Microsoft’s Killswitch Incoming

Responding to mounting  pressure, Google and Microsoft will follow Apple in adding an anti-theft “kill switch” to their smartphone operating systems.

The commitment comes at a time when new data shows a dramatic drop in theft of Apple iPhones and iPads after the September 2013 introduction of iOS 7, which included a kill-switch function that allows stolen devices to be remotely locked and deleted so they become useless.

In New York, iPhone theft was down 19 percent in the first five months of this year, which is almost double the 10 percent drop in overall robberies seen in the city. Over the same period, thefts of Samsung devices — which did not include a kill switch until one was introduced on Verizon-only models in April — rose by over 40 percent.

In San Francisco, robberies of iPhones were 38 percent lower in the six months after the iOS 7 introduction versus the six months before, while in London thefts over the same period were down by 24 percent. In both cities, robberies of Samsung devices increased.

“These statistics validate what we always knew to be true, that a technological solution has the potential to end the victimization of wireless consumers everywhere,” San Francisco District Attorney George Gascon told IDG News Service.

Gascon and New York State Attorney General Eric Schneiderman have been leading a push to get smartphone vendors and telecom carriers to include kill switches in their products as a way to curb phone theft.

The joint work had early success with Apple but other carriers and phone makers dragged their feet. However, resistance to the idea appears to be dropping as several bills that mandate kill switches make their way through state legislatures and the U.S. Congress.

The bills demand a function that would enable a phone owner to remotely delete and disable a phone if stolen. The function could be disabled by consumers before a theft takes place if desired, but crucially new handsets would be supplied with it switched on by default.

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Is Qualcomm In Trouble?

Qualcomm’s activities in China may lead to regulatory penalties for the chip vendor, this time from the U.S. Securities and Exchange Commission over bribery allegations.

The company is currently facing an anti-monopoly probe from Chinese authorities for allegedly overcharging clients. Qualcomm  has also said that the SEC may also consider penalizing the company, as part of an anti-corruption investigation.

The SEC’s Los Angeles Regional Office has made a preliminary decision to recommend that the SEC take action against Qualcomm for violating anti-bribery controls, the company said in its second quarter report. The accusations involve Qualcomm offering benefits to “individuals associated with Chinese state-owned companies or agencies,” the report added.

Both the SEC and the U.S. Department of Justice have been probing the company over alleged violations of the nation’s Foreign Corrupt Practices Act.

In cooperation with those official investigations, Qualcomm said it’s found instances of preferential hiring, and giving gifts and other benefits to “several individuals” with China’s state-owned companies. The gifts and benefits amounted to less than US$250,000 in value.

If the SEC takes action against Qualcomm, penalties could include giving up profits, facing injunctions, and other monetary penalties, the company said. Earlier this month, Qualcomm filed a submission with the U.S. regulator, countering any claims of wrongdoing.

Qualcomm is facing the investigations at a time when China is increasingly become a bigger part of its business. The nation is the world’s largest smartphone market, and more Chinese device manufacturers are expanding globally.

Last year, however, Chinese regulators began investigating Qualcomm due to complaints from industry groups. The company was allegedly abusing its market position and charging higher fees for its patent licensing business. In November, Chinese authorities conducted two surprise raids of Qualcomm offices in China for documents.

Chinese regulators could decide to penalize Qualcomm by confiscating financial gains made, and even imposing a fine of 1 to 10 percent on its revenues for the prior year, the company said in its quarterly report.

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Microsoft Issues New Policies

Microsoft Corp, under fire for accessing an employee’s private Hotmail account to prove he was illegally passing computer code to a blogger, has said it will now refer all suspicious activity on its email services to law enforcement.

The decision, announced by head lawyer Brad Smith on Friday, reverses Microsoft’s initial reaction to complaints last week, when it laid out a plan to refer such cases to an unidentified former federal judge, and proceed to open a suspect email account only if that person saw evidence to justify it.

“Effective immediately, if we receive information indicating that someone is using our services to traffic in stolen intellectual or physical property from Microsoft, we will not inspect a customer’s private content ourselves,” said Smith, in a blog post on the software company’s website. “Instead, we will refer the matter to law enforcement if further action is required.”

Microsoft – which has recently cast itself as a defender of customer privacy – was harshly criticized last week by civil liberties groups after court documents made public in the prosecution of Alex Kibkalo in Seattle federal court for leaking trade secrets showed that Microsoft had accessed the defendant’s email account before taking the matter to legal authorities.

The company said last week its actions were within its legal rights under the terms of use of its email services, but has now acknowledged that its actions raised concerns about customer privacy.

The issue is poignant for Microsoft, which routinely criticizes Google Inc for serving up ads based on the content of users’ Gmail correspondence.

It has also been campaigning for more transparency in the legal process through which U.S. intelligence agencies can get access to email accounts following the revelations of former National Security Agency contractor Edward Snowden.

“While our own search was clearly within our legal rights, it seems apparent that we should apply a similar principle and rely on formal legal processes for our own investigations involving people who we suspect are stealing from us,” said Smith in his blog. “Therefore, rather than inspect the private content of customers ourselves in these instances, we should turn to law enforcement and their legal procedures.”

