Tech Brief: FaceTime Class Action Suit Can Move Forward


Government Brief

  • A spokesman for the House Energy and Commerce Committee said the body will extend the deadline it had originally set for top executives of leading tech companies and internet service providers to respond to the invitation to testify before the panel on net neutrality. None of the companies has so far responded to the committee’s request. (Recode)
  • During an episode of BBC radio show “Desert Island Discs,” Facebook Inc.’s Sheryl Sandberg argued that WhatsApp, which has come under fire for helping extremists send secret communications, can actually help law enforcement because WhatsApp does not encrypt its metadata. (The Washington Post)
  • The Electronic Privacy Information Center asked the Federal Trade Commission to investigate Google Inc.’s use of data from in-store purchases on credit and debit cards. The group says linking that information to online activity such as product and location searches raises privacy and competition concerns. (NPR News)

Business Brief

  • A U.S. district judge ruled against Apple Inc. and declared users of an older version of the iPhone eligible to be part of a nationwide class action lawsuit against the company. The claimants say Apple disabled the FaceTime application in order to save money it was paying to route calls through Akamai Technologies Inc.’s servers. (Reuters)
  • Apple’s Siri is about to get some new competition: Facebook announced its acquisition of artificial intelligence startup Ozlo Inc., which is to be layered in with the company’s Messenger app. The hope is that Ozlo can help Messenger build a better virtual assistant. (Business Insider)
  • SoftBank Group Corp. has reportedly arranged up to $65 billion in financing for a plan to acquire Charter Communications Inc. but now seems to be reassessing its approach. Charter’s board is said to have been aware of the figure when it rejected SoftBank’s initial offer. (Bloomberg)

Chart Review

Events Calendar (All Times Local)

Tuesday
No events scheduled.
Wednesday
Senate Commerce Committee considers FCC nominees Ajit Pai, Jessica Rosenworcel and Brendan Carr 10 a.m.
Thursday
FCC open meeting 10:30 a.m.
D.C. Startup Week stakeholders meeting 4 p.m.
Tech in Motion and BMC tech panel on Big Data 6 p.m.
Friday
No events scheduled.
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General

The chiefs of Facebook, Google and other tech giants aren’t committing to testify to the U.S. Congress on net neutrality
Tony Romm, Recode

Amazon, Facebook, Google and Netflix — along with their telecom industry foes —have not committed to sending their chief executives to testify before the U.S. Congress in September on the future of net neutrality. Not a single one of those companies told the powerful House Energy and Commerce Committee, which is convening the hearing, that they would send their leaders to Washington, D.C. in the coming weeks, even at a time when the Trump administration is preparing to kill the open internet rules currently on the government’s books.

Seed funding slows in Silicon Valley
Heather Somerville, Reuters

The bloom is off seed funding, the business of providing money to brand-new startups, as investors take a more measured approach to financing emerging U.S. technology companies. Seed-stage financing has been sliding for the last two years, with the number of transactions down about 40 percent since the peak in mid-2015, data show.

Bitcoin technology faces split, may create clone virtual currency
Gertrude Chavez-Dreyfuss and Anna Irrera, Reuters

Bitcoin’s underlying software code could be split on Tuesday to create a clone called “Bitcoin Cash,” potentially providing a windfall for holders of the digital currency. The initiative is being led by a small group of mostly China-based bitcoin miners – who get paid in the currency for contributing computing power to the bitcoin network – who are not happy with proposed improvements to the currency’s technology.

Stocks Gain as Earnings Roll In; Dollar Steadies: Markets Wrap
Samuel Potter, Bloomberg

Global stocks advanced following the latest set of corporate results, with European shares tracking a jump in Asian peers on both earnings and promising economic data. The U.S. dollar traded sideways after Monday’s drop, as investors digested the latest developments in Washington.

Intellectual Property and Antitrust

Apple fails to end lawsuit claiming it ‘broke’ FaceTime
Jonathan Stempel, Reuters

Apple Inc. has failed in its bid to dismiss a lawsuit claiming it disabled the popular FaceTime video conferencing feature on older iPhones to force users to upgrade. U.S. District Judge Lucy Koh ruled late on Friday that iPhone 4 and 4S users can pursue nationwide class action claims that Apple intentionally “broke” FaceTime to save money from routing calls through servers owned by Akamai Technologies Inc.

SoftBank Said to Have $65 Billion in Funds for Charter Deal
Alex Sherman, Bloomberg

SoftBank Group Corp. has as much as $65 billion in financing lined up as Chairman Masayoshi Son weighs whether to make a formal takeover offer for Charter Communications Inc., according to people familiar with the matter. The financing arrangement is among the new details that are emerging on Son’s plan to merge Charter with SoftBank’s struggling U.S. wireless company Sprint Corp.

