Amazon’s barely-transparent transparency report somehow gets more opaque

Amazon’s barely-transparent transparency report somehow gets more opaque


Amazon posted its bi-annual report 

Thursday detailing the number of government data demands it receives. The numbers themselves are unremarkable, neither spiking nor falling in the second-half of last year compared to the first-half. The number of subpoenas, search warrants and other court orders totaled 1,736 for the duration, down slightly on the previous report. Amazon still doesn’t break out demands for Echo data, but does with its Amazon Web Services content — a total of 175 requests down from 253 requests.

But noticeably absent compared to earlier reports was how many requests the company received to remove data from its service. In its first-half report, the retail and cloud giant said in among the other demands it gets that it may receive court orders that might demand Amazon “remove user content or accounts.” Amazon used to report the requests “separately” in its report. Now it’s gone. Yet where freedom of speech and expression is more important than ever, it’s just not there any more — not even a zero. We reached out to Amazon to ask why it took out removal requests, but not a peep back on why.

Amazon has long had a love-hate relationship with transparency reports. Known for its notorious secrecy — once telling a reporter, “off the record, no comment” — the company doesn’t like to talk when it doesn’t have to. In the wake of the Edward Snowden disclosures, most companies that weren’t disclosing their government data demands quickly started. Even though Amazon wasn’t directly affected by the surveillance scandal, it held out — because it could — but later buckled, becoming the last of the major tech giants to come out with a transparency report.

Even then, the effort Amazon put in was lackluster.

Unlike most other transparency reports, Amazon’s is limited to just two pages — most of which are dedicated to explaining what it does in response to each kind of demand, from subpoenas to search warrants and court orders. No graphics, no international breakdown and no announcement. It’s almost as if Amazon doesn’t want anyone to notice. That hasn’t changed in years. Where most other companies have expanded their reports — Apple records account deletions, so does Facebook, and Microsoft, Twitter, Google and a bunch more — Amazon’s report has stayed the same. And for no good reason except that Amazon just can. Now it’s getting even slimmer.

Article Produced By
Zack Whittaker

Security editor at TechCrunch.

Reddit is raising a huge round near a 3 billion valuation

Reddit is raising a huge round near a $3 billion valuation


Reddit is raising $150 million to $300 million to keep the front page

of the internet running, multiple sources tell TechCrunch. The forthcoming Series D round is said to be led by Chinese tech giant Tencent at a $2.7 billion pre-money valuation. Depending on how much follow-on cash Reddit drums up from Silicon Valley investors and beyond, its post-money valuation could reach an epic $3 billion.

As more people seek esoteric community and off-kilter entertainment online, Reddit continues to grow its link-sharing forums. Indeed, 330 million monthly active users now frequent its 150,000 Subreddits. That warrants the boost to its valuation, which previously reached $1.8 billion when it raised $200 million in July 2017. As of then, Reddit’s majority stake was still held by publisher Conde Nast, which bought in back in 2006 just a year after the site launched. Reddit had raised $250 million previously, so the new round will push it to $400 million to $550 million in total funding.

It should have been clear that Reddit was on the prowl after a month of pitching its growth to the press and beating its own drum. In December Reddit announced it had reached 1.4 billion video views per month, up a staggering 40 percent from just two months earlier after first launching a native video player in August 2017. And it made a big deal out of starting to sell cost-per-click ads in addition to promoted posts, cost per impression and video ads. A 22 percent increase in engagement and 30 percent rise in total view in 2018 pushed it past $100 million in revenue for the year, CNBC reported.

The exact details of the Series D could fluctuate before it’s formally announced, and Reddit and Tencent declined to comment. But supporting and moderating all that content isn’t cheap. The company had 350 employees just under a year ago, and is headquartered in pricey San Francisco — though in one of its cheaper but troubled neighborhoods. Until Reddit’s newer ad products rev up, it’s still relying on venture capital.

Tencent’s money will give Reddit time to hit its stride. It’s said to be kicking in the first $150 million of the round. The Chinese conglomerate owns all-in-one messaging app WeChat and is the biggest gaming company in the world thanks to ownership of League of Legends and stakes in Clash of Clans-maker Supercell and Fortnite developer Epic. But China’s crackdown on gaming addiction has been rough for Tencent’s valuation and Chinese competitor ByteDance’s news reader app Toutiao has grown enormous. Both of those facts make investing in American newsboard Reddit a savvy diversification, even if Reddit isn’t accessible in China.

Reddit could seek to fill out its round with up to $150 million in additional cash from previous investors like Sequoia, Andreessen Horowitz, Y Combinator or YC’s president Sam Altman. They could see potential in one of the web’s most unique and internet-native content communities. Reddit is where the real world is hashed out and laughed about by a tech-savvy audience that often produces memes that cross over into mainstream culture. And with all those amateur curators toiling away for internet points, casual users are flocking in for an edgier look at what will be the center of attention tomorrow.

Reddit has recently avoided much of the backlash hitting fellow social site Facebook, despite having to remove 1,000 Russian trolls pushing political propaganda. But in the past, the anonymous site has had plenty of problems with racist, misogynistic and homophobic content. In 2015 it finally implemented quarantines and shut down some of the most offensive Subreddits. But harassment by users contributed to the departure of CEO Ellen Pao, who was replaced by Steve Huffman, Reddit’s co-founder. Huffman went on to abuse that power, secretly editing some user comments on Reddit to frame them for insulting the heads of their own Subreddits. He escaped the debacle with a slap on the wrist and an apology, claiming “I spent my formative years as a young troll on the Internet.”

Investors will have to hope Huffman has the composure to lead Reddit as it inevitably encounters more scrutiny as its valuation scales up. Its policy choice about what constitutes hate speech and harassment, its own company culture and its influence on public opinion will all come under the microscope. Reddit has the potential to give a voice to great ideas at a time when flashy visuals rule the web. And as local journalism wanes, the site’s breed of vigilante web sleuths could be more in demand, for better or worse. But that all hinges on Reddit defining clear, consistent, empathetic policy that will help it surf atop the sewage swirling around the internet.

Article Produced By
Josh Constine


Josh Constine is a technology journalist who specializes in deep analysis of social products. He is currently an Editor-At-Large for TechCrunch and is available for speaking engagements. Previously, Constine was the Lead Writer of Inside Facebook through its acquisition by WebMediaBrands, covering everything about the social network.

Constine graduated from Stanford University in 2009 with a Master's degree in Cybersociology, examining the influence of technology on social interaction. He researched the impact of privacy controls on the socialization of children, meme popularity cycles, and what influences the click through rate of links posted to Twitter.

Constine also received a Bachelor of Arts degree with honors from Stanford University in 2007, with a concentration in Social Psychology & Interpersonal Processes. Josh Constine is an experienced public speaker, and has moderated over 120 on-stage interviews in 15 countries with leaders including Facebook CEO Mark Zuckerberg, whistleblower Edward Snowden (via on-stage video conference), and U.S. Senator Cory Booker. He is available to moderate panels and fireside chats, deliver keynotes, and judge hackathon and pitch competitions.

Constine has been quoted by The Wall Street Journal, CNN Money, The Atlantic, BBC World Magazine, Slate, and more, plus has been featured on television on Good Morning, America, The Today Show, China Central Television, and Fox News. Constine is ranked as the #1 most cited tech journalist on prestigious news aggregator Techmeme.

The next integration evolution blockchain

The next integration evolution — blockchain


Here is one way to look at distributed ledger technologies (DLT)
and blockchain in the context of integration evolution. Over the years, businesses and their systems are getting more integrated, forming industry-specific trustless networks, and blockchain technology is in the foundation of this evolutionary step.

Enterprise integration

Large organizations have a large number of applications running in separate silos that need to share data and functionality in order to operate in a unified and consistent way. The process of linking such applications within a single organization, to enable sharing of data and business processes, is called enterprise application integration (EAI).

Similarly, organizations also need to share data and functionality in a controlled way among themselves. They need to integrate and automate the key business processes that extend outside the walls of the organizations. The latter is an extension of EAI and achieved by exchanging structured messages using agreed upon message standards referred to as business-to-business (B2B) integration. Fundamentally, both terms refer to the process of integrating data and functionality that spans across multiple systems and sometimes parties. The systems and business processes in these organizations are evolving, and so is the technology enabling B2B unification.

Evolution of integration

There isn’t a year when certain integration technologies became mainstream; they gradually evolved and built on top of each other. Rather than focusing on the specific technology and year, let’s try to observe the progression that happened over the decades and see why blockchain is the next technology iteration.

Evolution of integration technologies

Next we will explore briefly the main technological advances in each evolutionary step listed in the table above.

Data integration

This is one of the oldest mechanisms for information access across different systems with the following two primary examples:

  • Common database approach is used for system integration within organizations.
  • File sharing method is used for within and cross-organization data exchange. With universal protocols such as FTP, file sharing allows exchange of application data running across machines and operating systems.

But both approaches are non-real-time, batch-based integrations with limitations around scalability and reliability.

Functionality integration

While data integration provided non-real-time data exchange, the methods described here allow real-time data and importantly functionality exchange:

  • Remote procedure call provides significant improvements over low-level socket-based integration by hiding networking and data marshaling complexity. But it is an early generation, language-dependent, point-to-point, client-server architecture.
  • Object request broker architecture (with CORBA, DCOM, RMI implementations) introduces the broker component, which allows multiple applications in different languages to reuse the same infrastructure and talk to each other in a peer-to-peer fashion. In addition, the CORBA model has the notion of naming, security, concurrency, transactionality, registry and language-independent interface definition.
  • Messaging introduces temporal decoupling between applications and ensures guaranteed asynchronous message delivery.

