China Calls TikTok Deal 'Extortion'; Says It Will Not Approve

from the back-to-the-drawing-board-folks dept

As was hinted at in our previous post on China's response to Trump forcing TikTok to... not actually be sold to Oracle, but to force TikTok into signing a hosting deal to store data in the US, it appears that China is going to do some posturing of its own. The Chinese government has said that it will block the deal which it calls "extortion."

And, to be fair, the Chinese government has a point. It was extortionate. Trump told ByteDance it had to sell or TikTok would be blocked in the US. And while it didn't actually sell TikTok, it was forced at gunpoint into a deal that it appears it would not have made otherwise. And, of course, China holds all the leverage here because Trump is a ridiculously bad dealmaker. His "plan" flopped in that he didn't force a sale, and then to save face (and to help out one of his big donors) he gave the thumbs up to the Oracle non-purchase/hosting contract. It was already a weak move that everyone other than the dumbest of Trump's fans knows is a weak move by a President who swings the executive power bat like a toddler who just learned how to smash things.

So, of course China is going to move for a better deal. In the Chinese state-controlled English language outlet China Daily, the the Chinese government goes in for the kill.

What the United States has done to TikTok is almost the same as a gangster forcing an unreasonable and unfair business deal on a legitimate company.

It (correctly) calls out that the "national security" excuse that Trump used is an obvious fig leaf and hogwash for his real motives. Of course, it claims that it was really about the US wanting to kill foreign competition, when that's unlikely to be the case. It's got more to do with various culture wars the President feels like fighting, rather than actually leading in the midst of a pandemic.

The editorial claims that even with this half-assed Oracle deal, it's a move towards the US using mafioso techniques to gain control over TikTok, and says that China has no reason to approve the deal on its end.

It is not the first time the US has played such dirty tricks to bully foreign companies in order to either destroy them or take them over.

China has no reason to give the green light to such a deal, which is dirty and unfair and based on bullying and extortion. If the US gets its way, it will continue to do the same with other foreign companies. Giving in to the unreasonable demands of the US would mean the doom of the Chinese company ByteDance.

Again, this is almost certainly just more posturing. And, ridiculously, what's it's likely to come down to is some sort of stupid diplomatic discussion between the US State Department and counterparts in China to come up with something that will make the deal work -- which means it will almost be an already worse deal than it currently is, with no redeeming points whatsoever, and what little Trump "got" out of the deal will not just be whittled down to nothing, but probably less than nothing.

Filed Under: china, deals, donald trump, extortion, national security
Companies: bytedance, oracle, tiktok

Blowback Time: China Says TikTok Deal Is A Model For How It Should Deal With US Companies In China

from the because-of-course dept

We've already covered what a ridiculous, pathetic grift the Oracle/TikTok deal was. Despite it being premised on a "national security threat" from China, because the app might share some data (all of which is easily buyable from data brokers) with Chinese officials, the final deal cured none of that, left the Chinese firm ByteDance with 80% ownership of TikTok, and gave Trump supporters at Oracle a fat contract -- and allowed Trump to pretend he did something.

Of course, what he really did was hand China a huge gift. In response to the deal, state media in China is now highlighting how the Chinese government can use this deal as a model for the Chinese to force the restructuring of US tech companies, and force the data to be controlled by local companies in China. This is from the editor-in-chief of The Global Times, a Chinese, state-sponsored newspaper:

That says:

The US restructuring of TikTok’s stake and actual control should be used as a model and promoted globally. Overseas operation of companies such as Google, Facebook shall all undergo such restructure and be under actual control of local companies for security concerns.

So, beyond doing absolutely nothing to solve the "problem" that politicians in the US laid out, the deal works in reverse. It's given justification for China to mess with American companies in the same way, and push to expose more data to the Chinese government.

Great work, Trump. Hell of a deal.

Meanwhile, the same Twitter feed says that it's expected that officials in Beijing are going to reject the deal from their end, and seek to negotiate one even more favorable to China's "national security interests and dignity."

So, beyond everything else, Trump's "deal" has probably done more to help China, and harm data privacy and protection, while also handing China a justification playbook to do so: "See, we're just following your lead!"

