Tech Brief: Google Fires Controversial Diversity Memo Author


Government Brief

  • Recent shakeups at the Department of Homeland Security — including Secretary John Kelly’s transition to President Donald Trump’s chief of staff — have overshadowed unaddressed vulnerabilities in the U.S. voting system that the department continues to navigate. Many states have begun measures to strengthen the security of their election-related systems, but former DHS Secretary Jeh Johnson suggested the election systems are still very vulnerable to cyberattacks. (FCW)
  • Eleven Democrats on the House Energy and Commerce Committee told the Federal Communications Commission that there were a number of steps commissioners still need to take before voting on a proposed rollback of the net neutrality rules. In comments submitted to the FCC, the members, including Frank Pallone (N.J.), said that the agency still needs to seek feedback on a number of remaining issues — including whether the proposed rule change would impact free speech and economic development — and questioned the FCC’s independence from the Trump administration. (Broadcasting and Cable)
  • The Center for Democracy and Technology, a group that advocates for online privacy and security, filed a complaint with the Federal Trade Commission accusing Hotspot Shield VPN of engaging in unfair trade practices. The organization claims that the virtual private network service’s privacy claims are contradicted by its privacy policy and has accused the provider of potentially compromising users’ personal data. (The Hill)

Business Brief

  • Google Inc. fired the engineer responsible for writing an internal memo that blasted the tech giant’s diversity policies on gender. The author of the controversial memo confirmed that he has been dismissed for “perpetuating gender stereotypes.” (Bloomberg)
  • BroadbandNow, a broadband provider search site that tracks internet service providers and data caps across the United States, identified 196 home ISPs that impose monthly data limits on internet users among its database of roughly 2,500 providers. (Ars Technica)
  • Netflix Inc. made the first acquisition in the company’s 20-year history when it acquired comic-book publisher Millarworld, a move that insiders say is part of a larger strategy by the streaming giant to create more original content. Financial terms of the deal were not immediately disclosed, although the acquisition is reported to be between $50 million and $100 million. (The Wall Street Journal)

Chart Review

Events Calendar (All Times Local)

Tuesday
No events scheduled.
Wednesday
No events scheduled.
Thursday
D.C. Tech-Security Conference 8:15 a.m.
The Small Business and Entrepreneurship Council holds and event on the importance of modern infrastructure 11 a.m.
Friday
No events scheduled.

General

Carmakers have regained some of the upper hand in self-driving
Johana Bhuiyan, Recode

In 2014, Uber and Lyft were the future. Automakers like Ford and GM were under pressure as these fledgling startups threatened to cause a fall in sales, as they aimed to curb the need for personal car ownership. Initially, carmakers concluded they needed to partner with Uber or Lyft and help create autonomous vehicles or risk extinction.

Pilotless planes could save airlines billions, but passengers aren’t willing to fly them yet
Dani Deahl, The Verge

Pilotless flight might be in our future, but according to a new study by Swiss bank UBS, consumers are not quite ready to embrace it. Out of the 8,000 people surveyed for the report, more than half said they were unwilling to travel in a pilotless plane, even if the price was cheaper.

Amazon owns a whole collection of secret brands
Mike Murphy, Quartz

When you go to Amazon.com, what are you looking for? Products from the brands you recognize, or perhaps just the cheapest ones—assuming the ratings aren’t terrible?

Foxconn seeks to build self-driving car R&D site in Michigan
Zoey Chong, CNET

Foxconn Technology Group, best known as an iPhone manufacturer, said it’s planning a “multi-billion dollar” R&D facility in Michigan dedicated to developing self-driving cars, South China Morning Post reported Sunday. The announcement came just days after the company said it will build a $10 billion facility in Wisconsin that will make LCD displays and could generate as many as 13,000 jobs.

