Government

Trump’s Huawei ban also causing tech shocks in Europe

Posted by | Android, China, Europe, european commission, finland, Google, Google Play, Government, huawei, Jolla, Mobile, Nokia, play store, Qwant, Sami Pienimäki, search engine, smartphone, smartphones, stmicroelectronics, Trade war, trump, United States | No Comments

The escalating U.S.-China trade war that’s seen Chinese tech giant Huawei slapped on a U.S. trade blacklist is causing ripples of shock across Europe too, as restrictions imposed on U.S. companies hit regional suppliers concerned they could face U.S. restrictions if they don’t ditch Huawei.

Reuters reports shares fell sharply today in three European chipmakers — Infineon Technologies, AMS and STMicroelectronics — after reports suggested some already had, or were about to, halt shipments to Huawei following the executive order barring U.S. firms from trading with the Chinese tech giant.

The interconnectedness of high-tech supply chains coupled with U.S. dominance of the sector and Huawei’s strong regional position as a supplier of cellular, IT and network kit in Europe suddenly makes political risk a fast-accelerating threat for EU technology companies, large and small.

On the small side is French startup Qwant, which competes with Google by offering a pro-privacy search engine. In recent months it has been hoping to leverage a European antitrust decision against Google  Android last year to get smartphones to market in Europe that preload its search engine, not Google’s.

Huawei was its intended first major partner for such devices. Though, prior to recent trade war developments, it was already facing difficulties related to price incentives Google included in reworked EU Android licensing terms.

Still, the U.S.-China trade war threatens to throw a far more existential spanner in European Commission efforts to reset the competitive planning field for smartphone services — certainly if Google’s response to Huawei’s blacklisting is to torch its supply of almost all Android-related services, per Reuters.

A key aim of the EU antitrust decision was intended to support the unbundling of popular Google services from Android so that device makers can try selling combinations that aren’t entirely Google-flavored — while still being able to offer enough “Google” to excite consumers (such as preloading the Play Store but with a different search and browser bundle instead of the usual Google + Chrome combo).

Yet if Google intends to limit Huawei’s access to such key services, there’s little chance of that.

(In a statement responding to the Reuters report Google suggested it’s still deciding how to proceed, with a spokesperson writing: “We are complying with the order and reviewing the implications. For users of our services, Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices.”)

Going on Google’s initial response, Qwant co-founder and CEO Eric Léandri told us he thinks Google has overreacted — even as he dubbed the U.S.-China trade war “world war III — economical war but it’s a world war for sure.”

“I really need to see exactly what President Trump has said about Huawei and how to work with them. Because I think maybe Google has overreacted. Because I haven’t [interpreted it] that way so I’m very surprised,” he told TechCrunch.

“If Huawei can be [blacklisted] what about the others?,” he added. “Because I would say 60% of the cell phone sales in Europe today are coming from China. Huawei or ZTE, OnePlus and the others — they are all under the same kind of risk.

“Even some of our European brands who are very small like Nokia… all of them are made in China, usually with partnership with these big cell phone manufacturers. So that means several things but one thing that I’m sure is we should not rely on one OS. It would be difficult to explain how the Play Store is not as important as the search in Android.”

Léandri also questioned whether Google’s response to the blacklisting will include instructing Huawei not to even use its search engine — a move that could impact its share of the smartphone search market.

“At the end of the day there is just one thing I can say because I’m just a search engine and a European one — I haven’t seen Google asking to not be by default in Huawei as search engine. If they can be in the Huawei by default as a search engine so I presume that everyone else can be there.”

Léandri said Qwant will be watching to see what Huawei’s next steps will be — such as whether it will decide to try offering devices with its own store baked in in Europe.

And indeed how China will react.

“We have to understand the result politically, globally, the European consequences. The European attitude. It’s not only American and China — the rest of the world exists,” he said.

“I have plan b, plan c, plan d, plan f. To be clear we are a startup — so we can have tonnes of plans, The only thing is right now is it’s too enormous.

“I know that they are the two giants in the tech field… but the rest of the world have some words today and let’s see how the European Commission will react, my government will react and some of us will react because it’s not only a small commercial problem right now. It’s a real political power demonstration and it’s global so I will not be more — I am nobody in all this. I do my job and I do my job well and I will use the maximum opportunity that I can find on the market.”

We’ve reached out to the Commission to ask how it intends to respond to escalating risks for European tech firms as Trump’s trade war steps up.

Also today, Reuters reports that the German Economy Minister is examining the impact of U.S. sanctions against Huawei on local companies.