Filed Under: blowback, china, data localization, donald trump
Companies: bytedance, facebook, google, oracle, tiktok, walmart

The TikTok 'Deal' Was A Grift From The Start: Accomplishes None Of The Stated Goals; Just Helps Trump & Friends

from the a-joke dept

A week ago, we explained that the announced "deal" between Oracle and TikTok was a complete joke and what appeared to be a grift to let Trump claim he had done something, while really just handing a big contract to one of his biggest supporters. That was based on the preliminary details. As more details came out, it became even clearer that the whole thing was a joke. TikTok's investors actively recruited Oracle because they knew they needed to find a company that "Trump liked."

Over the weekend, Trump officially gave the "okay" on the Oracle deal (which now also involves Walmart). And before we get into the details of the deal and why it's a total grift, I'd like to just step back and highlight:

It is positively insane, Banana Republic, kleptocratic nonsense that any business deal should hinge on whether the President himself gives it a thumbs up or a thumbs down. Do not let all the insanity of this current administration hide this fact. If this had happened during the Obama administration, how crazy do you think Hannity/Carlson/Breitbart/etc. would be going right now about "big government" and claiming that the President is corrupt beyond belief? We should never, ever be in a situation where any President is giving the personal thumbs up or thumbs down to a business deal (and that's leaving out the fact that he forced this business deal in the first place with a blatantly unconstitutional executive order.

Okay, now back to the actual deal. Oracle and Walmart will team up to create a "new" (very much in quotes) company called TikTok Global that will be headquartered in the US. Of course, this is a joke. TikTok already has US operations. Oracle and Walmart will end up with a small equity stake in this "new" company (combined about 20%), but the Chinese company ByteDance will still own the majority of the company and will still control the TikTok algorithm. While there is some chatter about how the data will be hosted in the US, for the most part that was already true. Oracle says that it will review things to make sure that the data is secure, but remember, this is the same Oracle that collects a shit ton of data on internet users via Blue Kai, and then leaked it all. It's also the same Oracle that works closely with US spy agencies and isn't exactly known as being particularly good at security.

As the NY Times notes, this deal appears to accomplish literally nothing. As we said before, it was all performative, letting Trump claim he had "done something," when the rationale for the deal ("national security") was always bogus, and this is proved by the fact that nothing in the new setup changes whatever national security questions there were about the app before. So, rather than force ByteDance to "sell" the company to protect "US national security" as the NY Times rightly notes all that came out of this was:

A cloud computing contract for the Silicon Valley business software company Oracle, a merchandising deal for Walmart and a claim of victory for President Trump.

As former FCC chair Tom Wheeler tells the NY Times:

Vetting deals “is normally a process that involves multiple thoughtful people coming to the issue from multiple different concerns,” said Tom Wheeler, a former Democratic chairman of the Federal Communications Commission. “This appears as though what passes for process is what pleases one man: Donald J. Trump.”

Again, Banana Republic kleptocracy.

The NY Times also noted that Walmart either seemed to rush out its press release over the deal, or whoever wrote it had a heart attack in the process of composing it:

“This unique technology eliminates the risk of foreign governments spying on American users or trying to influence them with disinformation,” the company said. “Ekejechb ecehggedkrrnikldebgtkjkddhfdenbhbkuk.”

And that's not even getting into the whole issue of the mysterious $5 billion education fund. With the announcement, Oracle and Walmart said the new company would "pay $5 billion in new taxes to the Treasury," and then separately that it would "develop an educational curriculum driven by artificial intelligence to teach children basic reading, history and other subjects." Those two points got conflated to suggest that it was putting $5 billion into that project -- which sounded suspiciously like the finder's fee Trump demanded when first talking about forcing TikTok to be sold.

This got even more insane when Trump declared that he wanted the $5 billion to be used for his new 1776 history project, which is his new fascistic indoctrination education program, which Trump and his idiot followers insist is necessary because they falsely believe that kids are being indoctrinated to hate America (they're not -- they're just finally being taught, at least a little bit, that slavery is a key part of American history).

And the story got even more crazy when, after Trump talked about all of this, ByteDance came out with a giant shrug, saying it was totally unaware of any $5 billion education fund and appeared to have no interest in actually doing that.

