Everyone’s gunning for OpenSea.
Kraken is unveiling its own NFT marketplace.
Kraken is the latest crypto exchange to join the NFT craze. The crypto marketplace announced Tuesday that it has opened a waitlist for Kraken NFT, where users can buy, sell and store their tokens.
The move follows rival Coinbase’s beta launch last month of its own NFT marketplace, which underlined the growing competition in the fast-growing sector that’s been dominated by OpenSea. The NFT market was estimated to be worth more than $40 billion in 2021.
Like Coinbase, Kraken is touting how it is aiming to make NFT transactions more user-friendly.
“Non-fungible tokens have redefined the concepts of digital expression, culture and ownership for creators and collectors alike,” Kraken said in a blog post. “But the fast-changing, complex ecosystem has made it difficult for many to join in the excitement of the space.”
Kraken said it will not charge transaction fees — known as gas fees when trades are on the Ethereum blockchain — on NFT trades on its marketplace, although it will charge them “when transferring NFTs and other crypto assets on and off” Kraken’s marketplace.
Coinbase does not charge sales fees on NFTs, but gas fees may apply based on “the amount of congestion on the Ethereum network,” Coinbase said.
Kraken said users will also be able to pay with cash or crypto for NFT transactions. Kraken supports more than 120 cryptocurrencies.
Kraken is the fourth-largest crypto marketplace, after Binance, Coinbase and FTX, according to CoinMarketCap. The company said it has more than 9 million clients, and recorded $601 billion in transactions in 2021 and about $112 billion so far this year.
Update: This story was updated on May 3 to include more details on Coinbase’s handling of NFT transaction fees.
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Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at email@example.com or via Google Voice at (925) 307-9342.
Google is allowing some Android apps to use their own payment systems after getting into battles with both Match Group and Epic Games’ Bandcamp, but the move might be temporary. The company is facing legal action for requiring apps in the Google Play Store to use its billing, and the interim solution Google came up with is to let those apps use their own payments — with a catch.
Match Group withdrew its temporary restraining order against Google on Friday, according to TechCrunch, which it had filed amid its antitrust lawsuit against the company. Match eked out some “concessions” from Google, including making sure its apps would not be ousted from the Play Store for using alternative payment options, TechCrunch reported. Rather than pay Google, Match is putting aside $40 million in an escrow account, maintaining that the fees are illegal and awaiting a judge’s ruling.
The lawsuit, which alleges that Google has “illegally monopolized” the app market for Android with its Play Store policy, is still ongoing. Google’s Play Store policy requires app developers use the company’s billing system, then takes a cut of the revenue. In the original complaint, Match claimed Google holding it “hostage,” while Google responded that it charges for services “like any business,” and that its commission is the “lowest rate among major app platforms.”
“We plan to rebut Match’s unfounded complaint and will be counter-suing for damages and breach of our developer contract,” a Google spokesperson told Protocol. “Match has agreed to put up to $40 million in escrow as a reserve against damages and to work to integrate Google Play’s billing system.”
Google also settled its differences with Epic Games on Friday, and won’t kick Epic subsidiary Bandcamp off of Google Play Store for using its own payment system, Music Business Worldwide reported. Under the agreement, Bandcamp will also start an escrow account for Google’s fees, setting aside 10% of its revenue generated from digital sales until Epic’s case against Google is resolved, the company said in a blog post.
Epic acquired online music platform Bandcamp, which has used its own billing system on Android since 2015, in March. Bandcamp was threatened with being booted from the Google Play Store if it didn’t begin using Google’s proprietary billing system by June 1. Bandcamp was able to use its own system for so long because Google has an exemption from its billing rule for digital music companies, according to the blog post.
“We’ll continue to defend our business against Epic’s campaign to not pay for the value they get from Google Play,” the Google spokesperson said. “Epic has now agreed to pay a standard 10% service fee into escrow as a reserve against potential damages.”
Epic, parent company of Fortnite, sued Apple for similar anti-competitive behavior.
This story was updated May 20, 2022, with comments from a Google spokesperson.
Larry Ellison was among the participants on a call in November 2020, during which top Trump allies discussed ways to contest the election results, according to The Washington Post. It’s unclear what role Ellison played on the call, but The Post found evidence of Ellison’s apparent involvement in court records and confirmed with one of the call’s other participants.
An Oracle spokesperson didn’t immediately respond to Protocol’s request for comment.
The records are part of an ongoing legal case involving True the Vote, a conservative group focused on stopping supposed voter fraud, and Fair Fight, a progressive voting rights group founded by Stacey Abrams. According to documents revealed in that case, True the Vote’s founder Catherine Engelbrecht described the call in a note to a donor.
“Jim was on a call this evening with Jay Sekulow, Lindsey O. Graham, Sean Hannity and Larry Ellison,” Engelbrecht wrote, according to the Post. Jim, in this case, describes Jim Bopp, True the Vote’s lawyer. “He explained the work we were doing and they asked for a preliminary report asap, to be used to rally their troops internally, so that’s what I’m working on now.”
The donor, Fred Eshelman, replied days later, according to the Post, curious about Ellison’s involvement. “Why was he on call with Senator Graham? Is he part of data/analysis solution, is he a potential large donor, other?” Eshelman’s message read.
Bopp confirmed his participation in the call, but told the Post he couldn’t recall its participants and shared a different recollection about the substance of the call. “The question that I think was being discussed was whether or not congressional hearings on how the 2020 election was being conducted would be beneficial to whatever people were doing,” he told the Post.