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AMD Buys Mobile Patents

China’s Lenovo is acquiring patents related to 3G and 4G technologies from U.S.-based Unwired Planet for $100 million, as the company sets about expanding with its proposed Motorola Mobility acquisition.

The 21 patent families that Lenovo is purchasing from Unwired Planet will help the Chinese company grow its smartphone and mobile business in new markets, it said Thursday.

In addition, Unwired Planet is licensing its patent portfolio to Lenovo for an unspecified number of years. The Nevada-based company develops mobile technologies in use by carriers including AT&T and Sprint. After its deal with Lenovo closes, Unwired Planet said it will have about 2,500 issued and pending international patents in its portfolio.

Although Lenovo is best known as a PC maker, the company is aiming to becoming a major vendor of mobile phones. Already, in its home market of China, Lenovo ranks as one of the biggest smartphone vendors, and has dozens of different models on the local market.

Lenovo’s mobile phone business is set to grow even larger. In January, the company announced it planned to buy Motorola Mobility from Google for $2.9 billion.

With the proposed acquisition, Lenovo’s handset business will get a foothold in the North American market. The company plans to keep the Motorola business intact, and even use the business to sell phones in its home market of China.

The Motorola deal will also help Lenovo shield itself from patent-related lawsuits that have been used to try to stymie the businesses of other handset makers. By buying Motorola, Lenovo will take ownership of more than 2,000 patent assets and also gain access to Google’s own patent portfolio.

Lenovo’s deal with Unwired Planet is expected to close in 30 days.

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Target Makes Information Security Changes

Target Corp announced an overhaul of its information security processes and the departure of its chief information officer as the retailer tries to re-gain customers and investors after a massive data breach late last year.

CIO Beth Jacob is the first high-level executive to leave the company following the breach, which led to the theft of about 40 million credit and debit card records and 70 million other records of customer details.

Jacob, who comes from a sales background and has been CIO since 2008, will be replaced by an external hire, according to sources at Target.

“It’s a decision that should have been made by the CEO on January 1, not through the resignation of an employee that overlooked critical weakness in the operating model,” Belus Capital Advisors CEO Brian Sozzi said.

The breach at Target was the second largest at a U.S. retailer, after the theft of more than 90 million credit cards over about 18 months was uncovered in 2007 at TJX Cos Inc, operator of the T.J. Maxx and Marshalls chains.

Hacking has become a major concern for retailers in the United States. In the latest reported breach, beauty products retailer and distributor Sally Beauty Holdings Inc said on Wednesday its network had been hacked but no card or customer data appeared to have been stolen.

Target Chief Executive Gregg Steinhafel said the company would elevate the role of chief information security officer as part of its plan to tighten its security.

The company will also look externally to fill that position as well as the new position of chief compliance officer.

Steinhafel said Target would be advised by security consultant Promontory Financial Group as it evaluates its technology, structure, processes and talent.

“I believe this is definitely a measure in restoring faith and really showing that they are taking the breach seriously,” Heather Bearfield, who runs the cybersecurity practice for accounting firm Marcum LLP, told Reuters.

Target, the third-largest U.S. retailer, said last week customer traffic had started to improve this year after falling significantly toward the end of the holiday shopping season when news of the cyber attack spooked shoppers.

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Twitter Makes A Deal With IBM

Twitter Inc has purchased 900 patents and inked a cross-licensing agreement with IBM, making peace with Big Blue and bulking up on its intellectual property portfolio as it takes on larger rivals Google and Facebook.

The agreement announced on Friday comes after International Business Machines Corp accused Twitter in November – on the eve of its high-profile initial public offering – of infringing three of its patents. At the time, it underscored how few patents the six-year-old social media company possessed in relation to more established rivals.

A cross-licensing agreement will help safeguard Twitter against similar claims in the future.

IBM is one of the industry’s largest research spenders and stockpilers of intellectual property, a consistent leader in U.S. patent filings and the owner of some 41,000 patents.

Twitter is following on the heels of Facebook, which itself faced similar claims before its own 2012 IPO. The world’s largest social network has since gone on a patent-buying spree, acquiring intellectual property from tech bellwethers, including Microsoft Corp and IBM.

“This acquisition of patents from IBM and licensing agreement provide us with greater intellectual property protection and give us freedom of action to innovate on behalf of all those who use our service,” Ben Lee, Twitter’s legal director, said in a joint statement with IBM on Friday.

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NSA Developing System To Crack Encryption

The U.S. National Security Agency is working to develop a computer that could ultimately break most encryption programs, whether they are used to protect other nations’ spying programs or consumers’ bank accounts, according to a report by the Washington Post.

The report, which the newspaper said was based on documents leaked by former NSA contractor Edward Snowden, comes amid continuing controversy over the spy agency’s program to collect the phone records Internet communications of private citizens.

In its report, The Washington Post said that the NSA is trying to develop a so-called “quantum computer” that could be used to break encryption codes used to cloak sensitive information.

