senate
Auto Added by WPeMatico
A new Senate bill would totally upend Apple and Google’s app store dominance
With two giants calling the shots and collecting whatever tolls they see fit, mobile software makers have long complained that app stores take an unfair cut of the cash that should be flowing directly to developers. Hearing those concerns, a group of senators introduced a new bill this week that, if passed, would greatly diminish Apple and Google’s ability to control app purchases in their operating systems and completely shake up the way that mobile software gets distributed.
The new bill, called the Open App Markets Act, would enshrine quite a few rights that could benefit app developers tired of handing 30% of their earnings to Apple and Google. The bill, embedded in full below, would require companies that control operating systems to allow third-party apps and app stores.
It would also prevent those companies from blocking developers from telling users about lower prices for their software that they might find outside of official app stores. Apple and Google would also be barred from leveraging “non-public” information collecting through their platforms to create competing apps.
“This legislation will tear down coercive anticompetitive walls in the app economy, giving consumers more choices and smaller startup tech companies a fighting chance,” said Senator Richard Blumenthal (D-CT), who introduced the bipartisan bill with Sen. Marsha Blackburn (R-TN), and Sen. Amy Klobuchar (D-MN). Klobuchar chairs the Senate’s antitrust subcommittee and Blackburn and Blumenthal are both subcommittee members.
Senator Blackburn called Apple and Google’s app store practices a “direct affront to a free and fair marketplace” and Sen. Klobuchar noted that their behavior raises “serious competition concerns.”
The bill draws on information collected earlier this year from that subcommittee’s hearing on app stores and competition. In the hearing, lawmakers heard from Apple and Google as well as Spotify, Tile and Match Group, three companies that argued their businesses have been negatively impacted by anti-competitive app store policies.
“… We urge Congress to swiftly pass the Open App Markets Act,” Spotify Chief Legal Officer Horacio Gutierrez said of the new bill. “Absent action, we can expect Apple and others to continue changing the rules in favor of their own services, and causing further harm to consumers, developers and the digital economy.”
The Coalition for App Fairness, a developer advocacy group, praised the bill for its potential to spur innovation in digital markets. “The bipartisan Open App Markets Act is a step towards holding big tech companies accountable for practices that stifle competition for developers in the U.S. and around the world,” CAF executive director Meghan DiMuzio said.
Hoping to head off future regulatory headaches, Apple dropped its own fees for companies that generate less than $1 million in App Store revenue from 30% to 15% last year. Google followed suit with its own gesture, dropping fees to 15% for the first $1 million in revenue a developer earns through the Play Store in a year. Some developers critical of the companies’ practices saw those changes as little more than a publicity stunt.
Developers have long complained about the high tolls they pay to distribute their software through the world’s two major mobile operating systems. That fight escalated over the last year when Epic Games circumvented Apple’s payments rules by allowing Fortnite players to pay Epic directly, setting off a legal fight that has huge implications for the mobile software world. Following a May trial, the verdict is expected later this year.
“This will make it easier for developers of all sizes to challenge these harmful practices and seek relief from retaliation, be it during litigation or simply because they dared speak up,” Epic Games VP of Public Policy Corie Wright said of the new bill.
Unlike Apple, Google does allow apps to be “sideloaded,” installed onto devices outside of the Google Play Store. But documents unsealed in Epic’s parallel case against Google revealed that the Play Store’s creator knows the sideloading process is a terrible experience for users — something the company brings up when pressuring developers to stick with its official app marketplace.
The counterargument here is that official app stores make apps safer and smoother for consumers. While Apple and Google extract heavy fees for selling mobile software through the App Store and the Google Play Store, the companies both argue that streamlining apps through those official channels protects people from malware and allows for prompt software updates to patch security concerns that could jeopardize user privacy.
“At Apple, our focus is on maintaining an App Store where people can have confidence that every app must meet our rigorous guidelines and their privacy and security is protected,” an Apple spokesperson told TechCrunch.
