Head of WhatsApp to Leave Company

The head of popular messaging service WhatsApp is planning to leave the company because of a reported disagreement over how parent company Facebook is using customers’ personal data. 

WhatsApp billionaire chief executive Jan Koum wrote in a Facebook post Monday, “It’s been almost a decade since (co-founder) Brian (Acton) and I started WhatsApp, and it’s been an amazing journey with some of the best people. But it is time for me to move on,” he said.

Koum did not give a date for his departure.

The Washington Post reported Monday that Koum is stepping down because of disagreements over Facebook’s attempts to use the personal data of WhatsApp customers, as well as efforts to weaken the app’s encryption. 

Action left the company last fall and since then has become a vocal critic of Facebook, recently endorsing a #DeleteFacebook social media campaign.

The Post, citing people familiar with internal WhatsApp discussions, said Koum was worn down by the differences in approach to privacy and security between WhatsApp and Facebook.

When WhatsApp agreed to the company’s sale to Facebook in 2014 for $19 billion, it said WhatsApp would remain an independent service and would not share its data with Facebook. 

However, 18 months later, Facebook pushed WhatsApp to change its terms of service to give the social network access to the personal data of WhatsApp users. 

WhatsApp is the largest messaging service in the world with 1.5 billion monthly users. However, Facebook has been struggling to find ways to make enough money from the app to prove its investment was worth the cost. 

Facebook has faced intense criticism since March when news broke that the personal data of millions of Facebook users had been harvested without their knowledge by Cambridge Analytica, a British voter profiling company that U.S. President Donald Trump’s campaign hired to target likely supporters in 2016.

Facebook chief executive Mark Zuckerberg testified before Congress earlier this month and apologized for inadequately protecting the data of millions of social media platform users. 

Facebook also recently announced it would allow all its users to shut off third-party access to their apps and said it would set up “firewalls” to ensure users’ data was not unwittingly transmitted by others in their social network.

Some members of Congress said Facebook’s actions to rectify the situation did not go far enough and have called for greater regulation of the internet and social media.


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Paper Plane Protesters Urge Russia to Unblock Telegram App

Thousands of people marched through Moscow, throwing paper planes and calling for authorities to unblock the popular Telegram instant messaging app on Monday.

Protesters chanted slogans against President Vladimir Putin as they launched the planes – a reference to the app’s logo.

“Putin’s regime has declared war on the internet, has declared war on free society… so we have to be here in support of Telegram,” one protester told Reuters.

Russia began blocking Telegram on April 16 after the app refused to comply with a court order to grant state security services access to its users’ encrypted messages.

Russia’s FSB Federal Security service has said it needs access to some of those messages for its work, that includes guarding against militant attacks.

In the process of blocking the app, state watchdog Roskomnadzor also cut off access to a slew of other websites.

Telegram’s founder, Russian entrepreneur Pavel Durov, called for “digital resistance” in response to the decision and promised to fund anyone developing proxies and VPNs to dodge the block.

More than 12,000 people joined the march on Monday, said White Counter, a volunteer group that counts people at protests.

“Thousands of young and progressive people are currently protesting in Moscow in defense of internet freedom,” Telegram’s Durov wrote on his social media page.

“This is unprecedented. I am proud to have been born in the same country as you. Your energy changes the world,” Durov wrote.

Telegram has more than 200 million global users and is ranked as the world’s ninth most popular mobile messaging service.

Iran’s judiciary has also banned the app to protect national security, Iranian state TV reported on Monday.


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State TV: Iran’s Judiciary Bans Using Telegram App

Iran’s judiciary has banned the popular Telegram instant messaging app to protect national security, Iran’s state TV reported Monday.

“Considering various complaints against Telegram social networking app by Iranian citizens, and based on the demand of security organizations for confronting the illegal activities of Telegram, the judiciary has banned its usage in Iran,” TV reported.

The order was issued days after Iran banned government bodies from using Telegram, which is widely used by Iranian state media, politicians, companies and ordinary Iranians.

A widespread government internet filter prevents Iranians from accessing many sites on the official grounds that they are offensive or criminal.

