National

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Nintendo of America president Doug Bowser has joined the chorus of industry figures criticizing Activision Blizzard and its leadership over recent reports of company harassment and abuse.

Driving the news: Fanbyte first reported on the memo in which Bowser called the accusations "distressing and disturbing. They run counter to my values as well as Nintendo's beliefs, values and policies."

The memo was reportedly sent on Nov. 19 to all levels of Nintendo of America staff.

Bowser adds that Nintendo is "in contact with Activision" and is considering further actions.

A Nintendo spokesperson confirmed the accuracy of the memo to Axios.

An Entertainment Software Association spokesperson told Axios that harassment, abuse or mistreatment in the workplace "is unacceptable and must never be tolerated."

"As an industry association, the ESA convenes its member companies to create dialogue and shape actions to ensure that these beliefs are realized."

"Any allegation needs to be acknowledged, thoroughly investigated, and addressed with meaningful consequences."

The big picture: Bowser joins Xbox's Phil Spencer and PlayStation's Jim Ryan in reassuring employees internally that they find Activision Blizzard's behavior unacceptable.

However, it's still unclear what action these companies will take or what conversations are being conducted among the industry giants.

Elsewhere: Activision Blizzard's board of directors announced it is forming a "Workplace Responsibility Committee," led by two members of that board.

That committee will "oversee the Company’s progress in successfully implementing its new policies, procedures, and commitments to improve workplace culture and eliminate all forms of harassment and discrimination."

The company also will add "a new, diverse director to the Board."

Between the lines: Activision Blizzard is still in damage control mode after the Wall Street Journal's damning report that CEO Bobby Kotick was both aware of harassment and abuse allegations, and has a history of his own.

WSJ reports that Kotick would consider stepping down if the company's ongoing issues cannot be fixed "with speed."

Nintendo executive calls Activision harassment allegations "disturbing"

Doug Bowser | Photo by Michael Kovac/Getty Images for Nintendo

Doug Bowser. Photo by Michael Kovac/Getty Images for Nintendo

Video games

Gaming

Apple filed a lawsuit Tuesday against the Israeli cyber intelligence companies NSO Group and its parent company to "hold it accountable for the surveillance and targeting of Apple users," the company announced.

Details: Apple is also seeking a permanent injunction to ban NSO Group from using Apple devices, software, or services, per a press release.

Apple's legal complaint brings to light new information on how NSO Group used its Pegasus software to infect users' devices, and about the group's exploit of a now-patched security flaw first discovered by watchdog group Citizen Lab.

Apple has pledged to contribute $10 million, as well as any damages won in the lawsuit, to organizations that pursue "cybersurveillance research and advocacy."

State of play: The NSO Group's Pegasus software made news earlier this summer after an international consortium of investigative journalists revealed it had become a valuable tool for governments to spy on journalists, critics, and heads of state.

Earlier this month, the U.S. blacklisted NSO Group for engaging in activities contrary to U.S. national security and foreign policy interests.

What they're saying: “State-sponsored actors like the NSO Group spend millions of dollars on sophisticated surveillance technologies without effective accountability. That needs to change,” Craig Federighi, Apple’s senior vice president of Software Engineering, said in the press release.

“Apple devices are the most secure consumer hardware on the market — but private companies developing state-sponsored spyware have become even more dangerous," he added.

"While these cybersecurity threats only impact a very small number of our customers, we take any attack on our users very seriously, and we’re constantly working to strengthen the security and privacy protections in iOS to keep all our users safe.”

The other side: “Thousands of lives were saved around the world thanks to NSO Group's technologies used by its customers," an NSO Group spokesperson told Axios

“Pedophiles and terrorists can freely operate in technological safe-havens, and we provide governments the lawful tools to fight it. NSO group will continue to advocate for the truth," they added.

Apple sues Israeli NSO Group over spyware use

Apple is also seeking a permanent injunction to ban NSO Group from using Apple devices, software, or services.