It seems that most of the confusion was -- as per usual -- on the part of our not very intelligent President, who couldn't comprehend that the small education fund was different than the $5 billion, which is merely just estimate future tax revenues to the Treasury that, given the tax breaks this same President has helped set up, will probably never actually materialize.

It's like a clusterfuck of stupidity, corruption and kleptocracy. It's America in 2020.

Filed Under: banana republic, china, donald trump, grift, ieepa, kleptocracy, larry ellison, nonsense
Companies: bytedance, oracle, tiktok, walmart

Details Of Unconstitutional WeChat/TikTok Ban Actually Would Make Users Of Those Apps Less Secure, Not More

from the what-the-fuck-is-this? dept

This morning the Commerce Department released the details of how the WeChat and TikTok bans will work. It's possible that the ban on TikTok will get lifted if Treasury Secretary Mnuchin can convince enough people in the administration to buy into the grifty Oracle non-sale, but the WeChat ban is happening no matter what.

The details reinforce two key points:

1. This is way unconstitutional and should be offensive to any 1st Amendment/free speech supporter.
2. The excuses about national security are utter and total garbage, because this would actually make users of those apps significantly less secure.

So, great. We have some applications bans, premised on national security, that are unconstitutional piles of garbage that make people less secure, and the only possible path out is through a grifty deal, pushed deliberately to a large donor to the President, who has said multiple times he's hoping for a kickback on the deal. We're witnessing an astounding bit of corruption right here.

Here's how the "ban" will work. First up, both apps get banned from all US app stores. The following is listed as "prohibited."

Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S.

That's basically saying: "Apple and Google can no longer put those apps in their app stores." There are 1st Amendment concerns here, in that the executive branch is telling software companies what code they can or cannot host. While the IEEPA law under which this order is being made is broad, this seems ripe for a huge 1st Amendment challenge. The President should not be able to simply ban code from app stores based on an unsubstantiated claim of "national security."

Second, not only is this all based on unsubstantiated claims of national security, the very text proves how that's bullshit. The fact that these app stores can no longer issue updates means that people who have the apps currently can continue using them, but if there's a security update (say to patch a vulnerability) users can no longer patch those apps. If the goal of this ban is to "protect national security," everything here is exactly the opposite of that. Users will still have the app, but are unable to protect themselves and can only keep using the app if they accept the obsolete and increasingly less secure version of it.

In other words: the whole "national security" claim is a total lie, because the way the ban is implemented gives Americans less security. That sure is one way to fight back against supposed Chinese surveillance through these apps. If it's even true that China is spying on people via apps, they're now in a "don't throw me in the briar patch" situation -- since the US government is forcing these apps to be less secure and to expose even more data to whoever has it.

Another part of the ban that raises significant 1st Amendment issues is that it prohbits:

Any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.

Translating that: it means that no US developer can use WeChat or TikTok's APIs or build software using any of their code. That's deliberately interfereing with the speech of Americans. Leaving aside the issue of whether or not banning apps that allow for communications is a 1st Amendment issue. Leaving aside the issue of whether or not banning apps at all is a 1st Amendment issue. This goes even further: it says that US-based software developers cannot write the code they want. That's a huge 1st Amendment issue.

I discussed this a few months ago but the Supreme Court has already said that code is speech in Brown v. Entertainment Merchants Association (the case about whether or not the government could regulate video games and require age warnings). And, while it's not the Supreme Court, the 2nd Circuit has been even more direct about code being speech protected by the 1st Amendment in the the Universal v. Corley case (about whether or not you could publish code that breaks DRM):

Communication does not lose constitutional protection as "speech" simply because it is expressed in the language of computer code. Mathematical formulae and musical scores are written in "code," i.e., symbolic notations not comprehensible to the uninitiated, and yet both are covered by the First Amendment. If someone [*446] chose to write a novel entirely in computer object code by using strings of 1's and 0's for each letter of each word, the resulting work would be no different for constitutional purposes than if it had been written in English. The "object code" version would be incomprehensible to readers outside the programming community (and tedious to read even for most within the community), but it would be no more incomprehensible than a work written in Sanskrit for those unversed in that language. The undisputed evidence reveals that even pure object code can be, and often is, read and understood by experienced programmers. And source code (in any of its various levels of complexity) can be read by many more. Ultimately, however, the ease with which a work is comprehended is irrelevant to the constitutional inquiry. If computer code is distinguishable from conventional speech for First Amendment purposes, it is not because it is written in an obscure language.