France and Germany Plan Tax Crackdown on U.S. Tech Giants
 Francois De Beaupuy, Bloomberg

France is working with Germany and other partners to plug loopholes that have allowed U.S. tech giants like Alphabet Inc.’s Google, Apple Inc., Facebook Inc. and Amazon.com Inc. to minimize taxes and grab market share in Europe at the expense of the continent’s own companies. France will propose the “simpler rules” for a “real taxation” of tech firms at a meeting of European Union officials due mid-September in Tallinn, Estonia, French Finance Minister Bruno Le Maire said in an interview in his Paris office on Friday, complaining that Europe-wide initiatives are proving too slow.

Euro Extends Gain as Stocks Struggle; Gold Climbs: Markets Wrap
Samuel Potter, Bloomberg 

Europe’s common currency edged higher and the dollar fell back in a lackluster trading session on Tuesday. European stocks dropped, while gold climbed with oil and bonds were mixed.

Intellectual Property and Antitrust

Tech advocacy group asks FTC to investigate free VPN service
Morgan Chalfant, The Hill

A technology advocacy group has filed a complaint with the Federal Trade Commission asking the government agency to investigate a virtual private network (VPN) service’s security and data-sharing practices. The Center for Democracy and Technology, a nonprofit organization that advocates for privacy and security online, announced Monday that it has filed a complaint accusing Hotspot Shield VPN of engaging in what could be considered unfair and deceptive trade practices under federal law.

Netflix Makes Its First Acquisition, Comic-Book Producer Millarworld
Joe Flint and Cara Lombardo, The Wall Street Journal

Netflix Inc. has made the first acquisition in its 20-year history, buying comic-book producer Millarworld amid plans to develop original content based on the publisher’s characters and titles such as “Kick-Ass,” “Old Man Logan” and “Kingsman.”The streaming-video company on Monday didn’t say how much it paid for Millarworld, nor whether it was competing against other bidders.

Sprint and T-Mobile again exploring merger, report says
Mike Snider, USA Today

Wireless carriers Sprint and T-Mobile are reportedly talking again about a merger that would, if completed, vault the resulting company into the No. 2 spot in the highly competitive industry, behind AT&T.The No. 3 and No. 4 wireless providers — T-Mobile has 69.6 million subscribers, Sprint, 53.7 million — attempted a merger three years ago.

Telecom, Wireless and TV

Data cap analysis found almost 200 ISPs imposing data limits in the US
 Jon Brodkin, Ars Technica

A company that tracks ISPs and data caps in the US has identified 196 home Internet providers that impose monthly caps on Internet users. Not all of them are enforced, but customers of many ISPs must pay overage fees when they use too much data.

Dems Question FCC Independence on Net Neutrality
John Eggerton, Broadcasting and Cable

Most of a dozen House Energy & Commerce Democrats have told the FCC that there is a laundry list of things it needs to do before voting on FCC Chairman Ajit Pai’s proposal to roll back Title II classification of ISPs and review 2015 Open Internet order rules. They also suggest the FCC “may” have “inappropriately violated its independence by “taking direction from the President.”

Dish Asks FCC to Deny Sinclair/Tribune
John Eggerton, Broadcasting and Cable

As expected, Dish has filed a petition with the FCC to deny the merger of Sinclair and Tribune, a $3.9 billion deal that would create the nation’s largest broadcast group at over 200 stations. The American Cable Association, which also filed a petition to deny the deal, suggested earlier in the day Dish would be following suit.

Mobile Technology and Social Media

Google Fires Author of Divisive Memo on Gender Differences
Mark Bergen and Ellen Huet, Bloomberg

Alphabet Inc.’s Google has fired an employee who wrote an internal memo blasting the web company’s diversity policies, creating a firestorm across Silicon Valley. James Damore, the Google engineer who wrote the note, confirmed his dismissal in an email, saying that he had been fired for “perpetuating gender stereotypes.”

The End of Typing: The Next Billion Mobile Users Will Rely on Video and Voice
Eric Bellman, The Wall Street Journal

The internet’s global expansion is entering a new phase, and it looks decidedly unlike the last one. Instead of typing searches and emails, a wave of newcomers—“the next billion,” the tech industry calls them—is avoiding text, using voice activation and communicating with images.

