Jan 14, 2019

Axios Login

By Ina Fried
Ina Fried

Ina is still fighting the CES flu, so you've got me, Scott Rosenberg, at the helm of today's newsletter again.

1 big thing: Location data is privacy's ground zero

Illustration: Lazaro Gamio/Axios

Our phones' GPS and location capabilities are a key part of what make them magical — enabling them to speed our commutes, hail rides, and find the devices when we lose them.

These capabilities are also ground zero for the looming fight over defining the boundaries of privacy and acceptable business uses of our personal information.

The big picture: 3 recent stories show just how common problems with location data can be — and how thorny they've become...

1. Cell providers resell location info

  • Motherboard's story exposing a marketplace in the resale of location data that tracks phones raised alarms last week, leading major U.S. wireless carriers to announce they would stop selling the repositories of data that make such tracking possible.
  • That's a relief to anyone who'd prefer to keep their location private.
  • Yet we welcome similar reuse of location data that allows route-mapping services to tell us the fastest path between 2 points.
  • Those traffic guides anonymize data and shouldn't enable third parties track you down.
  • But no anonymizing scheme is perfect. And the tighter we draw privacy rules, the more likely we are to hobble valuable services, now or down the road.

2. Tweet locations reveal where you live

  • For years, Twitter's geolocation tagging of user's tweets also gave developers access to detailed GPS coordinates for each message posted from a phone.
  • As Wired reports, researchers have now used this data to build a tool that can predict where many Twitter users live.
  • Twitter argues that its geolocation feature has always been opt-in and voluntary, and in 2015 it started blocking the more detailed GPS information.
  • Still, this research highlights how common it is for online and mobile services to "leak" more information about you than you realize.

3. Slack monitors your itinerary

  • Slack users who have traveled to places embargoed by the U.S. — like Cuba, Syria, Iran or Crimea — and used the workplace messaging app there found their accounts suspended last month, Mashable reports.
  • Slack says it was just complying with U.S. economic sanctions, and it's using internet addresses, not GPS data, to track the forbidden logins.
  • The company issued a broad apology, saying that it had restored accounts suspended in error and in future would block access from affected internet addresses but not suspend user accounts.
  • The incident illustrates how tricky it can be for private companies to comply with complex laws governing electronic communications.

What's next: Members of the new Congress plan to float a wide range of new privacy legislation this year, with location data at the heart of the new rule-making. New laws will need to thread the needle between protecting personal information and enabling useful innovation.

The bottom line: Your phone is also a surveillance device. Use it with care unless you want your life to be an open book — or map.

2. Defining “emerging" tech for export controls

The Trump administration is considering a drastic expansion of the U.S. export control regime by looking to add controls to “emerging technologies” such as AI, robotics and quantum computing, Axios' Kim Hart reports.

The tech industry’s response — Tread carefully.

Why it matters: At the heart of the rulemaking is concern about national security. But the tech industry is worried the administration’s definition of “emerging technologies” will end up being too broad, undercutting U.S. competitiveness in these areas.

  • The administration identified 14 broad categories (like AI, neural networks and deep learning, and data analytics) for potential controls.

Between the lines: This rulemaking process forces the Trump administration to balance 2 big priorities — enabling emerging technologies and protecting national security.

  • In trying to shape the policy, the tech industry also has to balance 2 competing forces — its need to work productively with the Trump administration and a general wariness of overly protectionist trade policies.

What they’re saying: Tech industry trade groups (ITI, BSA, IA, CTA) filed comments with the Commerce Department’s Bureau of Industry and Security last week. Among the recommendations...

  • Export controls should be placed on the use of technologies, not the technologies themselves. They should be reserved for those that are “essential” to national security.
  • Companies suggest “emerging” tech should be understood as those that are not yet in production or use, since some of the 14 are “foundational” technologies that have been available for years.
  • Export controls shouldn’t be used as a lever in trade policy.
  • The administration should negotiate multilateral controls with other countries so the U.S. is not disadvantaged by one-sided restrictions.

