Billionaire Sacklers’ immunity threatened as DOJ moves to block opioid deal

Protestors hold up a banner while surrounded by empty prescription bottles.

Enlarge / PURDUE PHARMA, STAMFORD, Conn. – 2019/09/12: Members of P.A.I.N. (Prescription Addiction Intervention Now) and Truth Pharm staged a protest outside Purdue Pharma headquarters over the recent, controversial opioid settlement. (credit: Getty | Erik McGregor)

The Department of Justice is fighting to strip the billionaire Sackler family of the sweeping legal immunity granted as part of a controversial $4.5 billion opioid settlement.

The department filed a motion late Wednesday to block the implementation of the settlement until appeals can be heard in a higher court. Attorneys for the department argued that some aspects of the deal could go into effect quickly, complicating the appeal, according to NPR. Along with the DOJ, Connecticut, Maryland, the District of Columbia, and Washington state are also preparing to fight the settlement.

The Justice Department also requested an expedited hearing within the next two weeks.

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#addiction, #doj, #opioid, #opioid-crisis, #policy, #purdue-pharma, #sackler, #science

The DOJ and DHS subpoenaed Peloton over treadmill injury reporting

On Tuesday, Peloton announced the upcoming release of its entry-level Tread device. The news came ahead of a disappointing earnings report and after recalls of both of its treadmill products. Today, the connecting fitness company noted in a filing with the SEC that it has been subpoenaed by both the U.S. Department of Justice and Department of Homeland Security.

Both subpoenas are part of  investigations around the way the company reported injuries from its treadmills. It’s seemingly another sign that, in spite of the return of one of its two Tread products to market, the larger implications are far from over for the company.

Peloton writes in the filing,

Injuries sustained by Members or their friends and family members, or others who use or purchase our Connected Fitness Products, could subject us to regulatory proceedings and litigation by governance agencies and private litigants brought against us, that regardless of their merits, could harm our reputation, divert management’s attention from our operations and result in substantial legal fees and other costs. For example, we are presently subject to a CPSC investigation and other litigation related to injuries sustained by Members and others who use or purchase the Tread+, and we have reporting obligations to safety regulators in all jurisdictions where we sell Connected Fitness Products, where reporting may trigger further regulatory investigations.

The company declined to comment further on the investigations.

Peloton was, notably, at odds with the U.S. Consumer Product Safety Commission (CPSC)’s initial warning to stop using its treadmill products after an accident with the Tread+ resulted in a child’s death. At the time, Peloton said it was “troubled” by the reporting and insisted that “there is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed.” In May, CEO John Foley apologized for the pushback and agreed to work with the CPSC on a recall.

The Commission cited more than 70 incidents in all, noting, “a six-year-old child recently died after being pulled under the rear of the treadmill. In addition, Peloton has received 72 reports of adult users, children, pets and/or objects being pulled under the rear of the treadmill, including 29 reports of injuries to children such as second- and third-degree abrasions, broken bones, and lacerations.”

The cheaper Tread model, meanwhile, was at the center of separate issue wherein the product’s touchscreen could detach and cause injury during use. The new version of the device features a reinforced screen. The recalls impacted around 125,000 Tread+ systems and more than 5,500 Treads, which were in early release.

#dhs, #doj, #hardware, #health, #peloton, #recall, #tread

The SEC and the DOJ just charged this startup founder with fraud, saying he lied to Tiger and others

Today, both the U.S. Department of Justice and the Securities and Exchange Commission charged Manish Lachwani, cofounder of a mobile app testing company Headspin, with fraud. The SEC says he violated antifraud provisions and the civil penalties it’s seeking include a permanent injunction, a conduct-based injunction, and an officer and director bar of Lachwani.

The DOJ, which actually arrested Lachwani today, has accused him of one count of wire fraud and one count of securities fraud, and the associated penalties if he’s found guilty are are more harsh, including, for wire fraud, a maximum sentence of 20 years in prison and a fine of $250,000. If he’s found guilty of securities fraud, he faces a maximum sentence of 20 years in prison and a fine of $5,000,000.

Both the the SEC and the DOJ say Lachwani — who led the six-year-old company as CEO until May of last year — defrauded investors out of $80 million by falsely claiming that his company, Headspin, had “achieved strong and consistent growth in acquiring customers and generating revenue” when he was pitching its Series C round to potential backers.

By the SEC’s telling, his apparent bluster was largely an attempt to secure the round at a so-called unicorn valuation. That apparent plan worked, too, with Palo Alto-based Headspin attracting coverage in Forbes in February of last year after Dell Technologies Capital, Iconiq Capital and Tiger Global provided the company with $60 million in Series C funding at a $1.16 billion valuation. Forbes reported at the time that the valuation was double the valuation investors  assigned HeadSpin when it closed its Series B round in October 2018.

The SEC also says that Lachwani was looking to enrich himself, saying he did so “by selling $2.5 million of his HeadSpin shares in a fundraising round during which he made misrepresentations to an existing HeadSpin investor.” (It isn’t clear from its complaint whether the SEC is referring to the Series C or an earlier round.)

The DOJ’s federal complaint suggests that Lachwani’s alleged scheme dates back to at least November 2019, when the company was fundraising. It’s then that the success of Headspin — a six-year-old, Palo Alto, Ca., startup that helps apps and devices work in different environments around the world – was being knowingly misrepresented to investors by Lachwani, according to the DOJ.

More specifically, the complaint alleges that “in materials and presentations to potential investors, Lachwani reported false revenue and overstated key financial metrics of the company. . . he maintained control over operations, sales, and record-keeping, including invoicing, and he was the final decision maker on what revenue was booked and included in the company’s financial records.”

It says that in its investigation, the FBI discovered “multiple examples” of Lachwani “instructing employees to include revenue from potential customers that inquired but did not engage Headspin, from past customers who no longer did business with Headspin, and from existing customers whose business was far less than the reported revenue.”

Among other materials, Lachwani “provided investors false information that overstated Headspin’s annual recurring revenue . . . by approximately $51 to $55 million,” says the DOJ.

According to the complaint, Lachwani’s fraud unraveled after the company’s board of directors conducted an internal investigation that revealed significant issues with HeadSpin’s reporting of customer deals and revised HeadSpin’s valuation down from $1.1 billion to $300 million.

Indeed, in August of last year, The Information reported that “after an internal review of financial irregularities forced [Headspin] to restate its financials,” the company planned to lower the value of its Series C stock by nearly 80%.

The outlet reported at the time that Lachwani had been replaced by another executive. That person, according to LinkedIn, is Rajeev Butani, who joined Headspin as its chief sales officer around the time its Series C round was being announced in February of last year.

Nikesh Arora, a former SoftBank president, the current CEO and chairman of Palo Alto Networks, and a now-former board member of Headspin, helped lead the internal review, said The Information.

The SEC’s investigation is continuing, it says. Meanwhile, the DOJ notes in its announcement that “a complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.”

