The government has approved the supply of equipment by Chinese telecoms firm Huawei for the UK’s new 5G data network despite warnings of a security risk.
There is no formal confirmation but the Daily Telegraph says Huawei will build “non-core” components such as antennas.
The US wants its allies in the “Five Eyes” intelligence grouping – the UK, Canada, Australia and New Zealand – to exclude the company.
Huawei has denied that its work poses any risks of espionage or sabotage.
But Australia has already said it is siding with Washington – which has spoken of “serious concerns over Huawei’s obligations to the Chinese government and the danger that poses to the integrity of telecommunications networks in the US and elsewhere”.
A spokesman for the Department for Digital, Culture, Media and Sport has said it is reviewing the supply of equipment for the 5G network and will report in due course.
Digital minister Margot James responded to the reports by tweeting: “In spite of Cabinet leaks to the contrary, final decision yet to be made on managing threats to telecoms infrastructure.”
According to the Daily Telegraph, Huawei would be allowed to help build the “non-core” infrastructure of the 5G network.
This would mean Huawei would not supply equipment for what is known as the “core” parts – where tasks such as checking device IDs and deciding how to route voice calls and data take place.
Huawei, a private company which already supplies equipment for the UK’s existing mobile networks, has always denied claims it is controlled by the Chinese government.
It said it was awaiting a formal announcement, but was “pleased that the UK is continuing to take an evidence-based approach to its work”, adding it would continue to work cooperatively with the government and the industry.
Ciaran Martin, the head of the National Cyber Security Centre – which oversees Huawei’s current UK work – told BBC Radio 4’s Today programme a framework would be put in place to ensure the 5G network was “sufficiently safe”.
Asked about the potential of a conflict in the position of Five Eyes members, he added: “In the past decade there have been different approaches across the Five Eyes and across the allied wider Western alliance towards Huawei and towards other issues as well.”
What is 5G?
5G is the next (fifth) generation of mobile internet connectivity, promising much faster data download and upload speeds, wider coverage and more stable connections.
The world is going mobile and existing spectrum bands are becoming congested, leading to breakdowns, particularly when many people in one area are trying to access services at the same time.
5G is also much better at handling thousands of devices simultaneously, from phones to equipment sensors, video cameras to smart street lights.
Current 4G mobile networks can offer speeds of about 45Mbps (megabits per second) on average and experts say 5G – which is starting to be rolled out in the UK this year – could achieve browsing and downloads up to 20 times faster.
BBC security correspondent Gordon Corera says it is believed the decision to involve Huawei was taken by ministers at a meeting of the government’s national security council on Tuesday, chaired by Prime Minister Theresa May.
The home, defence and foreign secretaries were reported to have raised concerns during the discussions.
In a tweet, shadow Cabinet Office minister Jo Platt said using Huawei equipment would raise “serious questions” about the “government’s interests and how they will secure networks”.
BBC security correspondent Gordon Corera
The decision on Huawei is one of the most significant long-term national security decisions this government will make and was always going to be contentious.
5G will underpin our daily lives in ways that are hard to predict. So does allowing a Chinese company to build those networks put people at risk of being spied on or even switched off?
That is the concern from Washington and other critics who wanted the company excluded.
But deciding to ban Huawei entirely from the network would have risked slowing down the development of 5G and also upsetting China.
The UK believes it has experience in managing the risks posed by Huawei and can continue to do so going forward.
But one retired senior intelligence official recently told me his view on what to do about Huawei had changed.
In the past, he said, he had believed the policy of managing the risk had been sufficient. But now he was less sure.
The reason was not to do with any change in his view of what the company could do. Rather it was about the risks to relationships with close allies, namely those of the Five Eyes and US.
Foreign Affairs Committee chairman Tom Tugendhat tweeted that allowing Huawei to build some of the UK’s 5G infrastructure would “cause allies to doubt our ability to keep data secure and erode the trust essential to #FiveEyes cooperation”.
Speaking on the Today programme, Mr Tugendhat said the proposals still raised concerns, as 5G involved an “internet system that can genuinely connect everything, and therefore the distinction between non-core and core is much harder to make”.
Joyce Hakmeh, a research fellow at think tank Chatham House and co-editor of the Journal of Cyber Policy, said the UK’s current mobile network needs to be transformed to the “the next level… quicker, more stable 5G”.
But she added the government would be hoping its decision on Huawei did not upset either China or the US.
Limiting – but not barring – Huawei technology from the 5G networks would be a “diplomatic way of managing a difficult situation” for the UK, said Ms Hakmeh.
About 24 hours ahead of Tesla’s coming “Investor Day” and just moments after we broke the news that Tesla had been granted a restraining order on a short seller who has been critical of the company on Twitter, stunning video has surfaced of a Tesla catching fire and exploding, while parked.
It did not appear that anyone was in the vehicle at the time of the explosion.
A self proclaimed Tesla owner in Shanghai that Tweets under the name @ShanghaiJayIn posted video on his Twitter moments ago of what appears to be a Tesla Model S, 1st generation, catching fire spontaneously in a Chinese parking garage.
The video shows what appears to be security footage of a white Tesla that starts with smoke pouring out of the bottom of it. As people can be heard in the background talking in Mandarin, the car simply appears to spontaneously combust.
Before the video is written off as big oil conspiracy FUD, we should note that the Twitter user also has his own YouTube channel, which appears to mostly be positive content toward the brand.
The same user went on to post video of what appears to be the aftermath of the fire:
Anyone who, like me, joined Facebook a decade or more ago, probably clicked “yes” when invited to upload all of their contacts.
It seemed a good way of making the network more useful and, after all, what could be the harm? But after the various data scandals shattered trust in Facebook, we’ve become far more cautious.
We’ve woken up to the harms that could come from handing over that precious information about our social connections – for journalists it could mean revealing their contacts, for whistleblowers their dealings with regulators, for just about anyone their contacts with people they might not want their partners to know about.
Now we know that Facebook somehow scraped up the email contacts of 1.5 million people over a three year period without their agreement. Now every time the social network suggests “people you may know”, we will wonder “How do you know that I may know them?”
To many, the idea that they should trust Facebook with their data seems more old-fashioned by the day.
The ongoing breaches and other criticisms of Facebook are also prompting some high-profile users to bow out. The latest is Democrat Representative Alexandria Ocasio-Cortez who said she had “quit” the social network.
In an interview with a Yahoo News podcast she said: “I personally gave up Facebook, which was kind of a big deal because I started my campaign on Facebook.”
She added that social media posed a “public health risk”.
(NBC) Facebook’s leaders seriously discussed selling access to user data — and privacy was an afterthought.
Leaked internal Facebook documents show that the plans to sell access to user data were discussed for years and received support from Facebook’s most senior executives, including CEO Mark Zuckerberg and chief operating officer Sheryl Sandberg. Doug Chayka for NBC News / for NBC NewsApril 16, 2019, 9:30 AM GMT+1By Olivia Solon and Cyrus Farivar
Facebook CEO Mark Zuckerberg oversaw plans to consolidate the social network’s power and control competitors by treating its users’ data as a bargaining chip, while publicly proclaiming to be protecting that data, according to about 4,000 pages of leaked company documents largely spanning 2011 to 2015 and obtained by NBC News.
The documents, which include emails, webchats, presentations, spreadsheets and meeting summaries, show how Zuckerberg, along with his board and management team, found ways to tap Facebook’s trove of user data — including information about friends, relationships and photos — as leverage over companies it partnered with.
In some cases, Facebook would reward favored companies by giving them access to the data of its users. In other cases, it would deny user-data access to rival companies or apps.
For example, Facebook gave Amazon extended access to user data because it was spending money on Facebook advertising and partnering with the social network on the launch of its Fire smartphone. In another case, Facebook discussed cutting off access to user data for a messaging app that had grown too popular and was viewed as a competitor, according to the documents.
All the while, Facebook was formulating a strategy to publicly frame these moves as a way of protecting user privacy.
Private communication between users is “increasingly important,” Zuckerberg said in a 2014 New York Times interview. “Anything we can do that makes people feel more comfortable is really good.”
But the documents show that behind the scenes, in contrast with Facebook’s public statements, the company came up with several ways to require third-party applications to compensate Facebook for access to its users’ data, including direct payment, advertising spending and data-sharing arrangements. While it’s not unusual for businesses that are working together to share information about their customers, Facebook has access to sensitive data that many other companies don’t possess.
Facebook ultimately decided not to sell the data directly but rather to dole it out to app developers who were considered personal “friends” of Zuckerberg or who spent money on Facebook and shared their own valuable data, the documents show.
Facebook denied that it gave preferential treatment to developers or partners because of their ad spending or relationship with executives. The company has not been accused of breaking the law.