But many Iranians evade the filter through use of VPN software, which provides encrypted links directly to private networks based abroad, and can allow a computer to behave as if it is based in another country.

“The blocking of Telegram app should be in a way to prevent users from accessing it with VPN or any other software,” Fars said. The app had over 40 million users in Iran.


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Ugandan Government Eyes Tax on Mobile Data Use

Uganda’s President Yoweri Museveni was criticized this month when he asked the Finance Ministry to find a way to tax social media use, in order to control what he called “gossip” online. Officials have since walked back that characterization, though they say they are pushing ahead with efforts to add a daily tax on mobile data use beginning this July. For VOA, Halima Athumani reports from Kampala.


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ISS to Get a New Commander and AI Assistant

On June 6, a few months short of its 20th birthday, the International Space Station or ISS, is scheduled to receive its newest crew, including the new commander, German astronaut Alexander Gerst. While Gerst and other members of his team are undergoing rigorous training in NASA’s Johnson Space Center in Houston, Airbus engineers are preparing the first personal assistant to fly to the space. VOA’s George Putic reports.


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US Wireless Carriers T-Mobile, Sprint Announce Merger

The third and fourth biggest U.S. wireless carriers, T-Mobile and Sprint, said Sunday they plan to merge, the third attempt they’ve made to join forces against the country’s two biggest mobile device firms, Verizon and AT&T.

The deal, if it happens this time, calls for T-Mobile to buy Sprint for $26 billion in an all-stock deal.

The combined carrier would have 126 million customers, still third in the pecking order of U.S. wireless carriers, but closer to the top two. Verizon has more than 150 million customers, and AT&T more than 142 million.

The latest agreement caps four years of on-and-off talks between T-Mobile and Sprint. Sprint dropped its bid for T-Mobile more than three years ago after U.S. regulators objected and another proposed merger fell through last November.

The new deal could help the combined companies slash costs to make the new business more competitive with industry leaders. But customers could also pay more for wireless coverage because the combined company may not have to offer as many deals to attract new customers.

U.S. regulators at the Federal Communications Commission are expected to take a close look at the merger’s effects on customers and whether the deal violates antitrust laws.


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Parenting of the Future? Pick an Embryo

The future of parenting may see a big change as scientists and ethicists have a startling prediction about how children will be conceived in the future. Thanks to biomedical advances, parents may be able to choose a child from hundreds of embryos based on their DNA profile. Faith Lapidus reports.


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China Rapidly Expanding its Technology Sector

If you want your technology sector to expand rapidly, it pays to have strong support from the government, easy access to bank loans and a large market, hungry for your products. All this is available in China, where technology companies are expanding at a rapid pace — making other countries, including the U.S. — a bit uneasy. VOA’s George Putic reports.


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Can a River Model Save Eroding Mississippi Delta?

Thousands of years of sediment carried by the Mississippi River created 25,000 square kilometers of land, marsh and wetlands along Louisiana’s coast. But engineering projects stopped the flow of sediment and rising seas thanks to climate change have made the Mississippi Delta the fastest-disappearing land on earth. Louisiana State University researchers created the river system in miniature to try to stop the erosion and rebuild the delta. Faith Lapidus narrates this report from Deborah Block.


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Genetics Help Spot Food Contamination

A new approach for detecting food poisoning is being used to investigate the recent outbreak of E.coli bacteria in romaine lettuce grown in the U.S. state of Arizona. The tainted produce has sickened at least 84 people in 19 states. The new method, used by the Centers for Disease Control and Prevention, relies on genetic sequencing. And as Faiza Elmasry tells us, it has the potential to revolutionize the detection of food poisoning outbreaks. VOA’s Faith Lapidus narrates.


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The Store Where Everything Is Made in America

From T-shirts, socks and toys to knives and lanterns, a store in upstate New York takes pride in only selling goods that are made in America. Olga Loginova from VOA’s Russian service talked to the store owner about his business, which emerged after the 2008 financial crisis.


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Consumers Close Wallets, Trim US 1st Quarter Growth

The U.S. economy likely slowed in the first quarter as growth in consumer spending braked sharply, but the setback is expected to be temporary against the backdrop of a tightening labor market and large fiscal stimulus.

