Does Google’s Duplex violate two-party consent laws?

Does Google’s Duplex violate two-party consent laws?

Google’s Duplex, which calls businesses on your behalf and imitates a real human, ums and ahs included, has sparked a bit of controversy among privacy advocates. Doesn’t Google recording a person’s voice and sending it to a data center for analysis violate two-party consent law, which requires everyone in a conversation to agree to being recorded? The answer isn’t immediately clear, and Google’s silence isn’t helping.

Let’s take California’s law as the example, since that’s the state where Google is based and where it used the system. Penal Code section 632 forbids recording any “confidential communication” (defined more or less as any non-public conversation) without the consent of all parties. (The Reporters Committee for the Freedom of the Press has a good state-by-state guide to these laws.)

Google has provided very little in the way of details about how Duplex actually works, so attempting to answer this question involves a certain amount of informed speculation.

To begin with I’m going to consider all phone calls as “confidential” for the purposes of the law. What constitutes a reasonable expectation of privacy is far from settled, and some will have it that you there isn’t such an expectation when making an appointment with a salon. But what about a doctor’s office, or if you need to give personal details over the phone? Though some edge cases may qualify as public, it’s simpler and safer (for us and for Google) to treat all phone conversations as confidential.

As a second assumption, it seems clear that, like most Google services, Duplex’s work takes place in a data center somewhere, not locally on your device. So fundamentally there is a requirement in the system that the other party’s audio will be recorded and sent in some form to that data center for processing, at which point a response is formulated and spoken.

On its face it sounds bad for Google. There’s no way the system is getting consent from whomever picks up the phone. That would spoil the whole interaction — “This call is being conducted by a Google system using speech recognition and synthesis; your voice will be analyzed at Google data centers. Press 1 or say ‘I consent’ to consent.” I would have hung up after about two words. The whole idea is to mask the fact that it’s an AI system at all, so getting consent that way won’t work.

But there’s wiggle room as far as the consent requirement in how the audio is recorded, transmitted and stored. After all, there are systems out there that may have to temporarily store a recording of a person’s voice without their consent — think of a VoIP call that caches audio for a fraction of a second in case of packet loss. There’s even a specific cutout in the law for hearing aids, which if you think about it do in fact do “record” private conversations. Temporary copies produced as part of a legal, beneficial service aren’t the target of this law.

This is partly because the law is about preventing eavesdropping and wiretapping, not preventing any recorded representation of conversation whatsoever that isn’t explicitly authorized. Legislative intent is important.

“There’s a little legal uncertainty there, in the sense of what degree of permanence is required to constitute eavesdropping,” said Mason Kortz, of Harvard’s Berkman Klein Center for Internet & Society. “The big question is what is being sent to the data center and how is it being retained. If it’s retained in the condition that the original conversation is understandable, that’s a violation.”

For instance, Google could conceivably keep a recording of the call, perhaps for AI training purposes, perhaps for quality assurance, perhaps for users’ own records (in case of time slot dispute at the salon, for example). They do retain other data along these lines.

But it would be foolish. Google has an army of lawyers and consent would have been one of the first things they tackled in the deployment of Duplex. For the onstage demos it would be simple enough to collect proactive consent from the businesses they were going to contact. But for actual use by consumers the system needs to engineered with the law in mind.

What would a functioning but legal Duplex look like? The conversation would likely have to be deconstructed and permanently discarded immediately after intake, the way audio is cached in a device like a hearing aid or a service like digital voice transmission.

A closer example of this is Amazon, which might have found itself in violation of COPPA, a law protecting children’s data, whenever a kid asked an Echo to play a Raffi song or do long division. The FTC decided that as long as Amazon and companies in that position immediately turn the data into text and then delete it afterwards, no harm and, therefore, no violation. That’s not an exact analogue to Google’s system, but it is nonetheless instructive.

