Apple’s decision had wide-ranging consequences within Facebook, stoking chaos as employees were unable to access basic internal apps used for transportation and lunch menus. The company was not able to test versions of new apps that haven’t been released broadly to the public yet. It even crippled employee communications, affecting the internal versions of its Facebook, Workplace and Messenger apps, as Business Insider reported.
“Apple does have leverage over Facebook, and they’re using it,” said Matt Stoller, a fellow at the Open Markets Institute think tank.
With one fell swoop, Apple was able to cripple Facebook's ability to conduct business as usual -- throwing into stark relief just how slow U.S. regulators' attempts to rein in Facebook have been. Many privacy advocates worry the Federal Trade Commission is ill-equipped to draw blood from Facebook, even as it considers slapping the social network with a record-breaking fine relating to the Cambridge Analytica scandal.
But relying on one tech titan to take on another may not be the best solution, either. Apple — wrestling with digital security flaws of its own — is an inadequate privacy cop, advocates warn.
“Apple here is becoming the de facto FTC in the absence of what’s supposed to be America’s privacy regulator speaking out or acting,” said Jeffrey Chester, the executive director of the Center for Digital Democracy.
Advocates say the incident underscores the need for a tough federal privacy law, as well as stronger FTC enforcement of consumer privacy protections. “What Apple did today is significant, but it’s a tiny drop in the digital bucket,” Chester said.
Apple, of course, has no influence over the wider landscape of technology platforms -- like say, Google's Android operating system. “Apple's move is like you’re hiring a security guard who only protects you when you go into the bedroom, and the rest of the house is vulnerable to burglars,” Chester said.
What's more, Apple is positioning itself as a tough enforcer of privacy rules at an especially awkward time. New York state is launching a probe into its response to a report of a security bug in its FaceTime video-chat system. The glitch allowed callers to eavesdrop on people before they picked up a call, and the company had to disable a Group FaceTime feature.
All this is contributing to pressure on lawmakers to act on privacy, especially after the Cambridge Analytica scandal, in which a political research firm tied to the Trump campaign obtained Facebook users' data without their consent. As my colleagues Hamza Shaban and Tony Romm reported, Facebook’s latest research project has revived criticism in Congress of the social network.
“This is yet another astonishing example of Facebook’s complete disregard for data privacy and eagerness to engage in anti-competitive behavior,” Sen. Richard Blumenthal (D-Conn.) said in a statement. Sen. Mark R. Warner (D-Va.) sent a letter to Facebook yesterday, inquiring how transparent Facebook was with consumers about the scope of the data it was sucking up through the research project.
As lawmakers in Congress mull their next move, Apple has been trying to establish itself as the industry leader on privacy. Apple chief executive Tim Cook rebuked the “data industrial complex” and sweeping collection practices of competitors such as Facebook and Google in a speech earlier this year.
Apple spokesman Tom Neumayr told me in a statement that Facebook made “a clear breach of their agreement with Apple,” and the company revoked Facebook’s certificates “to protect our users and their data.” Apple had previously banned a similar Facebook app, called Onavo Protect, from the App Store.
It might not stop at Facebook: Neumayr said Apple would remove any developer that broke its rules for the program that allows companies to swiftly disseminate apps in their organizations. TechCrunch reported yesterday that Google was also using the program to push a similar data collection app to consumers. Google said yesterday it would remove the app, after it was contacted by TechCrunch. Neumayr did not immediately answer when I asked him whether Apple would also shut off Google’s certificate.
Some on Twitter suggested that Apple should flex its muscles even more in the name of privacy enforcement.
Though Apple has come out as a sharp critic of its industry peers, the Cupertino giant’s remains deeply intertwined with the other technology companies. Its App Store is the primary way companies like Facebook and Googles ship their apps to iPhones and other Apple devices.
Nilay Patel, editor in chief of the Verge, noted it would be masochistic for Apple to go beyond the ban and remove Facebook’s apps from the main App Store because they make up so much of the time people spend on Apple’s devices:
Apple’s aggressive display is a reminder of just how much power the hardware giant has amassed as the gatekeeper of many of the world’s most popular devices, from the iPhone to the iPad.
As Cheddar’s Alex Heath wrote:
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— Twitter lit up with reaction to a report by TechCrunch revealing that Facebook paid users ages 13 to 35 to install a “Facebook Research” app collecting extensive data about users' phone and Web activity.
From Sen. Edward J. Markey (D-Mass.):
From Bloomberg News's Sarah Frier:
From Wired's Issie Lapowsky:
BITS: Facebook posted a record profit of $6.9 billion for the fourth quarter, marking a 61 percent increase from a year earlier even as negative headlines about the social titan piled up. “Facebook’s worst year ever was its best year ever when it came to its business,” wrote the New York Times’s Mike Isaac. Facebook's revenue reached $16.9 billion in the fourth quarter, increasing 30 percent compared to a year earlier. “One of the biggest questions people have about Facebook is whether we can make the massive investments we’re making to monitor and protect the platform while we keep growing our business,” Sheryl Sandberg, the company’s chief operating officer, told the Times. “This quarter shows we can do both.”
The number of daily active users of the social network reached 1.52 billion, rising 9 percent from a year earlier, Facebook said. “Notably, the number of new users increased in every geography; in previous quarters, growth stagnated in the United States and in Europe,” Isaac reported. “In total, Facebook said, 2.7 billion people now use its core social network and its other apps.”