So far we have seen many technology improvements, but they are primarily focused on system integration rather than application integration aspects. From batch to real-time data exchange, from point-to-point to peer-to-peer, from synchronous to asynchronous, these methods do not care or control what is the type of data they exchange, nor force or validate it. Still, this early generation integration infrastructure enabled B2B integrations by exchanging EDI-formatted data for example, but without any understanding of the data, nor the business process, it is part of. With CORBA, we have early attempts of interface definitions, and services that are useful for application integration.

Service-oriented architecture

The main aspects of SOA that are relevant for our purpose are Web Services standards. XML providing language-independent format for exchange of data, SOAP providing common message format and WSDL providing an independent format for describing service interfaces, form the foundation of web services. These standards, combined with ESB and BPM implementations, made integrations focus on the business integration semantics, whereas the prior technologies were enabling system integration primarily.

Web services allowed systems not to exchange data blindly, but to have machine readable contracts and interface definitions. Such contracts would allow a system to understand and validate the data (up to a degree) before interacting with the other system. I also include microservices architectural style here, as in its core, it builds and improves over SOA and ESBs. The primary evolution during this phase is around distributed system decomposition and transition from WS to REST-based interaction. In summary, this is the phase where, on top of common protocols, distributed systems also got common standards and contracts definitions.

Blockchain-based integration

While exchanging data over common protocols and standards helps, the service contracts do not provide insight about the business processes hidden behind the contracts and running on remote systems. A request might be valid according to the contract, but invalid depending on the business processes’ current state. That is even more problematic when integration is not between two parties, as in the client-server model, but among multiple equally involved parties in a peer-to-peer model.

Sometimes multiple parties are part of the same business process, which is owned by no one party but all parties. A prerequisite for a proper functioning of such a multi-party interaction is transparency of the common business process and its current state. All that makes the blockchain technology very attractive for implementing distributed business processes among multiple parties.

This model extends the use of shared protocols and service contracts with shared business processes and contained state. With blockchain, all participating entities share the same business process in the form of smart contracts. But in order to validate the requests, process and come to the same conclusion, the business processes need also the same state, and that is achieved through the distributed ledger. Sharing all the past states of a smart contract is not a goal by itself, but a prerequisite of the shared business process runtime.

Looked at from this angle, blockchain can be viewed as the next step in the integration evolution. As we will see below, blockchain networks act as a kind of distributed ESB and BPM machinery that are not contained within a single business entity, but spanning multiple organizations.

Integration technology moving into the space between systems

First the protocols (such as FTP), then the API contracts (WSDL, SOAP) and now the business processes themselves (smart contracts) and their data are moving outside of the organizations, into the common shared space, and become part of the integration infrastructure. In some respect, this trend is analogous to how cross-cutting responsibilities of microservices are moving from within services into the supporting platforms.

With blockchain, common data models and now business processes are moving out of the organizations into the shared business networks. Something to note is that this move is not universally applicable and it is not likely to become a mainstream integration mechanism. Such a move is only possible when all participants in the network have the same understanding of data models and business processes; hence, it is applicable only in certain industries where the processes can be standardized, such as finance, supply chain, health care, etc.

Generations of integrations

Having done some chronological technology progression follow-up, let’s have a more broad look at the B2B integration evolution and its main stages.

First generation: system integration protocols

This is the generation of integration technology before CORBA and SOA, enabling mainly data exchange over common protocols but without an understanding of the data, contracts and business processes:

  • Integration model: client-server, where the server component is controlled by one party only; examples are databases, file servers, message brokers, etc.
  • Explicit, shared infrastructure: low-level system protocols and APIs such as FTP.
  • Implicit, not shared infrastructure: application contracts, data formats, business processes not part of the common integration infrastructure.

Second generation: application integration contracts

This generation of integration technology uses the system protocols from previous years and allows applications to share their APIs in the form of universal contracts. This is the next level of integration, where both applications understand the data, its structure, possible error conditions, but not the business process and current state behind it in the other systems:

  • Integration model: client-server model with APIs described by contracts.
  • Explicit, shared infrastructure: protocols, application contracts, and API definitions.
  • Implicit, not shared infrastructure: business processes and remote state are still private.


Third generation: distributed business processes

The blockchain-based generation, which still has to prove itself as a viable enterprise architecture, goes a step further. It uses peer-to-peer protocols, and shares business processes with state across multiple systems that are controlled by parties not trusting each other. While previous integration generations required shared understanding of protocol or APIs, this relies on common understanding of the full business process and its current state. Only then it makes sense and pays off to form a cross-organization distributed business process network:

  • Integration model: multi-party, peer-to-peer integration, by forming business networks with distributed business processes.
  • Explicit, shared infrastructure: business process and its required state.
  • Implicit, not shared infrastructure: other non-process related state.

There are many blockchain-based projects that are taking different approaches for solving the business integration challenges. In no particular, order here are some of the most popular and interesting permissioned open-source blockchain projects targeting the B2B integration space:

  • Hyperledger Fabric is one of the most popular and advanced blockchain frameworks, initially developed by IBM, and now part of Linux Foundation.
  • Hyperledger Sawtooth is another Linux Foundation distributed project developed initially by Intel. It is popular for its modularity and full component replaceability.
  • Quorum is an enterprise-focused distribution of Ethereum.
  • Corda is another project that builds on top of existing JVM-based middleware technologies and enables organizations to transact with contracts and exchange value.

There are already many business networks built with the above projects, enabling network member organizations to integrate and interact with each other using this new integration model.  In addition to these full-stack blockchain projects that provide network nodes, there also are hybrid approaches. For example, Unibright is a project that aims to connect internal business processes defined in familiar standards such as BPMN with existing blockchain networks by automatically generating smart contracts. The smart contracts can be generated for public or private blockchains, which can act as another integration pillar among organizations. Recently, there are many blockchain experiments in many fields of life. While public blockchains generate all the hype by promising to change the world, private and permissioned blockchains are promising less, but are advancing steadily.


Enterprise integration has multiple nuances. Integration challenges within an organization, where all systems are controlled by one entity and participants have some degree of trust to each other, are mostly addressed by modern ESBs, BPMs and microservices architectures. But when it comes to multi-party B2B integration, there are additional challenges. These systems are controlled by multiple organizations, have no visibility of the business processes and do not trust each other. In these scenarios, we see organizations experimenting with a new breed of blockchain-based technology that relies not only on sharing of the protocols and contracts but sharing of the end-to-end business processes and state.

And this trend is aligned with the general direction integration has been evolving over the years: from sharing the very minimum protocols, to sharing and exposing more and more in the form of contracts, APIs and now business processes. This shared integration infrastructure enables new transparent integration models where the previously private business processes are now jointly owned, agreed, built, maintained and standardized using the open-source collaboration model. This can motivate organizations to share business processes and form networks to benefit further from joint innovation, standardization and deeper integration in general.

Article Produced By
Bilgin Ibryam

Bilgin Ibryam is a principal architect at Red Hat, committer and member of Apache Software Foundation. He is an open-source evangelist, blogger, occasional speaker and the author of Kubernetes Patterns and Camel Design Patterns.

Without Regulation ICOs Unlikely to Disrupt Venture Capital According to OECD

Without Regulation ICOs Unlikely to Disrupt Venture Capital According to OECD


In its January report, the Organisation for Economic

Co-Operation and Development (OECD) explained some of the intricacies of ICOs in modern finance. Although ICOs still offer advantages for startups, it comes at a steep cost. The organization concluded that ICOs can’t be properly harnessed until there is regulatory consensus internationally and it is unlikely to replace venture capital for mainstream seed financing.

OECD’s Stance on ICOs

The Organisation for Economic Co-operation and Development was founded in 1961 to stimulate economic progress and world trade. Today, the organization is comprised of 36 member countries including the United States, much of the European Union, Korea, and other major economies. Like most regulatory agencies, the OECD asserts that ICOs, in their current form,

are risky:

“ICOs in their current shape and form carry important risks for SME [small and medium enterprise] issuers and investors subscribing to token offerings.”

At face value, an ICO seems like an excellent way to raise funding. Thousands of businesses which otherwise would have never formed have been able to raise hundreds of millions using these offerings. Yet, to some extent, ICOs can be a trap. Keeping issuers accountable, properly structuring token economics, and evolving definitions for “utility” and “security” token have stunted many companies post-ICO. In extreme cases, the Securities Exchange Commission has even compelled companies that have conducted ICOs to return funds to investors via recision. Considering the age of the industry, there are still a lot of unanswered questions. The OECD does provide some answers, but even these come with a lot of footnotes and exceptions.

Grin as a Case Study

One highly anticipated project in the cryptocurrency space is Grin. The privacy-centric cryptocurrency gained the attention of Peter Thiel and several crypto-minded venture funds, including Primitive Ventures, Iterative Capital, and BlockCypher. With no ICO, no pre-mine, and some innovative privacy attributes, Grin has some features the crypto-community appears to value. In his proof of work newsletter, Erik Meltzer, a partner at Primitive Ventures,


“Unlike Bitcoin, which was so maligned and ignored at launch that Satoshi had to mine by himself on a single Intel CPU for most of 2009, there is (by our conservative estimates) 100 million dollars of mostly VC money invested into special-purpose investment vehicles to mine Grin.”

