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February 22, 2019
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First China, now Starbucks gets an ambitious VC-funded rival in Indonesia

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Asia’s venture capital-backed startups are gunning for Starbucks .

In China, the U.S. coffee giant is being pushed by Luckin Coffee, a $2.2 billion challenger surfing China’s on-demand wave, and on the real estate side, where WeWork China has just unveiled an on-demand product that could tempt people who go to Starbucks to kill time or work.

That trend is picking up in Indonesia, the world’s fourth largest country and Southeast Asia’s largest economy, where an on-demand challenger named Fore Coffee has fuelled up for a fight after it raised $8.5 million.

Fore was started in August 2018 when associates at East Ventures, a prolific early-stage investor in Indonesia, decided to test how robust the country’s new digital infrastructure can be. That means it taps into unicorn companies like Grab, Go-Jek and Tokopedia and their army of scooter-based delivery people to get a hot brew out to customers. Incidentally, the name ‘Fore’ comes from ‘forest’ — “we aim to grow fast, strong, tall and bring life to our surrounding” — rather than in front of… or a shout heard on the golf course.

The company has adopted a similar hybrid approach to Luckin, and Starbucks thanks to its alliance with Alibaba. Fore operates 15 outlets in Jakarta, which range from ‘grab and go’ kiosks for workers in a hurry, to shops with space to sit and delivery-only locations, Fore co-founder Elisa Suteja told TechCrunch. On the digital side, it offers its own app (delivery is handled via Tokopedia’s Go-Send service) and is available via Go-Jek and Grab’s apps.

So far, Fore has jumped to 100,000 deliveries per month and its app is top of the F&B category for iOS and Android in Indonesia — ahead of Starbucks, McDonald’s and Pizza Hut .

It’s early times for the venture — which is not a touch on Starbuck’s $85 billion business; it does break out figures for Indonesia — but it is a sign of where consumption is moving to Indonesia, which has become a coveted beachhead for global companies, and especially Chinese, moving into Southeast Asia. Chinese trio Tencent, Alibaba and JD.com and Singapore’s Grab are among the outsiders who have each spent hundreds of millions to build or invest in services that tap growing internet access among Indonesia’s population of over 260 million.

There’s a lot at stake. A recent Google-Temasek report forecast that Indonesia alone will account for over 40 percent of Southeast Asia’s digital economy by 2025, which is predicted to triple to reach $240 billion.

As one founder recently told TechCrunch anonymously: “There is no such thing as winning Southeast Asia but losing Indonesia. The number one priority for any Southeast Asian business must be to win Indonesia.”

Forecasts from a recent Google-Temasek report suggest that Indonesia is the key market in Southeast Asia

This new money comes from East Ventures — which incubated the project — SMDV, Pavilion Capital, Agaeti Venture Capital and Insignia Ventures Partners with participation from undisclosed angel backers. The plan is to continue to invest in growing the business.

“Fore is our model for ‘super-SME’ — SME done right in leveraging technology and digital ecosystem,” Willson Cuaca, a managing partner at East Ventures, said in a statement.

There’s clearly a long way to go before Fore reaches the size of Luckin, which has said it lost 850 million yuan, or $124 million, inside the first nine months in 2018.

The Chinese coffee challenger recently declared that money is no object for its strategy to dethrone Starbucks. The U.S. firm is currently the largest player in China’s coffee market, with 3,300 stores as of last May and a goal of topping 6,000 outlets by 2022, but Luckin said it will more than double its locations to more than 4,500 by the end of this year.

By comparison, Indonesia’s coffee battle is only just getting started.

News Source = techcrunch.com

Meet the little-known Chinese WiFi startup that rubs shoulders with WeChat and Alipay

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A service that connects people to WiFi hotspots for free turned out to be one of China’s most popular apps, nestling in the top ranks with Tencent’s WeChat messenger and Alibaba’s digital wallet affiliate Alipay. According to a report from app tracking service App Annie, WiFi Master Key was China’s fifth-largest app and the world’s ninth largest by monthly active users in 2018, titles it also held in 2017.

Report: The State of Mobile 2019, App Annie

The aptly-named WiFi Master Key, which owns the enviable domain wifi.com, is the product of a little-known startup called LinkSure in Shanghai that gets people onto the nearest wireless networks without the need for passwords. In addition, the app also recommends news and video content based on users’ past habits to lock them in, a feature similar to that of ByteDance’s algorithm-driven Jinri Toutiao news app.

