Hillicon Valley: Apple lowers revenue outlook | Net neutrality bill dies in Congress | Netflix warns against 'Bird Box' challenge | Judge dismisses suit against tech giants over San Bernardino shooting

Welcome to Hillicon Valley, The Hill's newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley.

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We're back... but the government isn't. It's day 12 of the government shutdown, meaning the Department of Homeland Security's cyber agency, CISA, has lost about 45 percent of its employees to furloughs (including its spokesperson), and – according to Inside Cybersecurity – has "ceased a variety of critical cybersecurity and infrastructure protection capabilities."

But no funding doesn't mean no news. Here's the latest in the tech and cyber worlds.

 

BREAKING – APPLE WARNS OF REVENUE SHORTFALL AMID TRADE DISPUTE: Apple CEO Tim Cook on Wednesday warned investors that the company expects to fall as much as $9 billion short of its earlier revenue target for the first fiscal quarter of 2019.

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In a rare guidance revision, Cook pointed to a struggling market in China as the biggest factor for the change.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Cook wrote in a letter to investors. "In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad."

He added that the ongoing U.S.-China trade dispute likely played a factor.

"We believe the economic environment in China has been further impacted by rising trade tensions with the United States," he said. Read more here.

 

IS THIS A PATRIOTIC ACT THO: Netflix removed an episode of comedian Hasan Minhaj's show "Patriot Act" in Saudi Arabia after the kingdom complained it violated an anti-cybercrime law, the Financial Times reported Tuesday.

The news outlet reported that Netflix took down an episode of the streaming series that contained criticisms of Saudi Arabia and Crown Prince Mohammed bin Salman after it received a complaint from the kingdom.

"We strongly support artistic freedom worldwide and removed this episode only in Saudi Arabia after we had received a valid legal request -- and to comply with local law," a Netflix spokesperson said in a statement.

The Financial Times reported that Netflix removed the episode from its platform in Saudi Arabia last week after a request from the kingdom's Communications and Information Technology Commission. Read more here.

 

NET NEUTRALITY BILL DIES IN CONGRESS: Federal Communications Commission (FCC) Chairman Ajit Pai applauded Congress on Wednesday for not voting to overturn his repeal of the agency's Obama-era net neutrality rules.

The Senate had passed a bill in May to reinstate the open internet rules in a bipartisan vote, only to see the resolution stall in the House, which had until the end of the session to vote on it.

"I'm pleased that a strong bipartisan majority of the U.S. House of Representatives declined to reinstate heavy-handed Internet regulation," Pai said in a statement. "They did the right thing--especially considering the positive results for American consumers since the adoption of the Restoring Internet Freedom Order."

The bill to reinstate the rules rode a popular backlash against Pai's repeal of net neutrality in December. The bill surprisingly passed in the Senate after three Republicans crossed the aisle in support.

Read more here.

 

JUDGE ENDS LAWSUITS AGAINST TECH GIANTS OVER MASS SHOOTING: A federal judge in California dismissed two lawsuits earlier this week that sought to hold Google and social media giants Twitter and Facebook liable for the December 2015 mass shooting that killed 14 people and wounded 22 others in San Bernardino, Calif.

The companies were accused of aiding and abetting international terrorism and providing material support to international terrorists by allowing terrorist groups to use their platforms.

The plaintiffs, which included people either injured in the attack or related to someone who was injured or killed, alleged the shooters were radicalized through social media.

But Judge Laurel Beeler, a magistrate judge on the U.S. District Court for the Northern District of California and Obama appointee, dismissed the cases, finding no connection between the attack and the defendants. Read more here.

 

INSERT 'BIRD BOX' MEME HERE: Netflix is warning the public against participating in the "'Bird Box' challenge," in which people blindfold themselves while doing activities ranging from the mundane to the absurd.

"Can't believe I have to say this, but: PLEASE DO NOT HURT YOURSELVES WITH THIS BIRD BOX CHALLENGE," Netflix tweeted from its official account on Wednesday. "We don't know how this started, and we appreciate the love, but Boy and Girl have just one wish for 2019 and it is that you not end up in the hospital due to memes."  

"Bird Box," Netflix's new film starring actress Sandra Bullock, portrays a post-apocalyptic world in which all humans have to wear blindfolds to avoid a force that possesses people and makes them kill themselves if they make eye contact. The people in the film are forced to rely on their other senses to move through the world.

The "Bird Box" challengers are filming themselves using elevators, walking in forests and even driving while wearing blindfolds. In one video, a toddler runs into a wall while running around with the blindfold. Read more here.

 

STEP UP TO THE PLATE: Former Obama homeland security adviser Lisa Monaco in a new interview is speaking critically of the Trump administration's place on the global stage in defeating cyber threats.

Monaco told former CIA Director Michael Morrell in an interview for CBS News's "Intelligence Matters" podcast that aired Wednesday that she would like the U.S. under President TrumpDonald John TrumpTrump calls for Republicans to be 'united' on abortion Tlaib calls on Amash to join impeachment resolution Facebook temporarily suspended conservative commentator Candace Owens MORE to be involved in more multilateral agreements to establish norms in cyberspace, rather than just deals with one country at a time.

"I think that the focus on bilateral, to the exclusion of multilateral, agreements in the cyber realm to try and establish norms of behavior is something that is a departure from past approaches and past administrations, again, crossing the political spectrum," Monaco said.

She added that it "should not be a partisan issue," but acknowledged that there is a place for some bilateral cyber agreements, like the 2015 deal between former President Obama and China's President Xi Jinping aimed at curbing Chinese economic espionage.

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"But if we do not work, if the U.S. is not leading and if the president is not leading the international community to come together to say, 'Here's a set of activities that are acceptable in cyberspace and here's what we as an international community believe ought to be outside the bounds,' -- we can't hope to isolate bad actors," Monaco said. Read more here.

 

FOILED AGAIN: A nuclear-energy project backed by Bill Gates will be put on hold due to changes in U.S. policy toward China, The Wall Street Journal reported Tuesday.

The news outlet reported that Gates, who co-founded the company TerraPower LLC, indicated he is unlikely to move forward with the effort to develop a traveling-wave reactor. The project, which has been in the works for three years, is intended to make nuclear reactors safer and less expensive.

TerraPower was unable to develop the reactor in the U.S. because of regulatory and financial restrictions, and instead established a partnership with China National Nuclear Corp. to develop a test reactor near Beijing.

The Wall Street Journal reported that the Energy Department released new rules in October and that nuclear deals with China must come with a high degree of assurance that the technology won't be used for military or other purposes. The policy, developed on national security grounds, came amid a growing trade dispute between the two countries.

 

WHILE WE WERE AWAY:

A timeline of the Mueller probe's biggest developments.

House GOP probe into FBI, DOJ comes to an end.

GOP Alabama attorney general looking into disinformation campaign targeting Roy Moore.

Amazon users increasingly turning to use Alexa over holiday season, company says.

Election agency prepares to tackle foreign interference.

 

A LIGHTER CLICK: Pronunciation is key.

 

NOTABLE LINKS FROM AROUND THE WEB:

Rise of a smart city in Kansas also puts attention on possible security vulnerabilities. (The New York Times)

Hackers threaten to dump insurance files related to 9/11 attacks. (Motherboard)

Popular weather app collects too much user data, security experts say. (Wall Street Journal)

Google's "Project Soli" radar gesture chip isn't dead, gets FCC approval. (Ars Technica)