One interesting feature of Grin is “MimbleWimble,” a feature that purportedly hides information related to cryptocurrency transactions. Some have heralded the feature as a “cure” to Bitcoin’s privacy and scalability issues, but the feature has seen limited implementation outside of Grin. In a video explainer, crypto evangelist Andreas Antonopoulos said that MimbleWimble allows users to “have a much smaller, more private blockchain.” The innovation hides the amounts being transacted, the identities of the transactors, as well as verifies the state of the blockchain without storing all transactions. Allegedly, these are all features that Bitcoin has struggled with.

Grin has been compared a number of times to Bitcoin but implemented in such a way that’s more “fair,” according to advocates on Twitter. Prominent Bitcoin developer Jameson Lopp Tweeted his appreciation for the project on Jan. 15, 2019, saying that “there are no sketchy incentives skewed towards the creators, it’s actually innovating, and it’s a pretty cypherpunk project.” These questions of fairness are a matter of tokenomics (token economics). The monetary policy surrounding a cryptocurrency defines its use within the ecosystem and has a large impact on a coin’s price.

OECD on Pre-Mines and Tiered ICOs

The OECD offers some insights into this aspect of token offerings. The policy group asserts that “private sales of tokens ahead of ICOs raise a number of issues,” and “not having ‘skin-in-the-game’ is a source of potential conflicts.” Pre-ICO rounds that offer discounted tokens, but aren’t adjusted for risk compared to those sold during the main ICO, are primarily occupied by what the OECD labels “insiders.” The funds raised by insiders during this period are typically used to pay for marketing and advisory costs needed to establish the project in the first place.

Founders who manage to cover these costs often “carry no personal financial risk in the transaction besides reputation risk,” states OECD. The international agency underlined the importance of having “skin-in-the-game” as this accountability prevents conflicts such as pump and dump schemes. In the context of traditional startups and small businesses, cryptocurrency entrepreneurs need only pay for marketing expenses and advisory fees. Moreover, the absence of a mandatory lock-up period often tempts startup leaders to leave after they’ve raised the cash, rather than build out a working product.

ICOs Compared to IPOs

Initial public offerings (IPOs) for traditional stocks share few similarities with ICOs, other than that they are both fundraising methods. In the case of an IPO, investors interested in buying shares in a company are betting on a former track record of performance. There is a history of “both operational and financial performance,” explains the OECD, offering much more information than what is possible in an ICO. IPOs also tend to be much longer events, with planning for an offering lasting three times as long compared to an ICO, according to the OECD. With these features in mind, ICOs are more akin to venture

capital-style fundraising:

“IPOs follow series A-D financing or are used as an exit after venture capital funding, while ICOs look for seed/early stage financing, similar to seed financing (or perhaps series A round).”

If IPOs are a bet on a business’ forecasted success, then an ICO is a bet on turning an idea into reality. Unlike ICOs, venture capitalists (VCs) can meet with startups, get acquainted with the founding team, and then decide whether to provide funding. However, VCs still run into ‘problems’ of liquidity. For ICOs, as soon as a token is listed, a secondary market becomes available that makes “cashing out” easy. Such ease is tempting for

crypto founders:

“Academic research suggests that ICOs are preferred for projects with a high risk of failure and right-skewed payoff distribution, given that in case of some retention of ICO proceeds by the entrepreneur, the payoff for the entrepreneur is positive even when the project fails.”

ICOs Unlikely to Replace Venture Capital

Establishing a clear alignment of interest between token holders and founders is one of the largest impediments to ICOs succeeding. As the report claims, the OECD anticipates that the only way to harness ICOs is through international regulatory consensus. This, however, is easier said than done. At the end of the report, the OECD compiled all high-profile regulatory responses worldwide. Such a compilation emphasizes the complexity of “safeguarding” investors in each jurisdiction.

The FMA, the financial authority in Austria, suggested that ICOs require a license to help protect investors. Meanwhile, Thai authorities have simply outlined the benefits and risks associated with the fundraising technique, with few rules on how the practice should actually be regulated.

China and Korea have both outright banned ICOs, with the latter citing “serious concern about the fact that the current market funds are being pushed into a non-productive speculative direction.” ICOs were once lauded as a potential way to disrupt VC financing. Yet, at the present moment, the lack of accountability for issuers has left the space rife with scams and ill-conceived projects. With this in mind, the OECD concludes their report with the importance of a

quality use case:

“It [seems] inappropriate to consider ICOs as a potential ‘mainstream’ financing mechanism for SMEs whose projects are not enabled by DLTs and which would not benefit from network effects.”

By extension, the OECD suggests that it might make sense for projects enabled by distributed ledger technology to raise funds via ICO. Yet, this brings about a whole host of other issues around which projects should use blockchain technology instead of conventional databases. Again, it seems like international decision-makers are leaving more questions than answers.

Article Produced By
Liam Kelly


Blockchain Writer at CryptoSlate Berlin, Germany


SEC To Monitor Blockchain Transaction Seeking Suppliers to Extract Data

SEC To Monitor Blockchain Transaction, Seeking Suppliers to Extract Data

               us sec

An official announcement rolled out on Jan 31, 2019,
unveils that the SEC or Securities and Exchange Commission is analyzing blockchain transaction.

SEC to closely Analyze blockchain Services

According to the official report, the agency is looking for a supplier or vendor that would help them determine and monitor risk on grounds of digital assets. The opportunity is open for those that can extract blockchain data and parses them to make it reviewable. The opportunity page of

SEC reads that;

The U.S. Securities and Exchange Commission (SEC) is issuing these sources sought notice as a means of conducting market research to determine the availability and technical capability of large and small businesses to provide blockchain data to support the SEC’s efforts to monitor risk, improve compliance, and inform Commission policy with respect to digital assets.

The suppliers/vendors would further expected to enable SEC to access the data from the most widely used blockchain ledger. Besides data, SEC also demands to look at the process being used to extract the data and convert in reviewable format. This is to assure that the data transformation doesn’t lead to any kind of loss. Moreover, the requirement for the data provision mentioned by SEC website includes;

  • Provide data extracts on a recurring basis for the most widely used blockchain ledgers ,based on transaction volume.
  • Cleanse and normalize data to enable review and exploration. Provide capability to derive insights from the available data, including attribution data (i.e. to whom a particular address belongs).
  • Provide a means to demonstrate the data provided is accurate and complete

Article Produced By


Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies.

Apple is punishing Facebook big-time for breaking its rules

Apple is punishing Facebook big-time for breaking its rules

Apple moved fast and broke Facebook.


Facebook is in crisis.

Stop us if you’ve heard that one before. That’s been the general state of the company for almost two years now, ever since it became clear that so-called fake news and Russian election meddling on the social network may have influenced the result of the 2016 presidential election. In that time, Facebook has dealt with unflattering press, security breaches, congressional testimonies, and government investigations. Each week seems to add a new chapter to the madness. This week was no different, but it also brought on a new enemy: Apple. And Apple, it turns out, may be as dangerous as anything else Facebook is up against right now.

The quick backstory: Facebook is part of one of Apple’s special enterprise developer programs that allows companies to publish apps specifically for their own employees; these apps don’t go through the public App Store. Facebook uses that program to share beta versions of its own apps with employees so it can test new features or new code. It also uses the program to create apps for in-house purposes, like Facebook’s shuttle bus schedules or lunch menus.

On Tuesday, TechCrunch reported that Facebook has been abusing its role in Apple’s enterprise program by using it to distribute an app to non-employees. The app, which Facebook says was for “market research,” was used to gather personal data about the phone habits of the users who downloaded it. (Facebook paid these people to download the app, TechCrunch says.) An app like that would have violated Apple’s App Store guidelines, but Apple doesn’t review apps that are part of the developer program. It looks as though Facebook took advantage of the program to distribute the app without Apple’s knowledge.

Apple was upset. On Wednesday, the company announced that it was forcing Facebook to stop distributing the research app, calling it a “clear breach of their agreement with Apple.” But that wasn’t all: Apple also appears to have stopped Facebook from distributing all apps associated with its enterprise developer program, according to a source. This means the special versions of Facebook, Instagram, Messenger, and WhatsApp that Facebook employees use aren’t working on iPhones. It also means that other internal Facebook apps aren’t working in iOS, including Facebook’s Slack competitor, Workplace.

Essentially, Apple forced Facebook employees to download the public version of all of these apps, given that most of the company’s employees use iPhones. A Facebook spokesperson confirmed that its internal apps have been impacted by Apple’s decision to revoke its publishing abilities and that it is working with Apple to resolve the issue. It’s hard to overstate how big an issue this could be for Facebook. Not only does it completely disrupt all kinds of productivity, but if Facebook’s product teams can’t ship internal beta versions of its apps, it could seriously hinder Facebook’s product development. Don’t forget: This is a company that spent its first decade preaching the mantra, “Move fast, break things.”

