The Washington Post - USA (2022-05-29)

G2 EZ EE THE WASHINGTON POST.SUNDAY, MAY 29 , 2022

from everyone else’s, including by being siloed away from ads and trackers. And lawmakers should encode these kinds of protections into regulation, so the companies aren’t allowed to police them- selves. Bill Fitzgerald, a privacy researcher and former high school teacher who was not involved in the study, sees apps’ tracking of students not only as a loss of privacy but as a lost opportunity to use the best of technology for their benefit. Instead of rehashing old ways to vacuum up user data, schools and software developers could have been pursuing fresher, more creative ideas to get children excited to learn. “We have outsourced our col- lective imagination and our vision as to what innovation with technology could be to third-party product offerings that aren’t re- motely close to the classroom and don’t have our best interests at heart,” Fitzgerald said. “The conversation the industry wants us to have is: What’s the harm?” he added. “The right conversation, the ethical conversation is: What’s the need? Why does a fourth-grader need to be tracked by a third-party vendor to learn math?” Abby Rufer, a high school alge- bra teacher in Dallas, said she’s worked with a few of the tested apps and many others during a frustratingly complicated two years of remote education. School districts felt pressured during the pandemic to quickly replace the classroom with online alternatives, she said, but most teachers didn’t have the time or technical ability to uncover how much data they gobbled up. “If the school is telling you to use this app and you don’t have the knowledge that it might be recording your students’ information, that to me is a huge concern,” Rufer said. Many of her students are immi- grants from Latin America or ref- ugees from Afghanistan, she said, and some are already fearful of how information on their locations and families could be used against them. “They’re being expected to jump into a world that is all tech- nological,” she said, “and for many of them it’s just another obstacle they’re expected to overcome.”

companies to submit a plan showing how student information will be protected while Miami-Dade said it had conducted a “thorough and extensive” evaluation process before bringing on Schoology last year. The researchers said most school districts they examined had conducted no technical privacy evaluations before endorsing the educational tools. Because the companies’ privacy policies often obscured the extent of their monitoring, the researchers said, dis- trict officials and parents often were left in the dark on how students’ data would be collected or used. Some popular apps reviewed by the researchers didn’t track children at all, showing that it is possible to build an educational tool without sacrificing privacy. Apps such as Math Kids and Afri- can Storybook didn’t serve ads to children, collect their identifying details, access their cameras, re- quest more software permissions than necessary or send their data to ad-tech companies, the analysis found. They just offered simple learning lessons, the kind that students have relied on for dec- ades. Vivek Dave, a father of three in Texas whose company RV AppStu- dios makes Math Kids, said the company charges for in-app purchases on some word-search and puzzle games designed for adults and then uses that money to help build ad-free educational apps. Since launching an alphabet game seven years ago, the company has built 14 educational apps that have been installed 150 million times this year and are now avail- able in more than 35 languages. “If you have the passion and just try to understand them, you don’t need to do all this level of tracking to be able to connect with kids,” he said. “My first beta testers were my kids. And I didn’t want that for my kids, period.” The researchers argued that governments should conduct d ata-privacy audits of children’s apps, remove the most invasive, and help guide teachers, parents and children on how best to pre- vent data over-collection or m isuse. Companies, they said, should work to ensure that children’s information is treated differently

Editor: Suzanne Goldenberg • Art Director: Cece Pascual • Photo Editor: Haley Hamblin • E-mail: [email protected] • Telephone: 202-334-9800 • Mail: The Washington Post, Sunday Business, 1301 K St. NW, Washington, D.C. 20071 • Advertising: Noelle Wainwright, 202-334-7610, [email protected]