Photo: Budrul Chukrut/SOPA Images/LightRocket via Getty Images

Apple

Big Tech

While China's sweeping new data privacy laws have left tech companies confused about how to comply, they also put the U.S. even further behind in the global race to set digital standards.

What's happening: China enacted its Personal Information Privacy Law earlier this month, following Europe as the second major international player to have its own sweeping data privacy regulations.

The law, regarded as China's version of Europe's General Data Protection Regulation, is a set of rules for how businesses can collect, use, process, share and transfer personal information. Another Chinese data regulation, the Data Security Law, went into effect Sept. 1.

The laws aim to protect Chinese citizens from the private sector, while the Chinese government still has easy access to personal data.

In May, influential U.S. business groups sent comments, viewed by Axios, to the National People’s Congress protesting that the draft law’s vague language, monetary penalties and criminal liabilities were harsh. They also said it would hurt innovation by being overly prescriptive and burdensome.

Why it matters: The U.S. still does not have a federal data privacy law, and China's move could allow it to set future global norms on its terms. Meanwhile, tech companies doing business in China will have to navigate the vague new rules, and that could be expensive.

Not having a federal privacy law "impairs America's global leadership on the issue, and the fact that there is this patchwork makes it difficult to have meaningful interaction on the international stage on these issues," Martijn Rasser, senior fellow and director of the technology and national security program at the Center for a New American Security, told Axios.

The big picture: While reeling in its own companies such as Alibaba and Tencent, China is making it increasingly difficult for non-Chinese companies to do business in the country. That complicates the global tech landscape, in which companies rely on sending, holding and receiving data overseas.

"When you have power growing in China, the government ensures its supremacy is kept," said Omer Tene, chief knowledge officer at the International Association of Privacy Professionals. "In that regard, it's another piece of a very quickly accumulating puzzle of market and tech regulation in China more generally."

What they're saying: "If I were a corporate leader with major business in China, I'd frankly be quite concerned right now," said Rasser, who found the law's language vague, and said the Chinese Communist Party could make compliance difficult. "That type of uncertainty makes it challenging for business leaders."

"The U.S. is meant to be the world geopolitical and technological leader, and it is being left behind from a policy perspective on the global stage as it relates to its view on data privacy," said Cillian Kieran, CEO of Ethyca, a company that creates developer tools for data privacy. "[The U.S.] becomes the laggard in what are acceptable rights around data usage in consumer-facing technology businesses."

Just like GDPR, China's law has broad extraterritorial reach, said Tene.

Companies will "have to submit to a security assessment by the Chinese regulator before performing data transfers, appoint local representatives to handle privacy issues and manage exposure to steep fines and penalties, including criminal, under the law," he said.

Companies who violate the law could be subject to fines of up to 5% of annual revenue, revocation of their licenses to do business in China and personal penalties against executives, according to a blog post by attorneys at Morgan Lewis, an international law firm.

"There are really significant compliance requirements for any company that handles Chinese user data — and they're re-evaluating their exposure, and asking is it worth it or not," said Samm Sacks, a cyber policy fellow at the New America Foundation.

Our thought bubble, from Axios China reporter Bethany Allen-Ebrahimian: China's data law addresses a real issue, and does so in more or less legitimate ways, posing a significant concern for those who prefer a democratic data governance model. Without its own data governance framework, the U.S. is leaving open a regulatory void. 

China's new privacy law leaves U.S. behind

The law, regarded as China's version of Europe's GDPR, could give China an edge in setting global standards.

Illustration of a rearview mirror with a pixelated American flag reflected in it.

Online privacy

Data privacy

Axios Gaming

A former IT security analyst at Sony PlayStation filed a lawsuit against the company in California on Monday, alleging gender discrimination and wrongful termination after speaking up “about discrimination against females” at the gaming giant.

Why it matters: Video game companies are under increased scrutiny for their treatment of women in an industry long dominated by men.

