Aug 27, 2021

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Today's newsletter is 1,315 words, a 5-minute read.

1 big thing: Lookalike tech policies in China, Europe and the U.S.

Illustration: Rae Cook/Axios

For all their differences, Europe, China and the U.S. are making remarkably similar moves in tech policy.

The big picture: Nations and regions with wildly differing political systems and cultures have converged on a shared set of responses to the power of big tech firms: rein in the companies, avoid dependencies and subsidize critical networks and technologies.

China, which has long been accused of protecting domestic companies, has recently been taking action against companies, limiting their ability to raise foreign capital and collect user data.

The U.S. has long discounted the value of top-down industrial policy. But under the Biden administration, it's moving to boost the U.S. semiconductor industry, among other sectors that are seen as critical to future economic and national security.

Europe, caught in the middle, has been trying to take action on the antitrust front while navigating the U.S.-China battle over 5G and networking.

Political strategist Bruce Mehlman highlighted the similar moves in a recent presentation that characterizes the common strategy as:

  1. Tame the internet
  2. Restrain the dominant
  3. Subsidize the critical
Image: Mehlman Castagnetti Rosen & Thomas

The big picture: The policy convergence comes as each region looks to deal with similar trends that challenge existing rules, including cryptocurrency and the gig economy.

  • The three regional powers are also eyeing the power of large tech companies and using antitrust regulation as one means to limit it.

Yes, but: Both China and the U.S. will likely want to make sure that the pressure they exert on homegrown companies doesn't inadvertently benefit the overseas competition.

  • That's definitely an argument that U.S. tech giants are using in their dialogues with state and federal officials.

Between the lines: One of the trickiest parts of these parallel policies is the effort to boost technological independence.

  • China has been on this path for a while, though the motivation certainly accelerated during the Trump administration amid battles over Huawei, trade issues and cybersecurity.
  • Despite significant efforts to boost its domestic capabilities, China remains highly dependent on the U.S. for both chips and software.
  • U.S. companies, meanwhile, have scrambled to be less dependent on China for manufacturing, but it remains a key supplier of cell phones, computers, TVs and other electronics.
2. Apple makes App Store concessions

Apple said Thursday it will relax some App Store rules in order to settle a class-action lawsuit brought by U.S.-based developers over its store terms.

Why it matters: Apple will let developers communicate with users about alternative payment methods outside of the App Store. It will also set up a $100 million fund for small developers and make some other changes to its practices, but it's keeping its overall commission structure.

As part of the settlement, pending court approval:

  • Developers can communicate directly with customers about alternative payment options. Customers have to consent and be given the right to opt-out.
  • Apple agrees to maintain for three years a program that lowers commissions to small businesses.
  • Apple will also set up a $100 million fund for small developers in the U.S., ranging from a minimum of $250 to $30,000 based on the size of the developer. Eligible developers are those who made less than $1 million during each of five years, a group Apple says represents more than 99% of developers.
  • Apple will offer more price points for apps. Today there are less than 100, but the company is committing to increase that to more than 500 options.
  • The company will issue a transparency report that includes data on the number of apps rejected and removed and customer and developer accounts deactivated.
  • With the exception of the fund for small developers, the rest of the changes are being made globally.

Between the lines: Apple ceded some ground on issues of interest to developers, but gets to keep (at least for now) key structures of its App Store, including the overall commission structure of the store as well as its prohibition against using rival app stores or in-app payment mechanisms.

  • The settlement, which must be approved by Judge Yvonne Gonzalez Rogers, comes as Apple is awaiting a ruling in a separate lawsuit, brought by Fortnite developer Epic Games, which seeks to force Apple to allow rival in-app payment and store options.
  • The same federal judge is hearing the Apple-Epic case and a ruling could come at any time.

What they're saying:

  • Sen. Amy Klobuchar, (D-Minn.): "This new action by Apple is a good first step towards addressing some of these competition concerns, but more must be done to ensure an open, competitive mobile app marketplace, including commonsense legislation to set rules of the road for dominant app stores."
3. Internet subsidy program enrolls 5 million

Illustration: Shoshana Gordon/Axios

Some 5 million households have signed up for a new federal program that offers $50 a month to pay for internet service, Axios' Margaret Harding McGill reports.

The big picture: There are tens of millions of low-income Americans eligible for the Emergency Broadband Benefit program, and digital inclusion experts say more on-the-ground work is needed to connect those households.

Driving the news: In addition to the new enrollment figure, the FCC also announced Friday it is providing more enrollee demographic information, including age, eligibility, location and type of broadband service, to help better target outreach efforts.

How it works: The $3 billion program was created to help families facing financial hardship pay for internet service during the pandemic.

  • Eligible households, including those that receive federal food assistance or Pell Grants, can sign up through one of the more than 1,000 participating providers.
  • So far, about $378 million has been claimed since the program began in May.

Yes, but: There have been obstacles to more widespread participation, experts tell Axios, including:

  • Lack of awareness or robust outreach in marketing the program.
  • Lack of trust that the program will do what it claims.
  • Confusion over how the plans work, what happens if the funding runs out or how to prove eligibility have also come up.

What they're saying: "It's not something that you're just going to create a program and all of a sudden everybody's going to know about it, everybody's going to trust it, everybody's going to be able to sign up for it," Brandon Forester, national organizer for internet rights and platform accountability at Media Justice, told Axios.

What's next: The pending infrastructure bill would replace the EBB with a new $14 billion Affordable Connectivity Fund and includes money for digital equity programs.

4. How T-Mobile hacker breached carrier's security

John Binns, a 21-year-old American who now lives in Turkey, told the Wall Street Journal that he was behind the T-Mobile security breach that affected more than 50 million people earlier this month, Axios' Noah Garfinkel reports.

The intrigue: Binns said he broke through T-Mobile defenses by discovering an unprotected router exposed on the internet, after scanning the carrier's internet addresses for weak spots using a publicly available tool.

  • "I was panicking because I had access to something big," he wrote in Telegram messages to the Journal. "Their security is awful."
  • "Generating noise was one goal," Binns said. He declined to say whether he sold any of the information he stole, or whether he was paid for the hack.

The big picture: It was the third major data leak the network has disclosed in the last two years, per WSJ. T-Mobile is the second-largest U.S. mobile carrier, after Verizon.

5. Take note

On Tap

Trading Places

  • Longtime Facebook marketing executive Kate Rouch announced on Twitter that she is leaving the company to become Coinbase's first chief marketing officer.
  • Microsoft has hired Charlie Bell, a 15-year AWS veteran, CNBC reported, citing an internal Microsoft directory.


6. After you Login

Attention Roomba PR: Looks like you have some mopping up to do.