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Hillicon Valley — Presented by Philip Morris International — Apple reportedly dropped plans to let iPhone users encrypt backups | Justices decline facial recognition case | Critics fear Facebook losing misinformation fight | Truce on French tech tax

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

Welcome! Follow the cyber team, Maggie Miller (@magmill95), and the tech team, Emily Birnbaum (@birnbaum_e) and Chris Mills Rodrigo (@chrisismills).


LATEST ON APPLE AND ENCRYPTION: Apple discarded plans to allow iPhone users to fully encrypt their backup information stored on iCloud after the FBI complained to the company about how the plans would inhibit investigations, Reuters reported Tuesday.

Apple had informed the FBI about its idea to allow users to use end-to-end encryption in their iCloud storage more than two years ago, sources told the news wire. This would effectively remove the company’s ability to access the data, in an effort to block hackers, meaning it could not give this data to law enforcement.

The decision to abandon these arrangements was made two years ago following private conversations with the FBI’s cyber crime agents and operational technology division, but the decision had not been reported until Tuesday.

The FBI representatives warned the company that such an offer would not allow law enforcement to access evidence from suspects who are iPhone users.

Apple followed up with the bureau the next year and had at that point dropped the plans, the six sources told Reuters. 

Read more here.


DECLINED: The Supreme Court on Tuesday declined to take up a high-profile court battle over whether users can sue Facebook for using facial recognition technology on their photos without proper consent.

The high court rejected Facebook’s bid to review the case, meaning the social media giant will likely have to face the multibillion-dollar class-action lawsuit over whether it violated an Illinois privacy law. 

The case, Facebook vs. Patel, hinges on a question over whether Facebook violated Illinois law when it implemented a photo-tagging feature that recognized users’ faces and suggested their names without obtaining adequate consent. Facebook argued to the Supreme Court that the class-action case should not be allowed to proceed because the group of users have not proven that the alleged privacy violation resulted in “real-world harm.” 

“Although plaintiffs claim that their privacy interests have been violated, they have never alleged — much less shown — that they would have done anything differently, or that their circumstances would have changed in any way, if they had received the kind of notice and consent they alleged that [the Illinois law] requires, rather than the disclosures that Facebook actually provided to them,” Facebook wrote in its petition.

Read more here.



SAUDI MESSAGE LINKED TO HACK OF BEZOS’ PHONE: Amazon founder and CEO Jeff Bezos had his smart phone hacked in 2018 after receiving a WhatsApp message from Saudi Arabia’s crown prince, sources told The Guardian.

An analysis conducted by forensic investigators concluded that it was “highly probable” that inside the encrypted message from Saudi Crown Prince Mohammed bin Salman was a malicious file that proceeded to siphon large amounts of data from Bezos’s phone, according to the report from The Guardian published Tuesday.

Sources did not detail any specifics about the information taken with The Guardian.

The message was reportedly sent to Bezos after he and the crown prince had a cordial conversation on the messaging app on May 1, 2018.

Nine months after the supposed hack, the National Enquirer published intimate details about Bezos’s private life, including an extramarital affair.

The tabloid has claimed it received the information from the estranged brother of Bezos’s girlfriend, but the billionaire’s private team of investigators has “high confidence” that the Saudis hacked the information from Bezos’s phone, The Guardian reported.

Saudi Arabia and American Media Inc. — the then-owner of the National Enquirer — have both denied that the kingdom was involved in the publishing of the story.

Read more on the report here.


FACT-CHECKERS OF FACEBOOK: Facebook’s program to hire third-party fact-checkers to crack down on misinformation on the platform has been ramping up, with partners adding staff and expanding their work.

But the program still faces skepticism from activists and tech industry critics who say the company and its partners are still not providing the resources needed to address the scope of the problem on a platform with more than 2 billion users.

Launched in December 2016 after intense criticism of how Facebook handled false or misleading content in the last presidential election, the third-party fact-checker program shifts responsibility for verifying the accuracy or truthfulness of content from Facebook to independent, verified outside organizations.

Facebook does not fact-check content itself. However, it does send posts that its algorithm flags as potentially false to its partners. The partners can review the content flagged by Facebook or search for and identify false content themselves.

The hard numbers: There are six partners in the program evaluating U.S. content. Those The Hill reached out to all said they had recently or were currently adding staff to their efforts. Together, Facebook’s six partners have 26 full-time staff and fact-checked roughly 200 pieces of content per month.

Is it enough? But experts who spoke to The Hill said those changes were insufficient to make a serious dent in the fake accounts and disinformation they say are rampant on Facebook.