Like many consumer-facing services in China, the app is free to use and monetizes traffic through advertising. It claims 700 million MAUs in China and another 100 million around the world. WeChat and Alipay, by comparison, each has around 1 billion MAUs worldwide.

The internet connectivity service helped LinkSure secure $52 million from a Series A round and value the parent at $1 billion back in 2015, only two years after the firm had launched. LinkSure has not announced further fundings since then and has kept a relatively low profile, though its founder Chen Danian was a household name from China’s early internet days. Along with his brother Chen Tianqiao, Chen founded Shanda Games, once China’s largest operator of online games before the rise of Tencent.

In November, Chen resigned as LinkSure’s chief operating officer as former Shanda executive Wang Jingying took over the reins to become one of the few prominent female CEOs in China’s tech sector.

Sharing passwords

The idea of freeloading on strangers’ networks strikes one as dodgy (or too good to be true), but the reality is more nuanced. WiFi Master Key keeps a database of passwords while encrypts and hides them from users, the company explains on its site. How does it collect all the credentials in the first place? Well, every time someone uses it to key in a login, the internet access app transmits that piece of information to the cloud. When people use it to, say, enter the WiFi passcode a barista just gave them, the data gets stored and shared to whoever at the cafe that uses the app.

wifi master key

Aside from bringing connectivity, WiFi Master Key also provides news, e-book and video content to lock users in. Screenshot: TechCrunch

Those inner workings enable the app to bill itself as a WiFi “sharing” service and distance itself from anything that’s remotely a hack. But its data practice still draws concerns over user privacy. Last April, the Chinese state television broadcaster ran a 25-minute feature lambasting the app for “stealing passwords.” That was followed by an industry-wide crackdown from the state’s cybersecurity watchdog on all WiFi crowdsourcing services with lacklustre security practices.

LinkSure rebuked the state report and said it always asked for user consent before gleaning their data. Chances are few people read the lengthy terms of use on any kind of apps in real life, and the less digital savvy may fail to grasp how the app actually works. A major source of debate is when users inadvertently make their house WiFi publicly available after giving the credentials away to a guest who happens to use the data ravenous app to access the host’s network. WiFi Master Key has not responded to emailed questions about its security practices.

Aside from enabling strangers to crowdsource WiFi, LinkSure has also joined hands with two major Chinese telecommunication companies to offer a separate broadband card with appealing data plans. That puts it in competition with Tencent, Alibaba, Baidu and other tech firms that are working with big telcos to provide cheap or unlimited data enticing people to use their in-house apps.

Meanwhile, LinkSure is eying to beam down its own internet connection from the space as SpaceX and OneWeb do. The plan is to target the next few billion rural users who are just coming online and live in areas currently uncovered by terrestrial networks. LinkSure says it’s aiming to provide free satellite network around the world by 2026, with the first out of a constellation of 272 satellites bound to launch later this year.

A government-backed report put the number of people with internet access in China at 802 million in June, leaving nearly 600 million who are still unconnected. 30 million people came online for the first time last year, including an expanding base of elderly users who are increasingly embracing Alipay and WeChat to go about daily lives.

News Source = techcrunch.com

Zimbabwe’s government faces off against its tech community over internet restrictions

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After days of intermittent blackouts at the order of the Zimbabwe’s Minister of State for National Security, ISPs have restored connectivity through a judicial order issued Monday.  

The cyber-affair adds Zimbabwe to a growing list of African countries—including Cameroon, Congo, and Ethiopia—whose governments have restricted internet expression in recent years.

The debacle demonstrates how easily internet access—a baseline for all tech ecosystems—can be taken away at the hands of the state.  

It also provides another case study for techies and ISPs regaining their cyber rights. Internet and social media are back up in Zimbabwe — at least for now.   

Protests lead to blackout

Similar to net shutdowns around the continent, politics and protests were the catalyst. Shortly after the government announced a dramatic increase in fuel prices on January 12, Zimbabwe’s Congress of Trade Unions called for a national strike.

Web and app blackouts in the Southern African country followed demonstrations that broke out in several cities. A government crackdown ensued with deaths reported.