“It may be possible with careful design to extract the features you need without keeping the original, in a way where it’s mathematically impossible to recreate the recording,” Kortz said.

If that process is verifiable and there’s no possibility of eavesdropping — no chance any Google employee, law enforcement officer or hacker could get into the system and intercept or collect that data — then potentially Duplex could be deemed benign, transitory recording in the eye of the law.

That assumes a lot, though. Frustratingly, Google could clear this up with a sentence or two. It’s suspicious that the company didn’t address this obvious question with even a single phrase, like Sundar Pichai adding during the presentation that “yes, we are compliant with recording consent laws.” Instead of people wondering if, they’d be wondering how. And of course we’d all still be wondering why.

We’ve reached out to Google multiple times on various aspects of this story, but for a company with such talkative products, they sure clammed up fast.

Source: Mobile – Techcruch

zGlue launches a configurable system-on-a-chip to help developers implement customized chipsets

zGlue launches a configurable system-on-a-chip to help developers implement customized chipsets
The complexity and cost of packing an array of sensors and power inside a small amount of space has opened the door to a wider and wider variety of use cases for internet-connected devices beyond just smart thermostats or cameras — and also exposed a hole for getting those ideas into an actual piece of hardware.
So there are some startups that are looking to address this hole by providing developers a path to creating the customized chipsets they need to power those devices. zGlue is one of those, led by former Samsung engineering director Ming Zhang.  The company’s chiplets are built around the kind of system-on-a-chip approach that you’ll see in most modern devices, where everything is in a single unit that reduces some of the complexity of moving processes around a larger piece of hardware — shrinking the space constraints and allowing all these actions to happen on a device, such as a smartphone. As more and more IoT devices come online, they may all have varying form factor demands, which means companies — like zGlue and others — are emerging to address those needs.
“From the developer point of view, think of us as a system that is not different from any thing else on the market, user-interface-wise,” Zhang said. “It is just smaller in size, faster in time to market, and flexible — customizable by individuals rather than just by Apple and Qualcomms. [We’re] democratizing chip innovation so it is no longer [a] privilege of Fortune 500 companies.”
The company’s first product is called the zOrigin, a “chip-stacking” product that aims to allow developers to embed the sensors and processes necessary for their devices. Stemming from an ARM 32-bit core processor (meaning it can handle more complex and precise calculations), the first launch costs $149 for the wearable and development board and can include pieces like a Bluetooth radio, accelerometers, and other necessary features.

zGlue’s chipsets have embedded memory, which is an increasingly common approach to try to reduce the number of trips going from the actual processing power to where the information is stored. Those trips cost power, speed, and can restrict the scope of use cases for internet-connected devices. Zhang said the chiplets are packaged closer together — literally reducing the space that information has to cross — in order to speed it up, though that of course carries consequences when it comes to heat constraints these processors can have.
“That’s the price to pay for the continuation of Moore’s law, as it has in the past 40 years,” Zhang said. “Heat dissipation in our system is not going to be any worse than a conventional system. In fact, with the silicon substrate in place, it’s easier to conduct heat compared to a conventional package or board substrate.”
As a kind of templated approach, zGlue is geared toward helping developers produce a custom setup that the can implement into devices that may require a wide set of sensors. The company says it looks to help developers go from a design to a prototype in a few weeks, and then reduce the turnaround time from a prototype to production in “weeks or months,” depending on the complexity and volume.
While this is one example of trying to get a prototype chip out into the wild, there are a few others as well. Si-Five, for example, offers developers a way to prototype custom silicon for their specific niches based on the hardware and IP the startup has. The goal there is to offer both a prototype flow and the ability to graduate into a production flow, allowing developers and companies to get products out the door that require custom silicon. Si-Five hardware is based on the RISC-V architecture, an open-source instruction set for silicon, and the company most recently raised $50.4 million.
Zhang, too, said RISC-V offers some potential, especially in its own scope. “RISC-V is a great tool to build small, fast, and low power IoT applications,” he said. “The nature of open source makes it more available to more people. We welcome and embrace RISC-V to join the family of ‘MCU’ chiplets supported by our technology.”
When it comes to inference — the machine learning processes that happen on the hardware to execute some kind of action, like image recognition, based on trained models — Zhang said the chipsets would support it, but he would not comment further. There is a blossoming ecosystem around custom silicon that looks to speed up inference on devices like cars or IoT devices, which is geared toward reducing the space and power constraints of those chips while also running those processes much more quickly. Companies like Mythic have raised significant venture funding in order to build that kind of hardware.