But while a startup like Qwant waits to see what the next few months will bring — and how the landscape of the smartphone market might radically reconfigure in the face of sharply spiking political risk, a different European startup is hoping to catch some uplift: Finland-based Jolla steers development of a made-in-Europe Android alternative, called Sailfish OS.

It’s a very tiny player in a Google-dominated smartphone world. Yet could be positioned to make gains amid U.S. and Chinese tech clashes — which in turn risk making major platform pieces feel a whole lot less stable.

A made-in-Europe non-Google-led OS might gain more ground among risk averse governments and enterprises — as a sensible hedge against Trump-fueled global uncertainty.

“Sailfish OS, as a non-American, open-source based, secure mobile OS platform, is naturally an interesting option for different players — currently the interest is stronger among corporate and governmental customers and partners, as our product offering is clearly focused on this segment,” says Jolla co-founder and CEO Sami Pienimäki .

“Overall, there definitely has been increased interest towards Sailfish OS as a mobile OS platform in different parts of the world, partly triggered by the on-going political activity in many locations. We have also had clearly more discussions with e.g. Chinese device manufacturers, and Jolla has also recently started new corporate and governmental customer projects in Europe.”

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A year after outcry, carriers are finally stopping sale of location data, letters to FCC show

Posted by | AT&T, FCC, Government, Mobile, privacy, sprint, T-Mobile, Verizon | No Comments

Reports emerged a year ago that all the major cellular carriers in the U.S. were selling location data to third-party companies, which in turn sold them to pretty much anyone willing to pay. New letters published by the FCC show that despite a year of scrutiny and anger, the carriers have only recently put an end to this practice.

We already knew that the carriers, like many large companies, simply could not be trusted. In January it was clear that promises to immediately “shut down,” “terminate” or “take steps to stop” the location-selling side business were, shall we say, on the empty side. Kind of like their assurances that these services were closely monitored — no one seems to have bothered actually checking whether the third-party resellers were obtaining the required consent before sharing location data.

Similarly, the carriers took their time shutting down the arrangements they had in place, and communication on the process has been infrequent and inadequate.

FCC Commissioner Jessica Rosenworcel has been particularly frustrated by the foot-dragging and lack of communication on this issue (by companies and the commission).

“The FCC has been totally silent about press reports that for a few hundred dollars shady middlemen can sell your location within a few hundred meters based on your wireless phone data. That’s unacceptable,” she wrote in a statement posted today.

To provide a bit of closure, she decided to publish letters (PDF) from the major carriers explaining their current positions. Fortunately it’s good news. Here’s the gist:

T-Mobile swiftly made promises last May, and in June of 2018, CEO John Legere said in a tweet that he “personally evaluated this issue,” and pledged that the company “will not sell customer location data to shady middlemen.”

That seems to have been before “T-Mobile undertook an evaluation last summer of whether to retain or restructure its location aggregator program… Ultimately, we decided to terminate it.” That phased termination took place over the next half a year, finishing only in March of 2019.

AT&T immediately suspended access to location data by the offending company, Securus, but continued providing it to others. One hopes they at least began auditing properly. Almost a year later, the company said in its letter to Commissioner Rosenworcel that “in light of the press report to which you refer… we decided in January 2019 to accelerate our phase-out of these services. As of March 29, 2019, AT&T stopped sharing any AT&T customer location data with location aggregators and LBS providers.”

Sprint said shortly after the initial reports that it was in the “process of terminating its current contracts with data aggregators to whom we provide location data.” That process sure seems to have been a long one:

As of May 31, 2019, Sprint will no longer contract with any location aggregators to provide LBS. Sprint anticipates that after May 31. 2019, it may provide LBS services directly to customers like those described above [i.e. roadside assistance], but there are no firm plans at this time.

Verizon (the parent company of TechCrunch) managed to kill its contracts with all-purpose aggregators LocationSmart and Zumigo in November of 2018… except for a specific use case through the former to provide roadside assistance services during the winter. That agreement ended in March.

It’s taken some time, but the carriers seem to have finally followed through on shutting down the programs through which they resold customer location data. All took care to mention at some point the practical and helpful use cases of such programs, but failed to detail the apparent lack of oversight with which they were conducted. The responsibility to properly vet customers and collect mobile user consent seems to have been fully ceded to the resellers, who as last year’s reports showed, did nothing of the kind.

Location data is obviously valuable to consumers and many services can and should be able to request it — from those consumers. No one is arguing otherwise. But this important data was clearly being irresponsibly handled by the carriers, and it is probably right that the location aggregation business gets a hard stop and not a band-aid. We’ll likely see new businesses and arrangements appearing soon — but you can be sure that these too will require close monitoring to make sure the carriers don’t allow them to get out of hand… again.

