Hillicon Valley: Zuckerberg would support delaying Libra | More attorneys general join Facebook probe | Defense chief recuses from ‘war cloud’ contract | Senate GOP blocks two election security bills | FTC brings case against ‘stalking’ app developer

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Welcome! Follow the cyber team, Maggie Miller (@magmill95), and the tech team, Emily Birnbaum (@birnbaum_e) and Chris Mills Rodrigo (@chrisismills)

 

ZUCKERBERG TEES UP DEFENSE: Facebook CEO Mark Zuckerberg is set to tell House lawmakers that he would support a delay of the company’s Libra cryptocurrency project until regulators are satisfied.

Zuckerberg will make the remarks as part of his testimony before the House Financial Services Committee, which is set to hold a hearing on the digital currency on Wednesday.

{mosads}Members of the committee from both parties have raised sharp concerns over Facebook’s proposed 2020 launch date for the Libra, which is facing intensive financial regulatory scrutiny around the world.

What he’ll say: “Some have suggested that we intend to circumvent regulators and regulations,” Zuckerberg will say, according to his prepared testimony. “We want to be clear: Facebook will not be a part of launching the Libra payments system anywhere in the world unless all U.S. regulators approve it.” 

“And we support Libra delaying its launch until it has fully addressed US regulatory concerns,” he said.

Pushing the 2020 date: When Facebook first announced the Libra project, it said it was planning to launch the coin by next year. But executives have recently been tempering that date, and David Marcus — the head of Calibra, the Facebook subsidiary helping to launch the cryptocurrency — told reporters last week to think of 2020 as an ambitious goal.

“We co-wrote a white paper to begin a dialogue with experts and the regulators and policymakers who oversee the stability and security of our financial systems,” Zuckerberg will say. “It was never intended to be the final word on the project. The goal was to signal the direction we want to go and to start a conversation about how to get there. That conversation is ongoing.” 

Zuckerberg is certain to face a grilling from lawmakers at the hearing, who peppered Marcus with questions and criticisms for hours at a hearing over the summer. 

Read more on Zuckerberg’s prepared testimony here.

 

GET ON BOARD: Forty-seven attorneys general have joined onto the recently announced antitrust investigation into Facebook, the New York attorney general’s office announced Tuesday, super-charging a probe that comes amid broader scrutiny of Big Tech by the U.S. government.

New York Attorney General Letitia James announced that a broad range of states, represented by both Democratic and Republican attorneys general, will participate in probing Facebook’s market dominance and business practices over the next several months. 

The investigation has grown significantly since James launched the probe in June with then just seven other attorneys general. 

“After continued bipartisan conversations with attorneys general from around the country, today I am announcing that we have vastly expanded the list of states, districts, and territories investigating Facebook for potential antitrust violations,” James said in a statement on Tuesday.

“Our investigation now has the support of 47 attorneys general from around the nation, who are all concerned that Facebook may have put consumer data at risk, reduced the quality of consumers’ choices, and increased the price of advertising,” she said. “As we continue our investigation, we will use every investigative tool at our disposal to determine whether Facebook’s actions stifled competition and put users at risk.”

Read more here.

 

ESPER RECUSED: Defense Secretary Mark Esper will recuse himself from the Pentagon’s $10 billion “war cloud” contract competition due to his son’s employment with one of the companies that sought the deal, the Defense Department announced Tuesday.

Esper, who in late July ordered a review of the Joint Enterprise Defense Infrastructure (JEDI) program over concerns of bias in the competition, has “attended informational briefings to ensure he had a full understanding of the JEDI program and the universe of options available,” chief Pentagon spokesman Jonathan Hoffman said in a statement.

“Although not legally required to, he has removed himself from participating in any decision making following the information meetings, due to his adult son’s employment with one of the original contract applicants.”

The statement added that “out of an abundance of caution to avoid any concerns regarding his impartiality,” Esper has delegated decision making for JEDI to Deputy Defense Secretary David Norquist.

The JEDI competition is down to final contenders Amazon Web Services and Microsoft to offer cloud-computing to supercharge the Department of Defense’s (DOD) war capabilities, including on the battlefield.

Amazon has been largely favored to win the lucrative contract — which could last for up to 10 years, though it begins at only two — as it says it is best-equipped to store the necessary top-secret and highly classified information. 

We know you were wondering too: The Pentagon statement does not indicate which company Esper’s son works for.