Adam Kovacevich, a former Google policy executive who leads the new tech-backed industry group Chamber of Progress, called the new bill “a finger in the eye” for Android and iPhone owners.
“I don’t see any consumers marching in Washington demanding that Congress make their smartphones dumber,” Kovacevich said. “And Congress has better things to do than intervene in a multi-million-dollar dispute between businesses.”
At least in Google’s case, the counterargument has its own counterargument. Android has long been notorious for malware, but apparently most of that malicious software isn’t making its way onto devices through sideloading — it’s walking through the Google Play Store’s front door.
Powered by WPeMatico
What the growing federal focus on ESG means for private markets
The increasing regulation of ESG (environmental, social, governance) disclosure reporting may have started in the public markets, but will almost certainly have downstream effects for private market actors — for founders, companies and investors.
Since his confirmation as the chair of the U.S. Securities and Exchange Commission in April, Gary Gensler has made reforming ESG disclosures concerning climate change risk and human capital a top priority. The SEC’s regulatory agenda confirms as much. And Gensler is not alone in his focus on ESG at the federal level.
President Joe Biden issued an executive order encouraging regulators to assess climate-related financial risk. At the end of March, Treasury Secretary Janet Yellen wrote on Twitter that “our future livelihoods … depend on the financial sector to build a more sustainable and resilient economy.” Congress is considering measures that would require increased ESG disclosures, including the Improving Corporate Governance Through Diversity Act, the Diversity and Inclusion Data Accountability and Transparency Act and the Climate Risk Disclosure Act.
This renewed federal focus on ESG issues will bolster the SEC’s effort to create disclosure practices for public companies and mutual funds. Regardless of whether these federal policies around ESG come to pass, they reflect a momentum that will almost certainly impact private markets:
- Firms that want to go public — whether via SPAC, direct listing or traditional IPO — may have to seriously consider board diversity or environmental reporting in conjunction with — or well in advance of — their debuts.
- Private companies seeking to align with public companies as vendors or partners may be expected to meet specific ESG requirements before the engagement.
- Startup founders and venture funds raising capital may work to maintain the largest target market by proactively scoping ESG engagements to ensure they meet criteria for investors who may have their own ESG-focused investment requirements.
In his confirmation hearing before the Senate in early March, Gensler said, “Markets — and technology — are always changing. Our rules have to change along with them.”
The federal government is moving to increase regulation around ESG disclosure requirements with the goals of establishing greater transparency and metrics for public companies.
The federal government is moving to increase regulation around ESG disclosure requirements with the goals of establishing greater transparency and metrics for public companies. These requirements are a response to the changing markets — demands from consumers, scrutiny from investors and a general insistence for higher corporate standards from society at large.
Private markets aren’t immune to these forces. Already, three-quarters of investors in a 2020 survey said it was very important to measure the success of sustainability initiatives, but they also said there’s been a lack of clarity on how to define and measure outcomes.
To be sure, private markets are not headed toward full-scale adoption of ESG regulations. They will not be subject to the same reporting or disclosures framework as their public counterparts. Not today, and possibly not for some time.
But we may begin to see private investors, funds and companies adapting to get ahead of ESG regulation and position themselves to effectively operate in a new — albeit adjacent — regulatory environment. In their case, the rules may not change — but the game could.
Powered by WPeMatico
Decrypted: No warrants for web data, UK grid cyberattack, CyberArk buys Idaptive
One vote.
That’s all it needed for a bipartisan Senate amendment to pass that would have stopped federal authorities from further accessing millions of Americans’ browsing records. But it didn’t. One Republican was in quarantine, another was AWOL. Two Democratic senators — including former presidential hopeful Bernie Sanders — were nowhere to be seen and neither returned a request for comment.
It was one of several amendments offered up in the effort to reform and reauthorize the Foreign Intelligence Surveillance Act, the basis of U.S. spying laws. The law, signed in 1978, put restrictions on who intelligence agencies could target with their vast listening and collection stations. But after the Edward Snowden revelations in 2013, lawmakers champed at the bit to change the system to better protect Americans, who are largely protected from the spies within its borders.