Later in that ruling:

Computer programs are not exempted from the category of First Amendment speech simply because their instructions require use of a computer. A recipe is no less "speech" because it calls for the use of an oven, and a musical score is no less "speech" because it specifies performance on an electric guitar. Arguably distinguishing computer programs from conventional language instructions is the fact that programs are executable on a computer. But the fact that a program has the capacity to direct the functioning of a computer does not mean that it lacks the additional capacity to convey information, and it is the conveying of information that renders instructions "speech" for purposes of the First Amendment.

Based on all of that, it is difficult to see how this broad ban can possibly stand up to 1st Amendment scrutiny on multiple levels. The banning of US developers coding using these companies APIs is a 1st Amendment violation. The ban on US companies hosting their code is a 1st Amendment violation. The ban on apps used for speech is likely a 1st Amendment violation (on par with breaking up printing presses). So, these bans appear to violate the 1st Amendment in multiple different ways.

And for what? The claim is "to protect national security." We already knew that was bogus, and all of the info anyone can get from TikTok is already widely available for purchase. But now with the details coming out, in which it would make the data of US users of these services even less secure by banning updates, we have even more evidence that the national security claims are joke.

And thus, the bans are likely unconstitutional on multiple different grounds, have no national security purpose based on multiple different problems with the deal, and don't seem to do anything other than potentially put a lucrative business deal in the pocket of a top Trump supporter. How is there anyone out there who thinks this is a reasonable thing?

Filed Under: 1st amendment, apis, bans, china, code, commerce department, donald trump, executive order, ieepa, national security, security, updates
Companies: apple, bytedance, google, oracle, tencent, tiktok, wechat

The TikTok Oracle Grift: Insiders Admit They Went Hunting For A Tech Company The President Liked

from the because-of-course dept

Earlier this week we wrote about the absolute grift involved in the TikTok / Oracle deal. Contrary to the framing that this was Oracle "buying" TikTok to satisfy the President's unconstitutional demand that the Chinese company ByteDance sell TikTok to an American company, the story showed that this was just a hosting deal for Oracle's cloud service, which is way down the list of top cloud providers.

The end result was no actual sale (though the Treasury Department is still "reviewing" the deal), but a big contract for Oracle, and a bogus story in which the President can pretend he forced ByteDance to "sell" TikTok, even though it retains ownership in the company (there are some rumors that the hosting deal will include a small, and probably symbolic, equity stake for Oracle).

The other key point I noted in my article was that Oracle's executive leadership, starting with Larry Ellison, but including CEO Safra Catz, have been cozying up to Trump and the White House ever since Trump became President. While much of Silicon Valley's executive teams have made it quite clear how uncomfortable they are with a Trump Presidency, Oracle... has done the opposite. And while I framed it as being convenient that things worked out this way, a report from the Wall Street Journal highlights how this was the grift from day one.

Oracle was originally brought into the negotiations to provide an alternative to Microsoft Corp., a rival bidder with Walmart as a partner, said one person familiar with the talks. The U.S. investment firms Sequoia Capital and General Atlantic, which are existing investors in ByteDance, went in search of a tech company with close ties to the administration and settled on Oracle, the person said.

As we discussed earlier, from day one of this silly ordeal, the President made it clear he would steer a deal to a company he personally liked (meaning one where the leadership licked his boots, apparently). After all, after first saying that he was going to block TikTok in the US, as rumors of Microsoft's involvement came out, Trump immediately said that he would block a deal with Microsoft. Microsoft had to go grovelling to Trump over a weekend to have him say, grudgingly, they could continue to pursue a deal.

Then, of course, there's the Walmart story. Rumors came out that Walmart was a leading bidder, but Trump's White House stepped in and told them they would block that deal too, because it would show that Trump's figleaf "national security" explanation for banning TikTok was an obvious lie.