Either way, the outlook doesn’t look very promising right now for Lachwani, who, according to Forbes, previously sold a mobile cloud business to Google and wound up co-founding Headspin after Yahoo cofounder Jerry Yang introduced him to Brien Colwell, a former Palantir and Quora engineer was working at the time on a different startup.

Colwell remains with Headspin as its CTO. He has not been named in either the SEC or the DOJ’s complaints relating to Headspin.

The company itself, which has reportedly been cooperating with the government’s investigation, was also not charged.

Pictured above, left to right, Headspin founders Lachwani and Colwell.

#crime, #dell-technologies-capital, #doj, #headspin, #iconiq-capital, #manish-lachwani, #mobile-apps, #sec, #securities-fraud, #series-b, #startups, #tc, #tiger-global, #venture-capital, #wire-fraud

Biden nominates another Big Tech enemy, this time to lead the DOJ’s antitrust division

The Biden administration tripled down on its commitment to reining in powerful tech companies Tuesday, proposing committed Big Tech critic Jonathan Kanter to lead the Justice Department’s antitrust division.

Kanter is a lawyer with a long track record of representing smaller companies like Yelp in antitrust cases against Google. He currently practices law at his own firm, which specializes in advocacy for state and federal antitrust enforcement.

“Throughout his career, Kanter has also been a leading advocate and expert in the effort to promote strong and meaningful antitrust enforcement and competition policy,” the White House press release stated. Progressives celebrated the nomination as a win, though some of Biden’s new antitrust hawks have enjoyed support from both political parties.

The Justice Department already has a major antitrust suit against Google in the works. The lawsuit, filed by Trump’s own Justice Department, accuses the company of “unlawfully maintaining monopolies” through anti-competitive practices in its search and search advertising businesses. If successfully confirmed, Kanter would be positioned to steer the DOJ’s big case against Google.

In a 2016 NYT op-ed, Kanter argued that Google is notorious for relying on an anti-competitive “playbook” to maintain its market dominance. Kanter pointed to Google’s long history of releasing free ad-supported products and eventually restricting competition through “discriminatory and exclusionary practices” in a given corner of the market.

Kanter is just the latest high profile Big Tech critic that’s been elevated to a major regulatory role under Biden. Last month, Biden named fierce Amazon critic Lina Khan as FTC chair upon her confirmation to the agency. In March, Biden named another noted Big Tech critic, Columbia law professor Tim Wu, to the National Economic Council as a special assistant for tech and competition policy.

All signs point to the Biden White House gearing up for a major federal fight with Big Tech. Congress is working on a set of Big Tech bills, but in lieu of — or in tandem with — legislative reform, the White House can flex its own regulatory muscle through the FTC and DOJ.

In new comments to MSNBC, the White House confirmed that it is also “reviewing” Section 230 of the Communications Decency Act, a potent snippet of law that protects platforms from liability for user-generated content.

#amazon, #biden, #biden-administration, #big-tech, #chair, #columbia, #competition-law, #congress, #department-of-justice, #doj, #federal-trade-commission, #google, #government, #joe-biden, #lawyer, #lina-khan, #msnbc, #section-230, #tc, #tim-wu, #white-house, #yelp

US blames China for Exchange server hacks and ransomware attacks

The Biden administration has formally accused China of the mass-hacking of Microsoft Exchange servers earlier this year, which prompted the FBI to intervene as concerns rose that the hacks could lead to widespread destruction.

The mass-hacking campaign targeted Microsoft Exchange email servers with four previously undiscovered vulnerabilities that allowed the hackers — which Microsoft already attributed to a China-backed group of hackers called Hafnium — to steal email mailboxes and address books from tens of thousands of organizations around the United States.

Microsoft released patches to fix the vulnerabilities, but the patches did not remove any backdoor code left behind by the hackers that might be used again for easy access to a hacked server. That prompted the FBI to secure a first-of-its-kind court order to effectively hack into the remaining hundreds of U.S.-based Exchange servers to remove the backdoor code. Computer incident response teams in countries around the world responded similarly by trying to notify organizations in their countries that were also affected by the attack.

In a statement out Monday, the Biden administration said the attack, launched by hackers backed by China’s Ministry of State Security, resulted in “significant remediation costs for its mostly private sector victims.”

“We have raised our concerns about both this incident and the [People’s Republic of China’s] broader malicious cyber activity with senior PRC Government officials, making clear that the PRC’s actions threaten security, confidence, and stability in cyberspace,” the statement read.

The National Security Agency also released details of the attacks to help network defenders identify potential routes of compromise. The Chinese government has repeatedly denied claims of state-backed or sponsored hacking.

The Biden administration also blamed China’s Ministry of State Security for contracting with criminal hackers to conduct unsanctioned operations, like ransomware attacks, “for their own personal profit.” The government said it was aware that China-backed hackers have demanded millions of dollars in ransom demands against hacked companies. Last year, the Justice Department charged two Chinese spies for their role in a global hacking campaign that saw prosecutors accuse the hackers of operating for personal gain.

Although the U.S. has publicly engaged the Kremlin to try to stop giving ransomware gangs safe harbor from operating from within Russia’s borders, the U.S. has not previously accused Beijing of launching or being involved with ransomware attacks.

“The PRC’s unwillingness to address criminal activity by contract hackers harms governments, businesses, and critical infrastructure operators through billions of dollars in lost intellectual property, proprietary information, ransom payments, and mitigation efforts,” said Monday’s statement.

The statement also said that the China-backed hackers engaged in extortion and cryptojacking, a way of forcing a computer to run code that uses its computing resources to mine cryptocurrency, for financial gain.

The Justice Department also announced fresh charges against four China-backed hackers working for the Ministry of State Security, which U.S. prosecutors said were engaged in efforts to steal intellectual property and infectious disease research into Ebola, HIV and AIDS, and MERS against victims based in the U.S., Norway, Switzerland and the United Kingdom by using a front company to hide their operations.

“The breadth and duration of China’s hacking campaigns, including these efforts targeting a dozen countries across sectors ranging from healthcare and biomedical research to aviation and defense, remind us that no country or industry is safe. Today’s international condemnation shows that the world wants fair rules, where countries invest in innovation, not theft,” said deputy attorney general Lisa Monaco.

#attorney-general, #biden, #biden-administration, #china, #computer-security, #computing, #cyberattacks, #cybercrime, #cyberwarfare, #department-of-justice, #doj, #federal-bureau-of-investigation, #government, #hacker, #hacking, #healthcare, #internet-security, #microsoft, #national-security-agency, #norway, #russia, #security, #switzerland, #technology, #united-kingdom, #united-states

Binance, the biggest cryptocurrency exchange, reportedly under investigation

Binance, the biggest cryptocurrency exchange, reportedly under investigation

Enlarge (credit: Bloomberg / Getty Images News)

Binance, the world’s largest cryptocurrency exchange, is under investigation by a laundry list of US government agencies, including the US Justice Department, the Internal Revenue Service, and the Commodity Futures Trading Commission, according to a report by Bloomberg. The agencies are probing Binance for potential criminal violations, the report says, though the company has not been accused of any wrongdoing.

