Benner on Tech: Obama on Surveillance and the DEA on Facebook

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About…

President Barack Obama used his State of the Union address to reshape the story of his past six years in office – from a cable news-driven narrative of partisan rancor and back-to-back crises to one of an administration fostering policies that generated impressive employment and economic growth.

The president also used the speech to start shifting his legacy on civil liberties and government surveillance, issues that have been hotly debated ever since former government contractor Edward Snowden revealed that the intelligence community was involved in mass surveillance of (oftentimes innocent) U.S. citizens. 

As Americans, we cherish our civil liberties — and we need to uphold that commitment if we want maximum cooperation from other countries and industry in our fight against terrorist networks. So while some have moved on from the debates over our surveillance programs, I haven’t. As promised, our intelligence agencies have worked hard, with the recommendations of privacy advocates, to increase transparency and build more safeguards against potential abuse. And next month, we’ll issue a report on how we’re keeping our promise to keep our country safe while strengthening privacy.

It will be interesting to see just what’s in the report, which comes on the heels of an 85-page report by the National Research Council that says there are no technological alternatives to the National Security Agency’s mass surveillance programs. That report says: “Restricting bulk collection will make intelligence less effective…Whether the gain in privacy is worth the loss is a policy question that the committee does not address.”

I’m not sure what kind of civil liberties legacy Obama wants, but for now his record isn’t great. Numerous reports detail how the administration pushed the Foreign Intelligence Surveillance court to reverse restrictions on the NSA’s use of phone and email data. Critics have also noted that Obama's definition of spying doesn’t include the collection of records about lots of communication and location information and that warrantless electronic surveillance and surveillance programs in general have expanded during his presidency.

Obama’s statement also belies the fact that companies believe that the government is overstepping its bounds when it comes to data collection. Microsoft, for example, is appealing a judge's order to give up customer information stored in a data center in Ireland. The company says that the government’s domestic search warrant for an overseas database lacks jurisdiction.

Maybe the president will use his last two years in office to try to beat back some of the leeway that the U.S. intelligence community has won under his watch?

** Not related per se, but creepy: The Justice Department is paying a woman $134,000 to settle a case that involved the Drug Enforcement Agency using her identity and photos – without her consent – on Facebook to lure in suspected drug dealers, Ars Technica reports.  The fake Facebook profile included semi-naked photos that the DEA obtained from the woman’s phone without her permission.

** Also of interest: Private advertising and marketing companies have been given access to consumer data from Healthcare.gov, the government’s healthcare website, the Associated Press reports. (I’m interested in hearing the explantion for this one.)

Ventureland

Airbnb supporters and detractors descended on City Hall in Manhattan for the New York City Council's first oversight hearing on the home rental company’s impact on housing prices, USA Today reports.

Shazam Entertainment, which has an app that recognizes songs, raised $30 million and is now valued at more than $1 billion, Bloomberg reports.

Pluribus Networks, a networking and virtualization company, says that it raised a $50 million series D round led by Temasek Holdings. 

People and Personnel Moves

Mike Randall, who oversaw revenue growth at Snapchat, has left the messaging company after seven months, Re/code reports. 

Startup L. Jackson, the anonymous Twitter persona with a big Silicon Valley following, gives an interview and TechCrunch has the story.

Ted Livingston, the CEO of Kik, is fighting to unseat Snapchat as the messaging app for the younger generation, according to Bloomberg’s Sarah Frier, who profiled him.

Each morning, Kik Chief Executive Officer Ted Livingston tries to spend an hour in the bath to read and contemplate. But it's not always relaxing, especially when his mind turns to the mobile messaging business, where he has no shortage of competitors.

Companies

Apple…

** CEO Tim Cook has become a Washington D.C. regular as part of a push to make the company more open and forge Beltway relationships before releasing products that could come under government scrutiny, writes my Bloomberg colleague Tim Higgins.

** The company bought music analytics company Musicmetric, the Guardian reports. 

** iPhone sales in Asia are so strong that the company is now challenging Samsung in markets where it’s long dominated, the Wall Street Journal reports.

Facebook…

** The company is trying to show less fake news and hoaxes in News Feeds.

** Mobile users will hit 1 billion by the end of this year, and by 2018 the company should have 1.34 billion mobile users, or 75 percent of its userbase, Business Insider reports.

** Facebook commissioned a study that says that Facebook has a hugely positive effect on the overall economy.  Now the Wall Street Journal’s Reed Albergotti says that economists are questioning that report.

Independent economists said Deloitte and Facebook used questionable assumptions in the report, valuing each Facebook “Like,” and assigning Facebook credit for roughly one-sixth of smartphone sales. “The results are meaningless,” Stanford economist Roger Noll said in an email. “Facebook is an effect, not a cause, of the growth of Internet access and use.”

Google…

** The company reversed course and decided to sign President Obama’s student privacy pledge, the Wall Street Journal reports.

** Billions of people have signed up for Google+, but few people actually use it, reports Business Insider.

IBM…

The company’s stock fell on news that its outlook for 2015 wasn't going to meet expectations, Bloomberg reports.

Netflix…

** Shares jumped more than 16 percent in after-hours trading following the release of the online video company’s fourth quarter earnings report, Bloomberg reports. Netflix beat its subscriber growth forecast and said that by 2017 it will operate profitably in all 200 countries that have broadband Internet.

** Popcorn Time, not HBO or Hulu, freaks out Netflix, reports Bloomberg Businessweek.

Orbitz…

The online travel agent is reaching out to potential buyers, including other Internet companies and private equity firms, Bloomberg reports.

Samsung…

** The Korean handset maker didn’t want to buy BlackBerry, it wanted to partner with BlackBerry, reports Bloomberg.

** The company is also dropping Qualcomm chips in the next Galaxy S in favor of Samsung’s own microprocessors, Bloomberg reports.

Cybercrime Blotter

Cybersecurity companies are poised for hot 2015, according to VC investor Theresia Gouw’s latest editorial for the Wall Street Journal.

Old versions of browsers leave users vulnerable, but the Wall Street Journal reports that only a tenth of the websites loaded on Internet Explorer used the latest version.

Media Files

The White House broke its own embargo, disseminating the text of President Obama’s State of the Union address on Medium before the televised event.

Overstock.com, plans to launch video-on-demand and streaming services to compete with Amazon, according to the Hollywood Reporter.

News and Notes

Drones for construction work. The Wall Street Journal reports that Japanese construction-equipment maker Komatsu might use drones and unmanned bulldozers to do early stage construction work.

An “anti-harassment task force" for the Internet was launched by Zoe Quinn, the video game developer who was at the heart of the #gamergate brouhaha, Ars Technica reports.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Timothy L. O'Brien at tobrien46@bloomberg.net