Apple has shown that it isn’t just capable of stopping Facebook from moving fast — it might be capable of stopping Facebook altogether, at least temporarily. It’s unclear how long Apple will restrict Facebook from pushing updates, but it’s not the kind of enemy Facebook needs right now. The two companies have developed a bit of a rivalry. Apple CEO Tim Cook said last year that Facebook’s privacy issues could have been solved with “self-regulation,” but Facebook missed its chance. When asked what he would do in Facebook’s shoes, Cook replied pointedly, “I wouldn’t be in this situation.”

Facebook CEO Mark Zuckerberg later called the criticism “extremely glib.”

Facebook seems to have picked up in 2019 right where it left off in 2018. This Apple drama comes less than two weeks after a report in the Washington Post said that the Federal Trade Commission, which is investigating Facebook, is considering slapping Facebook with a “record-setting” fine for privacy violations.

Article Produced By
Kurt Wagner
Senior Editor, Social Media

Kurt Wagner has been a business and tech journalist since 2012 and was previously reporting for Mashable. He also covered general tech and Silicon Valley news in his first job as a tech reporter with Fortune magazine, based in San Francisco.
Originally from the Seattle area, Kurt graduated from Santa Clara University with a B.S. in communication and political science. He served as Editor-in-Chief of The Santa Clara, the university newspaper, for two years.

Facebook is in trouble for secretly breaking Apple’s rules But what it’s doing out in the open is way worse

Facebook is in trouble for secretly breaking Apple’s rules. But what it’s doing out in the open is way worse.

The company’s planned merger of Instagram, WhatsApp, and Facebook Messenger into one system should alarm regulators, NYU’s Scott Galloway says.


Facebook is in the doghouse with Apple

for abusing its role in Apple’s enterprise program to distribute research apps that suck up even more of users’ data. But on the latest episode of Pivot, NYU’s Scott Galloway said that’s a sideshow that mostly reflects personal animosity between Mark Zuckerberg and Tim Cook; the really suspicious thing Facebook is doing, he explained, is its plan to merge the infrastructure of Instagram, WhatsApp, and Facebook Messenger.

“‘I would like to give Mark Zuckerberg and Sheryl Sandberg broader reach and a more robust platform,’ said no person ever,” Galloway said. “And that’s what’s going on here.” Starting in 2016 and continuing to the present day, Facebook demonstrated that it was susceptible to foreign powers, and he suggested that allowing those apps to message each other more easily would be another powerful avenue for media manipulators looking to gin up outrage.

“We have figured out a way to create these giant dials that, if you put a hand on it, you can create rage from one community to another,” Galloway said. “And I think that Russians have been able to get their hands on these dials and are literally breaking us apart as Western democracy … What we’ve done here is we’ve decided to let Facebook create bigger, bigger dials.

“The most important move, I think long term, for the health of the commonwealth right now would be for either Senators Bennet or Warner or someone from the FTC to basically fire a shot across Facebook’s bow and say, ‘Look, if you integrate these three things, be careful. We can still break your ass up.’” You can listen to Pivot with Kara Swisher and Scott Galloway wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast.

Below, we’ve shared a full transcript of Kara and Scott’s latest conversation.

Kara Swisher: Hi everyone, this is Pivot from the Vox Media Podcast Network. I’m Kara Swisher, and I’m here in freezing DC, where the government is back up and running, for the moment.

Scott Galloway: And this is Scott Galloway coming to you from the polar vortex of Delray Beach, Florida, where it is 65 degrees. It’s unbearable, Kara.

You know what? Stop. Don’t. Don’t, because people in the Midwest are dying, don’t make … no. No. No. No. The white walkers are coming.

Not allowed. Not allowed. I just rode a scooter here to get here on time. I rode very fast. You got to stop that.

I was leaving the house fast, and my face froze. You got to stop the scooter thing, Kara.

It was lovely. It really did … I love the scooter thing. I wear a helmet. It’s good. You’re gonna slip and break a hip. People our age shouldn’t be on scooters. We shouldn’t be on scooters.

That’s enough. You should be at home watching Murder, She Wrote, not on a scooter.

That’s enough. Speak for yourself. I’m very fit. I’m very fit. I’m very fit. I do SoulCycle. I had a lovely SoulCycle yesterday. It was great. I’m in very good shape. You know what I did this morning? I did CrossFit.

Oh, did you? Do you like that stuff? All the internet people love that stuff. Well you know how you can tell if someone does CrossFit?

How? They tell you!

They’re damaged in the head. They tell you. They tell you. It’s telesignaling.

Oh, they tell you. That’s right. It’s like going to Harvard. Yeah. That’s right. “No, I went to school in Boston …”

All right, we got lots of stories this week. We have so many stories this week. There are so many. Let’s start … I know we have to get to Facebook again. Once again we had Apple beginning the week by doing something that was not good by having … It wasn’t a bug, it was a mistake in the FaceTime, which caused a lot of people to listen in, so, privacy snafu, right? And then they didn’t tell about it for a week. But they did talk about it. They did turn it off. They did all the things you’re supposed to do and admitted it. It just took them a long time. And they’re right in the middle of that also announcing pretty … earnings that people are not thrilled with.

And then Facebook is at it again. And this time they were caught paying teenagers to collect their data on an app and in doing so, even though they got consent of teenagers — I don’t know how that works, to start with — they violated Apple’s very strict terms of service on the kind of certificate, it’s called an Enterprise Certificate, I’m not going to go into it, it’s technical. But they were using it in a consumer-facing way. So Apple shut them down, including internal apps that Facebook uses on their staff’s iPhones, like I want a parking app or cafeteria. I don’t know what apps they’re using, but there’s a whole bunch of internal apps that these companies use and now Facebook isn’t allowed to use them. So Apple pulled all their rights to do that, making Apple sort of the regulator of Facebook. What do you think about this?

Let’s unpack both of those. So the first one was the Apple bug where, on Facebook, you got to listen to the conversation before people actually answered the phone.

FaceTime. I’m sorry, FaceTime. Excuse me. Thank you.

Not Facebook.  I think it’s actually a little bit of a nothing burger, and the only thing I take away from it is that there’s kind of a universal karmic response that when you go on an indignant story about privacy, you’re going to start violating people’s privacy. They kind of had it coming. I don’t think it’s a big deal. I think they fixed it. I think it makes for an interesting headline, but I think it’s a big nothing …

They act appropriately when it happens. Some people have the battery things.

They shut it down. They fixed it. Next. The fight between the other stuff, I actually think Facebook didn’t, as you know neither of us are big, huge fans of Facebook, companies do this all the time. And it was about 10 percent of the people were teenagers or under the age of 18, they did get parental consent.

Right. Research. What’s more interesting …

No. It’s not clear they got parental consent. It’s not totally clear. Oh, I thought they’ve shown that the parents were in fact contacted and that there was a “consent flow” was the term they used. I love the terms that Facebook puts out. But I don’t think it’s anything that other companies don’t do every day.

They’re doing research. They’re doing basic research. No. They all do, and Facebook does a lot of it, obviously, they run a lot of data. They all do. Google does.

What you have and what’s interesting is that the analogy I would use is, in the ’80s and ’90s, if you were black and sold white people marijuana, you got stuck in jail, and when you got out, you were on probation and anything including having pornography on your computer was reason to put you back in jail. And that’s where Facebook is. Facebook is on probation. Nobody believes them. Everything they do that is slightly questionable, everybody assumes is really malicious and covert and awful. And this management team has absolutely no credibility and everybody always assumes the worst. I don’t think it’s going to end until they turn …

But breaking the TOS is not should we care that they do because Apple has slapped other companies, and in fact, had slapped Facebook before for an app they had called Onavo, which was a data-collecting app that they had bought many years ago. I remember when they did. I’m like, “Oh, they’re trying to collect data on lots of different app usage. That’s what they’re doing it for.”

This is the worst Celebrity Deathmatch. This is Ali-Frazier turned hall monitor pass war between Zuckerberg and Tim Cook. This is personal. There’s nothing here except two people who hate each other, and they’re going after each other and all being indignant. It’s not … So what? I don’t think it’s a big story. I think the backstory here is that Zuck and Tim Cook hate each other, and they’re now fighting in public.

Yup. Yup. Yup. Which they have been doing. I got Tim to say those things about Mark on my interview with him this March and Apple … Facebook slapped back about it being indignant and Apple for being indignant. It just goes on. I think it still is getting to that. There was a really good thing that I tweeted. It was a thing of what they did. When others do it, Apple hits back harder, and most people feel that Apple didn’t hit back hard enough. Others feel like, “Wow, this was really sort of screwing up their internal systems,” was a nice little dig.

It’s very clear, Apple’s always been super strict in its app store and for Facebook to do a go-around because they didn’t like the rules just seems like, I don’t know, they can’t not like the rules. They shouldn’t operate on the platform. They can go over and use Google or whatever.

I think Facebook, I think the more interesting story, Kara, and this wasn’t in our notes, but I think the most under-reported story in tech right now, and the bigger deal that no one’s talking about, is Facebook’s integration of their backend among WhatsApp, Instagram, and the core platform, Facebook.

Yes. A hundred percent. Please go on. Please keep going.