In other words, throughout this nonsense process, the President -- who at one point also demanded a finder's fee for any deal -- made it clear that this was about his own whims. He was forcing a sale, and he was going to pick a winner -- and the winner had to be someone he liked.

That doesn't seem like the kind of free market people appreciate. It seems like the very worst of a corrupt crony capitalist system.

The WSJ piece details how being corrupt this whole process was. It was all about stroking Trump's ego, and lining his campaign's bank account:

Sequoia Capital used its own connections to push the administration to allow TikTok to continue operating in the U.S., say people familiar with the discussions. Doug Leone, the firm’s global managing partner who took a lead role lobbying on TikTok’s behalf, has donated tens of thousands of dollars to Republican candidates this election season along with his wife, including to the president’s re-election campaign. Mr. Leone also held a reception at his Silicon Valley home for Secretary of State Mike Pompeo in January.

Ms. Catz’s relationship to Mr. Trump could give Oracle a leg up in getting the deal approved, according to people in contact with the White House. Oracle has worked for decades with the U.S. government, including multiple contracts with the national-security establishment.

Once again, this was nothing but performative nonsense from the President that ends in his own supporters lining their pockets. None of it seems to have anything to do with actual national security. It's a joke.

Filed Under: china, corruption, donald trump, doug leone, grift, larry ellison, safra catz
Companies: bytedance, microsoft, oracle, sequoia, tiktok, walmart

Josh Hawley Isn't 'Helping' When It Comes To TikTok

from the sound-and-fury,-signifying-nothing dept

It's the dumb saga that only seems to get dumber. Earlier this week, we noted that Trump's dumb and arguably unconstitutional order banning TikTok had resulted in (surprise) Trump friend and Oracle boss Larry Ellison nabbing a cozy little partnership for his fledgling cloud hosting business. Granted the deal itself does absolutely nothing outside of providing Oracle a major client. It's more cronyism and heist than serious adult policy, yet countless outlets still somehow framed the entire thing as somehow meaningful, ethical, and based in good faith (it's none of those things).

Senator Josh Hawley, one of the biggest TikTok pearl clutchers in Congress, obviously didn't much like the deal. Hawley sent an open letter to Treasury Secretary Steve Mnuchin calling the deal "completely unacceptable" and demanding an outright ban:

Hawley's major complaint is correct in that the deal does absolutely nothing to thwart Chinese intelligence from collecting TikTok data since ByteDance would still own TikTok and control all algorithms:

"CFIUS should promptly reject any Oracle-ByteDance collaboration, and send the ball back to ByteDance’s court so that the company can come up with a more acceptable solution. ByteDance can still pursue a full sale of TikTok, its code, and its algorithm to a U.S. company, so that the app can be rebuilt from the ground up to remove any trace of CCP influence."

Here's the thing that Hawley, and every other TikTok pearl clutcher can't or won't understand: even a full ban of TikTok doesn't meaningfully thwart Chinese intelligence. Why? U.S. privacy and security standards are a joke. Sectors like telecom, adtech, and apps are such a poorly regulated dumpster fire (when they see any oversight at all), China can simply buy or steal this (and so much more) data from an absolute ocean of dodgy information brokers and middlemen.

Banning TikTok to protect U.S. consumer privacy is like spitting on a wildfire then patting yourself on the back for being an incredible firefighter. The real solutions to these problems require taking a far smarter, broader, more holistic view. That means passing a meaningful privacy law, shoring up election reform, adequately funding privacy regulators, passing some standards for the IOT, adequately securing decade-old U.S. network vulnerabilities, mandating transparency in the adtech, telecom, and other sectors, and better policing the collection and sale of U.S. location and other data. Fix the broader problem(s), and TikTok becomes a detail.

Hawley not only doesn't seem to understand that, he's actively opposed to many of these broader reform efforts.

Hawley, much like Marsha Blackburn or Tom Cotton, oddly adores freaking out when China is involved, but is either absent from -- or detrimental to -- efforts to shore op overall U.S. privacy and security standards and oversight. Blackburn, Cotton, or Hawley don't make so much as a peep when U.S. telecom providers get mired in privacy scandals. They've said nary a word about the dodgy adtech sector and the way it sells access to U.S. user location data to any moron with a nickel. They've actively opposed election security reform, adequately funding or staffing the FTC, or passing even the most basic of privacy rules.