One privacy-focused amendment, brought by Sens. Mike Lee and Patrick Leahy, passed — permits for more independent oversight to the secretive and typically one-sided Washington, D.C. court that authorizes government surveillance programs, the Foreign Intelligence Surveillance Court. That amendment all but guarantees the bill will bounce back to the House for further scrutiny.
Here’s more from the week.
THE BIG PICTURE
Three years after WannaCry, U.S. still on North Korea’s tail
A feature-length profile in Wired magazine looks at the life of Marcus Hutchins, one of the heroes who helped stop the world’s biggest cyberattack three years to the day.
The profile — a 14,000-word cover story — examines his part in halting the spread of the global WannaCry ransomware attack and how his early days led him into a criminal world that prompted him to plead guilty to felony hacking charges. Thanks in part to his efforts in saving the internet, he was sentenced to time served and walked free.
Powered by WPeMatico
The Pill Club is donating 5,000 units of emergency contraception
Eleven million women in the U.S. live more than an hour from an abortion clinic, a number expected to increase as facilities close up shop following new restrictions on women’s healthcare in several states.
Planned Parenthood and other leading nonprofits continue to put up a good fight while private “mission-driven” companies in the burgeoning women’s health tech sector are all talk and little action. But a new effort from The Pill Club, an Alphabet-backed birth control and prescription delivery startup, may lead to change in the nascent sector.
The Pill Club has partnered with Power To Decide, a nonprofit campaign to prevent unplanned pregnancies, to dole out free emergency contraception to women in need. Together they’ll distribute 5,000 units of a generic form of Plan B, a pill taken after sex to stop a pregnancy before it starts. For the next three months The Pill Club will also match all donations up to $10,000 made to Power To Decide’s Contraceptive Access Fund, which helps low-income women access contraception. Anyone can sign up now to receive free units.
The Pill Club’s decision to share resources with a nonprofit comes as several states this year have imposed new laws restricting or outlawing abortion procedures. Alabama, for example, earlier this year passed a Senate bill banning abortion in the state. Arkansas, Indiana, Kentucky and others have also OK’d new restrictions on abortion.
This is The Pill Club’s first effort to donate emergency contraception to populations in need, as well as its first partnership with a not-for-profit entity. Co-founder and chief executive officer Nick Chang says the startup thought long and hard about how it could be most helpful to women in this political climate.
“We thought, what can we do to support women in these states in ways that other companies may not be able to?,” Chang tells TechCrunch. “This is the moment where private companies can really go out and benefit women in ways that may not be supported in other avenues. Since we have the means and ability to do it in ways that are more convenient and private, it’s our opportunity to drive access and support.”
Founded in 2014 and backed with more than $60 million in venture capital funding, one might argue The Pill Club should have forged partnerships like this from the get-go. Curious what efforts other well-funded birth control startups were making to support women in 2019, especially women in contraceptive deserts who are likely unfamiliar with the new line of consumer birth control brands, I reached out to The Pill Club’s competitors Nurx, a fellow birth control delivery company, and Hers, a line of women’s healthcare products owned by the billion-dollar startup Hims.
Both companies emphasized the fact that many of their customers live in Southern states, or the region most impacted by new limitations to abortion care, but didn’t mention any new efforts to increase access, like partnerships with nonprofits or donations. Hers provided this quote from the company’s co-founder Hilary Coles, which didn’t answer my question but did make clear the company is thinking about serving contraceptive deserts:
“At Hers, our mission is to provide women with more convenient and affordable access to the healthcare system,” Hers co-founders Hilary Coles said in a statement. “Approximately 3.5 million patients go without care because they cannot access transportation to their providers and 19.5 million women have reported not having access to a clinic that provides birth control specifically. That’s simply unacceptable. Closing the gaps caused by geographic barriers between patients and their doctors was one of the primary challenges we set out to address when founding Hers. We’re proud to be a resource for women nationwide, including those who live in contraceptive deserts who may not otherwise have access to the care they need. It’s crucial to Hers to be part of the solution in alleviating the pain points women experience within the healthcare system.”