The investigations come on the heels of a report by Chainalysis that traced $2.8 billion worth of illicit bitcoin on exchange and trading platforms. Of that, $756 million went through Binance. Most of the suspect accounts received small amounts, but the majority of the illicit cryptocurrency flowed to a few hundred accounts that received between $100,000 to $100 million. Government officials are said to be focused on money laundering and tax evasion.

The recent ransomware attack on the Colonial Pipeline that led to gasoline shortages has sharpened the focus on cryptocurrencies’ role in illegal activities. In that case, it’s reported that Colonial paid the attackers $5 million to return control of the pipeline’s operations. In another, a ransomware gang recently posted personnel records from District of Columbia’s Metropolitan Police Department after the department didn’t cave to their demands of a $4 million ransom. The group, known as Babuk, is behind other ransomware attacks and frequently requests payment in bitcoin.

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#binance, #bitcoin, #cryptocurrency, #doj, #irs, #policy

This Week in Apps: TikTok viral hit breaks Spotify records, inauguration boosts news app installs, judge rules against Parler

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry is as hot as ever, with a record 218 billion downloads and $143 billion in global consumer spend in 2020.

Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This week, we’re looking into how President Biden’s inauguration impacted news apps, the latest in the Parler lawsuit, and how TikTok’s app continues to shape culture, among other things.

Top Stories

Judge says Amazon doesn’t have to host Parler on AWS

logos for AWS (Amazon Web Services) and Parler

Logos for AWS (Amazon Web Services) and Parler. Image Credits: TechCrunch

U.S. District Judge Barbara Rothstein in Seattle this week ruled that Amazon won’t be required to restore access to web services to Parler. As you may recall, Parler sued Amazon for booting it from AWS’ infrastructure, effectively forcing it offline. Like Apple and Google before it, Amazon had decided that the calls for violence that were being spread on Parler violated its terms of service. It also said that Parler showed an “unwillingness and inability” to remove dangerous posts that called for the rape, torture and assassination of politicians, tech executives and many others, the AP reported.

Amazon’s decision shouldn’t have been a surprise for Parler. Amazon had reported 98 examples of Parler posts that incited violence over the past several weeks before its decision. It told Parler these were clear violations of the terms of service.

Parler’s lawsuit against Amazon, however, went on to claim breach of contract and even made antitrust allegations.

The judge shot down Parler’s claims that Amazon and Twitter were colluding over the decision to kick the app off AWS. Parler’s claims over breach of contract were denied, too, as the contract had never said Amazon had to give Parler 30 days to fix things. (Not to mention the fact that Parler breached the contract on its side, too.) It also said Parler had fallen short in demonstrating the need for an injunction to restore access to Amazon’s web services.

The ruling only blocks Parler from forcing Amazon to again host it as the lawsuit proceeds, but is not the final ruling in the overall case, which is continuing.

TikTok drives another pop song to No. 1 on Billboard charts, breaks Spotify’s record

@livbedumb♬ drivers license – Olivia Rodrigo

We already knew TikTok was playing a large role in influencing music charts and listening behavior. For example, Billboard last year noted how TikTok drove hits from Sony artists like Doja Cat (“Say So”) and 24kGoldn (“Mood”), and helped Sony discover new talent. Columbia also signed viral TikTok artists like Lil Nas X, Powfu, StaySolidRocky, Jawsh 685, Arizona Zervas and 24kGoldn. Meanwhile, Nielsen has said that no other app had helped break more songs in 2020 than TikTok.

This month, we’ve witnessed yet another example of this phenomenon. Olivia Rodrigo, the 17-year-old star of Disney+’s “High School Musical: The Musical: the Series” released her latest song, “Drivers License” on January 8. The pop ballad and breakup anthem is believed to be referencing the actress’ relationship with co-star Joshua Bassett, which gave the song even more appeal to fans.

Upon its release the song was heavily streamed by TikTok users, which helped make it an overnight sensation of sorts. According to a report by The WSJ, Billboard counted 76.1 million streams and 38,000 downloads in the U.S. during the week of its release. It also made a historic debut at No. 1 on the Hot 100, becoming the first smash hit of 2021.

On January 11, “Drivers License” broke Spotify’s record for most streams per day (for a non-holiday song) with 15.17 million global streams. On TikTok, meanwhile, the number of videos featuring the song and the views they received doubled every day, The WSJ said.

Charli D’Amelio’s dance to it on the app has now generated 5 million “Likes” across nearly 33 million views, as of the time of writing.

@charlidamelio♬ drivers license – Olivia Rodrigo

Of course, other TikTok hits have broken out in the past, too — even reaching No. 1 like “Blinding Lights” (The Weeknd) and “Mood” (24kGoldn). But the success of “Drivers License” may be in part due to the way it focuses on a subject that’s more relevant to TikTok’s young, teenage user base. It talks about first loves and being dumped for the other girl. And its title and opening refer to a time many adults have forgotten: the momentous day when you get your driver’s license. It’s highly relatable to the TikTok crowd who fully embraced it and made it a hit.

Weekly News

Platforms: Apple

  • Apple stops signing iOS 12.5, making iOS 12.5.1 the only versions of iOS available to older devices.
  • A report claims Apple’s iOS 15 update will cut support for devices with an A9 chip, like the iPhone 6, iPhone 6s Plus and the original iPhone SE.
  • New analysis estimates Apple’s upcoming iOS privacy changes will cause a roughly 7% revenue hit for Facebook in Q2. The revenue hit will continue in following quarters and will be “material.”

Platforms: Google

  • Google adds “trending” icons to the Play Store. New arrow icons appeared in the Top Charts tab, which indicate whether an app’s downloads are trending up or down, in terms of popularity. This could provide an early signal about those that may still be rising in the charts or beginning to fall out of favor, despite their current high position.
  • Google appears to be working on a Restricted Networking mode for Android 12. The mode, discovered by XDA Developers digging in the Android Open Source Project, would disable network access for all third-party apps.

Gaming

  • Goama (or Go Games) introduced a way for developers to integrate social games into their apps, which was showcased at CES. The company focuses on Asia and Latin America and has more than 15 partners, including GCash and Rappi, for digital payments and communications.
  • Fortnite maker Epic Games is getting into movies. The animated feature film Gilgamesh will use Epic’s Unreal Engine technology to tell the story of the king-turned-deity. The movie is not an in-house project, but rather is financed through Epic’s $100M MegaGrants fund.

Augmented Reality

  • Patents around Apple’s AR and VR efforts describe how a system could be identified in a way that’s similar to FaceID, then either permitted or denied the ability to change their appearance in the game.
  • Pinterest launches AR try-on for eyeshadow in its mobile app using Lens technology and ModiFace data. The app already offered AR try-on for lipsticks.

