Hillicon Valley: Officials warn of Chinese influence efforts | Dow drops over 800 points | Tech stocks hit hard | Google appeals $5B EU fine | James Murdoch may be heading for Tesla | Most Americans worried about election security

Hillicon Valley: Officials warn of Chinese influence efforts | Dow drops over 800 points | Tech stocks hit hard | Google appeals $5B EU fine | James Murdoch may be heading for Tesla | Most Americans worried about election security
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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.

Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Jacqueline Thomsen (@jacq_thomsen), and the tech team, Harper Neidig (@hneidig) and Ali Breland (@alibreland). And CLICK HERE to subscribe to our newsletter.



CHINA IS THE NEW RUSSIA: Top U.S. national security officials warned Wednesday that China is attempting to influence the opinions of Americans, but said there is no evidence that the country is trying to interfere in election infrastructure.

Homeland Security Secretary Kirstjen NielsenKirstjen Michele NielsenBiden picks first Latino to lead Homeland Security Judge says acting DHS secretary appointment unlawful, invalidates DACA suspension Biden's hard stand on foreign election interference signals funding fight MORE testified before a Senate committee that China is "exerting unprecedented effort to influence American opinion."

However, she pointed to previous remarks she has made about President TrumpDonald John TrumpUSAID administrator tests positive for COVID-19 Kamala Harris, Stacey Abrams among nominees for Time magazine's 2020 Person of the Year DOJ appeals ruling preventing it from replacing Trump in E. Jean Carroll defamation lawsuit MORE's claims that China was seeking to interfere in U.S. elections, noting that officials have "not seen to date any Chinese attempts to compromise election infrastructure."

U.S. officials have warned of attempts by countries like Russia, China and Iran to try and sway American opinion ahead of November's midterm elections. China has recently faced more intense scrutiny over such campaigns after Trump claimed last month that the country was attempting to interfere in the midterm elections over his crackdown on Chinese trade policies.

FBI Director Christopher Wray also said during the hearing that China "in many ways represents the broadest, most complicated, most long-term counterintelligence threat we face."

"Russia is in many ways fighting to stay relevant after the fall of the Soviet Union. They're fighting today's fight," he said. "China is fighting tomorrow's fight, and the day after tomorrow and the day after that." 

Read more here.



DOW DROPS MORE THAN 800 POINTS: U.S. stocks slid sharply Wednesday as investors sought safe havens from rising interest rates and fears about technology companies.

The Dow Jones Industrial Average dropped 832 points, losing 3.2 percent on the day. The Nasdaq composite fell 4 percent and the S&P 500 lost 3.3 percent as U.S. stocks took their worse daily losses since February. The Dow's Wednesday skid was its third-worst daily loss by points.  

Stocks in tech companies that led the bull market of the past decade suffered the heaviest losses as investors pulled back from the sector. Shares of Amazon, Netflix, Facebook, Apple and Twitter all fell sharply throughout the day.

Tech companies had boasted some of the best performing stocks of the recent surge and wooed billions of dollars from investors drawn to booming Silicon Valley titans. But a rash of security breaches, hacks, scandals and federal oversight have made the sector less attractive to traders.

Investors have also been shaken by rising interest rates and bond yields triggered in part by recent Federal Reserve rate hikes. Higher borrowing costs typically narrow corporate profit margins and dampen investment, pushing traders toward Treasuries and other products seen as safe havens.

The Fed has raised interest rates eight times since 2015, six times since President Trump took office, and is expected to do so again in December. The central bank most recently raised rates in September, increasing the Fed's baseline interest rate range for the third time in 2018.

Read more here.


I SPY...: A new cyber group appears to have been targeting government and military organizations this past year as part of an espionage campaign, a security firm said on Wednesday.

Symantec researchers say they have discovered a new cyber group that they've dubbed "Gallmaker," which has carried out highly targeted attacks against targets such as overseas embassies in an Eastern European country as well as military and defense targets in the Middle East.

Symantec says that the group is likely state-sponsored.

"Gallmaker's activity appears to be highly targeted, with its victims all related to government, military, or defense sectors," a Symantec blog post reads, noting that the attacks are "unlikely to be random or accidental."

"Gallmaker's activity points strongly to it being a cyber espionage campaign, likely carried out by a state-sponsored group," it continues. 


Read more here.


OH NO, YOU AIN'T...FINE: Google has appealed the European Union's (EU) record $5 billion antitrust fine in July that alleged the company's Android mobile operating system was being used to shut out competing services.