And yet when a Chinese company develops a product that outperforms the best Silicon Valley has to offer, there are months upon months of absolute and total "security and privacy" hysteria. It's just weird how, for some folks, security and privacy only seem to matter when foreigners are involved. It's performative, xenophobic, wildly inconsistent, and largely just stupid. Either you genuinely care about U.S. security and privacy or you don't. Showing up late, crying about China, then disappearing entirely when broader solutions are recommended isn't "helping," it's performative histrionics.

Filed Under: china, executive order, josh hawley
Companies: oracle, tiktok

Oracle Doesn't Buy TikTok, But Gets A Lucrative Hosting Deal, And Trump & Friends Will Pretend This Means Something

from the art-of-the-grift dept

The TikTok saga, which was insanely stupid to begin with, kicked into overdrive last month when President Trump issued a blatantly unconstitutional executive order that was designed to force ByteDance to sell TikTok to an American company. We had all sorts of questions about this, but effectively ByteDance had until this week to find a buyer. While Microsoft was rumored for a while, late last night Microsoft announced that its proposal had been rejected and the only competitor left standing was... wait for it... Oracle. This led many to conclude that Oracle was buying TikTok. That is not the case. But hold on, we'll get there.

There was one other serious bidder: Walmart. Last night the company claimed it was still interested in buying TikTok, but the White House rejected that plan, because it would have made it totally obvious that the "national security" pretense for demanding the sale was obvious bullshit. Nope, the White House said: it has to be sold to a "tech" company, so that the White House can stand by its totally unsubstantiated by evidence claims that TikTok's dancing teens represented a national security threat.

So, with Walmart blocked, and Microsoft's deal not accepted, that left Oracle. But immediately the descriptions of Oracle's involvement were... weird. They very clearly did not say anything about "buying" TikTok. Instead, Oracle put out a very short press release saying that it will "serve as the trusted technology provider" to TikTok. That's not how you describe a sale.

This is a hosting deal.

Oracle will just host TikTok on its wannabe, way-behind-the-competition, cloud platform. And Trump and his cult-like supporters will pretend this actually accomplishes something. Oracle's executive suite has long been vocal Trump supporters, so this basically dumps a giant hosting contract into Oracle's lap. ByteDance will effectively still own TikTok, and Trump will pretend he's done something. For what it's worth, this is the second big Oracle cloud deal done in the last few months, with the previous one being with videoconferencing company Zoom.

As Russell Brandom over at the Verge notes, this deal "accomplished nothing." ByteDance still owns TikTok (and, according to reports, retains full control over TikTok's algorithm). As former Yahoo and Facebook Chief Security Officer Alex Stamos points out, literally none of the concerns people have raised about TikTok (most of which were bogus in the first place) are solved by an Oracle hosting deal:

As Stamos points out, accepting this deal would show that it's nothing but "pure grift," basically dumping a forced contract into Oracle's lap, a company which (again) has had an executive licking Trump's boots since day one.

And people can't even truly argue that Oracle will somehow make whatever little "private" data there is on TikTok "more secure." It's not like it was just months ago that an Oracle-owned subsidiary, BlueKai, leaked data that tracked users all over the web, exposing billions of records.

In other words, the whole thing was a joke. Like so much of this administration it was performative nonsense by Trump, who was mad that some kids made him look foolish on TikTok, combined with anti-Chinese racism, to push for a deal he had no legal right to push for, resulting in a weird scramble that doesn't accomplish what he wanted, but does shift a bunch of money to some of his vocal and wealthy supporters. The "Art of the Grift."

Filed Under: china, corruption, donald trump, grift, hosting, larry ellison, national security, security
Companies: bytedance, microsoft, oracle, tiktok

If Oracle Buys TikTok, Would It Suddenly Change Its Tune On Section 230?

from the seems-like-an-important-question dept

Late Monday, it came out that Oracle is one of the potential American acquirers of TikTok from the Chinese company ByteDance, after President Trump ordered Bytedance sell TikTok out of spite. Microsoft has been the most talked about potential purchaser, though there were also rumors of a potential bid by Twitter.