Ellison’s support for former President Trump is, by now, well known. He was among Trump’s most prominent allies in the tech industry during his time in office and held a fundraiser for him during the 2020 election. Trump, likewise, praised Oracle and looped the software giant in on the much-anticipated, but ultimately scuttled, deal to acquire TikTok in September 2020. His administration also backed Oracle in its copyright fight with Google.
Ellison, who is now chair of Oracle’s board, is also part of the group of financiers who recently joined Elon Musk in his bid to take Twitter private. Musk has said if the deal goes through (and that’s still a big if) that he would reinstate Trump’s account.
Microsoft Bing has exported Chinese censorship abroad, according to a new report by The University of Toronto’s Citizen Lab.
Bing searches for national figures, leaders within the Chinese Communist Party, dissidents and topics that Beijing considers politically sensitive did not appear in auto-suggest in North America, according to the report. Among the search terms that didn’t generate autocomplete suggestions were searches for President Xi Jinping, the late human rights activist Liu Xiaobo and searches related to the Tiananmen Square massacre.
“We consistently found that Bing censors politically sensitive Chinese names over time, that their censorship spans multiple Chinese political topics, consists of at least two languages, English and Chinese, and applies to different world regions, including China, the United States and Canada,” the report said.
In response, a spokesperson for Microsoft told The Wall Street Journal said the results were unintentional. “A small number of users may have experienced a misconfiguration that prevented surfacing some valid autosuggest terms, and we thank Citizen Lab for bringing this to our attention,” the spokesperson said.
The report raises questions about the long reach of Chinese official censorship and its infamous Great Firewall, which clamps down on discussions Beijing considers destructive. “If Microsoft had never engaged in Chinese censorship operations in the first place, there would be no way for them to spill into other regions,” Jeffrey Knockel, a senior research associate at Citizen Lab, told the Journal.
While other major American tech companies such as Facebook and Twitter have decided to stay out of China because of their refusal to comply with strict censorship rules, Microsoft has continued to do business there. That has led to frequent accusations that the company is acquiescing to censorship demands, including on LinkedIn, which began operating in China in 2014. In the past, the company has been found blocking the profiles of U.S. journalists in China due to “prohibited content” in their profiles.
Last year, however, the company announced that LinkedIn would be pulling out of China, citing what it described as “greater compliance requirements.” In its place, the company said it would launch a stripped-down job seeking site that did not include LinkedIn’s social features.
In an interview with Protocol last year, LinkedIn founder Reid Hoffman discussed that decision, saying, “[The] conflicts between society, Western society and China try to put you in the crossfire. Between them, you end up in a lot of controversy when you’re trying to navigate this line.”
Google had its “best year yet” for hiring Black and Latinx employees in the U.S. as well as women globally, according to its 2022 Diversity Annual Report. The hiring rate increased for Black, Latinx, Native American and female employees, although these identities are still very underrepresented compared to white and male employees.
The number of Black employees increased from 4.4% in 2021 to a little over 5% in 2022, while Latinx employees increased from 6.4% to 6.9%. White employees still make up almost half of the workforce, and Asian employees make up around 43%. Native American employees make up less than 1%. Men make up two-thirds of the company’s workforce nationally and globally. Attrition rates went down among almost every demographic compared to 2021, with the exception of growing attrition among Asian employees and Native American men.
Former Black Google employees have accused the company of racism in recent years, leading to an investigation from the California Department of Fair Employment and Housing. April Curley, a former recruiter, is suing Google for allegedly underpaying and undervaluing its Black employees. Timnit Gebru, a prominent AI research ethicist, was fired by the company in 2020 after she refused to remove her name from a research paper and wrote an internal note about her concerns with Google’s diversity efforts.
Protocol’s diversity tracker displays diversity data across Big Tech, allowing you to look at companies’ efforts side by side.
Correction: An earlier version of this story misstated the percentage of Black employees at Google in 2021. This story was updated on May 20, 2022.
Tech companies are figuring out how to handle the upcoming historic Supreme Court decision that could overturn abortion rights. In the case of Meta, that includes telling employees to not talk about it at work. Meta VP of HR Janelle Gale told workers during an all-hands on Thursday not to talk about abortion on Workplace, the company’s internal messaging platform.
She said that it’s the “most divisive and reported topic” by employees on the platform, according to recordings obtained by the Verge. Meta has had a policy in place since 2019 that prevents employees from talking about abortion, but the policy hasn’t been too much of an issue until recent weeks, after a Supreme Court draft opinion that would reverse Roe v. Wade was leaked.
Gale told employees that the issue is a “unique topic that kind of trips that line on a protected class.” Rather than talking among employees about the issue in a public, written forum, executives said the issue can be discussed with a “trusted colleague in a private setting” or in a group with up to five “like-minded people.”
“Even if people are respectful, and they’re attempting to be respectful about their view on abortion, it can still leave people feeling like they’re being targeted based on their gender or religion,” Gale said, according to the Verge.
The message is seen as contradictory among employees. Some Meta employees argued that if they can talk “respectfully” about issues like Black Lives Matter, immigration and trans rights on Workplace, then they should be able to discuss abortion as well. One employee wrote in an internal message earlier this month that she felt a “strong sense of silence and isolation” at work because of the policy, and others have shared frustrations about their posts on the topic being taken down.
The policy is also at odds with public stances executives have taken on the upcoming court decision; Meta’s Sheryl Sandberg publicly criticized the Supreme Court draft opinion, calling it a “scary day for women all across our country” when the opinion leaked.
A Meta spokesperson did not immediately return Protocol’s request for comment.