The Sony suit comes amid high-profile state and federal lawsuits against “Call of Duty” maker Activision over alleged sexual misconduct and gender-based pay disparities.

Game companies ranging from Ubisoft and Riot, to indies such as Fullbright, have faced a reckoning over women’s experiences working for them.

Driving the news: The former IT security analyst, Emma Majo, is seeking court approval to expand her effort into a class action on behalf of women who’ve worked for PlayStation in the past few years.

The suit alleges violations of the United States’ Equal Pay Act, saying: “Sony discriminates against female employees, including those who are female and those who identify as female, in compensation and promotion and subjects them to a work culture predominated by men.”

Majo alleges that she was ignored by a manager who only responded to men, was passed over for promotions, and was terminated this year after submitting a gender bias complaint to the company.

She says other women at PlayStation struggled to get promoted at the same rate as men.

Representatives from PlayStation did not immediately respond to questions about the lawsuit.

Majo notes in her suit that Sony says she was terminated because of the closure of an internal department, though she says she wasn’t in that department.

The big picture: Scrutiny of game companies over their treatment of women has been especially intense in California, where Sony’s U.S. headquarters is based.

In 2018, women from LA-based Riot Games filed a class-action suit alleging gender discrimination. Activision is also based in the state. 

California’s regulatory environment affords workers and state agencies many avenues for holding companies accountable.

The plaintiff in the PlayStation suit says she plans to invoke California’s Private Attorney General Act, which lets private citizens sue for breach of state labor laws. (Uber was sued via the same law in 2017.)

Lawsuit against PlayStation alleges gender discrimination

The suit comes amid a reckoning over women's experiences in the games industry.

Photo of a screen displaying PlayStation logos

Photo Illustration: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

Pro Rata

Axios Pro Rata

Niantic, an S.F.-based maker of augmented reality games like "Pokémon Go," raised $300 million from Coatue at a $9 billion valuation.

Why it matters: This is about the metaverse that Meta isn't interested in building.

History: Niantic previously raised $480 million, most recently in 2019 at a $4 billion post-money valuation. Existing backers include Alsop Louie Partners, Javelin Venture Partners, CapitalG, IVP and Spark Capital.

The bottom line: Niantic's vision is the world we already see around us, but with a digital overlay on top of it. Not a virtual world that people immerse themselves in with VR goggles or by way of a video game world like "Fortnite." 

Some of Niantic's recent games have struggled, but over a billion downloads of "Pokémon Go" make a strong case that it may be the ones to figure this all out. 

"Pokémon Go" maker Niantic now worth $9 billion

This is about the metaverse that Meta isn't interested in building.

 illustration a Pokémon Go logo. Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Media Trends

Axios Media Trends

The Washington Post has hired Miki King — the company's former chief marketing officer, who most recently served as the President of Genius Media Group — to run The Post's Arc XP software arm. 

Why it matters: The hire underscores The Post's commitment to growing its software arm as a significant revenue stream to support its journalism. 

The Post currently makes most of its money from ads and subscriptions, but software sales are increasingly becoming a third major business line for the company.

Catch up quick: The Washington Post launched Arc Publishing in 2015 as an in-house tech division that built and licensed publishing software to other media companies. 

Today, it serves a slew of businesses in addition to media and entertainment publishers, including sports teams, cryptocurrency companies, and financial services firms. 

Many of the clients it serves are increasingly focused on transactions between businesses and consumers. This year Arc XP added added e-commerce and video hosting capabilities.

Earlier this year, Arc Publishing rebranded to Arc XP to reflect its broader focus.  Arc XP's products are cloud-based and rely heavily on Amazon Web Services (AWS). 

Details: King, who starts officially on Nov. 29, says her goal in the next year is to accelerate the growth of Arc XP's sales team and to grow the business globally.