It’s not the responsibility of these companies to improve the political landscape of the U.S., but with $340 million in private capital shared between them, the trio does have a unique opportunity to innovate, share, collaborate and influence. After all, that’s what’s so great about healthtech; it brings new, innovative solutions to an industry characterized by antiquated systems and slow movers. For once, Silicon Valley’s “move fast and break things” mantra may be appropriately applied to a facet of healthcare. Women need sustained access to contraception and abortion care. Fast.
“This is the time when private companies can step in,” Chang concluded. “We can come in and help out and it’s our responsibility to do that.”
Powered by WPeMatico
CFIUS Cometh: What this obscure agency does and why it matters to your fund or startup
Evan J. Zimmerman
Contributor
Contributor
Evan J. Zimmerman is an entrepreneur, investor, and writer. He is the Chairman of Jovono and Chairman of the Clinton Health Access Initiative technology council. He is a partner and director in Mighty Mug/Mighty Products, Inc, and chairman of Brush Up Club, an innovative oral health company.
On January 12, 2016, Grindr announced it had sold a 60% controlling stake in the company to Beijing Kunlun Tech, a Chinese gaming firm, valuing the company at $155 million. Champagne bottles were surely popped at the small-ish firm.
Though not at a unicorn-level valuation, the 9-figure exit was still respectable and signaled a bright future for the gay hookup app. Indeed, two years later, Kunlun bought the rest of the firm at more than double the valuation and was planning a public offering for Grindr.
On March 27, 2019, it all fell apart. Kunlun was putting Grindr up for sale instead.
What went wrong? It wasn’t that Grindr’s business ground to a halt. By all accounts, its business seems to actually be growing. The problem was that Kunlun owning Grindr was viewed as a threat to national security. Consequently, CFIUS, or the Committee for Foreign Investment in the United States, stepped in to block the transaction.
So what changed? CFIUS was expanded by FIRRMA, or the Foreign Risk Review Modernization Act, in late 2018, which gave it massive new power and scale. Unlike before, FIRRMA gave CFIUS a technology focus. So now CFIUS isn’t just an American problem—it’s an American tech problem. And in the coming years, it will transform venture capital, Chinese involvement in US tech, and maybe even startups as we know it.
Here’s a closer look at how it all fits together.
What is CFIUS?
Image via Getty Images / Busà Photography
CFIUS is the most important agency you’ve never heard of, and until recently it wasn’t even more than a committee. In essence, CFIUS has the ability to stop foreign entities, called “covered entities,” from acquiring companies when it could adversely affect national security—a “covered transaction.”
Once a filing is made, CFIUS investigates the transaction and both parties, which can take over a month in its first pass. From there, the company and CFIUS enter a negotiation to see if they can resolve any issues.
Powered by WPeMatico
Senator Warner calls on Zuckerberg to support market research consent rules
In response to TechCrunch’s investigation of Facebook paying teens and adults to install a VPN that lets it analyze all their phone’s traffic, Senator Mark Warner (D-VA) has sent a letter to Mark Zuckerberg. It admonishes Facebook for not spelling out exactly which data the Facebook Research app was collecting or giving users adequate information necessary to determine if they should accept payment in exchange for selling their privacy. Following our report, Apple banned Facebook’s Research app from iOS and shut down its internal employee-only workplace apps too as punishment, causing mayhem in Facebook’s office.
Warner wrote to Zuckerberg, “In both the case of Onavo and the Facebook Research project, I have concerns that users were not appropriately informed about the extent of Facebook’s data-gathering and the commercial purposes of this data collection. Facebook’s apparent lack of full transparency with users – particularly in the context of ‘research’ efforts – has been a source of frustration for me.”
Warner is working on writing new laws to govern data collection initiatives like Facebook Research. He asks Zuckerberg, “Will you commit to supporting legislation requiring individualized, informed consent in all instances of behavioral and market research conducted by large platforms on users?”