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India is investigating Google over alleged Android abuse

Posted by | Android, Asia, competition commission of india, european union, Google, Google Play Store, Government, india, Policy | No Comments

More than 95% of the smartphones that ship in India run Android, according to industry estimates. Now the Indian antitrust watchdog is convinced that the nation should investigate whether Google is abusing the dominant position of its mobile operating system to hurt local rivals.

The Competition Commission of India (CCI), the local anti-monopoly regulator, began looking at Google’s Android business in India last year after it received a complaint from unspecified people. Last month, the regulator preliminarily found that Google had abused the dominant position of Android in the nation, and thereby ordered its investigation unit to conduct a full investigation, according to a report by Reuters, which cites unnamed sources.

In a statement to TechCrunch, a Google spokesperson said that the company looks forward to working with the CCI. “Android has enabled millions of Indians to connect to the internet by making mobile devices more affordable. We look forward to working with the Competition Commission of India to demonstrate how Android has led to more competition and innovation, not less.”

The investigation, not the first of its kind, will take about a year to conclude and could see Google executives summoned before the regulator, the news agency reported. The CCI has not publicly commented on the probe.

If found guilty, Google may be fined up to 10% of its local revenue or 300% of its net profits. Even as India has emerged as one of Google’s largest markets in recent years, the company makes a relatively tiny amount in the nation. It clocked $1.4 billion in revenue in India in the year that ended in March 2018, according to regulatory filings, compared to more than $100 billion it generated globally in a comparable time period.

The specific accusations, as well as the identity of those who filed the complaint, remain unclear.

With the launch of this investigation, India is joining the EU, which continues to look at several businesses of Google — including Android — to ensure that the company is not abusing its dominant position in the market. Earlier this year, the EU regulators concluded that Google had forced its OEM partners to prebundle a number of apps, including Google Search, Chrome browser and Google Play Store on their Android handsets.

Following the verdict, which Google has appealed, the Android maker announced it will give users more choices for browsers and search engines.

India’s regulator has previously investigated Google’s search business and Apple’s partnerships with local carriers for sale of iPhones. Apple’s iOS has tiny market share in India, where most people have annual income of less than $2,000.

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Tencent’s new alternative to PUBG is already topping the revenue chart

Posted by | Asia, Beijing, bluehole, China, communist party, game design, games publisher, Gaming, Government, quora, sensor tower, shenzhen, south korea, Tencent, video gaming | No Comments

In a move clearly driven by economic interests and an urgency to meet stringent regulations, the world’s largest games publisher Tencent pulled its mobile version of PlayerUnknown’s Battlegrounds on Wednesday and launched a new title called Game for Peace (the literal translation of its Chinese name 和平精英 is ‘peace elites’) on the same day.

As of this writing, Game for Peace is the most downloaded free game and top-grossing game in Apple’s China App Store, according to data from Sensor Tower data. That’s early evidence that the new title is on course to stimulate Tencent’s softening gaming revenues following a prolonged licensing freeze in China. Indeed, analysts at China Renaissance estimated that Game for Peace could generate up to $1.48 billion in annual revenue for Tencent.

Tencent licensed PUBG from South Korea’s Krafton, previously known as Bluehole, in 2017 and subsequently released a test version of the game for China’s mobile users.

Game for Peace is available only to users above the age of 16, a decision that came amid society’s growing concerns over video games’ impact on children’s mental and physical health. Tencent has recently pledged to do more ‘good’ with its technology, and the new game release appears to be a practice of that.

Tencent told Reuters the two titles are from “very different genres.” Well, many signs attest to the fact that Game for Peace is intended as a substitute for PUBG Mobile, which never received the green light from Beijing to monetize because it’s deemed too gory. Game for Peace received the license to sell in-game items on April 9.

For one, PUBG users were directed to download Game for Peace in a notice announcing its closure. People’s gaming history and achievement were transferred to the new game, and players and industry analysts have pointed out the striking resemblance between the two.

“It’s basically the same game with some tweaks,” said a Guangzhou-based PUBG player who has been playing the title since its launching, adding that the adjustment to tone down violence “doesn’t really harm the gamer experience.”

“Just ignore those details,” suggested the user.

For instance, characters who are shot don’t bleed in Game for Peace. A muzzle flash replaces gore as bloody scenes no longer pass the muster. And when people are dying, they kneel, surrender their loot box, and wave goodbye. Very civil. Very friendly.