NIBBLES: U.S. authorities charged Apple hardware engineer Jizhong Chen with stealing secrets about the company's autonomous vehicle project for a China-based company, Bloomberg News's Kartikay Mehrotra and Mark Gurman reported. Chen was arrested last week before boarding a flight after he told Apple he planned to visit his ill father in China. The engineer admitted to taking photographs inside a secure space that contains Apple's driverless vehicle initiative and backing up about 2,000 files on a personal hard drive, prosecutors said. Apple said the disclosure of the information that the employee took would be “enormously damaging.”
Chen didn't tell Apple that he had applied at a company based in China. “Chen told Apple investigators he’d taken the pictures to support applications for jobs within the company after supervisors tagged him with a performance improvement plan, according to the complaint,” Bloomberg News reported. “After Apple learned he was seeking employment with a Chinese rival, he was suspended.” The criminal complaint was filed in federal court in San Jose. Chen was released from federal custody on Jan. 25 after posting $500,000 in cash and property.
BYTES: Tesla posted a profit of $139 million for the fourth quarter, missing analysts' expectations, The Washington Post’s Drew Harwell reported. The company also reported a $1 billion loss for the whole year of 2018, which renewed concerns about Tesla’s capacity to fund its ambitions. “Last year was definitely the most challenging year of Tesla’s history, but also the most successful,” Musk said on an earnings call. The company still faces challenges: It has enacted two mass layoffs in the past seven months and has a $920 million debt payment that is due in March.
“Tesla’s $139 million quarterly profit marked the first time the company has recorded back-to-back quarterly profits, and the company’s $21 billion in revenue for the year — up from $11 billion in 2017 — showed it had made considerable progress in its race to dominate the global market for electric cars,” Drew wrote. “But analysts had expected the company to record about $182 million in profits for the quarter, and the miss appeared to reinvigorate investor concerns over the Silicon Valley automaker’s ability to reach new markets and survive in an increasingly competitive industry.”
— Some former Apple employees and analysts say the company should go all-in to customize iPhones with apps and software specifically for the Chinese market as the company's sales in Greater China lagged in the latest quarter, the Wall Street Journal's Tripp Mickle reported. “They’re not adapting quick enough,” Carl Smit, a former Apple retail executive in Asia and now a strategic sales consultant, told the Journal. “These apps and systems are how people communicate in China, and if you don’t have seamless integration, the Chinese manufactures have an edge.”
For instance, Apple didn't quickly take into account the success of the WeChat app in China, which people use for messaging, shopping and other activities. “The app helped popularize a mobile-payment system using QR codes, but Apple didn’t enable iPhone cameras to scan those QR codes until late 2017 when it offered some of its first software features aimed at China,” Mickle reported. “It also improved the pinyin keyboard, making it easier to type English and Chinese words.”
— The technology venture capital company Revolution Growth announced that it is investing in Clear, a start-up focusing on biometric identification systems, The Washington Post's Aaron Gregg reported. The amount of the investment by Revolution Growth, which is backed by AOL co-founder Steve Case and Washington Capitals owner Ted Leonsis, was not disclosed. Clear has about 3 million users and offers the option at 27 airports in the United States for passengers to sign up to use fingerprint and eye scanners to identify themselves instead of using an ID.
Clear is also expanding beyond its focus on airports. “Some 13 stadiums across the country have made Clear available to season ticket-holders and others,” Aaron reported. “The company recently announced a partnership with Hertz rental car company, and executives say they are engaged in discussions with health-care organizations and companies in the hospitality industry.”
— More technology news from the private sector:
— New York Mayor Bill de Blasio said he will push for Amazon to allow workers to unionize as the company plans to install half of its second corporate headquarters in Long Island City, the New York Daily News's Jillian Jorgensen reported. “This is my message to Amazon: Welcome to New York City, this is a union town. There's gonna be tremendous pressure on Amazon to allow unionization, and I will be one of the people bringing that pressure,” de Blasio said when asked about comments by an Amazon executive who indicated that the company would oppose attempts by workers to unionize in New York.
The executive, Amazon Vice President Brian Huseman, had made the comments at a New York City Council hearing. “Would you agree to neutrality if workers at Amazon wanted to unionize?” New York City Council Speaker Corey Johnson asked. Huseman responded: “No, sir,” according to the Daily News. (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)
— Life insurers in New York will be allowed to use data from nontraditional sources including social media when they set premium rates but they will have to prove that such data does not discriminate against certain groups, according to the Wall Street Journal’s Leslie Scism. “New York is the first state to set specific guidance governing how life insurers use algorithms to comb through everything from homeownership records to credit scores and Internet use in an effort to size up an applicant’s risk,” the Journal reported. “At least a couple dozen insurers are employing these automated programs to speed up the buying process, facilitate online life-insurance issuance and boost stagnant policy sales.”
— More technology news from the public sector:
— Some Google employees and shareholders are urging Alphabet's board to address a lack of racial and gender diversity, according to Bloomberg News's Josh Eidelson. “The tech diversity crisis threatens worker safety, talent retention, product development, and customer service,” according to a shareholder resolution written to Alphabet's board. The resolution also argues that Alphabet “has not responded adequately to key demands” about workplace issues from employees who took part in a walkout last year, according to Bloomberg News.
— More news about tech workforce and culture:
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— Scot Mollot, head of finance at Lime, and Rosemarie Carbone, human relations chief at Lime, left the scooter company, Recode's Theodore Schleifer reported.
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