Gross domestic product probably increased at a 2.0 percent annual rate, according to a Reuters survey of economists, also held back by a moderation in business spending on equipment as well as a widening of the trade deficit and decline in investment in homebuilding.

Those factors likely offset an increase in inventories. The economy grew at a 2.9 percent pace in the fourth quarter. The government will publish its snapshot of first-quarter GDP Friday at 8:30 a.m. 

Don’t lose sleep

The anticipated tepid first-quarter growth will, however, probably not be a true reflection of the economy, despite the expected weakness in consumer spending. First-quarter GDP tends to be soft because of a seasonal quirk. The labor market is near full employment and both business and consumer confidence are strong.

“I would not lose sleep over first-quarter GDP, there is the residual seasonality issue,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Overall the economy is doing very well and will continue to do well this year and into 2019.”

Economists expect growth will accelerate in the second quarter as households start to feel the impact of the Trump administration’s $1.5 trillion income tax package on their paychecks. Lower corporate and individual tax rates as well as increased government spending will likely lift annual economic growth to the administration’s 3 percent target, despite the weak start to the year.

Federal Reserve officials are likely to shrug off weak first-quarter growth. The U.S. central bank raised interest rates last month in a nod to the strong labor market and economy, and forecast at least two rate hikes this year.

Minutes of the March 20-21 meeting published earlier this month showed policymakers “expected that the first-quarter softness would be transitory,” citing “residual seasonality in the data, and more generally to strong economic fundamentals.”

Consumer spending lackluster

Economists estimate that growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, braked to below a 1.5 percent rate in the first quarter. That would be the slowest pace in nearly five years and follows the fourth quarter’s robust 4.0 percent growth rate.

Consumer spending in the last quarter was likely held back by delayed tax refunds and impact of tax cuts. Rebuilding and clean-up efforts following hurricanes late last year probably pulled forward spending into the fourth quarter.

“Our new consumer survey found that 37 percent of consumers thought they didn’t get any extra income from the tax cut or did not know what to do with it,” said Michelle Meyer, head of U.S. economics at Bank of America Merrill Lynch in New York. “It is possible this means that there is a lag in the consumer response to tax cuts.”

Business spending

Business spending on equipment is forecast to have slowed after double-digit growth in the second half of 2017. The expected cooling in equipment investment partly reflects a fading boost from a recovery in commodity prices. Economists expect a marginal impact on business spending on equipment from rising interest rates and more expensive raw materials.

“While we do not expect rising rates to crush equipment spending, a slowdown nevertheless appears in store,” said Sarah House, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “Higher interest rates will hurt at the margin.”

Investment in homebuilding is forecast to have declined in the first quarter after rebounding in the October-December period. Government spending probably contracted after two straight quarterly increases. Spending is, however, expected to rebound in the second quarter after the U.S. Congress recently approved more government spending.

Trade was likely a drag on GDP growth for a second straight quarter after royalties and broadcast license fees related to the Winter Olympics boosted imports.

With consumer spending slowing, inventories probably accumulated in the first quarter. Inventory investment is expected to have contributed to GDP growth after subtracting 0.53 percentage point in the fourth quarter.


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Amazon Delivers Profits, a $20 Prime Hike, NFL Games

Amazon.com Inc. more than doubled its profit Thursday and predicted strong spring results as the world’s biggest online retailer raised the price for U.S. Prime subscribers, added U.S. football games and touted its cloud services for business.

The results showed the broad strength of the company, which has been expanding far beyond shipping packages, the business that has drawn the ire of U.S. President Donald Trump.

The forecast beat expectations on Wall Street, sending shares up 7 percent to a new record in afterhours trade and adding $8 billion to the net worth of Jeff Bezos, Amazon’s chief executive and largest shareholder.

Seattle-based Amazon is winning business from older, big box rivals by delivering virtually any product to customers at a low cost, and at times faster than it takes to buy goods from a physical store. It is expanding across industries, too, striking a $130 million deal to stream Thursday night games for the U.S. National Football League online and working to ship groceries to doorsteps from Whole Foods stores nationwide.