“It’s what we call changing skin [for a game],” a Shenzhen-based mobile game studio founder said to TechCrunch. “The gameplay stays largely intact.”

Other PUBG users are less sanguine about the transition. “I don’t think this is the correct decision from the regulators. Getting oversensitive in the approval process will prevent Chinese games from growing big and strong,” wrote one contributor with more than 135 thousand followers on Zhihu, the Chinese equivalent of Quora.

But such compromise is increasingly inevitable as Chinese authorities reinforce rules around what people can consume online, not just in games but also through news readers, video platforms, and even music streaming services. Content creators must be able to decipher regulators’ directives, some of which are straightforward as “the name of the game should not contain words other than simplified Chinese.” Others requirements are more obscure, like “no violation of core socialist’s values,” a set of 12 moral principles — including prosperity, democracy, civility, and harmony — that are propagated by the Chinese Communist Party in recent years.

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Facebook reserves $3B for FTC fine, but keeps growing with 2.38B users in Q1

Posted by | Advertising Tech, Apps, Earnings, Facebook, Facebook ads, Facebook Earnings, facebook privacy, Facebook Stories, Facebook Stories Ads, Government, Mobile, privacy, Social, TC | No Comments

A massive penalty hangs over Facebook’s head, but it otherwise had a very strong Q1 earnings report. Facebook reached 2.38 billion monthly users, up 2.5 percent from 2.32 billion in Q4 2018 when it grew 2.2 percent, and it now has 1.56 billion daily active users, up 2.63 percent from 1.52 billion last quarter when it grew 2 percent. Facebook pulled in $15.08 in revenue, up 26 percent year-over-year compared to Refinitiv’s consensus estimates of $14.98 billion in revenue.

Facebook recorded earnings per share of $0.85 compared to estimates of $1.63 EPS. However, that’s because Facebook has set aside $3 billion to cover a potential FTC fine that it’s still resolving. Without that fine, it would have had an EPS of $1.89. Despite the set-aside, Facebook still earned $2.429 billion in profit, though that’s down from $4.988 a year ago and $6.8 billion in Q4 2018.

Facebook’s share price rose 8.3 percent to $197.84 after closing before earnings at $182.58, way up from its recent low of $124.06 in December. Wall Street seems to have already priced in the potential FTC fine. Facebook has agreed to strict oversight of how it handled user privacy in a 2011 deal with the FTC. It promised to not misrepresent its privacy practices or change privacy controls without user permission, and it’s now negotiating the fine for potentially breaking those terms.

Facebook wrote in its earnings release about the FTC fine that:

“In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices, which accrual is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet. We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”

It’s possible Facebook escapes with a lesser fine that would likely still dwarf Google’s $22.5 million penalty for violating an FTC privacy deal. But it also might have to drag down a future quarter of earnings if the fine ranges as high as $5 billion or larger. Though Facebook does have $45.2 billion in cash and securities on hand to pay that fine and make any necessary acquisitions. Facebook’s headcount grew 36% year-over-year to 37,773 as it staffs up its security team, but it still has a 22 percent operating margin.

Facebook has managed to hold on to its 66 percent daily to monthly user ratio, showing people aren’t necessarily using it less despite all the backlash. It added 39 million daily users, compared to Snapchat’s addition of 4 million in Q1. But Facebook failed to grow past its 186 million daily user count in the US & Canada where it got stuck last quarter, but at least it added 4 million in its lucrative Europe market, plus it had atypically large gains in Asia-Pacific and the Rest Of World regions. As for monetization, Facebook made modest gains in average revenue per user across markets compared to Q3 2018 (excluding the holiday-laden Q4). Europe did especially well, growing ARPU 8.2 percent.

Zooming out, Facebook now has over 2.7 billion total mothly users across its family of Facebook, Messenger, Instagram, and WhatsApp, the same as last quarter. 2.1 billion people use at least one of those apps daily, up from 2 billion last quarter. Instagram Stories, WhatsApp Status, and Facebook Stories on Facebook and Messenger combined each now have 500 million daily users. Facebook also now has 3 million advertisers buying Stories ads across its apps, so the ephemeral format will likely start to contribute meaningful revenue soon.

Color From The Earnings Call

In March, Zuckerberg announced plans for a massive privacy-centric overhaul of Facebook to turn it from just a townsquare into also a “living room”. That means unifying its messaging apps with a backend that supports end-to-end encryption, and promoting ephemerality in content sharing and communication. That could help deter calls for regulation, make Facebook harder to break up, and help it stay ahead of competitors like Snapchat, but will also be a massive product and engineering undertaking.

