May 19, 2020

Axios Login

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Today's Login, meanwhile, is 1,461 words, a 6-minute read.

1 big thing: DOJ, Apple renew their dispute over encryption

Illustration: Rebecca Zisser/Axios

The long-simmering debate over encryption has come to a boil once more, as Attorney General Bill Barr again attacked Apple on the issue and a leading Senate encryption critic now has law enforcement looking to get into his own device. 

The big picture: Although they're not viable in all cases, there are a number of ways for law enforcement to get suspects' data. That, however, hasn't stopped pressure on companies like Apple to build backdoors to let law enforcement access encrypted devices.

Driving the news:

What they're saying: At a Monday news conference announcing the FBI's findings in the Pensacola case, Barr took Apple to task.

  • “We asked Apple for assistance and so did the President,” he said. “Unfortunately, Apple would not help us unlock the phones. Apple had deliberately designed them so that only the user — in this case, the terrorist — could gain access to their contents.”
  • “There is no such thing as a back door just for the good guys, and the American people do not have to choose between weakening encryption and effective investigations,” Apple said in a statement.
  • In their own statement, the Center for Democracy & Technology, the Internet Society and Global Partners Digital said, “The Department of Justice has demonstrated again that it can access devices protected by strong encryption. It just has to expend the resources to do so.”

Flashback: The Pensacola case is the second recent case where the FBI has lashed out at Apple for not helping break its encryption — and was nonetheless able to get data off the phone. (The first, in 2016, involved the San Bernardino shooting.)

Be smart: Apple offers end-to-end encryption on the iPhone, meaning that no one, including both law enforcement and criminals, can access a device's contents without having its passcode.

  • However, those who back up their devices to Apple's iCloud leave Apple with data that it will provide if ordered by a court.

As for Burr, it's possible that the FBI, in seizing his phone, may be moving quickly to take advantage of its current access to newer iPhones. Apple is known for closing the loopholes that Greyshift and others use, creating a perennial cat-and-mouse game.

  • Ironically, Burr has been among the Senate's harshest critics of encryption. And yet law enforcement may be able to get the data it wants without Apple having to weaken encryption.

What's next: The encryption debate isn't going away, but it's unlikely to be settled any time soon, either. Both sides feel they're right, but both also seem reluctant to ask a court to decide the matter.

2. TikTok nabs top Disney streaming exec as CEO

Photo: Jesse Grant/Getty Images for Disney

Kevin Mayer, a Disney veteran who oversaw the company's streaming unit and the launch of Disney+, is leaving the company after 27 years to become the CEO of TikTok, Axios' Sara Fischer reports.

Why it matters: The move comes while TikTok seeks both to broaden its media business and to demonstrate its independence from its Chinese owner, ByteDance.

Details: In addition to his role as TikTok CEO, Mayer will become ByteDance's COO.

  • In that role, Mayer will lead the company's music and gaming businesses, as well as Helo, ByteDance's growing social media network.
  • Former TikTok president Alex Zhu, meanwhile, will take on a new role as vice president of product and strategy for ByteDance.

Yes, but: Mayer's dual roles could complicate TikTok's effort to show itself as independent from ByteDance. Also, while an American face could help TikTok weather troubles during a moment of increased U.S.-China tension, it also gives regulators a local target to haul in for questioning.

  • Sen. Josh Hawley, an outspoken critic of TikTok, wasted no time in signaling his intention to do just that, noting that in the past TikTok executives have said they were unable to come to the U.S. to testify. "But this new executive lives in the USA," Hawley said in a tweet. "I look forward to hearing from him. Under oath."
3. Instagram boss: Giphy purchase not about data access

Photo: Matt Winkelmeyer/Getty Images for Wired

Facebook's $400 million Giphy deal was an effort to tap the service's talent and creator ecosystem rather than to harvest data from users and partners of the shareable animated image platform, Instagram boss Adam Mosseri told Axios' Sara Fischer.

Why it matters: Facebook is facing intense scrutiny for its market power, specifically pertaining to the way it taps user data from acquisitions for advertising.

"On the motivations for Giphy, the short answer is it's not about data," Mosseri said in an interview.