About 400 of the 4,000 pages of documents have previouslybeenreported by other media outlets, and also by a member of the British Parliament who has been investigating Facebook’s data privacy practices in the wake of the Cambridge Analytica scandal. However, this cache represents the clearest and most comprehensive picture of Facebook’s activities during a critical period as the company struggled to adapt to the rise of smartphones following its rocky debut as a public company.
The thousands of newly shared documents were anonymously leaked to the British investigative journalist Duncan Campbell, who shared them with a handful of media organizations: NBC News, Computer Weekly and Süddeutsche Zeitung. Campbell, a founding member of the International Consortium of Investigative Journalists, is a computer forensics expert who has worked on international investigations including on offshore banking and big tobacco. The documents appear to be the same ones obtained by Parliament in late 2018 as part of an investigation into Facebook. Facebook did not question the authenticity of the documents NBC News obtained.
The documents stem from a California court case between the social network and the little-known startup Six4Three, which sued Facebook in 2015 after the company announced plans to cut off access to some types of user data. Six4Three’s app, Pikinis, which soft-launched in 2013, relied on that data to allow users to easily find photos of their friends in bathing suits.
Facebook has acknowledged that it considered charging for access to user data. But Facebook has challenged the significance of those discussions, telling the Wall Street Journal last year and NBC News this month that the company was merely mulling various business models.
Facebook has also repeatedly said that the documents had been “cherry-picked” and were misleading. Facebook reiterated this stance when NBC News contacted the social media company for comment on the newly leaked documents.
“As we’ve said many times, Six4Three — creators of the Pikinis app — cherry picked these documents from years ago as part of a lawsuit to force Facebook to share information on friends of the app’s users,” Paul Grewal, vice president and deputy general counsel at Facebook, said in a statement released by the company.
“The set of documents, by design, tells only one side of the story and omits important context. We still stand by the platform changes we made in 2014/2015 to prevent people from sharing their friends’ information with developers like the creators of Pikinis. The documents were selectively leaked as part of what the court found was evidence of a crime or fraud to publish some, but not all, of the internal discussions at Facebook at the time of our platform changes. But the facts are clear: we’ve never sold people’s data.”
NBC News has not been able to determine whether the documents represent a complete picture. Facebook declined to provide additional evidence to support the claim of cherry-picking.
Still, these freshly leaked documents show that the plans to sell access to user data were discussed for years and received support from Facebook’s most senior executives, including Zuckerberg, chief operating officer Sheryl Sandberg, chief product officer Chris Cox and VP of growth Javier Olivan. Facebook declined to make them available for comment.
After NBC News contacted Facebook for comment, Facebook’s lawyers wrote to the judge in the Six4Three case, claiming that Six4Three had leaked the documents to a “national broadcast network” and seeking to depose the company’s founders. NBC News received the documents from Campbell, who received them from an anonymous source. Six4Three denied leaking the documents.
When Facebook ultimately cut off broad access to user data in 2015, the move contributed to the decline of thousands of competitors and small businesses that relied on what Facebook had previously described as a “level-playing field” in terms of access to data. In addition to Pikinis, the casualties included Lulu, an app that let women rate the men they dated; an identity fraud-detecting app called Beehive ID; and Swedish breast cancer awareness app Rosa Bandet (Pink Ribbon).
The strategy orchestrated by Zuckerberg had some of his employees comparing the company to villains from Game of Thrones, while David Poll, a senior engineer, called the treatment of outside app developers “sort of unethical,” according to the documents. But Zuckerberg’s approach also earned admiration: Doug Purdy, Facebook’s director of product, described the CEO as a “master of leverage,” according to the documents.
Facebook declined to comment on these employee communications.
A PRIVACY MYTH
One of the most striking threads to emerge from the documents is the way that Facebook user data was horse-traded to squeeze money or shared data from app developers.
In the wake of the Cambridge Analytica scandal in early 2018 and rising awareness of the Six4Three case, Facebook has attempted to frame changes it made to its platform in 2014 and 2015 as being driven by concerns over user privacy. In statements to media organizations, Facebook has said it locked down its platform to protect users from companies that mishandled user data, such as Cambridge Analytica, as well as apps that spammed users’ news feeds or were creepy, such as Six4Three’s bikini-spotting app Pikinis.
However, among the documents leaked, there’s very little evidence that privacy was a major concern of Facebook’s, and the issue was rarely discussed in the thousands of pages of emails and meeting summaries. Where privacy is mentioned, it is often in the context of how Facebook can use it as a public relations strategy to soften the blow of the sweeping changes to developers’ access to user data. The documents include several examples suggesting that these changes were designed to cement Facebook’s power in the marketplace, not to protect users.
In Six4Three’s case, for example, Facebook’s head of policy Allison Hendrix acknowledged in a June 2017 deposition obtained by NBC News that the social network never received any complaints about the Pikinis app, nor did Facebook send Six4Three any policy or privacy violation notices. Six4Three, Hendrix confirmed, was playing within the rules Facebook had set for developers.
Despite this, Six4Three’s access to data, specifically access to a user’s friends’ photos, was cut off in April 2015 as part of sweeping changes to Facebook’s platform announced a year earlier, which affected as many as 40,000 apps. Six4Three shut down the app soon afterward.
“Our case is about Zuckerberg’s decision to weaponize the reliance of companies on his purportedly neutral platform and to weaponize the private and sensitive data of billions of people,” said Six4Three founder Ted Kramer.
A TURNING POINT FOR FACEBOOK
Facebook recognized early on that working with third-party app developers could help make the social network more interesting and drive the platform’s expansion. Beginning in early 2010, Facebook created tools that allowed the makers of games (remember Farmville?) and other apps to connect with its audience in return for ensuring those users spent more time on Facebook.
Facebook achieved this through its “Graph API” (Application Programming Interface), a common means to allow software programs to interact with each other. In Facebook’s case, this meant that third-party apps such as games could post updates on people’s profiles, which would be seen by players’ friends and potentially encourage them to play, too. Beyond that, it allowed the makers of those games to access a slew of data from Facebook users, including their connections to friends, likes, locations, updates, photos and more.
The Graph API — and particularly the way it let third parties promote their products to and extract data from a user’s social connections — was a key feature of Facebook that Six4Three and thousands of other companies relied upon for viral marketing and user growth.
However, after a few years, Facebook decided the app developers were getting more value from the user data they extracted from Facebook than Facebook was getting out of the app developers, the documents show.
After Facebook went public in May 2012, its stock price plummeted, which Zuckerberg later characterized as “disappointing.” The company was in a desperate position, documents show, with users sharing fewer photos and posts on the platform as they spent more time on their cellphones. An internal Facebook presentation looking back at this period used the phrase “terminal decline” to describe the fall in engagement.
Facebook executives, including Zuckerberg and Sandberg, spent months brainstorming ways to turn the company around. An idea that they kept returning to: make money from the app partners, by charging them for access to Facebook’s users and their data.
‘SELL DATA FOR $”
Several proposals for charging developers for access to Facebook’s platform and data were put forward in a presentation to the company’s board of directors, according to emails and draft slides from late August 2012.
Among the suggestions: a fixed annual fee for developers for reviewing their apps; an access fee for apps that requested user data; and a charge for “premium” access to data, such as a user trust score or a ranking of the strongest relationships between users and their friends.
“Today the fundamental trade is ‘data for distribution’ whereas we want to change it to either ‘data for $’ and/or ‘$ for distribution,’” Chris Daniels, a Facebook business development director, wrote in an August 2012 email to other top leaders in the company discussing the upcoming presentation.
Discussions continued through October, when Zuckerberg explained to close friend Sam Lessin the importance of controlling third-party apps’ ability to access Facebook’s data and reach people’s friends on the platform. Without that leverage, “I don’t think we have any way to get developers to pay us at all,” Zuckerberg wrote in an email to Lessin.
In the same week, Zuckerberg floated the idea of pursuing 100 deals with developers “as a path to figuring out the real market value” of Facebook user data and then “setting a public rate” for developers.
“The goal here wouldn’t be the deals themselves, but that through the process of negotiating with them we’d learn what developers would actually pay (which might be different from what they’d say if we just asked them about the value), and then we’d be better informed on our path to set a public rate,” Zuckerberg wrote in a chat.
Facebook told NBC News that it was exploring ways to build a sustainable business, but ultimately decided not to go forward with these plans.
“I just can’t think of any instances where that data has leaked from developer to developer and caused a real issue for us.”
Zuckerberg was unfazed by the potential privacy risks associated with Facebook’s data-sharing arrangements.
