mr. Umson said that when a car brakes at 25 miles per hour, "you have half the kinetic energy you have at 35 m.p.h."

Even at more languid speeds, one person who believes that Google has undertaken a tremendous challenge with self-driving cars on city streets is John J. Leonard, a veteran Massachusetts Institute of Technology roboticist, who developed one of the basic navigation techniques being widely used in autonomous vehicles. Dr. Leonard was a key member of the MIT team entered in DARPA's 2007 Urban Vehicle challenge, a contest for robotic vehicles sponsored by the Defense Advanced Research Projects Agency.

He has taken his camera to the streets in Cambridge, Mass. and Boston to hunt for situations that might be challenging for robot vehicles. These "edge" cases – unusual events that might be unexpected by the car's sensors and navigational equipment – are potentially a huge stumbling block to safe driving, even if they are extremely rare.

He has not yet compared notes with Google's researchers to see which of his challenging situations the Google car can already solve, but some of them are clearly driving hurdles that would be tough for the best human driver.

My personal favorite of Dr. Leonard's videos features a driver who comes to a busy intersection with traffic coming by in both directions. The challenge is not only watching the partially obscured traffic coming at high-speed from the left, but the continuous line of traffic coming from the right which requires a social as well as visual ballet to merge. The driver must use his car as a wedge and hope that the oncoming driver will give way gracefully. (I wonder how programmers will learn to deal with computer "road rage.")

In a second case, even though lights are green at an intersection, a uniformed police officer motions with one arm and then steps out into a crosswalk to stop traffic and make way for pedestrians.

In the third video, the driver must carefully keep an eye out for a double yellow freeway separator that has been obscured either by weather or roadwork so as to avoid oncoming traffic.

The challenge in the fourth video, in which pedestrians run out into the intersection after a light has turned green, is one that I believe Google's software can already handle with ease. In the demonstrations the company has given, the software can efficiently track individual pedestrians and bicyclists and make allowances for erratic behavior.

Finally, there is a still photograph of a snow-covered avenue in which lane markings are entirely obliterated. This is a challenge Google has said it has not yet solved.

Google has said it has not yet solved the ability for one of its autonomous vehicles to be able to detect lane markers covered by snow.John J. LeonardGoogle has said it has not yet solved the ability for one of its autonomous vehicles to be able to detect lane markers covered by snow.

Despite enumerating the remaining challenges, Dr. Leonard said he is impressed with the progress that Google has made so far, both in advancing existing navigational techniques and doing so while they have reduced the amount of computing resources necessary to navigate safely.

"I have mixed emotions," he said. "I have amazing respect for Google, but I do worry about public misunderstanding of what has been accomplished."

The problem, he suggested is the public may come to believe that the problem is closer to being solved than it actually is.


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Ford Recalls 1.1 Million S.U.V.s Because of Faulty Power Steering

In three actions, Ford said Thursday it was recalling about 1.3 million vehicles, mostly because of steering problems. In a separate equipment recall, the automaker said it would replace about 82,500 floor mats because they could jam against the accelerator pedal.

All the recalls come several years after Ford first knew of the problems and in three cases after investigations by either the National Highway Traffic Safety Administration or the Canadian safety agency Transport Canada.

The largest recall involves about 915,000 2008-11 Ford Escape and Mercury Mariner sport utility vehicles because they may lose the power assist to the steering, the automaker said Thursday. About 736,000 of the vehicles are in the United States.

Ford said a problem with a torque sensor might be causing a switch to manual steering, "making the vehicle more difficult to steer."

In a report to the United States safety agency, Ford said it was aware of a quality problem in 2009 and made improvements in the part about a year later. But there was no recall.

Late in 2011, Transport Canada began an investigation after receiving complaints from owners. Ford insisted the problem was not serious because the vehicle could still be steered. The Canadians, however, continued to push, leading to Ford's decision to recall the vehicles in both countries.

Ford said it was aware of claims of five accidents involving six injuries. The N.H.T.S.A. website lists several hundred complaints from owners, including at least nine claims of accidents and six injuries.