A Google spokeswoman confirmed to The Hill that it had filed its appeal with the EU General Court.

The European Commission, the EU's enforcement arm, ordered Google in July to halt its practice of bundling Android's operating system with Google's mobile products, arguing that it effectively prevents other services from competing with the internet giant.

"The Commission will defend its decision in Court," a Commission spokesperson said in an emailed statement to The Hill.

Google had promised to appeal when the decision was announced in July.


Read more here.


HACKING ON MY MIND: A vast majority of Americans are concerned about election security in the United States ahead of next month's midterm elections, according to a new poll.

Almost eight in 10 Americans are at least somewhat concerned about the potential hacking of the nation's voting systems, according to a University of Chicago Harris School of Public Policy and Associated Press-NORC Center for Public Affairs Research survey published Wednesday.

The poll also found that 45 percent of respondents said they are extremely or very concerned about the potential of hacking. Only 20 percent said they are not too concerned or not at all concerned about hacking.

In a separate question, 22 percent of respondents said they had only a little confidence or no confidence at all that the votes would be counted accurately in the 2018 midterms.

Democrats have become increasingly concerned about election security since 2016, when Russian intelligence officers are alleged to have hacked the Democratic National Committee (DNC). Read more here.



AMAZON TRIES TO ASSURE SANDERS ON WORKER PAY: Amazon is assuring Sen. Bernie SandersBernie SandersClyburn: Biden falling short on naming Black figures to top posts Prepare for buyers' remorse when Biden/Harris nationalize health care Biden: 'Difficult decision' to staff administration with House, Senate members MORE (I-Vt.) that its employees will earn more after it raises its minimum wage despite discontinuing stock options and bonuses.

In a letter sent to the senator Tuesday, Amazon head of global corporate affairs Jay Carney said that the raise in wages will "more than compensate" for the elimination of other benefits.

"The significant increase in hourly cash wages effective November 1 more than compensates for the phase out of incentive pay and future [restricted stock unit] grants," Carney wrote in the letter.

"In addition, because it's no longer incentive-based, the compensation will be more immediate and predictable."

Amazon raised its minimum hourly wage to $15 after an intense public campaign from Sanders about how the company treats its employees.

Read more here.


THUNE WANTS BRIEFING FROM AMAZON, APPLE: One of the top Republicans in Congress wants Amazon, Apple and information technology company Super Micro to hold a congressional briefing over concerns about a hardware hack reportedly carried out against them by the Chinese government.

Sen. John ThuneJohn Randolph ThuneDemocrats brush off calls for Biden to play hardball on Cabinet picks Overnight Defense: Pentagon set for tighter virus restrictions as top officials tests positive | Military sees 11th COVID-19 death | House Democrats back Senate language on Confederate base names Trump keeps tight grip on GOP amid divisions MORE (S.D.), the No. 3 Senate Republican who serves as chairman of the Senate Commerce Committee, sent letters on Oct. 5 to the CEOs of each of the companies asking them to brief committee staff on the reported hack.

In his letter provided to The Hill, Thune said that he wanted the briefing to occur no later than this Friday, and a committee source said that the first of several potential briefings could happen as early as this week by the deadline.

"Allegations that the U.S. hardware supply chain has been purposefully tampered with by a foreign power must be taken seriously," Thune wrote in his letter.

Read more here.


DON'T EMAIL BALLOTS, PLEASE: Election security groups are sounding the alarm about emailed ballots ahead of the November midterm elections, warning in a new report that PDF and JPEG ballot attachments sent to election officials could be exploited by hackers.

The organizations, including watchdog group Common Cause, issued a report Wednesday that found election workers who receive emailed ballots are at risk of clicking on unsafe attachments, sent from unknown sources, that could contain malware.

"In jurisdictions that receive ballots by PDF or JPEG attachment, election workers must routinely click on documents from unknown sources to process emailed or faxed ballots, exposing the computer receiving the ballots -- and any other devices on the same network -- to a host of cyberattacks that could be launched from a false ballot laden with malicious software," the report says.

"An infected false ballot would enter the server like any other ballot, but once opened, it would download malware that could give attackers backdoor access to the elections office's network."

The Association for Computing Machinery's Technology Policy Committee, the National Election Defense Coalition and the R Street Institute were among the report's co-authors.

Experts from both the private and public sector have warned about the vulnerabilities of online voting for years, but the report comes at a time of heightened alarm about election interference from hostile nation-states or cyber criminals.

At least 100,000 people voted online in 2016, according to data collected by the U.S. Election Assistance Commission.

Read more here.


