Aug 12, 2020

Axios Login

By Ina Fried
Ina Fried


You think you had a long day yesterday? The Tampa Bay Lightning and Columbus Blue Jackets playoff game lasted more than six hours and took five overtime periods before Tampa Bay eventually broke the 2-2 tie.

Today's Login is 1,383 words, a 5-minute read.

1 big thing: EU-U.S. privacy rift throws business into turmoil

Illustration: Eniola Odetunde/Axios

Some businesses fear growing liability while others worry that small and mid-sized firms will get hurt as the U.S. and Europe begin work to replace Privacy Shield, the pact that let thousands of firms transfer data across the Atlantic without breaking EU privacy rules, Axios' Ashley Gold reports.

Why it matters: Without a replacement in place after the EU's high court struck Privacy Shield down last month, thousands of businesses will be stuck complying with an agreement that no longer applies in the EU while scrambling to figure out how to get data over from Europe without exposing themselves to legal risks.

What's new: This week, the Department of Commerce and European Commission announced they have started discussions to come up with a new framework to govern data transfers between the EU and the U.S.

  • Flashback: When a European judge struck down an earlier agreement, called the Safe Harbor, it took about six months to agree on a new one.
  • Things could go quicker this time because the ruling gives officials a guide to issues they need to consider in any new agreement, Guido Lobrano, vice president of policy for Europe at the Information Technology Industry Council, told Axios.
  • Still, COVID-19 could complicate matters, as officials can’t huddle in person.

Where it stands: Businesses that relied on Privacy Shield to certify that they were being responsible with user data now face three key challenges.

1. Privacy Shield is still the law of the land in the U.S.

  • That means fines and compliance obligations won't stop even though the agreement is no longer valid in the EU. FTC chairman Joe Simons said at a recent Congressional hearing the agency would still be enforcing it.
  • This is because many companies have built data protection promises made under Privacy Shield into vendor contracts and their terms of service. If they stop complying, the FTC could consider it a deceptive act.

2. Privacy Shield's absence could entrench tech giants' dominance.

  • Some 5,300 businesses relied on Privacy Shield to safely transfer data. Most of them are small and midsize, while their larger counterparts instead protect themselves by customizing more complex "standard contractual clauses" drafted by the EU, an approach that's more expensive and complex.
  • After the July 16 decision, Microsoft, Google Cloud, Amazon Web Services and Facebook all said transfers would be uninterrupted.
  • Big Tech firms' deep pockets and crack legal teams continue to help them better weather uncertainty, even as their size and power come into question.

3. The U.S. and EU may never deliver an agreement that can pass legal muster.

  • The court's chief rationale for killing Privacy Shield was that digital surveillance by the American government makes it impossible to ensure that Europeans' data can be protected once it enters the U.S.
  • That was also the main reason the court struck down the Safe Harbor. It's unclear if it's even possible to create an agreement that can survive a court challenge absent a radical change in U.S. surveillance practices — and the Trump administration has agitated for more digital surveillance, not less.

The big picture: The uncertainty and complications raised by the end of Privacy Shield only threaten to push the U.S. and Europe further apart as the global internet grows increasingly balkanized.

Editor’s note: This story has been corrected to show that ITI’s Guido Lobrano said the conditions are right for a new privacy agreement to be reached more easily this time, not that it would take longer.

2. Microsoft's dual-screen device coming for $1,300

Photo: Microsoft

After long teasing the Surface Duo, Microsoft is finally offering full details on the dual-screen Android device, available for pre-order today for a hefty $1,300.

Why it matters: Microsoft hesitates to call it a phone, but it's the closest thing to one the company has made in several years. While it looks like other devices in the Surface line, it's the first Microsoft device to run Google's mobile operating system.

Details:

  • Thanks to a 360° hinge, the device can be used in a variety of configurations.
  • The Surface has a single 11-megapixel camera, requiring the owner to fold their screen a certain way to use it as either a front or rear-facing camera.
  • It comes with a host of Microsoft software, including all the Office apps, Skype and OneDrive, as well as all the standard Google Android apps.
  • The device supports most major LTE networks, but doesn't have 5G capabilities. And yes, it can make calls, too.
  • It will be officially available and shipping starting Sept. 10.