“The volume seems inadequate given the scale of the challenge that Facebook faces,” Paul Barrett, deputy director of the New York University Stern Center for Business and Human Rights, said.

Read more here.


CHARGES BROUGHT AGAINST JOURNALIST: Brazilian federal prosecutors on Tuesday charged American journalist Glenn Greenwald with cybercrimes over his role in the publication of articles based on leaked cell phone messages from Brazilian government officials. 

The New York Times reported that prosecutors accused Greenwald, who is the co-founding editor of The Intercept, as being a member of a “criminal organization” that hacked into phones of Brazilian officials last year. 

The charges were brought against Greenwald months after Brazilian President Jair Bolsonaro warned that Greenwald would “do jail time in Brazil” following the publication of private phone conversations involving Brazilian Justice Minister Sergio Moro. 

In a statement Tuesday, Greenwald strongly pushed back against the charges.

“Less than two months ago, after examining the same evidence cited today by Brazil’s Public Ministry, the Federal Police stated that not only have I never committed any crimes in my contacts with our source, but also that I exercised extreme caution as a journalist,” Greenwald said.

He added that the new accusation “is an obvious attempt to attack a free press in retaliation for the revelations we reported about Minister Moro and the Bolsanaro government.”

These phone conversations were published as part of a series by The Intercept, with the stories raising concerns about corruption within the Brazilian government, including the possibility that Moro had worked to shield Bolensaro’s son, federal Sen. Flávio Bolsonaro, from an anti-corruption investigation.  

Read more here.


ELECTION SECURITY WORRIES: More than half of Americans think that the president has personally encouraged foreign nations to interfere in the U.S. election system, according to a new poll.

A survey from NPR released Tuesday found that 51 percent of respondents thought President Trump had encouraged malicious activities related to U.S. elections. A slightly higher number, 56 percent, said that Trump has done not very much or nothing at all to prevent future interference in U.S. elections from occurring.

The poll continues to paint a dire outlook for confidence in U.S. democracy. Less that two-thirds, 62 percent, of respondents now believe that U.S. elections are fundamentally “fair,” according to the poll. Almost 40 percent said that another country would try or succeed in tampering with vote totals in a future U.S. election.

Tech companies also scored low marks in their handling of malicious political disinformation in the poll. Seventy-five percent of Americans do not have confidence in major tech companies when it comes to preventing services such as Facebook and Twitter from preventing election interference from occurring on their platforms.

Read more here.


A CALL FOR REGS: Google CEO Sundar Pichai is calling for governments around the world to regulate artificial intelligence, saying the sensitive technology should not be used to “support mass surveillance or violate human rights.”

However, Pichai — the top executive at Google as well as its parent company Alphabet — also argued that governments should not go too far as they work to rein in high-stakes technologies like facial recognition and self-driving vehicles. 

His views, shared in a speech and companion op-ed, come as Europe weighs new ethics rules for artificial intelligence and the White House urges a light-touch approach to regulating technology. 

“There is no question in my mind that artificial intelligence needs to be regulated,” Pichai wrote in the Financial Times. “It is too important not to. The only question is how to approach it.”  

Since 2018 Google has touted its AI principles as a potential framework for government regulation.

But critics have pushed back, claiming the companies are trying to dictate the terms of regulation in their own favor.

Read more here.


THERE WILL BE CONSEQUENCES: Treasury Secretary Steven Mnuchin warned the United Kingdom and Italy that they will face tariffs if they move forward with digital taxes, The Wall Street Journal reported Tuesday

At an event sponsored by the Journal on the sidelines of the World Economic Forum in Davos, Switzerland, Mnuchin said he hoped the two countries would put their plans for digital taxes on hold.

“If not, they’ll find themselves faced with President Trump’s tariffs,” Mnuchin said, according to the newspaper.

Several European countries are pursuing taxes on large tech companies such as Amazon, Facebook and Google. France enacted such a tax last year, Italy’s Parliament approved a digital tax late last year, and the U.K. is set to implement this type of tax this year.

European countries are seeking to raise revenue from businesses that have many users in their nations but pay little taxes there. But U.S. policymakers on both sides of the aisle argue that the digital taxes unfairly target American companies.

Read more here.

Trump gets deal with Macron: Trump and French President Emmanuel Macron spoke about France’s digital tax on Monday, with the Journal reporting that the two countries have reached a truce under which France has agreed to postpone its tax until the end of the year, while the U.S. will postpone tariffs. Trump confirmed the agreement in an interview with the Journal on Tuesday, saying that “if anybody is going to tax these companies, it’s going to be U.S. that taxes these companies.”


