Why Jeff Sessions scares tech companies - Axios
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Why Jeff Sessions scares tech companies

Susan Walsh / AP

As the new attorney general, Jeff Sessions has the power to create some major headaches for technology companies.

Sessions has gone after the tech industry for hiring high-skilled foreign workers and resisting law enforcement surveillance requests. Pile on Donald Trump's populist disdain for big companies and suspicion of some dominant tech platforms, and antitrust experts also say Silicon Valley has reason to be worried.

Encryption and privacy:

  • Sessions has been at odds with Silicon Valley over law enforcement's access to encrypted data and pushed back on surveillance reforms.
  • A year ago, Sessions took Apple to task for refusing to help the FBI access encrypted data on an iPhone linked to the San Bernandino attack. The government eventually backed down, but the industry is bracing for increased pressure from law enforcement as surveillance debates heat up.
  • The DOJ will also be involved in crafting policies around cross-border data sharing, an increasingly important issue for American tech companies doing business abroad.

Immigration:

  • Sessions has hammered Silicon Valley companies using H-1B visas to hire foreign workers for engineering jobs.
  • He and Trump share the general view that hiring American workers should be prioritized. The tech industry's long-standing goal of raising the annual visa cap is dead in the water — its goal now is to prevent the program from being gutted.
  • Sessions will be in the position to call for changes to the lottery system that divvies up the visas in ways that could discourage tech companies from using the system at all.

Mergers:

  • Front-runners to lead the DOJ's antitrust division include Joshua Wright (member of Trump's transition team) and Makan Delrahim (deputy White House counsel). They're known in antitrust circles as having traditional Republican pro-business leanings.
  • The real question is whether Trump will try to turn merger reviews into business negotiations. Antitrust experts fear Trump could use the merger review process to extract political promises, like creating jobs. (Mergers, of course, typically end up eliminating jobs.)
  • Take the proposed AT&T-Time Warner merger, which has drawn fire from Trump. Since the two companies don't directly compete against each other, the legal case to block the deal is seen as relatively weak. Still, Sessions could take the cue from his boss to intervene.

Competition:

  • The Justice Department can investigate the behavior of dominant companies if they are accused of engaging in anti-competitive practices (recall the case the DOJ brought against Microsoft in 1998). Typically Republican administrations don't go after companies on competition grounds, but as one antitrust attorney put it, "this isn't your typical Republican administration."
  • Trump has indicated he thinks some tech companies have grown too big and powerful. On the campaign trail, he said Amazon has "a huge antitrust problem." He told Axios he'd "like to create more competition," for companies like Facebook with rapidly expanding size and reach.
  • That means dominant tech companies like Apple and Google could also have targets on their backs, experts said.
What to watch: Immigration and visa program reform is top-of-mind for most tech companies, who've been increasingly vocal in speaking out about Trump's immigration order. But it's the antitrust division that keeps them up at night: Big tech firms know Sessions will have to bless any mergers coming down the pike and an activist department could even look at coming after tech companies the administration thinks have gotten too big. "Trump's a deal-maker," said one D.C. antitrust lawyer. "It's generally been frowned upon, but there's nothing illegal about the White House telling antitrust agencies what to do."
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WhatsApp adds Snapchat-like features

WhatsaApp

WhatsApp, the Facebook-owned messaging service that dominates the messaging app market globally, is adding a photo and video sharing capability within their status feature that mimics that of Snapchat and Instagram Stories. Users will have the ability to annotate photos and videos with emojis, text, etc. and photos and videos will expire from users' statuses after 24 hours.

Why it matters: This is just the latest of steps Facebook has taken to mimic Snapchat-like features on its apps. They've already introduced similar features for Facebook Messenger and Instagram. While Facebook has spent the past year adding Snapchat-like product features, Snapchat has spent the past year adding Facebook-like measurement and audience targeting-features.

What we're watching: Mark Zuckerberg's $19 billion bet on WhatsApp in 2014 was based largely on WhatsApp's incredible reach in emerging markets. But in addition to the growth opportunity, the acquisition also gives Facebook the opportunity to experiment with unique new features with lots of users, before potentially integrating them into other Facebook-owned apps. In January WhatsApp announced it was testing the ability to temporarily track friends' locations and the ability to recall sent messages that haven't been viewed yet.

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Trump picks McMaster to replace Flynn

AP Photo/Susan Walsh

Trump told reporters today that Lt. Gen. H.R. McMaster will be taking over as national security advisor. He's replacing Michael Flynn who stepped down after controversy surrounding Russia ties. Trump called McMaster "a man of tremendous talent and tremendous experience."