“I’m generally skeptical that there is as much data leak strategic risk as you think,” he wrote in the email to Lessin. “I think we leak info to developers but I just can’t think of any instances where that data has leaked from developer to developer and caused a real issue for us.”
Facebook told NBC News that this was an example of a cherry-picked email designed to bolster Six4Three’s case.
Zuckerberg didn’t know it at the time, but a privacy bug affecting an unnamed third-party app would create precisely this kind of strategic risk the following year, according to a panicked chatlog between Michael Vernal, who was director of engineering, and other senior employees.
It’s not clear exactly what happened or which app was involved, but it appears that Zuckerberg’s private communications could have leaked from Facebook to the external app in an unexpected way.
Vernal said that it “could have been near-fatal for Facebook platform” if “Mark had accidentally disclosed earnings ahead of time because a platform app violated his privacy.”
“Holy crap,” replied Avichal Garg, then director of product management.
“DO NOT REPEAT THIS STORY OFF OF THIS THREAD,” added Vernal. “I can’t tell you how terrible this would have been for all of us had this not been caught quickly.”
Vernal and Garg did not respond to requests for comment.
‘GOOD FOR THE WORLD’ BUT NOT ‘GOOD FOR US’
In late November 2012, Zuckerberg sent a long email to Facebook’s senior leadership team saying that Facebook shouldn’t charge developers for access to basic data feeds. However, he said that access to Facebook data should be contingent on the developers sharing all of the “social content” generated by their apps back to Facebook, something Zuckerberg calls “full reciprocity.”
The existing arrangement, where developers weren’t required to share their data back with Facebook, might be “good for the world” but it’s not “good for us,” Zuckerberg wrote in the email.
He noted that though Facebook could charge developers to access user data, the company stood to benefit more from requiring developers to compensate Facebook in kind — with their own data — and by pushing those developers to pay for advertising on Facebook’s platform.
The endgame: to ensure Facebook maintained its dominant position in the market.
“The purpose of the platform is to tie the universe of all the social apps together so we can enable a lot more sharing and still remain the central social hub,” Zuckerberg said in the email.
Facebook told NBC News that the focus of “full reciprocity” was to enable users to share their experiences within external apps with their friends on Facebook, not about providing Facebook with user data.
With Zuckerberg’s vision for Facebook set, the company began making deals with some of its most valued partners, including dozens of app developer friends of Zuckerberg and Sandberg. Facebook whitelisted their access to feeds of user data while restricting that same access to apps that Facebook viewed as competitors.
These data access deals prepared key partners, including Tinder, Sony and Microsoft, for sweeping changes to the Facebook platform that the company planned to announce at its annual developer conference in April 2014 and enforce within a year.
In one instance, described in June 2013 documents, Amazon received special treatment for the launch of a group gifting product, despite the fact that it competed with one of Facebook’s own products.
“Remind me, why did we allow them to do this? Do we receive any cut of purchases?” Chris Daniels, then Facebook’s director of business development, asked in an email.
“No, but Amazon is an advertiser and supporting this with advertisement … and working with us on deeper integrations for the Fire,” Amazon’s smartphone, replied Jackie Chang, who worked with Facebook’s “strategic partners.”
Apps that were not considered “strategic partners” got different treatment. In a March 2013 discussion, Justin Osofsky, then director of platform partnerships, described restricting the MessageMe app from accessing Facebook data because it had grown too popular and could compete with Facebook messages. He asked colleagues to see if any other messenger apps have “hit the growth team’s radar recently.”
“If so, we’d like to restrict them at the same time to group this into one press cycle,” he wrote in an email.
‘IT’S SORT OF UNETHICAL’
Deal negotiations created confusion among partners who had grown accustomed to unfettered access to Facebook user data.
“We gave a bunch of stuff ‘for free’ historically (data, distribution) and now we’re making you ‘pay’ for it via reciprocal value,” Vernal, director of engineering, wrote in an email in June 2013. He added, “The confusing thing here is that we haven’t really announced these changes publicly/broadly yet.”
Some Facebook employees were unhappy about this direction, particularly the way the company appeared to be blocking competitors from accessing data.
Here’s an extract from a December 2013 chatlog between several senior engineers talking about the changes:
Bryan Klimt: “So we are literally going to group apps into buckets based on how scared we are of them and give them different APIs? … So the message is, ‘if you’re going to compete with us at all, make sure you don’t integrate with us at all’? I’m just dumbfounded.”
Kevin Lacker: “Yeah this is complicated.”
David Poll: “More than complicated, it’s sort of unethical.”
Lacker and Poll declined to comment. Vernal and Klimt did not respond to requests for comment.
Facebook declined to comment on the employee exchanges.
THE PR SPIN
When it came to publicly announcing the sweeping changes at Facebook’s annual F8 developer conference in April 2014, members of the communications team worked with Zuckerberg to craft a narrative around user trust, not competition or profitability.
In a March 2014 email discussing Zuckerberg’s keynote speech at the event, where he was due to announce the removal of developers’ access to friends’ data, Jonny Thaw, a director of communications, wrote that it “may be a tough message for some developers as it may inhibit their growth.”
“So one idea that came up today was potentially talking in the keynote about some of the trust changes we’re making on Facebook itself. So the message would be: ‘trust is really important to us — on Facebook, we’re doing A, B and C to help people control and understand what they’re sharing — and with platform apps we’re doing D, E and F.’”
If that doesn’t work, he added, “we could announce some of Facebook’s trust initiatives in the run up to F8” to make the changes for developers “seem more natural.”
Facebook told NBC News that it was “completely reasonable” for someone on the communications team to discuss the best way to get the message out on changes to the platform.
User trust was crucial when Zuckerberg delivered his speech at the event on April 30, 2014.
“Over the years, one of the things we’ve heard over and over again is that people want more control over how they share their information, especially with apps, and they want more say and control over how apps use their data,” he told the audience of journalists and developers. “And we take this really seriously because if people don’t have the tools they need to feel comfortable using your apps, that’s bad for them and that’s bad for you.”
But despite Facebook’s public focus on privacy, staff member emails described confusion over the way third-party apps could override users’ privacy settings.
Even if users locked down their account so that their photos and other data were visible to “only me,” those photos could still be transferred to third parties, according to the documents.
In April 2015, Connie Yang, a product designer, told her colleagues that she’d discovered apps collecting profile data she had marked as “only me” and displaying it to “both you and *other people* using that app.”
“While ‘whoa how did you start working at Casterly Rock’ is a fun opener,” she wrote, referring to the ancestral stronghold of the most fearsome family in “Game of Thrones,” “isn’t this directly violating what we tell users is ‘only me’?”
Yang did not respond to requests for comment.
Facebook said this was another example of cherry-picked emails.
THE DOCUMENTS’ LEGACY
Even though Facebook eventually decided not to charge developers directly for access to user data, the extensive discussions around its monetary value, shown in the leaked documents, could create lasting problems for the company, privacy and policy experts say.
The biggest threat Facebook faces now is not competition but antitrust regulation, which is designed to promote fair competition among companies for the benefit of consumers, using fines or restrictions on mergers and acquisitions.
Regulators have typically struggled to build robust antitrust cases against technology companies that offer services to users for free. If the product is free, then it’s harder to argue that the consumer is being harmed by a monopoly.
But if regulators can show that users were paying for access to Facebook with their personal data, and that Facebook valued that data as leverage against competitors, that could expose Facebook to an antitrust complaint, said Jason Kint, CEO of Digital Content Next, a trade association representing digital publishers.
“These emails clearly establish the value of consumer data to Facebook,” Kint said. “It shows that it is not free.”
Facebook said that the service has always been free for users and developers.
In February, the Federal Trade Commission announced a task force to monitor anti-competitive behavior in the tech industry to, in the words of FTC chair Joseph Simons, “ensure consumers benefit from free and fair competition.”
Policymakers have called for the FTC to investigate Facebook specifically for violating antitrust laws.
The company “appears to have used its dominance to cripple other competitive threats by cutting them off from its massive network,” Rep. David Cicilline, D-R.I., chairman of the House Judiciary antitrust subcommittee, wrote in a New York Times op-ed last month.
Facebook appears to be preparing for the inevitable, with Zuckerberg writing his own op-ed in The Washington Post in March calling for regulation in areas including harmful content and election integrity, but not antitrust. Facebook watchers saw this show of willingness as an attempt by Zuckerberg to curry favor with policymakers at a time when many are baying for the company’s blood.
Ashkan Soltani, a privacy expert and former FTC chief technologist, said that Zuckerberg is approaching the looming threat of regulation with “bravado” and trying to “leverage things for his benefit.”