Arc XP currently serves customers across 28 countries and most U.S. states. King says Arc XP is looking to expand more into Latin America and Western Europe, as well as Africa. It currently serves clients in Mexico, Argentina, Brazil, Korea and the UAE, in addition to hundreds of local news sites and businesses in America.

Much of King's experience at Genius, which was recently acquired by Santa Monica-based MediaLab, was working with enterprise clients. That focus will translate to her new role at The Post. 

"The goal for Arc XP is to really to help brands optimize their digital presence," King said. She noted that developing products that support everything from cryptocurrency to sports betting is going to be inevitable. 

"We're in the very early stages on betting and gaming," she said. "It's a space that there could be an opportunity for us, but conversations have been preliminary to-date."

King will report to both publisher and CEO Fred Ryan and chief information officer Shailesh Prakash. Scot Gillespie will remain CTO and GM of Arc XP.

By the numbers: Currently, Arc XP's technology is licensed to over 1,900 sites, up from about 1,500 in April, per The Post. 

King says she expects Arc XP to bring in $100 million in revenue "in the next 3-5 years."

There are around 250 people that work for Arc XP alone, per King. For context, The Post has roughly 1,000 journalists. 

"The Post has really doubled down on expanding corporate functions dedicated to Arc XP, including in human resources, legal, finance and analysis roles," she said.

The Washington Post's owner Jeff Bezos has thrown his weight behind both Arc XP and The Post's ad tech division, Zeus Technology. 

"As we moved from news publishers to enterprise, that was very much of interest and supported by Jeff Bezos," King said. "He has been very much involved in every large strategic decision related to Arc XP."

Washington Post chief revenue officer Joy Robins told Axios in September that Zeus Technology work will hit nine figures in revenue "easily" next year.

The big picture: Several media companies, including Vox Media and Minute Media, have launched tech businesses as a way to fund journalism in recent years. 

But King says those firms are not The Post's biggest competitors. "I often do think our greatest competition is the trend of organizations that to want to go at it alone," she said.

She said Arc XP also sees opportunities in providing strategic insight and advisory services to companies building their own software.

What to watch: While it's long been rumored that one day The Post might spin out Arc XP, King says that's not in the cards for now. 

"As of today, my role is not one tied to an exit strategy," she said. "The conversation with our leadership team has really been one about how can we  accelerate growth."

"Arc is well on track to be a $100 million company, I don't think that's a path to a spin-off, but we'll see how things unfold."

Washington Post taps its former CMO to lead tech division

Miki King will head Arc XP,  the Post company's publishing software subsidiary.

Photo credit: Jackie Hicks, Photo courtesy of The Washington Post

Washington Post

Media

Generate

Axios Generate

General Motors' expanding electric vehicles' business left dry land Monday when the auto giant announced it's acquiring a 25% stake in the electric boating company Pure Watercraft.

Why it matters: "The investment in Pure Watercraft represents the first time GM will commercialize all-electric marine products and applications," Mark Lubin, a GM spokesman, tells Axios.

He notes GM has previously invested in "exploratory all-electric proof-of-concept marine propulsion projects," and that work will inform their collaboration with Pure Watercraft, he said.

Details: The deal is worth $150 million, Pure Watercraft CEO Andy Rebele tells CNBC, which includes cash and other commitments. "The company is not disclosing the split between cash and payment-in-kind," it reports.

GM plunges into electric marine transport

General Motors announced it's acquiring a 25% stake in the electric boating company Pure Watercraft.

General Motors

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

After years of hoarding engagement, new startups — along with some tech giants — are finally making it easier for users to add external links to their profiles and content.

Why it matters: Linking out to personal web pages or online storefronts has traditionally been difficult to do on some social media platforms, since most firms want to keep users engaged on their own platforms as much as possible. 

Driving the news: Clubhouse's new "Pinned Links" product has quickly become one of the live audio company's fastest-growing features, a spokesperson tells Axios. 

