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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Trump's backup plan for a health care failure

What will President Trump do if the Senate can't pass the health care bill? It's pretty obvious from this morning's tweet: Blame Democrats for whatever happens next.

Between the lines: Remember that Trump threatened the same thing after House Republicans pulled their bill from the floor — before they revived and passed it. But it's also a reminder that the Affordable Care Act does need support from the administration in power, including funding and encouragement for insurers to stay in the markets. The Trump administration has been trash-talking the ACA for so long that they'll have no interest in doing that if repeal fails.

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Trump’s new Obama accusation: “he colluded or obstructed”

Evan Vucci / AP

President Trump blasted Barack Obama on Twitter Monday morning for having "colluded or obstructed" justice, following a Washington Post timeline Friday on the Obama administration's handling of Russian interference in the November presidential election:

"The reason that President Obama did NOTHING about Russia after being notified by the CIA of meddling is that he expected Clinton would win... and did not want to "rock the boat." He didn't "choke," he colluded or obstructed, and it did the Dems and Crooked Hillary no good. The real story is that President Obama did NOTHING after being informed in August about Russian meddling. With 4 months looking at Russia... under a magnifying glass, they have zero "tapes" of T people colluding. There is no collusion & no obstruction. I should be given apology!"
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New test can diagnose mysterious infections

Keith Srakocic / AP

Researchers have created a brain test that can discover the source "of virtually any neurological infection," according to Scientific American.

For example, the test helped doctors to diagnose a brain tapeworm in a man from Nicaragua by identifying its DNA. The patient didn't have symptoms of the infection typically picked up by MRI scans.

How it works: Rather than look for a particular infection with a specific test, all of the DNA and RNA in a sample of cerebrospinal fluid is analyzed in order to identify foreign genetic material from viruses, bacteria, parasites or fungi. The challenge, researchers say, is "making sense of the output," but they've developed procedures for doctors to determine the most-likely cause of infection from the genomic data.

Coming soon: The researchers who developed the test at U.C. San Francisco will begin offering the test "as a custom-ordered service" to hospitals and labs across the U.S. on July 1.

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Takata files for bankruptcy, selling assets to Michigan company

Shizuo Kambayashi / AP

Takata, the Japanese auto parts manufacturer whose defective airbags have led to at least 14 deaths and 70 million recalls in the United States alone, announced the sale of its factories and operations to a Chinese-American rival, Key Safety Systems, and filed for bankruptcy in both the U.S. and Japan, per the NYT.

Think back: After denying that its airbags were faulty and fabricating test results to hide the issue, Takata agreed to pay fines and compensation totaling more than $1 billion earlier this year following a Department of Justice investigation.

The ramifications: Pending regulatory approval, the bankruptcy deal might short Takata's creditors — including some of the world's largest automakers, like Honda — out of millions of dollars.

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Ivanka Trump: "I try to stay out of politics"

Susan Walsh / AP

Ivanka Trump — President Trump's daughter and a White House senior advisor — told Fox News this morning that she tries to "stay out of politics" and that it's normal for she and her father to "not have 100% aligned viewpoints on every issue."

Top quote: "I feel blessed just being part of the ride from day one and before. But he did something pretty remarkable. But I don't profess to be a political savant."

Why it matters: Ivanka has an office in the West Wing. She was influential in President Trump's decision to bomb Syria, worked with her husband Jared Kushner on LGBT rights, and many climate activists saw her as a hope for fighting climate change and staying in the Paris Agreement (although her dad left anyway). This all doesn't seem to back up her claim of staying out of politics.

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NYMag cover brings back Watergate

"Just wait: Watergate didn't become Watergate overnight, either" — New York mag cover story, by Frank Rich:

"For all the months of sensational revelations and criminal indictments... a Harris poll found that only 22 percent thought Nixon should leave office. Gallup put the president's approval rating in the upper 30s, roughly where our current president stands now — lousy, but not apocalyptic. There had yet to be an impeachment resolution filed in Congress by even Nixon's most partisan adversaries. ... [A]fter Nixon hit a new low of a 27 percent approval rating in November 1973, he spiked to 37 in a Harris poll a month later. ... Looking back on it all, Elizabeth Drew would write, 'In retrospect, the denouement appeared inevitable — but it certainly didn't feel like that at the time.'"

Go deeper: The timelines of Watergate vs the Russia probe, side by side.

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D.C. on edge: rumors of new Supreme Court vacancy swirl

Fred Schilling / AP

White House sources think Justice Anthony Kennedy, the Supreme Court's ideological fulcrum, may announce his retirement today, as the justices gather on the bench for the last time this term.

If that happens, Day 158 instantly becomes President Trump's biggest moment.