Meanwhile, David Carroll, a professor at the New School, who pursued legal claims in the U.K. in the wake of the Cambridge Analytica data scandal, says Zuckerberg is “bracing for impact.”
“When the penalty hits they can be like, ‘Yeah, we agree, we deserve this fine.’ It positions them to be conciliatory,” Carroll said.
Reaction Engines says it successfully tested an integral component of its Synergetic Air-Breathing Rocket Engine (SABRE) that could clear the path for commercial hypersonic flight in the next decade, read the press release.
SABRE’s pre-cooler heat exchanger met all objectives in the first phase of high-temperature testing designed to replicate hypersonic flight. At very high speeds, Mach 5 or greater, hypersonic vehicles transition into dense atmospheric layers which causes a significant temperature increase. The biggest dilemma for any aerospace company testing hypersonic engines has been how to reduce heat above Mach 5.
The release said additional tests would be planned throughout 2019, will test the heat exchanger with even hotter temperatures replicating Mach 5 or higher. The pre-cooler is an essential part of the engine and has the potential for reducing heat at high speeds.
In the latest tests, the pre-cooler performed exceptionally well, achieved a 1.5 MW of heat transfer, the equivalent to the energy demand of 1,000 American homes; successfully cooling incoming air that was in excess of the 1,000°C (~1800°F).
To replicate intense heat, engineers used a General Electric J79 turbojet engine to provide high-temperature airflow.
The test was completed at Test Facility 2 located at the Colorado Air and Space Port. Reaction Engines constructed a facility that has conducted ground-based ‘hot’ testing of its pre-cooler technology. The release said the engine component has already passed a series of tests in the U.K.
Commenting on the success, Mark Thomas, Chief Executive, Reaction Engines, said:
“This is a hugely significant milestone which has seen Reaction Engines’ proprietary precooler technology achieve unparalleled heat transfer performance. The HTX test article met all test objectives and the successful initial tests highlight how our precooler delivers world-leading heat transfer capabilities at low weight and compact size. This provides an important validation of our heat exchanger and thermal management technology portfolio which has application across emerging areas such as very high-speed flight, hybrid electric aviation and integrated vehicle thermal management.”
The release ends by saying additional testing of the SABRE engine core will be conducted this year. The company has received over $131 million in public financing from BAE Systems, Rolls-Royce and Boeing HorizonX. If all goes well, the SABRE could be the next hypersonic engine that powers commercial flights in the next decade.
Video: Reaction Engines explains the ‘breakthrough’ technology
New research shows that Facebook’s ad-distribution software is disturbingly biased
Business and finance
Apr 4th 2019
ON MARCH 28th the American government sued Facebook for allowing advertisers to exclude whole categories of people from seeing ads for housing—couples with children, non-Americans, non-Christians, disabled people, Hispanics, and so on. The Department of Housing and Urban Development (HUD) said this violated the Fair Housing Act, which bans discrimination against certain “protected” groups.Get our daily newsletter
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Facebook has tried to clean up its act, shutting down tools which allowed advertisers to aim at Facebook users based on age, gender, and zip code. HUD is seeking “appropriate relief” for Facebook’s past actions nonetheless. HUD’s lawsuit also accused Facebook itself of discrimination against minorities through the algorithms it uses to run its advertising business. These are the same ones that Facebook uses to maximise click-throughs and views, and therefore revenue.
A paper published on April 3rd by researchers from Northeastern University in Boston, the University of Southern California and Upturn, a Washington-based advocacy group, appears to add weight to HUD’s claim.The research team, which is led by two computer scientists, Muhammad Ali and Piotr Sapiezynski of Northeastern, concludes that Facebook’s own systems are influenced by the race and gender of its users when it presents them with ads. The research has not yet been through a peer-review process, but The Economist asked six experts in the field to comment on the paper’s results. All six said that it appeared sound.
Mssrs Sapiezynski and Ali tested Facebook’s systems by paying for advertisements and observing to whom they were delivered. They provided hundreds of pairs of ads, each of which was identical in all but one characteristic. They found that, for instance, an ad with the same image was delivered to fewer black people if it claimed to refer to a property for sale rather than one for rent.
They also show that the race of people depicted in images affected which groups were more likely to see the ads. An ad for cheap houses for sale, which depicted white families, was delivered to an audience that was 85% white. An identical ad that contained pictures of black families was served to an audience comprising around 73% white users. This suggests that fewer black people saw ads for cheap or affordable housing when those ads used pictures of white people.
The researchers also found a disparity based on gender: jobs for supermarket attendants and janitors tended to be delivered to women, whereas ads for lumberjacks were more likely to be delivered to men.
“Even a well-meaning advertiser might end up reaching a mostly white and/or mostly male audience,” said Mr Sapiezynski, summing up his research. “That’s because Facebook’s opaque algorithms, trained on historically biased data, predict that those people will be most interested.”
The research offers compelling evidence that Facebook is using “machine vision”, whereby powerful computers scan images and recognise what they depict. This is something that has long been assumed but never proven. The researchers established the use of machine vision by changing the transparency of the images they used in their ads, so that they were visible to machines but not to humans. Otherwise identical ads with different pictures of black and white families were still routed to different groups of people.
Advertising relies to a large extent on trying to reach particular groups of people. Sellers of luxury watches want to sell to rich people, for instance, who are more likely to be white than black. But the ability of algorithms to reach the intended audience by sifting vast amounts of personal data is causing growing dismay. This is especially true of Facebook because of its scale relative to traditional media. Moreover, its advertising systems are too complex to be understood at a glance. This makes it harder to draw a clear line between ads that are clearly discriminatory and those than are merely discomfiting.
Christian Sandvig, Director of the Centre for Ethics, Society and Computing at the University of Michigan, said the research showed that Facebook is making “drastic, important, and potentially illegal editorial decisions all the time by using algorithmic systems to identify audiences”. Mr Sandvig was not involved in the work.
Facebook appears to accept the findings. In a statement, Elisabeth Diana, a Facebook spokeswoman, said: “We stand against discrimination in any form. We’ve made important changes to our ad-targeting tools and know that this is only a first step. We’ve been looking at our ad-delivery system and have engaged industry leaders, academics, and civil-rights experts on this very topic—and we’re exploring more changes.”
The researchers take pains to point out that they are not making sweeping claims about Facebook’s entire ad-delivery system, given that they monitored its behaviour in only a few situations. There is no suggestion that Facebook designed its systems to discriminate intentionally. But its machine-learning software, in the process of training itself on the data of Facebook’s users in order to tailor ads to their interests, appears to have absorbed some of their prejudices.
The worry extends beyond Facebook to all systems that rely on machine learning, including the majority of digital-content providers. “This paper is telling us that if your parents never went to college, it is quite likely that an algorithm will look at your pattern of clicks and associations and conclude that you are not interested in college. If you’re black, it will decide that you are less interested in buying a house,” says Mr Sandvig.
Technology companies tend to claim that they are shielded from liability for these kinds of harmful effects. The Communications Decency Act states that digital platforms are not responsible for the unlawful behavior of their users. But the research appears to show that Facebook’s own systems are contributing to discrimination.
The results throw doubt on Facebook’s claims to be blind to race, says David Garcia, a researcher at the Complexity Science Hub in Vienna, Austria. “Perhaps there is no table in the Facebook databases called ‘race’, but these results suggest that some race-related discrimination in advertisement is taking place,” he says.
After two years of abysmal public relations, the research is another blow to Facebook. Last month Mark Zuckerberg, Facebook’s boss, tried to take back the initiative by calling for extensive regulation of digital-technology firms. He argued, for instance, that tech firms “shouldn’t make so many important decisions about speech on our own”. But he was noticeably quiet on the matter of Facebook’s advertising model. There, regulation may come sooner than he expects—and probably not in the form he is hoping for.
In July, the government concluded an agreement with three telecom operators to relax the strict radiation standards in Brussels. But according to the Region, it is now impossible to estimate the radiation from the antennas required for the service.
“I cannot welcome such technology if the radiation standards, which must protect the citizen, are not respected, 5G or not,” Environment minister Céline Fremault (CDH) told Bruzz. “The people of Brussels are not guinea pigs whose health I can sell at a profit. We cannot leave anything to doubt,” she added.
A pilot project is not feasible with the current radiation standards, and Fremault told Bruzz that she does not intend to make an exception. –Brussels Times
Belgian officials found themselves at an impasse last week over an agreement on the auctioning of 5G licenses.
5G cell towers are more dangerous than other cell towers for two main reasons. First, compared to earlier versions, 5G is ultra high frequency and ultra high intensity. 1G, 2G, 3G and 4G use between 1 to 5 gigahertz frequency. 5G uses between 24 to 90 gigahertz frequency. Within the RF Radiation portion of the electromagnetic spectrum, the higher the frequency the more dangerous it is to living organisms.
