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China tech giant in spat with state

Written By andika jamanta on Rabu, 28 Januari 2015 | 23.58

28 January 2015 Last updated at 12:46

Alibaba, China's biggest net retailer, has engaged in a rare public row with one of the country's watchdogs.

The spat was prompted by the regulator's claim that Alibaba was "failing" to tackle illegal business being carried out on its platforms.

The company has reacted by accusing the watchdog of being "biased" and "wrong", adding that it plans to file a formal complaint of its own.

About 279 million buyers, and 8.5 million sellers use the firm's sites.

The company's founder, Jack Ma, announced last week that he intended to swell its number of customers to two billion people within the next decade by expanding across the world, posing a threat to eBay, Amazon and others. A clash with the authorities in its home market could prove a major distraction.

Alibaba previously acknowledged that its efforts to tackle the sale of counterfeit goods "may not always be successful", in documents filed ahead of its $25bn (£16.4bn) share sale in the US last year.

However, the firm also stressed that it was taking a variety measures to tackle unlawful acts on its platforms, noting that Washington no longer places its Taobao marketplace and Alibaba.com site on a list of "notorious markets".


The allegations made by China's State Administration for Industry and Commerce (SAIC) on Wednesday morning followed a meeting between the watchdog and Alibaba held last July.

The regulator accused the firm's bosses of "narcissism" and claimed they were failing to do enough to address the sale of goods that were trademark-infringing, substandard, and sometimes illegally imported. It added that it believed some of the firm's employees had taken bribes.

"Illegal business activities on Alibaba Group's platforms have for a long time failed to elicit sufficient attention, and [the company] for a long time has not adopted effective measures to address the situation," its report said, adding that the firm had let this "abscess fester until it became a danger".

It acknowledged that the firm had pledged to take action, but stated: "This not only is the biggest crisis of integrity faced by the company since its founding, but it has also hurt other internet companies that try to operate legally."

Government-watchers say such strong language is highly unusual, with local business magazine Caixin describing the report as a "bombshell".

It is also abnormal for a Chinese company to hit back at the regulator with tough language of its own.

The firm posted a letter on the Weibo micro-blogging service headlined: "Don't make unfair calls, Director Liu Hongliang. You've crossed the line".

It accused the SAIC official of "professional misconduct", and complained that his organisation had based its criticism on a survey limited to just 51 of the many million products listed on Taobao.

Futhermore, it questioned the decision to classify 32 of the products as being "not genuine" simply because their sellers had not provided proper documentation.

"We welcome fair and just supervision, and oppose selective omissions and malicious actions,'' the letter added.

"Obtaining a biased conclusion using the wrong methodology has inflicted irreparable and serious damage to Taobao and Chinese online businesses.''

Alibaba said last month that it had removed 90 million listings for potentially counterfeit goods over the first nine months of 2014, and had spent more than $160m on efforts to protect its customers since 2013.

The timing of the clash coincides with Yahoo's announcement that it plans to spin-off a 15% stake in Alibaba into a separate business.

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Police raid Amazon's Tokyo offices

27 January 2015 Last updated at 11:45

Japanese police raided Amazon's Tokyo offices as part of an investigation into alleged sales of images of child sexual abuse.

Amazon said it was "co-operating fully" with police after the raid.

The raid is part of a continuing operation against people believed to be selling books featuring abuse images via Amazon's Japanese store.

The operation began in September 2013 with the arrest of two men selling illegal photo books via the site.

The raid on 23 January was the second mounted against Amazon in Japan. A separate distribution centre in Kanagawa was raided in November last year as part of the same operation.

The crackdown by police follows a change to Japanese laws enacted in June last year that criminalised the possession of real images of child sexual abuse. The creation and distribution of such images has been illegal since 1999.

The latest raid targeted Amazon's head office in Tokyo and one of the firm's distribution centres outside the city. It was mounted after police discovered more people attempting to sell books of illegal images via Amazon, local newspapers reported.

"We take this investigation seriously and we are co-operating fully with the authorities," Amazon said in a statement.

"We don't permit illegal items on our site, and we have systems and processes designed to prevent and remove illegal items from being listed," it added.