“That began Monday [January 14]. A few demonstrations around the country become violent…Then on Tuesday morning there was a block on social media: Facebook, Twitter, and WhatsApp,” TechZim CEO Tinashe Nyahasha told TechCrunch on a call from Harare.

On January 15, Zimbabwe’s largest mobile carrier Econet Wireless confirmed via SMS and a message from founder Strive Masiyiwa that it had complied with a directive from the Minister of State for National Security to shutdown internet.

Net access was restored, taken down again, then restored, but social media sites remained blocked through January 21.

Data provided to TechCrunch from Oracle’s Internet Intelligence research unit confirm the net blackouts on January 16 and 18.

VPNs, government response

Throughout the restrictions, many of Zimbabwe’s citizens and techies resorted to VPNs and workarounds to access net and social media, according to Nyahasha.

Throughout the interruption TechZim ran updated stories on ways to bypass the cyber restrictions.

The Zimbabwean government’s response to the net shutdown started with denial—one minister referred to it as a congestion problem on local TV—to presidential spokesperson George Charamba invoking its necessity for national security reasons.

Then President Dambudzo Mnangawa took to Twitter to announce he would skip Davos meetings and return home to address the country’s unrest—a move panned online given his government’s restrictions on citizens using social media.    

The Embassy of Zimbabwe in Washington, DC and Ministry for ICT did not respond to TechCrunch inquiries on the country’s internet and app restrictions.

Court ruling, takeaways

On Monday this week, Zimbabwe’s high court ordered an end to any net restrictions, ruling only the country’s president, not the National Security Minister, could legally block the internet. Econet’s Zimbabwe Chief of Staff Lovemore Nyatsine and sources on the ground confirmed to TechCrunch that net and app access were back up Tuesday.  

Zimbabwe’s internet debacle created yet another obstacle for the country’s tech scene. The 2018 departure of 37–year President Robert Mugabe—a  hero to some and progress impeding dictator to others—sparked hope for the lifting of long-time economic sanctions on Zimbabwe and optimism for its startup scene.

Some of that has been dashed by subsequent political instability and worsening economic conditions since Mugabe’s departure, but not all of it, according to TechZim CEO Tinashe Nyahasha.   

“There was momentum and talk of people coming home and investing seed money. That’s slowed down…but that momentum is still there. It’s just not as fast as it could have been if the government had lived up to the expectations,” he said.  

Of the current macro-environment for Zimbabwe’s tech sector, “The truth is, it’s bad but it has been much worse,” Tinashe said

With calls for continued protests, Monday’s court ruling is likely not the last word on the internet face-off between the government and Zimbabwe’s ISPs and tech community.

Per the ruling, a decision to restrict net or apps will have to come directly from Zimbabwe’s president, who will weigh the pros and cons.

On a case by case basis, African governments may see the economic and reputational costs of internet shutdowns are exceeding whatever benefits they seek to achieve.

Cameroon’s 2017 shutdown, covered here by TechCrunch, cost businesses millions and spurred international condemnation when local activists created a  #BringBackOurInternet campaign that ultimately succeeded.

In the case of Zimbabwe, global internet rights group Access Now sprung to action, attaching its #KeepItOn hashtag to calls for the country’s government to reopen cyberspace soon after digital interference began.

Further attempts to restrict net and app access in Zimbabwe will likely revive what’s become a somewhat ironic cycle for cyber shutdowns. When governments cut off internet and social media access, citizens still find ways to use internet and social media to stop them.

News Source = techcrunch.com

Facebook is reportedly testing solar-powered internet drones again — this time with Airbus

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Facebook last year grounded its ambitious plan to develop a solar-powered drone to beam internet across the world, but the company isn’t done with the concept, it seems. The social media giant is working with aeronautics giant Airbus to test drones in Australia, according to a new report from Germany’s NetzPolitik.

Using a request under Australia’s Freedom of Information Act, NetzPolitik got hold of a document that shows the two companies spent last year in talks over a collaboration with test flights scheduled for November and December 2018. The duo have collaborated before on communication systems for satellite drones.

Those trials — and it isn’t clear if they took place — involved the use of Airbus’ Zephyr drone, a model that is designed for “defence, humanitarian and environmental missions.” The Zephyr is much like Facebook’s now-deceased Aquila drone blueprint; it is a HAPS — “High Altitude Pseudo Satellite” — that uses solar power and can fly for “months.”