Sales jumped 43 percent to $51.0 billion in the quarter, topping estimates of $49.8 billion, according to Thomson Reuters.

Prime now $119

Prime, Amazon’s loyalty club that includes fast shipping, video streaming and other benefits, has been key to Amazon’s strategy. Its more than 100 million members globally spend above average on Amazon.

The company announced Thursday it will increase the yearly price of Prime to $119 from $99 for U.S. members this spring.

The fee hike is expected to add a windfall to Amazon’s subscription revenue, already up 60 percent in the first quarter at $3.1 billion.

“We do feel it’s still the best deal in retail,” Brian Olsavsky, Amazon’s chief financial officer, said on a call with analysts. He said the number of items Prime members can get within two days had grown fivefold since the last price increase four years ago.

Advertising and the cloud

Despite the surge in shopping, Olsavsky gave credit for Amazon’s $1.6 billion profit last quarter to two younger businesses: advertising and Amazon Web Services.

Revenue from third-party sellers paying to promote their products on Amazon.com was an unusually large bright spot during the quarter, with sales in the category, which includes some other items, growing 139 percent to $2.03 billion. This included $560 million from an accounting change.

Amazon Web Services (AWS), which handles data and computing for large enterprises in the cloud, won new business and saw its profit margin expand. It posted a 49 percent rise in sales from a year earlier to $5.44 billion, beating estimates.

Amazon remains the biggest in the space by revenue, and its stock trades at a significant premium to cloud-computing rival Microsoft Corp.

Amazon’s shares have also outperformed the S&P 500, rising 30 percent this year as of Thursday’s market close, compared with the S&P’s less than 1 percent decline.

More workers, spending

Notorious for running on a low profit margin, Amazon has still reaped rewards for shareholders as it has bet on new services like voice-controlled computing and has expanded across continents and industries.

Global headcount was up 60 percent from a year earlier at 563,100 full-time and part-time employees, thanks to a hiring spree and an influx of workers from Whole Foods Market.

The company plans to increase its video content spending this year, Amazon’s Olsavsky said, with a prequel to “The Lord of the Rings” in the works. The third quarter will also see extra spending to prepare for the busy holiday season.

Amazon is working with JPMorgan Chase & Co and Berkshire Hathaway Inc to determine how to cut health costs for hundreds of thousands of their employees.

And it is expanding its retail footprint outside the United States, particularly in India. Amazon’s international operating loss grew 29 percent to $622 million in the first quarter.


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Mexico Economy Minister Says NAFTA Revamp Talks ‘Not Easy’

Much remains to be done before a new North American Free Trade Agreement is reached, Mexican Economy Minister Ildefonso Guajardo said Thursday, tempering hopes for a quick deal as ministers met in Washington for a third successive day.

Negotiators from the United States, Mexico and Canada have been working constantly for weeks to clinch a deal, but major differences remain on contentious topics such as autos content.

Complicating matters, the Trump administration has threatened to impose sanctions on Canadian and Mexican steel and aluminum on May 1 if not enough progress has been made on NAFTA.

President Donald Trump, who came into office in January 2017 decrying NAFTA and other international trade deals as unfair to the United States, has repeatedly threatened to walk away from the agreement with Canada and Mexico, which took effect in 1994.

“It is going, it’s going, but not easy — too many things, too many issues to tackle,” Guajardo told reporters after a meeting with U.S. Trade Representative Robert Lighthizer.

Now under way for eight months, the talks to revamp the accord underpinning $1.2 trillion in trade entered a more intensive phase after the last formal round of negotiations ended in March with ministers vowing to push for a deal.

Lighthizer is due to visit China next week, and when asked if a deal was possible before the USTR left, Guajardo said: “It will depend on our abilities and creativity. We are trying to do our best, but there are still a lot of things pending.”

Although Washington is keen for an agreement soon to avoid clashing with a July 1 Mexican presidential election, the three NAFTA members remain locked in talks to agree on new rules governing minimum content requirements for the auto industry.