Okay. So, “I would like to give Mark Zuckerberg and Sheryl Sandberg broader reach and a more robust platform,” said no person ever. And that’s what’s going on here. We have these giant … If you think about Einstein, I love the Einstein quote, they said, “How will the third World War be fought? With what weapons?” And he said, “I don’t know, but I know the fourth World War will be fought with sticks and stones.” And I’m beginning to believe that the third World War is going to be fought with “likes” and retweets. We have figured out a way to create these giant dials that, if you put a hand on it, you can create rage from one community to another. And I think that Russians have been able to get their hands on these dials and are literally breaking us apart as Western democracy. I know that sounds paranoid but just because I’m paranoid doesn’t mean I’m wrong.

What we’ve done here is we’ve decided to let Facebook create bigger, bigger dials. I know that some politicians listen to this show. The most important move, I think long term, for the health of the commonwealth right now would be for either Senators Bennet or Warner or someone from the FTC to basically fire a shot across Facebook’s bow and say, “Look, if you integrate these three things, be careful. We can still break your ass up.” And what they’re clearly doing is they’re trying to create what I would call a Siamese triplets defense. And they’re going to be able to say, “Look, if you break us up, if you try and separate us, the whole thing’s gonna die.” And the notion that they’re going to have …

That is the reason Kevin Systrom left, he saw this coming and didn’t want any part of it. One hundred percent, and also the guys at Whatsapp, the guys who knew what was going on were disturbed by this and yet nobody’s talking about it.

Right. That is a very fair point, but this was something they are going to do. The main Facebook business is so lagging among young people and others that they have to sort of bring them together. I think the big blue app is bloated essentially, and so they’re trying to be dynamic in other parts, but control it all from a centralized thing. Now, if you were Mark Zuckerberg, this is precisely what you would do, right? I mean, what else do you have to do? You’d get consent from teenagers and you would do this because you need as much data as possible. Even though today they turned in, or last night they turned in amazing results again because there is nowhere else to go. Unbelievable. We’ve been saying this despite all the headline …

When is that over? I don’t think it is over. Look, in the ’80s and ’90s, tobacco companies were killing half a million people a year and they were fantastic stocks to own and that’s what we have here. We have a fantastic stock. This company is massively undervalued even as we speak with it up 13 percent today. There is absolutely no evidence of the deceleration in the business because it’s a duopoly and because these tools on Facebook, if you ever want … I think all marketing classes should force their kids to go on Facebook and use their ad tools just to see how incredibly robust and powerful this platform is. And if you look at their numbers yesterday, I mean this company literally, from a business standpoint, is a juggernaut and we’d like to think that all this bad behavior translates to a reduction in their power in the business community. A hundred percent not, this is tobacco in the ’80s and ’90s, killing people and growing earnings massively.

Well, there you have it. Boom.

I didn’t think about it. Someone asked me earlier this week, I was on a stage, “How do you think they’re going to do?” I said, “Great.” Yeah, 100 percent.

You know, analysts and stock market, they own the digital advertising market with Google and so why wouldn’t they be doing great? It doesn’t matter, any of this. I think eventually it does matter though, in the end, is how products get less and less interesting and if they embarrass people who advertise there, that’s really where the bad, but so far, they haven’t embarrassed them. We’ll see if they can continue to do so. And you’re right there, but their trust is way down and I don’t think that’s a great place to be. You know, that’s how it started for Microsoft.

I don’t know. People overestimate the power of trust. Everybody at DLD was talking about trust. I think the majority of the products we use and love, we don’t trust the companies. I don’t think it matters.

All right, well, we’ll see. Speaking of people, people who like someone and people having a lot of feels, we’ll finish up with Howard Schultz, the former CEO of Starbucks. Very tech-savvy guy. I’ve known him for many years. It says he’s running for president and there’s been a lot of feels. Let’s play a clip from the event that he spoke at that kind of sums up the whole thing.

Howard Schultz: Well, let’s begin with what I said on national TV last night, so I can frame the answer. What I said last night is that I am seriously considering running for president as a centrist independent and I wanted to clarify the word independent, which I view merely as a designation on the ballot.

Protester: Don’t help elect Trump, you egotistical billionaire asshole. Go back to getting ratio’d on Twitter. Go back to Davos with the other billionaire elites who think they know how to run the world. That’s not what democracy needs.

Okay. Someone doesn’t like Howard Schultz. There was a fantastic column in the Washington Post where “there’s going to be a latte trouble” with this guy and there was tons and tons of “trouble brewing.” “Everyone wants to venti,” and stuff like that. There’s tons of coffee jokes.

Scott Galloway: He’s running for president in venti venti, 2020.

Right, exactly. That’s a good one. That’s my coffee joke.

What do you think of this? What do you think of Howard? You know what, Kara, you know, I think we should do, we should do what Gary V. does and have a camera follow us around all the time. Although you and I think have been together in the same room twice, but I’m thinking you and I go into a Starbucks and start handing out cups to the employee saying, “What the fuck is your boss thinking?”

Yeah, he’s not their boss. You know how they had those cups that talked about race …

Former boss. The boss is Kevin Johnson from Microsoft, but yes, he was. He made it into a big thing. What do you think of this? He’s running against the Democrats, which is fascinating because he’s all mad about taxes and Alexandria Ocasio has gotten under his skin in some fashion, and so what do you think? What do you think about this? I know him pretty well.

Ross Perot and Ralph Nader both handed the presidency to … Ross Perot gave it to Clinton and Ralph Nader gave it to Bush and that’s what independents do, they’re spoilers, and so the notion that he’s going to create some great centrist movement, I mean, it’s very idealistic and it’s unrealistic and the guy kind of summed it up perfectly. “Look, you billionaire asshole, you’re going to reelect Trump.” I mean, that’s a pretty heavy dose of truth, I think. It’s too bad, my sense of him is he’s a very thoughtful, civic-minded guy.

He is. I think he’s a principled guy. I think he could do a tremendous amount of good. I think what he should do is what Sheldon Adelson does and have this agora in Seattle and basically hand out a couple hundred million bucks to the people he likes and promote his values, and then go be ambassador to Britain or something. But running as an independent? It’s just terrible.

He doesn’t give away a lot of money. He’s very thoughtful. He’s written me several thoughtful emails about what he wanted to do and so, I don’t know. It’s interesting. You’re right. You don’t want him to be the spoiler here in a situation, given that there’s 412 Democrats running for office, including Bloomberg, who has moved over to the Democratic Party. Anyway, it’s gonna be fascinating to watch as we move forward.

We’re going to go to wins and fails. We’re gonna go to predictions at the end-up because you are clairvoyant again. But obviously, Nancy Pelosi and the people going back to work was a big win for Nancy Pelosi and the workers. Thoughts?

You’re right. Huge win for her. I think a lot of people doubted her leadership. There was some noise about her not being the best speaker of the House and she’s been outstanding. I mean, she’s really kind of, you know, “Say my name,” “Nancy Pelosi.” This is the Heisenberg of … I don’t know if you watched Breaking Bad, but she’s just an incredible … She’s done incredible leadership and if you’re a Democrat you were really excited to kind of see her basically just body slam the president.

If you go into the middle of the country and the rest of the country, it’s not about political victories, it’s about the fact that the greatest democracy and experiment in the history of mankind was shut down. And I don’t think it’s any accident that Russian bombers are trolling our coasts or that Venezuelan politics are being infiltrated by foreign entities because I think people are bumping us now. I think they see us as weak. I think when the government shuts down, it reflects weakness to the rest of the world. So I think it generally was just bad for America.

I would agree. I would agree. Also, when even the Republicans are arguing with each other, which they are today about Syria and all kinds of things about shutting down the … We’re going to get to your prediction in a minute, but the fighting now between Trump and the entire Congress, which is interesting. I’m not so sure the problems are that, fighting with him, but they’re at least pushing back on certain things. He yelled at his spy chiefs this week because they disagreed with him on the facts. His were made up, theirs were from actually doing work. It should be a very interesting couple of months, I think, going forward, especially in the next few weeks when they have to decide on this immigration stuff, which doesn’t look like it’s going anywhere fast, pretty much. Other wins and fails, Scott, anything else?

So I always feel … For me, you’re like me living in San Francisco again. I’m a progressive but living in San Francisco is enough to turn me into almost a conservative because I just got … I always like to bring up a win that you would never in a million year say is a win. I was on Fox on Tuesday.

Again, you with the Fox. I was in the green room with Chris Christie.

Who were you on? I was on Stuart Varney. I love Stuart Varney.

All right, okay. Stuart Varney! Varney is a gentleman and a scholar and I like it. I really like Neil Cavuto too. Anyways, I’m equal opportunity. I’m a total media whore, I’ll pretty much go anywhere they ask me.

We all understand that, Scott.

Anyways, I was in a room with Chris Christie and I actually think Chris Christie, his media tour around his book, I think it’s been a win for him. I think he comes across as smart. I don’t like his politics, but I do think he comes across as smart and a straight shooter and I don’t think his career is over. What I don’t understand is how naive he was that he thought he was going to get a job in an administration where he put a family member’s father in jail. Was he really shocked he didn’t get a job? I know that people have a tendency not to forget when you put their dads in jail, which he did to Jared.

He doubled down on it too. He’s like, “That was the most disgusting prosecution. I was glad I did it.” Like he’s not even backing off that. Yeah. He’s not apologizing, but if you’ve got a … Have you seen any of the media interviews he’s done over the last 24 hours?

Yeah, he’s a smart man, although, you know, I don’t love his denials of what happened in wherever the heck when he was stopping up the traffic on the bridge. BridgeGate?