Entertainment

  • The CW app became the No. 1 app on the App Store this week, topping TikTok, Instagram and YouTube, thanks to CW’s season premieres of Batwoman, All American, Riverdale and Nancy Drew.
  • Users of podcasting app Anchor, owned by Spotify, say the app isn’t bringing them any sponsorship opportunities, as promised, beyond those from Spotify and Anchor itself.
  • YouTube launches hashtag landing pages on the web and in its mobile app. The pages are accessible when you click hashtags on YouTube, not via search, and weirdly rank the “best” videos through some inscrutable algorithm.
  • Apple’s Podcasts app adds a new editorial feature, Apple Podcasts Spotlight, meant to increase podcast listening by showcasing the best podcasts as selected by Apple editors.

E-commerce

  • WeChat facilitated 1.6 trillion yuan (close to $250 billion) in annual transactions through its “mini programs” in 2020. The figure is more than double that of 2019.

Fintech

  • Douyin, the Chinese version of TikTok, launched an e-wallet, Douyin Pay. The wallet will supplement the existing payment options, Alipay and WeChat Pay, and will help to support the Douyin app’s growing e-commerce business.
  • Neobank Monzo founder Tom Blomfield left the startup, saying he struggled during the pandemic. “I think [for] a lot of people in the world…going through a pandemic, going through lockdown and the isolation involved in that has an impact on people’s mental health,” he told TechCrunch.
  • New estimates indicate about 50% of the iPhone user base (or 507 million users) now use Apple Pay. 
  • Samsung’s newest phones drop support for MST, which emulates a mag stripe at terminals that don’t support NFC.

Social

  • Indian messaging app, StickerChat, owned by Hike, is shutting down. Founder Kavin Bharti Mittal said India will never have a homegrown messenger unless it bars Western companies from its market. Hike pivoted this month to virtual social apps, Vibe and Rush, which it believes have more potential.
  • Instagram head Adam Mosseri, in a Verge podcast, said he’s not happy with Reels so far, and how he feels most people probably don’t understand the difference between Instagram video and IGTV. He says the social network needs to simplify and consolidate ideas.
  • Facebook and Instagram improve their accessibility features. The apps’ AI-generated image captions now offer far more details about who or what is in the photos, thanks to improvements in image recognition systems.
  • TikTok launches a Q&A feature that lets creators respond to fan questions using text or videos. The feature, rolled out to select creators with more than 10,000 followers, makes it easier to see all the questions in one place.

Health & Fitness

  • Health and fitness app spending jumped 70% last year in Europe to record $544 million, a Sensor Tower report says. The year-over-year increase is far larger than 2019, when growth was just 37.2%. COVID-19 played a large role in this shift as people turned to fitness apps instead of gyms to stay in shape.

Government & Policy

  • Biden’s inauguration boosted installs of U.S. news apps up to 170%, Sensor Tower reported. CNN was the biggest mover, climbing 530 positions to reach No. 41 on the App Store, and up 170% in terms of downloads. News Break was the second highest, climbing 13 positions to No. 65. Right-wing outlet Newsmax climbed 43 spots to reach No. 108. In 2020, the top news apps were: News Break (23.7 million installs); SmartNews (9 million); CNN (5 million); and Fox News (4 million). This month, however, News Break saw 1.2 million installs, followed by Newsmax with about 863,000 installs, the report said.
  • Ireland’s Data Protection Commission (DPC) sent a draft decision to fellow EU Data Protection Authorities over the WhatsApp-Facebook data sharing policy. This means a decision on the matter is coming closer to a resolution in terms of what standards of transparency is required by WhatsApp.
  • German app developer Florian Mueller of FOSS Patents filed a complaint with the EU, U.S. DOJ and other antitrust watchdogs around the world over Apple and Google’s rejection of his COVID-related mobile game. Both stores had policies to only approve official COVID-19 apps from health authorities. Mueller renamed the game Viral Days and removed references to the novel coronavirus to get the app approved. However, he still feels the stores’ rules are holding back innovation.

Productivity

  • Basecamp’s Hey, which famously fought back against Apple’s App Store rules over IAP last year, has launched a business-focused platform, Hey for Work, expected to be public in Q1. The app has more App Store ratings than rival Superhuman, a report found. Currently, Hey has a 4.7-star rating across 3.3K reviews; Superhuman has 3.9 rating across only 274 reviews.

Trends

  • Baby boomers are increasingly using apps. Baby boomers/Gen Xers in the U.S. spent 30% more time year-over-year in their most used apps, App Annie reports. That’s a larger increase than either Millennials or Gen Z, at 18% and 16%, respectively.

Funding and M&A

  • Curtsy, a clothing resale app for Gen Z women, raised an $11 million Series A led by Index Ventures. The app tackles some of the problems with online resale by sending shipping supplies and labels to sellers, and by making the marketplace accessible to new and casual sellers.
  • Storytelling platform Wattpad acquired by South Korea’s Naver for $600 million. The reading apps whose stories have turned into book and Netflix hits will be incorporated into Naver’s publishing platform Webtoon.
  • On-demand delivery app Glovo partnered with Swiss-based real estate firm, Stoneweg, which is investing €100 million in building and refurbishing real estate in key markets to build out Glovo’s network of “dark stores.”
  • Pocket Casts app is up for sale. The podcast app was acquired nearly three years ago by a public radio consortium of top podcast producers (NPR, WNYC Studios, WBEZ Chicago and This American Life). The owners have now agreed to sell the app, which posted a net loss in 2020. (NPR’s share of the loss was over $800,000.)
  • Travel app Maps.me raised $50 million in a round led by Alameda Research. The funding will go toward the launch of a multi-currency wallet. Cryptocurrency lender Genesis Capital and institutional cryptocurrency firm CMS Holdings also participated in the round, Coindesk reported.
  • Bangalore-based hyperlocal delivery app Dunzo raised $40 million in a round that included investment from Google, Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone Aspada and Alteria.
  • London-based food delivery app Deliveroo raised $180 million in new funding from existing investors, led by Durable Capital Partners and Fidelity Management, valuing the business at more than $7 billion.
  • Dating Group acquired Swiss startup Once, a dating app that sends one match per day, for $18 million.

Downloads

Bodyguard

Image Credits: Bodyguard

A French content moderation app called Bodyguard, detailed here by TechCrunch, has brought its service to the English-speaking market. The app allows you to choose the level of content moderation you want to see on top social networks, like Twitter, YouTube, Instagram and Twitch. You can choose to hide toxic content across a range of categories, like insults, body shaming, moral harassment, sexual harassment, racism and homophobia and indicate whether the content is a low or high priority to block.

Beeper

Image Credits: Beeper

Pebble’s founder and current YC Partner Eric Migicovsky has launched a new app, Beeper, that aims to centralize in one interface 15 different chat apps, including iMessage. The app relies on an open-source federated, encrypted messaging protocol called Matrix that uses “bridges” to connect to the various networks to move the messages. However, iMessage support is more wonky, as the company actually ships you an old iPhone to make the connection to the network. But this system allows you to access Beeper on non-Apple devices, the company says. The app is slowly onboarding new users due to initial demand. The app works across MacOS, Windows, Linux‍, iOS and Android and charges $10/mo for the service.