Source: Gadgets – techcrunch

Fortnite is finally coming to Android this summer

Fortnite is finally coming to Android this summer

Fornite is finally coming to Android…in a matter of months. After dominating the iOS gaming charts since March, the wildly popular sandbox survival game will be hitting the world’s top mobile operating system at some point this summer.

Creator Epic Games buried the news in the middle of a larger blog post titled, “The State of Mobile,” noting, vaguely, “We know many of you are excited for this release, and we promise that when we have more information to share, you’ll hear it from us first.”

That news comes amid a flurry of other Fornite related announcements this week. Earlier this morning, Epic unveiled a Battle Royale competition with a large in-game cash prize. This morning, the company also laid out plans to bring voice chat and improved gameplay and controls to the mobile side of things. Stats are coming to mobile, as well, along with a reduced install size.

Not that any of those issues have hampered the games success, of course. Earlier this year, the game was reportedly bringing in $126 million in monthly revenue — even before it arrived on iOS. With its imminent release on Android, that number’s likely to get a whole lot larger. 

Source: Mobile – Techcruch

LocationSmart didn’t just sell mobile phone locations, it leaked them

LocationSmart didn’t just sell mobile phone locations, it leaked them

What’s worse than companies selling the real-time locations of cell phones wholesale? Failing to take security precautions that prevent people from abusing the service. LocationSmart did both, as numerous sources indicated this week.

The company is adjacent to a hack of Securus, a company in the lucrative business of prison inmate communication; LocationSmart was the partner that allowed the former to provide mobile device locations in real time to law enforcement and others. There are perfectly good reasons and methods for establishing customer location, but this isn’t one of them.

Police and FBI and the like are supposed to go directly to carriers for this kind of information. But paperwork is such a hassle! If carriers let LocationSmart, a separate company, access that data, and LocationSmart sells it to someone else (Securus), and that someone else sells it to law enforcement, much less paperwork required! That’s what Securus told Senator Ron Wyden (D-OR) it was doing: acting as a middle man between the government and carriers, with help from LocationSmart.

LocationSmart’s service appears to locate phones by which towers they have recently connected to, giving a location within seconds to as close as within a few hundred feet. To prove the service worked, the company (until recently) provided a free trial of its service where a prospective customer could put in a phone number and, once that number replied yes to a consent text, the location would be returned.

It worked quite well, but is now offline. Because in its excitement to demonstrate the ability to locate a given phone, the company appeared to forget to secure the API by which it did so, Brian Krebs reports.

Krebs heard from CMU security researcher Robert Xiao, who had found that LocationSmart “failed to perform basic checks to prevent anonymous and unauthorized queries.” And not through some hardcore hackery — just by poking around.

“I stumbled upon this almost by accident, and it wasn’t terribly hard to do. This is something anyone could discover with minimal effort,” he told Krebs. Xiao posted the technical details here.

They verified the back door to the API worked by testing it with some known parties, and when they informed LocationSmart, the company’s CEO said they would investigate.

This is enough of an issue on its own. But it also calls into question what the wireless companies say about their own policies of location sharing. When Krebs contacted the four major U.S. carriers, they all said they all require customer consent or law enforcement requests.

