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Apple insistence on secrecy bites Hyundai



Steve Proehl | Corbis Unreleased | Getty Images

Hyundai confirmed in a short statement last week it was in early talks with Apple about cars. Almost immediately, the Korean auto giant started to backtrack, releasing a subsequent statement that removed all mention of Apple.

Hyundai’s retreat is almost certainly the latest fallout from Apple’s insistence on secrecy and discretion from its suppliers or potential partners. Companies who deal with Apple are held to strict nondisclosure agreements, even if they are public companies and Apple is a major customer.

While nondisclosure agreements are common in high tech, people who work with Apple say it takes confidential information more seriously than competitors. Apple tells partners they can’t mention Apple in public or to the media, according to people familiar with the matter who didn’t want to be identified to avoid risking their relationship with Apple. One person who has worked with Apple described its secrecy requirements as a lot of hoops to jump through.

In at least one case, Apple has threatened to penalize suppliers $50 million for each individual leak, according to a contract that became public as part of a bankruptcy proceeding by supplier GT Advanced Technologies.

Some companies can engage in limited discussions of their business with Apple, especially if Apple has publicly talked about the relationship and approves. One example is Corning, which supplies glass for iPhones. Apple has paid the company at least $450 million since 2017 and has highlighted it in its own press releases as an example of an American manufacturing company it supports.

But its CEO said earlier this year he wasn’t comfortable talking about the relationship until Corning’s new stronger glass was mentioned during the recent iPhone 12 launch livestream.

“I have to tell you that it feels not quite right to use Apple’s name out loud. I still don’t think I’ve ever done that. Inside the company, we have a codename for Apple, we never even say ‘Apple’ inside the company,” Corning CEO Wendell Weeks said on an earnings call in October. “So, if you could see me, I sound like I’m turning a little pink and I am having an anxiety attack, if I read their name out loud.”

Why Apple loves secrecy

Apple’s obsession with secrecy is one of its defining aspects — some Silicon Valley insiders jokingly dub it the “Fruit Company.” In 2011, Apple even sold a shirt at its campus gift shop that said “I visited the Apple campus. But that’s all I’m allowed to say.”

Apple’s secrecy can be tied to its founder, Steve Jobs, who insisted on it. Jobs was a master marketer who perfected the product launch as spectacle, often relying on surprises to keep the show going when discussing new products.

Today, Apple still relies on “surprise and delight” during product launches, which remain a key marketing strategy — Apple held three separate launch livestreams this fall to release new Apple Watches, iPhones and Mac laptops. All three presentations drew millions of viewers, who tuned into YouTube to hear directly from Apple executives about its new products.

Apple considers details about unreleased products to be a “one of its greatest assets.” In Apple’s business conduct policy from October, it says employees should be “very selective” when disclosing Apple business information to vendors or suppliers, and they should only do so after a nondisclosure agreement is in place. The handbook also says suppliers should follow Apple principles such as confidentiality.

“When there is a business need to share confidential information with a supplier, vendor, or other third party, never volunteer more than what is necessary to address the business at hand,” according to the policy. “Any confidential information shared outside Apple should be covered by a non disclosure/confidentiality agreement.”

Double-edged sword

Even with layers of NDAs and a limited ability to publicize a customer win, many suppliers jump at the opportunity to sell to Apple.

Cirrus Logic, a maker of audio chips, said in an SEC filing in March that Apple accounted for 81% of its total sales in fiscal 2020, which were $1.28 billion.

Still, Cirrus executives rarely say Apple’s name, and for years they avoided it entirely. In 2017, an investor presentation included a slide with a variety of logos of their customers. Apple’s logo was nowhere to be found. Instead, the Cirrus slide included a picture of a brown box with the words “#1 CUSTOMER.” Recent investor slide decks simply say that Cirrus Logic supplies the top seven smartphone makers.

“Before we begin the Q&A, I’d also like to note that while we understand this intense interest related to our largest customer, in accordance with our policy, we do not discuss specifics about our business relationship,” Cirrus Logic President John Forsyth said on a conference call with analysts in November, as the company regularly says before discussing its own earnings. A Cirrus spokesperson provided the same statement in response to a question for this article.

Other public companies also use euphemisms when they have to discuss the iPhone maker’s business. Last June, Broadcom CEO Hock Tan tipped that the iPhone 12 would be released later than usual when discussing its wireless revenue projections. However, he didn’t mention Apple — he spoke about “our large North American mobile phone customer,” even after a previous deal with Apple was big enough to merit an SEC filing, albeit with scant details.