 

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Stay gold, ‘Plaid for X’ startups

A failed acquisition usually triggers the same series of questions: What does this mean for early-stage startups in the sector? Will a chilling effect occur and hurt valuations? Will VCs stop funding this category? How will the exit environment look going forward?

This week gave that narrative a bullish twist. Visa and Plaid announced that they have reached a mutual agreement to no longer pursue a merger. The $5.3 billion deal had been under antitrust scrutiny from the DOJ, and eventually ended amid these regulatory challenges.

Fintech VCs and startups alike reacted to the fallen deal with aggressive optimism about Plaid’s future as an independently-owned fintech startup.

The most common arguments?

  • Plaid’s price in this current moment is far beyond $5.3 billion, so now that it is a free bird it will pursue a much larger exit
  • Plaid will go public through SPAC because it is in charge of its own destiny.
  • And my favorite: One day, Plaid will buy Visa.

In an interview with TechCrunch, Plaid CEO Zach Perret wouldn’t give too many details on the future (and whether a SPAC is involved), but he did say he has new ‘clarity’ going forward.

The fact that fintech is bullish on the future of fintech isn’t quite surprising. I will say that while one deal can never make or break a sector, a flopped merger certainly can surface the current temperature in the market. Startups Weekly readers will remember last week’s edition about how P&G’s decision not to acquire Billie could hurt DTC exit opportunities. Fintech seems unbothered and, in fact, celebratory. The only counterargument I got, via Twitter DM, is that it could set a bad precedent on big fintech mergers.

“Or maybe…corporations learn from this and look to make riskier acquisitions earlier in a company’s lifecycle because they know that if they let the company get too big they’ll lose the chance,” Rami Essaid, founder of Finmark, told me.

Only in 2021 could a $5.3 billion break-up and a DOJ investigation be considered a blessing. Rock on, ‘Plaid for X’ startups.

Before we go on, make sure to follow me on Twitter for my bad jokes and early-stage startup coverage. You can also always reach me at natasha.m@techcrunch.com.

Columbus is the new Miami which is new the San Francisco

I hope that sub-hed gave you a headache, because that’s exactly what debates about where the best place to start a company do to me. The rise of Work From Anywhere has emboldened VCs to leave San Francisco for markets such as Miami or Austin in search of the next unsung hero of their portfolios.

For investors, though, the financial benefit of moving to an emerging market might not be apparent within months, but instead years. Venture is a long game (at least most of the time).

Here’s what to know, per Silicon Valley editor Connie Loizos: Drive Capital, a venture capital firm based in Columbus, Ohio, and started by two ex-Sequoia investors now has over $1.2 billion in assets. But before it had breakout companies like Root and Olive AI, Drive had to play the unusual role of investing in a region without key investing infrastructure.

Etc: Founding partner Chris Olsen explained how they set up their roots:

“We’ve had to spend a lot of time going into the universities and putting new seed managers in business and helping them fundraise and sort of building all of this infrastructure from scratch so that the next entrepreneur is out here [versus moves away], and it works. In our first year, we had inbound interest from 1,800 [startups], then it went to about 3,000 and now it’s up to about 7,000, which is more than I’ve heard any other venture firms say that they see in California. And I don’t think it’s because we’re great. I think that’s more [a reflection of the] scale of the opportunity that’s here now. One of the things that we would love to see more of is more venture capitalists coming here, because there’s certainly more opportunity than we can invest in.”

Ideal paper world powered with alternative wind and solar energy. environmental concept.

Image Credits: Paula Dani/ABlse (opens in a new window) / Getty Images

The CFO Tech Stack

If you want to start a company, go to a startup and look where employees are still using an Excel sheet. The best products are the ones fueled by frustrations, right?

Here’s what to know per managing editor Danny Crichton: For a trio of Palantir alums, 15 collective years at the now-public government tech company showed a huge gap in technology for CFOs. So, they started Mosaic, a techstack to help financial officers better communicate and perform their jobs.

Etc: Co-founder Bijan Moallemi describes the mistake other platforms are making:

“Everyone wants to be strategic, but it’s so tough to do because 80% of your time is pulling data from these disparate systems, cleaning it, mapping it, updating your Excel files, and maybe 20% of [your time] is actually taking a step back and understanding what the data is telling you.”

GettyImages 946391800

Image via Getty Images / alashi

The future of consumer hardware startups beyond Peloton

Are wearables still exciting? Is consumer hardware ever going to get easier to pull off? What was the strategy that made Peloton so successful?

These questions and more are answered in the latest consumer hardware-focused Extra Crunch Survey, which brings together VCs from SOSV, Lux Capital, Shasta Ventures, and more.

Here’s what to know: Everyone is studying the Peloton success recipe. But the big question for consumer hardware startups is if the at-home fitness market’s boom is translating to other use cases.

Etc: Cyril Ebersweiler of SOSV noted that supply chain distribution disruption during COVID-19 has been difficult for category startups, but the need for innovative solutions has never been more clear.

“Everybody is waiting for new and mind-blowing experiences, and I guess we’ve all experienced the shortcomings or the magic of some IoT products over the shelter-in-place [orders]. Spatial and ambient technologies that work well will be in demand (audio or visual), while “holographic Skype” will invade households thanks to Looking Glass.”

Also: In another investor survey, five VCs weighed in on the future of cannabis in 2021.

3D render, visualization of a man holding virtual reality glasses, electronic device, head surrounded by virtual data with neon green grid. Player one ready for the VR game. Virtual experience.

Pop goes the public market

We had yet another noisy week of privately-held startups going public to a Very Warm Wall Street reception. The most opulent story of the week was definitely Affirm’s debut, which doubled its already-increased price when it started to officially trade.

Here’s what to know, per our resident IPO reporter Alex Wilhelm, who writes The Exchange:

Etc:

GettyImages 1155292858

NEW YORK, NEW YORK – JUNE 11: PayPal Co-Founder & Affirm CEO Max Levchin visits “Countdown To The Closing Bell” at Fox Business Network Studios on June 11, 2019 in New York City. (Photo by John Lamparski/Getty Images)

Around TechCrunch

Extra Crunch Live is returning in a big way in 2021. We’ll be interviewing VC/founder duos about how their Series A deals went down, and Extra Crunch members will have the chance to get live feedback on their pitch deck. You can check out our plans for ECL in 2021 right here, or hit up this form to submit your pitch deck. Episodes air every Wednesday at 3pm ET/12pm PT starting in February.

And if you’re feeling extra generous, take this survey to help shape the future of TechCrunch

Across the week

Seen on TechCrunch

Glassdoor: Best tech companies to work for in 2021

Signal’s Brian Acton talks about exploding growth, monetization and WhatsApp data-sharing outrage

Two-year-old NUVIA sells to Qualcomm for $1.4 billion

Loop launches out of stealth to make auto insurance more equitable

Nuclear fusion tech developer General Fusion now has Shopify and Amazon founders backing it

Seen on Extra Crunch

Lessons from Top Hat’s acquisition spree

12 ‘flexible VCs’ who operate where equity meets revenue share

Dear Sophie: What’s the new minimum salary required for H-1B visa applicants?

