Dhaka, Jul 18 (AP/UNB) - Microsoft says it has detected more than 740 infiltration attempts by nation-state actors in the past year targeting U.S.-based political parties, campaigns and other democracy-focused organizations including think tanks and other nonprofits.
A company spokeswoman would not name or further characterize the targets. All subscribe to Microsoft's year-old AccountGuard service. It provides free cyberthreat detection to candidates, campaigns and other mostly election-related groups.
Microsoft did not say how many infiltration attempts were successful but noted in a blog post Wednesday that such targeting similarly occurred in the early stages of the 2016 and 2018 elections.
A year ago, Microsoft said it had detected attempts to infiltrate the networks of U.S. senatorial candidates and think tanks.
Wednesday's announcement was timed to coincide with the annual Aspen Security Forum in Colorado.
Washington, Jul 18 (AP/UNB) — Facebook endured a second day of criticism from Congress over its plan to create a digital currency as senior House Democrats asked Facebook to scale back the project and threatened legislation that would block big tech companies from getting into banking.
Facebook's massive market power and its record of scandals, fines and privacy breaches were on trial at a hearing Wednesday of the House Financial Services Committee. Lawmakers from both parties insisted they cannot trust the social network giant.
"I think you're pretty low on the trust spectrum right now, and understandably," Rep. Vicente Gonzalez, D-Texas, told David Marcus, the Facebook executive leading the project. It was Marcus' second straight day of tough questioning by lawmakers.
Among their concerns is the risk that the new currency, to be called Libra, could be used for illicit activity such as money laundering or drug trafficking. Lawmakers also worry that the massive reserve created with money used to buy Libra could supplant the Federal Reserve and destabilize the financial system, and that consumers could be hurt by Libra losses.
The committee's leader, Rep. Maxine Waters, D-Calif., has asked Facebook to suspend its plan for the new currency until regulators and lawmakers have a chance to fully review it. She renewed that demand to Marcus.
Rep. Carolyn Maloney, D-N.Y., asked that Facebook commit to starting with a pilot project with no more than a million users, overseen by the Federal Reserve.
If Facebook cannot meet that request, Maloney said, "then Congress should seriously consider stopping this project from moving forward."
Waters held out the prospect of legislation that would prohibit big tech companies such as Facebook, Google, Amazon and Apple from becoming chartered or licensed as U.S. financial institutions, and thus able to offer banking services, and specifically from establishing a digital currency.
Facebook, marshaling its more than 2 billion users around the world, "is apparently trying to create a new global financial system that will compete with the U.S. dollar," Waters said.
The congressional criticism thickened the cloud over Facebook's plan, coming after negative statements and expressions of concern from the two most powerful financial regulators , Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin, as well as from President Donald Trump himself.
In a rare endorsement of Trump's views, committee Democrats projected his negative tweets last week about cryptocurrencies and Libra on a giant electronic screen in the hearing room. Trump said Libra "will have little standing or dependability."
As he did at Tuesday's hearing by the Senate Banking, Housing and Urban Affairs Committee, Marcus repeatedly took pains to assure lawmakers that Facebook would not launch the currency project until it had received all the necessary approvals from regulators and secured safeguards to protect the privacy of users' data. He said Facebook will not control Libra because Facebook will be only one of about 100 companies and nonprofits in an association that will manage the currency.
Marcus said the plan would open low-cost online commerce to millions of people around the world who lack access to bank accounts and would make it cheaper to send money across borders.
He did not agree to a suspension of the plan or a pilot project.
"We will take the time to get this right," Marcus said.
He said Facebook isn't looking to base the Libra project in Switzerland in order to evade oversight, but because that country is recognized as an international financial center.
Acknowledging lawmakers' concerns over Facebook's record on data privacy , Marcus said, "I think trust is essential and it's clear we've made mistakes. We're owning these mistakes."
The committee's senior Republican, Rep. Patrick McHenry of North Carolina, said skepticism over the project is justified but the effort should not be prohibited outright. A thorough review is needed, "instead of a knee-jerk reaction of banning something before it begins," McHenry said.
Rep. Tom Emmer, R-Minn., said the legislation Waters is proposing to ban big tech companies from banking "has no constitutional basis."
Marcus' assurance that Facebook won't control Libra failed to convince Rep. Brad Sherman, D-Calif., who focused on Facebook CEO Mark Zuckerberg.
"This is the Zuck buck," Sherman insisted. "This is a godsend to drug dealers" and other criminals. "Zuckerberg has billions but he doesn't have the authority to print more. ... This is an attempt to transfer enormous power from America to Facebook and its allies."
The planned digital currency is to be a blend of multiple currencies, which means the exchange rate will fluctuate.
Beijing, Jul 18 (AP/UNB) — Trading starts Monday on a Chinese stock market for high-tech companies that play a key role in official development plans that are straining relations with Washington.
