Feb 8, 2019

Axios Login

Situational awareness: Sprint has filed a lawsuit against AT&T for what it's calling "fake 5G" marketing, the Washington Post reports.

Plus, a reminder: In a world filled with complexifiers, Login is here to make things simple for you.

1 big thing: Silicon Valley is ready for its closeup

Illustration: Aïda Amer/Axios

A giant book deal for two New York Times journalists based on an investigation of Facebook's privacy scandals portends a new era of brutal scrutiny for Silicon Valley's giants, Axios' David McCabe and Kia Kokalitcheva write.

Why it matters: The intense focus on tech companies' troubles comes not just from policymakers and investigative reporters, but also from our culture's storytellers in New York and Hollywood — book publishers, TV producers, and movie directors. And unlike their past infatuations with the tech world, this time they're taking a much tougher view.

What's happening: The new book from NYT reporters Cecilia Kang and Sheera Frenkel, which sold to HarperCollins, will "expand upon their bombshell investigative piece" about Facebook's "delay, deny and deflect" response to its scandals, the publisher said Wednesday. (Film and TV rights haven't been sold for the book.)

The big picture: There's more concern than ever about the power of Big Tech companies — and an interest in stories that expose their influence.

Other books from reporters covering the industry are coming fast and furious:

  • The NYT's Mike Isaac is set to publish a book about Uber, sparked by his reporting on the company's turbulent recent years.
  • Bloomberg's Sarah Frier is at work on a book about Instagram, tentatively entitled "No Filter."
  • Wall Street Journal's Tim Higgins has a book underway about Elon Musk's Tesla, the latest in a series of books about the carmaker and its larger-than-life CEO.

Then, there are the tell-alls.

  • Facebook investor Roger McNamee just published "Zucked," a winding reflection on how the social giant had lost its way.
  • Jessica Powell, who used to lead Google's communications team, wrote a "satirical novel based on my experience working at both a startup and one of the biggest tech companies in the world" called "The Big Disruption."
  • Yes, but: It's still less common for exposés to be written by tech insiders, given that there are many financial incentives to keeping their jobs and status in the Valley. "The code of silence is still there," said Antonio García Martínez, author of the 2016 life-at-Facebook memoir "Chaos Monkeys."

Where books go first, movies often follow.

  • "Bad Blood," the bestselling Theranos exposé from the WSJ's John Carreyrou out last year, is also being made into a movie set to star Jennifer Lawrence.
  • A script about Snapchat founder Evan Spiegel called "Frat Boy Genius" topped 2018's prestigious Black List of unproduced screenplays, which also included a script about disgraced data firm Cambridge Analytica.

Our thought bubble: As you read this, there's probably a screenwriter in an apartment somewhere in Santa Monica hoping to knock out the first five pages of her Jeff Bezos vs. the National Enquirer screenplay before lunch.

The bottom line: It's a great time to tell a story about Silicon Valley's inner workings — but maybe not the best time for its companies to have their stories told.

Go deeper: David and Kia have more here.

2. Jeff Bezos takes on the National Enquirer

Jeff Bezos. Photo: Emma McIntyre via Getty Images

You know who else is ready for his closeup? Jeff Bezos.

The Amazon CEO shocked the country on Thursday, going public with allegations that the National Enquirer and its parent company were trying to extort and blackmail Bezos into calling off an investigation into how the paper got its hands on his text messages.

  • Bezos posted emails that seem to show the company threatening to post more pictures if Bezos didn't back down.

Why it matters: It opens up a new front in the battle between Trumpland and Bezos, David notes. Thus far, the battle had largely been a one-sided fight, with President Trump and associates hurling insults and accusations and Bezos remaining silent. This time, though, Bezos came out guns blazing against the Trump-friendly publisher.

"Rather than capitulate to extortion and blackmail, I’ve decided to publish exactly what they sent me, despite the personal cost and embarrassment they threaten."
— Jeff Bezos, in a blog post on Medium

Winners: Bezos — even many of his critics had to support his move.

  • Medium is another winner, as it received a traffic surge and renewed prominence after Bezos posted his blog there.

Losers: It could be bad for Enquirer parent American Media, which has a plea agreement with federal prosecutors that calls for it not to commit any new crimes.

My thought bubble: I'm no lawyer, though I have seen a lot of "Law & Order," but some people think the company could be in hot water.

