with Tonya Riley

The massive Twitter breach yesterday wasn't just disruptive. It was a sobering reminder that even the most powerful social networks are vulnerable to attacks. 

The hack impacted everyone from Joe Biden to Elon Musk, raising new concerns about Twitter’s ability to keep global leaders’ accounts safe. It's sure to have wide-ranging implications for the service that has become a core communication channel in American society, disseminating everything from President Trump's rockets to corporate news. 

“The problem is that we all rely on Twitter as this public space that is safe and secure, and we know that the tweets that someone like a Joe Biden is sending out are authentic,” Harper Reed, an entrepreneur who served as the 2012 Obama campaign’s chief technology officer, told me. “Twitter has proven to us that may not be true.”

Accounts belonging to prominent billionaires and politicians began posting similar messages yesterday afternoon asking for money to be sent to cryptocurrency accounts, Rachel Lerman, Joseph Marks and I reported. The messages received thousands of likes before they were taken off Twitter, and in some instances, they were posted again from the same account.

Twitter is still investigating the situation, but it appears to have originated from a social engineering attack targeting Twitter employees. From the company:

The hackers could have sown mass chaos with the privileged access they scored. 

It appears the accounts were seeking financial gain based on what is known so far. But technologists warn they could have done far more damage after infiltrating the accounts of some of the world's most prominent figures. The incident demonstrates how the tools technology companies build can be misused, Reed said.

We’re lucky this was a bitcoin scam and not something that was greater or more nefarious,” he said.

The incident is certain to reverberate through Washington, where Twitter is increasingly used by government officials. 

Security experts have long fretted about bad actors infiltrating President Trump’s account, which has become his favorite bully pulpit at all hours of the day and night. Now that the accounts of Biden and Barack Obama were hit, those concerns are no longer theoretical.  

Trump’s account did not post a bitcoin message and did not appear to be affected by the incident. But critics swiftly warned that the incident highlighted the risk of his social-media-first style of governance. 

“This data breach in particular underscores just how troubling it is to have a president who dictates policy ad hoc over Twitter and practices the opposite of responsible digital citizenship,” Rep. Jennifer Wexton (D-Va.), founder of the Congressional Task Force on Digital Citizenship, told me.

It's also certain to increase concerns Twitter could be compromised closer to Election Day. If hackers gained similar access in November, they could disrupt voting by pushing voter fraud or planting false information about polling locations being impacted by the coronavirus

From Ryan Calo, professor at the University of Washington School of Law:

The breach also raises concerns that Twitter could be leveraged to wreak financial havoc. 

The infiltrators also compromised the accounts of prominent tech billionaires, including Musk, Microsoft founder Bill Gates and Amazon chief executive and Washington Post owner Jeff Bezos. That worries company leaders who say the bad actors could have wreaked havoc on the stock market, as tweets from world leaders have been known to move markets. 

“It will become real to people what influence and power these channels have,” Ashkan Soltani, a former Federal Trade Commission chief technologist, told me in an interview. 

Twitter will inevitably face greater political scrutiny. 

Social media companies are already under a microscope in this election year. And with each breached account yesterday, Twitter's political problems multiplied. 

This isnt Twitters first brush with cybersecurity issues, and the company is currently under an order with the FTC related to privacy settlement. Depending on the circumstances that caused this breach, the agency may move to open an investigation into whether the company violated the terms of that agreement, Soltani told me. The FTC declined to comment. 

Already the incident is sparking scrutiny on Capitol Hill. Sen. Josh Hawley (R-Mo.) wrote a letter to Twitter chief executive Jack Dorsey on Wednesday evening, calling on the company to take immediate steps to secure the service and contact the FBI and Justice Department.

“As you know, millions of your users rely on your service not just to tweet publicly but also to communicate privately through your direct message service,” Hawley wrote. “A successful attack on your system’s servers represents a threat to all of your users’ privacy and data security.”

Twitter has struck an apologetic tone about the incident. From Dorsey: 

Rant and rave

A temporary freeze on verified accounts also led to chaos on the platform. CNBCs Annie Palmer:

Others wondered if the temporary freeze on blue check marks lead to a new world.

Joe Calvello, associate director of state media at Planned Parenthood Federation of America:

Adam Conner of the Center for American Progress:

But it didnt last long. Taylor Lorenz of the New York Times:

BuzzFeeds Hayes Brown:

But wed still buy a cross-stitch of this tweet:

Our top tabs

The European Union just restricted data transfers to the United States, dealing a blow to tech companies. 

The European Union's top court ruled that data of E.U. residents is not sufficiently protected from government surveillance when it is transferred to the United States, Michael Birnbaum reports from Brussels. That could have stark implications for global commerce, especially smaller businesses. 