Senator Blumenthal’s fierce statement
Meanwhile, Senator Richard Blumenthal (D-CT) provided TechCrunch with a fiery statement regarding our investigation. He calls Facebook anti-competitive, which could fuel calls to regulate or break up Facebook, says the FTC must address the issue and that he’s planning to work with congress to safeguard teens’ privacy:
“Wiretapping teens is not research, and it should never be permissible. This is yet another astonishing example of Facebook’s complete disregard for data privacy and eagerness to engage in anti-competitive behavior. Instead of learning its lesson when it was caught spying on consumers using the supposedly ‘private’ Onavo VPN app, Facebook rebranded the intrusive app and circumvented Apple’s attempts to protect iPhone users. Facebook continues to demonstrate its eagerness to look over everyone’s shoulder and watch everything they do in order to make money.
Mark Zuckerberg’s empty promises are not enough. The FTC needs to step up to the plate, and the Onavo app should be part of its investigation. I will also be writing to Apple and Google on Facebook’s egregious behavior, and working in Congress to make sure that teens are protected from Big Tech’s privacy intrusions.”
Senator Markey says stop surveiling teens
And finally, Senator Edward J. Markey (D-MA) requests that Facebook stop recruiting teens for its Research program, and notes he’ll push his “Do Not Track Kids” act in Congress:
“It is inherently manipulative to offer teens money in exchange for their personal information when younger users don’t have a clear understanding how much data they’re handing over and how sensitive it is. I strongly urge Facebook to immediately cease its recruitment of teens for its Research Program and explicitly prohibit minors from participating. Congress also needs to pass legislation that updates children’s online privacy rules for the 21st century. I will be reintroducing my ‘Do Not Track Kids Act’ to update the Children’s Online Privacy Protection Act by instituting key privacy safeguards for teens.
But my concerns also extend to adult users. I am alarmed by reports that Facebook is not providing participants with complete information about the extent of the information that the company can access through this program. Consumers deserve simple and clear explanations of what data is being collected and how it being used.”
The senators’ statements do go a bit overboard. Though Facebook Research was aggressively competitive and potentially misleading, Blumenthal calling it “anti-competitive” is a stretch. And Warner’s questioning on whether “any user reasonably understood that they were giving Facebook root device access through the enterprise certificate” or that it uses the data to track competitors oversteps the bounds. Surely some savvy technologists did, but the question is whether all the teens and everyone else understood.
Facebook isn’t the only one paying users to analyze all their phone data. TechCrunch found that Google had a similar program called Screenwise Meter. Though it was more upfront about it, Google also appears to have violated Apple’s employee-only Enterprise Certificate rules. We may be seeing the start to an industry-wide crack down on market research surveillance apps that dangle gift cards in front of users to get them to give up a massive amount of privacy.
Warner’s full letter to Zuckerberg can be found below:
Dear Mr. Zuckerberg:
I write to express concerns about allegations of Facebook’s latest efforts to monitor user activity. On January 29th, TechCrunch revealed that under the auspices of partnerships with beta testing firms, Facebook had begun paying users aged 13 to 35 to install an enterprise certificate, allowing Facebook to intercept all internet traffic to and from user devices. According to subsequent reporting by TechCrunch, Facebook relied on intermediaries that often “did not disclose Facebook’s involvement until users had begun the signup process.” Moreover, the advertisements used to recruit participants and the “Project Disclosure” make no mention of Facebook or the commercial purposes to which this data was allegedly put.
This arrangement comes in the wake of revelations that Facebook had previously engaged in similar efforts through a virtual private network (VPN) app, Onavo, that it owned and operated. According to a series of articles by the Wall Street Journal, Facebook used Onavo to scout emerging competitors by monitoring user activity – acquiring competitors in order to neutralize them as competitive threats, and in cases when that did not work, monitor usage patterns to inform Facebook’s own efforts to copy the features and innovations driving adoption of competitors’ apps. In 2017, my staff contacted Facebook with questions about how Facebook was promoting Onavo through its Facebook app – in particular, framing the app as a VPN that would “protect” users while omitting any reference to the main purpose of the app: allowing Facebook to gather market data on competitors.