In less than a month, the company says that there have been 5.5 million clicks to Pinned Links from Clubhouse rooms, up from 1.6 million clicks in the first week. 

Nearly 1-in-5 public "clubs," or groups that host conversations in Clubhouse "rooms," have used pinned links to date, the spokesperson adds. Users have used Pinned Links to do everything from sell books to drive tune-in campaigns. 

Be smart: Because Facebook and Instagram are so highly focused on sales and marketing, they have long experimented with products that push users and creators to transact directly on its platform. 

Because Clubhouse is for now focused on building a community, it has less to lose in sending people off its platform to conduct transactions. 

The company says it's proud of the click-through rates it's seen amongst links shared in rooms thus far and wants to continue investing in the product. 

Yes, but: Clubhouse, which skyrocketed during the pandemic but has since seen growth slow, has bigger problems than sending users off platform.

Between the lines: Link-sharing has been especially contentious between competitive platforms.

Twitter and Instagram last month finally ended a long-running policy that forced users to click onto Instagram links shared on Twitter in order to see pictures that were shared. Twitter initially banned showing photo previews on its app from Instagram in an attempt to push users to share more of their own photos to the app directly. 

The big picture: The growth of the creator economy has created a whole new industry around link-in-bio and link-to-purchase features, per The Information. 

Bitly launched a "Link Launchpad" earlier this month, a landing page that allows users to share multiple links from their social media profiles.  

Linktree, a "link in bio" service, created an integration with Shopify earlier this month that lets creators set up Shopify storefronts on the landing pages that users encounter from links in those creators' bios. 

New social media trend: Old-fashioned links

Hoarding engagement is giving way, in places, to helping creators connect with audiences.

Social media

Elon Musk

The Cybersecurity and Infrastructure Security Agency (CISA) and Federal Bureau of Investigation (FBI) are urging public and private sector organizations to remain vigilant and bolster protections against ransomware and other cyberattacks during the holidays.

Why it matters: Malicious cyber actors often take advantage of holidays and weekends to disrupt critical networks, the agencies said. Ahead of Thanksgiving, the federal government is warning organizations to be proactive about reducing vulnerability to cyberattacks.

Details: The cybersecurity reminder issued Monday outlines best practices, which include:

Ensuring IT security workers are available during weekends and holidays.

Implementing multi-factor authentication for administrative and other accounts.

Updating incident response and communication plans in case of an attack.

What they're saying: "While we are not currently aware of a specific threat, we know that threat actors don't take holidays," CISA Director Jen Easterly said in a statement. 

"We will continue to provide timely and actionable information to help our industry and government partners stay secure and resilient during the holiday season," Easterly said.

"Cyber criminals have historically viewed holidays as attractive times to strike," added FBI cyber assistant director Bryan Vorndran. "We urge network defenders to prepare and remain alert over the upcoming holiday weekend."

Organizations should report any cyber incidents to CISA or the FBI, they added.

Why it matters: Multiple cyberattacks targeted critical U.S. infrastructure this year, ranging from a major meat supplier to the federal government.

FBI Director Christopher Wray warned earlier this year that cyber threats are "increasing almost exponentially."

CISA and FBI issue holiday season ransomware warning

"Cyber criminals have historically viewed holidays as attractive times to strike," the FBI's Bryan Vorndran said.

A member of the Red Hacker Alliance using a website that monitors global cyberattacks on his computer  in Dongguan, China's southern Guangdong province, in August 2020..

 Photo: Nicolas Asfouri/AFP via Getty Images

Cyber threats

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Cannabis retailer Tokyo Smoke and Uber Canada are partnering to streamline the process for ordering cannabis in Ontario, the companies announced Monday.

Why it matters: Tokyo Smoke is the first cannabis merchant to be listed on Uber Eats across all of Uber's global markets, Uber Canada said.

Driving the news: Uber Eats now has a section in its digital marketplace for Tokyo Smoke's virtual stores. Consumers will be able to place orders on the app and pick them up at their respective store locations.