Yet using LocationSmart’s tool, phones could be located without user consent on all four of those carriers. Both of these things can’t be true. Of course, one was just demonstrated and documented, while the other is an assurance from an industry infamous for deception and bad privacy policy.

There are three options that I can think of:

  • LocationSmart has a way of finding location via towers that does not require authorization from the carriers in question. This seems unlikely for technical and business reasons; the company also listed the carriers and other companies on its front page as partners, though their logos have since been removed.
  • LocationSmart has a sort of skeleton key to carrier info; their requests might be assumed to be legit because they have law enforcement clients or the like. This is more likely, but also contradicts the carriers’ requirement that they require consent or some kind of law enforcement justification.
  • Carriers don’t actually check on a case by case basis whether a request has consent; they may foist that duty off on the ones doing the requests, like LocationSmart (which does ask for consent in the official demo). But if carriers don’t ask for consent and third parties don’t either, and neither keeps the other accountable, the requirement for consent may as well not exist.

None of these is particularly heartening. But no one expected anything good to come out of a poorly secured API that let anyone request the approximate location of anyone’s phone. I’ve asked LocationSmart for comment on how the issue was possible (and also Krebs for a bit of extra data that might shed light on this).

It’s worth mentioning that LocationSmart is not the only business that does this, just the one implicated today in this security failure and in the shady practices of Securus.

Source: Mobile – Techcruch

House committee accepts amendment to uphold ZTE ban

House committee accepts amendment to uphold ZTE ban

The bizarre recent tale of ZTE is getting another wrinkle. Earlier today, a bipartisan House Appropriations Committee unanimously voted to accept an amendment to uphold sanctions against the company.

The amendment to the 2019 Commerce, Justice, and Science Appropriations bill is, of course, being viewed as a rebuke of the president, whose tweets over the weekend appeared to suggest a softening on the seven-year ban imposed by the Department of Commerce last month.

In fact, the amendment’s author, Rep. Dutch Ruppersberger of Maryland, called out Trump by name on social media, adding in a press release tied to the news, “This amendment, which passed with the unanimous support of my colleagues on both sides of the aisle, shows that, when the United States enacts sanctions, we stand behind them.”

Perhaps unsurprisingly, the release name checks not just the sanctions violations that led to the export ban, but also claims of spying that have put the company in the crosshairs of U.S. intelligence agencies. It’s a complicated series of events that I went into a bit more detail over here.

Trump, meanwhile, surprised the world by suggesting that he was working with the Chinese president to help ZTE find a way around the seven-year ban that has threatened to wipe the company off the map. The president cited job losses in China as his major motivator. That statement was met with bipartisan disapproval and Trump appeared to walk it back yesterday in another tweet, accusing The Washington Post and CNN of writing “false stories.”

It’s clear, however, that ZTE is being viewed as an important stumbling block as trade tensions increase between the two superpowers. The bill carrying the new amendment will come under consideration by the House of Representatives next month. 

Source: Mobile – Techcruch

Facebook Stories reveals 150M daily viewers and here come ads

Facebook Stories reveals 150M daily viewers and here come ads

After 14 months of silence since launching, Facebook Stories has finally announced a 150 million daily active user count for its Snapchat Stories clone. And now it’s time to earn some money off it. Facebook Stories will start testing its first ads today in the U.S., Mexico and Brazil.

They’re 5- to 15-second video ads users can skip, and while there’s no click-through or call to action now, Facebook plans to add that in the coming months. Advertisers can easily extend their Instagram Stories ads to this new surface, or have Facebook automatically reformat their News Feed ads with color-matched borders and text at the bottom. Facebook also plans to give businesses more metrics on their Stories performance to convince them the feature is worth their ad dollars.