The Model S version chosen by Facebook sports a 25-meter wingspan, can operate at up to 20km altitude and it uses millimeter-wave radio to broadcast to the ground.

The Zephyr Model S and Model T as displayed on the Airbus website

The Facebook and Airbus were designed to test a payload from the social network — doubtless internet broadcasting gear — but, since the document covers planning and meetings prior to the tests, we don’t know what the outcome or results were.

“We continue to work with partners on High Altitude Platform System (HAPS) connectivity. We don’t have further details to share at this time,” a Facebook spokesperson told NetzPolitik.

TechCrunch contacted Facebook for further comment (06:55 am EST), but the company had not responded at the time of writing.

Facebook has a raft of projects that are aimed at increasing internet access worldwide, particularly in developing regions such as Asia, Africa and Latin America. The drone projects may be its boldest, they are aimed at bringing connectivity to remote areas, but it has also used software and existing infrastructure to try to make internet access more affordable.

That has included the controversial Internet.org project, which was outlawed in India because it violated net neutrality by selecting the websites and apps that could be used. Since renamed to Free Basics — likely promoted by the Indian setback — it has been scaled back in some markets but, still, Facebook said last year that the program has reached nearly 100 million people to date. Beyond that top line number, little is known about the service, which also includes paid tiers for users.

That aside, the company also has a public-private WiFi program aimed at increasing hotspots for internet users while they are out and about.

News Source = techcrunch.com

Facebook is not equipped to stop the spread of authoritarianism

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After the driver of a speeding bus ran over and killed two college students in Dhaka in July, student protesters took to the streets. They forced the ordinarily disorganized local traffic to drive in strict lanes and stopped vehicles to inspect license and registration papers. They even halted the vehicle of the Chief of Bangladesh Police Bureau of Investigation and found that his license was expired. And they posted videos and information about the protests on Facebook.

The fatal road accident that led to these protests was hardly an isolated incident. Dhaka, Bangladesh’s capital, which was ranked the second least livable city in the world in the Economist Intelligence Unit’s 2018 global liveability index, scored 26.8 out of 100 in the infrastructure category included in the rating. But the regional government chose to stifle the highway safety protests anyway. It went so far as raids of residential areas adjacent to universities to check social media activity, leading to the arrest of 20 students. Although there were many images of Bangladesh Chhatra League, or BCL men, committing acts of violence on students, none of them were arrested. (The BCL is the student wing of the ruling Awami League, one of the major political parties of Bangladesh.)

Students were forced to log into their Facebook profiles and were arrested or beaten for their posts, photographs, and videos. In one instance, BCL men called three students into the dorm’s guestroom, quizzed them over Facebook posts, beat them, and then handed them over to police. They were reportedly tortured in custody.

A pregnant school teacher was arrested and jailed for just over two weeks for “spreading rumors” due to sharing a Facebook post about student protests. A photographer and social justice activist spent more than 100 days in jail for describing police violence during these protests; he told reporters he was beaten in custody. And a university professor was jailed for 37 days for his Facebook posts.

A Dhaka resident who spoke on the condition of anonymity out of fear for their safety said that the crackdown on social media posts essentially silenced student protesters, many of which removed photos, videos, and status updates about the protests from their profiles entirely. While the person thought that students were continuing to be arrested, they said, “nobody is talking about it anymore — at least in my network — because everyone kind of ‘got the memo’ if you know what I mean.”

This isn’t the first time Bangladeshi citizens have been arrested for Facebook posts. As just one example, in April 2017, a rubber plantation worker in southern Bangladesh was arrested and detained for three months for liking and sharing a Facebook post that criticized the prime minister’s visit to India, according to Human Rights Watch.

Bangladesh is far from alone. Government harassment to silence dissent on social media has occurred across the region and in other regions as well — and it often comes hand-in-hand with governments filing takedown requests with Facebook and requesting data on users.

Facebook has removed posts critical of the prime minister in Cambodia and reportedly “agreed to coordinate in the monitoring and removal of content” in Vietnam. Facebook was criticized for not stopping the repression of Rohingya Muslims in Myanmar, where military personnel created fake accounts to spread propaganda which human rights groups say fueled violence and forced displacement. Facebook has since undertaken a human rights impact assessment in Myanmar, and it has also taken down coordinated inauthentic accounts in the country.