In 2014, bankruptcy proceedings gave a peek into how Apple requires secrecy for its suppliers. In 2013, GT Advanced Technologies entered into a deal with Apple to provide raw sapphire balls to make scratch-resistant iPhone screens. GT was unable to manufacture the sapphire in its Apple-owned facility in Arizona, and declared bankruptcy, leaving Apple as a major creditor. 

During bankruptcy proceedings, GT presented a contract labeled confidential that said GT would have to pay Apple $50 million per leak. The contract mentioned three separate confidentiality contracts to which the sapphire maker had agreed. GT also said the terms of its confidentiality agreements were required to be secret.

Another contract said any publicity involving Apple would require written approval. 

Apple settled with GT shortly after the $50 million penalty for leaks was revealed. One condition of the settlement was that GT would keep a “description of its relationship with Apple” private. 

Apple declined to comment for this story.

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Facebook Pauses Ads For Gun Accessories And Military Gear After Complaints From Lawmakers And Employees




Following complaints from Senators and employees, Facebook on Saturday said it was temporarily halting ads for gun accessories and military gear in the US through next week’s inauguration of President-elect Joe Biden.

The move follows a BuzzFeed News story that revealed the world’s largest social network displayed ads for gun holsters, body armor, and other military-related paraphernalia in the News Feeds of people who had engaged with content about the attempted coup at the US Capitol building earlier this month.

“Out of an abundance of caution, we are temporarily banning ads promoting weapons accessories and protective equipment in the U.S. until at least January 22nd,” Facebook spokesperson Liz Bourgeois. “We appreciate our employees, BuzzFeed’s reporting, and policymakers for raising this concern.”

While Facebook already prohibited advertisements for guns, ammunition and weapon enhancements like silencers, the company has still allowed ads for accessories including holsters and attachable flashlights and laser sights. Facebook users and employees noticed an uptick in ads for these products and military gear, including armored vests, on their newsfeeds in the days following a riot at the Capitol that left five people dead.

Ads for tactical gear were also shown to people who followed right-wing extremist pages or groups on the social network. Research from the Tech Transparency Project, a nonprofit industry watchdog group, showed that a Facebook account set up by the organization to follow pages belonging to right-wing extremists and militant organizations was regularly served ads for military gear in between posts casting doubt on the presidential election and praising the assault on the US Capitol.

Developing …

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‘Law unto themselves’: the Australian battle to curb Facebook and Twitter’s power | Australia news




Nationals MP Anne Webster and Labor MP Sharon Claydon are less concerned with why Donald Trump was taken off social media, and more concerned with what platforms such as Facebook are doing to stop online defamation and abuse.

Webster and Claydon are the co-chairs of the Parliamentary Friends of Making Social Media Safe, a group to “highlight the environment of social media and the risks associated” and to make the platforms more accountable. It now boasts more than 50 members thanks partly to Twitter and Facebook’s response to last week’s attack on the US Capitol.

For Webster, it’s personal. After winning a defamation case against a conspiracy theorist who falsely accused her of being “a member of a secretive paedophile network”, she wants Facebook treated as a publisher.

The decision of Twitter and other social media platforms to first remove posts and then suspend Trump’s account prompted outrage among some conservatives, including National MP George Christensen and Liberal MP Craig Kelly.

The outspoken pair both favour changes to stop social media platforms from censoring any lawful content created by their users – a push in the direction of more free speech and less responsibility for content on the part of the platforms.

Webster tells Guardian Australia although she’s glad the Trump controversy and the Chinese foreign ministry tweet accusing Australia of war crimes in Afghanistan had “put fire under the debate” there is now a broader discussion about the regulation of social media to be had.

Webster says social media companies “are a law unto themselves, largely”. Her defamation case “cost me dearly, both financially and emotionally” and Webster said most aggrieved people are not able to afford to fight defamatory posts in court.

The legal position on social media defamation is unclear. University of Sydney professor David Rolph, a defamation law expert, says that “in principle” the social media companies can be liable.

Just as media companies were held liable for comments on their Facebook page in the Dylan Voller case because they were “responsible for everything that flows” from having setting up a public page, “that analysis might extend to the social media platform itself”, Rolph says.

He says there are also “problems of jurisdiction and enforcement” in taking on overseas based companies, so plaintiffs rarely go after the internet giants, and a possible immunity in the Broadcasting Services Act if social media can argue that they are an “internet content host”.

Webster says in her case Facebook’s handling was “appalling – it took months” and was only prompted by her taking legal action.

“Freedom of speech must be valued but it shouldn’t give people the right to incite a riot or lie about people.

