Hillicon Valley: Trump AG pick signals new scrutiny on tech giants | Wireless providers in new privacy storm | SEC brings charges in agency hack | Facebook to invest $300M in local news

Hillicon Valley: Trump AG pick signals new scrutiny on tech giants | Wireless providers in new privacy storm | SEC brings charges in agency hack | Facebook to invest $300M in local news
© Greg Nash

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. If you don't already, be sure to sign up for our newsletter with this LINK.

Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Jacqueline Thomsen (@jacq_thomsen), and the tech team, Harper Neidig (@hneidig).

 

BARR HINTS AT TOUGHER STANCE TOWARD SILICON VALLEY: President TrumpDonald John TrumpAverage tax refunds down double-digits, IRS data shows White House warns Maduro as Venezuela orders partial closure of border with Colombia Trump administration directs 1,000 more troops to Mexican border MORE's pick to lead the Department of Justice, William Barr, suggested during his confirmation hearing on Tuesday that the agency should take a closer look at tech giants' dominant market power and handling of user data.

During an exchange with Sen. Mike LeeMichael (Mike) Shumway LeeThe Hill's Morning Report — Emergency declaration to test GOP loyalty to Trump The Hill's 12:30 Report: Trump escalates fight with NY Times The 10 GOP senators who may break with Trump on emergency MORE (R-Utah), Barr said that he wanted to better understand the dynamic between Silicon Valley and the nation's antitrust officials who have allowed tech companies to grow so big.

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Key quote: "I'm sort of interested in stepping back and reassessing, or learning more, about how the antitrust division has been functioning and what their priorities are," said Barr, who previously served as attorney general under the George H.W. Bush administration. "I don't think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers."

The takeaway: Barr said that he doesn't know if internet giants have run afoul of antitrust laws. But he wants to learn more about the DOJ's antitrust approach. He also did not indicate whether he would push for a tougher stance towards Silicon Valley if confirmed.

Still, his comments suggest he is in line with a growing number of lawmakers and consumer advocates that are concerned about the influence companies like Amazon, Facebook and Google wield through their market power.

In a later exchange with Sen. Josh HawleyJoshua (Josh) David HawleyWhite House braces for Mueller report Google calls failure to disclose hidden microphone 'an error' Senators demand answers from Facebook on paying teens for data MORE (R-Mo.), who as a state attorney general launched investigations into Facebook and Google, Barr echoed his concerns about their effects on competition and how they handle user privacy. Read more here.

There were other notable moments during the hearing: Barr said he would not fire special counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE if President Trump ordered him to do so without good cause.

"Most famously when directed by President Nixon to fire the special counsel, the prosecutor investigating Watergate, Richard Nixon resigned, as we all know. If those directions were to fire Mueller, would you follow Richard Nixon's example and resign instead?" Sen. Christopher CoonsChristopher (Chris) Andrew CoonsTrump got in Dem’s face over abortion at private meeting: report Live coverage: Trump delivers State of the Union Actor Chris Evans meets with Democratic senators before State of the Union MORE (D-Del.) asked Barr, adding the qualifier "assuming no good cause."

"I would not carry out that instruction," Barr replied.

The nominee also said that President Trump would not be allowed to "correct" special counsel Robert Mueller's final report on his Russia investigation, after Trump's attorney Rudy Giuliani claimed a right to do so.

"That will not happen," Barr said during his confirmation hearing.

"As a matter of fairness, they should show it to you -- so we can correct it if they're wrong," Giuliani told The Hill in an exclusive interview last week. "They're not God, after all. They could be wrong."

And Barr said that former AG Jeff SessionsJefferson (Jeff) Beauregard SessionsTrump says he hasn't spoken to Barr about Mueller report Ex-Trump aide: Can’t imagine Mueller not giving House a ‘roadmap’ to impeachment Rosenstein: My time at DOJ is 'coming to an end' MORE "did the right thing" by recusing himself from the Russia probe, despite Trump's frequent criticism of Sessions over the move.

 

NEW SCRUTINY FOR WIRELESS INDUSTRY: Major wireless providers are facing new scrutiny into their privacy practices after a bombshell report sparked a public outcry and questions from lawmakers.

A story from tech news site Motherboard last week detailed how easy it is to track individuals with just a cellphone number using data aggregation companies. The report put a new spotlight on how wireless providers monetize their users' real-time location data and set off a rush in the industry to abandon the practice and avoid new regulations.

Democratic lawmakers are questioning why the data practices were in place for so long and are pushing the Trump administration's regulators to get serious about cracking down on the industry.

