Axios - Technology
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Immelt is frontrunner for Uber CEO

Steven Senne / AP

Recode's Kara Swisher reports that Jeff Immelt, the former chairman of GE, is the leading candidate to be the next CEO of Uber. Citing several sources, she reports the pick isn't final and others are still in the running, though none of them are women. A decision by the board could come in the next 2 weeks.

Why it matters: Swisher reports Immelt is a strong candidate because as an experienced CEO he'll be able to navigate the tumultuous board dynamic (ousted CEO Travis Kalanick is still a member and an investor is suing to get him removed), and he's well known to Wall Street ahead of a possible IPO.

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The Daily Stormer is back online

Virginia Mayo / AP

A 20-year-old is making sure the neo-nazi, white supremacist website the Daily Stormer continues to exist online, at least for now, after GoDaddy and Google kicked it off their servers last weekend. ProPublica talked to Nicholas Lim, the man behind Daily Stormer's resurrection, who said he's simply trying to protect free speech rights.

  • Lim didn't even know what type of content the Daily Stormer publishes before ProPublica reached out to him. "I think there's a lot of stupid ideas here,'' he told ProPublica. "But frankly it's not my decision or something I really want to get involved in."
  • Daily Stormer was kicked from its internet servers after publishing articles bashing the physical appearance of Heather Heyer, the 32-year-old woman killed by the man who drove his car through a crowd last weekend in Charlottesville.
  • Lim's company, Bitmitigate.com, just launched in March and he told ProPublica that resurrecting Daily Stormer could bring beneficial publicity to his company. "I thought it would really get my service out there."
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Judge shuts down key Uber argument in Waymo lawsuit

AP

A federal judge has denied Uber's attempt to use a key argument to explain why a former employee downloaded files prior to leaving his job at Waymo, Alphabet's self-driving car unit.

What's next: Uber still has to show that it didn't know about Levandowski's alleged downloading of Waymo files (at least until this meeting in March), and that it was not as part of a plan to steal Waymo's technology. The case is set to go to jury trial in October.

"We had hoped that the jury and the public could hear the reasons Levandowski gave for his downloading files, which had nothing to do with Uber," Uber said in a statement. "The fact remains, and will be demonstrated at trial, that none of those files came to Uber."

The details: Recently, Uber's lawyers told the court that the former employee, Anthony Levandowski, told its then-CEO and in-house counsel in March that he downloaded the files as insurance that Waymo pay him a $120 million bonus. However, Uber also attempted to argue that while this particular meeting shouldn't be confidential (and could therefore use this defense), others that took place that same evening are confidential because lawyers were present to give advice. The judge ruled Friday that Uber can't separate the meetings out.

"Anthony Levandowski's supposed excuse for downloading more than 14,000 confidential Waymo files was self-serving and more than just suspicious – it was entirely made-up," said Waymo in a statement. "The extreme measures he took to try to erase the digital fingerprints of his actions completely belie any benign motive."

The story has been updated with statements from the companies.

Featured

Trump elevates Cyber Command

Andrew Harnik / AP

Trump approved an Obama-era plan Friday to elevate Cyber Command, currently housed at the National Security Agency (NSA), to be a Unified Combatant Command.

Why it matters: This shows the U.S. is getting serious about dealing with cyber warfare. The move will also help the U.S. bolster its cyber weapons so it can match Russia's capabilities, three U.S. officials told Reuters, and improve America's ability to interfere in foreign adversaries' military programs when necessary.

Effect: This moves shakes Cyber Command up a bit and gives it some operational independence, although it's not entirely separate from the NSA — yet. Trump's announcement raised the possibility that it could eventually be entirely split off, which would grant it new powers as a standalone unit reporting directly to Defense Secretary James Mattis.
Then it would be the 10th unified command in the U.S. military. Commands are organized by region (for example, Pacific Command) and by responsibility (for example, Transportation Command) and report directly to the defense secretary, per Military.com.

What's next: Cyber Command now needs a nomination for a new leader, which will likely be recommended by Mattis.

Go deeper with Axios' breakdown of the top cyber powers in the world and see where the U.S. stands.

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Dell Tech CEO sends Charlottesville email denouncing violence

AP Photo/John Locher

Despite initially deciding to stay on President Trump's American Manufacturing Council (though it was ultimately disbanded), Dell Technologies founder and CEO Michael Dell has now sent an email to employees, denouncing the events last weekend in Charlottesville.

About face: Dell's email is notable because he was one of the few members on the council not to resign following Trump's press conference on Tuesday where he addressed the weekend's events in Charlottesville, saying there was violence on "both sides." This email comes after Trump abruptly dissolved the council on Thursday (and another decided to disband).