How employees can — and can’t — talk about abortion at work is only one facet of the evolving landscape for tech companies on women’s reproductive health. Some, including Amazon and Bumble, have offered to pay for abortion-related travel costs ahead of the likely overturning of abortion rights in states where many tech companies operate. User data could also become a battleground in states that end up criminalizing abortion.
As many tech companies face a slump and crypto looks set for a deep freeze, Coinbase is facing reality and hitting the brakes on spending. The company is halting some business projects, freezing hiring for two weeks and cutting its spending on Amazon Web Services, the Information reported Thursday.
Coinbase is also giving employees stock grants to boost compensation, according to internal emails viewed by the Information. The company’s stock tumbled more than 75% in the last year. Employees will receive grants that offset half the difference between grants made earlier in the year and the company’s closing share price on Friday, the Information reported.
In a plan codenamed “Plutus,” Coinbase will focus its efforts on products such as retail trading, institutional trading and custody, and staking, as well as focus on international expansion.
The plan also includes several cost-cutting measures, such as trimming spending on AWS and Datadog and reducing gas fees for validating crypto transactions, according to the Information. The company also paused initiatives including business banking and a months-old pilot program for remittances. Though Coinbase will honor job offers sent to candidates as of this past Monday, further hiring has been paused.
The news follows a Monday blog post from President and COO Emilie Choi, noting that the company was planning to slow hiring amid the market downturn, and will “reassess our headcount needs against our highest-priority business goals.” Coinbase had previously planned to triple the size of the company, which now has more than 5,000 employees.
“This slow down will also force us to be more rigorous in our prioritization,” said Choi. “We’re in a strong position — we have a solid balance sheet and we’ve been through several market downturns before, and we’ve emerged stronger every time.”
Coinbase stock is down this month, closing at $67.42 on Thursday. Its shares are down 80% since its direct listing in April 2021.
AWS reached a private settlement with a female employee who accused now-former executive Joshua Burgin of discrimination and harrasement, Protocol has learned.
The cloud giant agreed to pay the employee $10 million with the mandate that she leave the organization, according to a source familiar with the deliberations, which she did in January. Burgin, who previously led AWS Outposts, left the company in December for VMware, a move harshly criticized by employees of the virtualization software provider.
An AWS spokesperson confirmed the settlement but said the figure was “wildly inaccurate” and declined to comment further. The employee, whom Protocol is not identifying in order to stave off further harassment, declined to comment, citing a confidentiality agreement with Amazon.
Amazon is facing several discrimination and harassment cases. In 2021, at least five female employees filed suits against the company alleging, among other claims, that executives made racist remarks and withheld promotions as a result of their activism.
Amazon previously said it found no evidence to support the claims. Last year, however, the company tapped an outside law firm to conduct a review into how it investigates such allegations.
“We engaged Oppenheimer Investigations Group (OIG) to work directly with employees and conduct an independent investigation of the ProServe organization’s culture. We committed to that being a thorough review, and will continue to communicate with employees about the investigation,” an AWS spokesperson said in an emailed statement.
The Federal Trade Commission on Thursday unanimously reminded providers of education technology to follow federal limits on the collection and use of kids’ data in an attempt to ensure that common practices in the data economy don’t become the norm in schools.
During its open meeting, the commission voted to approve a policy emphasizing that ed tech providers shouldn’t collect more data on kids under 13 than they reasonably need for their services, can’t use the data for advertising without parental consent and have to maintain appropriate security, among other measures.
In a statement, President Joe Biden, who had called for children’s privacy protections in his State of the Union address, applauded the vote and said that “the agency will be cracking down on companies that persist in exploiting our children to make money.”
The vote, which comes after the COVID-19 pandemic accelerated the reliance on education technology, highlighted the bipartisan interest in protecting kids’ privacy. The commissioners enunciated their worries about companies forcing parents to accept overly vast data collection so kids can do homework, firms getting sign-off only from schools for practices that go beyond students’ work and the long-term retention of educational data for use in advertising or other commercial contexts.
Democratic Commissioner Rebecca Kelly Slaughter, who spoke about her daughter learning to read online during the pandemic, said she was glad that federal law requires parental consent for collecting kids’ data, but praised the new FTC statement’s reliance on the additional limits that the law places on companies’ use and collection of kids’ data even if they do have consent. “While I appreciate being in the driver’s seat, I also understand that I actually can’t drive all the things that my children are doing on a day-to-day basis,” she said. “There just aren’t enough hours in the day to do all of that micromanaging of my children’s use of technology.”
While the policy closely follows existing law on kids’ privacy, known as COPPA, the statement signaled that the commissioners are turning their attention to tools that kids may use every day and that parents rely on for their children’s development.
In a separate vote, the commissioners also voted unanimously to seek public input on their stance that social media sites may not be providing sufficient tools to let influencers disclose endorsements and that other businesses may be violating advertising rules when they hide negative reviews.
The votes also represented one of the first public moves as a commissioner for Alvaro Bedoya. His confirmation earlier this month gave the FTC a Democratic majority that can begin to work on far-reaching enforcement actions and regulation of tech companies, as envisioned by the agency’s chair, Lina Khan.
At the same time, the two Republican commissioners, who have criticized Khan’s agenda as well as procedural changes she’s put in place, went out of their way on Thursday to praise the process that went into some of the day’s votes. All commissioners also highlighted the work of staff as surveys have revealed plummeting morale at the agency.
The apocalypse is coming, at least according to one of the world’s biggest startup accelerators.