Today, Zuckerberg focused on providing more details to this plan to expand privacy, encryption, impermanence, safety, interoperability, and secure data storage. He stressed that given people traditionally spend more time communicating and consuming content privately than publicly, strengthening Facebook’s “living room” could boost its business. Zuckerberg noted that since Facebook already doesn’t use messaging content for ad targeting and recent content is more useful for its business, encryption and impermanence shouldn’t be a big risk either. Refusing to store data in countries with poor records of privacy could lead to Facebook being banned there, which Zuckerberg admitted is a major business threat, but one it’s grappled with over content policies for years.

In fact, impermanence is already earning money for Facebook. It said that Instagram Stories was the greatest contributor of additional ad impressions this quarter. And while the Facebook and Instagram feeds are already jammed full of ads with little room for more, Facebook says there’s still room to significantly increase Instagram Stories ad load.

Another highlight of the call was Zuckerberg’s discussion of Facebook’s payments strategy. He confirmed that Facebook plans to build out ways for people to pay merchants through its messaging apps. “So I think that what we’re going to end up seeing is building out payments, which is going to end up being something that we do country by country . . . The goal is to have something where you could do discovery through the broader townsquare-like platforms like Instagram and Facebook, and then you can complete the transactions and follow up with businesses individually and have an ongoing relationship through Messenger and WhatsApp.”

This is the first earnings report of a full quarter following Facebook’s worst-ever security breach in September that impacted 50 million users, shaking confidence in the social network’s privacy and security. It’s also the first full quarter in which Facebook sold its own branded hardware — its Portal video chat device that was well received by critics except for the fact that it was made by Facebook.

Yet the defining story continues to be Facebook’s struggle with claims that its user research and developer platform efforts endangered user privacy and steamrolled competitors in search of growth. That includes TechCrunch’s big scoop that Facebook was paying teens to snoop on their data with a VPN app, which eventually led Facebook to shut down its Onavo user surveillance apps. The fact that Facebook isn’t losing massive numbers of users after years of sustained scandals is a testament to how deeply it’s woven itself into people’s lives.

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China’s new gaming rules to ban poker, blood and imperial schemes

Posted by | Asia, China, Gaming, Government, iQiyi, netease, Netflix, online poker, Tencent, video gaming | No Comments

Lots of news has surfaced from China’s gaming industry in recent weeks as the government hastens to approve a massive backlog of titles in the world’s largest market for video games.

Last Friday, On April 10th, the country’s State Administration of Press and Publication, the freshly minted gaming authority born from a months-long reshuffle last year that led to an approval blackout, held a gaming conference and enshrined a new set of guidelines for publication that are set to move some to joy and others to sorrow. TechCrunch confirmed with an attendee present at the conference and a source close to the SAPP that the event took place.

On April 22, China finally resumed the approval process to license new games for monetization. Licensing got back on track in December, but Reuters reported in February that the government stopped accepting new submissions due to a mounting pile of applications.

The bad news: The number of games allowed onto the market annually will be capped, and some genres of games will no longer be eligible, according to information communicated at the gaming conference. Mahjong and poker games are taken off the approval list following a wave of earlier government crackdowns over concerns that such titles may channel illegal gambling. These digital forms of traditional leisure activities are immensely popular for studios because they are relatively cheap to make and bear lucrative fruit. According to video game researcher Niko Partners, 37 percent of the 8,561 games approved in 2017 were poker and mahjong titles.

While the new rule is set to wipe out hundreds of small developers focused on the genre, it may only have a limited impact on the entrenched players as the restriction applies only to new applicants.

“It won’t affect us much because we are early to the market and have accumulated a big collection of licenses,” a marketing manager at one of China’s biggest online poker and mahjong games publishers told TechCrunch.

China will also stop approving certain games inspired by its imperial past, including “gongdou,” which directly translates to harem scheming, as well as “guandou,” the word for palace official competition. The life inside palaces has inspired blockbuster TV series such as the Story of Yanxi Palace, an in-house production from China’s Netflix equivalent iQiyi . But these plots also touch a nerve with Chinese officials who worry about “obscene contents and the risk of political metaphors,” Daniel Ahmad, senior analyst at Nikos Partners, suggested to TechCrunch.

china games

Screenshots of Xi Fei Zhuan, a mobile game that lets users play the role of harems to win love from the emperor. Image source: Superjoy Interactive Games

Games that contain images of corpses and blood will also be rejected. Developers previously modified blood color to green to circumvent restrictions, but the renewed guidelines have effectively ruled out any color variations of blood.

“Chinese games developers are used to arbitrary regulations. They are quick at devising methods to circumvent requirements,” a Guangzhou-based indie games developer told TechCrunch.

