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Diseconomies of scale in fraud, spam, support, and moderation

danluu.com

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Re: Diseconomies of scale in fraud, spam, support, and moderation

#121

Post by Nursie »

palmfacehn wrote: post #111
Animats wrote: post #82

This is easy to fix. Make Amazon responsible for warranting all sales on their platform. Amazon claims they are not the seller, some anonymous party running an ad on their platform is the seller. That was litigated in Pennsylvania, and when it got to the level that Amazon was looking at a major lose, Amazon settled to avoid a precedent. On the ad front, anyone who runs an ad for a third party should have to be able t…

This is basically regulatory capture for the fraudsters. Fraudsters will have forums full of ID fraud services to fix their KYC problem. Big platforms won't blink at the costs involved with verification. Fraudsters will simply rinse and repeat when their scheme collapses. Normal business people will have yet another headache. Corner cases will exist where users are condemned to unending bureaucratic limbo. A human su…

If big platforms like amazon find themselves liable if they cannot connect seller activity to real human beings and real businesses, they will have an incentive to fix their systems to stop those spammers churning out KYC'd accounts.

The platform will care about costs to itself. One of the advantages these large platforms enjoy over smaller ones is their ability to pass the buck on consumer law, to their benefit and to the scammers. By making it the platform's liability, always, this could start to change.

If the companies that think of themselves as large 'platforms' end up erecting barriers to legitimate business in the process, then that becomes their problem and is likely to result in more competition in the market from companies who act as actual stores themselves.

It's not 'so simple' but a liability change, and an end to exempting retailers like amazon from their retailer responsibilities could start to rebalance things.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#122

Post by godelski »

jonathanlydall wrote: post #110

The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially “shoo’ing them away”, and fraudsters after being shoo’ed away simply try again until they, almost invariably, eventually do succeed. Subsequently, the industry of fraud is generally lucrative and is thus constantly growing. When I worked at Blizzard, there wer…

This is why I have a problem with a lot of the legal structure and incentives. If you measure in number of arrests you aren't solving the problems. I'm not sure there's any good metric to measure that.

To take an analogy I'll mention the drug war. The main target was always low level drug dealers and users. They're easy to arrest and easy to say you're doing something. But they are fairly inconsequential to the business of selling drugs and thus the availability on the streets. But it's orders of magnitude harder to go after the root of the problem. I don't want to detract this conversation with the other aspects or conspiracies (real or contrived), but just focus on the incentive structures. I think the same is here. Blizzard gets no short term reward for reporting fraudulent activity. It's hard to know if they get long term. But at the end of the day it would be the right thing to do.

That's what matters. Doing the right thing. Move fast and break things it's a great strategy. But it can't be used in isolation. If it is you're left with a trail of destruction which never gets cleaned up. It's hard to quantify objectives and so every objective function is misaligned. You need to rely on humans to see through that and correct the course as best they can. You need both the people pushing to move fast and the people pushing to slow down and repair. There's a harmony in that competition. Pick your camp but recognize that there's value in the other one too.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#123

Post by godelski »

bongodongobob wrote: post #119
jonathanlydall wrote: post #110

The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially “shoo’ing them away”, and fraudsters after being shoo’ed away simply try again until they, almost invariably, eventually do succeed. Subsequently, the industry of fraud is generally lucrative and is thus constantly growing. When I worked at Blizzard, there wer…

Well what can you do? Trace their IP back to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Then what? Start kicking doors down? Going to get the FBI involved for a $20 purchase? Reminds me of Lebowski asking the cops about his Credence tape.

> Going to get the FBI involved for a $20 purchase?

Sure, why not? And if you're at the scale is Blizzard I'm sure it's a lot more than $20.

We're collecting all kinds of information these days. Surveillance capitalism is a common term for it. Data is gold they say. So why not give that data to people that can use it to stop crime?

Re: Diseconomies of scale in fraud, spam, support, and moderation

#124

Post by alexey-salmin »

throwaway2037 wrote: post #65
alexey-salmin wrote: post #45

Earlier quoted context omitted.

Well I'm pretty confident in my memories because it wasn't too long ago. The thing fell apart only around 2016 with the rise of apps and the inflection point was a complete misery hard to forget: drivers taking your order and not moving, drivers calling you to ask about the destination point and then refusing to go there, drivers telling you that you should've put the destination point into comments, driver asking yo…

Did you report these drivers to the app owner? Did they do anything?

They apologized and gave promocodes, subsidizing the service even further. They were well aware of the problem.

Things normalized a few years later. I think the biggest lesson was that clients were willing to endure a lot of hardship for a 50% discount.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#125

Post by torton »

singron wrote: post #88
bawolff wrote: post #57

I largely agree, although i think the author misses on some of the examples. Reddit is not an example of being bad due to this affect, but an example of being good because of it. Reddit is not one huge platform but a combination of thousands of subreddits independently moderated. That is how reddit remains good, because small subreddits have small scale. Running your own email server isn't a counterexample, but is le…

My experience running my email server is exactly what danluu says. Receiving emails and classifying spam is not a problem at all, but my outgoing mail is often blocked. It's not that I struggle to moderate the whole world, but the whole world is moderating me.

It’s not “the whole world” moderating you, it’s more likely than not specifically Google. In my age and peer group, personal usage of GMail is 98%+, professional usage of GMail is 50%+. Not delivering to GMail is not an option, especially so if the email is not just for a social purpose but, for example, for finding a job.