Read more here.

 

DEJA VU AGAIN: Senate Republicans on Tuesday blocked legislation that would provide funding for states to shore up election security and create more transparency around online advertisements.

Senate Majority Whip John Thune (R-S.D.) blocked passage of the Honest Ads Act, sponsored by Sen. Amy Klobuchar (D-Minn.), saying work was needed to make the measure more bipartisan.

Klobuchar’s bill, whose lone GOP cosponsor is Sen. Lindsey Graham (S.C.), would require online platforms to make “all reasonable efforts” to ensure foreign entities are not buying political ads. It also would require public disclosure of who paid for the ad.

“There are many other bills that I’ll come back and discuss in the next few weeks which would help on foreign influence in our elections, but today I want to focus on this one because election security is national security, and it’s well past time we take action,” Klobuchar said on the Senate floor.

Senate Minority Whip Dick Durbin (D-Ill.) later came to the floor and attempted to pass the Election Security Act, a measure with 40 Democratic cosponsors that would give states $1 billion for election security efforts and require back-up paper ballots.

Sen. John Kennedy (R-La.) blocked its passage, arguing the bill had “more red flags than the Chinese Embassy.” He added that the level of funding was excessive when considering the $380 million appropriated to states last year for election security.

Read more on the Senate floor debacle here.

 

THAT’S A NO FROM ME: Federal officials from the FBI, the Department of Homeland Security (DHS) and the Election Assistance Commission (EAC) said Tuesday that they did not support the idea of a foreign government investigating political opponents of President Trump.

House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) questioned witnesses at a committee hearing on election security about whether they thought it was “appropriate for the president of the United States to ask a foreign government to investigate his political opponent in the 2020 elections.”

Witnesses including Matthew Masterson, DHS’s senior cybersecurity advisor; Nikki Floris, the deputy assistant director for counterterrorism at the FBI; and EAC Vice Chairman Ben Hovland all answered “no.”

Adam Hickey, the deputy assistant attorney general within the Justice Department’s National Security Division, was the only witness to not answer “no,” instead saying he did not “comment on the president’s activities” but that the Justice Department is “committed to confronting violations in the law wherever we find them.”

Nadler’s question referred to the subject of a House impeachment inquiry into Trump, which was launched by House Speaker Nancy Pelosi (D-Calif.) last month after Trump allegedly pressured Ukrainian President Volodymyr Zelensky to investigate former Vice President Joe Biden’s son Hunter Biden during a late-July phone call. 

Questions about the impeachment inquiry at times overshadowed the overall hearing on election security. This is the second time the House Judiciary Committee has formally held a hearing on the issue this year.

Read more on the hearing here.

 

FTC TAKES ON STALKERWARE: The Federal Trade Commission on Tuesday charged the developer of three “stalking” apps with violating consumer’s privacy and creating security vulnerabilities.

Retina X Studios and its founder James Johns Jr. will have to delete the data collected by the three apps as part of the settlement and will not be able to sell new apps unless steps are taken to ensure they are used for legitimate purposes.

The stalking apps allowed purchasers to monitor a user’s precise GPS location, text messages sent and received and photos without the knowledge of the user.

Purchasers could allegedly then track that data through an online portal.

Tuesday’s charges are the first time the FTC has taken steps against a stalking app developer, a development which commissioner Rebecca Slaughter called an “important milestone in the FTC’s efforts to protect consumers.”

“These apps are not just creepy — they can put victims of stalking and domestic violence at profound risk,” Slaughter told reporters in a phone call.

Read more on the FTC case here.

 

TERRORISM ON TWITTER: A team of bipartisan lawmakers are digging into Twitter over its policy of allowing Hamas and Hezbollah to maintain presences on the powerful social media platform. 

In a letter to Twitter CEO Jack Dorsey on Tuesday, the four House lawmakers offered a sharp rebuke of the company’s decision to support accounts even for groups designated as “foreign terrorist organizations” by the U.S. government, particularly Hamas and Hezbollah.

“If you believe that Twitter is better at determining violent extremist content than the United States Government’s interagency process, then we urge you to come testify before Congress to explain your own process and how it differs from that of the State and Treasury Departments,” the lawmakers — including Reps. Josh Gottheimer (D-N.Y.), Tom Reed (R-N.Y.), Max Rose (D-N.Y.) and Brian Fitzpatrick (R-Pa.) — wrote to Dorsey.