Advertisers can extend their Instagram Stories ads to Facebook Stories (left), or have Facebook reformat their News Feed ads with color-matched image borders and ad copy text shown at the bottom

Facebook has to nail Stories ads to preserve its business, as CPO Chris Cox said this month that Stories sometime next year will surpass feed posts as the top way to share. CEO Mark Zuckerberg warned that Facebook must ensure “that ads are as good in Stories as they are in feeds. If we don’t do this well, then as more sharing shifts to Stories, that could hurt our business.” Despite criticism that the feature is obtrusive and redundant with Instagram Stories, Facebook is proving there’s no retreating from the ephemeral slideshow format. And Snapchat could see ad spend slip over to Facebook, especially since the big blue social network has so much targeting data on us.

The race for storytellers

My first question was how Facebook is defining a daily user for Stories. It’s anyone who watches a Story on Facebook’s app or site. That’s useful, because it means it’s not counting users who simply cross-post their Stories from Instagram or Messenger to Facebook, which would inflate the number. It’s a testament to the coercive power of the top-of-feed Stories design that Instagram pioneered and Facebook brought over, and it’s already testing bigger Stories preview tiles.

For context, here’s a breakdown of Stories daily user counts and total monthly user counts across the top players, ranked by size:

  1. WhatsApp Status: 450 million daily out of 1.5 billion monthly as of May 2018
  2. Instagram Stories: 300 million daily out of 800 million monthly as of November 2017
  3. Snapchat (whole app): 191 million daily as of May 2018, launched
  4. Facebook Stories: 150 million daily out of 2.2 billion monthly as of May 2018
  5. Messenger Day/Stories: 70 million daily out of 1.3 billion monthly as of September 2017

Instagram Stories also started showing ads when it hit 150 million users, though that was just five months after launch, while it’s taken Facebook Stories 14 months to get there.

The real opportunity for Facebook’s future engagement growth is bringing the Stories format to the international market that Snapchat has largely neglected for four years and only recently got serious about by re-engineering its Android app. WhatsApp capitalized on Snap’s focus on U.S. teens by surging to become the top Stories product thanks to youth across the globe. And now Facebook is specifically building Stories features for countries like India, such as the new audio posts to help users with non-native language keyboards, and cloud storage so you can privately save photos and videos to Facebook for those without room on their phones.

Facebook Stories lets you shoot 360 photos without a 360 camera with this cool “paint with the lens” interface

Since testing in January 2017 and then launching in March 2017, Facebook has been rapidly iterating on its version of Stories in hopes of making it more unique and apt to its audience. That includes adding cross-posting from its other apps and a desktop interface, advanced shutter formats like Boomerang and new augmented reality features like 3D doodling and real-world QR and image triggers that anchor AR to a location.

Oh, and there’s one bonus unannounced feature we’ve spotted. Facebook Stories can now shoot 360 photos without a 360 camera. It uses a cool interface that shows you where to “paint” your camera over your surroundings, so unlike a panorama where you only get one shot, you can go back and fill in missed spots.

Snap’s beaten; time to monetize

All of Facebook’s efforts seem to be paying off. Snapchat sunk to its slowest daily user growth rate ever, a paltry 2.13 percent last quarter, while the much more saturated Facebook grew a strong 3.42 percent. Snapchat actually shrank in user count during March.

That might have been the signal Facebook needed to start putting ads in its Stories. It’s effectively beaten Snapchat into submission. Without as strong of a competitor, Facebook has more leeway to pollute the Stories user experience with ads. And that comes just as Snapchat is desperate to ramp up ad sales after missing revenue estimates in Q1 and mounting losses of $385 million.

Ads in stories have added a lot of value for businesses on Instagram, and we believe we can do the same on Facebook,” Facebook product manager Zoheb Hajiyani tells me. “Ensuring that this is a good experience for people using the product will be our top priority.” Facebook has lined up a number of ad test partners it’s not disclosing, but also will be running its own ads for Oculus inside Stories.

