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Tech Brief: Benchmark Capital Sues Former Uber CEO Kalanick


Government Brief

  • Next week’s North American Free Trade Agreement modernization talks might include cybersecurity and other tech issues, as the tech sector is working to nudge tech-related issues and cyber concerns further up the Trump administration’s list of priorities. The Office of the U.S. Trade Representative has already included tech issues with cyber implications on the “negotiating agenda” for the talks, which represent only the first round among U.S., Canadian and Mexican negotiators regarding the trade agreement. (Washington Examiner)
  • A group of four House Democrats are requesting answers from Google Inc. about a now-fired engineer’s divisive internal memo criticizing the internet search giant’s diversity efforts. In a letter to CEO Sundar Pichai, the lawmakers — Reps. Robin Kelly (D-Ill.), Pramila Jayapal (D-Wash.), Jamie Raskin (D-Md.) and Jan Schakowsky (Ill.) — voiced support for the employee’s firing but expressed their concerns about the continuing lack of diversity in Silicon Valley. (The Hill)
  • Federal agencies have one month left before they need to submit finalized reform plans to the Office of Management and Budget as part of the Trump administration’s effort to better streamline the federal government. Government officials are pointing to the role of shared services — operations which condense government operations like IT management into a series of centralized providers — as an effective means of making agencies’ reform plans turn into a reality. (FedScoop)

Business Brief

  • Benchmark Capital is suing Uber Technologies Inc.’s co-founder and former CEO Travis Kalanick for not honoring the terms of his resignation and allegedly trying to stack the company’s board with allies to prepare for a return as CEO. The Silicon Valley venture firm, one of Uber’s biggest shareholders, alleges that Kalanick is attempting to “entrench himself for his own selfish ends” — an accusation a Kalanick spokesman called “without merit.” (Recode)
  • Google canceled a planned company-wide meeting about diversity shortly before it began, citing safety concerns following the publication of certain employees’ names by conservative commentators. The meeting was supposed to be in response to the recent memo criticizing Google’s diversity practices and the ensuing debate that followed the firing of its author. (The Wall Street Journal)
  • Snap Inc.’s second-quarter growth fell short of estimates, adding to shareholder concerns that competition from Facebook Inc. is limiting the social media platform’s growth. Snap reported both daily active users and quarterly revenue below analysts’ forecasts, sending shared down by as much as 18 percent in late trading. (Bloomberg)

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Events Calendar (All Times Local)

Friday
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General

Dems demand answers on controversial Google memo
Harper Neidig, The Hill

A group of House Democrats wants answers from Google about a divisive internal memo that criticized the internet search giant’s diversity initiatives. In a letter to Google CEO Sundar Pichai, the group applauded the company for firing the author of the memo but expressed concern that the note was indicative of a larger problem in Silicon Valley.

Agencies leaning into shared services for reform plans
Carten Cordell, FedScoop

There’s a month left before agencies submit finalized reform plans to the Office of Management and Budget, and officials are pointing to shared services as key to making those plans work. Shared services will help agencies reduce redundancies and achieve the efficiencies the Trump administration seeks in its governmentwide reorganization, announced in April, Beth Angerman, executive director of the Unified Shared Services Management office, said Wednesday.

Wisconsin won’t break even on Foxconn plant deal for over two decades
Jacob Kastrenakes, The Verge

Wisconsin’s plan to treat Foxconn to $3 billion in tax breaks in exchange for a $10 billion factory is looking less and less like a good deal for the state. In a report issued this week, Wisconsin’s Legislative Fiscal Bureau said that the state wouldn’t break even on its investment until 2043 — and that’s in an absolute best-case scenario.

Stock Selloff Deepens on Korea Tension; Oil Slides: Markets Wrap
Eddie Van Der Walt, Bloomberg

European stocks tumbled to a five-month low as volatility soared amid rising tensions over North Korea’s nuclear program. The dollar edged stronger as investors awaited the release of U.S. inflation data.

Intellectual Property and Antitrust

Developers file antitrust complaint against Apple in China
Cate Cadell, Reuters

A Chinese law firm has filed a complaint against Apple Inc (AAPL.O) on behalf of 28 local developers alleging the firm breached antitrust regulations. The complaint, lodged by Beijing-based Dare & Sure Law Firm, accuses Apple of charging excessive fees and removing apps from its local store without proper explanation, Lin Wei, an attorney at the firm told Reuters on Thursday.