“Social media companies have profited from online conversations but there are rights and responsibilities … If they’re not held responsible the number of falsehoods will increase at the rate of knots.”

Nationals MP Anne Webster won a defamation case against a conspiracy theorist who falsely accused her of being ‘a member of a secretive paedophile network’.
Nationals MP Anne Webster won a defamation case against a conspiracy theorist who falsely accused her of being ‘a member of a secretive paedophile network’. Photograph: Mike Bowers/The Guardian

Mia Garlick, Facebook’s director of policy in Australia and New Zealand, has told a parliamentary committee the company did geo-block some posts from Webster’s accuser and the account was removed after repeated breaches of community standards. She blamed “additional legal complexities in that case” for the delay.

Claydon got involved due to her constituents’ experiences of “online harassment, posting intimate photos, cyber-stalking, and of women who were found by family violence perpetrators through social media platforms”.

“I had a growing interest because there were posts and pages that allowed the abuse of women – and when people complained they fell into a deep dark void somewhere, and the complaints didn’t really go anywhere.”

According to Claydon, users agree not to peddle hate speech, incite violence, or deliberately spread dangerous misinformation – so the platforms are not doing anything wrong by removing users who breach the terms, such as Trump.

For Claydon, the de-platforming of Trump raises the question “why it took four years when he’s clearly in breach of their terms” – and the fact social media platforms have found courage only on the eve of a new presidency shows the limits of self-regulation.

“They regard themselves as big global entities, and are not particularly accountable to anyone,” she says.

According to the e-safety commissioner, 14% of Australians have faced online hate speech. Claydon wants to build cross-party support to prevent social media becoming “a dangerous weapon for half our citizens”, rather than “let those with the biggest mouths rush out and determine the shape” of the reform conversation.

Despite calls from Christensen to swing back in the direction of free speech, creating a safer space is also the direction the government is heading in.

In December, the communications minister, Paul Fletcher, released a draft online safety bill proposing to give the e-safety commissioner powers to order the take-down of harmful content.

The e-safety commissioner, Julie Inman Grant, has said the bill would ensure moderation of social media is applied “fairly and consistently” but does not address concerns from some in the Coalition about de-platforming.

The legislation would be the first of its kind to tackle not just illegal content “but also serious online harms, including image-based abuse, youth cyberbullying and … serious adult cyber-abuse with the intent to harm”.

There is also a voluntary code on disinformation, to be devised by the social media giants and enforced by the Australian Communications and Media Authority, expected to be finalised by mid-year.

While senior Coalition figures including the acting prime minister, Michael McCormack and the deputy Liberal leader, Josh Frydenberg, expressed disquiet at Trump’s removal, there were no suggestions the government would change course to accommodate Christensen’s call to abolish community standards in favour of anything but unlawful speech goes.

Fletcher has signalled he is cold on the idea of going beyond the existing package, arguing that it already creates “a public regulatory framework within which decisions about removing content are made by social media platforms (and, if necessary, can be overridden by decisions of government)”.

One common strand in reform calls is that participants want to see greater transparency around decisions that are made to block posts or remove users.

Labor MP Sharon Claydon says the de-platforming of Donald Trump only on the eve of a new presidency shows the limits of self-regulation.
Labor MP Sharon Claydon says the de-platforming of Donald Trump only on the eve of a new presidency shows the limits of self-regulation. Photograph: Andre M Chang/ZUMA Wire/REX/Shutterstock

The Australian Competition and Consumer Commission chairman, Rod Sims, who led the digital platforms review, has said given the degree of control they exercise on what we see and read “we definitely need the government to get to grips with this; we can’t just leave it with the digital platforms”.

The e-safety commissioner says the platforms “aren’t always transparent in how they enforce and apply these policies and it’s not always clear why they may remove one piece of content and not another”.

Transparency would be improved by the online safety bill’s basic online safety expectations, which would “set out the expectation on platforms to reflect community standards, as well as fairly and consistently implementing appropriate reporting and moderation on their sites”, she tells Guardian Australia.

“This could include, for example, the rules that platforms currently apply to ensuring the safety of their users online, including from threats of violence.”

Liberal MP Trent Zimmerman supported the platforms’ decision to remove Trump, who he accused of “stoking the flames” of a threat to the peaceful transition of power in the US.

Yet the episode demonstrated the “inconsistent standards being applied” as Trump was removed while “many authoritarian leaders remain able to use these platforms for their propaganda”.

“We need clear, transparent rules. And it would be helpful to clarify what avenues there are to seek explanation or appeal those decisions.”