With existing Facebook and Instagram advertisers able to easily port their ads over to Facebook Stories, and much greater total reach, they might not go to the trouble of advertising on Snap unless they seek young teens. Stories could in fact be the answer to Facebook’s issue with running out of ad space in the News Feed while it shuts down its sidebar units. Stories could generate the ad inventory needed to keep pushing more marketing into the social network.

Stories were inevitable. First launched by Snapchat in October 2013, it took almost three years for Facebook to wake up to the format as an existential threat to the company. But with the quick success of Instagram’s clone, Facebook has wisely swallowed its pride and pivoted its apps toward this style of visual communication. It was another moment, like the shift to mobile, where Facebook could have faltered. But willingness to admit its mistakes and ruthlessly compete may have won another epoch of social dominance.

For more on Stories, check out our feature piece:

Source: Mobile – Techcruch

Snapchat Spectacles tests non-circular landscape exports

Snapchat Spectacles tests non-circular landscape exports
The worst thing about Spectacles is how closely tied they are to Snapchat. The proprietary circular photo and video format looks great inside Snapchat where you can tip your phone around while always staying full screen, but it gets reduced to a small circle with a big white border when you export it to your phone for sharing elsewhere.
Luckily, Snapchat has started beta testing new export formats for Spectacles through the beta version of its app. This lets you choose a black border instead of a white one, but importantly, also a horizontal 16:9 rectangular format that would fit well on YouTube and other traditional video players. The test was first spotted by Erik Johnson, and, when asked, a Snapchat spokesperson told TechCrunch “I can confirm we’re testing it, yes.”
Allowing Spectacles to be more compatible with other services could make the v2 of its $150 photo and video-recording sunglasses much more convenient and popular. I actually ran into the Snapchat Spectacles team this weekend at the FORM Arcosanti music festival in Arizona where they were testing the new Specs and looking for ideas for their next camera. I suggested open sourcing the circular format or partnering so other apps could show it natively with the swivel effect, and Snap declined to comment about that. But now it looks like they’re embracing compatibility by just letting you ditch the proprietary format.
Breaking away from purely vertical or circular formats is also a bit of a coup for Snapchat, which has touted vertical as the media orientation of the future as that’s how we hold our phones. Many other apps, including Facebook’s Snapchat clones, adopted this idea. But with Snapchat’s growth slipping to its lowest rate ever, it may need to think about new ways to gain exposure elsewhere.

Seeing Spectacles content on other apps without ugly borders could draw attention back to Snapchat, or at least help Spectacles sell better than v1, which only sold 220,000 pairs and had to write-off hundreds of thousands more that were gathering dust in warehouses. While it makes sense why Snap might have wanted to keep the best Spectacles content viewing experience on its own app, without user growth, that’s proven a software limitation for what’s supposed to be a camera company.

Snapchat launches Spectacles V2, camera glasses you’ll actually wear

Source: Gadgets – techcrunch

AT&T and Verizon will carry RED’s crazy ‘holographic’ handset

AT&T and Verizon will carry RED’s crazy ‘holographic’ handset

RED’s Hydrogen One handset is one of those devices we’ll believe when we actually see it. The company’s been promising up the $1,200 smartphone for a while now, only to be hit with delays and outright admitting, “We have no idea whatsoever what we are doing.”

Consider this some small vote of confidence, however. AT&T announced today that it will be carrying the 5.7-inch “holographic display device.” That, of course, shouldn’t be taken as a tacit approval of the device, so much as a confirmation of the fact that it does, in fact, exist.

Though in a press release tied to the announcement, a market SVP says, “This revolutionary smartphone will provide you with significant advancements in the way you create and view content on the leading network for entertainment.” So, take that as you will. Personally, I’m holding off any sort of judgement until I can hold the thing in my hands. 

The carrier mentions “later this summer” in the press release, which lines up with RED’s most recent mention of an August launch date. As for price, your guess is as good as ours. We reached out to AT&T to see whether the company will be subsidizing the product on contract, or simply offering up the $1,200 phone as is through its retail channel. The carrier won’t comment on that, yet, though its Next subsidy plan might make sense, cushioning the cost by stretching it out over a longer period.