Regulators have approved 25 companies in information technology and other fields seen by communist leaders as a path to prosperity and global influence for the Shanghai Stock Exchange's STAR Market.
The market, modeled on the U.S.-based NASDAQ, reflects the ruling Communist Party's desire to channel private capital into its development plans. It gives small Chinese investors a chance to buy into tech industries that until now have turned to Wall Street to sell shares.
The STAR Market has no direct link to Beijing's tariff war with President Donald Trump over U.S. complaints China steals or pressures companies to hand over technology. But it will raise money for industries some American officials see as a competitive threat to U.S. technology leadership.
"The new board's important role is to provide a fundraising channel for China's scientific and technologic innovation," said economist Lu Zhengwei at Industrial Bank in Shanghai.
China's stock exchanges in Shanghai and the southern city of Shenzhen were set up in the early 1990s to raise money for state industry. They have expanded to include private enterprises but still are dominated by government-owned companies such as PetroChina Ltd. and China Mobile Ltd.
Companies such as e-commerce giants Alibaba and JD.com and search operator Baidu.com have raised billions of dollars on Wall Street. But foreign stock sales are inconvenient and expensive for smaller companies.
The STAR Market has more lenient standards for profitability and price volatility than the main exchanges. The Shenzhen Stock Exchange launched its own second board, dubbed ChiNext, in 2009 for small, faster-growing companies.
Companies that have yet to make a profit can trade on the Shanghai tech board if they spend at least 15% of revenue on research and development or have drugs or other technologies in advanced development. By contrast, the main board requires at least two years of profits before a company can join, a condition that has limited access for fledgling ventures.
Allowing companies to sell shares before they are profitable will encourage development of Chinese venture capital by allowing early investors to recover some of their money, said Lu of Industrial Bank.
Shares on the new market can swing by 30 percent in price before regulators will impose a 10-minute trading halt. The main exchanges halt trading for the day of any stock that rises or falls 10 percent in price.
In addition to companies due to start trading Monday, the Shanghai exchange said it was reviewing applications from 116 other ventures for initial public share offerings.
A state-owned maker of railway controls accounts for the bulk of the market's share value. China Railway Signal & Communication Co., Ltd. said it raised 10.5 billion yuan ($1.5 billion) from investors.
San Francisco, Jul 18 (AP/UNB) — Netflix's video streaming service suffered a dramatic slowdown in growth during its traditionally sluggish spring season, a drop-off coming as the company boosts its prices and girds for even stiffer competition.
The service picked up 2.7 million worldwide subscribers for the April-June period. That's far below Netflix's forecast of 5 million subscribers. The second-quarter letdown announced Wednesday comes after Netflix attracted nearly 10 million subscribers during the first three months of the year , more than any other quarter since the debut of its video streaming service 12 years ago.
The slowdown rattled investors already wondering how Netflix might fare against a new wave of competition coming this fall when both Walt Disney Co. and Apple plan to launch their own video streaming services.
After the second-quarter numbers came out, Netflix's stock plunged 12% in extending trading. If that sell-off is replicated in Thursday's regular trading session, it will be the largest decline in Netflix's stock price in three years and wipe out $18 billion in shareholder wealth.
Netflix ended June with 151.6 million worldwide subscribers, far more than a current crop of video streaming rivals that includes as Amazon and Hulu.
Signaling it expects to regain some momentum this summer, the company projected it will add 7 million subscribers from July through September. The optimism stems in part from the immense popularity of "Stranger Things," whose third season attracted record viewership after its July 4 release.
But the battle for viewers' attention and dollars is about to get much tougher. Besides the Disney and Apple, AT&T will also join the fray next year with HBO Max and NBC is expanding into video streaming, too.
"I think our position is excellent," Netflix CEO Reed Hastings said during a Wednesday webcast. "We're building amazing capacity for content. Our product has never been in better shape."
Netflix traced the second-quarter's slow subscriber growth primarily to a recent round of prices increase, including hikes of 13% to 18% in its biggest market, in the U.S. That pushed the price of its most popular U.S. plan to $13 per month, testing the bounds of how much some consumers are willing to pay for a service that started out at $8 per month for the same level of service. Disney is already planning to undercut Netflix by charging just $7 per month for its new service .
Some U.S. households decided Netflix is no longer worth it at the higher price, causing the company to end June with 120,000 fewer subscribers in the country than it had at the end of March. Hastings brushed off the disappointing second quarter as an aberration and predicted Netflix's subscriber growth this year will surpass the 28.6 million customers who were added last year.
But the increasingly crowded video streaming field has led to questions whether Netflix will be able to maintain the rapid rate of subscriber growth that has made its stock as one of Wall Street's premier performers during the past decade.
A $10,000 investment in Netflix at the end of 2009 would have been worth $460,000 at the end of Wednesday's regular trading session.