Read the whole email:

At the most basic level human emotion can be divided into into love or hate. Hate is evil and we've seen far too much hate lately whether in Charlottesville, Barcelona or elsewhere.
Our company is a place where everyone is welcome. Our team members come from all backgrounds, religions, nationalities, genders and races. This is one of our greatest strengths and we thrive in this culture. Hatred, violence, racism and terrorism like the kind we have seen last weekend in Virginia and more recently in Barcelona are driven only by evil and seek to divide us. These actions and any who support them have no place in our global society.
Our culture code (dell.com/learn/ly/en/ly…) is at the heart of our commitment and it details the expectations we have for our team members and our company. These recent events only strengthen our resolve to make an even greater positive difference in the world.
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Australia moves to regulate bitcoin

AP

Australia plans to regulate digital currencies like bitcoin as part of an effort to bolster anti-money laundering laws, the FT reports. Reforms published Thursday would bring digital currency exchanges under the purview of the country's financial crime-fighting agency. Australian justice minister Michael Keenan wants to ensure digital currencies aren't used to fund terrorists.

Not alone: Japan took similar measures this year to regulate bitcoin and other "alternative coin" exchanges, opening them up for annual audits. Japan was the first national government to take such action.

Why it matters: Regulating the currency means Japan and other countries are recognizing bitcoin as a legitimate form of payment. That recognition has helped send the price of bitcoin to record highs.

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Android O to get formal debut on Monday

Screenshot by Axios

Google plans to formally launch Android O just after next Monday's solar eclipse. A livestream is scheduled for 2:40 p.m. ET on Aug. 21.

"Android O is touching down to Earth with the total solar eclipse, bringing some super (sweet) new powers," Google said on an eclipse-themed teaser site. The software, which has been in testing for months, aims to improve battery life and add picture-in-picture multitasking on phones.

The creamy middle: Eagle-eyed enthusiasts noted that one of the accompanying files to a Google+ post had Oreo teaser in the file name, so that could well be the dessert-themed name for O.

The bottom line: Of course, what really matters is when the new software starts to show up on phones. Expect existing Google devices like the Pixel to be the first to get the update. As for new devices, the next Pixel will almost certainly be running O. And Samsung is due to debut the next Galaxy Note on Wednesday. It's either going to be one of the last flagship devices running Nougat or one of the first to pack Android O

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Studios reportedly nearing digital distribution deal with Apple, Comcast

AP

Warner Bros. and Universal Pictures are negotiating a deal with Apple and Comcast to offer audiences digital versions of movies two weeks after their theatre releases, Bloomberg reports. Sources familiar with the matter tell Bloomberg that the deal could come as early as next year. As more consumers watch movies via streaming services, studios want a digital distribution package that help will make up for the decline in DVD sales and home entertainment.

Why it matters: The theatre chain and studio businesses have been unable to compromise on a more expensive ($30+) digital movie option. At issue for some studios is the cost/benefit analysis of charging ahead without the blessing of theatre chains, who still hold enormous power distributing movies and driving revenue. Noticeably missing from the negotiations is Disney, which announced it would build its own entertainment streaming package.

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One idea for regulating Google and Facebook's control over content

Paul Sakuma / AP

We reported this morning on the mounting pressure on major web platforms over their role in moderating content. A conservative activist named Phil Kerpen circulated a confidential memo earlier this year on the mechanics and politics of how to regulate the political neutrality of major web companies like Google and Facebook. Find the full text below.

Why it matters: Moves to turn these ideas into concrete policy or regulation haven't happened. But the memo is certainly getting attention, especially as major web platforms try to walk the fraught line of removing extremist content while also maintaining an open platform for free speech in the wake of the Charlottesville attack.

Worth noting: "The unpublished draft memo represents preliminary thoughts on complex issues," Kerpen said when contacted by Axios.

Confidential Strategy Memorandum: Layer-Neutral Net Neutrality And The Private Censorship Problem

Social media (Facebook, Twitter) and search (Google) companies with dominant market position represent themselves as politically neutral while systematically promoting liberal views and limiting or even banning conservatives. They do so while enjoying blanket liability protection and with the full approval of liberal elites. Far too many conservative media and intellectuals defend the politically biased practices of these companies on the basis that viewpoint discrimination by private entities is beyond the reach of government.

That view ignores the reality that basic network economics create a high bar to competition – a problem that's been with us since the railroads – and that incumbents with market power therefore pose a serious threat to free speech.

Worse, that view incorrectly assumes the political bias of these companies is a free-market phenomenon, when it is largely result of federal law that insulates these companies from a natural market constraint on being an active political player: legal liability for publishing false and malicious claims.

Section 230 of the Communications Decency Act includes a finding by Congress that "The Internet and other interactive computer services offer a forum for a true diversity of political discourse," but has enabled precisely the opposite by allowing sites to exercise editorial control without becoming legally responsible for user-generated content.

CDA 230's provision for "Good Samaritan blocking and screening of offensive material" is so broad, allowing sites to filter or block content that is "harassing, or otherwise objectionable," that it effectively gives carte blanche to promote an aggressive political agenda without any risk of legal consequence.

Moreover, the very companies that are now exploiting these liability protections and their enormous incumbent market power were the principal corporate proponents of imposing draconian regulation on ISPs via the FCC in the context of net neutrality, which morphed into Title II public utility regulation. The arguments they made in that context apply in every respect to themselves, as both critics and supporters of net neutrality regulation have long observed.

