Nov 7, 2019

Axios Login

By Ina Fried
Ina Fried

Hello just once more from L.A. before I head back to the foggy confines of San Francisco later today. Tune in this weekend to Axios AM to find out the really fun thing I was up to yesterday.

In the meantime, here's a jam-packed 1,459-word Login, a 5-minute read.

1 big thing: In the Trump era, Oracle holds sway

Photo illustration: Aïda Amer/Axios; Photo: The Washington Post

Oracle, the business software giant, has maintained exceptional sway with the Trump administration that has helped it win policy battles and thwart its larger competitors, Axios' Margaret Harding McGill reports.

Why it matters: The techlash that's causing headaches for Google, Facebook and Amazon has yet to hit Oracle. Instead, the company is helping stoke some aspects of the tech critique in D.C. itself — highlighting the distinction between its own fee-for-service model and free, ad-based businesses.

What they're saying: "We have been working hard to point out that there is no techlash. There is a substantial backlash against the business model where purportedly 'free services' are offered in exchange for massive and unconstrained collection of consumer data untethered to the underlying service," said Ken Glueck, Oracle's executive vice president and top Washington lobbyist. "Winter is here for that business model."

Driving the news: Over the last two years, Oracle has turned is sights on Amazon, a competitor in the cloud-computing business.

  • Amazon recently lost the fight for a major Defense Department cloud contract worth up to $10 billion after the White House instructed the department to re-examine awarding the contract, according to the Washington Post.
  • While Oracle didn't win the contract, either — the Defense Department chose Microsoft — Oracle has a better relationship with Microsoft and prefers this outcome to an Amazon win.
  • Oracle CEO Safra Catz reportedly discussed the contract issue with Trump during a dinner at the White House in April 2018.

The backstory: Catz developed ties with the Trump administration early on.

  • Catz and other technology executives met with President Trump at Trump Tower in New York in December 2016 before the inauguration, and Catz joined the transition team.
  • Her name was floated for administration positions, including national security adviser.
  • "Safra Catz in particular would have very good access, and different from the rest of the tech industry," said a former administration official. "She was for Trump before a lot of other people, and a lot of the tech industry is still not for Trump. She gets meetings, she gets access."

The big picture: Oracle grew rich and strong as a corporate database provider in the '90s and expanded into an array of business software markets from retail to HR via acquisition.

  • It has held onto a big chunk of the business software market amid a shift from onsite servers to the cloud.
  • Its market cap remains significantly smaller than that of Big Tech giants such as Apple, Microsoft, Amazon and Google.

Details: Oracle has supported law and policy changes that may not directly benefit the company, but could cause problems for its rivals.

  • The company weighed in with the FCC to support the repeal of Obama-era net neutrality rules that were favored by Google and other tech companies. Catz met with FCC chairman Ajit Pai ahead of the commission's December 2017 vote to back the repeal.
  • Oracle publicly supported a legislative carve-out to the law that protects online platforms from liability over user-generated content. The Internet Association, whose members include Google and Facebook, fought the change before reaching a compromise with lawmakers.

My thought bubble: Oracle isn't the only tech giant to play the insider game in Trump's Washington. IBM has taken a similar strategy. Microsoft and Apple have also had successes, using a mix of engagement and confrontation.

2. Facebook, Google mull political ad changes

Photos: Denis Charlet/AFP/Daniel Reinhardt/picture alliance via Getty Images

Google and Facebook are both mulling changes to their political ad policies, sources tell Axios' Sara Fischer.

Driving the news: There's no indication at this point that either company will stop running political ads. Rather, both are weighing policy changes that have been floated as compromise ideas, like limiting micro-targeting or disclosing more info about the advertiser.

Why it matters: Google and Facebook are by far the two biggest online advertising firms in the U.S., and already, presidential candidates alone have spent well over $50 million on both platforms so far this year.

  • Changes to the platforms' policies could affect that race, as well as hundreds of others at the state and local levels.
  • Hundreds of issue advertisers, like non-profits that advocate for climate change or gun reform, could also be affected.

The big picture: Both companies are under enormous pressure from policymakers and industry leaders to address ways political ads can be manipulated on big automated platforms and to curtail the spread of lies and misinformation through paid advertising.