“So basically the radiation that we will constantly be absorbing will be much, much, much more powerful than before, and the sources emitting the radiation will be much closer to us,” writes Snyder.
And as Mac Slavo of SHTFplan.com notes, author and activist Arthur Robert Firstenberg recently launched an online petition calling for various world organizations, such as the such as the United Nations, World Health Organisation (WHO), and European Union to “urgently halt the development of 5G,” as they are “harmful for humans.”
“There is about to be as many as 20,000 satellites in the atmosphere. The FCC approved Elon Musk’s project for 12,000 satellites on November 15th and he’s going to launch his in mid-2019. I’m getting reports from various parts of the world that 5G antennas are being erected all over and people are already getting sick from what’s there now and the insect population is getting affected,” Firstenberg stated.
Meanwhile, as Brussels pulls back on 5G technology, Verizon on Wednesday announced that it has turned on its 5G wireless network in two markets; Chicago and Minneapolis – which will be compatible with the next generation of 5G-capable devices, according to CNBC.
Verizon said the wireless network will give customers access to peak speeds up to 1Gbps. That’s about 10 times faster than you might traditionally find on the LTE connection you have now. Put plainly: You’ll be able to download movies in seconds instead of minutes.
Only a select number of phones will support the network at first. Samsung will launch a Galaxy S10 5G model later this quarter that will be exclusive to Verizon to start. AT&T, T-Mobile and Sprint begin to sell it during the end of the second half of the year. That leaves the Motorola Z3 as the only phone that supports Verizon’s new 5G network right now, and it requires a separate accessory to work on it.
The Motorola Z3 costs $240 and requires a $200 “moto mod” to work on the network. –CNBC
Sprint and T-Mobile are planning 5G rollouts later this year, however neither company has activated networks yet. AT&T, meanwhile, is providing their “5G+” network in 12 markets – and has been marketing its new network by switching on an indicator for capable phones which reads “5GE” despite the devices still operating at 4G speeds.
BRUSSELS/SAN FRANCISCO (Reuters) – Facebook Inc toughened its rules on political advertising in Europe on Friday under pressure from EU regulators to do more to guard against foreign meddling in the bloc’s upcoming legislative election. Chastened since Russia used the social media platform to influence polls that swept U.S. President Donald Trump to power, Facebook says it has ploughed resources and staff into safeguarding the ballot across 27 EU nations on May 26.FILE PHOTO: A 3D printed Facebook logo is placed on broken glass above a printed EU flag in this illustration taken January 28, 2019. REUTERS/Dado Ruvic/Illustration/File Photo
“I don’t want anyone to be in any doubt that this is a top priority for the company,” Richard Allan, Facebook’s vice president for global policy solutions, told reporters over a video-link to Brussels.
All such ads will be labeled as “paid for”, offering info on who bought it, for how much and how many people have seen it – broken down by age, location and gender.
Only advertisers located and authorized in a given country will be able to run political ads or issue ads there, mirroring policies elsewhere where the tools have been rolled out.
Ads will also be archived for seven years in a publicly searchable archive.
Facebook will block ads that fail to comply from mid-April.
Despite requests by the umbrella political groups that make up the European Parliament and by the EU executive to allow for one-stop-shop pan-European advertising, Facebook said the risks were too high and the timeline too short to do so.
“The convenience … we understand why they want that, but we could not find any way to carve that out without opening up opportunities nobody would want to see,” Allan said.
Doing so when polls in each of the 27 EU member states are governed by local election rules, he said, would allow little recourse for regulators in case of a breach of law.
The ad transparency rules – already in place in the United States, Britain, Brazil, India, Ukraine and Israel – will be rolled out globally by late June, the company said.
Issue categories differ by country. In Europe, they will be: political values, immigration, security and foreign policy, civil and social rights, environmental politics and the economy.
In the same update, Facebook said it was adding new features and information to its ad archive, the Ad Library, and expanding access to its database so researchers can conduct more in-depth analysis of the data.
Other efforts by the company to safeguard a ballot in which 350 million adults can vote include working with independent fact-checkers to combat disinformation and a cyber security team working to foil bad actors and fake accounts.
As the polls approach, EU heads of state again sounded the alarm at a summit last week, urging private operators such as online platforms and social networks to “ensure higher standards of responsibility and transparency.”
“Over the past year there has been huge progress in awareness of the problem,” said a senior diplomat from an EU member state in the former Soviet bloc, whose government was among those pushing Brussels to pay more attention to the threat. “Now it is becoming a central part of EU thinking … to address the fragilities that our democratic systems may have.”
NCSC report casts doubt over Chinese firm’s future involvement in telecoms
The government-led watchdog set up to vet Huawei products has given a damning report on the cyber security risks posed by the Chinese company’s involvement in the British telecommunications industry.
The annual report published by the Huawei oversight board, which is chaired by the head of GCHQ’s National Cyber Security Centre, said it has found further “significant technical issues in Huawei’s engineering processes leading to new risks in the UK telecommunications networks”.
The 46-page report did not call for a ban on Huawei’s equipment being used in the roll-out of next-generation 5G networks, which critics say could be exploited to allow Beijing to spy on communications in the UK. Huawei denies the accusations.
The watchdog said Huawei had made “no material progress” in addressing security flaws identified in last year’s report and raised serious doubts about the Chinese company’s ability to deliver a $2bn programme to address concerns previously raised by the UK watchdog.
“At present, the oversight board has not yet seen anything to give it confidence in Huawei’s capacity to successfully complete the elements of its transformation programme that it has proposed as a means of addressing these underlying defects,” the report said. “[Our] work has continued to identify concerning issues in Huawei’s approach to software development bringing significantly increased risk to UK operators.”
The report casts doubt on whether UK operators should be involved with Huawei over the future roll-out of telecommunications networks.
“It will be difficult to appropriately risk-manage future products in the context of UK deployments, until the underlying defects in Huawei’s software engineering and cyber security processes are remediated,” the report said.
The US has put increasing pressure on the UK and other countries to stop Huawei from being involved in the roll-out of future 5G networks. Countries including New Zealand and Australia have stopped Huawei from being involved, citing national security concerns.
The report said that last year “several hundred vulnerabilities and issues” were reported to UK operators to inform the risk management of their networks. The report said the National Cyber Security Centre does not believe the defects identified in Huawei equipment “are the result of Chinese state interference”.
An NCSC spokesman said: “Huawei’s presence in the UK is subject to detailed, formal oversight. This report illustrates above all the need for improved cyber security in the UK telecoms networks.”
The annual report does not suggest the UK networks are more vulnerable than in 2017.
“The report details some concerns about Huawei’s software engineering capabilities,” a spokesman for Huawei said. “We understand these concerns and take them very seriously. The issues identified in the report provide vital input for the ongoing transformation of our software engineering capabilities.”
A final decision on Huawei’s involvement in the roll-out of the UK’s 5G networks is likely to be part of a government review of the telecoms market and infrastructure, which is due to be published in coming weeks.
The warnings come amid growing pressure from the US, which has told its allies any collaboration with the Chinese tech firm could compromise intelligence sharing agreements.
The National Cyber Security Centre (NCSC), which is part of GCHQ, is currently preparing its annual report into the safety of Huawei equipment.
While the findings of the report are yet to be published, the NCSC has previously indicated it has not seen any evidence of spying by the Chinese firm.
One US official told the Financial Times a significant risk of 5G is that it is based on software, meaning the network can be altered even after the equipment has undergone testing.
“One analogy that we can often use is, one minute you’re holding a 5G coffee cup that is transmitting back telemetric data on what the temperature is what the actual liquid is inside. And then the next moment that object can turn into something radically different,” the source said.
“While a huge opportunity, it is also deeply concerning to us from the perspective of national security.”
The official cast doubts over the UK’s programme for testing Huawei equipment, which is carried out at a dedicated NCSC facility in Banbury known as ‘The Cell’.
“The mandate that the UK and their Huawei oversight centre has is a purely technical mandate about looking at a piece of equipment that is sitting in front of you,” the person said.
“Ours is a much broader question about how trust is changing in the way in which 5G networks will work in the future. Right now, back doors exist by definition, that’s how the manufacturer runs the network.”
The NCSC declined to comment on the report. Earlier this year the spy organisation’s boss, Ciaran Martin, said the UK has “arguably the toughest and most rigorous oversight regime in the world for Huawei”.
“Huawei’s presence is subject to detailed, formal oversight, led by the NCSC,” he said at a cyber security conference in Brussels.
“We also have strict controls for how Huawei is deployed. It is not in any sensitive networks – including those of the government.”