That may only work out for companies armed with sufficient developing capabilities and resources to counter new policies. For instance, Tencent was quick to implement an anti-addiction system for underage users before the practice became an industry-wide norm as of late.

“Many smaller publishers will have a harder time under this new set of regulations, which will require them to spend extra time and money to ensure games are up to code,” suggested Ahmad. “We’ve already seen that many smaller publishers were unable to survive the temporary game license approval freeze last year and we expect to see further consolidation of the market this year.”

China has over the past year taken aim at the gaming industry over concerns related to gaming addiction among minors and illegal content, such as those that promote violence or deviate from the government’s ideologies. To enforce the growing list of requirements, an Online Game Ethics Committee launched in December under the guidance of the Publicity Department of the Chinese Communist Party to help the new gaming regulator in vetting title submissions.

More than 1,000 games have been approved since China ended the gaming freeze in December, though Tencent, the dominant player in the market, has yet to receive the coveted license required for monetizing its hugely popular mobile title PlayerUnknown’s Battlegrounds.

Uncertain waters in the gaming industry have wiped billions of dollars off the giant’s market cap and prompted it to initiate a bigger push in such non-game segments as cloud computing and financial technologies. NetEase, the runner-up in China’s gaming market, reacted by trimming its staff to cut costs.

The article was updated to correct the date for the gaming conference and clarify that the new guidelines were announced at the conference.

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FCC looks to slap down China Mobile’s attempt to join US telecom system

Posted by | ajit pai, China Mobile, FCC, Government, Mobile | No Comments

The FCC has proposed to deny an application from China Mobile, a state-owned telecom, to provide interconnect and mobile services here in the U.S., citing security concerns. It’s another setback to the country’s attempts to take part in key portions of American telecommunications.

China Mobile was essentially asking to put call and data interconnection infrastructure here in the U.S.; It would have come into play when U.S. providers needed to connect to Chinese ones. Right now the infrastructure is generally in China, an FCC spokesperson explained on a press call.

In a draft order that will be made public tomorrow and voted on in May, FCC Chairman Ajit Pai moves to deny the application, which has been pending since 2011. Such applications by foreign-owned entities to build and maintain critical infrastructure like this in the U.S. have to pass through the Executive, which only last year issued word that it advised against the deal.

In the last few months, the teams at the FCC have reviewed the record and came to the conclusion that, as Chairman Ajit Pai put it:

It is clear that China Mobile’s application to provide telecommunications services in our country raises substantial and serious national security and law enforcement risks. Therefore, I do not believe that approving it would be in the public interest.

National security issues are of course inevitable whenever a foreign-owned company wants to be involved with major infrastructure work in the U.S., and often this can be taken care of with a mitigation agreement. This would be something like an official understanding between the relevant parties that, for instance, law enforcement in the U.S. would have access to data handled by the, say, German-owned equipment, and German authorities would alert U.S. about stuff it finds, that sort of thing.

But that presupposes a level of basic trust that’s absent in the case of a company owned (indirectly but fully) by the Chinese government, the FCC representative explained. It’s a similar objection to that leveled at Huawei, which given its close ties to the Chinese government, the feds have indicated they won’t be contracting with the company for infrastructure work going forward.

The denial of China Mobile’s application on these grounds is apparently without precedent, Pai wrote in a separate note: “Notably, this is the first time the Executive Branch has ever recommended that the FCC deny an application due to national security concerns.”

It’s likely to further strain relations between our two countries, though the news likely comes as no surprise to China Mobile, which probably gave up hope some time around the third or fourth year its application was stuck in a bureaucratic black hole.

The draft order will be published tomorrow, and will contain the evidence and reasoning behind the proposal. It will be voted on at the FCC open meeting on May 9.

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Juul launches a pilot program that tracks how Juul devices get in the hands of minors

Posted by | Gadgets, Government, Health, juul, juul labs, Startups, TC | No Comments

Juul Labs is today launching a pilot for its new Track & Trace program, which is meant to use data to identify exactly how Juul devices wind up in the hands of minors.

Juul vaporizers all have a serial number down at the bottom, by the Juul logo. However, it wasn’t until recently that Juul had the capability to track those serial numbers through every step of the process, from manufacture to distribution to retail to sale.

With Track & Trace, Juul is calling upon parents, teachers and law enforcement officials to come to the Juul Report web portal when they confiscate a device from a minor and input the serial number. Each time a device is input in the Track & Trace system, Juul will open an investigation to understand how that minor wound up with that device.