Despite unease at the highest levels of the Australian government about de-platforming, the prevailing mood is still for more – not less – regulation.

For those such as Webster or Claydon’s constituents, basic enforcement of existing standards would be an improvement.

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How Parler deplatforming shows power of Amazon, cloud providers




Andy Jassy, CEO of Amazon Web Services.


Getting kicked off Amazon Web Services is rare, but it has enormous consequences.

It happened this week, when Amazon dropped Parler, a social network that gained traction from conservatives after Twitter banned President Donald Trump and housed content that encouraged violence. Parler filed suit against Amazon in federal district court in an attempt to stop Amazon from suspending Parler’s account, and Amazon pushed back, requesting that the court deny Parler’s motion.

The incident demonstrates a type of power that Amazon wields almost uniquely because so many companies rely on it to deliver computing and data storage. Amazon controlled 45% of the cloud infrastructure in 2019, more than any other company, according to estimates from technology research company Gartner. The app survived without being listed in Apple and Google’s app stores, but getting sent away from Amazon’s cloud has left Parler absent from the internet for days.

Parler’s engineering team had built software that drew on computing resources from Amazon Web Services, and the company had been in talks with Amazon about adopting proprietary AWS database and artificial intelligence services, the company said in a district court filing on Wednesday.

It would take time to figure out how to perform similar functions on Parler’s own servers or a cloud other than AWS. And in the case of Parler, time is critical, because it came as the service was gaining attention and new users following Twitter’s Trump ban.

Parler’s engineers could learn to use other computing infrastructure, or the company could hire developers who already have that knowledge. But because no cloud provider is as popular as Amazon, people skilled in, say, Oracle’s cloud aren’t as as easy to find as those who know how to build on AWS.

The warnings were there

The swiftness with which Amazon acted shouldn’t come as a shock. Companies have been disclosing details about their deals with Amazon that warn of these kinds of sudden discontinuations for years.

In 2010, DNA sequencing company Complete Genomics said that “an interruption of services by Amazon Web Services, on whom we rely to deliver finished genomic data to our customers, would result in our customers not receiving their data on time.”

Gaming company Zynga warned about how its AWS foundation could quickly vanish when it filed the prospectus for its initial public offering in 2011. At the time, AWS hosted half of the traffic for Zynga’s games, such as FarmVille and Words with Friends, the company said.

“AWS may terminate the agreement without cause by providing 180 days prior written notice, and may terminate the agreement with 30 days prior written notice for cause, including any material default or breach of the agreement by us that we do not cure within the 30-day period,” Zynga said.

AWS can even terminate or suspend its agreement with a customer immediately under certain circumstances as it did in 2010 with Wikileaks, pointing to violations of AWS’ terms of service.

Parler started using AWS in 2018, long after the Wikileaks incident and the first corporate disclosures about the possibility of cloud interruptions.

When AWS told Parler it planned to suspend Parler’s AWS account, it said Parler had violated the terms repeatedly, including by not owning or controlling the rights to its content.

Over the course of several weeks, AWS alerted Parler to instances of user content that encouraged violence, Amazon said in a court filing. More of that content surfaced after protesters stormed the Capitol building in Washington on Jan. 6, interrupting Congress’ confirmation of the Electoral College results from the 2020 presidential election. AWS conveyed that Parler wasn’t doing enough to speedily remove that sort of information from its social network.

Parler could have protected itself more. Large AWS customers can sign up for more extensive agreements, which allow more customers time to get into compliance if they wind up breaking rules.

Gartner analyst Lydia Leong spelled out this difference in a blog post: “Thirty days is a common timeframe specified as a cure period in contracts (and is the cure period in the AWS standard Enterprise Agreement), but cloud provider click-through agreements (such as the AWS Customer Agreement) do not normally have a cure period, allowing immediate action to be taken at the provider’s discretion,” she wrote.

Other cloud providers have their own terms their customers must follow. AWS now has millions of customers, though, and it holds more of the cloud infrastructure market than any other provider. As a result, many organizations could be exposed to the sort of treatment Parler received, rare as it is, if they don’t behave in accordance with Amazon’s standards.

Parler recognized the drawbacks of being beholden to a cloud provider, but ultimately, the flexibility clouds offer was too appealing to ignore. “I’m personally very anti-cloud and anti-centralization, though AWS has its place for high-burst traffic,” Alexander Blair, Parler’s technology chief, wrote in a post on the service.

Parler and Amazon did not immediately respond to requests for comment.

WATCH: Apple pulls Parler from App Store amid crackdown on violent posts

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