"The power steering goes out while driving or parked," one owner wrote to the agency. "The car needs to be pulled over and restarted. This is very unsafe."

Another owner complained that Ford wanted $1,500 for the repair.

There is no indication the agency ever opened an investigation, and a spokesman did not immediately respond to a request for comment.

The second recall action covers about 195,500 2011-13 Explorers in which a poor electrical connection in the steering could cause the loss of power assist. Almost 178,000 of the sport utility vehicles are in the United States.

Ford said it was aware of 15 accidents, which it said took place at low speeds, and two injuries, described as minor, related to the defect, a Ford spokeswoman, Kelli Felker, wrote in an email.

Ford said it began investigating "quality issues" with the steering in the summer of 2011 after noticing more warranty claims than expected. That fall the automaker modified a part to fix the problem. But there was no recall.

In June 2012, however, the N.H.T.S.A. began an investigation based on complaints from owners. Ford responded that even if power assist was lost the vehicle could still be controlled. However, the safety agency continued to push for a recall, and this month the automaker agreed.

The third recall covers about 196,600 2010-14 Tauruses with corrosion in the rear license plate lamps that could cause a short circuit and fire. The recall includes about 183,400 in the United States.

Ford is recalling vehicles only in places that use a lot of road salt, including New York, New Jersey and Connecticut. The recall is also taking place in Delaware, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, Wisconsin and the District of Columbia.

Ford told federal regulators it was aware of a problem in 2011 and had been monitoring the problem. Ms. Felker said the automaker was aware of 18 reports of fires and one minor injury.

The fourth recall covers about 82,500 all-weather floor mats on some 2006-11 Fusions, Mercury Milans, Lincoln Zephyrs and Lincoln MKZs. The mats may have come with the vehicles or been purchased from a dealer. Ford is aware of two complaints that the accelerator jammed, but no accidents, Ms. Felker wrote in an email.

After receiving complaints from owners, the safety agency began investigating the floor mats in May 2010. Ford resisted a recall, and the agency upgraded the investigation in December 2012. In March, federal regulators said their tests showed that a floor mat could interfere with the accelerator pedal, although Ford officials said they could not duplicate the problem. This month, the automaker agreed to a recall.


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DealBook: Tyson Foods Swoops 1n With Bid for Hillshire

Hillshire's brands include Hillshire Farm, Jimmy Dean, State Fair and Ball Park.M. Spencer Green/Associated PressHillshire's brands include Hillshire Farm, Jimmy Dean, State Fair and Ball Park.

Tyson Foods swooped in on Thursday and started a bidding war for Hillshire Brands, making a $6.8 billion unsolicited offer for the packaged meat producer that trumps an existing offer from Pilgrim's Pride.

It was just two days ago that Hillshire, the maker of Ball Park hot dogs and Jimmy Dean sausages received an offer from Pilgrim's Pride of $45 per share, valued at $6.4 billion including the assumption of debt.

Tyson said its offer, of $50 per share, values Hillshire at 35 percent above its unaffected stock price earlier this month, before it inadvertently put itself in play by trying to strike a deal of its own. The equity value of the offer is $6.1 billion. Including the assumption of debt, the deal is valued at $6.8 billion.

Earlier this month, Hillshire offered $4.6 billion for Pinnacle Foods, the maker of Vlasic pickles and Birds Eye frozen vegetables, a deal that left analysts scratching their heads.

Now, Hillshire and its shareholders find themselves in the middle of a bidding war between two large rivals.

"We believe that there is a strong strategic, financial and operational rationale for the combination of Tyson and Hillshire," Donnie Smith, the chief executive of Tyson Foods, said in a statement. "Our proposal provides Hillshire shareholders with an immediate cash premium for their shares that we believe is both greater and more certain than what can be attained in the near term by the company either on a stand-alone basis or in combination with any other food processing company.

Should Tyson succeed in acquiring Hillshire, it would mean the end of the bid for Pinnacle.