NEWS ABOUT FAKE NEWS: Researchers released a new tool Wednesday to track how many stories posted on social media are coming from sources known to publish disinformation.

The University of Michigan Center for Social Media Responsibility unveiled a new metric titled the "Iffy Quotient," which determines how frequently stories from the questionable sources are shared on Facebook and Twitter.

The researchers tracked stories back to 2016, and found that the metric grew in the months ahead of the previous presidential election, doubling from January 2016 to November of the same year on both platforms.

The "Iffy Quotient" has since fallen on Facebook to its levels at the start of 2016. However, Twitter hasn't experienced the same kind of decrease, and the metric's levels are currently 50 percent higher on that site than they are for Facebook. 

Read more here.


JAMES MURDOCH TO TESLA? James Murdoch, the outgoing chief executive of 21st Century Fox, is the favorite to replace Elon Musk as the chairman of Tesla, sources told the Financial Times on Wednesday.

Musk must relinquish his chairmanship as part of a settlement with the Securities and Exchange Commission (SEC) after the agency hit him with fraud charges. Musk will remain the company's chief executive.

Murdoch, who is currently a nonexecutive director at the company, is the lead candidate for the job, two sources familiar with the matter told the FT.

He has been considering creating a technology investment fund and has spoken positively of his relations with Tesla and Musk.

Read more here.


DEMS PRESS FTC FOR PROBE INTO GOOGLE: Sens. Richard Blumenthal (D-Conn.), Edward J. Markey (D-Mass.) and Tom UdallThomas (Tom) Stewart UdallFormer Sen. Carol Moseley Braun stumps for Interior post: 'A natural fit for me' Five House Democrats who could join Biden Cabinet Overnight Energy: Biden names John Kerry as 'climate czar' | GM reverses on Trump, exits suit challenging California's tougher emissions standards | United Nations agency says greenhouse gas emissions accumulating despite lockdown decline MORE (D-N.M.) on Wednesday called for the Federal Trade Commission (FTC) to investigate Google's security lapses, criticizing the tech giant for its failure to prioritize consumer privacy.  

"We write to urge the FTC to immediately open an investigation into Google's exposure of private information from Google+ users and this alleged concealment in its handling of consumer data," the senators wrote in a letter.

"The FTC should conduct a vigorous review whether the Google+ incident constitutes a breach of the company's consent decree or other commitments, and more broadly whether Google has engaged in deceptive acts and practices with respect to privacy. If the FTC finds problematic conduct, we encourage you to act decisively to end this pattern of behavior through substantial financial penalties and strong legal remedies."

The letter comes after The Wall Street Journal reported last week that the personal information of thousands of Google Plus users was exposed to third-party developers over the course of three years. The company then hid the data leak for six months, reportedly fearing negative press coverage and Congressional scrutiny.


CYBER OFFICIAL GETS SWORN IN, AGAIN: The Department of Energy held a grand swearing-in ceremony at its headquarters Wednesday for Karen Evans, the new assistant secretary for the agency's office of cybersecurity, energy security and emergency response (CESER).

Evans was sworn in in early September after gliding through Senate confirmation, but leaders wanted a bigger ceremony, complete with private sector attendees.

In celebrating Evans, Perry said she'll help carry out the new cybersecurity focus at DOE that was central to creating CESER.

"DOE is on the front lines of this battle to protect our nation, our energy infrastructure," he said. "And it's a battle, don't get confused that this is not a battle. It's a battle that's becoming more dangerous every day. These threats continue to grow, they metastasize, they attack with greater frequency and scale and sophistication every day."

"The sustained and growing threat of cyberattacks to our energy infrastructure requires us to think differently," he continued.

Evans has long been in the federal information technology world, including a six-year stint at the White House Office of Management and Budget under President George W. Bush. Perry created CESER in February, taking some of the office of electricity's responsibilities and adding a new cybersecurity focus.

-- Hat tip to our colleague Timothy Cama who covers energy.


A LIGHTER TWITTER CLICK: This is the only good a capella song.


AN OP-ED TO CHEW ON: China reportedly is weaponizing the technology supply chain.



FBI chief: 'Usual process was followed' for Kavanaugh background investigation. (The Hill)

House panel postpones meeting with Rosenstein. (The Hill)

Senate Homeland chair vents Mueller probe blocking panel from receiving oversight answers. (The Hill)

Less IPOs = More inequality? (The Atlantic)

How teens bully each other on the internet. (The Atlantic)

Soldiers in Facebook's war on fake news are feeling overrun. (The New York Times)