Aug 2, 2019

Axios Login

Ina Fried

I still have a bit of a cough but the doctor assures me my email is no longer contagious.

Today's Smart Brevity count: 1,334 words (~ 5 min read)

1 big thing: New tariffs could hit tech hard

Illustration: Aïda Amer/Axios

The tech industry was scrambling yesterday after President Trump announced plans to impose tariffs on the $300 billion worth of goods the U.S. imports from China annually that are not yet subject to such taxes.

Why it matters: Until now, the U.S. has tried to target the tariffs on items that consumers wouldn't feel as directly, but this new round would appear to hit all manner of everyday goods, including nearly all types of consumer electronics.

Between the lines: The Trump administration announced the moves even as it described recent trade talks with China as "productive." That's leaving many wondering whether the administration actually plans to levy these new taxes.

  • Plus, as this round of tariffs is more likely to be quickly noticed by consumers, the president may be risking disaffection among his base.

Details: Expected to be included in the new tariffs are all the "List 4" items not included in prior rounds, including everything from cellphones, laptops and game consoles to landline telephones, batteries and printer cartridges.

What they're saying:

  • President Trump: "Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. ... We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!"
  • Gary Shapiro, CEO of the Consumer Technology Association: "Retaliatory tariffs, whether 10% or 25%, are bad policy. The Trump administration is again taxing the American people in the form of new tariffs on their favorite technology products. Tariffs are taxes paid for by U.S. consumers, not China’s government."
  • Jason Oxman, CEO of tech trade group ITI: "The tariffs already in force have cost American consumers, workers, and businesses of all sizes more than $30 billion. ... We urge the president and his team to direct their focus on striking a long-term deal without using Americans’ wallets as leverage.”

Of note: Although the tariffs would appear to affect nearly all tech products not already covered, companies can seek case-by-case exemptions, something many are likely to do.

Several tech companies contacted by Axios, including Apple and Google, declined to comment.

2. Apple suspends human review of Siri queries


Apple says it is putting a worldwide hold on a program that had contractors listening to some Siri queries in an effort to grade the digital assistant on its responses. When the program returns, Apple says users will have the choice whether to participate.

Why it matters: Apple touts privacy as a key selling point, making the idea that someone might be listening to Siri queries unsettling, even if only a tiny fraction were being monitored.

Driving the news: The issue came to light after a report by The Guardian last week that Apple contractors "grading" Siri's responses had been privy to all sorts of conversations, including couples having sex and people at doctors' appointments.

  • "While we conduct a thorough review, we are suspending Siri grading globally," Apple said in a statement to Axios, saying it's "committed to delivering a great Siri experience while protecting user privacy."
  • Apple previously said less than 1% of queries were subject to such grading and that they were typically only a few seconds long. Also, it said the queries weren't tied to a particular Apple ID and that those listening were in secure facilities and subject to Apple's strict confidentiality rules.

Between the lines: Digital assistants are in their early days, so the tech giants want to find ways to both see how well they are doing and identify areas for improvement. However, digital assistants are often awakened accidentally, and as such, can end up being privy to sensitive conversations.

The big picture: Google is pausing a similar program for EU residents after a German data protection commissioner announced an inquiry into its practices.

3. Report: FTC eyes Facebook's Instagram and WhatsApp buys

The Federal Trade Commission's antitrust probe of Facebook is looking at whether the social network used acquisitions to take out its competition, according to the Wall Street Journal.

Why it matters: It suggests that the agency was serious when it said it might look at already-completed mergers and acquisitions as part of a broader review of the tech sector, Axios' David McCabe writes.

Flashback: The major acquisitions of Instagram and WhatsApp have given Facebook a shield against declining user growth on its classic social platform for nearly a decade.

  • It bought Instagram first, in 2012, for $1 billion.
  • It purchased WhatsApp two years later for $19 billion.

In recent years, critics have contended that those deals allowed Facebook to stifle competition.

  • They say Facebook has used proprietary data, via a virtual private network called Onavo that it acquired in 2013, to identify small companies gaining market share and buy them before they can present too much of a threat.
  • Presidential candidate Sen. Elizabeth Warren (D-Mass.) has called for appointing regulators who might be willing to unwind those acquisitions by Facebook, and other purchases by major internet firms.

Yes, but: The exact nature of the FTC's inquiries are not yet clear. Investigations are generally cloaked in secrecy and can take years.

The big picture: The increased antitrust scrutiny of major tech giants may already be affecting their decisions about what companies to acquire — and whether the extra fight in D.C. is worth the effort.

4. FCC votes to improve broadband maps

FCC Chairman Ajit Pai. Photo: Ethan Miller/Getty Images.

The Federal Communications Commission voted on Thursday to require broadband service providers like Comcast and Verizon to provide more granular information about where their services are available. The goal of the data is to help the agency create more precise broadband maps, Axios' Kim Hart reports.

Why it matters: The agency uses its maps to determine where billions of dollars in broadband subsidies should be allocated. But the mapping data used has long been criticized for overstating the availability of broadband services and speeds to consumers, especially in rural areas where coverage is spotty.

How it works: The FCC currently requires fixed broadband service providers — not wireless providers — to report broadband availability by census block.

  • The catch: Companies can report that a census block is served even if only one household is hooked up to the service.
  • As a result, existing data may show services are available even where consumers can't get access — meaning the entire census block is not eligible for federal subsidies to expand broadband service.

The new requirements will make service providers report broadband access using "shapefiles," which are a more precise measurement to indicate where companies have broadband networks.

  • The FCC also said it will accept feedback from the public and local governments to make sure the data is accurate.

Meanwhile, Democratic commissioners said they were disappointed the agency didn't commit to publishing the data in the National Broadband Map. Commissioner Jessica Rosenworcel said affordability and price should be accounted for in the map, in addition to availability.

5. Quick takes

1. Texas is joining a lawsuit of more than a dozen states seeking to block T-Mobile's purchase of Sprint. Meanwhile, a judge granted the states' request to delay the trial until December.

  • Our take: The move means that a Republican state is now joining the largely Democratic effort that has been the biggest obstacle to the deal. And the December trial date means it could be a while longer before the merger's fate is decided.

2. DoorDash is buying food delivery rival Caviar from Square for $410 million in cash and stock, the companies announced yesterday.

  • Our take: Consolidation in the crowded field was inevitable. Plus, Square has been looking to sell Caviar at least as far back as 2015, a year after it purchased it.

3. Microsoft has signed popular Fortnite player Tyler "Ninja" Blevins to broadcast exclusively on Mixer, its Twitch rival.

  • Our take: Given that Microsoft certainly had to write a big check, the bold move will pay off only if a good chunk of Ninja's fans migrate and start using Mixer more broadly.
  • "Within 40 minutes of the announcement, Mixer was the top trending topic on Twitter in the United States, and Ninja’s Mixer page had over 28,000 subscribers," per AP.
6. Take Note

On Tap

  • It's Friday.

Trading Places

  • GoDaddy CEO Scott Wagner is stepping down, citing health reasons, and will be replaced by former Expedia executive Aman Bhutani.


  • The Pentagon has delayed the awarding of a $10 billion cloud computing contract after Trump raised concerns about the deal that had been expected to go either Amazon or Microsoft. (NYT)
  • Amazon, which stopped selling Dash buttons earlier this year, said it will shut off existing buttons at the end of this month. (CNET)
  • Facebook said it took down a series of accounts tied to Saudi Arabia, the first time that country had been implicated in so-called coordinated inauthentic behavior. (CNN)
7. After you Login

If you liked yesterday's collection of run-created art, I have a proposal for you.

Ina Fried