UNITED STATES – APRIL 10: Facebook CEO Mark Zuckerberg testifies during the Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee joint hearing on “Facebook, Social Media Privacy, and the Use and Abuse of Data”on Tuesday, April 10, 2018. (Photo By Bill Clark/CQ Roll Call)

Protesters scrubbing Facebook data for fears of repercussions isn’t uncommon. Over and over again, authoritarian-leaning regimes have utilized low-tech strategies to quell dissent. And aside from providing resources related to online privacy and security, Facebook still has little in place to protect its most vulnerable users from these pernicious efforts. As various countries pass laws calling for a local presence and increased regulation, it is possible that the social media conglomerate doesn’t always even want to.

“In many situations, the platforms are under pressure,” said Raman Jit Singh Chima, policy director at Access Now. “Tech companies are being directly sent takedown orders, user data requests. The danger of that is that companies will potentially be overcomplying or responding far too quickly to government demands when they are able to push back on those requests,” he said.

Elections are often a critical moment for oppressive behavior from governments — Uganda, Chad, and Vietnam have specifically targeted citizens — and candidates — during election time. Facebook announced just last Thursday that it had taken down nine Facebook pages and six Facebook accounts for engaging in coordinated inauthentic behavior in Bangladesh. These pages, which Facebook believes were linked to people associated with the Bangladesh government, were “designed to look like independent news outlets and posted pro-government and anti-opposition content.” The sites masqueraded as news outlets, including fake BBC Bengali, BDSNews24, and Bangla Tribune and news pages with photoshopped blue checkmarks, according to the Atlantic Council’s Digital Forensic Research Lab.

Still, the imminent election in Bangladesh doesn’t bode well for anyone who might wish to express dissent. In October, a digital security bill that regulates some types of controversial speech was passed in the country, signaling to companies that as the regulatory environment tightens, they too could become targets.

More restrictive regulation is part of a greater trend around the world, said Naman M. Aggarwal, Asia policy associate at Access Now. Some countries, like Brazil and India, have passed “fake news” laws. (A similar law was proposed in Malaysia, but it was blocked in the Senate.) These types of laws are frequently followed by content takedowns. (In Bangladesh, the government warned broadcasters not to air footage that could create panic or disorder, essentially halting news programming on the protests.)

Other governments in the Middle East and North Africa — such as Egypt, Algeria, United Arab Emirates, Saudi Arabia, and Bahrain — clamp down on free expression on social media under the threat of fines or prison time. And countries like Vietnam have passed laws requiring social media companies to localize their storage and have a presence in the country — typically an indication of greater content regulation and pressure on the companies from local governments. In India, WhatsApp and other financial tech services were told to open offices in the country.

And crackdowns on posts about protests on social media come hand-in-hand with government requests for data. Facebook’s biannual transparency report provides detail on the percentage of government requests the company complies within each country, but most people don’t know until long after the fact. Between January and June, the company received 134 emergency requests and 18 legal processes from Bangladeshi authorities for 205 users or accounts. Facebook turned over at least some data in 61 percent of emergency requests and 28 percent of legal processes.

Facebook said in a statement that it “believes people deserve to have a voice, and that everyone has the right to express themselves in a safe environment,” and that it handles requests for user data “extremely carefully.’”

The company pointed to its Facebook for Journalists resources and said it is “saddened by governments using broad and vague regulation or other practices to silence, criminalize or imprison journalists, activists, and others who speak out against them,” but the company said it also helps journalists, activists, and other people around the world to “tell their stories in more innovative ways, reach global audiences, and connect directly with people.”

But there are policies that Facebook could enact that would help people in these vulnerable positions, like allowing users to post anonymously.

“Facebook’s real names policy doesn’t exactly protect anonymity, and has created issues for people in countries like Vietnam,” said Aggarwal. “If platforms provide leeway, or enough space for anonymous posting, and anonymous interactions, that is really helpful to people on ground.”

BERLIN, GERMANY – SEPTEMBER 12: A visitor uses a mobile phone in front of the Facebook logo at the #CDUdigital conference on September 12, 2015 in Berlin, Germany. (Photo by Adam Berry/Getty Images)

A German court found the policy illegal under its decade-old privacy law in February. Facebook said it plans to appeal the decision.