The Hydrogen One is, by all accounts, about as far as you can get from a mainstream piece of mobile hardware. At the moment, it feels more like a fun consumer electronics thought experiment, but at least it’s one that’s real — and coming to the second largest mobile carrier in the U.S. at some point this summer. 

Update: Looks like Verizon will be getting the phone, as well. The carrier (which, disclosure, owns the company that owns TechCrunch) will be getting the phone in the even broader timeframe of “later this year.” No word on pricing there, either.

Source: Mobile – Techcruch

Monzo, the U.K. challenger bank, finally rolls out Apple Pay

Monzo, the U.K. challenger bank, finally rolls out Apple Pay

Monzo, the U.K. challenger bank, has finally added Apple Pay to its mobile-only current account. The just over three year-old fintech says it has been one of the most requested features for its banking app, with over 2,000 mentions of Apple Pay on Monzo’s forum, whilst its customer support team have been asked about the functionality more than 13,000 times. In other words, the rollout can’t come soon enough. Noteworthy, Monzo was able to add Google Pay all the way back in October 2017.

Meanwhile, many of its passionate and vocal users will be wondering what took Monzo so long (as an aside, rival challenger Starling was able to add Apple Pay in July 2017). The upstart bank, which usually makes a virtue of its community-driven approach and transparency hasn’t been able to say (or even fully acknowledge that the feature was coming), likely because Apple imposes strict rules on the ways its partners communicate working with the tech giant. And when you sign an NDA with Apple it’s not atypical for it to stipulate that you don’t talk about said NDA.

What we do know is that — similar to Apple’s iOS App Store when submitting an app — the Apple Pay approval process for a new bank partner is not for the faint-hearted. Industry insiders tell me that Google Pay has fewer hurdles to jump in comparison.

Now that the feature is live, Monzo is talking up the security and privacy aspect of using Apple Pay, noting that when you use a credit or debit card with Apple Pay, the actual card numbers are not stored on the device, nor on Apple servers. Instead, “a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on your device… [and] each transaction is authorised with a one-time unique dynamic security code”.

Of course, most people simply like Apple Pay for its convenience, letting you use your phone to pay rather than fumbling for a debit or credit card, and when shopping online not having to repeatedly enter card details.

Cue Monzo’s Tom Blomfield waxing lyrical in a company statement about Apple’s design and UX. “Apple is famous for building beautiful products with simple, intuitive interfaces. Their design thinking has long been a source of inspiration for us. Monzo’s mission has alway been to make sure everyone can use and manage their money effortlessly, and with Apple Pay we are one step closer to achieving that,” says the challenger bank’s co-founder and CEO.

Source: Mobile – Techcruch

How ZTE became the focal point of US/China relations

How ZTE became the focal point of US/China relations

Here in the States, ZTE has been content with a kind of quiet success. The Chinese smartphone maker has landed in the top five quarter after quarter (sometimes breaking the top three, according to some analysts), behind household names like Apple, Samsung and LG. Suddenly, however, the company is on everyone’s lips, from cable news to the president’s Twitter account.

It’s the kind of publicity money can’t buy — but it’s happening for one of the worst reasons imaginable. ZTE suddenly finds itself in the eye of a looming trade war between superpowers. Iranian sanctions were violated, fines levied and seven-year international bans were instated.

It’s like a story ripped from the pages of some Cold War thriller, though instead of Jason Bourne, it’s that one budget smartphone company that you’ve maybe heard of, who maybe makes that weird Android phone with two screens.

So, how did we get here?

ZTE began U.S. operations in 1998, a little over a decade after forming in Shenzhen (and a year after going public in China) as Zhongxing Semiconductor Co., Ltd. The change of name to Zhongxing Telecommunications Equipment reflects the newfound focus for the company, which employees around 75,000 and operates in 160 countries.

