Twitter fires first shots against Instagram/Facebook

The Great Network Wars of 2012 have begun.

Someday, your children will ask you "where were you when the first shots of the great Twitter Wars were fired?" Well, if you're reading this from Britain, you were probably in bed, but fired they were last night, as Twitter disabled access to parts of its network for the Facebook-owned photo sharing app Instagram.

TechCrunch's Alexia Tsotsis reports:

Instagram has just announced 80 million users and a new app update; Noticeably missing in the update? The “Find Your Friends” on Twitter feature, which allowed users to follow the same people they follow on Twitter on Instagram.

The “Tweet Photo” feature is still available.

We’ve learned that the feature is missing due to API restrictions from Twitter’s end. . .

The official word from Twitter, as told to The Next Web's Brad McCarthy:

We understand that there’s great value associated with Twitter’s follow graph data, and we can confirm that it is no longer available within Instagram.

Twitter is, it appears, deathly serious about consolidating its users into one big, official-client using, advertising-watching mass of people. It announced earlier this month that it was going to be severely restricting API access – the method by which apps communicate with the network – to unofficial apps like Hootsuite, Tweetbot and Ubersocial "replicate the experience of using".

Now it apparently wants to protect its "follow graph", the information about who follows who, as well. What's interesting is that this is not a blanket change to the API. Smaller apps, like the reading service Instapaper, still have access to the follow graph, and are using it in the same way Instagram has been banned. This is a surgical strike against Facebook.

Twitter is playing a dangerous game with their users here, however. Part of the reason the service is so popular has been the ease with which other ones can hook into it. Yes, Instagram needed access to the follow graph to take off; but once all your Twitter friends became Instagram friends as well, the bond of the first app grew stronger. If everything comes from one site, there is the chance that the walled garden that they are trying to create may keep people out as well as in.

The conflict – between how they grew and how they want to grow – was summed up well by Matt Yglesias, who wrote that Twitter wants to be an advertising company, but all its users want it to be a service provider:

Rather than selling lots of ads on Twitter, Twitter could sell itself as a service to the large number of people and firms who are already organically using it as an advertising tool.

Which is just to say that the Twitter user base seems ideal for a tiered pricing model. Most people on Twitter don't tweet that much, don't have very many followers, and don't particularly aspire to having a large number of followers. Then you have a relatively small minority of heavy users who are deliberately courting a mass Twitter audience. Just charge us! Let everyone with fewer than 500 followers use it for free, and then have a few tiers of pricing for people with large followings. Most people probably have no desire to pay for Twitter, but anyone who's bothered to amass 20,000 is obviously getting a lot of value from access to the Twitter audience and would pay for it. Meanwhile the broad mass of non-professional users could keep using a great no-charge ad-free service that creates the ecosystem pro users want to pay to gain access to.

Sadly, the company is unlikely to take that advice; yet for many people, a small monthly fee would be worth it to keep twitter the way it was when they joined it. Just remember, if you aren't paying for something, you aren't the customer – you're the product being sold.

Douchebag Twitter.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.