Such a computer, which would be able to perform several calculations at once instead of in a single stream, could take years to develop, the newspaper said. In addition to being able to break through the cloaks meant to protect private data, such a computer would have implications for such fields as medicine, the newspaper reported.

The research is part of a $79.7 million research program called “Penetrating Hard Targets,” the newspaper said. Other, non-governmental researchers are also trying to develop quantum computers, and it is not clear whether the NSA program lags the private efforts or is ahead of them.

Snowden, living in Russia with temporary asylum, last year leaked documents he collected while working for the NSA. The United States has charged him with espionage, and more charges could follow.

His disclosures have sparked a debate over how much leeway to give the U.S. government in gathering information to protect Americans from terrorism, and have prompted numerous lawsuits.

Last week, a federal judge ruled that the NSA’s collection of phone call records is lawful, while another judge earlier in December questioned the program’s constitutionality. The issue is now more likely to move before the U.S. Supreme Court.

On Thursday, the editorial board of the New York Times said that the U.S. government should grant Snowden clemency or a plea bargain, given the public value of revelations over the National Security Agency’s vast spying programs.

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Google Snubs Privacy

Search giant Google has told the British government it is immune to prosecution on privacy issues and it can do what it like. The US Company is accused of illegally snooping on its British customers by bypassing privacy settings on Apple devices, such as iPads, to track their browsing history.

A group of British people took Google to court but the search engine is trying to get the case thrown out. Its argument is that it is not subject to British privacy law because it is based in California. This is the second time that Google has tried to avoid British law by pretending to operate in another country. It has come under fire for failing to pay tax in the UK

Nick Pickles, director of Big Brother Watch, said: ‘It is deeply worrying for a company with millions of British users to be brazenly saying they do not regard themselves bound by UK law. Solicitor Dan Tench, of law firm Olswang, said this was another instance of Google being here when it suits them and not being here when it doesn’t. Ironically when the US ordered Google to stop what it was doing, it forced the search engine to pay a $22.5million to regulators.

There are some indications that Google may not get its way. In July the Information Commissioner’s Office told Google its privacy rules breached UK law so it will be very hard for it to stand up in court and say it didn’t.

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Google Fights NSL Over Data Privacy

Google is fighting a National Security Letter (NSL) issued by the US government, with the Electronic Frontier Foundation (EFF) acknowledging it is one of the first firms to do so.

Google took the unusual step last month of revealing, albeit in vague terms, the number of NSLs it received from the US government. At the time the company said it was working with the authorities to improve transparency around the subject, but according to court filings it is also fighting against handing over users’ data.

In March, Google filed a petition to set aside a legal process. Kevan Fornasero, a lawyer for Google said in the filing that petitions “filed under Section 3511 of Title 18 to set aside legal process issued under Section 2709 of Title 18 must be filed under seal because Section 2709 prohibits disclosure of the legal process”.

Fornasero’s reference to Section 2709 refers to the ability of the FBI to issue NSLs and force the handover of user data. According to the EFF, Google is one of the first communications companies to fight an NSL, but because Section 2709 doesn’t allow firms to disclose the legal process, few people can be certain that others haven’t tried to stand up to the US government.

Matt Zimmerman, a lawyer for the EFF said, “The people who are in the best position to challenge the practice are people like Google. So far no one has really stood up for their users’ among large Internet service providers.”

Google has tried in recent years to provide users with some information on how it deals with government agencies’ requests for user data. If the firm can succeed in its fight against NSLs then it could open the floodgates for others to stand up against a law that some see to be nothing more than a snooper’s charter.

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FTC Defends Google Decision

The FTC defended its decision to let Google carry on with its anti-trust-like antics, while other regulations in civilized nations are planning to put the boot in.

The US Federal Trade Commission reached a settlement with Google which really did little to stop the company using its dominance to push down search results from its competitors. The move attracted considerable criticism because it followed a letter from US senators to go easy on the search engine because it was good for US jobs.  We guess they mean the jobs of US senators who Google paid campaign contributions.

Google promised to change the ways it presents some search results and runs search advertising, but was exonerated of the results bias claims. Rivals including Yelp and Microsoft claimed that Google had favored its own product results over those of its competitors and called for the anti-trust case. What makes the case look more suspect is that the EU is less frightened of actually fining Google or forcing it to behave. Indeed indications from Brussels are that it has not only agreed with the rival’s complaints but will do something about it if Google does not pull finger.

But FTC chairman Jon Leibowitz told Talking Points Memo that the agency’s decision was legally sound and would be beneficial to competition and consumers. Under facts we found, all five of us, from liberal Democrat to conservative Republican, agreed that the evidence militated against an anti-trust case,” Leibowitz told TPM.

The fact that we managed to have both Google and Google’s rivals unhappy, in an odd way that’s maybe unique to Washington, that puts us in the right place substantively, he claimed. When asked if Google’s $25 million lobbying budget for the duration FTC’s investigation helped, he said that lobbying makes the companies feel good and lobbyists feel good.

“At the end of the day, whether you want to say lobbying had any influence, or cancelled itself out because there was lobbying on both sides, if you’re going to do what lobbyists want you to do in a regulatory agency, you’re not doing your job.”

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