NEW 5G BILL: Rep. Jim Banks (R-Ind.) introduced a bill on Tuesday aimed at barring the United States from sharing intelligence with any countries that permit Huawei to operate their 5G networks.

“Huawei is a Trojan Horse for the Chinese Communist Party to spy on and infiltrate other nations. Our allies must choose: Adopt Huawei and lose access to U.S. intelligence, or remain our trusted partner,” Banks said in a statement.

The legislation comes after the Department of Commerce placed the Chinese telecommunications giant on its blacklist last spring, preventing U.S. firms from working with Huawei without first obtaining a permit.

Proponents of the new bill — which include House Republican Conference Chairwoman Liz Cheney (R-Wyo.) — argue that it’s a necessary step to prevent the Chinese government from spying on the country, saying the company poses a risk to U.S. national security.

Read more here.


HUAWEI SAYS BRING IT: Huawei’s CEO on Tuesday said that his company was ready for any “attacks” by the U.S. government and suggested that the divide would not split the world between two separate 5G systems.

Speaking at the annual meeting of the World Economic Forum in Davos, Switzerland, Ren Zhengfei said that Huawei was “more confident we can survive even further attacks,” referring to restrictions placed on Huawei’s sales in the U.S. and the Trump administration’s efforts to convince nations to avoid using Huawei tech when setting up 5G networks, Axios reported.

Continuing, Ren suggested that the Trump administration’s position that Huawei devices and networks built with Huawei assistance posed security risks due to the company’s relationship with China’s government was not based in fact.

“Whether the world will be split in two systems, I don’t think so,” Ren said, according to Axios. “Science is about truth; there is only one truth. It is unique.”

Read more here.


POWER TO THE DRIVERS: Uber is testing a new feature in some areas of California that will allow some drivers to set their own fares.

Starting Tuesday morning, drivers picking up riders in Santa Barbara, Palm Springs and Sacramento, Calif., are able to charge up to five times the cost that Uber sets, an Uber official told The Hill.

The ride-sharing company is starting this program in an effort to give drivers more independence after the state’s gig-economy law went into effect this year. 

Uber confirmed the initiative in a statement obtained by The Hill.

“We’re now doing an initial test of additional changes which would give drivers more control over the rates they charge riders,” an Uber official said.

Under this test, drivers can increase the costs of drives in 10 percent increments. When a rider requests a vehicle, the rider will be matched with the driver with the cheapest cost, while drivers with higher fares are matched as demand increases. 

Read more here.



RIOT GAMES: The state of California is intervening in a class action settlement over alleged gender discrimination and sexual harassment at Riot Games, the video game developer behind “League of Legends,” the Los Angeles Times reported Tuesday

The company reached a preliminary settlement with former female employees who brought a lawsuit last year, agreeing to pay them $10 million.

However, the state believes that figure is far less than what the women deserve. After two state agencies weighed in, California is now asking the gaming company to pay the women $400 million. 

One of the state agencies added that the non-monetary terms of the settlement also seemed inadequate, writing that “no enforceable changes to employment policies, at a company alleged to be rife with sexism, are part of the settlement.”

Read more here.


THIS IS GETTING EXPENSIVE: Attempted cyberattacks against North Dakota state government nearly tripled last year, according to the Grand Forks Herald

Shawn Riley, North Dakota’s chief information officer and head of the information technology department, said there were more than 15 million cyberattacks against the state’s government per month in 2019, a 300 percent increase since 2018.

In 2018, there were about 5 million attempted cyberattacks per month.

These figures aren’t surprising, however. Local governments nationwide have seen an increase in cyberattacks. Often, foreign criminals will infect a government computer with ransomware, holding important government documents hostage until a certain amount of money is exchanged.

Read more here.




AN OP-ED TO CHEW ON: SpaceX’s inflight abort test paves way to commercial human spaceflight



The future is female… marketing for Bumble (Bloomberg Businessweek / Claire Suddath)

Vodafone is the latest big company to quit Facebook-founded Libra Association (Coindesk / Nikhilesh De) 

Senators bend the rules by wearing Apple Watches to Trump trial (Roll Call / Katherine Tully-McManus) 

Peter Thiel’s latest venture is the American government (New York Magazine / Max Reed) 

Tags Donald Trump Emmanuel Macron Jeff Bezos Liz Cheney Steven Mnuchin

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