The Trump administration has launched a campaign urging its allies not to use the Chinese firm’s equipment. Secretary of State Mike Pompeo has previously warned that countries using Huawei technology in their 5G networks risk damaging their relationship with the US.
The Chinese firm has denied all allegations of spying and accused the US of operating a coordinated smear campaign. Earlier this month the company sued the US government, claiming a law limiting its US business was unconstitutional.
Official cites past security-related events as example
Auctioning of 5G licenses in Germany starts next week
Huawei Technologies Co. isn’t a trustworthy partner to build Germany’s fifth-generation mobile networks, a representative of the country’s BND intelligence service told a committee of lawmakers.
Past “security-relevant incidents” involving the company are part of the reason, the representative told the committee in Berlin on Wednesday. An official from the Foreign Ministry, speaking at the same meeting, said it would be hard to work with a company that cooperates with its national secret service. The parliamentary press service reported the comments in a statement but didn’t name the officials.
“It’s above all a matter of trustworthiness and of the impact on our relationship with our allies,” the Foreign Ministry official told the committee, adding that Germany is in contact with partner nations on the issue.
German intelligence officials have been pushing the government to stop Huawei from playing a part in the building of 5G infrastructure in the country, people familiar with the matter told Bloomberg News this month. The officials are concerned that Huawei could help China steal German corporate secrets, the people said.
Huawei has repeatedly denied wrongdoing and long maintained it doesn’t provide back doors for the Chinese government, pointing out that no one has provided evidence to support such concerns.
An outright ban on Huawei is seen as legally impossible, but German officials are looking at tools that would have the same effect. The U.S. has been pressuring its allies in Europe to ban Chinese equipment in the ultrafast networks being rolled out over spying concerns.
Germany’s Bundesnetzagentur regulator said last week that it wants to limit equipment supply to “trustworthy” vendors that comply with national safety regulations as well as secrecy and privacy rules. Germany plans to start an auction of 5G airwaves on March 19, though legal challenges to its design by multiple carriers risk delaying the process.
Several Pilots repeatedly warned federal authorities of safety concerns over the now-grounded Boeing 737 Max 8 for months leading up to the second deadly disaster involving the plane, according to an investigation by the Dallas Morning News. One captain even called the Max 8’s flight manual “inadequate and almost criminally insufficient,” according to the report.
“The fact that this airplane requires such jury-rigging to fly is a red flag. Now we know the systems employed are error-prone — even if the pilots aren’t sure what those systems are, what redundancies are in place and failure modes. I am left to wonder: what else don’t I know?” wrote the captain.
At least five complaints about the Boeing jet were found in a federal database which pilots routinely use to report aviation incidents without fear of repercussions.
The complaints are about the safety mechanism cited in preliminary reports for an October plane crash in Indonesia that killed 189.
The disclosures found by The News reference problems during flights of Boeing 737 Max 8s with an autopilot system during takeoff and nose-down situations while trying to gain altitude. While records show these flights occurred during October and November, information regarding which airlines the pilots were flying for at the time is redacted from the database. –Dallas Morning News
One captain who flies the Max 8 said in November that it was “unconscionable” that Boeing and federal authorities have allowed pilots to fly the plane without adequate training – including a failure to fully disclose how its systems were distinctly different from other planes.
An FAA spokesman said the reporting system is directly filed to NASA, which serves as an neutral third party in the reporting of grievances.
“The FAA analyzes these reports along with other safety data gathered through programs the FAA administers directly, including the Aviation Safety Action Program, which includes all of the major airlines including Southwest and American,” said FAA southwest regional spokesman Lynn Lunsford.
Meanwhile, despite several airlines and foreign countries grounding the Max 8, US regulators have so far declined to follow suit. They have, however, mandated that Boeing upgrade the plane’s software by April.
Sen. Ted Cruz (R-TX), who chairs a Senate subcommittee overseeing aviation, called for the grounding of the Max 8 in a Thursday statement.
“Further investigation may reveal that mechanical issues were not the cause, but until that time, our first priority must be the safety of the flying public,” said Cruz.
At least 18 carriers — including American Airlines and Southwest Airlines, the two largest U.S. carriers flying the 737 Max 8 — have also declined to ground planes, saying they are confident in the safety and “airworthiness” of their fleets. American and Southwest have 24 and 34 of the aircraft in their fleets, respectively. –Dallas Morning News
“The United States should be leading the world in aviation safety,” said Transport Workers Union president John Samuelsen. “And yet, because of the lust for profit in the American aviation, we’re still flying planes that dozens of other countries and airlines have now said need to grounded.”
Qilai Shen | Bloomberg | Getty ImagesRen Zhengfei, founder and chief executive officer of Huawei Technologies, left, speaks during an interview at the company’s headquarters in Shenzhen, China, in January.
Huawei would have no choice but to hand over network data to the Chinese government if Beijing asked for it, because of espionage and national security laws in the country, experts told CNBC.
Major governments including the United States, Japan and Australiahave blocked the Chinese telecommunications equipment maker from providing hardware for next-generation mobile networks known as 5G. The U.S. has said Huawei equipment could provide backdoors for the Chinese government into American networks — a claim the company has repeatedly denied.
Australia did not cite specific countries or companies, but last year it gave guidance to domestic carriers saying that “the involvement of vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorized access or interference.”
“There is no way Huawei can resist any order from the (People’s Republic of China) Government or the Chinese Communist Party to do its bidding in any context, commercial or otherwise.”-Jerome Cohen, NYU professor, adjunct senior fellow at Council on Foreign Relations
The Australian government is highlighting a concern on the top of minds of several governments — China’s wide-ranging internet laws, which require tech firms to help Beijing with vaguely-defined “intelligence work,” meaning companies could be forced to hand over network data whether they want to or not.
Two pieces of legislation are of particular concern to governments — the 2017 National Intelligence Law and the 2014 Counter-Espionage Law. Article 7 of the first law states that “any organization or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law,” adding that the the state “protects” any individual and organization that aids it.
And it appears that organizations and individuals don’t have a choice when it comes to helping the government. The 2014 Counter-Espionage law says that “when the state security organ investigates and understands the situation of espionage and collects relevant evidence, the relevant organizations and individuals shall provide it truthfully and may not refuse.”
Huawei: We ‘will not build backdoors’
The company strenuously contends that it will not hand over customer data, and Huawei told CNBC that it has never been asked to do so.
Huawei’s billionaire founder Ren Zhengfei and other senior executives “have stated unambiguously that Huawei will not build backdoors or hand over customer data. It doesn’t get much clearer than that,” a Huawei spokesperson said. “We have never been required to do so, they have stated. We are not going to speculate on future possible scenarios beyond repeating the reassurances of Huawei’s most senior management.”
In an interview last month with CBS News, Huawei’s Ren said the company would never help China spy on the United States — even if required by law.
“We never participate in espionage, and we do not allow any of our employees to do any act like that. And we absolutely never install backdoors. Even if we were required by Chinese law, we would firmly reject that,” Ren told the American television network.
Sources within China contacted by CNBC declined to comment. But experts from outside the country suggested it would be near-impossible for Huawei to reject a request for data from Beijing.
“There is no way Huawei can resist any order from the [People’s Republic of China] Government or the Chinese Communist Party to do its bidding in any context, commercial or otherwise. Huawei would have to turn over all requested data and perform whatever other surveillance activities are required,” Jerome Cohen, a New York University law professor and Council on Foreign Relations adjunct senior fellow, told CNBC by email.
“Not only is this mandated by existing legislation but, more important, also by political reality and the organizational structure and operation of the Party-State’s economy. The Party is embedded in Huawei and controls it,” said Cohen, who as a practicing attorney represented corporate clients in China and elsewhere in Asia.
The relationship between Huawei and the government has been questioned because of Ren’s past as a former soldier in the People’s Liberation Army and a current Communist Party member. In a question and answer session with international media in January, Ren said that his relationship with China’s ruling party would not stop him from refusing any request from them for user data.
“I don’t see close connection between my personal political belief and our business actions we are going to take as a business entity,” Ren said.
In the same session, Ren said that he “would rather shut Huawei down than do anything that would damage the interests of our customers in order to seek our own gains.”
“The idea of fighting a request of this nature in the courts is not realistic. In truth the law only confirms what has long been true — that one must submit to the Party if called upon.”-Martin Thorley, University of Nottingham
The problem for Huawei is that there does not appear to be legal recourse if Beijing comes knocking.
“The idea of fighting a request of this nature in the courts is not realistic. In truth the law only confirms what has long been true — that one must submit to the Party if called upon. Added to this, a company of Huawei’s size, working in what is considered a sensitive sector, simply cannot succeed in China without extensive links to the Party,” Martin Thorley, an expert on international engagement with China at U.K.-based University of Nottingham, told CNBC by email.