The Title II order is ticketed for imminent revocation under Republican FCC Chairman Ajit Pai, and deservedly so. It has had a profound negative impact on broadband investment and represents a dangerous precedent of a federal regulatory agency dramatically expanding its own power without authorization by Congress.

At the same time, however, the Internet ecosystem is not likely to be satisfied with going back to the old, unenforceable broadband statement given the battle-scars on all sides of the net neutrality fight. Stakeholders will seek bright line rules requiring transparency and prohibiting blocking and throttling from the place the debate always should have taken place: Congress.

The legislative process is likely to be led by the Senate Commerce Committee and its chairman, John Thune of South Dakota, who unfortunately may fear taking on powerful edge companies after receiving unexpected criticism from the right when he held important hearings on the systematic political manipulation of the "Trending News" feature by Facebook.

The Trump administration should urge Thune to think bigger than just the ISPs and make clear that they will provide robust cover from the right if he takes on the challenge of political bias from the edge.

Social media and search companies, and possibly others, should be subject to the same neutrality rules because they possess the same benefits of market power that come from enormous fixed costs as well as, in the case of social network platforms, the network lock-in effects of having a large user-base.

Putting everyone in the same boat has enormous advantages, ensuring the exercise is genuinely pro-consumer rather than devolving into the familiar attempt by the edge to seek regulatory predation of the core.

The most likely approach would be a supercharged transparency rule requiring clear disclosure of how traffic is treated, and clear specification of the standards used for limiting speech, including any possible viewpoint discrimination.

Platforms that represent themselves to the public as neutral would be subject to enforcement actions if they violate those representations through a consumer-protection framework.

Platforms that elect not to be neutral would be free to exercise editorial control, but would have to prominently disclose they are doing so – and would no longer be eligible for a section 230 safe harbor to shield them from the legal consequences of the material they choose to publish.

Critics will raise First Amendment objections, but their arguments will smack of hypocrisy if they supported the FCC neutrality rules for ISPs, which also provide a legal template.

In USTA v. FCC the DC Circuit upheld so-called net neutrality regulation of broadband providers and laid out a roadmap for neutrality regulation without running afoul of the First Amendment:

If a broadband provider nonetheless were to choose to exercise editorial discretion—for instance, by picking a limited set of websites to carry and offering that service as a curated internet experience—it might then qualify as a First Amendment speaker. But the Order itself excludes such providers from the rules. The Order defines broadband internet access service as a "mass-market retail service"—i.e., a service that is "marketed and sold on a standardized basis"—that "provides the capability to transmit data to and receive data from all or substantially all Internet endpoints." That definition, by its terms, includes only those broadband providers that hold themselves out as neutral, indiscriminate conduits.

Search and social can, by the same logic, be required to enforceably identify themselves as neutral or non-neutral platforms.

Jack Dorsey of Twitter has said: "We think of it as an information utility and a communications network," making it functionally identical to the ISPs Twitter lobbied the FCC to regulate.

If Twitter is in fact an advocate for liberal views – as it appears to be – then it should be forced to say so clearly, as should Facebook and Google. And if they choose to be First Amendment speakers rather than neutral conduits, then they should be willing and able to defend the material they label as "fact checked" in court.

By simply proposing this framework, the Trump administration would make clear that the asymmetry of companies identified with conservative causes risking regulatory retaliation while companies identified with liberals are given a free pass is over.

Moreover, while the initial response will be indignation from the left as well as search and social companies – possibly including mass mobilization of site users, which is a potent political weapon – the focus on transparency, a core value of younger voters, as well as the hypocrisy of these companies supporting for ISPs precisely what they oppose for themselves puts these companies in an untenable position.

They are therefore likely to rely principally on the argument that regulation is unnecessary, to issue even stronger statements of political neutrality, and to actually improve their behavior to prevent regulation.

Rather than fighting a standalone rearguard action to defend rollback at the FCC, this approach puts us on offense on the net neutrality issue and assures a positive outcome whether or not the bill passes.


Featured

Move over, Amazon, for Alibaba

Chairman Jack Ma (Kin Cheung / AP Photo)

Shares of Alibaba, the Chinese e-commerce and mobile pay company, are up 85% this year, catapulting it alongside the big U.S.-based tech icons as a global juggernaut.

  • Led by its charismatic founder, Jack Ma, Alibaba is now worth $392 billion, moving up on Amazon, whose market value is about $475 billion and share price is up about 27% this year. Alibaba shares rose 2.7% on Thursday alone.
  • It's not quite Amazon: Alibaba commands an estimated three-quarters of on-line sales in China, but its $7.4 billion in second-quarter revenue was dwarfed by Amazon, which reported $38 billion, five times as much.
  • But why it still matters: Alibaba's quarterly revenue, reported Thursday, was up 56%, and profit increased by 94% — to $2.17 billion — from a year ago. Alibaba has more than 500 million monthly active users for its online shopping apps, per the NYT, 42% more than the entire U.S. population. Similar to Amazon chief Jeff Bezos, Ma is enormously ambitious, pushing into competition, for instance, with Amazon, Microsoft and Google for business in cloud services.