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Scanner locates potential potholes

27 January 2015 Last updated at 11:47 By Zoe Kleinman Technology reporter, BBC News

Smart scanners that can identify the sites of potholes before they form are being developed by academics at Nottingham Trent University.

An algorithm processes data captured by 2D and 3D scanners and sensors positioned at the front of a van.

It identifies signs of "ravelling" - damage to the asphalt that leads to cracks and potholes.

Drivers claimed more than £3m compensation for pothole damage in the UK last year, according to the RAC.

The scanner system can distinguish ravelling from other textural differences on the road, such as oil spills, tyre marks and previous pothole repairs.

In a test, the device correctly identified 900 potential sites. It took 0.65 seconds to process the data, the researchers say.

While the technology would be adopted by paving specialists Dynatest, who collaborated on the research project, it would also be open-source, said Dr Senthan Mathavan, lead researcher and visiting fellow at Nottingham Trent University.

The sensors used on the device were the same as those developed to help robots perceive their environment, he said.

"These sensors are common to us and to civil engineers," he said.

"The technology is established, but we're using the data to look for much smaller defects."

Fellow researcher Dr Mujib Rahman added: "Dealing with road-surface damage like potholes in the early stages is cheaper in the long-term than reacting to potholes when they occur.

"This technology will also allow councils to plan ahead better and be more efficient with any programme of repairs.

"If councils know that there's likely to be a pothole in a certain part of a road in say three years' time, they can plan the repair before it gets to the point that an emergency repair is needed."

The research has been published in the journal Transportation Research Record.

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Web attacks 'growing' in volume

27 January 2015 Last updated at 13:39

Hacktivists and gamers are becoming big users of net attacks that knock sites offline by bombarding them with data, suggests a report.

Compiled by Arbor Networks, the report looks at 10 years of distributed denial of service (DDoS) attacks.

The ease with which they could be staged had made them a favourite for groups with a grudge, said Arbor.

Also, it said, insecure home routers were being enrolled into large groups of devices that mounted the attacks.

Extortion attempt

In the early days of DDoS, cybercrime gangs had used them to extort cash from websites run by betting and gambling firms that could not afford to be knocked offline, said Darren Anstee, a senior analyst at Arbor.

Now, he said, attacks were being mounted by different groups and had grown considerably in size.

In 2011, the biggest attacks had flung about 100 gigabits per second (Gbps) of data at targets, found the report. In 2014 that peak had hit 400Gbps and in the same year there had been four times as many attacks over 100Gbps than in the previous 12 months.

"There's been a massive jump in the number of very large attacks going on out there," said Mr Anstee.

"In 2014 we saw more volumetric attacks, with attackers trying to knock people offline by saturating their access to the internet."

Almost 40% of the organisations Arbor contacted for its report said they were being hit by more than 21 attacks per month, said the report.

Part of the reason for the shift to the large attacks could be explained by a change in the technologies being used to stage them, he said.

When cybercrime gangs had been behind the majority of attacks, the data barrages had been generated by the thousands of hijacked home computers they had had under their control, he said.

Botnets were still used to mount extortion attacks, he said, and were also used to divert the attention of a company's security team so they did not notice a separate attack on another part of a company's infrastructure.

Figures in the report suggested that companies were getting better at spotting the early stages of an attack and recovering once they were hit, he said.

However, said Mr Anstee, building a botnet was difficult for hacktivists and others, who had instead turned to other net-connected devices and technologies to generate the huge data flows.

Some attacks abused the net's timekeeping system or the domain servers that kept a list of which website was where, he said.

Other groups had found ways to enrol insecure home net gateways and routers into attacks, he added.

Hacktivists, hacker groups such as Lizard Squad and gamers who wanted revenge on other players were the bigger users of these tactics, said Mr Anstee.

It was now easy to find so-called "booter" services online that let gamers kick rivals off a particular gaming network or title by attacking that network, he said.

DDoS was also being used by people keen to use their technical skills express their feelings about a real-world conflict.

"If you look at DDoS attacks and try to tie them up with geopolitical events in the last few years, you will always see those events echoed in cyberspace," he said.

