A view of the entrance of the Provisional Detention Centre Pinheiros in Sao Paulo where Facebook executive Diego Dzodan was detained. (Paulo Whitaker/Reuters)
A senior executive of Facebook was released from detention in Brazil on Wednesday even as authorities moved ahead with an investigation over access to a popular messaging service.
Diego Dzodan was taken into custody Tuesday in São Paulo after the Facebook subsidiary WhatsApp told Brazilian authorities that it was unable to intercept instant messages in connection with a drug-trafficking probe. Dzodan, Facebook’s vice president for Latin America, was detained on an order from a Brazilian judge, said WhatsApp spokesman Matt Steinfeld.
But a higher court ruled that Dzodan could be freed while the legal process against Facebook continues.
Steinfeld said the company’s platform is not built for wiretaps. WhatsApp, which operates as a separate entity and is based in California, does not have an office in Brazil or store messages on its servers. It encrypts them when they are in transit between users.
“WhatsApp cannot provide information we do not have,” he said.
Facebook said in a statement that it is “disappointed with the extreme and disproportionate measure of having a Facebook executive escorted to a police station in connection with a case involving WhatsApp, which operates separately from Facebook.”
— Dom Phillips
In the most recent fiscal year, 5.05 percent of small-business-eligible federal contract work went to companies owned by women.
That is a small percentage, but it is the first time the government has met the 5 percent target set for it by Congress more than two decades ago. The U.S. Small Business Administration announced the news at a Wednesday news conference headlined by White House aide Valerie Jarrett.
“This has been long-fought and took a lot of effort to put together,” said John Shoraka, the SBA’s associate administrator for government contracting and business development.
The agency’s efforts to steer more contract money toward businesses owned by women were stepped up in 2011 with a program allowing government contract officers to set aside contracts specifically for female-owned small businesses. An amendment in the 2013 National Defense Authorization Act removed caps on contract funds going to such small businesses, effectively expanding what counts as a small contractor. And more changes are coming: A regulation taking effect Thursday will expand the number of industries in which these contract set-asides are allowed.
The federal government also narrowly surpassed the small-business contracting goal set by the SBA for at least 23 percent of contracts eligible for small businesses (as well as large businesses) to go to small businesses.
— Aaron Gregg
● Verizon Communications and Hearst have created a joint venture to develop programming for millennials who watch video on their mobile devices. Verizon Hearst Media Partners will begin this spring with two channels — RatedRed.com, which will offer lifestyle content for young people who live in the “heartland,” and Seriously.TV, a comedic news network, the companies said in a statement. Financial terms weren’t disclosed. The channels will be distributed on Verizon’s mobile video service, go90, and on other platforms, the statement said.
● Toyota is adding 331,000 cars worldwide to an existing recall of passenger air bags made by Japanese supplier Takata. The expanded recall includes the 2008 Corolla and Corolla Matrix sedans, and the 2008-2010 Lexus SC430 convertible. Almost 200,000 of the cars are in the United States. The air bags can inflate with too much force and hurl shrapnel toward those riding in the vehicles. Ten deaths have been blamed on the problem.
● Teen apparel retailer American Eagle Outfitters reported a 3.2 percent rise in quarterly sales, largely helped by demand for its Aerie brand in the holiday shopping season. American Eagle’s results, which follow rival Abercrombie & Fitch’s rise in same-store sales, indicate that retailers of teen apparel may be winning back young shoppers who were flocking to fast-fashion companies such as H&M. American Eagle’s net income rose to $81.7 million, or 42 cents per share, in the quarter. Net revenue rose to $1.11 billion.
● The economy was expanding in most of the country in January and February, helped by gains in consumer spending and home sales. But also rising were head winds from falling oil prices and a strong dollar, the Federal Reserve said Wednesday. The Fed’s latest survey of business conditions in its 12 regions, known as the “beige book,” found moderate gains in most regions. Two areas — New York and Kansas City — described activity as flat. The survey found that while consumer inflation was holding steady, wage growth varied from flat to strong. Manufacturing was feeling the effects of the stronger dollar, which hurts U.S. exports, and weakening global activity in key U.S. markets such as Europe and China.
— From news services
● 8:30 a.m.: Labor Department releases weekly jobless claims.
● 8:30 a.m.: Labor Department releases fourth-quarter productivity data.
● 10 a.m.: Freddie Mac releases weekly mortgage rates.
● ● 10 a.m.: Commerce Department releases factory orders for January.
● ● 10 a.m.: Institute for Supply Management releases its service-sector index for February.
— From news services