“For anyone at Huawei to oppose a serious request from the Party would require bravery bordering on recklessness — what do you do when your adversary is the police, the media, the judiciary and the government?” he added.
China: Don’t ‘take anything out of context’
China’s government addressed the National Intelligence Law during a press conference on Monday.
“According to China’s National Intelligence Law, organizations and citizens have the obligation to support, assist and cooperate with national intelligence work. At the same time it also explicitly stipulates that intelligence work should be conducted according to law and in a way that respects and protects human rights and the lawful rights of individuals and organizations,” government spokesperson Zhang Yesui said, urging people to “not take anything out of context.”
“Some U.S. government officials have been playing up the so-called security risk associated with products of certain Chinese companies and linking it with Chinese national intelligence law. This kind of behavior is interference into economic activities by political means and it is against WTO rules.”-Zhang Yesui, China government spokesperson
Zhang was responding to reporters’ questions ahead of China’s National People’s Congress, a big annual event where Beijing formally announces major policy elements such as economic growth targets. The comments were made in Mandarin and translated into English by an official translator.
“Some U.S. government officials have been playing up the so-called security risk associated with products of certain Chinese companies and linking it with Chinese national intelligence law,” Zhang said. “This kind of behavior is interference into economic activities by political means and it is against WTO (World Trade Organization) rules. And it disrupts international market order that is built on fair competition. This is a typical double standards (sic). It is neither fair nor ethical.”
Many of China’s largest tech companies have flourished over the last decade within the country in the absence of foreign competition. China has for years blocked some of America’s largest internet giants — on claims that those U.S. companies pose national security risks.
China 5G dominance
The battle between the U.S. and Huawei is bigger than worries over national security risks, according to geopolitical analysts. It’s about who has control of the critical infrastructure that runs 5G. The new network will not only support super-fast mobile internet but it will be the backbone behind other technology like driverless cars.
“Huawei has indeed said that it would refuse any Chinese government request to facilitate espionage. But such a statement simply cannot be taken at face value.”-Nigel Inkster, senior adviser, International Institute for Strategic Studies
“Huawei involvement in the core backbone 5G infrastructure of developed western liberal democracies is a strategic game-changer because 5G is a game-changer,” Nigel Inkster, a senior adviser to the International Institute for Strategic Studies, told CNBC by email.
Inkster, a former senior British intelligence official, explained that China has “embarked on an ambitious strategy to reshape the planet in line with its interests” through its massive Belt and Road Initiative. Its “national telecoms champions” are a big part of that.
Because of that drive from China, Inkster said that Huawei is part of this “all-of-nation project.”
“Huawei has indeed said that it would refuse any Chinese government request to facilitate espionage. But such a statement simply cannot be taken at face value,” Inkster told CNBC.
“Huawei is a product and instrument of the Chinese state and has been co-opted to achievement of the state’s strategic objectives,” he said. “The proposition that it is just a telecommunications company has worn beyond thin.”
The Golden State thinks tech companies should share the wealth.
It isn’t a secret that tech companies collect your personal data and use it to make a buck. If you don’t like it, stop using Facebook and Google. And the rest of the internet.
California Gov. Gavin Newsom thinks there might be a better relationship: Charge companies to use your information and give some of the benefit back to you. He calls it a “data dividend.”
“We recognize that your data has value,” Newsom said during his State of the State speech on Feb. 12. “And it belongs to you.”
The idea of paying consumers for their data — either by letting them sell it or by taxing companies for the money made using personal data — isn’t entirely new. Academics have kicked the idea around for decades, and Washington State tried to pass a similar plan in 2017.
Newsom’s suggestion, however, is eye-catching because it coincides with privacybecoming a front-and-center issue for many internet users. Calls for tech companies to get our consent to use our data have taken an increasingly urgent tone, putting those companies into damage control mode. Paying users for their data, as Newsom is suggesting, usually isn’t on the table. His talk of a data dividend might change the conversation.
Now playing: Stronger data privacy laws may be coming to the US 1:41
Another reason to pay attention to Newsom’s dividend talk: California, the home of Silicon Valley, has some of country’s most advanced data privacy laws. That includes the state’s recently passed data privacy protection law, which aims to give users much broader control over their data, as well as more specific laws that protect schoolchildren’s privacy and prevent employers from requiring workers to hand over passwords to their personal accounts.
CNET reached out to several major Silicon Valley companies for comment on Newsom’s remarks. The companies either declined to comment or didn’t respond.
Here comes legislation
While Newsom’s suggestion was open-ended, a bill is very near completion. Common Sense Media, the same organization that spearheaded California’s Student Online Personal Information Protection Act in 2014, has come up with a bill it plans to submit soon.
“While platforms are fast and loose with consumer data, they are not so willing to share what they are doing with the data or how much they are profiting,” said Jim Steyer, CEO of Common Sense Media, in a statement. “We fully support the Governor’s data dividend proposal and expect to introduce legislation that reflects that in the coming weeks.”
The details of the bill, drafted by Princeton economist Glen Weyl, aren’t public yet. Weyl said in an interview that the bill is unlikely to push for a straight tax on tech companies for using consumer data, nor will it try to create a specific wage companies must pay consumers directly. Instead, he hopes the bill will help groups of people bargain for a good return on the data they’re generating for tech companies.
That’s because data isn’t just helping companies sell ads. It’s helping them build the tool of the future: artificial intelligence. And once AI starts really taking off, it will earn tech companies a lot of money while putting some people out of a job, Weyl said.
“This is more of a big-picture answer to the questions about AI,” Weyl said, “rather than a huge check in the near future.”
Paying the price
The idea of paying consumers for their data first surfaced in the 1990s, when Kenneth Laudon, an economist at New York University, argued that access to consumer data was artificially cheap. Companies sent out junk mail, and consumers and the government paid with time wasted on unwanted letters and subsidized postal rates. Invasion of privacy also prompted feelings of helplessness and lost trust in companies.
“The cost of invading privacy is far lower than the true social cost,” Laudon wrote. And that was in 1993.
To fix that, he suggested consumers should be allowed sell their data.
More recently, virtual reality pioneer Jaron Lanier wrote a book called Who Owns the Future? that focuses on the idea of paying users for internet content. Since then, Facebook co-founder Chris Hughes as well as academics like Weyl have argued that companies such as Facebook and Google should pay users for time spent searching, clicking and liking, either with a tax or in wages. Finance expert Saadia Madsbjerg of the Rockefeller Foundation said the data brokers who buy and sell information about your internet usage from ISPs and other sources should be taxed for selling consumer data.This is more of a big-picture answer to the questions about AI, rather than a huge check in the near future.Economist Glen Weyl
California might be a powerful place to try the concept IRL. Laws passed in the Golden State tend to set things in motion nationally, like when the state legislators passed the strictest data privacy law in the country in June. That matters throughout the country.
In his book Click Here to Kill Everybody, cybersecurity expert Bruce Schneier points out that the toughest state law in the country becomes the de facto federal law for the tech industry, because every tech company has customers in all 50 states.
The only thing that can stop a law like California’s is a federal law that supersedes it. After California’s data privacy law passed, major tech companies including Facebook and Google asked federal lawmakers to pass a privacy law to create a national standard. Several bills have been introduced, but none has passed yet.
Some privacy advocates don’t love the idea of a data dividend. They say public policy shouldn’t create incentives for consumers to share data. Rather, it should help them keep their information private.
Marc Rotenberg, president and executive director of the Electronic Privacy Information Center, said a data dividend is more akin to a copyright law than a privacy law. Copyright law encourages people to publish their work.
“That’s not how we understand privacy.” Rotenberg said. “Typically, we want to restrict data or make available the least amount of data possible.”
Balancing a payday with privacy restrictions
Alessandro Acquisti, a professor of information technology and public policy at Carnegie Mellon University, said concerns a data dividend will simply encourage people to share their information are valid, up to a point.
A data dividend should be balanced with regulations that protect privacy, he said. Otherwise, a data dividend “may create perverse incentives without ultimately addressing consumers’ privacy concerns.”
Acquisti said there’s no reason Newsom’s soon-to-be-unveiled bill can’t strike that balance. What’s more, a law may be the only way to return the value of data back to internet users.
“I do not believe that such a significant change in the policy of consumer data will be implemented by the tech industry,” Acquisti said, “in absence of regulatory intervention.”
Australia, New Zealand, and the US have already banned Huawei from supplying equipment for their future fifth generation mobile broadband networks, while Canada is reviewing whether the company’s products present a serious security threat.