The Oracle rumor strikes many as particularly bizarre, for good reason. Oracle is pretty much an enterprise-only focused company. However, if it has one strength it is in buying up companies and integrating them into its cashflow generation machine. I'm still not sure I see the synergies here, but perhaps Larry Ellison is finally realizing that Oracle is the opposite of cool in Silicon Valley.

However, the thing that struck me most about all of this is that Oracle is one of the main companies behind the plot to undermine Section 230. Oracle has been a funder of a weird group of anti-Section 230 activists, and has been involved in multiple anti-Section 230 crusades. And, as we've pointed out in the past, it seems pretty clear why: Oracle has always been incredibly (to a petty level) jealous of Google and Facebook's success -- and seems to see Section 230 reform as a weapon it can use to attack those companies without harming itself, since Oracle doesn't really host much user generated content.

Of course, that would change if Oracle actually ended up buying TikTok. Suddenly, it would have a massive platform full of user generated content, and it would be fascinating to watch if Oracle changes its tune on 230 (or calls off its attack dogs who keep misrepresenting 230). That would certainly be interesting. Of course, the general rumor is that Oracle is really just doing this to drive up the price for Microsoft (who Oracle is losing to in the fight for "cloud" supremacy), but President Trump has given his blessing for an Oracle/TikTok deal, which isn't too surprising, given that Oracle's top execs have been sucking up to Trump and praising him since he was elected.

Filed Under: china, section 230, user generated content
Companies: bytedance, microsoft, oracle, tiktok

One Of The World's Largest Web Tracking Companies Leaks Tons Of Personal Info From An Unsecured Server

from the so-happy-to-have-contributed-to-the-leak-by-using-the-internet dept

Advertisers want to know everything about you. So do sites that buy ad inventory and allow middlemen to let their trackers run free, tracing people from site to site, following them into their email inboxes, and tracking them across platforms and devices if need be.

BlueKai, owned by Oracle, deploys these pervasive trackers, sinking its hooks into a reported 1% of the world's internet traffic. BlueKai is the kind of clever no one really respects. It's more along the lines of "devious." But it is very, very effective.

BlueKai relies on vacuuming up a never-ending supply of data from a variety of sources to understand trends to deliver the most precise ads to a person’s interests.

[...]

BlueKai… uses more covert tactics like allowing websites to embed invisible pixel-sized images to collect information about you as soon as you open the page — hardware, operating system, browser and any information about the network connection.

[...]

BlueKai can also tie your mobile web browsing habits to your desktop activity, allowing it to follow you across the internet no matter which device you use.

All the information BlueKai grabs has to go somewhere so it can be packaged and sold to marketers. Considering how much data BlueKai is able to obtain about the average internet user, you'd think it would place a premium on keeping this data secure -- if not for the security of unsuspecting trackees, then to prevent its valuable stash from falling into a competitor's hands.

Unfortunately for a whole lot of internet users, BlueKai doesn't seem to believe this information -- or the people who generated it -- is worth protecting.

[F]or a time, that web tracking data was spilling out onto the open internet because a server was left unsecured and without a password, exposing billions of records for anyone to find.

Security researcher Anurag Sen found the database and reported his finding to Oracle through an intermediary — Roi Carthy, chief executive at cybersecurity firm Hudson Rock and former TechCrunch reporter.

TechCrunch reviewed the data shared by Sen and found names, home addresses, email addresses and other identifiable data in the database. The data also revealed sensitive users’ web browsing activity — from purchases to newsletter unsubscribes.

Oracle's response was to blame "two companies" for "not properly configuring their services." The two companies have not been named. Whoever these companies are, they collect data on a wide range of activities. TechCrunch examined the exposed data and found extensive records tied to individuals -- an astonishing pool of data that even indicated if a tracked person's device was in need of a software update. That's on top of the wealth of purchase and internet history that linked people to purchases, web searches, and other activity. Sitting in with everything else was personally identifiable info like addresses, phone numbers, and email addresses.

Very few people want all of this information in the hands of marketers. (BlueKai says it strips identifiable info before handing it over to its ad-serving customers.) And they definitely don't want it in the hands of people even more nefarious than ordained spyware pushers like BlueKai. The company has created a one-stop shop for phishers, stalkers, and identity thieves. And then it left the door unlocked for an undetermined amount of time.