  • Trump's first Court appointment, of Justice Neil Gorsuch, was a one-for-one ideological swap for the late Justice Antonin Scalia.
  • Replacing Kennedy would be even more historic and consequential: a momentous chance to edge the Court right, since Kennedy is the center of the Court — the one most willing to listen to both sides. On a controversial case, both sides pitch to him. It's been called "Kennedy's Court."
  • No one's predicting: Court watchers say no one knows, and Kennedy has said nothing publicly. He could well wait one more year: The Court buzz is that it'll be this year or next.
  • Lyle Denniston, who has covered the Supreme Court for 58 years, headlines a post on his website, "High drama: Supreme Court term is ending": "[R]umors have continued to make the rounds that ... Kennedy, who will be 81 in July, could reveal plans [today] to end his career. ... The longest serving of the Justices, Kennedy joined the court more than 29 years ago."

Be smart: Few domestic developments could more instantly and decisively change the national conversation — blotting out almost everything else, and vastly reducing the sting for conservatives is healthcare tanks.

A Washington wise man emails: "With two court appointments and maybe one more, Trump's presidency will be consequential even if he has few legislative achievements. This week may well demonstrate both."

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Scoop: Trump group gives Heller a 2nd chance on health bill

Scott Sonner / AP

Many Republicans wondered this weekend if it made sense for America First Policies, the outside group backing President Trump, to run attack ads against Sen. Dean Heller (R-Nev.) for wavering on healthcare, when his vote is desperately needed.
"Does Trump team think it's smart to attack the most endangered GOP senator, from a state Trump lost?" asked a longtime lion of the GOP. "This is the second dumbest thing Trump has done since firing Comey."
Well, Axios has learned that the group is giving Heller a chance to modify his blast at the bill, before unleashing an advertising attack in his home state.
  • The backstory: After Heller announced his surprise opposition to the Senate bill on Friday, the group said it planned a seven-figure buy in Nevada.
  • The drama: The attacks have not begun — and won't, if Heller retreats. The group could follow what it did with some wavering House members, and run ads of encouragement rather than opposition.
  • A Republican operative: "The content of the ad is really up to Senator Heller ... If [moderate] Congressman [Tom] MacArthur and [conservative] Congressman [Mark] Meadows can work together in the House to get to yes, I'd like to think Senator Heller could work with Leader McConnell to get to yes."
  • The arsenal: Phone banks that connect constituents with senators' offices are being run by America First Policies in the states of eight wavering senators: Ohio, Kentucky, Utah, Texas, Maine, Wisconsin, Louisiana and Alaska.
  • The longer game: Looking ahead to 2018, the group is running cable ads against Democrats in these eight states, starting this week: Michigan, Ohio, Montana, North Dakota, Virginia, Missouri, Indiana and West Virginia.
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Theresa May completes her deal to keep power

Virginia Mayo / AP

Prime Minister Theresa May's Conservative Party have signed a deal with North Ireland's Democratic Unionist Party, which will strengthen support of May's government as the UK continues to navigate Brexit talks, per AP.

Why it matters: The results of the UK's June general election shocked many, as May came up short of the strong majority needed to rally support for the Tories as they move into Brexit negotiations with the European Union. But with the DUP's backing, May will have the necessary backing on key votes, such as on the Queen's Speech and Budgets, which without would threaten the government's survival.

The caveats: The agreement only guarantees DUP support on votes needed to prevent the government from falling; there is no guarantee they will back other legislation proposed in parliament. Meanwhile, other UK devolved nations will be indignant about the large sums of money promised to Northern Ireland up front in order to secure the deal.

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John Deere quietly opens tech office in San Francisco

Photos: John Deere, Ina Fried/Axios; Illustration: Rebecca Zisser

John Deere has quietly opened an office in San Francisco as the agriculture machinery giant looks to expand its efforts in computer vision and machine learning. Leading up John Deere Labs, as the office is known, is Alex Purdy, a former Boston Consulting Group principal who joined Deere about a year ago.

Purdy aims to hire 8-12 people, though he recognizes the company may need to be flexible given the fierce competition in the areas in which Deere is hiring.

"We're going to be a little bit opportunistic," Purdy said.

So why is Deere doing this? Though not well-known in the tech industry, Deere has been a pioneer in autonomous technology, having had tractors capable of moving themselves for years. Self-driving tractors free the farmer sitting on the rig to focus on more pressing tasks, such as monitoring where seeds and chemicals are getting placed, among other things.

Food needs are expected in the coming decade even as the amount of land devoted to farmland remains relatively stagnant. That means getting more productivity out of the same fields.

Why SF? Deere was already spending a lot of time in the Bay Area meeting with various partners. "We found ourselves renting hotel rooms quite a bit," said Purdy.

Ina Fried / Axios

By opening an office here, the company hopes to bring a little bit of the heartland to San Francisco, with plans to put a harvest simulator in the lobby.

"We've actually had three or four people knock on the glass," Purdy said, all asking "are you selling tractors here?"