Rep. Frank Pallone Jr.Frank Joseph PalloneOvernight Health Care — Presented by National Taxpayers Union — Trump bans abortion providers from family planning program | White House doesn't back GOP governor on drug imports | HHS declines to provide witnesses for family separations hearing Overnight Health Care — Presented by National Taxpayers Union — Top Dems call for end to Medicaid work rules | Chamber launching ad blitz against Trump drug plan | Google offers help to dispose of opioids Top Dems call for end to Medicaid work rules after 18,000 lose coverage in Arkansas MORE (D-N.J.), the new chairman of the House Energy and Commerce Committee, demanded that Republican Federal Communications Commission (FCC) Chairman Ajit Pai provide Congress with an emergency briefing and investigate the location-sharing agreements, writing in a letter that "the public can no longer rely on [the wireless industry's] voluntary promises to protect this extremely sensitive information."

"This briefing should explain why the Federal Communications Commission has yet to end wireless carriers' unauthorized disclosure of consumers' real-time location data and what actions the FCC has taken to address this issue to date," Pallone wrote in his letter Friday. "An emergency briefing is necessary in the interest of public safety and national security, and therefore cannot wait until President Trump decides to reopen the government." 

Pai though declined the request citing the shutdown and setting the stage for a showdown between House Democrats and the agency. Read more here.

 

MORE SECURITY FOR EXCHANGES? The Securities and Exchange Commission (SEC) on Tuesday filed fraud charges against nine individuals and firms that allegedly made more than $4.1 million in trades based on information stolen from the agency.

In a complaint filed with the U.S. District Court in Newark, N.J., the SEC said a group of Russian, Ukrainian and U.S. individuals made the illegal gains using nonpublic information hacked from the agency's electronic filing system and database.

Ukrainian hacker Oleksandr Ieremenko allegedly overrode authentication checks in the SEC's Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) to access unreleased earnings reports from 157 companies between May and October 2016.

"International computer hacking schemes like the one we charged today pose an ever-present risk to organizations that possess valuable information," said Stephanie Avakian, co-director of the SEC's enforcement division. "Today's action shows the SEC's commitment and ability to unravel these schemes and identify the perpetrators even when they operate from outside our borders."

Ieremenko allegedly shared the stolen information with six individuals and two firms, which made investments based on the nonpublic data, according to the SEC complaint. Ieremenko and Artem Radchenko, a Ukrainian who allegedly helped recruit traders for the scheme, were also indicted on 16 counts of fraud-related charges by the Department of Justice (DOJ).

Meet EDGAR: The EDGAR system is a hub for financial information with corporate disclosures that have still not been made available to the public. While parts of the database are accessible to the public, companies use the system to make disclosures to regulators about their finances, including nonpublic information. Read more here.

 

HUAWEI SAYS NO TO CHINA: The founder of Huawei Technologies on Tuesday said the company would refuse to disclose its customers' data and information about their communications networks amid concerns the telecommunications giant might be used to spy for the Chinese government.

The Associated Press reported that Ren Zhengfei sought to put to rest allegations that the company is controlled by China's ruling Communist Party and is used to aid in government spying. Such concerns have led the U.S., Australia and Japan to limit use of the company's technology, which is used in 5G phones.

Asked how the company would respond to a Chinese government demand for information about a foreign customer, Ren said, "We would definitely say no."

The AP reported that Ren laughed off a question about whether Huawei would challenge such a demand in court, saying it would be up to Chinese authorities to take that step. Read more here.

 

SORRY ABOUT TAKING ALL YOUR AD MONEY: Facebook is planning to invest $300 million over the next three years to boost local news initiatives around the world, the social media giant announced on Monday.

The investment comes as the company faces sharp criticism and scrutiny over its role in the spread of misinformation and the platform's contributions to the decline of local print journalism.

"[Facebook] can't uninvent the internet," Campbell Brown, Facebook's head of global news partnerships, told CBS, adding that the company hopes to "be part of helping find a solution."

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"We don't want publishers to be dependent on us, but we do want to support them," Brown told CNN.

Critics say Facebook aided the decline of local news as advertisers turned toward the social media platform and audiences around the world began to use Facebook as their main method of consuming news. Read more here.

 

AN OP-ED TO CHEW ON: Could the shutdown lead to a meltdown of our cyber defenses?

 

A LIGHTER CLICK: I'd like to report an assault.

 

NOTABLE LINKS FROM AROUND THE WEB:

The most powerful person in tech is ... David CicillineDavid Nicola CicillineDem lawmaker: Mueller report ‘belongs to the American people’ White House braces for Mueller report Ex-GOP congressional candidate charged with wire fraud, violating election law MORE? (Bloomberg Opinion)

Netflix raises prices on all streaming plans in US. (The Verge)

In Portland, scooter start-ups played nice. Regulators took note. (The New York Times)

India wants access to encrypted WhatsApp messages. (The Wall Street Journal)