Yeah. BridgeGate. Yeah, I think he’s a liar about that. All his people did it. Anyways, my win, Governor Christie. Your win?

My win is historian Rutger Bregman, who called out the billionaires at Davos for not talking about tax avoidance. Him and Winnie Byanyima from Oxfam had a back and forth with someone I know very well, the former CFO of Yahoo, Ken Goldman, about it. Let’s listen to Mr. Bregman talk about this.

Rutger Bregman: The answer is very simple. Just stop talking about philanthropy and start talking about taxes, taxes, taxes. We need to. I mean, just two days ago there was a billionaire in here. What’s his name? Michael Dell. He asked the question like, “Name me one country where a top marginal tax rate of 70 percent has actually worked.” And you know, I’m a historian. The United States, that’s where it has actually worked. In the 1950s during Republican President Eisenhower. You know, the war veteran. The top marginal tax rate in the US was 91 percent for people like Michael Dell, you know, the top estate tax for people like Michael Dell was more than 70 percent. I mean, this is not rocket science. I mean, we can talk for a very long time about all these stupid philanthropy schemes. We can invite Bono once more. Come on, we got to be talking about taxes. That’s it. Taxes, taxes, taxes. All the rest is bullshit, in my opinion.

So here he is making the salient point that we had it in this country for years. I love, “We can talk for a very long time about all these stupid philanthropy schemes, we can invite Bono once more.” That was my favorite. What do you think of this? He’s, “taxes, taxes, taxes.” You don’t like taxes, I’m guessing.

Scott Galloway: Well, complexity favors the wealthy in our tax system, slowly but surely, whether it’s capital gains on stocks, the top 1 percent own 50 percent of the stocks, so capital gains tax deduction is nothing but a transfer of wealth from the poor to the rich. Even, I would argue mortgage tax, mortgage interest tax deduction is nothing but a transfer of wealth from the poor to the rich. You know who owns homes, old rich people who raise young, middle-class people. So our tax system slowly but surely has been nothing but an elegant transfer of wealth from the poor to the rich. I would love somebody to do an analysis. I believe that the most valuable company in the world and the wealthiest man in the world, Amazon and Jeff Bezos respectively, have not only not paid any tax, but I believe they’ve been subsidized by the government.

I think when New York gives $3 billion in subsidies to Amazon as a function of this incredibly deft gamification of the commonwealth, with Bezos owning 16 percent of the company, effectively the government has written a check to Jeff Bezos personally for $5 million, and if you look at what Bezos has likely done with his wealth, he never sells shares, so he never incurs a tax liability. He just borrows against his shares from JPMorgan at probably a 2 percent interest rate and keeps rolling, but never actually pays taxes. And then he’ll put all his wealth in a trust and it’ll be transferred without taxes. So he’s basically building a dynasty that’s been subsidized by taxpayers. The wealthiest man in the world, most valuable company in the world, not paying any taxes.

Yeah, but we can invite Bono once more. That’s what we can do. There you go. Or someone from Brazil who paints with their feet. We got to find someone who paints with their feet.

You know, I think it does resonate in this election. I think this topic is going to be a bit … What do we do about the rich kind of thing? I think it’s not an attack. It’s really interesting because the Silicon Valley people all of a sudden are like, “Rah, taxes!” It’s really fascinating because I think they’re sort of in the know that they’re really not paying their fair share and how it ruins innovation and they’ll trot out everything else, but it’s a really interesting thing that it’s being discussed as much as it is. I don’t know if it’ll go anywhere because it’s not Bregman, it’s Ocasio and others and marginal tax rate and we’ll see if it goes anywhere. It will certainly effect tech given how much money they all have.

So it’ll be interesting where different tech people come down on this issue and what taxes they’re willing to pay or what they’re willing to go through. So it should be an ongoing story and some people will think of it as an attack, a class war kind of thing. I’m not so sure that’s the case. I think a lot of people are laying out very good arguments for what’s going on, but we’ll see if that matters and if …

But what’s interesting about it, it’s a nuanced argument because you know who gets really screwed, Kara, is what I would refer to as the work horses, and that is people who earn, call it between $150 grand and $1 million a year in current income. If you live in New York or California, you’re paying an effective tax rate of between 48 percent and 52 percent. So what you call the wealthy current-income work horses, the partners in law firms, the entrepreneurs. But the people who don’t pay their fair share are the people who get the majority of their income to capital gains. Basically, the investors and kind of the capital owners, but the people who do I think pay an unfair share to the high end are who a lot of people would deem as wealthy, the work horses. So I think it’s a nuanced argument, but we should have it.

I think the Democrats are screwing up by proposing, even using the term 70 percent in which you go back to a super tax. I don’t think that it’s winnable. I don’t think, whether it’s right or wrong, it’s not a winnable argument and you can see the ads from the Republicans now.

Yeah, they can twist it because that’s what they do for a living. They’ll just put the number 70 on the screen and go, “Okay, your choice. Is this what you want? Do you want 70 percent tax rates?”

All right, we’re going to get to predictions, how we get to run it. We’re not going to even talk about Roger Stone’s back tattoo of Richard Nixon. I just didn’t want to go there at all, that guy. I just want him in jail. That’s all I want. That’s pretty gangster though. That causes some conversations.

You know what? He’s such a weird … I’m sorry. He needs to just go away. A Nixon tattoo? I think that’s actually pretty cool.

He needs to go wherever Kato Kaelin’s gone. That’s where he needs to go. Anyway, all right Scott, someone on Twitter called you clairvoyant with your predictions about last week. I predicted I’d never buy a new car and later that day it was announced that Apple laid off 200 employees in their Project Titan division which is working on autonomous cars. So cars are over. I get a little credit for predictions, though I actually don’t. I think there’s gonna be autonomous cars and I’m gonna be in them, but you were predicting that the government would reopen. Now I need some more predictions about the national emergency, etc., etc. So go for it. Let’s hear your predictions on this and you can take a runaround, like a big cheering runaround, whatever you run around when you cheer. You’re so jealous of the Big Dog’s prediction. I just have one word.

You’re calling yourself the Big Dog?

Come on, who called it? Who called it, Kara? Friday morning we said, you and I said the government shutdown was coming to an end. Friday afternoon, they announced it. So my predictions are pretty boring. I made a prediction earlier in the year or late last year that Facebook would be an outstanding stock to own and I think this is a company that’s gonna just rocket up in the next three months. Be clear, bad for our democracy, bad for the planet, but this stock and this company have a supernova business model. I think it’s up 13 percent today and I think it’s just getting started and it’s dangerous to make stock predictions, but I won’t make a stock prediction, but I think the underlying business results of Facebook are just incredible. Amazon reports, Amazon comes out tonight. Look for Amazon Media Group to all of a sudden be the third player in the Facebook/Google duopoly. It’s now the fastest-growing media company in the world, over a billion dollars.

Advertising, yeah. That’s true. All right, so that’s your prediction. All right, anything else about the next government shutdown? Do you want to go there? Is there gonna be one? It won’t happen Kara. There’s no way either party wants to go there again because …

Well, Trump does. … if we went to another shutdown, people would just move to, “Okay, let’s vote them all out,” and the one thing that scares all of them is the notion of not being reelected. So no, the government won’t be shutting down.

So what about the “national emergency”? Are they gonna declare it? I don’t have a viewpoint. What’s your view?

I don’t know. He’ll probably try to declare it and then he’ll go to … it’ll never happen, you know what I mean? The lawyers will go to town and it’ll go on and then he’s either not gonna be in office or he’s not gonna control either the House or the Senate, something like that. I think he’s never getting that wall and Mexico’s definitely not paying for it.

In terms of negotiating, what is it Sun Tzu, in terms of negotiating you don’t want to, unless you give your competitor absolutely no out. If you give them no out, what you’re basically saying, “I’m gonna slaughter you,” and I think the Democrats and Pelosi have won and I think for them to give a little bit, whatever that little bit might look like such that the Republicans and specifically POTUS can sort of declare victory or at least not be totally shamed …

They can’t. He’s not getting the five, they’re never gonna give him the five. They’ll give him some drones, a bunch of people. They’ll give him something.

Yeah, but he wants that wall. He’s obsessed with the wall. He’s got Ann Coulter on his back yelling at him about that. So he seems to respond to whatever she says. Talk about where Kato Kaelin goes. Why do we even use the word Ann Coulter? Like what qualifies her for us to care?

Because she has the … You know, I was at a dinner party and someone said this and someone else correctly said, “Because the President listens to her and he happens to be the president of the United States.” So there you have it. What do you think is gonna happen with the national emergency?

I think he’s gonna try to declare it. I do. He likes the idea. He is gonna declare it.

It’s like a little Mussolini move and he’ll do it and then it’ll go nowhere. I think eventually he’ll end up indicted somehow. I just do. He’s a sloppy criminal. So I don’t know, that’s where I see it. Yeah, the southern district.

Except he’s a sloppy one. I think about all these other, you just eventually run out of tricks. Well when everyone around you has an ankle monitor, it’s not a good sign. But have you seen, you have two teenage sons, have you seen Honey Badger Just Don’t Care, that video about Honey Badgers? Yeah, of course.

Video: Honey badger don’t care. Honey badger don’t give a shit. It just takes what it wants. Whenever it’s hungry, it just oo, it eats …

Scott Galloway: Okay so I think the new Honey Badger is a southern district. I just think they don’t care. I think they’re going after the guy. He’s the president, these aren’t high crimes. It’s like southern district just don’t care. They are coming for him.