Y Combinator sent an email to portfolio founders this week, obtained by TechCrunch, advising the startups to “plan for the worst” as the market turbulence has prompted many companies to initiate layoffs, cost-cutting measures and hiring slowdowns.
“If your plan is to raise money in the next 6-12 months, you might be raising at the peak of the downturn,” said the email, which was titled “Economic Downturn.” “Remember that your chances of success are extremely low even if your company is doing well. We recommend you change your plan.”
The note advised founders to “cut costs and extend your runway within the next 30 days.”
The famed startup accelerator is falling squarely into the camp that believes the hot funding environment of the last couple of years is decidedly over, and early-stage startups will have to prepare to hunker down and live off of “lower valuations, lower round sizes and many fewer deals completed.”
They also predicted that the downturn will disproportionately impact “international companies, asset heavy companies, low margin companies, hardtech, and other companies with high burn and long time to revenue.“
Finally, the note ended with a link to a 35-minute YouTube video from Y Combinator called, “Save Your Startup during an Economic Downturn.”
Even the big tech giants are feeling the cost-cutting pressure amid rising inflation, rising interest rates and a looming bear market. Netflix laid off 150 employees this week amid stalled growth, a month after laying off Tudum staff. Meta, Robinhood, Salesforce and Uber all initiated hiring freezes or layoffs as well.
PSA: If you’re going to do a mass layoff, don’t do it like Carvana.
Apple just hit an important milestone in developing its mixed-reality headset as rivals like Meta are making strides in developing similar devices. Executives showed off an AR/VR device to Apple’s board last week, according to Bloomberg, a sign that the product is really happening and it’s inching closer to a public launch.
Sources with knowledge of the matter told Bloomberg that a version of Apple’s AR/VR headset was demonstrated to the company’s board members at their latest meeting last week. The board meets four times per year. Apple is also reportedly making progress on the operating system that will power the headset, called rOS (reality operating system) for now. Combined, the developments make clear that Apple is closer to releasing the first device in the first new product category since it launched the Apple Watch in 2015. According to Bloomberg, the company might show off the headset this year and is targeting a 2023 release date for the public.
The first iteration of the mixed-reality headset will offer both AR and VR capabilities, using advanced processors and ultra-high-resolution screens. The company has also been working on AR versions of apps that are currently on the market, and also plans for the headset to be used to stream content and hold virtual meetings. The company is also reportedly working on a separate pair of AR glasses, but those are years away.
The headset won’t come cheap: Bloomberg has reported that it will cost about $2,000. The company last year believed it would sell one unit per day at Apple stores, for a total of 200,000 per year. That’s underwhelming for a company like Apple, which doesn’t tend to sell small quantities of products, but signals that the company believes the first device will be a game-changer.
Apple was originally going to debut the product at the Worldwide Developers Conference in June, but that plan was delayed due to issues including content and overheating, according to Bloomberg.
The SEC is pushing back on Ripple’s bid for access to emails and other documents that the crypto giant believes could bolster its case against the regulator.
The SEC, which sued Ripple in 2020 for failing to register $1.4 billion worth of XRP as securities, has refused to release emails related to a 2018 speech by former director William Hinman in which he argued the ether cryptocurrency was not a security. The speech sparked a rally in ether’s price and was interpreted as an endorsement of the industry’s view that cryptocurrencies are not securities.
A federal judge had ordered the SEC to release drafts of the speech and related emails, documents which Ripple says could shed more light on the agency’s deliberations on cryptocurrencies.
But the SEC on Wednesday argued in a letter to the judge that the communications were protected by “attorney-client” privilege, arguing that Hinman “communicated with the SEC staff to obtain their legal advice.”
“The question of ‘whether offers and sales of ether constitute securities transactions’ is indisputably a legal question,” the SEC wrote.
In a May 13 court filing, Ripple had argued that Hinman, who stepped down as the director of SEC’s Division of Corporate Finance in late 2020, “was not a ‘client’ of the SEC’s lawyers for purposes of his outside personal activities.” In its letter, the SEC argued that Hinman delivered the speech in his role as a senior SEC leader, not in any “personal capacity.”
The legal battle is expected to drag on into 2023 as the case enters its next phase. Filings and hearings on motions for summary judgment will extend to December. At that point, the judge will either decide the case or have it go to trial.
Tesla’s autopilot system is being investigated by the U.S. National Highway Traffic Safety Administration following a fatal crash in California that killed three passengers this month. It is the 35th accident the agency has investigated since 2016 related to Tesla’s Autopilot feature, according to Reuters. Those accidents have resulted in a total of 14 deaths.
It is unclear whether Autopilot was in use during the crash in California, and earlier investigations have ruled out the use of Autopilot in three of the 35 investigations the agency has undertaken.
But the NHTSA isn’t the only one taking a harder look at Tesla’s Autopilot promises. Senators have also called on the FTC to investigate Tesla’s statements with regard to Autopilot.
One big issue is the way Tesla has promised “full self-driving capabilities.” Last September, Jennifer Homendy, the head of the National Transportation Safety Board, described the use of such language in advertising as “misleading and irresponsible” and prone to abuse by drivers. In a letter to FTC chair Lina Khan last year, Democratic senators made much the same case, writing, “Their claims put Tesla drivers — and all of the traveling public — at risk of serious injury or death.”
When in Autopilot mode, Tesla says the car can suggest lane changes and steer itself in “tighter, more complex roads.” The company warns that Autopilot does “require active driver supervision” and says that the feature does not “make the vehicle autonomous.”