Tesla to Sell $1.5 Billion in Debt to Fuel Aggressive Expansion
Justina Vasquez and Cara Lombardo, The Wall Street Journal

Tesla Inc. on Monday said it would sell $1.5 billion in senior notes, opting to raise cash through the debt market rather than by offering equity, as the electric-vehicle maker ramps up production on its first automobile for mainstream customers, the Model 3. Chief Executive Elon Musk last week told analysts that Tesla faces “manufacturing hell,” and that the company was considering tapping the debt market in its efforts to compete as a mass-market manufacturer.

Uber board member and co-founder Garrett Camp says Travis Kalanick is not coming back as CEO
Johana Bhuiyan, Recode

Uber co-founder and board member Garrett Camp told employees that the company’s former CEO Travis Kalanick isn’t returning to fill his prior role, sources told Recode. In an email to staff on Monday, Camp addressed recent reports that Kalanick was attempting to come back as CEO.

Uber discloses details of Travis Kalanick’s deposition in Waymo lawsuit
Megan Rose Dickey, TechCrunch

Uber unsealed former CEO Travis Kalanick’s deposition in the Uber versus Waymo self-driving car technology case over the weekend. Kalanick, who was deposed for more than six hours last month, spoke about when he learned that Anthony Levandowski, who formerly worked at Google, downloaded documents related self-driving technology.

Autonomous cars race narrows on doubts about clear path to profit
Edward Taylor and Paul Lienert, Reuters

BMW and Daimler, the world’s top luxury carmakers, have announced alliances with suppliers, talking up the virtues of having a bigger pool of engineers to develop a self-driving car.But another motive behind these deals, executives and industry experts told Reuters, is a concern that robocars may not live up to the profit expectations that drove an initial investment rush.

Cybersecurity and Privacy

Amid DHS leadership shuffle, voting systems remain vulnerable
Chase Gunter, FCW

Even with the widespread attention and federal protections provided to election systems, state and federal officials alike have concerns that U.S. election systems remain vulnerable to digital meddling. In the final days of the Obama administration, then-Department of Homeland Security Secretary Jeh Johnson formally designated state election assets as U.S. critical infrastructure in response to digital floods of misinformation, as well as Russian cyber espionage on an election software vendor and spear-phishing attempts against local election officials during the lead-up to the November 2016 presidential election

Hackers Demand Millions in Ransom for Stolen HBO Data
Tali Arbel and Frank Bajak, The Associated Press

A group of hackers posted a fresh cache of stolen HBO files online Monday, and demanded a multimillion-dollar ransom from the network to prevent the release of entire television series and other sensitive proprietary files. HBO, which had previously acknowledged the theft of “proprietary information,” said it’s continuing to investigate and is working with police and cybersecurity experts.

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

Sex trafficking bill would make the internet a wasteland
Ryan Hagemann, The Hill

Last week, Sens. Rob Portman (R-Ohio) and Claire McCaskill (D-Mo.) released the Stop Enabling Sex Traffickers Act of 2017 (SESTA). Don’t let the title fool you.

The Man Who Wrote Those Password Rules Has a New Tip: N3v$r M1^d!
Robert McMillan, The Wall Street Journal

The man who wrote the book on password management has a confession to make: He blew it. Back in 2003, as a midlevel manager at the National Institute of Standards and Technology, Bill Burr was the author of “NIST Special Publication 800-63. Appendix A.”

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

DoD Biometrics and Forensics: Progress Made in Establishing Long-term Deployable Capabilities, but Further Actions Are Needed
Government Accountability Office

The Department of Defense (DOD) has validated its requirements for long-term deployable biometric capabilities (such as fingerprint collection devices) and forensic capabilities (such as expeditionary laboratories). Biometric capabilities are used to identify individuals based on measurable anatomical, physiological, and behavioral characteristics such as fingerprints, iris scans, and voice recognition.

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.

Tech Brief: WannaCry Hero Indicted for Kronos Malware

Marcus Hutchins, the security researcher credited with helping to stop the spread of the global WannaCry cyberattack in May, was indicted for his alleged involvement in creating, advertising and distributing Kronos malware between July 2014 and July 2015. Kronos steals victims’ banking credentials by directing them to malicious websites.

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