They don’t care. I think we’re gonna hear those two words “southern district” a lot over the next 12 months.

It’ll be interesting to see what happens with his taxes when they finally reveal them, which I think they eventually will out itself, but we’ll see. We’ll see. He’s always also shown himself to get out of things, to get out of jams. So we’ll see. We’ll see if he can keep getting out. I think he will eventually not get out of jams, no matter how much he … You know how he gets reelected, Kara?

How? How?

Well this should be another lose. I think the politically correct police that went after Tom Brokaw for his comments, which I thought were wrong, but I thought the other journalists on Meet the Press handled it really well and basically said, “No, you’re wrong.” He had said essentially that the Latino community needed to have a conversation around assimilating better, which was wrong, which was just factually wrong, but the level of hate that came out against him on Twitter forcing him to apologize. I feel like we’re at a point where people are so sick of this indignance on both sides that the way Donald Trump gets elected is he says, he basically runs on a campaign of like, “Screw you, snowflake,” and I think we have to be better about being a little more generous with people and saying, “Okay, let’s have the conversation and you might be wrong,” but just the response …

Again, we talked about this last week with some of the stuff between you and Fox. This gotcha culture really hurts, I think it hurts our chances, the Democratic Party’s chances of getting elected.

Except that he started it. That’s the thing is he started it. I do think people are, all my Trumpy relatives, I’m gonna see some Trumpy people this weekend, they are tired of him. It’s like the show. I watched that show for years. Again I’m the only person that’s watched every episode of The Apprentice and I got tired of it after a while. I think the show gets boring and it gets ridiculous and the stuff that you liked about it gets tiresome. Tiresome ratings is what’s gonna take him down, that’s what’s gonna happen. People are sick of it and I know, I can see my Trumpy relatives already being like, “Oh shut up,” kind of stuff. So that’s what I think. They’re fed up. They’re sick of it.

Not just, it’s just like, “Oh shut the hell up.” That’s exactly what they are, they’re like they don’t want to hear it. They don’t want to even defend it saying, “Oh it’s just him.” They’re just like, “Oh God. Stop talking. Go away.” I think that’s one of the things I think and if the Democrats have a relatively decent … And who is Kara Swisher supporting for president or who do you like out of the gates? Did you see, by the way, did you see Kamala Harris’s talk in Oakland?

Kamala Harris, yeah, I like her. I thought she did a great job. I thought she was great on the CNN thing. I think she’s gotten very appealing. I’ve interviewed her many times. She is really strong.
And I thought she’s improved drastically on her interview style, I have to say, because she was a little flat when I interviewed her, so I think if she plays it right, she’s very appealing in lots of ways. So who do you like?
Her. Who does Kara Swisher like?
I like Kamala Harris. Really?
I do. I do. I do. I like all the women. I like Amy Klobuchar. I have hopes for her. We’ll see. One of them, one of the ladies. Yeah, you’ve always been a fan of Senator Klobuchar.
I think it is time to elect a lady. I just know I don’t like Beto. As you know, I’m not a Beto fan. You don’t like Beto?
Stop it, stop it. How can you not like Beto?
Because he’s a man-child. Oh he’s outstanding.
A man child. No, he’s not. He’s not. Oh my God, women are … Outstanding, Kara.
Don’t agree. Well, I doubt women … A lot of women like him, what am I talking about? Anyway, we will go on to this … You, me and Beto at South By Southwest, we would slay it.
No thank you. Oh my God. Oh my gosh, a little Tex Mex.
He’s like every boyfriend that made me a lesbian. I don’t know what else to say. He’s just like the boyfriend. Every boyfriend that made you a lesbian?
Yes. Oh, this is getting better. Can we go another half hour?
No, we can’t. No, we’re stopping. Okay Scott, let’s see you … Oh my gosh. That’s awesome.
I’m looking forward to seeing what next week brings. Bye Scott, I’ll see you soon. Stay warm, Kara.

Article Produced By
Eric Johnson
A Producer and Recode Radio

Eric Johnson is the key point person for our expansion in podcasting. Previously, he wrote about the videogame industry, as he had for, both on established and emerging platforms. Eric spent four years in radio at 95.5 WBRU in Providence, R.I. He also wrote for the Peninsula Press, while he was a student at Stanford University. Eric holds a B.A. in History from Brown University and an M.A. in Journalism from Stanford.

Ethics statement

Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out. I do not own stock in any company that I report on, but I may make investments in mutual funds, over whose portfolio investments I have no direct control.

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Recode is owned wholly by Vox Media, a company with an audience of 170 million worldwide. It has eight distinct media brands: The Verge (Technology and Culture), (News), SB Nation (Sports), Polygon (Gaming), Eater (Food and Nightlife), Racked (Shopping, Beauty and Fashion), Curbed (Real Estate and Home), as well as Recode (Tech Business). Vox Media has a number of investors, including, but not limited to, Comcast Ventures and NBCUniversal, both of which are owned by Comcast Corporation.

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Everything you need to know about Facebook Google’s app scandal

Everything you need to know about Facebook, Google’s app scandal


Facebook and Google landed in hot water with Apple this week

after two investigations by TechCrunch revealed the misuse of internal-only certificates — leading to their revocation, which led to a day of downtime at the two tech giants. Confused about what happened? Here’s everything you need to know.

How did all this start, and what happened?

On Monday, we revealed that Facebook was misusing an Apple-issued enterprise certificate that is only meant for companies to use to distribute internal, employee-only apps without having to go through the Apple App Store. But the social media giant used that certificate to sign an app that Facebook distributed outside the company, violating Apple’s rules. The app, known simply as “Research,” allowed Facebook unparalleled access to all of the data flowing out of a device. This included access to some of the users’ most sensitive network data. Facebook paid users — including teenagers — $20 per month to install the app. But it wasn’t clear exactly what kind of data was being vacuumed up, or for what reason.

It turns out that the app was a repackaged app that was effectively banned from Apple’s App Store last year for collecting too much data on users. Apple was angry that Facebook was misusing its special-issue enterprise certificates to push an app it already banned, and revoked it — rendering the app unable to open. But Facebook was using that same certificate to sign its other employee-only apps, effectively knocking them offline until Apple re-issued the certificate. Then, it turned out Google was doing almost exactly the same thing with its Screenwise app, and Apple’s ban-hammer fell again.

What’s the controversy over these enterprise certificates and what can they do?

If you want to develop Apple apps, you have to abide by its rules — and Apple expressly makes companies agree to its terms. A key rule is that Apple doesn’t allow app developers to bypass the App Store, where every app is vetted to ensure it’s as secure as it can be. It does, however, grant exceptions for enterprise developers, such as to companies that want to build apps that are only used internally by employees. Facebook and Google in this case signed up to be enterprise developers and agreed to Apple’s developer terms. Each Apple-issued certificate grants companies permission to distribute apps they develop internally — including pre-release versions of the apps they make, for testing purposes. But these certificates aren’t allowed to be used for ordinary consumers, as they have to download apps through the App Store.

What’s a “root” certificate, and why is its access a big deal?

Because Facebook’s Research and Google’s Screenwise apps were distributed outside of Apple’s App Store, it required users to manually install the app — known as sideloading. That requires users to go through a convoluted few steps of downloading the app itself, and opening and trusting either Facebook or Google’s enterprise developer code-signing certificate, which is what allows the app to run. Both companies required users after the app installed to agree to an additional configuration step — known as a VPN configuration profile — allowing all of the data flowing out of that user’s phone to funnel down a special tunnel that directs it all to either Facebook or Google, depending on which app you installed.

This is where the Facebook and Google cases differ.

Google’s app collected data and sent it off to Google for research purposes, but couldn’t access encrypted data — such as the content of any network traffic protected by HTTPS, as most apps in the App Store and internet websites are. Facebook, however, went far further. Its users were asked to go through an additional step to trust an additional type of certificate at the “root” level of the phone.

Trusting this Facebook Research root certificate authority allowed the social media giant to look at all of the encrypted traffic flowing out of the device — essentially what we call a “man-in-the-middle” attack. That allowed Facebook to sift through your messages, your emails and any other bit of data that leaves your phone. Only apps that use certificate pinning — which reject any certificate that isn’t its own — were protected, such as iMessage, Signal and additionally any other end-to-end encrypted solutions.Facebook’s Research app requires Root Certificate access, which Facebook gather almost any piece of data transmitted by youone.Google’s app might not have been able to look at encrypted traffic, but the company still flouted the rules — and had its separate enterprise developer code-signing certificate revoked anyway.

What data did Facebook have access to on iOS?

It’s hard to know for sure, but it definitely had access to more data than Google. Facebook said its app was to help it “understand how people use their mobile devices.” In reality, at root traffic level, Facebook could have accessed any kind of data that left your phone.

Will Strafach, a security expert with whom we spoke for our story, said: “If Facebook makes full use of the level of access they are given by asking users to install the certificate, they will have the ability to continuously collect the following types of data: private messages in social media apps, chats from in instant messaging apps – including photos/videos sent to others, emails, web searches, web browsing activity, and even ongoing location information by tapping into the feeds of any location tracking apps you may have installed.” Remember: this isn’t “root” access to your phone, like jailbreaking, but root access to the network traffic.