Equity (and a bonus Equity)

The news keeps coming so we keep recording. This week, the trio chatted about the Plaid-Visa deal, but also about the Palantir mafia‘s next big bet. In early-stage news, I covered a fintech accelerator that pivoted into an edtech accelerator and a new startup coming out of Austin that makes car insurance more equitable. We also debated SPACs for a bit, and Danny was…optimistic?

Listen to our episode, follow the pod on Twitter, and if you so please, tune into our bonus Equity episode that just came out today. It’s an episode dedicated entirely to the barrage of payments and e-commerce funding that came out this week.

Until next week,

Natasha 

#austin, #doj, #early-stage, #fintech, #hardware, #palantir, #peloton, #plaid, #startups, #startups-weekly, #tc, #visa

DoJ says SolarWinds hackers breached its Office 365 system and read email

DoJ says SolarWinds hackers breached its Office 365 system and read email

Enlarge (credit: Gregory Varnum)

The US Justice Department has become the latest federal agency to say its network was breached in a long and wide-ranging hack campaign that’s believed to have been backed by the Russian government.

In a terse statement issued Wednesday, Justice Department spokesman Marc Raimondi said that the breach wasn’t discovered until December 24, which is nine days after the the hack campaign came to light. The hackers, Raimondi said, took control of the department’s Office 365 system and accessed email sent or received from about 3 percent of accounts. The department has more than 100,000 employees.

Investigators believe the campaign started when the hackers took control of the software distribution platform of SolarWinds, an Austin, Texas-based maker of network management software that’s used by hundreds of thousands of organizations. The attackers then pushed out a malicious update that was installed by about 18,000 of those customers. Only a fraction of the 18,000 customers received a follow-on attack that used the backdoored SolarWinds software to view, delete, or alter data stored on those networks.

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#biz-it, #doj, #hackers, #justice-department, #policy, #solarwinds, #tech

Cases against Facebook are reportedly coming… when FTC decides how

Giant monitors displaying the Facebook logo hang from the ceiling of an empty convention center.

Enlarge / All Facebook, no matter which way you look. (credit: Michael Short | Bloomberg | Getty Images)

After well over a year spent investigating Facebook, state and federal regulators are more than ready to start launching a slate of cases against Facebook, new reports say—that is, as soon as the agencies can agree on how they actually want to do it.

New suits against Facebook should come before the end of January, The Wall Street Journal writes. Both the Federal Trade Commission and a coalition of attorneys general for 47 states and territories are expected to take some kind of action.

The state and the federal probes are basically looking into two overall buckets of potentially anticompetitive behavior. The first has to do with Facebook’s effects on other businesses that could or do compete with it. That’s the investigation that delves into mergers and acquisitions, both large and small, as well as Facebook’s behavior toward companies that refuse a buyout.

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#antitrust, #competition, #department-of-justice, #doj, #facebook, #federal-trade-commission, #ftc, #google, #instagram, #justice-department, #lawsuits, #policy, #whatsapp

Cryptocurrency exchange Liquid confirms hack

Cryptocurrency exchange Liquid has confirmed it was hacked, but that the scope of the incident is still under investigation.

The company’s chief executive Mike Kayamori said in a blog post the attack happened on November 13. The hacker gained access to the company’s domain records, allowing the hacker to take control of several employee email accounts, and later compromised the company’s network.

Kayamori said that while cryptocurrency funds are “accounted for,” the hacker may have accessed the company’s document storage. “We believe the malicious actor was able to obtain personal information from our user database. This may include data such as your email, name, address and encrypted password,” he said.

The company said it was “continuing to investigate” if the hacker gained access to documents that users submitted to verify their identity with the exchange, such as a government-issued ID, selfie, or proof of address, which could put users at a heightened risk of identity theft or for targeted attacks.

Liquid told users in an email that they should change their passwords to be safe.

Attacks that target a company’s network infrastructure take advantage of weak or reused passwords that were used to register the company’s domain name. By breaking in and changing those network settings, attackers can invisibly control the network and gain access to email accounts and systems that would be far more difficult through other routes of attack.

Cryptocurrency startups and exchanges are high-value targets for hackers, given the potential for massive financial rewards of a successful breach. In 2018, Nano saw $170 million stolen in a breach, Coinrail lost $40 million after a hack, Bithumb lost $30 million, and Binance and Coincheck each lost a massive $400 million after hackers broke in.

Liquid was founded in 2014, and claims to have facilitated the trade of $50 billion in cryptocurrency over the past year.

More:

#articles, #cryptocurrencies, #cryptocurrency, #digital-currencies, #doj, #funding, #identity-theft, #security

The DOJ has approved Mastercard’s acquisition of Finicity

Federal regulators have approved Mastercard’s acquisition of Salt Lake City-based startup Finicity, which provides open-banking APIs. The deal is expected to go for $825 million.

“We were notified that the Department of Justice completed its review of our planned acquisition of Finicity and has cleared it to move forward,” Mastercard wrote in a statement. “We are pleased to have reached this milestone.”

Finicity allows users to be able to decide how their financial information is shared and who can make money decisions on their behalf through open APIs. The buy will allow Mastercard to offer consumers and businesses more choice in these transactions, without requiring them to do heavy lifting themselves.

Finicity, according to Crunchbase, has raised nearly $80 million in known venture capital as a private company. When closed, it will be one of the largest fintech acquisitions at nearly $1 billion in 2020.

The DOJ approval comes just two weeks after the body filed an antitrust lawsuit challenging Visa’s proposed $5.3 billion buy of Plaid. Plaid, which empowers a large chunk of financial services through its data network, including Venmo and Acorns, is being accused of making Visa a monopoly in online debt services.

Plaid has denied these claims, saying that “Visa intends to defend the transaction vigorously.” The feds are also looking into Intuit’s $7 billion proposed buy of Credit Karma, which was first announced in February 2020.

The approval of the Mastercard-Finicity transaction could be a shot in the arm for fintech startup valuations. After both the Plaid and Credit Karma deals came under increasing regulatory scrutiny, it was an open questions whether big-dollar M&A was going to be an option for fintech unicorns.

If the path was closed due to regulatory concerns, fintech startups would have to either pursue earlier, smaller sales themselves, or wait for an eventual IPO. If that was the case, venture capitalists might shun putting as much capital to work in the sector. However, the Finicity approval makes it clear that not all fintech M&A worth $500 million or more is going to encounter oversight headaches. That should be welcome news for late-stage fintech valuations.

#doj, #exit, #finicity, #fundings-exits, #ma, #mastercard, #mergers-and-acquisitions, #startups, #tc, #visa

Sacklers—who made $11 billion off opioid crisis—to pay $225 million in damages

Protestors hold up a banner while surrounded by empty prescription bottles.

Enlarge / PURDUE PHARMA, STAMFORD, Conn. – 2019/09/12: Members of P.A.I.N. (Prescription Addiction Intervention Now) and Truth Pharm staged a protest on September 12, 2019, outside Purdue Pharma headquarters in Stamford, over their recent controversial opioid settlement. (credit: Getty | Erik McGregor)

The infamous megarich Sackler family will pay $235 million in civil penalties as part of a controversial $8.3 billion settlement with the US Department of Justice.