The investigations are yet another burden for Tesla CEO Elon Musk, whose company has also faced mounting recalls over everything from Tesla vehicles’ rolling stop feature to concerns about windshield defrosting. That’s in addition to Tesla’s falling stock price in the wake of Musk’s bid to takeover Twitter.
Google has reportedly pulled out of Russia, and many employees there have moved to Dubai.
The Wall Street Journal reported Wednesday that most of Google’s Russia-based employees had chosen to leave the country, and that the company will soon have no workforce presence in Russia amid the country’s ongoing war in Ukraine.
Russian authorities reportedly emptied Google’s main Russian bank account after a court froze it in March. Unnamed sources declined to tell the Journal how much the government took, but it left Google without the money to pay its Russia-based employees and vendors. As a result, Google’s Russian subsidiary will file for bankruptcy, Reuters reported Wednesday.
Google told Reuters and the Journal that it will continue to offer free services in Russia, including Search, YouTube, Gmail and Maps. But Google hasn’t brought back advertising operations in Russia since suspending them in March. Russia also banned Facebook and Instagram in March after calling Meta “extremist.”
“The Russian authorities’ seizure of Google Russia’s bank account has made it untenable for our Russia office to function, including employing and paying Russia-based employees, paying suppliers and vendors, and meeting other financial obligations,” a spokesperson from Google told Protocol. “People in Russia rely on our services to access quality information.”
This story was updated on May 19 to include a statement from Google.
Add lawmakers to the growing list of people, companies and trade groups that are ticked off about the Commerce Department’s solar probe.
This week, a collection of 85 House Democrats wrote to the White House saying that they’re concerned “about the devastating economic and environmental impacts” of the probe, which began in April and has already had already stunted the clean energy transition in the U.S. While the probe has not resulted in any changes to the U.S. tariff structure so far, the chance that it could has the industry upset. Lawmakers have heard those concerns, and they’re turning up the pressure on the Biden administration to wrap the probe up as quickly as possible.
“Many of us have repeatedly cautioned against the severe negative consequences this inquiry would have on the U.S. solar industry, and now that this investigation has been initiated, those consequences are playing out across the United States,” the lawmakers wrote, adding that it “threatens to completely derail” the country’s renewable energy progress. The letter signatories include progressives like Rep. Alexandria Ocasio-Cortez and centrists like Rep. Tom O’Halleran, reflecting the broad range of lawmakers invested in a rapid resolution.
The inquiry came about following a petition from Auxin Solar, a small California solar company, that asked the agency to look into whether Chinese companies are skirting tariffs by building panels in Southeast Asia. The resulting investigation is expected to last roughly a year.
In addition to the House Democrats trying to speed up the timetable, a bipartisan group of 19 governors weighed in. They also sent a letter to President Joe Biden on Monday saying the uncertainty caused by the probe threatens clean energy jobs and project deployments nationwide.
“The current market disruption jeopardizes much of the progress achieved by the domestic solar industry and we fear this will only continue for the duration of the investigation,” the group wrote. Neither Texas Governor Greg Abbott nor California Governor Gavin Newsom signed the letter, despite representing the two largest states for solar deployment in the country. (Newsom sent a separate letter to the Commerce Department earlier this month.)
For her part, Commerce Secretary Gina Raimondo said in a Senate hearing last week that the department is “going to go as fast as possible” to complete the probe. She also said that the inquiry is being carried out by an investigative body that is entirely isolated from political considerations, something the agency has reiterated repeatedly over the past month. But White House officials reportedly told a group of Democrats that the administration is working to limit the uncertainty that the industry is faced with, according to Axios.
This post has been updated with info about the letter that Governor Gavin Newsom sent. This story was updated May 19, 2022.
A major reversal by the U.S. Department of Justice on how it views good-faith security research is expected to be warmly welcomed by the cybersecurity community.
On Thursday, the DOJ announced a new policy that “for the first time directs that good-faith security research should not be charged” under the Computer Fraud and Abuse Act, according to a news release.
The act has long been controversial among cybersecurity professionals, particularly following the death of Reddit co-founder Aaron Swartz, who died by suicide in 2013 after facing severe legal issues for downloading documents from a server at MIT.
The DOJ said the new policy aims to ensure that the agency only focuses on certain specific Computer Fraud and Abuse Act cases. “The policy clarifies that hypothetical CFAA violations that have concerned some courts and commentators are not to be charged,” the DOJ said in the release.
The news release says the agency will focus on cases where “a defendant is either not authorized at all to access a computer or was authorized to access one part of a computer — such as one email account — and, despite knowing about that restriction, accessed a part of the computer to which his authorized access did not extend, such as other users’ emails.”
“However, the new policy acknowledges that claiming to be conducting security research is not a free pass for those acting in bad faith,” the DOJ said in the release.
TikTok is getting much more serious about gaming, according to a new report from Reuters. The social video platform is already testing mobile games with users in Vietnam, due to the country’s high concentration of younger smartphone owners. Eventually, TikTok plans to roll out games more broadly in Asia and possibly other markets as well.
This isn’t parent company ByteDance’s first foray into gaming. The company partnered with Zynga last November to release an exclusive dance game, Disco Loco 3D. “We see a tremendous opportunity to reach new audiences across the globe through TikTok’s massive and unparalleled user base,” Zynga Publishing President Bernard Kim said at the time.
TikTok also partnered with the nonprofit Feeding America to release a mini-game, Garden of Good, in June of last year. Users of ByteDance’s version of TikTok for the Chinese market, called Douyin, have been able to play mini-games and other gaming content since 2019.