BUSINESS

Dilbert Scott Adams

Yet there has been little public discussion of how the companies that provided the programs remote schooling depends on may have profited from the pandemic windfall of student data. The learning app Schoology, for example, says it has more than 20 million users and is used by 60,000 schools across some of the United States’ largest school districts. The study identified code in the app that would have allowed it to extract a unique identifier from the student’s phone, known as an advertising ID, that marketers often use to track people across different apps and devices and to build a profile on what products they might want to buy. A representative for Power- School, which developed the app, referred all questions to the company’s privacy policy, which said it does not collect advertising IDs or provide student data to companies for marketing purposes. But the policy also says the company’s website uses third-party tools to show targeted ads to users based on their “browsing history on other websites or on other devices.” The policy did not say which t hird-party companies had re- ceived users’ data. The policy also said that it “does not knowingly collect any information from children under the age of 13,” in keeping with the Children’s Online Privacy Protec- tion Act, or COPPA, the U.S. law that requires special restrictions on data collected from young children. The company’s software, however, is marketed for classrooms as early as kindergarten, which for many children starts around age 4. The investigation acknowl- edged that it could not determine exactly what student data would have been collected during real- world use. But the study did reveal how the software was designed to work, what data it had been pro- grammed to seek access to and where that data would have been sent.

parents how the companies would
use it. Some apps hinted at the
monitoring in technical terms in
their privacy policies, the re-
searchers said, while many others
made no mention at all.
The websites, the researchers
said, shared users’ data with on-
line ad giants including Facebook
and Google. They also requested
access to students’ cameras, con-
tacts or locations, even when it
seemed unnecessary to their
schoolwork. Some recorded stu-
dents’ keystrokes, even before
they hit “submit.”
The “dizzying scale” of the
tracking, the researchers said,
showed how the financial incen-
tives of the data economy had
exposed even the youngest Inter-
net users to “inescapable” privacy
risks — even as the companies
benefited from a major revenue
stream.
“Children,” lead researcher Hye
Jung Han wrote, were “just as
likely to be surveilled in their vir-
tual classrooms as adults shop-
ping in the world’s largest virtual
malls.”
School districts and the sites’
creators defended their use, with
some companies saying research-
ers had erred by including in their
study homepages for the pro-
grams, which included tracking
codes, instead of limiting their
analysis to the internal student
pages, which they said contained
fewer or no trackers. The re-
searchers defended the work by
noting that students often had to
sign in on the homepages before
their lessons could begin.
The coronavirus pandemic
abruptly upended the lives of chil-
dren around the world, shuttering
schools for more than 1.5 billion
students within the span of just a
few weeks. Though some class-
rooms have reopened, tens of mil-
lions of students remain remote,
and many now depend on educa-
tion apps for the bulk of their
school days.

APPS FROM G1

Educational apps

tracked kids’ data

for Facebook’s parent company, Meta, said it restricts how busi- nesses share children’s data and how advertisers can target children and teens. The study comes as concern grows over the privacy risks of the educational-technology industry. The Federal Trade Commission voted e arlier this month on a policy statement urging stronger en- forcement of COPPA, with Chair Lina Khan arguing that the law should help “ensure that children can do their schoolwork without having to surrender to commercial surveillance practices.” COPPA requires apps and websites to get parents’ consent before collecting children’s data, but schools can consent on their be- half if the information is designat- ed for educational use. In an announcement, the FTC said it would work to “vigilantly enforce” provisions of the law, including bans against requiring children to provide more information than is needed and restrictions against using personal data for marketing purposes. Compa- nies that break the law, it said, could face fines and civil penal- ties. Clearly, the tools have wide im- pact. In Los Angeles, for example, more than 447,000 students are using Schoology and 79,000 are using ST Math. Roughly 70,000 students in Miami-Dade County Public Schools use Schoology. Both districts said they’ve tak- en steps to limit privacy risks, with Los Angeles requiring software