The companies say the partnership will help combat the underground illegal market, which accounts for over 40% of all nonmedical cannabis sales in Canada, according to data from the government.

What they're saying: "Tokyo Smoke is thrilled to partner with Uber Canada on this innovative offering for our customers, bringing them high quality products and the very best customer experience," said Mark Hillard, Tokyo Smoke's vice president of operations, in a statement. 

"As a market leader in innovation and a platform used by so many Canadians, we believe this is the ideal next offering that can be done safely and conveniently on the Uber Eats app." 

"By combining a streamlined ordering process through the Uber Eats app with Tokyo Smoke's in-person pickup service, we're creating a new end-to-end experience for responsible cannabis ordering across the province," added Lola Kassim, general manager of Uber Eats Canada. 

What to watch: Cannabis delivery looks like the next horizon. 

"When Canadian cannabis laws evolve to include delivery, options like Uber Eats are expected to help decrease impaired driving and improve safety on the road," Uber Canada said in its release.

Cannabis orders are now available on Uber Eats in Ontario

Tokyo Smoke is the first cannabis merchant to be listed on Uber Eats across all of Uber's global markets.

Photo of a storefront showing "Tokyo Smoke" on the right and "High Variety on the left"

Cannabis shops High Variety and Tokyo Smoke in Toronto, Canada. Photo: Steve Russell/Toronto Star via Getty Images

Uber

The Federal Communications Commission on Monday said it had approved Verizon's $6 billion purchase of wireless company TracFone, after the companies agreed to conditions meant to protect consumers.

Why it matters: The FCC was the last regulatory hurdle for Verizon, which expects to close the transaction in the coming days.

Catch up quick: Public interest groups had opposed the deal over concerns it could reduce access to affordable phone service. They withdrew their objections this summer after Verizon committed to continuing to offer TracFone's current services to low-income customers via the government's Lifeline program.

The Lifeline program, administered by the FCC, provides a $9.25 monthly subsidy to companies that provide phone or broadband service to low-income consumers, generally at no out-of-pocket cost to the customer.

Driving the news: The FCC said Verizon made several commitments to secure agency approval, including:

Offering TracFone's Lifeline services for at least seven years.

Offering a 5G plan and cost-effective 5G devices to existing and new Lifeline customers.

Submitting publicly available reports with information on Lifeline and non-Lifeline customers for seven years.

Between the lines: TracFone has a large Lifeline customer base, but Verizon has not been a major player in the program.

Verizon's move into the prepaid market with TracFone will position it to compete against AT&T's Cricket and T-Mobile's MetroPCS.

What they're saying: "The deal will provide customers with the best of both worlds: more choices, better services and new features thanks to Verizon’s investment and innovation," Kathy Grillo, Verizon senior vice president of public policy and government affairs, said in a statement.

FCC approves Verizon's $6B purchase of TracFone

Groups had initially opposed the deal over concerns it could reduce access to affordable phone service.

A photo illustration of a smartphone with the Verizon logo on the screen.

Tuesday's technology stories

Nintendo executive calls Activision harassment allegations "disturbing"

Apple sues Israeli NSO Group over spyware use

China's new privacy law leaves U.S. behind

Lawsuit against PlayStation alleges gender discrimination

"Pokémon Go" maker Niantic now worth $9 billion

Washington Post taps its former CMO to lead tech division

GM plunges into electric marine transport

New social media trend: Old-fashioned links

CISA and FBI issue holiday season ransomware warning

Cannabis orders are now available on Uber Eats in Ontario

FCC approves Verizon's $6B purchase of TracFone

Ex-Theranos CEO Elizabeth Holmes testifies in her own defense

New York game state

Report: Facebook sidelined hate speech study

Crypto group tries to claw back fees after failed Constitution bid

Fox News commentators resign over Tucker Carlson Jan. 6 series