Go deeper:

3. Slack mulls direct stock listing

Slack, the workspace messaging innovator, is considering a direct listing at some point this year, according to reports in the WSJ and FT on Friday.

Why it matters: The move, Axios' Felix Salmon writes, would allow Slack stock to be traded on the stock exchange. However, he adds, it's not an IPO — no new shares would be issued and the company would not raise any money.

  • That's no great hardship for Slack, which has already raised some $1.2 billion, per Crunchbase, and has so much money that it has an in-house VC arm that invests in other companies. Whatever growth constraints it might have, they're not financial.
  • Another advantage of a direct listing: It doesn't dilute existing shareholders. If the share price turns out to be significantly lower than earlier-stage investors like SoftBank think the company is worth, then it's a great opportunity for them to increase their stake without the company having to answer pointed questions about taking Saudi money.

The bottom line, per Felix: A lot of people would love the opportunity to invest in Slack, while many others, including employees, would love the opportunity to be able to sell their stock at will and diversify their investments.

  • A direct listing is an elegant solution that brings those two sides together. And if CEO Stewart Butterfield wants to be able to show impressive long-term growth in his share price, then if anything it helps him to go public at a relatively low valuation.

Our thought bubble: Butterfield is a veteran tech nonconformist (his tongue-in-cheek 2008 resignation letter from Yahoo is a classic), so an unorthodox direct-listing move would be totally in character.

Go deeper: Spotify inspires unicorns to ponder going public via direct listing

4. Amazon's next five years

Illustration: Aïda Amer/Axios

For two decades, Amazon has grown like wildfire, eschewing profit, pouring all its revenue back into itself and leaving a wake of destruction in retail. Now, it's going in for the kill, Axios' Erica Pandey reports.

Amazon has launched more than 100 private-label products, according to market research firm Gartner L2.

  • “That’s going to be a major part of what we think of as the future of retail," says Donald Ngwe, a professor of business administration at Harvard Business School.
  • The massive amounts of data Amazon has on its consumers give it unparalleled insights into what shoppers really want, says James Thomson, a former Amazon executive who now advises brands that sell on the platform.
  • By selling more of its own products, Amazon is competing against the sellers on its own marketplace — and starting to catch the attention of regulators and anti-trust lawyers.

Physical stores: At the beginning of 2018, Amazon made waves with its announcement of "Go" — a cashierless convenience store. By the end of the year, it had opened 6 of them across the country, with plans for as many as 3,000 more by 2021.

  • Add those to Amazon's bookstores — 18 and counting — and "4-star" stores, where it sells goods that earned over 4 stars on its site.
  • Tack on the more than 450 Whole Foods stores that Amazon also owns plus its reported plans to open even more of them.
  • All told, the e-commerce giant is well on its way to establishing a brick-and-mortar presence in every major city in the country.

Read more from the Axios Future team's Deep Dive into the future of retail.

5. Take note

On Tap

  • A federal court in California holds a hearing on criminal charges against Theranos' top executives today.
  • Qualcomm's FTC trial continues this week.

Trading Places

  • Mary Kay Bowman, Square's head of payments, is joining Visa.

ICYMI

  • Twitter's unconventional "beta" program for new product features like color-coded threading of replies will get tested in public. (TechCrunch)
  • The Chinese government wants short-video services like Tik Tok to review all user-posted content on their platforms. (Financial Times)
  • A Michigan State University study found that heavy use of social media impairs users' judgment at levels similar to drug addiction. (MSUToday)
  • After big platforms cracked down on ISIS recruiting pitches, the terrorist group migrated to encrypted messaging services and blogging platforms. (Wired)
  • Microsoft veteran and Andreessen Horowitz partner Steven Sinofsky offers his annual in-depth review of CES. (Medium)
  • How an egg dethroned Kylie Jenner to become Instagram's most-liked photo ever. (Axios)
6. After you Login

Watch this epic snowball melee at the base of the Washington Monument.

Ina Fried