School districts and public au- thorities that had recommended the tools, Han wrote, had “offload- ed the true costs of providing education online onto children, who were forced to pay for their learning with their fundamental rights to privacy.” The researchers said they found a number of trackers on websites common among U.S. schools. The website of ST Math, a “visual instructional program” for prekindergarten, elementary and middle school students, was shown to have shared user data with 19 third-party trackers, including Facebook, Google, Twitter and the e-commerce site Shopify. Kelsey Skaggs, a spokeswoman for the California-based MIND Research Institute, which runs ST Math, said in a statement that the company does not “share any per- sonally identifiable information in student records for the purposes of targeted advertising or other commercial purposes” and does not use the same trackers on its student platform as it does on its homepage. But the researchers said they found trackers not just on ST Math’s main site but on pages offering math games for prekindergarten and first grade. Google spokesperson Christa Muldoon said the company is i nvestigating the researchers’ claims and will take action if they find any violations of their data privacy rules, which include bans on personalized ads aimed at m inors’ accounts. A spokesperson

ETHAN MILLER/GETTY IMAGES Reaghan Keeler, a fourth-grader at Doral Academy Red Rock Elementary School in Las Vegas, attends virtual schooling in 2020.

ments. “This is an especially democrat- ic and open marketplace and defi- nitely is affected by hype and FOMO,” he said, using the acro- nym for “fear of missing out.” “And people make bad decisions in ev- ery single market.” Deepak Thapliyal, the chief ex- ecutive of the cryptocurrency company Chain, who purchased a rare NFT of a pixelated alien in February for $23.7 million, isn’t afraid. “My decision to purchase a rare Alien Crypto Punk remains the same as it is today,” he said in a statement to The Washington Post. “It is a rare piece of digital art which will have a lifetime of value to the beholder.” Meanwhile, Frank Chaparro, an NFT collector who works for the crypto news firm The Block, said he has paid more than $20,000 for his collection of NFTs, which includes tokens like Froyo Kittens, which are images of cats in bowls. Nowadays, they probably have very little value, he said. But Chap- arro added that he isn’t worried because what drove him to purchase these NFTs wasn’t a desire to make money but an attraction to the characteristics of the image and the community they created. “Does it hurt? Of course,” Chap- arro said. “You want what you have to go up, but think about all the things you enjoy having that really don’t have value but they say something about yourself.”

collection — that he had purchased for roughly $210,000 in October. He said the market for digital assets looks bleak in the days ahead, and he wanted to limit the damage by selling now. Hsiao added that he expects the NFT market to suffer because of the declining price of cryptocurrency, along with other conditions like inflation, the prospect of ris- ing interest rates, the pandemic and Russia’s war in Ukraine. After selling his NFTs, he converted his proceeds to USD Coin, a cryptocurrency pegged to the U.S. dollar. “If we enter a real recession, NFTs are going to be the first to go,” he said. “People aren’t going to value art, especially such a new age of digital art, when there’s a lot more problems in the world.” Some industries, like video games and the high-end art market, find NFTs useful and likely to retain value. Noah Davis, who leads NFT work at Christie’s, said the auction house will sell the digital assets for a long time. It plans to hold shows biannually in New York, London and Hong Kong where it will sell tokens of artwork, and it is a lso partnering with OpenSea, an NFT marketplace. NFTs solve an essential prob- lem, Davis said, in that they “give currency to ephemeral goods in an era where people are tending to favor virtual life,” but he agrees there are people who will lose lots of money by making bad invest-

and purchase add-ons. In April, the Bored Ape Yacht Club report- ed that hackers cracked into their Instagram account, stealing $2.8 million worth of NFTs. Recently, high-profile hiccups have also deflated investors. In late April, the company behind the Bored Ape Yacht Club, Yuga Labs, auctioned off millions in tokens offering land in a metaverse project they started. Its pop- ularity caused the digital ledger it was being transacted on to nearly shut down. Trading volume also caused transaction fees to rise higher than the actual NFT price in some cases, news reports indi- cate. “I think of NFTs as pure froth,” said Peter M. Garber, an economist and author of “Famous First Bubbles: The Fundamentals of Early Manias.” “It is more of a pump-and-dump, Wolf-of-Wall- Street operation than anything else.” The market for NFTs blos- somed in 2021, with investors spending roughly $40 billion on tokens, up from $106 million in 2020, data from crypto intelli- gence firm Chainalysis found. This year, NFTs have generated roughly $37 billion in sales as of May, data shows. While that puts sales on pace to surpass last year’s, a few notable companies may be driving a large part of the growth, experts noted. Transactions since last summer have come in “fits and starts,” according to a report from Chain- alysis, with two spikes probably driving most activity: The late- August release of digital tokens from the Mutant Ape Yacht Club, a different collection of images of apes with colorful disfigurations, and a period between January to early February this year were probably driven by the launch of a new NFT marketplace, Looks - Rare. Since then, transactions have declined significantly, the report found, dropping from $3.9 billion the week of Feb. 13 to $964 million the week of March 13, with in- creases recently coming from the Bored Ape Yacht Club’s project to sell land in the metaverse, which garnered $320 million in sales nearly a month ago. Ethan McMahon, an economist for Chainalysis, said this indicates that the NFT market is starting to