Who is McMaster? Tom Ricks of Foreign Policy, who says he's known McMaster since he was a major, wrote before the announcement that he's "smart, energetic, and tough" and has good combat experience. Ricks also identifies the key challenge facing McMaster: "To do the job right, McMaster needs to bring in his own people. And it remains unclear if he can get that." Ricks says most people he talked to who have worked for McMaster would follow him into the Trump White House.

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Snapchat sells Spectacles online

Snap Inc.

Snapchat spectacles now available for purchase online.

Spectacles are smartphone-connected glasses that take Snapchats — up-to 10-second videos or stills — with the click of a button. Previously, the glasses were only available for purchase at pop-up vending machines in New York and California, where lines were long and the allure was strong. Now, Snap Inc. is making their glasses available to all consumers for $130 USD.

Why it matters: In its S-1 filing with the New York Stock Exchange, Snapchat calls itself a "camera company" instead of a social media app or a messaging service. This is critical in understanding how Snapchat plans to monetize its reach and technology, which investors are monitoring closely ahead of its IPO. In its S-1 filing, Snapchat noted that Spectacles have not initially generated any revenue. While Snapchat makes the majority of its money from advertising now, opening up sales for its new camera now signals that Snap Inc. sees camera technology and sales as a lucrative business model in the future.

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Russia's UN ambassador dies in NYC

John Minchillo / AP

The Russian foreign ministry says Vitaly Churkin, its ambassador to the United Nations, has died in New York City. He was 64. Russia did not offer details on his death, but said in a statement:

A prominent Russian diplomat has passed away while at work. We'd like to express our sincere condolences to Vitaly Churkin's family — Russian Foreign Ministry
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Not invited to administration Obamacare meeting: Treasury

(Carolyn Kaster / AP)

Members of the Trump administration got together on Sunday to talk about President Trump's plan to repeal and replace Obamacare — but a photo tweeted by White House chief of staff Reince Priebus doesn't show any Treasury Department officials at the table, despite the likelihood that the plan will involve big tax changes.

At the table were many members of the president's health care and policy teams, including Department of Health and Human Services Secretary Tom Price, yet-to-be confirmed Centers for Medicare and Medicaid Services head Seema Verma, and White House aide Stephen Miller.

But no one from the Treasury Department was there, and a source who heard about the snub from a White House economic adviser said the department feels shut out of the process. A White House spokesperson responded that while Treasury Secretary Steven Mnuchin "wasn't in attendance at this particular meeting, he is absolutely involved in the discussion of how best to repeal and replace Obamacare."

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The growing fight to save local newsrooms

Non-profits and media distribution companies are stepping in to support local newsrooms as they navigate the chaotic news cycle of the new administration and the rapidly-changing digital news environment.

The non-profits

Poynter is dedicating a reporter to cover the transformation of local and regional journalism full-time, in addition to launching a weekly newsletter. The Knight-Lenfest Newsroom Initiative made a $5 million investment to continue a program that helps local papers transform their newsrooms to support digital storytelling. Local News Lab relaunched its site to include updated guidebooks to help local newsrooms survive the transition into the digital age. MuckRock started a Slack channel in January to help journalists all over the country, including 50% local news reporters, better cover the Trump Administration.

The platforms

Facebook finally took its initiative to reach out to local journalists to the road, hosting around 70 print and broadcast reporters — mostly from Texas — for a Dallas forum about best practices and the future of news. The move is part of the Facebook Journalism Project. Google introduced a local news source tag in May that algorithmically favors local sources in users' feeds. The tag labels stories that are reported first-hand by local sources.
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10 Axios stories to get you caught up on last week

Lazaro Gamio / Axios

Use the holiday to get caught up on last week.
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Yes, your commute is really that awful

Julie Jacobson / AP

Reuters flags the latest Global Traffic Scorecard from INRIX Inc, a traffic data company based in Washington state. It found that 5 of the 10 most congested cities globally are in the U.S., and that drivers waste an average of $1,200 a year in lost fuel and time sitting in traffic jams.

The five worst U.S. offenders: Los Angeles, New York City, San Francisco, Atlanta and Miami.

The worst road: The Cross Bronx Expressway in New York City.

But at least you're not in Bogota or Moscow: Drivers in those two cities deal with the worst traffic in the world, when you break it down by the percentage of time spent in traffic jams compared to total drive time.