Be smart: The Facebook-Giphy transaction is not subject to any mandatory merger control review, a source familiar with the deal told Axios' Margaret Harding McGill. Such reviews are triggered for deals that reach certain financial thresholds.

  • Still, Facebook is already getting significant blowback for the deal, primarily from open markets and consumer advocate groups.

Mosseri says another big motivation for buying the company was to "keep the platform going."

  • A source close to the deal says Giphy came to Instagram amid financial struggles prior to the pandemic, although conversations were initially more about a partnership than an acquisition.
  • Giphy currently is integrated across most of Facebook's services. Facebook says users of its apps account for roughly half of Giphy's engagement.

As for why Giphy will be housed within Instagram and not Facebook more broadly, Mosseri said, "Instagram is very focused on expression, youth, and creators, all of which align with Giphy. That said, I’d be excited about them joining anywhere in the company."

  • Giphy is expected to retain its own branding, with its primary integration to come via Facebook's Instagram platform.
  • Instagram accounts for roughly 25% of Giphy's current engagement.

Yes, but: Critics argue that aside from the antitrust concerns, there are copyright problems surrounding Giphy, whose library of images includes many taken from popular TV shows and movies.

  • Mosseri did not answer questions about copyright, but a Facebook spokesperson noted that Giphy's content would be subject to Facebook's existing notice-and-takedown program and repeat infringer policy.

The big picture: Facebook's acquisition of Giphy comes two years after Facebook rival Google bought Giphy's main rival, Tenor.

  • "The Tenor acquisition wasn't a major factor in either direction," Mosseri said.
4. FCC to vote on "5G upgrade" plan

Commissioner Brendan Carr. Photo: Tom Williams/CQ Roll Call

The Federal Communications Commission will vote next month on a plan to get U.S. 5G networks built out faster by clarifying rules on updating existing wireless infrastructure, Margaret reports.

The big picture: The plan builds on past actions the agency has taken over the objections of cities. The FCC's GOP majority says rule changes, including preempting cities in some cases, will make it quicker, cheaper and easier for wireless carriers to build out their 5G networks.

Details: Commissioner Brendan Carr, who is leading the agency's work on wireless infrastructure, told Axios the latest proposal focuses on replacing or modifying existing wireless equipment with new gear that can carry 5G signals.

  • “This is going to take 3G and 4G sites and make it easier and faster to upgrade them to 5G," Carr said.

The plan, set for a June 9 vote, would clarify:

  • the starting point of a 60-day shot clock on whether to allow a wireless equipment installation;
  • what equipment can go on an existing structure; and
  • what rules cities can impose around concealing equipment or making it aesthetically pleasing.

Yes, but: Some cities have warned the commission against making such rule changes, which wireless industry groups have requested.

  • "The current public health crisis has proven that local governments are eminently capable of working in partnership with industry stakeholders to dedicate resources where they are needed most," a group of Western cities including San Jose, California; Boulder, Colorado; and Tacoma, Washington, told the agency last month.
  • "The commission should celebrate these success stories and not view this moment as an opportunity to further preempt local authority."

Go deeper: The battle over 5G deployment in America's cities

5. Take Note

On Tap

  • Microsoft's Build conference kicks off online today starting at 8am PT. Microsoft CEO Satya Nadella and other company executives are scheduled to speak.
  • Facebook CEO Mark Zuckerberg is hosting a live session at 10am PT "to share some new product updates we've been working on to help small businesses."

Trading Places


  • Uber is cutting 3,000 more jobs, on top of 3,700 positions eliminated just two weeks ago. (Axios)
  • Online car marketplace Vroom filed for an IPO. (Axios)
  • With the T-Mobile's Sprint purchase done, former Sprint controlling owner SoftBank hopes to sell some of its T-Mobile holdings in a secondary offering. (CNBC)
  • Google and Alphabet CEO Sundar Pichai sat down with The Verge to talk about running the companies during a pandemic. (The Verge)
  • Walmart is shutting down, which it acquired in 2016, though its overall e-commerce business is spiking. (TechCrunch)
6. After you Login

Check out this family's quarantine rendition of the Beatles' "Come Together." The dad, Colt, may be a professional musician, but it's his young daughter who steals the show with her dance moves.