Revelations in 2017 and 2018 prompted Apple to remove Onavo from its App Store in 2018 after concluding that the app violated its terms of service prohibitions on monitoring activity of other apps on a user’s device, as well as a requirement to make clear what user data will be collected and how it will be used. In both the case of Onavo and the Facebook Research project, I have concerns that users were not appropriately informed about the extent of Facebook’s data-gathering and the commercial purposes of this data collection.
Facebook’s apparent lack of full transparency with users – particularly in the context of ‘research’ efforts – has been a source of frustration for me. As you recall, I wrote the Federal Trade Commission in 2014 in the wake of revelations that Facebook had undertaken a behavioral experiment on hundreds of thousands of users, without obtaining their informed consent. In submitted questions to your Chief Operating Officer, Sheryl Sandberg, I once again raised these concerns, asking if Facebook provided for “individualized, informed consent” in all research projects with human subjects – and whether users had the ability to opt out of such research. In response, we learned that Facebook does not rely on individualized, informed consent (noting that users consent under the terms of the general Data Policy) and that users have no opportunity to opt out of being enrolled in research studies of their activity. In large part for this reason, I am working on legislation to require individualized, informed consent in all instances of behavioral and market research conducted by large platforms on users.
Fair, robust competition serves as an impetus for innovation, product differentiation, and wider consumer choice. For these reasons, I request that you respond to the following questions:
1. Do you think any user reasonably understood that they were giving Facebook root device access through the enterprise certificate? What specific steps did you take to ensure that users were properly informed of this access?
2. Do you think any user reasonably understood that Facebook was using this data for commercial purposes, including to track competitors?
3. Will you release all participants from the confidentiality agreements Facebook made them sign?
4. As you know, I have begun working on legislation that would require large platforms such as Facebook to provide users, on a continual basis, with an estimate of the overall value of their data to the service provider. In this instance, Facebook seems to have developed valuations for at least some uses of the data that was collected (such as market research). This further emphasizes the need for users to understand fully what data is collected by Facebook, the full range of ways in which it is used, and how much it is worth to the company. Will you commit to supporting this legislation and exploring methods for valuing user data holistically?
5. Will you commit to supporting legislation requiring individualized, informed consent in all instances of behavioral and market research conducted by large platforms on users?
I look forward to receiving your responses within the next two weeks. If you should have any questions or concerns, please contact my office at 202-224-2023.
Powered by WPeMatico
Zuckerberg will also testify before the Senate
Earlier this week, the House Energy and Commerce Committee announced that Facebook CEO Mark Zuckerberg is slated to testify on the use and protection of user data in Washington D.C. on April 11. Turns out, Zuckerberg will have a busier week in D.C. than expected, with the Senate Judiciary and Senate Commerce Committees announcing a joint hearing with the Facebook boss.
The Senate hearing will go down on April 10, a day before Zuckerberg appears before the House Committee.
The hearing, convened by Senate Committee on the Judiciary Chairman Chuck Grassley (R-Iowa) and Senate Commerce, Science and Transportation Committee Chairman John Thune (R-S.D.), is titled “Facebook, Social Media Privacy, and the Use and Abuse of Data.”
The hearing will take place in the U.S. Capitol Visitors Center at 2:15pm ET.
Here’s what Senator Thune had to say in a prepared statement:
Facebook now plays a critical role in many social relationships, informing Americans about current events, and pitching everything from products to political candidates. Our joint hearing will be a public conversation with the CEO of this powerful and influential company about his vision for addressing problems that have generated significant concern about Facebook’s role in our democracy, bad actors using the platform, and user privacy.
Zuckerberg brought up the possibility of speaking to congress in late March, saying: “If it is ever the case that I am the most informed person at Facebook in the best position to testify, I will happily do that.”
Powered by WPeMatico