For TikTok, gaming represents a major growth opportunity and a way to keep user engagement high, similar in ways to Netflix’s recent push into mobile gaming and Facebook parent company Meta’s Instant Games platform. The global mobile games industry is expected to surpass $100 billion this year, and the market is overwhelmingly fueled by free-to-play games ranging from casual puzzle and endless runner games to complex versions of console and PC titles like miHoYo’s Genshin Impact, Krafton’s PUBG Mobile and Roblox.
TikTok will focus at first on mini-games in the hypercasual space, according to Reuters, and the first slate of releases could arrive as early as this fall. It’s unclear whether the company intends to build games itself — ByteDance last year did acquire a mobile gaming studio called Moonton — or if it will continue to license games from third parties like Zynga and others.
Correction: This story has been updated to correct the name of Garden of Good. This story was updated May 19, 2022.
A bipartisan group of senators wants to force Google to spin off huge chunks of the online ads business at the heart of its profits.
A bill introduced Thursday, led by Republican Sen. Mike Lee, would ban major digital exchanges that match buyers and sellers of online ad space from also operating technology that allows publishers to manage their part of the sales and advertisers to control their purchases. Google is the biggest player in all three areas.
The legislation would also stop the owners of platforms for publishers from operating a similar system for advertisers, or vice versa, regardless of whether they also run an ad exchange.
Lee, the top Republican on the Senate subcommittee focused on competition, was joined on the legislation by Democratic Sen. Amy Klobuchar, who chairs the panel. Sens. Ted Cruz and Richard Blumenthal have also signed on. The bill comes as Klobuchar is also hoping to advance two other tech-competition bills that Lee, a critic of Big Tech who is nonetheless an antitrust traditionalist, has not joined.
The bill is an answer to complaints that Google abuses its presence to give advantages to its own customers, route transactions through the systems where it charges fees and keep the whole arrangement opaque to the detriment of other players. Such allegations have resulted in one of the multistate antitrust cases against Google, which is led by Texas.
The lawsuit has led to claims that Google was charging publishers up to four times what other exchanges would and leveraging privileged historical bid data of advertisers. Even inside of Google, according to the complaint, the arrangement was compared to a tie-up between a major bank and the New York Stock Exchange.
The legislation could also prompt divestitures by Meta, according to the lawmakers, and could even touch Amazon or Apple.
Google said in a statement that the legislation “would hurt publishers and advertisers, lower ad quality, and create new privacy risks,” according to the Wall Street Journal. A bipartisan House companion is also expected soon, according to the report.
Twitter will begin taking action against misinformation in crisis situations, the company said Thursday. The new policy will be immediately applied to misinformation surrounding the war in Ukraine.
Given the way misinformation and disinformation have been weaponized in that war, it’s an important update. But it’s also a challenging one for Twitter to pull off, and not just because Twitter’s would-be new owner believes the company should let all legal speech stand. It also puts Twitter in a position of defining what’s true — or not true — in often chaotic situations and, perhaps even more challenging, deciding what constitutes a crisis to begin with.
“During periods of crisis like international armed conflict, public health emergencies and large-scale natural disasters, we find misinformation can undermine public trust and cause further harm to already vulnerable communities,” Yoel Roth, Twitter’s head of Safety and Integrity, said on a call with reporters. Roth said the company eventually plans to deploy this policy in “any situation in which there’s a widespread threat to life, physical safety, health or basic subsistence,” but that the company was starting off in Ukraine because of “the unique role that disinformation has played in this conflict.”
To figure out what’s true and not, Roth said, Twitter is relying on public information from multiple “credible sources,” including humanitarian groups, news organizations, conflict-monitoring services and open-source intelligence investigators. Once Twitter determines that a given post is misinformation, it’ll stop amplifying and recommending it, and will add warning notices that users have to click through in order to view the tweet. Users also won’t be able to retweet, quote tweet or engage with posts with those labels. The company will prioritize acting on tweets with high visibility and tweets from accounts with lots of followers.
Roth said Russian state media accounts on Twitter saw a 30% drop in their reach when the company stopped recommending or amplifying them. “We believe that we’ll see similar effects in this context, but we’re studying it closely and we’re going to share data about this as we learn more,” Roth said.
Twitter will remove content, Roth said, only “in the most severe cases where the potential to cause harm is the greatest.”
Twitter started developing this policy long before the war in Ukraine began. According to Roth, the idea began in 2020 when misinformation began spreading about arsonists starting the wildfires in the West. “That was resulting in first responders being unable to pass through national parks and federal land in order to do their job,” Roth said. The company has been working on developing the scope of the policy since last year.
While the war in Ukraine is an obvious first target, the big question now is how Twitter will define crises in the future. The company is starting with international conflicts, and could some day apply these policies in countries including Ethiopia, Afghanistan and India, where Twitter has already deployed safeguards in times of crisis. But Twitter also expects to use this policy in the future in relation to a wide range of crises, including mass shootings and natural disasters, Roth said. That will inevitably set Twitter up for getting things wrong and lead to public criticism about why the company is or isn’t intervening in a given crisis.
The new policy rollout also suggests that Twitter is forging ahead with new forms of content moderation, even as employees fear Musk’s takeover could send them back in time to a period of Twitter history that was even more lawless than it is now.
“This is an area of active investment and development by us, and we’re going to be evolving and expanding this policy over time,” Roth said. “This work remains full steam ahead.”
This story has been updated to clarify Twitter’s international expansion plans for the policy.
Cisco blamed COVID-19 lockdowns in China and the war in Ukraine for its flat revenue growth during the fiscal third quarter, and forecast for a declining current quarter when it reported earnings late Wednesday.