Last month, Gottheimer, Reed and Fitzpatrick penned letters to the CEOs of Facebook, YouTube and Twitter about why they allow figures associated with foreign terrorist organizations (FTOs) — Hamas and Hezbollah — to make accounts, post and accrue substantial followings on their platforms. 

After receiving responses from all of the companies over the past month, the lawmakers are taking issue with Twitter in particular, which they say is not taking the issue seriously. 

At a press conference on Tuesday, Rose, Reed and Gottheimer said they’re pushing the company to take down the Hezbollah and Hamas content by Nov. 1. 

“Bring your policy in line with U.S. law,” Gottheimer said. “And we’re bringing it to the attention of the State Department and the Treasury [Department].” Hamas and Hezbollah are two of the more than 60 groups currently on the State Department’s list of FTOs. 

Read more on the press conference here.

 

DATA PORTABILITY BILL: A bipartisan group of lawmakers is expected to introduce legislation on Tuesday that they say will foster competition between social media companies. 

The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act would allow users to move their data to a competing network. 

Communications platforms with more than 100 million monthly active users would be required to maintain systems to facilitate the transfer of user data “to a user, or to a competing communications provider acting at the direction of a user.”

The legislation will be introduced by Sens. Mark Warner (D-Va.), Josh Hawley (R-Mo.) and Richard Blumenthal (D-Conn.), according to a statement from Warner’s office. 

“Your data is your property. Period. Consumers should have the flexibility to choose new online platforms without artificial barriers to entry. This bill creates long-overdue requirements that will boost competition and give consumers the power to move their data from one service to another,” Hawley said in the statement. 

Read more on the bill here.

 

PUT A LABEL ON IT: Democratic lawmakers in the House and Senate on Tuesday introduced legislation to increase the security of internet-connected devices.

The Cyber Shield Act, sponsored by Sen. Edward Markey (D-Mass.) and Rep. Ted Lieu (D-Calif.), would establish an “advisory committee” comprised of cyber experts from government, industry, and academia to create “cyber benchmarks” for internet-connected devices, also known as Internet of Things (IoT) devices.

IoT devices, which include everything from mobile phones to baby monitors, can then be built by manufacturers to meet these security standards, and be given a “Cyber Shield” label to show consumers they meet these benchmarks.

Markey said in a statement that “the IoT will also stand for the Internet of Threats until we put in place appropriate cybersecurity safeguards.”

“With more than 60 billion IoT devices projected to be in our pockets and homes by 2025, cybersecurity continues to pose a direct threat to economic prosperity, privacy, and our nation’s security,” Markey added. “By creating a cybersecurity certification program, the Cyber Shield Act will give consumers a seal of approval for more secure products, as well as encourage manufacturers to adopt the best cybersecurity practices so they can compete in the marketplace for safety.”

Read more here.

 

FACEBOOK’S HOUSING PLEDGE: Facebook on Tuesday announced a $1 billion investment aimed at addressing California’s affordable housing crisis, including up to 20,000 new housing units.

CEO Mark Zuckerberg shared the funding pledge on his page, acknowledging the role of big technology companies in reducing access to affordable housing.

“As part of today’s commitment, we’re partnering with California Governor Gavin Newsom and the State of California to create up to 20,000 new housing units to help teachers, nurses, first responders and other workers live closer to the communities that need them,” Zuckerberg wrote.

Apart from those 20,000 new units, Facebook will also invest in housing for the homeless in the Bay Area and mixed-income housing on Facebook owned-land in Menlo Park.

The announcement comes as Bay Area tech companies face increasing pressure from local communities claiming their expansion is displacing longtime residents.

Google also committed $1 billion to the housing crisis earlier this year, with a promise of 15,000 new homes.

Read more on the commitment here.

 

A LIGHTER CLICK’S: Someone’s getting fired

 

AN OP-ED TO CHEW ON: Rural broadband in jeopardy unless Congress fixes taxing problem

 

NOTABLE LINKS FROM AROUND THE WEB:  

New map chronicles the growth of ransomware attacks across the country (StateScoop)

Sensitive U.S. army data exposed by online leak (BBC News)

Cyber Monday is exciting deal-hungry shoppers more than Black Friday this holiday season (CNBC)

Facebook isn’t taking political ads ‘for the money,’ COO Sandberg says. (CNet)