Netflix also needs more customers to help cover the costs of all the exclusive TV series and movies that it keeps adding to its line-up to stand out for the rest of the crowd. The Los Gatos, California, company so far has been borrowing heavily to finance a highly acclaimed slate of programming that garnered 117 Emmy nominations, second only to HBO's 137 nominations among all networks.
Selling ads would help Netflix bring in more revenue, but the company's management on Wednesday reiterated the service will continue to remain commercial free.
For now, Netflix is still burning through more cash than it is bringing in. In the second quarter, it registered a negative cash flow of $594 million and expects to accumulate a negative cash flow of $3.5 billion for the entire year.
Part of that outgoing money will go toward the development of more original shows to replace some of the programming that it has been licensing from Disney, AT&T and NBC, all of which are reclaiming the rights for their own streaming services. The losses include "Friends" and "The Office," long-defunct series that still remain among the most-watched shows on Netflix.
But Netflix still posts profits due to the way entertainment companies are allowed to account for their programming costs. In the most recent quarter, Netflix earned nearly $271 million, a 30% drop from the same time last year. Revenue climbed 26% from last year to $4.9 billion.
Brussels, Jul 17 (AP/UNB) — While the U.S. Congress talks about reining in big tech companies, Europe is taking action.
The European Union said Wednesday it is investigating whether Amazon uses data from independent retailers to gain an unfair advantage, a decision that could lead to changes in how the internet's biggest marketplace works.
The move echoes similar antitrust actions against Google and Microsoft that have led to billions in fines. It also contrasts with U.S. lawmakers' slower approach to the issue, as they start discussing how to keep in check the growing power of the tech industry's titans.
The EU's antitrust chief, Margrethe Vestager, said she's taking a "very close look at Amazon's business practices and its dual role as marketplace and retailer."
In addition to selling its own products, Amazon allows third-party retailers to sell their goods through its site. Last year, more than half of the items sold on Amazon worldwide were from third-party sellers.
In doing so, Amazon collects data about activity on its platform that, the EU says, it might be able to use to favor its own products for sale. In particular, the EU will look at how Amazon determines which trader is selected as the default seller of an item that a customer wants to buy.
The EU opened a preliminary probe into the issue last year, and Vestager said it has shown that "Amazon appears to use competitively sensitive information - about marketplace sellers, their products and transactions on the marketplace."
The investigation could lead to fines and eventually cause Amazon to change the way it works. Previous EU antitrust cases have resulted in such change, though it is unclear how big their ultimate impact has been in addressing the EU's concerns. For example, Google had to tweak the display of search results, which the EU had said favored Google goods and services.
Amazon said it "will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow."
In a parallel but separate case, Germany's competition regulator said Wednesday that Amazon was changing some of its business conditions for traders on its online marketplace worldwide after the regulator raised concerns about some terms. The case is not like the EU's probe about data on traders, but about contractual terms such as a one-sided exemption from liability to Amazon's benefit as well as the place of jurisdiction for disputes.
Other EU countries like Austria, Luxembourg and Italy are also independently investigating Amazon but EU spokeswoman Lucia Caudet said the national probes did not overlap with the EU investigation.
The EU's investigations into major companies like Amazon have led the way in a global push to more tightly regulate tech giants, as many governments wonder if they are becoming too big for the good of the wider economy.
Among the key questions are not only whether the tech giants abuse their market dominance to choke off competition, potentially stifling choice for consumers and innovation, but also whether they are adequately protecting users' data and paying their fair share of taxes in countries where they operate.
U.S. authorities have started to follow Europe's lead in taking a closer look at the big tech companies, particularly after the scandal in which Facebook was found to have allowed data on millions of people to be used by other companies, including to try to influence the 2016 election that made Donald Trump the new U.S. president. According to published reports, U.S. regulators are poised to fine Facebook $5 billion for that scandal, but the wider debate of reining in tech companies' powers has only just begun.
The House Judiciary Committee in the U.S. is investigating the market power of Facebook, Google, Amazon and Apple. Congress is this week holding a two-day hearing on Facebook's plan to create a digital currency, Libra, which governments in the U.S. and Europe have been skeptical about.
In Europe, one of the big questions is how to tax these companies, which do huge business across the continent but pay taxes only in the EU nation where their local headquarters are based, often a low-tax haven like Luxembourg or the Netherlands. The result is they pay a far lower tax rate than traditional businesses.
France has tried to address the problem by unilaterally proposing a 3% tax on big tech companies' revenue in the country. The U.S. government is not happy about that and finance ministers from the Group of Seven wealthy countries are discussing the issue this week in Paris.
Ursula von der Leyen, the newly appointed EU Commission President who should take up her role in November, has said the issue will be a priority for her.
The tax issue has brought Amazon into the EU's crosshairs before. Two years ago, officials ordered it to pay $295 million in back taxes to Luxembourg after finding that the company profited from a tax avoidance deal with the tiny European country.