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Wired dazed after offer goes viral

27 January 2015 Last updated at 16:45 By Leo Kelion Technology desk editor

Wired has apologised after a fitness tracker giveaway proved too good to be true for some of its UK readers.

The tech magazine had run an offer promising new subscribers Misfit's latest activity and sleep monitor.

The deal appeared tempting, since the total cost of the package was less than a fifth of the price the Misfit Flash retailed for on the High Street.

But when details of the offer spread online, the magazine's publisher said it was "overwhelmed" by the response.

News that Conde Nast was struggling to meet demand emerged after users emailed the firm to chase up overdue deliveries.

After several days of delay, it sent back the following response late last week:

"While this promotion was only published in the printed copy of Wired, one individual took the initiative to leak the offer on hotukdeals.co.uk... as a result we received a large number of orders online after the offer was made public. We are looking into a solution."

This provoked scorn from some of those affected.

"Wired, a tech magazine has the gall to complain a reader posted the offer online," wrote one member of HotUKDeals.

"This is their target audience, what did they think was going to happen?"

Another wrote: "In my opinion any company worth their salt would have removed the link page to order as soon as the numbers had dwindled... from what I can see, this has been a shambles."

The Misfit Flash sells for about £50 in UK stores, but was being offered as part of a £9 package that also included home delivery of the magazine and access to its digital editions for half a year.

After being contacted by the BBC, Conde Nast promised that those left out of hand would shortly be contacted by post.

"The take-up has far surpassed anything equivalent run in the past, and the limited stocks - which were subject to availability as outlined in the terms and conditions - have run out," said spokeswoman Melody Rayner, who was unable to quantify the scale of the shortfall.

"We have been working hard to find an alternative, and are pleased to offer a six-month extension to the subscription.

"Letters have been sent to those affected, which they will receive this week. For anyone not satisfied with this, a refund will be available."

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Revived snoopers' charter shelved

27 January 2015 Last updated at 18:26 By Kevin Rawlinson BBC News

A last-minute attempt to revive a "snoopers' charter" before the general election has been dropped.

Four peers tried to push through measures from the bill, rejected in 2012, adding them to draft legislation currently before Parliament.

But their fellow Lords were unconvinced and the amendment withdrawn.

The BBC understands they will try again next week unless the Home Office publishes a government redraft of the bill, of which the Lords has been told.

Last week, Lords King, Blair, Carlile and West proposed adding whole sections of the defeated Communications Data Bill to the Counter-Terrorism and Security Bill, which is currently being considered by Parliament.

'Snoopers' charter'

But Lord Blencathra, whose joint committee scrutinised - and was heavily critical of - the original legislation, told a House of Lords debate on Monday that the government had subsequently redrafted the bill.

The new draft, he said, addressed his concerns and could not be considered a "snoopers' charter".

In response, the peers withdrew the proposed amendments, which threatened to enshrine the controversial measures in law, and called on the government to produce its draft.

A source told the BBC that if the Home Office was to refuse that request, the "snoopers' charter" proposals would be revived once again and added to the draft counter-terrorism legislation.

The Internet Service Providers Association (Ispa) said it agreed that the government should produce its private draft.

But both Ispa and the Open Rights Group, which campaigns for digital freedom, said it should wait until after the general election, in order to avoid rushing the legislation through.

"Ispa, along with many others, have not seen the amended Communications Data Bill, nor had a chance to scrutinise it.

"As many peers and the joint committee argued, it is crucial that industry is involved in a full and proper consultation at an early stage," said Ispa's secretary general Nicholas Lansman.

During Monday's debate, the four peers defended the wholesale reintroduction of the rejected draft legislation because, they said, there was a dangerous gap in Britain's ability to deal with the threats posed by terrorists and serious criminals.

Lord Paddick

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The move to reintroduce the bill was opposed by former senior police officer Lord Paddick, a Lib Dem

Similar to the Communications Data Bill, their proposed amendments to the Counter-Terrorism and Security Bill sought to require internet service providers to hold records of customers' browsing habits for a year.

However, they cut the number of agencies that could demand access to the data from the hundreds included in the original bill to just three: the police and the two security services.