In some cases, it may be an issue with a certain retail store knowingly selling to minors. In others, it may be a case of social sourcing, where someone over 21 years of age buys several devices and pods to then sell to minors.

Juul will then take next steps in investigating, such as talking to a store manager about the issue. It may also enhance its secret shopper program around a certain store or distributor where it sees there may be a spike in sale/distribution, to youth to identify the source of the problem. To be clear, Track & Trace only tracks and traces the devices themselves, and does not use personal data about customers.

Juul isn’t yet widely publicizing Track & Trace (thus, the “Pilot” status), but it is focusing on Houston as a testing ground with banner ads targeted at older individuals (parents, teachers, etc.) pointing them to the portal. Of note: The ad campaign is geofenced to never be shown in or around a school, hopefully keeping the program a secret from young people illegally using Juul.

The company wants to learn more about how people use the portal and test the program in action before widening the campaign around Track & Trace. That said, the Report portal is not limited to Houston residents — anyone who confiscates a Juul can report it through the portal and trigger an investigation.

“It’s important to note that the pilot is an opportunity for us to learn how the technology is working and optimize the technology,” said Chief Administrative Officer Ashley Gould. “It’s not just at the retailer level. It’s a whole process through the supply chain to track that device and find out if everyone who is supposed to be scanning it is scanning it, and the software that we’ve created to track that serial number through the supply chain to the retail store is working. The only way we’re going to know that is when someone puts in the serial number and we see if we have all the data we need to track it.”

According to Juul, every device in production will be trackable in the next few weeks. In other words, Juul vapes that are years old are likely not fully traceable in the program, but those purchased more recently should work with the system.

Juul has been under scrutiny from the FDA and a collection of Democratic Senators due to the device’s rise in popularity among young people. Outgoing FDA Commissioner Scott Gottlieb has called it “an epidemic” and enforced further restrictions on sales of e-cig products.

Juul has also made its own effort, removing non-tobacco and non-menthol flavored pods from all physical retail stores, enhancing their own purchasing system online to ensure online buyers are 21+ and not buying in bulk, going after counterfeits and copycats posing as Juul products and exiting its Facebook and Instagram accounts.

But Juul Labs also committed to build technology-based solutions to prevent youth use of the product. Co-founder and CPO James Monsees told TechCrunch at Disrupt SF that the company is working on Bluetooth products that would essentially make the Juul device as smart as an iPhone or Android device, which could certainly help lock out folks under 21.

However, the Track & Trace program is the first real technological step taken by the e-cig company. And it has been an expensive one. The company has spent more than $30 million to update its packaging, adjust printing standards, change manufacturing equipment and integrate the data and logistics software systems.

For now, Track & Trace is only applicable to Juul vaporizers, but it wouldn’t be shocking to learn that the company was working on a similar program for its Juul Pods.

Editor’s Note: This article mistakenly said that Republican senators were scrutinizing Juul. It has been edited for accuracy.

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Democratic senators question Juul about its Altria deal

Posted by | altria group, ecigarettes, Gadgets, Government, Health, juul labs, Startups, TC | No Comments

Eleven democratic senators, led by Sen. Dick Durbin (D-IL), have penned a letter to Juul Labs, asking a series of questions around the product’s marketing, its effectiveness as a tool to help people quit smoking combustible cigarettes, sales figures and, perhaps most importantly, more information on the deal that gave Altria a minority stake in Juul Labs.

“The corporate marriage between two companies that have been the most prolific at marketing highly addictive nicotine products to children is alarming from a public health standpoint and demonstrates, yet again, that JUUL is more interested in padding its profit margins than protecting our nation’s children,” writes Sen. Durbin in the letter.

Questions in the letter include records around advertising and marketing spend for Juul products, as well as any changes that might have been made to Juul’s Youth Prevention Plan following the deal with Altria.

In late 2018, Juul announced it had sold a 35 percent minority stake of the company to Altria Group, makers of Marlboro cigarettes, for $12.8 billion. The company said that a partnership with Altria would help Juul market and distribute to currently addicted adult cigarette smokers.

In the letter, the senators cite the American Heart Association, which called the Altria/Juul deal “a match made in tobacco heaven.” Juul was already in hot water over its product’s popularity among young people, so it’s only expected that a partnership with traditional Big Tobacco would further fuel concerns among critics.