Most of the UK’s mobile companies – Vodafone, EE and Three – have been working with Huawei on developing their 5G networks.
They are awaiting on a government review, due in March or April, that will decide whether they can use Huawei technology.
As first reported by the Financial Times, the conclusion by the National Cyber Security Centre – part of the intelligence agency GCHQ – will feed into the review.
The decision has not yet been made public, but the security agency said in a statement it had “a unique oversight and understanding of Huawei engineering and cyber security”.
BBC business correspondent Rob Young said the National Cyber Security Centre’s conclusion “will carry weight”, but said the review could still rule against Huawei.
In an interview, Huawei’s cyber security chief John Suffolk told the BBC: “We are probably the most open and transparent organisation in the world. We are probably the most poked and prodded organisation too.”
The former UK chief information officer added: “We don’t say ‘believe us’ we say ‘come and check for yourself’, come and do your own testing and come and do your own verification.
“The more people looking, the more people touching, they can provide their own assurance without listening to what Huawei has to say.”
Rory Cellan-Jones, technology correspondent
If anybody knows just how Huawei works and the threat it might pose to the UK’s security, it is the National Cyber Security Centre.
This arm of GCHQ has been in charge of an annual examination of the Chinese telecoms giant’s equipment, and expressed concerns in its most recent report – not about secret backdoors, but sloppy cyber-security practices.
The NCSC has also been giving advice to UK mobile operators as they order the equipment for the rollout of their 5G networks later this year.
They feel they have been given the same cautious nod the agency appears to have given the government’s Supply Chain Review: keep Huawei out of the core of your 5G networks, but you are OK to use its equipment at phone masts as part of the mix of suppliers.
Australia and New Zealand have taken a very different view by taking a far harder line against Huawei.
That isn’t because they know something about the Chinese firm which the NCSC has missed.
Their decisions were probably based on an assessment of the political as well as security risk of ignoring the urging from the US to shut Huawei out.
And whatever the NCSC’s advice, similar factors will determine the UK government’s final decision.
A spokesperson for the Department of Culture, Media and Sport, which is leading the review into the future of the telecoms industry, said its analysis was “ongoing”.
“No decisions have been taken and any suggestion to the contrary is inaccurate,” they said in a statement.
Asked whether the findings changed her country’s stance towards Huawei, the prime minister of New Zealand – which is a member of the Five Eyes intelligence sharing network that includes the UK – said her government would conduct its own assessment.
Jacinda Ardern told reporters: “It is fair to say Five Eyes, of course, share information, but we make our own independent decisions.”
Last year, BT confirmed that it was removing Huawei’s equipment from the EE core network that it owns.
The network provides a communication system being developed for the UK’s emergency services.
The White House wants to highlight its commitment to telecom security ahead of a key wireless industry conference.
President Donald Trump is expected to sign an executive order, banning Chinese telecom equipment from U.S. wireless networks before a major industry conference at the end of February, three sources told POLITICO.
The administration plans to release the directive, part of its broader effort to protect the U.S. from cyber threats, before MWC Barcelona, formerly known as Mobile World Congress, which takes place Feb. 25 to Feb. 28.
The current plan is for Trump to sign the long-delayed executive order next week, according to a source close to the administration, who requested anonymity to candidly discuss internal deliberations.
“There’s a big push to get it out before MWC,” said an industry source familiar with the matter, who also requested anonymity to speak candidly.
By preempting MWC, the world’s largest conference for the wireless industry, the White House hopes to send a signal that future contracts for cutting-edge technology must prioritize cybersecurity. That could further roil the Trump administration’s already tense relationship with Beijing, especially if the U.S. push erodes Chinese firms’ significant European market share.
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The Chinese telecom giants Huawei and ZTE have been in the Trump administration’s crosshairs as part of a broader focus on Chinese national security threats that has paralleled the ongoing trade war. Trump officials have repeatedly slammed Beijing for its theft of intellectual property and its more traditional cyber espionage.
In December, the Justice Department indicted two Chinese operatives for a decadelong campaign of digital intrusions into U.S. businesses and government agencies. And in January, DOJ unsealed a suite of charges against Huawei and its chief financial officer, who faces extradition to the U.S. for violating sanctions on Iran.
Many countries are eager to deploy next-generation 5G wireless networks to power the rapidly proliferating internet of things, and Chinese firms such as Huawei and ZTE are aggressively pushing to build these networks — at a lower cost than virtually all of their competitors.
With these 5G build outs looming, senior officials want “to move the needle” with their security messaging, said the source close to the administration.
“Contracts are going out now,” this person told POLITICO. “Extra stigma could change the situation out in the countries on this major decision.”
“We’re going to be asking people to do things, but the U.S. legal and regulatory environment hasn’t really closed the circle yet on this issue,” said Paul Triolo, who leads the consulting firm the Eurasia Group’s global technology practice. “So there’s a lot of pressure now to get this EO out there.”
The White House declined to comment for this story, but National Security Council spokesman Garrett Marquis said the U.S. was “working across government and with our allies and like-minded partners to mitigate risk in the deployment of 5G and other communications infrastructure.”
MWC is expected to feature several telecom security meetings, and a second industry source said the U.S. is sending an interagency delegation of at least 20 officials and staffers. Attendees will include FCC Chairman Ajit Pai; Rob Strayer, the State Department’s top cyber official; Strayer’s boss Manisha Singh, the acting undersecretary of state for economic growth, energy and the environment; and Brian Bulatao, Trump’s nominee to be under secretary of state for management.
Trump’s telecom directive, which will invoke the International Emergency Economic Powers Act, has been finished for months. As POLITICO first reportedlast August, it was originally paired with a second order formalizing an interagency team that reviews foreign entities’ telecom investment requests. At the time, sources said that Trump would also sign a memorandum explaining how agencies should implement both directives. It is unclear if that will still happen.
Concerns about foreign firms helping U.S. adversaries infiltrate sensitive computer systems, whether wittingly or unwittingly, have gained prominence in recent years. After alleged Russian government hackers interfered in the 2016 election, officials increased their scrutiny of the Russian cybersecurity firm Kaspersky Lab, and DHS eventually banned its antivirus products from government systems.
DHS has recently taken a lead role in helping to protect the sprawling and often opaque global web of manufacturers and resellers — also known as the “supply chain” — that delivers equipment and software to the U.S. The department created a task force that will, among other things, develop criteria for security assessments, assemble an approved-manufacturers list and advise companies about supply chain threats.
In addition, the latest defense policy bill bans agencies from buying and using Huawei and ZTE equipment.
Meanwhile, State Department officials are warning their foreign counterparts about 5G security as often as possible.
“We’re raising it at the highest diplomatic levels,” Rob Strayer of the State Department said Wednesday during an event at the Center for Strategic and International Studies. “We’re making sure that the most senior policymakers in governments are aware of the momentousness of this decision and what is at stake in the decision they’re about to make.”
But the U.S. still hasn’t developed an alternative, Huawei-free vision for the massive, complicated and high-stakes global 5G buildout.
Trump administration officials are still “trying to understand the full range of options,” John Costello, director of strategy, policy and plans at the Cybersecurity and Infrastructure Security Agency, said at the CSIS event.
The message to Europe about 5G, according to the second industry source, has been, “Go slow. There’s no need to rush into this. We need to figure out how to do this now.”
Right now, the source said, U.S. telecom companies have “no clear guidance on how to proceed” with a 5G buildout that excludes Huawei, which controls 28 percent of the global telecom equipment market.
If Trump signs the telecom directive before MWC, the U.S. will be able to attend the conference armed with fresh evidence of its commitment to the issue.
The administration’s desire to make a strong impression at MWC is so great that, at one point, Secretary of State Mike Pompeo planned to attend the event, according to the second industry source. This person said that former House Speaker Newt Gingrich, one of Trump’s closest outside advisers, “called Pompeo and said, ‘What the hell are we doing on 5G?’” (Gingrich did not respond to a request for comment, and the State Department declined to discuss its delegation.)
“The geopolitics of 5G have come home to roost,” said Triolo, “and Barcelona is now the epicenter of the whole thing.”
At the end of 2017, China banned virtually all materials for recycling. Before that, it took about 60 per cent of the plastic waste exported by G7 countries. That dropped to less than ten per cent in 2018. As the FT’s Leslie Hook explains, finding new ways to deal with recyclables has suddenly becomean enormous challenge.
Since ancient Rome animal poisons have been used to heal rather than harm the human body. Scorpion venom can be used to help detect and cure diseases, but milking scorpions by hand is a time-consuming and dangerous process. Now scientists in Morocco are using robots to harvest the venom, which, at $8,000 per gram, is probably the most expensive liquid in the world.