Data laws
  • Draft Communications Data Bill 2012 - Would have extended the range of data communications companies have to store for 12 months. It would have included, for the first time, details of messages sent on social media, webmail, voice calls over the internet and gaming, in addition to emails and phone calls. Officials would not have been able to see the content of the messages without a warrant. The bill, dubbed the "snoopers' charter" by critics, was blocked by the Lib Dems
  • Data Retention and Investigatory Powers Act 2014-15 - Introduced as emergency legislation to maintain the requirement for phone and internet companies to log records (but not content) of calls, texts and internet use
  • Counter-Terrorism and Security Bill 2014-15 - Part of the bill going through Parliament would add to the Data Retention and Investigatory Powers Act to allow internet protocol (IP) address matching. This would identify the individual or the device that was using a particular IP address at any given time. The peers proposed - then dropped - the idea of adding elements of the Draft Communications Data Bill 2012 to it

On Monday, Lord Blencathra said he stood by his committee's criticism of the original bill, which it said was "too sweeping, and goes further than it need or should". He could not support the amendments, he said.

Ispa and the Open Rights Group added to the criticism last week, calling the attempt to add such comprehensive amendments at a late stage in the bill's progression through Parliament an "abuse of procedure".

A Home Office spokesman said: "We have been clear throughout this Parliament of the need for legislation to give our law enforcement agencies the properly regulated access they need to communications data to help them keep the public safe."

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Electronic Arts shares up on results

28 January 2015 Last updated at 01:37

Shares in Electronic Arts (EA) jumped almost 5% after the video games publisher reported stronger than expected results.

The firm's quarterly profit and revenue came in better than expected on growth in digital revenue and strong sales of its sports titles.

Revenue rose nearly 40% to $1.13bn (£744m) in the three months to December from a year ago.

EA shares had closed down more than 2% before the earnings results came out.

Its net income was $142m in the period, compared with a loss of $308m a year earlier.

The company behind hit games FIFA and Madden NFL said sales were boosted over the holiday season as consumers bought discounted older generation consoles like Microsoft's Xbox 360 and Sony's PlayStation 3.

It saw a 62% increase in EA games made for such consoles in the quarter.

Sales for mobile phone games also rose 26% for the world's second-largest video game publisher.

Monthly active users for its mobile games averaged over 160 million in the period, up from 155 million in its fiscal second quarter.

"Great execution with our leading IP [intellectual property], new mobile hits and continued strength in our catalogue of top games and services were the foundation for an excellent performance in the third quarter," said chief executive Andrew Wilson in a statement on Tuesday.

The earnings results are a turnaround for the firm that had cut its full-year sales outlook last year after falling demand for old gaming console titles ate into profits.

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Yahoo to spin-off Alibaba stake

28 January 2015 Last updated at 07:32

Yahoo has announced a plan to spin-off its 15% stake in China's Alibaba Group and hand the business to its shareholders.

In creating a separate company that is made up of its stake in Alibaba, Yahoo will avoid a large tax bill.

Yahoo also reported fourth-quarter earnings of $166m (£109m), a 52% decrease from a year earlier.

The company said revenue from display advertising fell by 4% to $532m from a year earlier.

However, investors were cheered by the company's decision to spin-off its Alibaba stake.

Shares in Yahoo increased by more than 6% in trading after US markets closed.

According to a release, Yahoo's remaining 384 million shares of Alibaba - worth about $40bn - will be owned by a newly registered company called SpinCo.

SpinCo shares will then be given to existing Yahoo shareholders.

Renewed focus

By spinning-off the Alibaba shares into a separate company, Yahoo's chief executive Marissa Mayer will please investors - but also put renewed focus on her efforts to turn around the company.

Since taking over in 2012, Ms Mayer has led a string of high-profile acquisitions - most notably that of blogging platform Tumblr - but the company has still struggled to find other streams of revenue as its primacy as a search destination declines.

"I'm pleased to report that our performance in Q4 and in 2014 continues to show stability in our core business," she said in a statement.

"Our mobile strategy and focus has transformed Yahoo and yielded significant results," she added, noting that the company's mobile ad revenue was $1.26bn in 2014.