Members of the Sackler family own and formerly directed Purdue Pharma, which introduced the powerful opioid painkiller OxyContin in 1996. Throughout the years, Purdue and members of the Sackler family have been accused of using aggressive, misleading marketing tactics to push the highly addictive opioid painkiller on doctors and patients, which helped spark a massive nationwide epidemic of opioid abuse and overdose. So far, nearly 450,000 people have died from opioid overdoses in the United States during the past two decades, and the epidemic is still ongoing.

As part of the settlement with the federal government, Purdue will plead guilty to one count of defrauding the United States and two counts of violating the anti-kickback statute. Between 2009 and 2017, Purdue paid two doctors via the company’s doctor speaker program to increase opioid prescriptions to patients, according to the Justice Department. In 2016, the company also paid an electronic medical records company to install prompts and alerts in its software that would refer, recommend, and set up ordering for Purdue’s opioid drugs for patients.

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#addiction, #doj, #opioid, #purdue, #sacklers, #science, #settlement

Google calls DOJ’s antitrust lawsuit “deeply flawed” in GIF-laden blog response

Google was clearly anticipating today’s U.S. Department of Justice antitrust complaint filing – the company posted an extensive rebuttal of the lawsuit to its Keyword company blog. The post, penned by SVP of Global Affairs and Google Chief Legal Officer Kent Walker, suggests that the DOJ’s case is “deeply flawed” and “would do nothing to help consumers,” before going into a platform-by-platform description of why it thinks its position in the market isn’t representative of unfair market dominance that would amount to antitrust.

Google’s blog post is even sprinkled with GIFs – something that’s pretty common for the search giant when it comes to its consumer product launches. These GIFs include step-by-step screen recordings of setting search engines other than Google as your default in Chrome on both mobile and desktop. These processes are both described as “trivially easy” by Walker in the post, but they do look like a bit of an own-goal when you notice just how many steps it takes to get the job done on desktop in particular, including what looks like a momentary hesitation in where to click to drill down further for the “Make Default” command.

Image Credits: Google

Google also reportedly makes reference to companies choosing their search engine as default because of the quality of their service, including both Apple and Mozilla (with a link drop for our own Frederic Lardinois). Ultimately, Google is making the argument that its search engine isn’t dominant because of a lack of viable options fostered by anti-competitive practices, but that instead it’s a result of building a quality product that consumers then opt in to using from among a field of choices.

The DOJ’s full suit dropped this morning, and an initial analysis suggests that this scrutiny is perhaps inopportunely timed in terms of its proximity to the election to actually have any significant teeth. There is some indication that a more broad, bipartisan investigation with support from state level attorney generals on both sides of the aisle could follow later, however, so it’s not necessarily all just going to go away regardless of election outcome.

#apple, #chrome-os, #doj, #freeware, #gif, #google, #google-search, #google-chrome, #kent-walker, #mozilla, #operating-systems, #search-engine, #search-engines, #software, #tc, #web-browsers

Justice Dept. files long-awaited antitrust suit against Google

Will the sun ever set on the Google empire?

Enlarge / Will the sun ever set on the Google empire? (credit: 400tmax | Getty Images)

The Department of Justice today filed a landmark antitrust suit against Google, alleging that the company behaved anticompetitively and unfairly pushed out rivals in its search businesses.

A company does not have to be a literal monopoly, with no available competition of any kind, to be in violation of antitrust law. The law is instead primarily concerned with what a company does to attain dominance and what it does with that dominant position once it’s at the top. And according to the DOJ’s complaint (PDF), Google did indeed abuse its outsized market power to tilt the playing field in its favor and keep potential rivals out.

“Google is the gateway to the Internet,” Deputy Attorney General Jeffrey Rosen said in a call with reporters. “It has maintained its power through exclusionary practices that are harmful to competition.”

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#alphabet, #antitrust, #competition, #department-of-justice, #doj, #google, #justice-department, #lawsuits, #policy

John McAfee arrested, indicted on tax evasion charges, sued for fraud

John McAfee gesticulating on his yacht outside Havana, Cuba, during an interview with AFP in June 2019.

Enlarge / John McAfee gesticulating on his yacht outside Havana, Cuba, during an interview with AFP in June 2019. (credit: Adalberto Roque | AFP | Getty Images)

Noted cybersecurity eccentric John McAfee is under arrest in Spain awaiting extradition to the United States after being indicted on federal tax evasion charges.

The Department of Justice unsealed the indictment (PDF) yesterday, following McAfee’s arrest by Spanish authorities at Barcelona’s airport over the weekend.

The filing alleges that McAfee deliberately not only avoided paying federal taxes from tax years 2014 through 2018 but also tried to hide considerable assets from the IRS. He allegedly hid those assets—including a yacht, a vehicle, real estate, bank accounts, and cryptocurrency—by purchasing and titling them under “the name of a nominee.”

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#department-of-justice, #doj, #john-mcafee, #justice-department, #mcafee, #policy, #sec, #securities-and-exchange-commission

John McAfee arrested after DOJ indicts crypto millionaire for tax evasion

Cybersecurity entrepreneur and crypto personality John McAfee’s wild ride could be coming to an end after he was arrested in Spain today, now facing extradition to the US over charges spanning tax evasion and fraud.

The SEC accuses McAfee of being paid more than $23.1 million worth of cryptocurrency assets for promoting a number of ICO token sales without disclosing that he was being paid to do so. Furthermore the DOJ has levied a number of counts of tax evasion against McAfee, saying that he “willfully attempted to evade” payment of income taxes owed to the federal government.

In a brief announcing the arrest and unsealing of indictment documents, the DOJ also details that the charges are confined to McAfee the individual and that they did not find any connection with the “anti-virus company bearing his name.”

The DOJ’s charges against McAfee are a bit dry but detail 10 counts against the entrepreneur. McAfee faced 5 counts of tax evasion, which each carry a maximum penalty of 5 years in prison, as well as 5 counts of “willful failure to file a tax return,” each carrying a maximum penalty of 1 year in prison.

The SEC filing is a much more interesting read, with 55 pages detailing a lengthy investigation into McAfee’s alleged fraudulent activity promoting a number of ICOs throughout 2017 and 2018. The report specifically notes that McAfee allegedly received more than $11.6 million worth of BTC and ETH tokens worth for promoting seven ICOs. Unfortunately, those offerings were not named in the suit. He additionally received $11.5 million worth of the promoted tokens, the suit alleges.

We have reached out to John McAfee for comment.

#articles, #cryptocurrency, #cryptography, #doj, #entrepreneur, #federal-government, #initial-coin-offering, #john-mcafee, #mcafee, #spain, #tax-evasion, #tc, #u-s-securities-and-exchange-commission, #united-states

Justice Dep’t. sends its Section 230 rewrite to Congress

Cartoon hands hold out a band-aid over the words Section 230.