But with the crypto market cra-
tering by $500 billion in recent
weeks, the hype over NFTs has
cooled. And while Hart, who goes
by NateAlex on Twitter and is a
cryptocurrency investor, is un-
likely to sell, he knows that if he
put it on the market today, it
probably would sell low. His cat
picture isn’t from a sought-after
collection, he said, like the color-
ful apes known as the Bored Ape
Yacht Club or the pixelated people
known as CryptoPunks.
“It’s more wait-and-see,” he
said. “If it becomes a historical
artifact, then it’s going to be ex-
tremely valuable. If that doesn’t
happen, then maybe it just fades
away into where nobody knows or
ever cares about it.”
Hart isn’t alone. A host of col-
lectors have shelled out small for-
tunes in recent months for digital
assets whose worth is now in
limbo.
An NFT of Twitter founder Jack
Dorsey’s first tweet, purchased
last year by an Iranian crypto
investor for $2.9 million, was put
up for auction in April, with bids
topping out at $280. A token of a
pixelated man with sunglasses
and a hat that sold for roughly
$1 million seven months ago
brought just $138,000 on May 8. A
digital token of an ape with a red
hat, sleeveless T-shirt and multi-
colored grin — part of the popular
Bored Ape Yacht Club — pur-
chased for over $520,000 on April
30 was sold for roughly half that
price 10 days later.
Over the past three years, NFTs
have generated significant excite-
ment because proponents say
they solve tricky problems. Digital
images, once viewed as worthless
because they could be easily cop-
ied, could now be owned and
assigned monetary value. Collect-
ible artworks, long seen as exclu-
sive to high society, could now
exist on decentralized, communi-
ty-run networks, making them
more appealing to a new genera-
tion.
But such high hopes have been
punctured by bad actors targeting
the industry with scams. In
March, North Korean hackers
stole more than $600 million
from the NFT gaming company
Axie Infinity, where tokens are
used to gain entry into the game

NFT FROM G1

NFT buyers play waiting

game after crypto crash

In recent days, multiple crypto experts have also noted that the precipitous drop in cryptocurrency has caused the market for high- end NFTs — ones that sell for thousands or even millions — to stall. Fewer bitcoin millionaires, they said, means less spending on luxury purchases such as h igh- priced NFTs. David Hsiao, the chief execu- tive of the crypto magazine Block Journal, said he recently sold off his entire NFT collection for a profit of around $165,000. That included his prized picture of an ape with a lazy stare, glasses, collared shirt and green vest — part of the Bored Ape Yacht Club

consolidate, with few companies holding a growing market share. NFTs generated by lesser-known companies and without celebrity appeal are beginning to lose trac- tion. Those generated by high-end collections — known as blue chips — such as the Bored Ape Yacht Club and CryptoPunks, will probably retain value with their mass appeal, financial backing, part- nerships with mainstream brands like Adidas and collaborations with celebrities. “Things are changing,” he said. “[What] we have been seeing is consolidation in the more well- known blue-chip collections of NFTs.”

CRYPTOKITTIES “Celestial Cyber Dimension” from the CryptoKitties collection of non-fungible tokens, or NFTs. It sold for $600,000 in September.

The Washington Post - USA (2022-05-29)

Get our desktop app

Company

Features

Documentation

Resources