While ZTE has flirted with premium and sometimes bizarre devices, in the smartphone world, the company is primarily known for its budget hardware. It’s no coincidence that the company was tapped by google to be the first to run Android Oreo Go Edition (nee Android Go). The manufacturer has found particular success in the developing world, while making significant gains in the U.S. by releasing dozens of low-cost devices targeted at prepaid users.

In recent years, however, the company has come under increased scrutiny on two fronts. First, there’s the issue of the company’s perceived ties to the Chinese government. It’s the same thing that’s tripped up fellow Chinese handset manufacturer Huawei in its pursuit of the U.S. market.

In Huawei’s case, multiple warnings from top U.S. security agencies has severely hobbled any chance of making significant headway in this country. The company kicked off the year with the one-two punch of having AT&T pull out of a deal last minute, only to have Best Buy stop restocking its product on store shelves. ZTE, on the other hand, has run into less headwind there.

In February, top officials at the FBI, CIA and NSA all warned against buying product from both companies over remote surveillance concerns and later ending their sale at military bases. But after making significant inroads through non-contract carriers like Boost, Cricket and Metro PCS, the warnings appear to have had little impact on the company.

The same, however, can’t be said of a seven-year ban.

In 2016, the U.S. Commerce Department found the company guilty of violating U.S. sanctions. The department disclosed internal documents from the company naming “ongoing projects in all five major embargoed countries — Iran, Sudan, North Korea, Syria and Cuba.” That’s a big issue when selling a product that contains, by some estimates, a quarter of components created by U.S. companies — not to mention all of the Google software.

The following year, the company pleaded guilt and agreed to a $1.19 billion fine, along with the stipulation that it would punish senior management for the transgression. Last month, however, the DOC said ZTE failed to live up to the latter part of the deal, issuing an even steeper fine as a result.

“ZTE misled the Department of Commerce,” the department said in a statement to TechCrunch at the time. “Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored.”

The new punishment bans U.S. component manufacturers from selling to ZTE for seven years. A few days later, the company told TechCrunch that the export ban would “severely impact” its chances of survival. And then, last week, the company ceased major operating activities.

“As a result of the Denial Order, the major operating activities of the company have ceased,” it wrote in an exchange filing. “As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations.”

In the meantime, the company was reportedly meeting with companies like Google in hopes of figuring out a workaround, while China was said to be meeting with U.S. officials to discuss the steep ban. For some, the ZTE ban was seen as a political move amidst a potential trade war, and a major roadblock toward negotiations.

That leads us to Sunday, when Trump tweeted, “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

Job loss in China seems like an odd motivator for any U.S. president, let along Trump, but things make significantly more sense when you consider the sheer size of a company like ZTE. If a U.S. trade ban caused the company to fold, it’s easy to see how that could severely impact already tenuous relations between the two countries.

“The Chinese have suggested that ZTE was a show-stopper,” international studies expert Scott Kennedy succinctly told NPR, “if you kill this company, we’re not going to be able to cooperate with you on anything.”

And that brings us to this morning — and other Trump tweet. “The Washington Post and CNN have typically written false stories about our trade negotiations with China,” Trump writes. “Nothing has happened with ZTE except as it pertains to the larger trade deal. Our country has been losing hundreds of billions of dollars a year with China[…]…haven’t even started yet! The U.S. has very little to give, because it has given so much over the years. China has much to give!”

Those tweets, it should be noted, were most likely posted in reaction to bipartisan concern about Trump’s focus. “#China intends to dominate the key industries of the 21st Century not through out innovating us, but by stealing our intellectual property & exploiting our open economy while keeping their own closed,” Marco Rubio tweeted earlier this week. “Why are we helping them achieve this by making a terrible deal on ZTE?”

So things are weird. And it’s 2018, so expect that it will only get weirder from here.

Source: Mobile – Techcruch