Our thought bubble: With its 360° hinge and dual screens, the Surface Duo is a truly unique device, with some unmatched abilities, including sophisticated multitasking. But at $1,300, it is competing against the priciest smartphones, including Samsung's Galaxy Z Fold and Galaxy Note 20 Ultra.

What they're saying: "I'm not trying to reinvent the phone," Surface head Panos Panay said during a briefing with reporters on Tuesday. "I do believe this is a better way to get things done."

3. Scoop: EO threatens TikTok's U.S. jobs plan

An order from President Trump that would ban TikTok in the U.S. is putting in jeopardy TikTok's plan to hire 10,000 U.S. employees, according to a source familiar with the company's thinking.

Between the lines: When TikTok first rolled out the job pledge, it served as a carrot in the political conflict over the social video service, but it's now being held out as a stick.

The company doesn't expect the move to affect current employees at this point, according to the source. TikTok employs about 1,500 people in the U.S., 1,000 of whom have joined in the past year.

  • The new jobs involve a mix of skills and locations across Texas, California, Florida, Tennessee and New York. Many of the jobs in Texas are slated to be sales-related, while Florida and Nashville, Tennessee were targeted as customer service hubs.

Meanwhile, the Wall Street Journal reported that TikTok was collecting user data using a technique banned by Google.

  • In a statement, TikTok said the current version of its app does not collect MAC address information, but the company did not respond to follow-up questions from Axios as to when and why it stopped collecting such information.

By the numbers: A new Harris Poll survey finds 57% of Americans support Trump’s executive order.

  • Nearly two-thirds of active TikTok users oppose the order, however.
  • Interestingly, more than 60% of both the overall sample and the active TikTok users said a sale to an American company wouldn't eliminate security concerns given TikTok's ties to China.

Go deeper: Earlier this week, I talked to CNBC about the challenges facing TikTok as it looks to find an American buyer for its U.S. operations.

4. Kamala Harris' alliances, brawls with Big Tech

Sen. Kamala Harris, tapped Tuesday as Joe Biden's running mate, is not a "break up Big Tech" crusader. But should Democrats win in November and seek to go after Silicon Valley, she could bring prosecutorial rigor to the case, Axios' Kyle Daly and Ashley report.

Why it matters: The vice president doesn't normally run a president's tech agenda, but can still help set the tone on a wide range of issues for a presidential campaign and administration. Harris' familiarity with the firms in her backyard may give her an outsize role on tech policy.

The big picture: Harris came up through San Francisco politics and has many friends and allies in Silicon Valley, including among the Big Tech billionaire set.

  • Facebook COO Sheryl Sandberg posted a photo of Harris on Instagram within minutes of Biden's announcement, cheering her selection as a "huge moment for Black women and girls all over the world."
  • Salesforce CEO Marc Benioff, Airbnb CEO Brian Chesky and then-Yahoo and Apple executives Marissa Mayer and Jony Ive were among the big-name fundraisers for her 2014 bid for reelection as California attorney general, Recode's Teddy Schleifer noted on Twitter.

Yes, but: As both AG and as a senator, Harris has also turned the screws on Big Tech.

  • She pressured online platforms into action in a fight against revenge porn.
  • Harris backed the 2018 bill that chipped away at the tech industry's liability shield, Section 230 of the Communications Decency Act.
  • She told CNN she would "take a close look at" breaking up Facebook.
  • Pressing platforms on misinformation, foreign meddling and hate speech, she's made tech CEOs squirm on Capitol Hill.
5. Take Note

On Tap

  • Earnings reports today include Cisco and Lyft.

Trading Places

  • Rental marketplace Zumper has hired Darren Goode as its chief marketing officer. Goode was previously an executive at women's health tech firm Elvie and ran iTunes in Europe for Apple.
  • Coding bootcamp provider General Assembly named Lisa Lewin as CEO, succeeding founding chief executive Jake Schwartz. Lewin was previously an executive at Pearson and McGraw-Hill and most recently was at Ethical Ventures, a management consulting firm she co-founded in 2018.

ICYMI

6. After you Login

Just because the locales in Disney's animated films are fictitious doesn't mean you can't map them. A new book does just that.

Ina Fried