Amazon and Whole Foods: What’s Next?
Laura Stevens, The Wall Street Journal

Amazon.com Inc.’s acquisition of Whole Foods Market Inc. could mean that consumers see Echo and Kindle devices for sale in the grocery aisle and 365 organic foods in Amazon’s green delivery totes. But beyond simple cross-selling opportunities, a big question in the $13.7 billion deal is: How deeply will the online retail giant integrate its new brick-and-mortar subsidiary?

Telecom, Wireless and TV

FCC seemingly forgot about a net neutrality complaint filed against Verizon
Jon Brodkin, Ars Technica

As the Federal Communications Commission prepares to deregulate broadband providers and eliminate or weaken net neutrality rules, the commission has not yet made a ruling on a net neutrality complaint filed against Verizon more than a year ago. There have been tens of thousands of “informal” net neutrality complaints filed since the rules took effect in 2015, but there has been only one formal complaint.

Rather than Expanding Broadband, the FCC Wants to Count Cell Service as Internet
Kaleigh Rogers, Vice News

For many Americans without access to high-speed internet, their options for getting online are pretty limited: go to the library, go to McDonald’s, or eat up their data limit on their cell phone. Now, in a move that would seriously oversell the number of Americans who have real access to high-speed internet, the Federal Communications Commission is considering including that last option—using your phone’s data plan to access the internet—in its definition of “broadband access.”

SBA Chief: Government Should Reduce 5G Rollout Red Tape
John Eggerton, Broadcasting and Cable

Linda McMahon, administrator of the Small Business Administration, Thursday talked up the economic boon as well as the safety aspects of self-driving cars, but signaled that those driverless cars won’t be going anywhere without the accelerator of a strong digital infrastructure and a light regulatory hand on the break. McMahon was keynoting a Small Business Entrepreneurship Council event on Capitol Hill.

Mobile Technology and Social Media

Benchmark is suing Travis Kalanick (and Uber) over board control, claiming ‘selfish’ power grab
Kara Swisher, Recode

One of Uber’s biggest shareholders, Benchmark Capital, has sued co-founder and ousted CEO Travis Kalanick, claiming he has not honored the terms of his resignation and has been trying to change the makeup of the board to advantage himself. Along with saying he wanted to “entrench himself for his own ‘selfish ends,’” the high-profile Silicon Valley venture firm has alleged that the pugnacious entrepreneur’s “overarching objective is to pack Uber’s Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO.”

Google Cancels Meeting on Diversity, Citing Safety Concerns for Employees
Jack Nicas, The Wall Street Journal

Google canceled a companywide meeting about diversity just before it was set to begin Thursday, citing safety concerns after right-wing commentators published the names of certain employees. Google Chief Executive Sundar Pichai had scheduled the meeting in the wake of his firing this week of software engineer James Damore, who wrote and distributed a memo that argued biological differences between men and women explain the gender gap among tech workers.

Snap Misses User-Growth Estimate as Facebook Copying Takes Toll
Sarah Frier, Bloomberg

Snap Inc.’s growth again fell short of estimates, feeding fears that aggressive competition from Facebook Inc. is blunting the younger social-media company’s potential just months after its initial public offering. The Los Angeles-based company said daily active users reached 173 million in the second quarter, compared with 166 million in the prior period.

Apple’s App Store in China, Long a Moneymaker, Faces Scrutiny
Amy Qin, The New York Times

In China, where Western-owned online services like Facebook and Google have long been blocked, Apple’s app store is a lucrative exception. Apple offers gaming, dining and dating apps in a country where most rivals are locally owned — and where it can reap big fees from iPhone users.

China investigates top local social media sites in push to control content
Cate Cadell, Reuters

China is investigating its top social media sites, including WeChat and Weibo, for failing to comply with cyber laws, the latest step in the country’s push to secure the internet and maintain strict Communist Party control over content. President Xi Jinping has made China’s “cyber sovereignty” a top priority and has also reasserted the ruling party’s role in limiting and guiding online discussion.

Exclusive: Amazon in talks to offer event ticketing in U.S.- sources
Jessica Toonkel and Jeffrey Dastin, Reuters

Amazon.com Inc is seeking to partner with U.S. venue owners to sell event tickets, four sources have told Reuters, a move that could loosen Ticketmaster’s powerful grip on the lucrative ticketing business. If Amazon moves ahead, it would represent the latest attempt by the world’s largest online retailer to use its massive customer base, tech savvy and bargaining power to shake up a big market.

