FTC Cracks Down on Webcam Company’s Lax Security

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Sept. 5 (Bloomberg) –- Chertoff Group Managing Director Brian White discusses TRENDnet’s settling with the FTC over charges that it failed to secure its cameras. He speaks with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Live from pier 3 in san francisco, welcome to the late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world.

I am emily chang.

Our focus is on innovation, technology and the future of business.

Could this man be the next steve jobs?

He has the jeans and a black t- shirt and his company is already beating apple in china.

Samsung may have beat apple to market with its galaxy gear wristwatch, but the pebble watch has been available since the beginning of the year.

How safe is that camera on your computer or smart tv?

A government agency says some webcams can be magnets for hackers.

Smart phone maker has already claimed a larger share of the chinese market than apple's iphone.

The founder and ceo took a page just out of steve jobs book.

Taking the stage out of an audience of screaming fans.

All of this for the launch of a new smartphone billed as the world's fastest and a 47 inch smart tv that will run on the android operating system.

We got exclusive access.

How much do companies like google and apple be worried about xiamaomi?

To provide more context, when you look at the market share gains in china with smartphones, you start to understand, a very young company that is competing was a very large companies and succeeding.

Or is a breakdown of the china smartphone market share in the second quarter.

There is -- very quickly becoming a popular player.

Here is a company that actually is not as comfortable being compared to apple.

A founder that does not seem to be all that interested in being compared to steve jobs.

When you think about the business, the company is trying to send a message that may be a better comparison is amazon.

Pricing devices at a low level and trying to make up the difference on services.

With amazon, selling kindle devices to get you to shop more through amazon, a comparison they feel a little bit better about.

At the end of the day, the push into television only raises questions about whether apple has one more thing to worry about.

One of the biggest differences maybe china mobile, right?

That has been the void for apple, not having a deal with china mobile.

The two sides not being able to come to favorable terms to date.

As every day passes, it feels like there is more of a risk on the apple side not being able to team up with china mobile.

700 million subscribers.

Being able to get at&t and verizon on your team.

Not to say there are not people who are indirectly already using iphones through the china mobile market, but if apple really wants to make a very fast dent into the chinese market, the no- brainer way to go is through china mobile.

Jon erlichman, thank you.

Speaking of apple, the company is looking into some new claims of labor violations at an iphone plant.

This comes days ahead of the company's president in cupertino and beijing on tuesday.

Adam covers apple for bloomberg news and joins me now.

Let's talk about china mobile.

Apple is holding an event in beijing.

That is a sign.

They think china is really important.

Might we see something different?

They are having a rebroadcast of the event they are holding in california in beijing.

Some of the media there will be able to watch it and get their hands on the device.

That is creating a lot of speculation that there will be a deal with china mobile.

Clearly, china is a huge market and opportunity for apple and there is more and more competition there.

Getting on the world's biggest carrier is critical.

Apple has been trying to strike a deal with china mobile four years.

What are the sticking points?

When apple started with the iphone in 2007, it was able to dictate the terms.

It was also able to drive a harder bargain.

As the market has matured, china mobile has not wanted to concede.

Or has been some technological things where china mobile network works in a different way that has been compatible with the iphone.

Maybe this is the time when things can finally get hashed out.

Now you have upstarts like shall mean -- xiaomi.

They are taking advantage of certain things.

They are using android software, which is free.

As the market matures, there is less differentiation between the different devices.

Customers can decide based on price or marketing or whatever.

What is the plan to build more apple stores question mark that is part of the problem.

They do not have as big of a network of a network there as they have in the u.s. or europe.

They are planning to ramp it up.

Tim cook has made that a big priority to get more into china.

That will be coming online in the next few years.

Do we know how many more stores?

Do we know how fast this will ramp up?

In the past, they would -- it has not worked out as quickly as they thought.

It is more complicated than they anticipated.

I want to asked you about some of these labor issues.

Apple is looking into claims of abuse.

Tell me exactly what they are looking into.

China labor watch has done a lot of investigations into apple's practices and they go around doing anonymous interviews with workers.

They found several labor violations at this plant that has opened up the make the back plastic casing for this new iphone.

Excessive overtime was the main one.

There is also accusations of women workers leading to get pregnancy tests to go against apple's code of conduct as well as some of the chinese labor laws.

Women have been forced to take pregnant the test before they are even hired.

They are given five minutes to eat.

Alterable people sharing dorm rooms.

Apple has made a lot of strides in terms of trying to improve the factories.

Why do these things keep popping up?

They have a very big supplier network.

One million workers building these devices.

It is a massive endeavor to keep a watch over it.

They have enlisted outside groups to help do audits and they have been pretty public about their findings.

They also released their audits every year, which are -- a lot of the -- to their credit, they are pretty transparent compared to other technology companies.

That does not make some of these violations any less horrible.

Adam, thank you.

Yahoo ceo marissa mayer is making her mark with a new company logo.

Will the new look drive results?

You can also watch a streaming on your phone, tablet, and bloomberg.com.

? i am emily chang.

After holding a contest, yahoo has revealed its new logo.

It is still purple, still has an exclamation point, but it is meant to be more modern.