How does this compare to the technical ways other market research programs work?

In fairness, these aren’t market research apps unique to Facebook or Google. Several other companies, like Nielsen and comScore, run similar programs, but neither ask users to install a VPN or provide root access to the network. In any case, Facebook already has a lot of your data — as does Google. Even if the companies only wanted to look at your data in aggregate with other people, it can still hone in on who you talk to, when, for how long and, in some cases, what about. It might not have been such an explosive scandal had Facebook not spent the last year cleaning up after several security and privacy breaches.

Can they capture the data of people the phone owner interacts with?

In both cases, yes. In Google’s case, any unencrypted data that involves another person’s data could have been collected. In Facebook’s case, it goes far further — any data of yours that interacts with another person, such as an email or a message, could have been collected by Facebook’s app.

How many people did this affect?

It’s hard to know for sure. Neither Google nor Facebook have said how many users they have. Between them, it’s believed to be in the thousands. As for the employees affected by the app outages, Facebook has more than 35,000 employees and Google has more than 94,000 employees.

Why did internal apps at Facebook and Google break after Apple revoked the certificates?

You might own your Apple device, but Apple still gets to control what goes on it. Apple can’t control Facebook’s root certificates, but it can control the enterprise certificates it issues. After Facebook was caught out, Apple said: “Any developer using their enterprise certificates to distribute apps to consumers will have their certificates revoked, which is what we did in this case to protect our users and their data.”

That meant any app that relied on Facebook’s enterprise certificate — including inside the company — would fail to load. That’s not just pre-release builds of Facebook, Instagram and WhatsApp that staff were working on, but reportedly the company’s travel and collaboration apps were down. In Google’s case, even its catering and lunch menu apps were down. Facebook’s internal apps were down for about a day, while Google’s internal apps were down for a few hours. None of Facebook or Google’s consumer services were affected, however.

How are people viewing Apple in all this?

Nobody seems thrilled with Facebook or Google at the moment, but not many are happy with Apple, either. Even though Apple sells hardware and doesn’t use your data to profile you or serve you ads — like Facebook and Google do — some are uncomfortable with how much power Apple has over the customers — and enterprises — that use its devices. In revoking Facebook and Google’s enterprise certificates and causing downtime, it has a knock-on effect internally.

Is this legal in the U.S.? What about in Europe with GDPR?

Well, it’s not illegal — at least in the U.S. Facebook says it gained consent from its users. The company even said its teenage users must obtain parental consent, even though it was easily skippable and no verification checks were made. It wasn’t even explicitly clear that the children who “consented” really understood how much privacy they were really handing over.

That could lead to major regulatory headaches down the line. “If it turns out that European teens have been participating in the research effort Facebook could face another barrage of complaints under the bloc’s General Data Protection Regulation (GDPR) — and the prospect of substantial fines if any local agencies determine it failed to live up to consent and ‘privacy by design’ requirements baked into the bloc’s privacy regime,” wrote TechCrunch’s Natasha Lomas.

Who else has been misusing certificates?

Don’t think that Facebook and Google are alone in this. It turns out that a lot of companies might be flouting the rules, too.According to many finding companies on social media, Sonos uses enterprise certificates for its beta program, as does finance app Binance, as well as DoorDash for its fleet of contractors. It’s not known if Apple will also revoke their enterprise certificates.

What next?

It’s anybody’s guess, but don’t expect this situation to die down any time soon. Facebook may face repercussions with Europe, as well as at home. Two U.S. senators, Mark Warner and Richard Blumenthal, have already called for action, accusing Facebook of “wiretapping teens.” The Federal Trade Commission may also investigate, if Blumenthal gets his way.

Article Produced By
Zack Whittaker

Security editor

Zack Whittaker is the security editor at TechCrunch.

NEM Foundation Close to Bankruptcy Might Start Layoffs Next Month

NEM Foundation Close to Bankruptcy, Might Start Layoffs Next Month


The NEM foundation, a non-profit organization established to support

the ongoing development of the NEM (XEM) blockchain platform, is reportedly planning to layoff many of its staff members. Due to the prolonged crypto bear market, the NEM foundation has been forced to reduce its operational costs and also begin restructuring its organization. Alex Tinsman, the newly appointed president of the NEM foundation, told Coindesk (on January 30th) that the Singapore-based organization will be submitting a funding request to the NEM community fund. The NEM foundation is seeking 160 million XEM tokens (to help it cover operational costs), an amount currently valued at about $6.85 million according to CryptoCompare data. These funds are urgently required as the NEM foundation is reportedly close to filing for bankruptcy.

In an interview this month, Tinsman revealed: 

Basically we realized we had a month to operate, due to the is management of the previous governance council.

Layoffs Could Begin Next Month

NEM foundation’s 202 supporting members, who are required to comply with know-your-customer (KYC) requirements and also pay a yearly $50 membership fee, will be voting on whether to approve the funding request in February. Based on the amount of funding the NEM foundation receives, the organization will announce the number of employees it will be laying off, Tinsman stated. Launched in March 2015, the NEM cryptocurrency network is based on a centralized blockchain model and it’s governance, or platform management, is often compared to Dash (DASH). Notably, XEM tokens were initially distributed to a group of individuals who helped develop the NEM platform.

NEM To Launch "Full-Featured" Blockchain Engine 

According to NEM’s founders, the few people that held XEM started distributing the tokens to NEM’s growing community. Former NEM foundation president, Lon Wong had expressed confidence about NEM’s potential in an interview in February 2018 – when the market capitalization of XEM tokens and other cryptoassets were considerably higher.

At that time, Won had explained that the NEM platform and its native cryptocurrency was primarily developed to facilitate cheap transactions and help businesses conveniently pay routine services fees. NEM’s development team is planning to launch Catapult, the platform’s “full-featured” blockchain engine. The updated version of NEM’s protocol is being developed specifically for enterprise-level use in public and private networks.

Reducing Marketing Activities

Some of the use cases for NEM that are currently being explored are blockchain-based voting. According to Tinsman, the NEM foundation spent approximately 80 million XEM (appr. $34 million at current rates) between December 2017 and January 2019 on marketing services. However, Tinsman said that the foundation has “reduced [its] marketing activities” as “it doesn’t make sense to market a product [Catapult]” that has not yet been introduced.

Notably, a blockchain developer who had been working under NEM’s previous management team, revealed that the foundation’s former president, Wong, had been promoting what the developer thinks are questionable ICO projects, including Ecobit and ProximaX. The developer, who chose to remain anonymous, said: “the community felt this was a breach of faith” (on Wong’s part).

Need For Better Budget Management

He added:

There’s not a whole lot of people working on this platform. Even though it’s easy, the community isn’t really there unless you go to Japan. We need more developer traction on this platform.

In order to better manage NEM’s operations, Tinsman, a former communications executive at the foundation, is planning to cut costs and will be closely supervising the development budget.

She explained:

The community will also be voting on these [funding requests] and which ones we should be moving forward with.

Article Produced By
Omar Faridi

I enjoy writing about all topics related to Bitcoin, Blockchain, and other cryptocurrencies. The topics that interest me most are crypto regulations, quantum resistant blockchains, Ethereum and Bitcoin Core development, and scams orchestrated under the guise of ICOs. My academic background includes an undergraduate degree in Computer Science, with a minor in Mathematics from the University of Nevada, Las Vegas. I also possess a Master of Science degree in Psychology from the University of Phoenix.

While completing my coursework, I engaged in independent study programs focused on public-key cryptography and quantum computing. My professional work experience includes working as an application developer for the University of Houston, data storage specialist at Dell EMC, and as Teacher of Mathematics in the United States, China, Kuwait, and Pakistan.

XRP Price Jumps 11 After IMF Praises Ripple Says Banks Will Be Cannibalized’

XRP Price Jumps 11% After IMF Praises Ripple, Says Banks Will Be ‘Cannibalized


The price of XRP has popped 11%
at time of publishing, according to the crypto price tracker Coin360

The price jump follows news that Ripple rival Swift will link to R3’s Corda Settler, which uses a distributed ledger to settle transactions between traditional assets and cryptocurrencies such as XRP. It also comes after a new endorsement of Ripple’s endeavors from International Monetary Fund (IMF) director Christine Lagarde. At the Paris Fintech Festival, Lagarde warned banks that they need to act and adapt to new technologies to better serve their customers.

“I think in the banking system at large in many, many countries, the difference will not be between those who are disrupted and those who survive. The difference will be between those who are cannibalized because they’re not seeing it coming, and they’re not embracing it, and those who self-induce that cannibalization.

And I’m using cannibalization on purpose because it’s a bit of a striking, horrible word. But it’s really what it means. You’re going to disrupt your business model. You’re going to change it. You’re going to reduce your costs. You’re going to expedite your transactions, and you’re going to inspire confidence because you will build out on the basis of an existing backbone, which is your bank and the confidence, relationship you’ve established with your customers.

So that’s where I see changes happening now. If you think of Circle, and Ripple and all those – that’s where they are active and helpful.” This is not the first time Lagarde has made the case for blockchain technology and digital currencies. In November, Largarde said that “cryptocurrencies such as Bitcoin, Ethereum, and Ripple are vying for a spot in the cashless world, constantly reinventing themselves in the hope of offering more stable value, and quicker, cheaper settlement.”

Article Produced By
The Daily Hodl