Supply shortages appear to be the largest culprit, and CEO Chuck Robbins said during a conference call Wednesday that the company’s disappointing revenue was the result of its inability to secure adequate components to sell its various products. The lockdowns in China were especially damaging, Robbins said.
“These lockdowns resulted in an even more severe shortage of certain critical components. This, in turn, prevented us from shipping products to customers at the levels we originally anticipated heading into Q3,” Robbins said.
Cisco, which makes networking products that include semiconductors, has struggled for over a year as the chip shortage drags on and enterprises continue to move their applications out of their own data centers and into major cloud computing providers, which tend to design and build their own networking equipment. But CFO Scott Herren said the company is trying to figure out ways around the component supply issues.
“To give a sense of scale of the shortages, we currently see constraints in Q4 on roughly 350 critical components out of a total of 41,000 unique component part numbers. Our supply chain team is aggressively pursuing multiple options to close those shortages,” Herren said.
The Russian invasion of Ukraine damaged revenue by roughly $200 million, according to the company. Cisco said it had announced it stopped doing business in Russia and Belarus, and that those two countries plus Ukraine historically accounted for about 1% of the company’s revenue.
Block just detailed plans for its self-custody bitcoin hardware wallet, aiming to bring together the often contradictory goals of convenience and crypto security. Block’s goal is to monetize the wallet through a subscription service.
The plan, laid out at Block’s investor day, aims to make it easier for mainstream individuals to self-custody their own bitcoin — thus enabling total control of it — while offering additional protections that are often not available for self-custody hardware or software wallets. Many other wallets don’t have easy backup systems for consumers to access their funds.
To do this, the wallet will include three parts: a mobile app, a hardware device and a self-serve recovery tool. The mobile app, which will presumably be run by Block, will be for everyday, smaller transactions since it is easily accessible for people at all times. “Our wallet breaks up the secret key into three pieces to reduce the stakes of losing any one piece,” said Jesse Dorogusker, Block’s bitcoin hardware lead.
The hardware wallet, with its “rock” design and fingerprint access, which has been previously detailed, will be used for larger transactions where more security is needed. The hardware wallet would presumably hold the user’s private key which a user would set only for transactions above a certain size.
If the mobile app is like a checking account, the hardware wallet is like a savings account, Dorogusker said. “We are designing a system for regular folks, so it has to be resilient and inspire confidence even when things go wrong,” he said.
The hardware wallet will also be a security tool if someone loses a phone or switches to a new phone.
The big question: How will this make money for Block? The wallet could be monetized through a subscription service that can help “customers regain access to their funds,” Dorogusker said. It could also get referral revenue from sending trading volume to exchanges. Pointing to bitcoin’s connection to the rest of Block, Dorogusker said the hardware wallet could connect to Cash App.
“Connecting the wallet and Cash App ecosystems can drive both wallet sales and Cash App trading volume, providing 44 million Cash App actives an easy path to self custody, and providing wallet customers an easy way to buy and sell bitcoin and connect to a broader set of financial services in the markets where Cash App offers them.”
Apple’s loss is Google’s gain: Ian Goodfellow, who was a director in Apple’s machine learning division, left the company recently, citing the company’s return-to-office policy as the reason for his departure. Goodfellow is reportedly joining Google’s DeepMind AI group.
Goodfellow is joining Google’s artificial intelligence hub as an individual contributor, people with knowledge of the matter told Bloomberg on Wednesday. Before being poached by Apple in 2019, he worked in several research positions at Google.
Google did not respond to Protocol’s request for comment on the hire.
Goodfellow worked at Apple for more than three years, where he led machine learning within the company’s Special Projects Group supervising autonomous tech engineers, Bloomberg reported. In an internal memo to Apple staff about his departure from the company, first reported by The Verge’s Zoë Schiffer, he said of the company’s remote work policy that he “believe(s) strongly that more flexibility would have been the best policy for my team.”
Apple planned to bring employees back to the office three days a week. Most were already being required to return to the office for two. On Tuesday, the company put that plan on hold, citing the recent rise in COVID-19 cases as the reason. Apple’s requirement for employees to be in three days per week was met with protest among employees who want to remain remote, including Goodfellow.
Meanwhile, Google parent company Alphabet, has a more lenient policy. Although the company is still asking employees to return to the office, and offering perks like free scooters in the hopes of enticing workers to commute, it will grant exemptions to those who still want to work from home, according to Bloomberg. A more flexible WFH policy seems to be doing exactly what Alphabet wants it to do: drawing top talent from rivals who aren’t as flexible.
SEC Chair Gary Gensler warned Congress Wednesday that consumers and investors are vulnerable in an increasingly volatile crypto market now reeling from a sharp downturn.
Citing the recent collapse in the crypto market’s value, Gensler said, “This is a field that is now worth $1.2 trillion. Two weeks ago it was supposedly worth $2 trillion.”
“The public is not protected,” he testified at a House Appropriations Committee hearing on the proposed budget for the SEC and the FTC. “They don’t have the disclosures from these entrepreneurs.”
In a clear reference to the UST stablecoin meltdown, Gensler noted that “one crypto complex went from like $50 billion of value to near zero just in the last three weeks.”
Gensler made a pitch for more resources for the SEC in order to more effectively monitor the crypto industry. The SEC recently announced that it was expanding its enforcement team to focus more closely on crypto.
“We are outpersoned,” he said. “We’re not trying to grow really significantly,” but the SEC hopes to “grow our enforcement arm in this space.”
