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.

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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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Google will stop peddling a data collector through Apple’s back door

Google will stop peddling a data collector through Apple’s back door


It looks like Facebook was not the only one abusing Apple’s system

for distributing employee-only apps to sidestep the App Store and collect extensive data on users. Google has been running an app called Screenwise Meter, which bears a strong resemblance to the app distributed by Facebook Research that has now been barred by Apple, TechCrunch has learned.

In its app, Google invites users aged 18 and up (or 13 if part of a family group) to download the app by way of a special code and registration process using an Enterprise Certificate. That’s the same type of policy violation that led Apple to shut down Facebook’s similar Research VPN iOS app, which had the knock-on effect of also disabling usage of Facebook’s legitimate employee-only apps — which run on the same Facebook Enterprise Certificate — and making Facebook look very iffy in the process. After we asked Google whether its app violated Apple policy, Google announced it will remove Screenwise Meter from Apple’s Enterprise Certificate program and disable it on iOS devices.

The company said in a statement to TechCrunch:

“The Screenwise Meter iOS app should not have operated under Apple’s developer enterprise program — this was a mistake, and we apologize. We have disabled this app on iOS devices. This app is completely voluntary and always has been. We’ve been upfront with users about the way we use their data in this app, we have no access to encrypted data in apps and on devices, and users can opt out of the program at any time.”


First launched in 2012, Screenwise lets users earn gift cards for sideloading an Enterprise Certificate-based VPN app that allows Google to monitor and analyze their traffic and data. Google has rebranded the program as part of the Cross Media Panel and Google Opinion Rewards programs that reward users for installing tracking systems on their mobile phone, PC web browser, router and TV. In fact, Google actually sends participants a special router that it can monitor.

Originally, Screenwise was open to users as young as 13, just like Facebook’s Research app that’s now been shut down on iOS but remains on Android. Now, according to the site’s Panelist Eligibility rules, Google requires the primary users of its Opinion Rewards to be 18 or older, but still allows secondary panelists as young as 13 in the same household to join the program and have their devices tracked, as demonstrated in this video below (which was created in August of last year, underscoring that the program is still active).

Unlike Facebook, Google is much more upfront about how its research data collection programs work, what’s collected and that it’s directly involved. It also gives users the option of “guest mode” for when they don’t want traffic monitored, or someone younger than 13 is using the device. Putting the not-insignificant issues of privacy aside — in short, many people lured by financial rewards may not fully take in what it means to have a company fully monitoring all your screen-based activity — and the implications of what extent tech businesses are willing to go to to amass more data about users to get an edge on competitors, Google Screenwise Meter for iOS appears to violate Apple’s policy.

This states, in essence, that the Enterprise Certificate program for distributing apps without the App Store or Apple’s oversight is only for internal employee-only apps. Google walks users through how to install the Enterprise Certificate and VPN on their phone. Developers seeking to do external testing on iOS are supposed to use the TestFlight system that sees apps reviewed and limits their distribution to 10,000 people.

We’ve yet to hear back from Apple, but Google moving quickly to cancel its iOS Screenwise Meter might save it from further punishment. We’ll see if Apple still invalidates the certifications for all of Google’s legitimate employee-only apps that run using the same certificate the way it did to Facebook. That would throw a wrench into Google’s product development and daily work flow that could be more damaging than just removing one way it gathers competitive intelligence. But rather than taking seven hours to respond as backlash swelled like Facebook, Google managed to get things sorted in a little under three.

Article Produced By
Zack Whittaker

Zack Whittaker
Security editor

Zack Whittaker is the security editor at TechCrunch.

Daily Crunch: FaceTime bug allows eavesdropping

Daily Crunch: FaceTime bug allows eavesdropping


The Daily Crunch is TechCrunch’s roundup

of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here:

1. Apple disables group calling in FaceTime in response to eavesdropping bug

Apple has disabled the group calling feature within its FaceTime calling service while it works on a patch to fix a nasty bug that allows eavesdropping. Apple’s status page shows that group calling via FaceTime is “temporarily unavailable” — that’s a stop-gap move while the company works to deliver a more permanent fix. We were unable to set up a group call when we tried, having earlier been able to do so and replicate the issue.

2. Huawei ‘disappointed,’ denies charges

The long-simmering battle between the U.S. government and Huawei heated up last night when the U.S. DOJ announced that it is pursuing criminal charges against the Chinese hardware maker. Huawei has, unsurprisingly, denied all wrongdoing.

3. SAP job cuts prove harsh realities of enterprise transformation

While the company tried to put as positive a spin on the announcement as possible, there could be up to 4,000 job cuts as SAP shifts into more modern technologies.

4. Petal raises $30M from Valar to bank the unbanked with credit cards

Petal uses a more holistic and comprehensive underwriting model to determine the creditworthiness of credit card applicants compared to traditional banks that rely predominantly on an applicant’s FICO score. The goal is to focus more on cash flows rather than a static score.

5. Casper announces the Glow — a portable, sleep-friendly light

The Casper team sent me a couple of Glows to try out for myself. The result? I found myself getting sleepier as the light dimmed, and I seemed to pass out more quickly and reliably than normal.

6. Home improvement platform Houzz lays off 180, reportedly gears up for public listing

We’ve confirmed that the company laid off around 110 people in the U.K. and Germany this month, along with an additional 70 in its U.S. home market in Q4 of last year.

7. Screen time inhibits toddler development, study finds

A study has found that kids 2-5 years old who engage in more screen time received worse scores in developmental screening tests. The apparent explanation is simple: when a kid is in front of a screen, they’re not talking, walking or playing, the activities during which basic skills are cultivated.

Article Produced By
Anthony Ha

Senior Writer

Anthony Ha is a senior writer at TechCrunch, where he covers media and advertising and co-hosts the Original Content podcast. Previously, he worked as a tech writer at Adweek, a senior editor at the tech blog VentureBeat, and a local government reporter at the Hollister Free Lance. He attended Stanford University and now lives in Brooklyn.