Fighting fakes

Separately, on Wednesday, a Chinese regulator accused Alibaba of not paying enough attention to illegal businesses conducted on its e-commerce websites and failing to take measures to eliminate issues such as the sale of fake goods.

The report was based on a meeting between Alibaba and government regulators in July before the company's record breaking share flotation in September.

Last month, Alibaba reported that it spent more than $160m (£103m) fighting fake goods on its websites between the beginning of 2013 and November 2014.

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Apple profit 'biggest in history'

28 January 2015 Last updated at 11:22
Apple store Beijing

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Apple's China sales are up 70% - and about to grow further, John Sudworth reports

US technology giant Apple has reported the biggest quarterly profit ever made by a public company.

Apple reported a net profit of $18bn (£11.8bn) in its fiscal first quarter, which tops the $15.9bn made by ExxonMobil in the second quarter of 2012, according to Standard and Poor's.

Record sales of iPhones were behind the surge in profits.

Apple sold 74.5 million iPhones in the three months to 27 December - well ahead of most analysts' expectations.

In a conference call with financial analysts Apple's chief executive Tim Cook said that demand for phones was "staggering".

However, sales of the iPad continued to disappoint, falling by 22% in 2014 from a year earlier.

Continue reading the main story

The demand for Apple's larger iPhone 6 Plus model appeared to help boost profits and increase the iPhone's gross profit margin - or how much Apple makes per product - by 2% to 39.9%.

However, Apple did not give a breakdown of sales for the iPhone 6 and other models.

Apple shares rose more than 5% in trading after the US markets had closed.

Buster Hein, who edits the "Cult of Mac" website, told the BBC that iPhone sales had surpassed expectations.

"Oh my gosh, it's unbelievable," he said. "I mean, a lot of us were expecting good iPhone sales during the holidays, but I don't think anybody really thought Apple was going to blow past 70 million units sold," he said.

"Apple became the number one smartphone company in China in the last quarter, which was just huge for them," he added.

Analysis: Richard Taylor, BBC North America Technology Correspondent

Apple's impressive results represent a significant shift towards the massive untapped potential of China.

With a strong line-up of devices entering the final quarter, it was able to reap the fruits of its deal with the world's biggest mobile network, China Mobile.

However, the success of its latest big-screen iPhones may have contributed to further cannibalising sales of the iPad.

The once unstoppable tablet is being further squeezed both by a resurgence in laptop sales, as well as by competition - both in an increasingly saturated US market and in emerging markets by lower-priced, rival machines.

All eyes now are on the Apple Watch - but with a relatively high base price it is not clear whether it will be able to woo more than the Apple faithful.

BBC technology correspondent Rory Cellan-Jones said the iPhone had "transformed the mobile phone industry".

"Others have a bigger share of the market - Samsung, for instance, actually sells more phones than Apple - but Apple makes just an extraordinary amount of money from this one phone.

"A lot of this, at the moment, is about China, where this brand has got extraordinary cachet. They [Apple] sold more phones in China in the last quarter than they have in the United States."

He added that one possible shadow on Apple's future was the question of whether the firm could repeat the success of the iPhone.

"The next one [product] that's supposed to be coming along is the Apple Watch in April," he said. "I've got some doubts as to whether that will be the mass market success, beyond the geek population, that the iPhone has been."

Currency woes

Apple's revenue grew to $74.6bn in 2014 - a 30% increase from a year earlier.

However, on a conference call to discuss earnings, Mr Cook complained of "fierce foreign exchange volatility", which added Apple to a growing list of US firms who have been hurt by the strong dollar abroad.

Apple said that currency fluctuations shaved 4% from its first-quarter revenue.

Sales in greater China hit $16bn in 2014 - a 70% increase from a year earlier, and almost equalling the $17bn in sales the company recorded in Europe last year.

A report by research firm Canalys released on Tuesday said that Apple had overtaken competitors to become China's number one seller of smartphones by units shipped in the fourth quarter of 2014.

Apple also said that its newest product, the Apple Watch, was still on schedule and would begin shipping in April.