Uber’s Ryan Graves leaving SVP role to focus on board position
Darrell Etherington, TechCrunch

Uber SVP of Global Operations will be leaving that full-time senior leadership role in the middle of September to “focus” on his role as a director of Uber’s board.Graves, who acted as Uber’s CEO from early 2010 until founder Travis Kalanick took over the position at the end of that year, had been seen as a close associate of Kalanick’s over the course of his long tenure at the ride-hailing company.

Cybersecurity and Privacy

Cybersecurity could make an appearance in NAFTA talks
Charlie Mitchell, Washington Examiner

The technology sector is trying to nudge cybersecurity and other tech issues a little higher up on the priority list for next week’s launch of the North American Free Trade Agreement modernization talks in Washington. The technology sector is trying to nudge cybersecurity and other tech issues a little higher up on the priority list for next week’s launch of the North American Free Trade Agreement modernization talks in Washington.

17-year-old Hacks the Air Force for the Biggest Bug Bounty
Jack Corrigan, Nextgov

Foreign and domestic hackers probed hundreds of security holes in critical Air Force networks for weeks in late spring, and the Pentagon knew all about it. But instead of getting punished, the hackers got paid.The Defense Department’s third and most successful bug bounty program, Hack the Air Force, uncovered a record 207 vulnerabilities in the branch’s major online systems.

A Message from the Electronic Payments Coalition:

The evidence is mounting: There are now at least a dozen studies that illustrate the failure of the Durbin amendment. In fact, a recent paper from Federal Reserve economists provides empirical evidence of harm to the consumer. Get the facts from the Electronic Payments Coalition.

Opinions, Editorials and Perspectives

The growing Chinese threat to advanced technology industries
Thomas Duesterberg, The Hill

As the Trump administration develops trade policies to match its tough rhetoric from the 2016 election campaign, it would do well to focus on the single biggest foreign challenge to the modern U.S. economy: China. While a plan to counter the dumping of metals into the U. S. market is certainly needed, a more existential threat is represented by the “Made in China 2025” program now being implemented with vigor by President Xi Jinping.

Google’s CEO Must Answer These Questions About That Memo
Nitasha Tiku, WIRED

Google CEO Sundar Pichai is hosting a companywide town hall meeting Thursday to discuss a controversial memo about Google’s diversity practices that led to the firing of its author, James Damore. Based on the questions being submitted by Google employees, the session promises to be lively, with Pichai being probed by both employees who were offended by Damore’s post and those concerned about his dismissal.

How hunt operations can strengthen your security posture
Joseph Williams, FCW

There’s no question that federal agencies have expanding options today for sophisticated threat analytics, automated tools and security solutions to protect the growing complexity of their IT environments. However, it’s equally true that as the attack surface grows and malicious threat actors remain both creative and agile, threats will abound if not escalate.

How Minimizing Cyber Risk Can Actually Increase It
Kalev Leetaru, Forbes

As the cyber landscape has evolved, so too has its targets, from governments and large corporations to the smallest local website. From the early days of the modern web when trust was the norm, encryption and security were rare and bad actors were few, to the active cyber war zone of today, companies and private individuals must maintain constant cyber vigilance.

A Message from the Electronic Payments Coalition:

In a new paper, Federal Reserve economists confirm what many industry experts have said before: The Durbin amendment harms consumers. There are now at least a dozen studies that illustrate why this failed policy must be repealed. Learn the truth from EPC.

Research Reports

Space Launch: Coordination Mechanisms Facilitate Interagency Information Sharing on Acquisitions
Government Accountability Office

The Department of Defense (DOD)—including the Air Force and the National Reconnaissance Office (NRO)—and the National Aeronautics and Space Administration (NASA) spend over a billion dollars per year on space launch. These launches are for satellites, probes, and cargo capsules that are critical for carrying out government functions such as protected military communications, missile warning, navigation, intelligence collection, scientific discovery, and delivering supplies to the International Space Station.

More Details on the PACER Vulnerability We Shared with the Administrative Office of the Courts
Free Law Project

PACER/ECF is a system of 204 websites that is run by the Administrative Office of the Courts (AO) for the management of federal court documents. The main function of PACER/ECF is for lawyers and the public to upload and download court documents such as briefs, memos, orders, and opinions.