There you see it.

Jon erlichman is back with us from new york with more.

She wrote a detailed public post about this change.

" we wanted there to be a mathematical consistency to the logo.

" will the rebranding help yahoo's business?

Jeff is the former chief marketing officer for kodak.

30 days of buildup.

Here we are.

Your thoughts?

I would go back to some of the comments i have been reading.

I would say the biggest one i saw that sums it up, yahoo cares?

It does not seem to be that exciting.

If i were changing the company, this would not be the thing i would be talking about.

I would let someone do it, let the chief marketing officer do it.

I do not think marissa should be the one unveiling this.

It has missed the mark.

I want to go there, but before i do, how important is a logo?

What's the bigger thing is the brand and the promise of the brand -- the bigger thing is the brand and the promise of the brand.

A brand is nothing but a promise delivered.

What people are wanting to see is what are you going to be delivering?

What new changes are you going to be making in the company?

I am ok.

Every ceo that i know that comes into a new job, that is one of the first things they want to do, make a change in the logo.

Is a different?

Over the course of the weekend, she rolled up her sleeves, she'd sat down with some of the design people and said, let's bang this out.

I think of them calling up a few different shops, think of something new, that does seem a little bit different.

I do not know if she is really doing it.

I saw they made sure the triangle looked exactly the same between the y and the a. that is cool to do.

I really do not want my ceo of the company really worried about those things.

Most ceos always wants to own the brand.

Let the chief marketing officer do it.

Let them go do it.

She should be focusing in on how do i deliver promises that i need to make in terms of fundamental changes in the business?

I like her, i like what she is doing.

This is a distraction.

Sometimes people interchange the word marketing and advertising.

There is another story about the possibility of a chief marketing officer at the company feeling a little bit of pressure.

This big move to mobile.

Are those separate arms?

Inside the outward bound activity of the company, advertising is part of our getting.

From her revenue side, it is a totally different perspective.

-- from a revenue side, it is a totally different perspective.

Marketing is the ideation of whatever the product or idea or service you are going to have all the way through customer satisfaction.

The chief marketing officer is going to have a say in which they put out the advertising product.

Certainly, the chief marketing officer owns the advertising side.

What does yahoo do with all of the feedback that it has received?

Which is a lot more than what some companies get a cut as they unveiled it in this way.

I think it is cool they try to crowd source a little bit of that.

I am large, moveon.

It is time they move on.

You got your feedback.

Get back to business.

That is what most people need to do.

Jeff, always good to see you.

Are hackers watching you through your webcam?

A government agency thinks so and it is cracking down.

That is next on "bloomberg west ." ? welcome back.

I am emily chang.

You can also catch our early edition at 10:00 pacific.

Web connected baby monitors and smart refrigerators are meant to make our lives easier.

The ftc is cracking down on what webcam maker for lack security measures.

This is the first time the agency is taking action against a company for not ensuring its devices are secure.

What we start to see more federal crackdowns?

For more on that, i want to bring in brian white.

What exactly happened in this case?

This maker of baby monitors and home cameras called trenton dnet was broadcasting its ip signal.

They did not encrypt the credentials.

Some very basic knowledge of how computers work,. how do they steal the credentials?

What are they looking for?

It is analogous on how you gain access where they do not have a password for their home network.

If you have a password on your home network, you are ok?

You are fairly well protected.

You are not totally protected.

They are making it harder.

The idea is to make it harder for someone to cause mischief or harm.

But i have a new baby, you have kids.

I have baby monitors.

Should i be worried?

I would make sure you have your encryption turned on and you have a password on your home network.

You also have a password on your mobile phone.

I would not be too concerned.

But it is something you need to be aware of.

What is suggest is that consumers are going to be more concerned about going forward -- concerned about security going forward.

They wanted to make a point, this was a basic stake, they should have known better.

-- basic mistake, they should have known better.

Other than the creepiness factor of it, what are they actually getting?

Most of them are mischief.

Because it exposed credentials, that is often the same name we use for online tanking accounts.

-- banking accounts.

They may be able to target your bank, gain access to your financial information and do serious harm to you.

Other than using a password, what else can be done?

Should we avoid smart refrigerators and appliances and smart baby monitors?

It gives us more information, more control.

What it also requires is us to be knowledgeable about putting in security.

Making the passwords include some numbers and uppercase letters and doing some security hygiene.

You will lower your risk of to being affected.

-- risk of being affected.

We are fortunate, there are a lot of people who do the basics.

There are a lot of open networks they can target.

What about the makers of these products?

Do they have a responsibility?


Security needs to be a feature and not a bug.

Consumers need to buy security.

We need to pay a premium if we want something that is secure.

Security becomes much more common and security should enable business rather than being a cost of business.

Malware is targeting mobile devices.

It is going to increase.

However, it is not a big issue right now.

We mostly see it coming out of the eastern european countries.

They are focused on financial information.

Interesting stuff.

Scary stuff, to.

Always great to have you here on the show.

Stanford university is investing in its own student startups incubators.

How will the school allen's finding the next big thing and educating its students "bloomberg west?

That is next on "bloomberg west -- students?

That is next on "bloomberg west ." ?

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