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Heads-up: Every quarter Axios journalists highlight the trends they are watching in politics, energy, science, technology, business and more. As a subscriber to this newsletter, you'll see that in your inbox from Mike Allen tomorrow. The topic: "A brewing storm for big tech."
Today's Login is 1,240 words, a 4-minute read.
1 big thing: U.S., allies push Facebook on encryption
The U.S., along with the U.K. and Australia, has sent a letter to Facebook asking it to halt implementation of end-to-end encryption tech in its services, in order to keep messages accessible to law enforcement.
Why it matters: The request marks the latest twist in a long-running debate over encryption, with some arguing for government backdoors and others maintaining that there is no way to provide them without compromising security and privacy.
- Facebook's move to encrypt Messenger and Instagram messages would significantly expand the proportion of all messaging that is encrypted, but Facebook's WhatsApp and Apple's iMessage are already encrypted from end-to-end.
The big picture: Facebook's pivot to encrypted messaging, announced last winter, is raising tons of questions, from how the company will make money to how to combat child pornography, human trafficking and cybercrime.
- Concerns over how encryption could make it tougher to crack down on child exploitation have raised particular concern, as detailed recently by the New York Times.
Asked about the issue at an employee Q&A Thursday (which Facebook broadcast publicly), CEO Mark Zuckerberg said one reason the company announced the move toward encrypted messaging years ahead of actually doing so was to consult with law enforcement and child safety groups on how best to mitigate potential harms.
- "I still think that the equities are generally in favor of moving towards end to end encryption," Zuckerberg said.
What they're saying:
- U.K. Home Secretary Priti Patel: "So far nothing we have seen from Facebook reassures me that their plans for end-to-end encryption will not act as a barrier to the identification and pursuit of criminals operating on their platforms. Companies cannot operate with impunity where lives and the safety of our children is at stake, and if Mr. Zuckerberg really has a credible plan to protect Facebook’s more than 2 billion users it’s time he let us know what it is."
- Facebook: A spokesperson said the company believes "people have the right to have a private conversation online, wherever they are in the world," and noted that more than 1 billion people send encrypted messages every day. The company's statement added that it respects the role of law enforcement and noted that it is "consulting closely with child safety experts, governments and technology companies and devoting new teams and sophisticated technology so we can use all the information available to us to help keep people safe."
- ACLU senior legislative counsel Neema Singh Guliani: “When a door opens for the United States, Australia, or Britain, it also opens for North Korea, Iran, and hackers that want to steal our information. Companies should resist these repeated attempts to weaken encryption that reliably protects consumers' sensitive data from identity thieves, credit card fraud, and human rights abusers.”
History lesson: The FBI got into a huge fight with Apple in 2016 after the company refused to rewrite iOS to make it easier for the government to crack the encrypted phone of the San Bernardino shooting suspect. The conflict never really got resolved, as the FBI found another way in.
Separately: Facebook launched Threads, a new unencrypted messaging app for Instagram, on Wednesday. The move is seen as another effort to duplicate the success of Snapchat.
2. Political ads become 2020 flashpoint
Tech giants, TV networks, and even transit companies are all struggling to figure out how to managing political ads ahead of the 2020 election. While some firms choose to run lots of political and issue ads with little oversight, others opt to ban them altogether, Axios' Sara Fischer reports.
Why it matters: Absent strict government regulation of political ads across all media, the decision over how to manage those ads is left to companies.
Driving the news: TikTok, the Chinese-owned viral karaoke app, said Thursday that it would ban political ads because they don't fit the company's goal of creating an "entertaining, genuine experience" for users.
- "Any paid ads that come into the community need to fit the standards for our platform, and the nature of paid political ads is not something we believe fits the TikTok platform experience," the company said in a statement.
That position is unusual compared to its Big Tech competitors in the U.S.
- Political ad experts expect well over $1 billion to be spent on digital ads alone this campaign cycle. So far, presidential campaigns have spent more than $60 million on Google and Facebook this year. About $1.2 million has been spent on political ads on Snapchat since last June.
Yes, but: Facebook, Google and others have faced enormous scrutiny for letting groups buy ads that promote false or misleading claims.
- Most recently, Facebook banned ads from conservative news outlet The Epoch Times, after NBC News reported that the company had funneled its Facebook ads through other dummy sites to hide their connection to its $2 million pro-Trump campaign. The company sharpened its political ad rules shortly thereafter.
- Facebook, Google and most recently Snapchat have all set up political advertising archives to bring transparency to their advertising policies and the ads that run on their platforms.
Be smart: It's not just Big Tech that's grappling with these decisions.
- On Thursday The Daily Beast reported that CNN refused to air 2 Trump campaign ads that push misleading claims and suggest the network's anchors are the Democrats' "media lapdogs." The Trump campaign says the ad is factually accurate.
- Metro authorities and other out-of-home (billboard) companies also struggle with this dilemma.
The big picture: Traditional media companies have had years to develop rigorous political and advocacy advertising guidelines and approval processes.
- But for newer tech companies that were born without regulations, and for national cable and transit companies, figuring out the appropriate balance between oversight and acceptance has proven difficult.
3. Third of industrial plants lack plans for cyberattacks
35% of global industrial plants have no response plan in case of cyberattacks, according to a survey conducted by Siemens and the Ponemon Institute, Axios' Joe Uchill reports.
Why it matters: The consensus among cybersecurity experts is to treat breaches as inevitable and plan ahead for resiliency. That can be particularly important in industrial systems, where physical safety and plant operations can hinge on the uptime of single systems.
The report sampled 1,726 employees of industrial companies scattered around the globe.
By the numbers: Only 42% of respondents rated their readiness for cyber attacks as "high."
- Siemens head of industrial cybersecurity Leo Simonovich told Axios that a low number actually speaks well of a community waking up to its vulnerability.
- "We've seen a real awareness of the problem," he said. "The first step is identifying the threat."
Simonovich said there were 3 key problems that appear to plague industrial cybersecurity.
- Experts aren't in charge. At the majority of plants, it's plant managers or industrial engineers, rather than cybersecurity experts, who run cybersecurity.
- Low visibility. Unlike with traditional business networks, industrial networks often lack the tools to see what's going on in a network, which is critical in catching hackers. That, too, is getting better.
- Staffing. "There's a lack of people who understand industrial controls, networking, security, and heavy machinery," Simonovich said. "One person needs at least 2–3 out of the 4. "
4. WeWork tells employees to brace for layoffs
WeWork parent We Company confirmed to its employees on Thursday that significant layoffs are in the offing, according to a source. Bloomberg and others had reported that cuts were coming and Bloomberg also reported on Thursday's employee meeting.
Why it matters: The cuts comes as the newly installed co-CEOs look to return the company to its core co-working business. As we reported earlier this week, the company is looking to sell or spin off at least 5 of its recent acquisitions.
Yes, but: A source familiar with the matter said the cuts will be less than the 25% reported by Business Insider as possible. Bloomberg pegged the cuts as in the neighborhood of 2,000 employees, or 16% of staff.
Meanwhile: HP says it plans to cut 7,000 to 9,000 jobs through layoffs and early retirements amid weakness in its printer business.
5. Take Note
- D.C.-based Higher Logic named Daniel Reese as chief customer officer and veteran software marketer Kevin Alansky as chief marketing officer.
6. After you Login
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