Overnight Tech: Uber exec says ‘no justification’ for covering up hack | Apple considers battery rebates | Regulators talk bitcoin | SpaceX launches world’s most powerful rocket

by Harper Neidig and Ali Breland - 02/06/18 7:55 PM ET

UBER: ‘NO JUSTIFICATION’ FOR COVERING UP DATA BREACH: An Uber executive told Congress on Tuesday that there was “no justification” for the company covering up a massive 2016 data breach that exposed the information of 57 million people.

“I think we made a misstep in not reporting to consumers, and I think we made a misstep in not reporting to law enforcement,” John Flynn, Uber’s chief information security officer, told a Senate panel.

Flynn confirmed reports that the company paid one of the hackers $100,000 to destroy the stolen data and to not disclose the breach publicly.

Uber made the payment through a “bug bounty” program, which generally offers financial rewards for cybersecurity researchers who identify vulnerabilities for companies. Flynn on Tuesday said paying off malicious hackers was improper use of such a program.

“We recognize that the bug bounty program is not an appropriate vehicle for dealing with intruders who seek to extort funds from the company,” he said in his written testimony. “The approach that these intruders took was separate and distinct from those of the researchers in the security community for whom bug bounty programs are designed.”

The 2016 breach exposed information like names and email addresses for 57 million users and the driver license numbers of about 600,000 drivers. Flynn said on Tuesday that about 25 million of the users affected were in the U.S.

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BEFORE THE MEETING… TWO HOUSE DEMS ACCUSED UBER OF CONCEALING DATA BREACH FROM FTC: Two House Democrats are accusing Uber of covering up a massive 2016 data breach from federal regulators while the company was negotiating a consent decree over a separate, earlier breach.

Reps. Jan Schakowsky (D-Ill.) and Ben Ray Luján (D-N.M.) on Monday wrote to the top members of a Senate panel that heard testimony from John Flynn, Uber’s chief information security officer, on Tuesday.

They urged the senators to press Flynn on whether Uber misled the Federal Trade Commission (FTC) in the run-up to an August 2017 consent decree, which came months before the company disclosed the breach that exposed the personal information of 57 million people.

Read more here.

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APPLE MAY OFFER REBATES ON BATTERIES: Apple may offer rebates to customers who recently bought new iPhone batteries at full price, the company revealed in a letter it sent to Senate Commerce Committee Chairman John Thune (R-S.D.)

The company says that it is exploring the option after Thune pressed the tech giant over its practice of slowing iPhones as their battery life deteriorates over time.

“I appreciate Apple’s response to my inquiry and the company’s ongoing discussions with the committee,” Thune said in response to Apple’s follow-up to his own letter. “In those conversations, Apple has acknowledged that its initial disclosures came up short.”

In December, the company endured criticism when it revealed its practice of slowing down iPhones. Consumers and media outlets had long speculated that Apple slowed its phones as they get older, but the company had not publicly confirmed this before.

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SPACEX LAUNCHES WORLD’S MOST POWERFUL ROCKET: SpaceX, the private space company founded by billionaire Elon Musk, successfully launched the most powerful commercial rocket in the world on Tuesday.

The Falcon Heavy, launched from NASA’s Kennedy Space Center in Florida, took off with double the power of the world’s next most powerful rocket, United Launch Alliance’s (ULA) Delta IV Heavy.

ULA, a Lockheed-Martin and Boeing joint venture, is SpaceX’s biggest rival.

The Falcon Heavy carried a red Tesla Motors Roadster with a mannequin strapped inside.

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TILLERSON PROPOSES NEW CYBER BUREAU AT STATE: Secretary of State Rex Tillerson is proposing the consolidation of two separate offices at the State Department to form a single bureau that will focus on a wide range of cyber issues.

A State Department spokesperson told The Hill that the two offices, the Office of the Cybersecurity Coordinator and the Bureau of Economic Affairs’ Office of International Communications and Information Policy, would be unified in order to form the proposed Bureau for Cyberspace and the Digital Economy.

“The combination of these offices in a new Bureau for Cyberspace and the Digital Economy will align existing resources under a single Department of State official to formulate and coordinate a strategic approach necessary to address current and emerging cyber security and digital economic challenges,” Tillerson said in a Tuesday letter to House Foreign Affairs Committee Chairman Ed Royce (R-Calif.).

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REGULATORS PUSH FOR ‘COORDINATED’ APPROACH TO BITCOIN TRADING: One of the nation’s top financial regulators pressed for greater coordination on regulating trading of cryptocurrencies at a hearing Tuesday.

“We should all come together, the federal banking regulators, the [Commodity Futures Trading Commission] and [Securities and Exchange Commission] — there are states involved as well — and have a coordinated plan for dealing with the virtual currency trading market,” Jay Clayton, chairman of the Securities and Exchange Commission (SEC), told the Senate Banking Committee.

Clayton testified alongside Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo, as lawmakers pressed them on steps they are taking to regulate bitcoin and other cryptocurrencies.

Read more here.

HATCH BILL WOULD CLARIFY CROSS-BORDER DATA RULES: Sen. Orrin Hatch (R-Utah) on Monday introduced a bill aimed at creating a clearer framework for law enforcement to access data stored in cloud computing systems.

Hatch’s bill is aimed at making it easier for U.S. officials to create bilateral data sharing agreements that allow them to access data stored overseas and also for foreign law enforcement to access data stored on U.S. firms’ servers.

The legislation, known as the Clarifying Lawful Overseas Use of Data (CLOUD) Act, is co-sponsored by Sens. Christopher Coons (D-Del.), Lindsey Graham (R-S.C.) and Sheldon Whitehouse (D-R.I.).

Federal law currently doesn’t specify whether the government can demand that U.S. companies give it data they have stored abroad. The CLOUD Act would amend this, likely impacting Microsoft’s pending Supreme Court case over data it has stored in Ireland. A lower court has previously ruled that Microsoft doesn’t have to turn over data stored overseas, following a request for it to do so by the Department of Justice.