More from the letter:

JUUL’s decision to team up with Altria, the parent company of Philip Morris USA, is also bad news for children considering that Altria has a long and sordid history of spending billions to entice children to smoke through targeted campaigns that intentionally lied about the science and health effects from cigarettes. And their efforts have clearly paid off. According to the CDC, Altria’s Marlboro cigarette continues to be the most popular cigarette brand among children in the United States, with 48.8 percent of high school smokers preferring Marlboro cigarettes. Further, the proportion of high school smokers who smoked Marlboro cigarettes increased dramatically between 2012 and 2016, by a whopping 27 percent. While JUUL has promised to address youth vaping through its modest voluntary efforts, by accepting $12.8 billion from Altria—a tobacco giant with such a disturbing record of deceptive marketing to hook children onto cigarettes—JUUL has lost what little remaining credibility the company had when it claimed to care about the public health.

A Juul Labs spokesperson had this to say in response to the letter:

We welcome the opportunity to share information regarding JUUL Labs’ commitment to curbing underage use of our products while fulfilling our mission to eliminate combustible cigarettes, the number one cause of preventable death in our country. We agree that companies such as ours must step up with meaningful measures to limit access and appeal of vapor products to young people. That’s exactly what we’ve done, and we will do more to combat teen use to save the harm-reduction opportunity for the 34 million adult smokers in the United States. Don’t take our word for it — look at our actions. As part of our action plan deployed in November 2018 to keep JUUL products out of the hands of youth, we stopped the sale of certain flavored JUULpods to traditional retail stores, strengthened our retail compliance and secret shopper program, enhanced our online age-verification, exited our Facebook and Instagram accounts and are continuously working to remove inappropriate third-party social media content. We support the FDA’s draft guidance restricting the sale of certain flavored products, including JUULpods, at retail outlets and online, and will continue to work with FDA, Congress, state Attorneys General, local municipalities, and community organizations as a transparent and responsible partner in combating underage use.

U.S. Senators Patty Murray (D-WA), Ron Wyden (D-OR), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), Jack Reed (D-RI), Elizabeth Warren (D-MA), Tom Udall (D-NM), Ed Markey (D-MA), Jeff Merkley (D-OR) and Chris Van Hollen (D-MD) joined Sen. Durbin in sending the letter. It comes just a month after the FDA proposed further regulations to the sale of flavored e-cig products.

Juul has until April 25 to provide answers and information in response to the letter.

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20 years for swatter who got a man killed

Posted by | Gaming, Government, swatting | No Comments

Tyler Barriss, a prolific and seemingly unremorseful repeat swatter and bomb hoaxer whose fakery got a man killed in 2017, has been sentenced to 20 years in prison. This hopefully closes the book on a long and disturbing career of random and mercenary harassment and threats.

Not to linger on the crimes committed by Barriss, but to refresh your memory: Barriss accumulated dozens of charges generally relating to calling in fake threats in order to get police or SWAT called to a location or shut it down. Among his bomb threat targets was the FCC, which had to clear the room during a major net neutrality vote because of a call Barriss made.

Nearly at the same time, as part of a conflict relating to a $1.50 Call of Duty bet, he called the police claiming he was armed and had shot his father, and was at an address in Kansas, where he thought his target lived. Unfortunately the target had moved well before, and when the police showed up, they shot and killed the current resident, Andrew Finch.

Barriss was arrested in early 2018 and pleaded guilty to 51 various charges, facing up to 25 years in prison. The sentencing today reflects the defense’s plea that he get 20 instead, no doubt in return for cooperation and the guilty plea.

It should not go unnoted here that Finch was unarmed and on his own doorstep when police killed him — with an assault rifle — reportedly because “he was reaching for his waistband.” Apparently the officer also “believed he saw a gun come up in Mr Finch’s hands.” Well, which was it, up or down? Was he reaching for the gun or raising it? Is it common for Wichita police to shoot someone within seconds of them answering the door, without assessing the situation — for instance, where the children are? As is sadly often the case in such shootings, the police are entirely without credibility here, and the officer involved seems to have faced no consequences. Justice seems out of the question, but the family has filed a lawsuit over the matter.

If the police weren’t already considered a serious danger to others, swatting wouldn’t be a thing. The chance that police will escalate is highly unpredictable, though of course being a person of color adds considerably to that risk, as a fraudulent gun in the call will cause the police to hallucinate weapons with even greater frequency than usual.

The whole case is sad and depressing, from the astonishing pettiness of Barriss and his associates to the total lack of concern over the consequences of his actions — extending, it seems, even to his prison term: he has been in before and attempted to get online and continue his hoax habit even while incarcerated.

Barriss, it seems, is a symptom of internet culture less extreme but as inevitable as the Christchurch killer. All the worst parts about being online rolled into one and given form — and means to kill. Here’s hoping we find a way to reverse the trend.

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