I ran my own email for close to 15 years, most of that time on the same IP address and the same old domain. I could never get GMail to reliably accept my mail, and of course there is no support to find out why. I set up and tested their documented best practices, and had no issues corresponding with a lot of people.

Spam is not an issue in practice. Two basic filters drop 95% of spam without scanning the content, and an open source reputation+content engine drops the rest to the tune of maybe 1 spam a day. The two annoying parts are dealing with exceptions, often large companies misconfiguring their outgoing email; and the open-source nature of the filtering engine’s ruleset, meaning it occasionally completely breaks for a short while.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#126

Post by Nursie »

lotsofpulp wrote: post #120
Nursie wrote: post #97

Earlier quoted context omitted.

This is nonsense. Businesses are not above the law and claiming that you are only a proxy or that what you do is too complex shouldn't get you out of having to follow those laws. We're talking KYC (or direct liability) for businesses here. There is nothing discriminatory about it.

I specifically wrote why know your customer laws are bad. A law that makes a bank liable for their customer’s illegal actions harms people who kind of sort of look like they could be doing something illegal, even if they are innocent. Plainly discriminatory. A law that makes hotels liable for human trafficking harms people who “look” like human traffickers. Guess what, now people who want to pay with cash or don’t ha…

If you sell something to the public, you must abide by certain regulations.

A law that says "Amazon must know their sellers and be able to pass the consumer on to those sellers, or it is liable itself as a backstop" might indeed shut some people out of Amazon's marketplace who cannot comply.

But those people would not be allowed to legally retail to the public anyway, as they couldn't fulfil those requirements

> The government is literally telling a business they have to judge someone without the person being able to provide a defense, like they would in a court of law.

A business, not a someone, and there are all sorts of compliance rules you could complain about doing exactly the same thing.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#127

Post by torton »

dewey wrote: post #92
singron wrote: post #88

Earlier quoted context omitted.

My experience running my email server is exactly what danluu says. Receiving emails and classifying spam is not a problem at all, but my outgoing mail is often blocked. It's not that I struggle to moderate the whole world, but the whole world is moderating me.

> It's not that I struggle to moderate the whole world, but the whole world is moderating me. Wouldn't that be the "best case" for email because of the centralized idea? In reality it's a few huge companies that matter and if you end up on one of their lists because of some bad IP, missing header etc. you are a bit out of luck.

It is in fact very instructive, given that email is an open federated protocol but it doesn’t matter because the industry has centralized.

We now have several new social networks based on the ideas of open protocols and federation. They are not yet large enough to attract too much attention but we’ll see if the story rhymes.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#128

Post by BrenBarn »

I think the post underestimates the scope of these problems. It touches on it briefly, but I've mostly come to believe that it is in general bad for companies to become extremely large. It's not just an issue of content moderation.

One reason that the article does touch on is the detachment from support. Large companies no longer need to care about the individual consumer, so they stop doing so. A sort of corollary for this is the tendency for large companies to shift from "doing what they do" to protecting their market position. That means spending more time on non-core activities, and in some cases even trying to expand into totally unrelated markets (as seen with large conglomerates).

It is only when we talk about "economics" in the sense of money-making for an individual company that "economies of scale" are a good thing. In the sense of benefit to the overall economy, to the society in which that economy sits, or to humanity in general, virtually all economies of scale are actually harmful.

I think we should view economies of scale like the rampant growth of grass or weeds: they are natural phenomena, but that doesn't mean they're good, and in fact for most practical purposes they need to be actively opposed. It's natural for grass to grow, and if it doesn't, it may indicate a problem, but you should still cut the grass every so often. Likewise it is natural for companies to grow, but big companies should regularly be broken up simply because they have become big.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#129

Post by faronel »

bongodongobob wrote: post #119
jonathanlydall wrote: post #110

The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially “shoo’ing them away”, and fraudsters after being shoo’ed away simply try again until they, almost invariably, eventually do succeed. Subsequently, the industry of fraud is generally lucrative and is thus constantly growing. When I worked at Blizzard, there wer…

Well what can you do? Trace their IP back to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Then what? Start kicking doors down? Going to get the FBI involved for a $20 purchase? Reminds me of Lebowski asking the cops about his Credence tape.

From the article as an example of what doesn't scale:

"...He was going through emails in his inbox, then responding to questions in the craigslist forums, and hopping onto his cellphone about once every ten minutes. Calls were quick and to the point "Hi, this is Craig Newmark from craigslist.org. We are having problems with a customer of your ISP and would like to discuss how we can remedy their bad behavior in our real estate forums". He was literally chasing down forum spammers one by one, sometimes taking five minutes per problem..."

Seems like it's possible but not feasible to build a pipeline to scale out that sort of behavior.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#130

Post by golergka »

godelski wrote: post #123
bongodongobob wrote: post #119

Earlier quoted context omitted.

Well what can you do? Trace their IP back to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Then what? Start kicking doors down? Going to get the FBI involved for a $20 purchase? Reminds me of Lebowski asking the cops about his Credence tape.

> Going to get the FBI involved for a $20 purchase? Sure, why not? And if you're at the scale is Blizzard I'm sure it's a lot more than $20. We're collecting all kinds of information these days. Surveillance capitalism is a common term for it. Data is gold they say. So why not give that data to people that can use it to stop crime?

Because they're in Russia or North Korea, and their bosses bosses are good friends of local police and secret services.

What exactly can FBI do about them?

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