Filed Under: cookies, data leak, personal info, privacy, security, tracking
Companies: bluekai, oracle

The Plot Against Section 230 Is Being Run By Big Legacy Companies Who Failed To Adapt To The Internet

from the the-plot-against-the-internet dept

Last summer, we explained how it was not crazy to think that the narrative being pushed about internet companies and Section 230 was a manufactured narrative by Hollywood and other old legacy companies jealous of the success of new internet companies. Now, the NY Times has a detailed article on exactly that. It's about how a broad coalition of big, old, legacy companies are conspiring to punish Google and Facebook by convincing the media and politicians that Section 230 of the Communications Decency Act is bad.

The headline lists three companies: IBM, Marriott, and Disney. While that might seem like "an unusual constellation of powerful companies" -- as the article puts it -- there is a simple thing tying them together: all three failed to adapt to an open internet. And now they're trying to kill it.

Disney and its powerful trade association have fought to stop the law’s spread abroad.

Marriott has asked Congress to amend the law.

IBM has a plan to slim it down.

An unusual constellation of powerful companies and industries are fighting to weaken Big Tech by limiting the reach of one of its most sacred laws. The law, known as Section 230, makes it nearly impossible to sue platforms like Facebook or Google for the words, images and videos posted by their users.

We've discussed each of these companies and their motivations in the past. Disney, of course, is a stand-in for the MPAA and all of the big Hollywood movie studios. Indeed, while Disney led the copyright lobbying charge in the 80s and 90s, the company leading the way against the internet and Section 230 over the past decade has been Fox. But, of course, Disney recently bought Fox. Hollywood has been fighting against the open internet for years, and its lobbyists have been planting false narratives about 230 for years, and eagerly fan the flames at every opportunity. Their hope has always been to chip away at 230 to make Google and Facebook more vulnerable, and to force them to negotiate some sort of huge transfer of money.

Marriott, somewhat famously, has been screaming bloody murder about Airbnb for years, because it can't stand having competition that actually offers better service. Its hatred of 230 is because Airbnb has argued (though not always successfully), that 230 protects it from liability over user listings -- which, if successful, would block some of the laws Marriott and the wider hotel industry have been pushing to hinder Airbnb.

Finally, there's IBM. And while the article doesn't mention it, it's really IBM and Oracle teaming up here. Last summer we wrote about IBM's sad attack on 230, a law that it doesn't rely on. Once again, with IBM and Oracle, we see two giant, lumbering tech companies, that made bad bets on the internet, and rather than recognizing that they messed up, they're using lobbying and the political process to harm the competitors who built the products people actually want. Neither IBM nor Oracle rely on Section 230, since they don't run consumer facing internet services. Both bet that the enterprise market and data would be where the market was -- but it actually turned out to be in consumer facing services. In both cases, the bottom-up open internet has also enabled smaller enterprise focused offerings to chip away increasingly at the bottom of their markets.

A decade ago, we wrote about writer Andy Kessler's concept of political entrepreneurs v. market entrepreneurs. One of them builds better, more innovative products that increase consumer welfare and increase the overall size of the pie by making things people want. The other uses its enormous power and political connections to pass regulations that hinder competitors who have innovated. One becomes successful through building services that make money from happy customers. One makes money by creating a restrained market in which they can collect monopoly rents above and beyond what an open market would bear.

The latter -- the old legacy companies using lobbying to stomp out competition -- are a form of dangerous "unproductive entrepreneurship." It does not make the world a better place. It limits innovation and limits consumer welfare.

So the next time you hear about the "techlash" and the "problems" of Section 230, consider who actually stands to benefit from chipping away (or removing entirely) Section 230. It is not you or me. It is not those who rely on a wide variety of internet services to express ourselves. It is the legacy companies which have fallen behind, which have not adapted, and which are using their political will to try to suppress and destroy the open systems that the rest of us now depend on.

Filed Under: competition, lobbying, market entrepreneurs, political entrepreneurs, section 230, techlash
Companies: disney, facebook, fox, google, ibm, marriott, oracle