  • Ted Boutrous, a lawyer who has tussled with the Enquirer before, told the Washington Post it was a "textbook example of blackmail and extortion."
  • "It’s ripped right out of the law books," Boutrous told WashPost.

What's next: The question now is whether law enforcement opens a case against the Enquirer or any of its associates. Meanwhile, Business Insider points out that it looks like the National Enquirer website runs off of Amazon cloud infrastructure. We'll see how long that lasts.

3. Apple is dealing with another privacy mess

Apple told developers Thursday that they need to either stop using third party code that records what people do within their apps, or at the very least warn users they are being recorded. The statement followed a TechCrunch report that apps were using data-capturing code from a company called Glassbox.

Why it matters: This is the second time in as many weeks that Apple has been caught unawares as to how its platform was being misused.

Our thought bubble: Neither issue was Apple's fault and, indeed, the company had policies in place designed to prevent such behavior. But the fact that Apple learned of both issues through the press shows the limits of its ability to keep users safe.

Yes, but: What's different this time is that the same software is also running on Android devices. Google has yet to respond to an inquiry as to what, if any, action it will be taking.

What they're saying, via statements:

  • Apple points to their App Store review guidelines, which require apps to get explicit user consent and also to provide visual indication of any type of recording. "We have notified the developers that are in violation of these strict privacy terms and guidelines, and will take immediate action if necessary."
  • Glassbox says it's not interested in "spying on consumers" and that its software helps "improve online customer experiences" and protects users "from a compliance perspective." Its recording software "helps companies better understand how consumers are using their services, and where and why they are struggling."

Meanwhile, Apple released a patch for the FaceTime bug that allowed users to see a recipient even before a call was answered. The iPhone maker also added a fix for another, previously undisclosed bug.

4. New Congress, same net neutrality debate

Members of Congress who say they want to reach a compromise on net neutrality seemed no closer than ever to actually striking a deal, as they rehashed old arguments at a Thursday hearing on the issue, David reports.

Why it matters: More internet service providers are also big content producers now, exemplified in AT&T's purchase of Time Warner. That's the kind of power net neutrality rules are aimed at reining in.

Republicans say they want to reach a deal to codify net neutrality rules into law, but that they refuse to do so if it returns to the utility-style "common carrier" regime the FCC repealed last year.

  • They've introduced 3 bills — some inspired by what they say were Democratic proposals — to push their Democratic colleagues to the table.
  • "Our point is, do you want this as a political issue or are you serious about legislating?" said Rep. Greg Walden (Ore.), the top Republican on the Energy and Commerce Committee, which hosted the hearing.

Democrats say they want tough rules and defend the utility-style regulations.

  • "The interesting thing is that saying, 'I am for an open internet, I'm just not for the common carrier rules,' is kind of like saying, 'I'm for justice, just not for the courts overseeing it,'" said former FCC chairman Tom Wheeler, who produced the utility-style rules.

Our thought bubble: Privacy has partly supplanted net neutrality as the major tech issue on Capitol Hill. But, that didn't stop people from packing the hearing room on Thursday.

The bottom line: People on all sides of the net neutrality question have said for years that they want a compromise but the devil is in the details. So far, there's still a lot of daylight between them.

5. Take Note

On Tap

  • Not much work will be getting done. Many will still be talking about Bezos while waiting to see if a new shoe to drops in the Mueller investigation.

Trading Places

  • Airbnb hired airline veteran Fred Reid, previously CEO of Virgin America and president of Delta Airlines, as global head of transportation, signaling a new area for the company.
  • DigitalOcean named former VMware executive Barry Cooks as chief technology officer.
  • As it continues to expand its medical ranks, CNBC reports Apple has hired an obstetrician, indicating an interest in women's health.


  • Former AOL CEO and Verizon executive Tim Armstrong has launched a new startup to help direct-to-consumer brands. (CNBC)
  • Amazon and Microsoft are taking positions in support of facial recognition regulations. (VentureBeat)
  • Amazon also appears to be using customer tips to lower the amount it has to pay to some drivers. (LA Times)
  • Google Fiber is pulling out of Louisville after a new, cheaper method of laying fiber failed to deliver. (CNET)
  • Cisco is the latest tech company to come out in favor of privacy regulation. (Axios)
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