He urged crypto exchanges “to come in and register or frankly, we’re going to continue to use what Congress has given us in [areas] of enforcement and examination function.” “I prefer if they’d come in,” he said. “We can also use our exemptive authorities.”
Gensler has faced criticism for the SEC’s approach to the crypto industry. SEC Commissioner Hester Peirce has said the agency under Gensler has not done enough to reach out to the industry and come up with rules for how crypto companies should operate.
Gensler reaffirmed his key view about crypto, citing the “underlying innovations” from it that could be useful in finance. But he stressed the need for more transparency and information disclosures from crypto companies.
“If you’re raising money from the public, you’re an entrepreneur raising money from the public, you should have full and fair disclosure, and, guess what, not lie to them,” he said.
New York Attorney General Letitia James is launching an investigation into social media companies’ role in this past weekend’s mass shooting in Buffalo, which the shooter mapped out on Discord for months prior to the attack and livestreamed on Twitch before the video was taken down.
James announced on Wednesday that her office will probe tech companies that the Buffalo shooter used to “plan, promote and stream his terror attack.” Twitch, 4chan, 8chan and Discord are among the platforms being investigated, she said. The alleged shooter used 4chan and its sister board, 8chan, frequently, and cited the two sites in a 180-page document detailing his attack. Twitch has said it removed the livestream of the attack within two minutes.
“This terror attack again revealed the depths and dangers of these platforms that spread and promote hate without consequence,” James wrote on Twitter. “We are doing everything in our power to stop this dangerous behavior now and ensure it never happens again.”
A spokesperson for Discord said it plans to cooperate with the investigation. “Our deepest sympathies are with the victims and their families. Hate has no place on Discord and we are committed to combating violence and extremism,” the spokesperson said.
Representatives for Twitch,, 4chan and 8chan did not immediately return Protocol’s requests for comment. The attorney general’s office received a referral from New York Gov. Kathy Hochul to launch the investigation.
Update: This story was updated to include comment from Discord.
Salesforce will slow hiring and cut back other expenses, according to a Wednesday report from Insider. The company will join Meta, Netflix, Coinbase, Uber and others that have slowed or frozen hiring in recent weeks.
Per an internal memo, cutbacks will include corporate travel and some upcoming off-sites, Insider reported.
The reversal would be noteworthy for Salesforce, which held several glitzy employee and customer conferences in the past month amid a push to sell technology that helps companies “safely” hold in-person events. And apart from a round of layoffs in 2020, Salesforce has remained one of Silicon Valley’s most aggressive recruitment engines, touting various internship initiatives as recently as last month.
“We hired 20,000 employees over the past year and are hiring another 4,000 employees this quarter alone. Business travel remains an important part of how we serve our customers,” a spokesperson from Salesforce told Protocol.
Software companies are under immense pressure to improve their margins in the face of a looming economic slowdown, leading to cost-cutting measures and changes to hiring strategy. For Salesforce, it’s especially paramount to show financial stability to Wall Street following its $27.7 billion acquisition of Slack. Executives at the software giant have ruled out any large deals and, instead, will focus on integrating Slack and continuing to improve operating margins.
Salesforce’s stock price has sunk almost 50% in the last six months. After a pandemic boom, it’s a theme in Big Tech now as the market slumps and investor sentiment suffers.
Additional reporting by Amber Burton.
Tesla’s cars have helped spur an electric vehicle revolution. But that wasn’t enough to stop the S&P 500 from removing the company from its ESG list on Tuesday, leading Elon Musk to call the list a “scam” that has been “weaponized by phony social justice warriors.”
The S&P made the decision to remove Tesla despite its ranking remaining relatively stable over the past year. But the automaker has slipped when compared to improvements at other companies, Margaret Dorn, the S&P senior director for ESG Indices North America, wrote in a Wednesday blog post. Dorn said that the company attributed Tesla’s fall off the list to reports about poor working conditions and racial discrimination in the company’s Fremont, California, factory as well as an NHTSA investigation into reports about deaths and accidents tied to the company’s self-driving technology.
“Both of these events had a negative impact on the company’s S&P DJI ESG Score at the criteria level, and subsequently its overall score. While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens,” Dorn wrote.
Tesla has faced multiple racial discrimination lawsuits over its treatment of workers at its Fremont factory, one of which it lost last year. Protocol found in a 2021 investigation that 120 individuals requested the right to sue the company for discriminatory reasons between 2018 and 2021 in California. Workers in the Fremont factory have described racist graffiti and the use of racial slurs as rampant throughout the factory and have alleged that Tesla does little to address the incidents when they occur.
Tesla’s recently constructed Gigafactory in East Austin has also come under criticism. Both community and environmental advocates have raised concerns that the plant could contribute to the area’s noise and water pollution problems, as well as add congestion in an area that’s predominantly home to communities of color.
Though the company’s products are key to decarbonizing transportation, Tesla has also been dinged in a report released earlier this year by corporate watchdog As You Sow for not having a climate plan to disclose, let alone deal with, its own carbon pollution. That report ranked major polluters like Exxon and Chevron higher for their disclosures. Exxon remains a large part of the S&P 500 ESG list, something Musk was quick to point out in his tweet criticizing the rankings.
That complaint is something climate and social justice advocates — and, increasingly, investors — have also said, noting that the criteria used to create ESG ratings rarely reflect companies’ actual progress in reducing carbon pollution or improving society. They’ve said the rankings instead capture how the world’s current and future political and economic climate might affect a company’s prospects. Elon, it seems, agrees now that he’s been bumped from the list.