Enlarge (credit: Aurich Lawson / Getty Images)

The Department of Justice today dropped a proposed “recalibration” of one of the most important laws governing the US Internet into Congress’s lap and urged legislators to act to remove a liability protection on which nearly every website and app currently relies.

Attorney General Bill Barr sent the proposed legislation—an extension of his June wish list—to Speaker of the House Nancy Pelosi and Vice President Mike Pence (in his role as President of the Senate) this morning.

“For too long Section 230 has provided a shield for online platforms to operate with impunity,” Barr said in a written statement. “Ensuring that the internet is a safe, but also vibrant, open, and competitive environment is vitally important to America,” he added. “We therefore urge Congress to make these necessary reforms to Section 230 and begin to hold online platforms accountable both when they unlawfully censor speech and when they knowingly facilitate criminal activity online.”

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#congress, #department-of-justice, #doj, #justice-department, #laws, #legislative-proposal, #policy, #section-230

States, DOJ reportedly meeting this week to plan Google antitrust suit

Google's in everything. Perhaps too much everything, regulators now worry.

Enlarge / Google’s in everything. Perhaps too much everything, regulators now worry. (credit: Omar Marques | SOPA Images | LightRocket | Getty Images)

Multiple investigations into Google parent Alphabet’s competition practices may finally be reaching a head, as state and federal regulators meet today to plan next steps for one or more lawsuits against the company.

Attorneys from the Department of Justice are meeting today with attorneys general from several different states about imminent plans to file an antitrust suit against Google, the Washington Post and Bloomberg report.

The DOJ began its antitrust probe of “market-leading online platforms” a little more than a year ago, without naming names. Google was widely assumed to be one of the targets, and the company confirmed last September that it was indeed under investigation.

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#alphabet, #antitrust, #department-of-justice, #doj, #google, #justice-department, #lawsuits, #policy

DoJ suggested OANN should call FBI about NPR’s tipline, emails show

The most salacious tips obviously also have the most dramatic backlighting.

Enlarge / The most salacious tips obviously also have the most dramatic backlighting. (credit: Andrew Brookes | Getty Images)

A representative from the Department of Justice suggested in 2018 that the Federal Bureau of Investigation should have a look into NPR’s use of a secure, encrypted tipline, newly publicized emails reveal.

Reporter Jason Leopold obtained an email exchange from DOJ officials from a Freedom of Information Act (FOIA) request and shared them on Twitter. The email thread begins with an April 2018 message from Neil McCabe, who was at the time a reporter at One America News Network (OANN), a far-right cable news channel best known for boosting and spreading conspiracy theories. McCabe was writing to Lauren Ehrsam Gorey, who was then a spokesperson in the DoJ’s Office of Public Affairs (i.e., the department’s communications and public relations division).

“Can you find out if DOJ is cool with NPR running a Tor-enabled tip email?” McCabe wrote, adding a link to NPR’s instructions for sending in confidential tips.

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#department-of-justice, #doj, #encryption, #fbi, #federal-bureau-of-investigation, #foia, #justice-department, #npr, #oann, #policy, #securedrop, #tor

DOJ accuses Chinese hackers of trying to steal COVID-19 research data

The Department of Justice seal as seen during a press conference in December 2019.

Enlarge / The Department of Justice seal as seen during a press conference in December 2019. (credit: Samuel Corum | Getty Images)

Two state-sponsored hackers in China targeted US businesses in a “sophisticated and prolific threat” for more than 10 years, both for financial gain and to steal trade secrets, the Department of Justice said today.

The 11-count indictment (PDF), which was made public today, alleges Li Xiaoyu and Dong Jiazhi worked with China’s Ministry of State Security (MSS) and other agencies to hack into “hundreds of victim companies, governments, non-governmental organizations, and individual dissidents, clergy, and democratic and human rights activists in the United States and abroad.”

Li and Dong were allegedly infiltrating networks of businesses in a wide array of sectors, including “high tech manufacturing; civil, industrial, and medical device engineering; business, educational, and gaming software development; solar energy; and pharmaceuticals,” including defense contractors, since at least September 2009. In recent months, prosecutors allege, the two were seeking ways in to “the networks of biotech and other firms publicly known for work on COVID-19 vaccines, treatments, and testing technology” in at least 11 countries, including the US.

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#china, #chinese-espionage, #covid-19, #department-of-justice, #doj, #espionage, #hackers, #hacks, #justice-department, #national-security, #policy, #spies

Senator pushes DOJ to launch criminal antitrust probe of Amazon

We like to imagine Attorney General Barr is telling Hawley, "Just hold that thought, maybe."

Enlarge / We like to imagine Attorney General Barr is telling Hawley, “Just hold that thought, maybe.” (credit: Drew Angerer | Getty Images)

Amazon is already facing a bevy of antitrust probes, both in the United States and overseas. Just about every state, federal, and international regulator with any kind of competition regulation power is investigating the company over some aspect of its business. Sen. Josh Hawley (R-Mo.), however, wants to add one more to the pile and is calling on the Justice Department to launch a criminal probe.

“Recent reports suggest that Amazon has engaged in predatory and exclusionary data practices to build and maintain a monopoly,” Hawley wrote today in a letter (PDF) to Attorney General William Barr. “These practices are alarming for America’s small businesses under ordinary circumstances. But at a time when most small retail businesses must rely on Amazon because of coronavirus-related shutdowns, predatory data practices threaten these businesses’ very existence.”

The recent report to which Hawley refers is last week’s Wall Street Journal exposé, which found that Amazon employees accessed third-party merchants’ data as a matter of habit in order to launch their own in-house products and undercut the marketplace vendors who rely on Amazon as a platform.

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#amazon, #antitrust, #congress, #department-of-justice, #doj, #justice-department, #policy

Justice Dep’t tackles coronavirus scam site, first of probably many

Stock photo of hands operating a laptop while holding a credit card.

Enlarge / Fraudulent websites never actually look like this, really, but if you come across one that does, maybe don’t put in your credit card information. (credit: boonchai wedmakawand | Getty Images )

The US Department of Justice is keeping busy during the coronavirus crisis: the agency has filed its first—but unfortunately, almost certainly not last—suit to take down a fraudulent scheme allegedly trying to profit off Americans’ fears about the virus.

The DOJ said late Sunday that it filed suit in Austin against the operators of website coronavirusmedicalkit.com and issuing a restraining order requiring the registrar to block access to it. (As of this writing the site is indeed offline.)

The site operators were engaging in a “predatory wire fraud scheme,” the suit (PDF) alleges. When it was online, the site claimed that the World Health Organization was offering free vaccine kits for COVID-19. All users had to do to get these “free” kits was enter their credit card information and pay $4.95 for shipping. The site also featured an image of Dr. Anthony Fauci—the director of the National Institute of Allergy and Infectious Diseases and current leading US expert in infections disease—to make itself look more official.

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#coronavirus, #covid-19, #department-of-justice, #doj, #fraud, #justice-department, #policy, #scams