“I’m not sure if Facebook even has an effective strategy or understanding of strategy in the long term,’ said Sean O’Brien, lead researcher at Yale Privacy Lab. “In some cases, Facebook is taking a very proactive role… but in other cases, it won’t.” In any case, these decisions require a nuanced understanding of the population, culture, and political spectrum in various regions — something it’s not clear Facebook has.

Facebook isn’t responsible for government decisions to clamp down on free expression. But the question remains: How can companies stop assisting authoritarian governments, inadvertently or otherwise?

“If Facebook knows about this kind of repression, they should probably have… some sort of mechanism to at the very least heavily try to convince people not to post things publicly that they think they could get in trouble for,” said O’Brien. “It would have a chilling effect on speech, of course, which is a whole other issue, but at least it would allow people to make that decision for themselves.”

This could be an opt-in feature, but O’Brien acknowledges that it could create legal liabilities for Facebook, leading the social media giant to create lists of “dangerous speech” or profiles on “dissidents,” and could theoretically shut them down or report them to the police. Still, Facebook could consider rolling a “speech alert” feature to an entire city or country if that area becomes volatile politically and dangerous for speech, he said.

O’Brien says that social media companies could consider responding to situations where a person is being detained illegally and potentially coerced into giving their passwords in a way that could protect them, perhaps by triggering a temporary account reset or freeze to prevent anyone from accessing the account without proper legal process. Some actions that might trigger the reset or freeze could be news about an individual’s arrest — if Facebook is alerted to it, contact from the authorities, or contact from friends and loved ones, as evaluated by humans. There could even be a “panic button” type trigger, like Guardian Project’s PanicKit, but for Facebook — allowing users to wipe or freeze their own accounts or posts tagged preemptively with a codeword only the owner knows.

“One of the issues with computer interfaces is that when people log into a site, they get a false sense of privacy even when the things they’re posting in that site are widely available to the public,” said O’Brien. Case in point: this year, women anonymously shared their experiences of abusive coworkers in a shared Google Doc — the so-called “Shitty Media Men” list, likely without realizing that a lawsuit could unmask them. That’s exactly what is happening.

Instead, activists and journalists often need to tap into resources and gain assistance from groups like Access Now, which runs a digital security helpline, and the Committee to Protect Journalists. These organizations can provide personal advice tailored to their specific country and situation. They can access Facebook over the Tor anonymity network. Then can use VPNs, and end-to-end encrypted messaging tools, and non-phone-based two-factor authentication methods. But many may not realize what the threat is until it’s too late.

The violent crackdown on free speech in Bangladesh accompanied government-imposed Internet restrictions, including the throttling of Internet access around the country. Users at home with a broadband connection did not feel the effects of this, but “it was the students on the streets who couldn’t go live or publish any photos of what was going on,” the Dhaka resident said.

Elections will take place in Bangladesh on December 30.

In the few months leading up to the election, Access Now says it’s noticed an increase in Bangladeshi residents expressing concern that their data has been compromised and seeking assistance from the Digital Security hotline.

Other rights groups have also found an uptick in malicious activity.

Meenakshi Ganguly, South Asia director at Human Rights Watch, said in an email that the organization is “extremely concerned about the ongoing crackdown on the political opposition and on freedom of expression, which has created a climate of fear ahead of national elections.”

Ganguly cited politically motivated cases against thousands of opposition supporters, many of which have been arrested, as well as candidates that have been attacked.

Human Rights Watch issued a statement about the situation, warning that the Rapid Action Battalion, a “paramilitary force implicated in serious human rights violations including extrajudicial killings and enforced disappearances,” and has been “tasked with monitoring social media for ‘anti-state propaganda, rumors, fake news, and provocations.’” This is in addition to a nine-member monitoring cell and around 100 police teams dedicated to quashing so-called “rumors” on social media, amid the looming threat of news website shutdowns.

“The security forces continue to arrest people for any criticism of the government, including on social media,” Ganguly said. “We hope that the international community will urge the Awami League government to create conditions that will uphold the rights of all Bangladeshis to participate in a free and fair vote.”

News Source = techcrunch.com

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