The court struck down a key data transfer agreement known as Privacy Shield because it did not adequately uphold E.U. law. The move could force thousands of companies to reconsider how they move data from Europe, and it will prompt new negotiations between the United States and Europe over how to store Europeans' data on U.S. soil. 

Tech companies were bracing for this outcome, and they called for the governments to swiftly begin negotiations. 

“The interruption of transatlantic data flows resulting from this decision is a significant setback for all businesses and industries in the U.S. and EU who relied on Privacy Shield and hampers their ability to conduct day-to-day operations—everything from accessing the cloud to managing human resources and running payroll," said Jason Oxman, president and chief executive of the trade association ITI. “The Court’s decision negatively affects the two economies’ shared efforts to facilitate trade while providing necessary privacy protections for EU citizens.”

Companies blasted the move as the economy is struggling in the wake of the coronavirus. "This is an unwelcome development at a time when businesses on both sides of the Atlantic are focusing on recovering from the economic impacts of covid-19 and are increasingly relying on data-driven tools and services to do so,” said Thomas Boué, director general of policy—EMEA at BSA, another tech trade group. 

Other larger companies said the ruling would not immediately impact their business. Microsoft told customers in a blog post that the court’s ruling does not change their ability to transfer data today between the EU and U.S. using its cloud product. 

Parler wants to be the free-speech social network, but an influx of new users are pushing the boundaries.

Parlers user base increased by 1 million users in just one week after Twitter moved to moderate posts from Trump that violated its policies. Thats putting pressure on the company, so Parler chief executive and co-founder John Matze took to the platform in late June to explain its house rules in response to the posts, Rachel Lerman reports

“Here are a few basic rules we need you to follow on Parler,” he wrote. He added bulletin points including, “When you disagree with someone, posting pictures of your fecal matter in the comment section WILL NOT BE TOLERATED.”

The company has brought on 200 volunteer content moderators and is looking for more. Matze said in a statement that he did not believe the app’s guidelines conflicted with free speech.

Parler could also have its say in the ongoing antitrust debate over Big Tech.

Two Republican members of the House Judiciary Committee last week called for a meeting with Parler. House lawmakers are expected to grill the chief executives of Apple, Google, Facebook and Amazon later this month.

The State Department will restrict the visas of some Huawei employees, citing human rights abuses.

Secretary of State Mike Pompeo accused some employees of providing material support to the Chinese Communist Party at a news conference

The action also applies to other Chinese companies sanctioned by the United States for aiding human rights abuses. The move is the latest escalation in the United States siege on the Chinese telecommunications company, which it has accused of posing a national security threat.

“Telecommunications companies around the world should consider themselves on notice, Pompeo saidIf they are doing business with Huawei, they are doing business with human rights abusers.

U.S. officials say the Chinese Communist Party could compel the company to provide a backdoor for espionage and has in the past. 

Pompeo also praised the United Kingdoms decision to phase out Huaweis equipment from its 5G networks, an action that the White House takes credit for spurring. 

This isnt about commercial interests, this is about protecting the information, Pompeo said. I think in fact the tide has turned there and youll see this continue in [other] countries.” 

Workforce report

Facebook struggles to recruit and retain black engineers, company data shows.

Black employees make up just 1.7 percent of the companys technical roles, up from 1.5 percent last year, Bloomberg News reports. Facebook is struggling to convince black employees to join as it faces intense scrutiny from civil rights groups and some of its own employees.

Maxine Williams, Facebooks chief global diversity officer, says the company is investing in fixing the problem. Facebook is working to standardize its leadership training and has introduced an anonymous reporting system for “uncomfortable moments and microaggressions,” Williams said.

“It’s something we definitely have to take seriously,” Williams said. “We are sort of eyes open about where we have challenges and people should be if they’re considering coming here.”

Inside the industry

Apple won a major battle against a $13 billion tax bill from E.U. antitrust officials.

The European Unions second-highest court ruled against the blocs top antitrust enforcer, the Wall Street Journal reported. The European Commission failed to prove that Apple was illegally given unfair treatment in not paying taxes to Ireland, the court ruled. The critical ruling comes as the European Union discusses both taxes on tech firms and stricter antitrust laws.

More industry news:

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Daybook

  • The Center for Strategic and International Studies will host a discussion with former Google chairman and chief executive Eric Schmidt about technology, data and innovation policy on Friday at 4 p.m.
  • The Senate Commerce subcommittee on manufacturing, trade, and consumer protection will hold a hearing on protecting Americans from coronavirus scams on July 21 at 2:30 p.m.

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