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AI will not kill us, says Microsoft

28 January 2015 Last updated at 14:54

Microsoft Research's chief has said he thinks artificial intelligence systems could achieve consciousness, but has played down the threat to human life.

Eric Horvitz's position contrasts with that of several other leading thinkers.

Last December, Prof Stephen Hawking told the BBC that such machines could "spell the end of the human race".

Mr Horvitz also revealed that "over a quarter of all attention and resources" at his research unit were now focused on AI-related activities.

"There have been concerns about the long-term prospect that we lose control of certain kinds of intelligences," he said.

"I fundamentally don't think that's going to happen.

"I think that we will be very proactive in terms of how we field AI systems, and that in the end we'll be able to get incredible benefits from machine intelligence in all realms of life, from science to education to economics to daily life."

Mr Horvitz heads up a team of more than 1,000 scientists and engineers at Microsoft's research wing.

The division's work on AI has already helped give rise to Cortana - a voice-controlled virtual assistant that runs on the Windows Phone platform and will shortly come to desktop PCs when Windows 10 is released.

Mr Horvitz said that he believed Cortana and its rivals would spur on development of the field.

"The next if not last enduring competitive battlefield among major IT companies will be artificial intelligence," he said.

"The notion that systems that can think, listen, hear, collect data from thousands of user experiences - and we synthesise it back to enhance its services over time - has come to the forefront now.

"We have Cortana and Siri and Google Now setting up a competitive tournament for where's the best intelligent assistant going to come from... and that kind of competition is going to heat up the research and investment, and bring it more into the spotlight."

'Existential threat'

Mr Horvitz's comments were posted online in a video marking his receipt of the AAAI Feigenbaum Prize - an award for "outstanding advances" in AI research.

But while the Microsoft executive describes himself as being "optimistic" about how humans might live alongside artificial intelligences, others are more cautious.

Stephen Hawking

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Stephen Hawking has warned of the threat AI poses

The physicist Prof Hawking has warned that conscious machines would develop at an ever-increasing rate once they began to redesign themselves.

"Humans, who are limited by slow biological evolution, couldn't compete, and would be superseded," he said.

Elon Musk - chief executive of car firm Tesla and rocket-maker SpaceX - has also suggested AI poses the greatest "existential threat" humankind faces.

"With artificial intelligence, we are summoning the demon," he told an audience of students in October.

"In all those stories where there's the guy with the pentagram and the holy water, it's like yeah he's sure he can control the demon. Didn't work out."

The Spectrum computer's inventor Sir Clive Sinclair has gone even further, saying he believes it is unavoidable that artificial intelligences will wipe out mankind.

"Once you start to make machines that are rivalling and surpassing humans with intelligence, it's going to be very difficult for us to survive," he told the BBC. "It's just an inevitability."

Sir Clive Sinclair

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WATCH: Sir Clive Sinclair discussed AI as part of a wider interview

Several recent and forthcoming films have also focused on how people might handle the potential threat AI poses, including Ex Machina, Transcendence, Avengers: Age of Ultron, Chappie and Terminator Genisys.

Perhaps unsurprisingly, Mr Horvitz voiced a preference for 2014's Her, charting the relationship of a flirtatious Cortana-like app and its owner.

Privacy fears

He did, however, acknowledge one concern: AI systems risk invading people's privacy, since they will become capable of making ever-deeper inferences about users by "weaving together" the mass of data generated by human activities.

But, he added, AI itself might offer a solution to this problem.

Eric Horvitz, managing director of Microsoft Research

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WATCH: Eric Horvitz spoke to the BBC about AI last year

"We've been working with systems that can figure out exactly what information they would best need to provide the best service for a population of users, and at the same time then limit the [privacy] incursion on any particular user," he said.

"You might be told, for example, in using this service you have a one in 10,000 chance of having a query ever looked at... each person only has to worry about as much as they worry about being hit by a bolt of lightning, it's so rare.

"So, I believe that machine learning, reasoning and AI more generally will be central in providing great tools for ensuring the privacy of folks at the same time as allowing services to acquire data anonymously or with only low probabilities of risk to any particular person."

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