Discovery and Scripps Seek to Tie Up in $12 billion TV Deal
The Associated Press 

Discovery Communications will buy Scripps Networks for close to $12 billion, tying together two powerful stables of TV shows ranging from Animal Planet to the Food Network. The deal, announced Monday, puts the combined company in a stronger position to draw more women viewers and to navigate an increasingly chaotic entertainment landscape, where cable companies and streaming services like Netflix and Hulu fight for eyes.

Telecom, Wireless and TV

Buffalo, N.Y., Proposes Annual Fees for Small Cell Tech Installations
Deidre Williams, The Buffalo News

Cellphone, laptop and tablet users in Buffalo won’t have to worry about traffic jams on the information superhighway if new equipment is installed that will enable telephone and other poles throughout the city to act as cell towers. But first, a dispute over the fee the city would charge to use its poles may have to be worked out.

Mobile Technology and Social Media

Facebook bought an AI startup that could turn its middling virtual assistant into a Siri killer
Alexei Oreskovic, Business Insider 

Facebook’s virtual assistant, which goes by the name of M, hasn’t quite delivered on the promise of a life-changing artificial intelligence product. But Facebook isn’t giving up.

GM Hires Jeep Hackers as Detroit Battles Silicon Valley for Tech Talent
Mike Colias, The Wall Street Journal

Chris Valasek and Charlie Miller made names for themselves a couple of years ago when they remotely hacked into a Jeep made by Fiat Chrysler Automobiles NV. Now they are going to work for General Motors Co.

With 200M daily users, Giphy will soon test sponsored GIFs
Jordan Crook, TechCrunch

And it’s about time. Giphy, the four-year-old search engine for GIFs, is going to finally start testing monetization.

Reddit raised $200 million in funding and is now valued at $1.8 billion
Kurt Wagner, Recode

Reddit has raised $200 million in new venture funding and is now valued at $1.8 billion, according to CEO Steve Huffman. The new funding round, the company’s largest ever, should expedite a number of internal product and business efforts, including a redesign of its homepage and its first foray into user-uploaded video, Huffman added in an interview with Recode.

Apple, Google Drop Trading Apps After Australian Intervention
Emily Cadman, Bloomberg

Apple Inc. and Google have removed over 300 so-called binary trading applications from their online stores after intervention by the Australian Securities & Investments Commission, according to an ASIC statement on Tuesday. The country’s securities regulator said it made the request to Apple and Google after numerous cases of fraud involving unlicensed operators of the apps, which encourage consumers to make bets on whether instruments like shares or currencies will rise or fall.

Elon Musk Is Borrowing Car Dealer ‘Tricks’ to Sell the Model 3: Barclays
Claire Ballentine, Bloomberg

Tesla Inc. may tout its electric cars as innovative and unlike anything else on the market, but Elon Musk’s introduction of his cheapest model yet is drawing parallels with the way dealers have pushed traditional cars for decades. The automaker’s tactics for marketing the Model 3 have been similar to how local car dealers advertise, Barclays analyst Brian Johnson wrote in a report Monday.

6 Guidelines for Acquiring Drones that Government Procurement Professionals Should Keep in Mind
Delaine Bender, Government Technology

It’s no secret that drones have already soared well beyond the realms of the military and hobbyists. New commercial uses for unmanned aerial vehicles (UAVs) are being found every day, from cell tower inspections to agricultural applications to media coverage.

Cybersecurity and Privacy

Sheryl Sandberg: WhatsApp encryption actually helps governments combat terrorism
Hamza Shaban, The Washington Post

Sheryl Sandberg defended Facebook’s use of encryption in its popular messaging service WhatsApp, telling a BBC radio show that what limited data remains accessible can be useful to law enforcement as it seeks to thwart terrorist activity.

Watchdog Group Files Complaint Over Google Tracking In-Person Purchases
Camila Domonoske, NPR News

A privacy watchdog group has filed a complaint with the FTC over Google’s system for tracking purchases Internet users make in person, at physical store locations. Google announced the new service — a way for advertisers to measure the effectiveness of an online ad campaign — in May.

Ukraine finally battens down its leaky cyber hatches after attacks
Matthias Williams, Reuters

When the chief of Microsoft Ukraine switched jobs to work for President Petro Poroshenko, he found that everyone in the office used the same login password. It wasn’t the only symptom of lax IT security in a country suffering crippling cyber attacks.

Top cybersecurity firm targeted by hackers
Alanna Petroff, CNN 

Cybersecurity firms are paid to protect their clients from hackers. But what happens when they’re the target? U.S. cybersecurity firm Mandiant confirmed Monday that one of its analyst’s social media accounts had been compromised in an attack.