Still, Canadian Foreign Minister Chrystia Freeland rejected the notion that discussion of the so-called rules of origin for the automotive sector was holding up the process.

“I would very much disagree with the characterization of the autos conversation as being log-jammed,” she said as she entered the USTR offices. “This is a week when very good, significant progress is being made on rules of origin for the car sector.”

Freeland said she would skip a planned visit to a NATO summit in Brussels on Friday, and vowed to stay in Washington for “as long as it takes.” Guajardo, too, said he was ready to remain in Washington this week for more talks.

Disagreements

The three sides are also trying to settle disagreements over U.S. demands to change how trade disputes are handled, to restrict access to agricultural markets and to include a clause that would allow a country to quit NAFTA after five years.

Bosco de la Vega, head of Mexico’s National Agricultural Council, the main farm lobby, said he believed the three would be able to reach an agreement on agricultural access.

But the auto sector rules were still contentious, he added.

“It’s the most important issue there,” he said, adding that he had earmarked May 10 as the deadline for a quick deal.

Separately, Canada on Thursday unveiled details of how it plans to prevent the smuggling of cheap steel and aluminum into the North American market in a bid to avoid the U.S. tariffs.

Prime Minister Justin Trudeau, who announced the plan last month, said Ottawa would hire 40 new trade officers to probe complaints, including those related to steel and aluminum.


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EU Piles Pressure on Social Media Over Fake News

Tech giants such as Facebook and Google must step up efforts to tackle the spread of fake news online in the next few months or potentially face further EU regulation, as concerns mount over election interference.

The European Commission said on Thursday it would draw up a Code of Practice on Disinformation for the 28-nation EU by July with measures to prevent the spread of fake news such as increasing scrutiny of advertisement placements.

EU policymakers are particularly worried that the spread of fake news could interfere with European elections next year, after Facebook disclosed that Russia tried to influence U.S. voters through the social network in the run-up to the 2016 U.S. election. Moscow denies such claims.

“These [online] platforms have so far failed to act proportionately, falling short of the challenge posed by disinformation and the manipulative use of platforms’ infrastructure,” the Commission wrote in its strategy for tackling fake news published on Thursday.

“The Commission calls upon platforms to decisively step up their efforts to tackle online disinformation.”

Advertisers and online platforms should produce “measurable effects” on the code of practice by October, failing which the Commission could propose further actions, including regulation “targeted at a few platforms.”

Companies will have to work harder to close fake accounts, take steps to reduce revenues for purveyors of disinformation and limit targeting options for political adverts.

The Commission, the EU’s executive, will also support the creation of an independent European network of fact-checkers and launch an online platform on disinformation.

Tech industry association CCIA said the October deadline for progress appeared rushed.

“The tech industry takes the spread of disinformation online very seriously…when drafting the Code of Practice, it is important to recognize that there is no one-size-fits-all solution to address this issue given the diversity of affected services,” said Maud Sacquet, CCIA Europe Senior Policy Manager.

Weaponizing fake news

The revelations that political consultancy Cambridge Analytica – which worked on U.S. President Donald Trump’s campaign – improperly accessed the data of up to 87 million Facebook users has further rocked public trust in social media.

“There are serious doubts about whether platforms are sufficiently protecting their users against unauthorized use of their personal data by third parties, as exemplified by the recent Facebook/Cambridge Analytica revelations,” the Commission wrote.

Facebook has stepped up fact-checking in its fight against fake news and is trying to make it uneconomical for people to post such content by lowering its ranking and making it less visible. The world’s largest social network is also working on giving its users more context and background about the content they read on the platform.

“The weaponization of online fake news and disinformation poses a serious security threat to our societies,” said Julian King, EU Commissioner for security. “The subversion of trusted channels to peddle pernicious and divisive content requires a clear-eyed response based on increased transparency, traceability and accountability.”

Campaign group European Digital Rights warned that the Commission ought not to rush into taking binding measures over fake news which could have an effect on the freedom of speech.

King rejected any suggestion that the proposal would lead to censorship or a crackdown on satire or partisan news.

“It’s a million miles away from censorship,” King told a news conference. “It’s not targeting partisan journalism, freedom of speech, freedom to disagree, freedom to be, in some cases, a bit disagreeable.”