"Our interest is in the company on its own, and not as combined with Pinnacle," Mr. Smith wrote in a letter to Hillshire's chief executive, Sean Connolly. "Accordingly, the termination of the Pinnacle merger agreement would be a condition to our proposed transaction."

Hillshire has known it was a target for some time. A few months before it made its offer for Pinnacle, Pilgrim's Pride privately approached the company about a merger but was rebuffed.

The Tyson offer was set in motion after Hillshire made its bid for Pinnacle, according to a person briefed on the process. Tyson was surprised when Pilgrim's Pride made its own offer this week.

But Tyson, this person said, believes its bid is superior, not only because its premium of 35 percent is large compared with other premiums this year, but also because its offer has no financing contingencies.

Pilgrim's Pride and its majority owner, the Brazilian meatpacking titan JBS, must now decide if they want to enter into a bidding war with Tyson. Pilgrim's Pride did not immediately comment on the Tyson bid.

In the letter to Hillshire's chief executive, Mr. Smith said, "We would have preferred to make this proposal to you privately, but in light of current circumstances we believe that it is in the best interests of your and our shareholders to have current and accurate information about our proposal and the reasons we believe that it is a compelling opportunity for both of our companies."

Tyson is one of the largest producers of chicken, pork and beef, with more than $34 billion in annual revenue. It has a market capitalization of more than $14 billion. Tyson shares were up in premarket trading on news of its bid for Hillshire.

Tyson said there was no financing condition to its offer, and that it had secured a bridge loan to pay for the all-cash deal.

Morgan Stanley and JPMorgan Chase are advising Tyson, and Davis Polk & Wardwell is providing legal advice.


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A Revision Shows the Economy Shrank Last Quarter

In a sharp downward revision of its estimate for growth at the start of 2014, the Commerce Department said Thursday that the economy shrank at an annual rate of 1 percent last quarter.

Experts had predicted the revised data for the first quarter would be lackluster, and growth is expected to revive in the current quarter. Still, the economy's performance in the period of January, February and March reflects the first quarterly decline in three years.

The unusually cold winter has been blamed by the Federal Reserve and private economists for a substantial part of the slowdown. But the revision Thursday was prompted by slower additions to inventories on the part of businesses and a slightly weaker trade balance than first thought.

The initial estimate by the Commerce Department released last month showed the economy grew at a rate of 0.1 percent, and economists on Wall Street were expecting Thursday's revision to show a 0.5 percent rate of contraction.

In the current quarter, the growth rate is expected to rebound to between 3 and 4 percent on annual basis, putting the economy back on the growth trajectory it reached in the second half of 2013. And a final revision of the first quarter's performance will be released June 25.

"Even if gross domestic product does show a contraction, I don't believe the economy is in any danger," said Gus Faucher, senior economist at PNC Financial Services, in an interview before the release of the data. "We had a hit in terms of weather and we will see a bounce back in activity in the second quarter."

Still, the on-again, off-again pattern of economic expansion in the current recovery explains why so many Americans remain skeptical that things really are getting better, despite strong corporate profits and a booming stock market.

Earlier this week, the Standard & Poor's 500-stock index hit a fresh high, and the index is up over 3 percent so far this year. In 2013, the S.&P. index rose nearly 30 percent.

Despite the likelihood of a pickup this quarter, economists have been reassessing the prospects for growth over the next year or two, said Michael Hanson, senior United States economist at Bank of America Merrill Lynch.

"Many market participants are pricing in lower growth than they expected six months ago," said Mr. Hanson, adding that these concerns about the potential of the economy to sustain faster growth over time may help explain why investors have piled into Treasury bonds recently, including on Wednesday, driving yields sharply lower.

At 2.45 percent Wednesday, the yield on the benchmark 10-year Treasury bond was close to lows last seen a year ago, when the Federal Reserve started to signal it would begin easing its efforts to stimulate the economy.

Treasury bond yields typically rise when economic growth picks up, but yields are half a percentage point lower now than they were at the start of 2014. Fed officials have said they plan to keep reducing their stimulus efforts through the end of 2014 and have indicated they will begin raising short-term rates in the second half of 2015.


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