Watchdog: Pentagon needs stronger guidance for IoT device security
Carten Cordell, FedScoop

A report from the Government Accountability Office has found that the Defense Department’s policies on Internet of Things devices aren’t sufficient enough to guard against potential security risks. The July 27 report analyzed the agency’s guidance on IoT devices regarding cybersecurity, information security and physical security concerns, finding that they either didn’t address the devices — which include items like digital wearables and smart televisions — or failed to attribute security procedures for industrial control systems.

Fighting Cyberattacks With Volunteers
Jenni Bergal, Stateline

For three years, a team of highly trained volunteers from the public and private sector has been standing by in Michigan, ready to spring into action and provide technical assistance if the state gets hit by a massive cyberattack. But despite a steady stream of smaller-scale breaches, the Michigan Cyber Civilian Corps, MiC3, has yet to be deployed.

Opinions, Editorials and Perspectives

Policymakers and Startups Should Think Global Together
Melissa Blaustein, Morning Consult

Today’s startup ecosystem is no longer bound by geography. Once confined to hubs like Silicon Valley and Seattle, communities from Buffalo to Kansas City are becoming centers of innovation.

Apple’s Silence in China Sets a Dangerous Precedent
Farhad Manjoo, The New York Times

A year ago, the Federal Bureau of Investigation made an extraordinary demand of Apple. To get inside a dead terrorist’s iPhone, law enforcement officials wanted the company to create a hackable version of the software that runs all iPhones.

Are we in a tech bubble? Ask a chipmaker
Mike Murphy, Quartz

Two of the best-preforming stocks over the past year have been those of chip manufacturers Advanced Micro Devices (AMD) and Nvidia. AMD’s most recent surge can be at least partially credited to the boom in ethereum, a cryptocurrency second only to bitcoin in its market value, and the miners who use its graphics chips to process their mining calculations.

Research Reports

2017 Cyber Threatscape Report
Accenture

The 2017 Cyber Threatscape Report examines cyber-threat trends during the first half of 2017 and offers an overview of how those trends might unfold in the latter half of the year. This report should serve as a reference and strategic complement to Accenture Security iDefense’s daily intelligence reporting to provide IT security and business operations with actionable and relevant decision support.

Briefings

Tech Brief: Lobbying Tech Groups Target NAFTA Renegotiations

According to data from the Center for Responsive Politics, the number of tech companies and trade associations registered to lobby U.S., Canadian and Mexican government officials has more than doubled in the last few months. Companies like Cisco Systems Inc. and Microsoft Corp. are looking to zero out tariffs for tech goods and remove restrictions on cloud storage as officials prepare to renegotiate the North American Free Trade Agreement.

Tech Brief: Intel CEO Leaves Trump’s Manufacturing Council

Brian Krzanich, Intel Corp.’s chief executive, joined the chief executives of Merck and Under Armour in announcing that he would leave Trump’s council on American manufacturing following the president’s response to violence during a white supremacist rally in Charlottesville, Va. Krzanich said he resigned “to call attention to the serious harm our divided political climate is causing to critical issues.” 

Tech Brief: Week in Review & What’s Ahead

The U.S. Court of Appeals for the 8th Circuit will not block the Federal Communications Commission’s April decision to eliminate price caps for much of the business broadband market. The FCC’s business data services ruling deems certain local markets as competitive, even when there is only one broadband service provider.

Tech Brief: Benchmark Capital Sues Former Uber CEO Kalanick

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.”

Tech Brief: Kaspersky Lab, Microsoft Reach Antitrust Resolution

Cybersecurity firm Kaspersky Lab plans to withdraw antitrust complaints it made in Europe against Microsoft Corp. after the U.S. tech company agreed to work with outside antivirus vendors on delivery of its security updates for Windows users. The Moscow-based security company in June accused Microsoft of abusing its dominance in the computer market by favoring its own antivirus software over those of independent security companies.

Tech Brief: SoftBank Considers U.S. Ride-Hailing Investment

SoftBank Group Corp.’s founder and CEO, Masayoshi Son, publicly expressed interest in branching out into the U.S. ride-hailing market by investing in Uber Technologies Inc. or Lyft Inc. SoftBank has funded Uber’s competitors in China, India and Southeast Asia, but last month reports came out that the company was looking at buying a stake in Uber.

Tech Brief: Week in Review & What’s Ahead

Apple Inc. agreed to remove virtual private network applications from its app stores in China. The Chinese government has been bolstering its “great firewall,” which blocks access to many, mostly foreign, websites — a firewall that VPNs could circumvent. The company defended its actions, saying it complies with the law in every country, but is facing public backlash for giving into China’s censorship demands.

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