Commission Vice-President Andrus Ansip said there had been some debate internally over whether to explicitly mention Russia in the fake news strategy.

“Some people say that we don’t want to name just one name. And other people say that ‘add some other countries also and then we will put them all on our list’, but unfortunately nobody is able to name those others,” the former Estonian prime minister said.


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Facebook’s Rise in Profits, Users Shows Resilience 

Facebook Inc. shares rose Wednesday after the social network reported a surprisingly strong 63 percent rise in profit and an increase in users, with no sign that business was hurt by a scandal over the mishandling of personal data.

After easily beating Wall Street expectations, shares traded up 7.1 percent after the bell at $171, paring a month-long decline that began with Facebook’s disclosure in March that consultancy Cambridge Analytica had harvested data belonging to millions of users.

The Cambridge Analytica scandal, affecting up to 87 million users and prompting several apologies from Chief Executive Mark Zuckerberg, generated calls for regulation and for users to leave the social network, but there was no indication advertisers immediately changed their spending.

“Everybody keeps talking about how bad things are for Facebook, but this earnings report to me is very positive, and reiterates that Facebook is fine, and they’ll get through this,” said Daniel Morgan, senior portfolio manager at Synovus Trust Company. His firm holds about 73,000 shares in Facebook.

Facebook’s quarterly profit beat analysts’ estimates, as a 49 percent jump in quarterly revenue outpaced a 39 percent rise in expenses from a year earlier. The mobile ad business grew on a push to add more video content.

Facebook said monthly active users in the first quarter rose to 2.2 billion, up 13 percent from a year earlier and matching expectations, according to Thomson Reuters.

The company reversed last quarter’s decline in the number of daily active users in the United States and Canada, saying it had 185 million users there, up from 184 million in the fourth quarter.

Resilient business model

The results are a bright spot for the world’s largest social network amid months of negative headlines about the company’s handling of personal information, its role in elections and its fueling of violence in developing countries.

Facebook, which generates revenue primarily by selling advertising personalized to its users, has demonstrated for several quarters how resilient its business model can be as long as users keep coming back to scroll through its News Feed and watch its videos.

It is spending to ensure users are not scared away by scandals. Chief Financial Officer David Wehner told analysts on a call that expenses this year would grow between 50 percent and 60 percent, up from a prior range of 45 percent to 60 percent.

Spending on security

Much of Facebook’s ramp-up in spending is for safety and security, Wehner said. The category includes efforts to root out fake accounts, scrub hate speech and take down violent videos.

Facebook said it ended the first quarter with 27,742 employees, up 48 percent from a year earlier.

“So long as profits continue to grow at a rapid rate, investors will accept that higher spending to ensure privacy is warranted,” Wedbush Securities analyst Michael Pachter said.

It has been nearly two years since Facebook shares rose 7 percent or more during a trading day. They rose 7.2 percent on April 28, 2016, the day after another first-quarter earnings report.

Net income attributable to Facebook shareholders rose in the first quarter to $4.99 billion, or $1.69 per share, from $3.06 billion, or $1.04 per share, a year earlier.

Analysts on average were expecting a profit of $1.35 per share, according to Thomson Reuters.

Total revenue was $11.97 billion, above the analyst estimate of $11.41 billion.

Some details secret

The company declined to provide some details sought by analysts. It has not shared the revenue generated by Instagram, the photo-sharing app it owns, and it declined to provide details about time spent on Facebook. Facebook also owns the popular smartphone apps Messenger and WhatsApp.

Tighter regulation could make Facebook’s ads less lucrative by reducing the kinds of data it can use to personalize and target ads to users, although Facebook’s size means it could also be well positioned to cope with regulations.

Facebook and Alphabet Inc’s Google together dominate the internet ad business worldwide. Facebook is expected to take 18 percent of global digital ad revenue this year, compared with Google’s 31 percent, according to research firm eMarketer.

The company said it was increasing the amount of money authorized to repurchase shares by an additional $9 billion. It had initially authorized repurchases up to $6 billion.


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