Between the lines: At this point, both companies are likely more worried about pressure coming from Democrats than from Republicans.

  • Republicans are traditionally hostile to government regulation of business and are less inclined to sign on to any effort to force the companies' hands.
  • Case in point: the Honest Ads Act, a 2017 Senate bill, has not received enough Republican support to move forward, even though the provisions it called for have mostly already been implemented by the tech firms themselves.
  • The recent controversy about falsehood in online ads was triggered by complaints about false statements in ads by President Trump's campaign attacking Democratic candidate Joe Biden.
3. Former Twitter employees charged with spying for Saudi Arabia

Justice Department charges were revealed on Wednesday against two former Twitter employees for spying on behalf of Saudi Arabia by obtaining information on dissidents who use the platform, the Washington Post reports.

Why it matters, via the Post: This marks the "first time federal prosecutors have publicly accused the kingdom of running agents in the United States. ... The case highlights the issue of foreign powers exploiting American social media platforms to identify critics and suppress their voices," and it has escalated concerns over the tech industry's ability to protect user data.

The big picture: Ahmad Abouammo has been charged with spying on three users — one of which discussed Saudi leadership, as Axios' Ursula Perano reports. Ali Alzabarah, the other former employee, allegedly accessed the private information of more than 6,000 Twitter accounts in 2015.

  • One of the accounts breached by Alzabarah belonged to a Saudi dissident Omar Abdulaziz, who had been close to slain Washington Post columnist Jamal Khashoggi.

Our thought bubble, via Axios' Scott Rosenberg: This is a classic "insider risk" situation, illustrating how a company's public commitments to protecting individuals' data can fray if it's not also effectively curbing employee misbehavior.

4. California says Facebook dodged privacy subpoenas

California Attorney General Xavier Becerra is taking Facebook to court to force it to turn over evidence for a newly revealed state investigation into the social network giant's privacy practices.

The big picture: The challenge adds one more layer of trouble for the beleaguered company, which already faces a slew of antitrust investigations and privacy probes in the U.S. and EU.

Driving the news: In a filing with the San Francisco County Superior Court, Becerra says Facebook has failed to comply with subpoenas for documents and emails. The company's responses have been "patently inadequate," Becerra said at a Wednesday press conference.

What they're saying:

  • Facebook "has not been fully responsive," Becerra said. "They have also failed to provide, or even search for, responsive documents among the emails of the company's chief executive Mark Zuckerberg and its chief operating officer Sheryl Sandberg."
  • "We have cooperated extensively with the State of California's investigation," Will Castleberry, Facebook vice president of state and local policy, said in a statement. "To date, we have provided thousands of pages of written responses and hundreds of thousands of documents."
5. How Facebook recruited, but failed to nab, a top Microsoft exec

Scott Guthrie. Photo: Microsoft.com

Among the many, many Facebook documents NBC posted Wednesday was one that indicated that Facebook tried, but failed to hire top Microsoft executive Scott Guthrie in 2014.

Sources tell me that Facebook had indeed heavily recruited Guthrie, who has long led Microsoft developer efforts, but now heads the company's overall Azure cloud push, as well as its developer and some business software units.

Why it matters: Facebook was trying to lure Guthrie at what ended up being a key time for both companies. When Satya Nadella was named CEO in 2014, Guthrie was promoted to Nadella's former role atop the server and tools business and has since added responsibility and influence within the company.

Between the lines: Most of Guthrie's Microsoft colleagues only learned today that he had ever considered leaving Redmond for Facebook.

My thought bubble: It all worked out pretty well for Guthrie, who ended up getting a promotion at roughly the same time as Facebook's recruiting push, all apparently without having to leverage that offer. And, if you haven't heard, Facebook has had a bit of a rough go of things of late.

6. Take Note

On Tap

  • T-Mobile is holding its first "uncarrier" event in a while, where the company typically offers some new consumer perks or benefits.
  • Web Summit continues in Lisbon (not London, as I mistakenly said yesterday) mea culpa.

Trading Places

  • Qualcomm named interim CFO Akash Palkhiwala to fill the spot permanently.

ICYMI

7. After you Login

This is your reminder that if Sky News presenter Kay Burley ever asks you for an interview, you'd better show up.

Ina Fried