Tag: watchdog

ZTE pays $900 million fine


Chinese telecom equipment maker ZTE has agreed to plead guilty and pay up in a US sanctions case, drawing a line under a damaging scandal that had threatened its cut off its supply chain.

While the fine was larger than expected, ZTE, also a major smartphone maker, reported robust underlying earnings for 2016 and was upbeat in estimates for the first quarter.

A five-year investigation found ZTE conspired to evade US embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran.

It also made 283 shipments of telecommunications equipment to North Korea.

US Attorney General Jeff Sessions said in a statement that ZTE Corporation not only violated export controls that keep sensitive American technology out of the hands of hostile regimes like Iran’s, they lied … about their illegal acts,”

But ZTE relies on US suppliers for 25 percent to 30 percent of its components, many of which are key to its goods. It buys about $2.6 billion worth of components a year from US firms. This includes  Qualcomm, Microsoft and Intel.

ZTE Chief Executive Zhao Xianming said in a statement that his outfit acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company.

The company agreed to a seven-year suspended denial of export privileges, which could be activated if there are further violations, as well as three years of probation, a compliance and ethics program, and a corporate monitor.

It also agreed to an additional penalty of $300 million that will be suspended during the seven-year term on the condition the company complies with requirements in the agreement.

ZTE has replaced executives allegedly involved, including naming a new president.

The company said it slid to a preliminary net loss of $342 million in 2016, its first loss in four years, due to the settlement.

Google tells French watchdog “va te faire foutre”

poodleA French privacy watchdog, the CNIL, has growled at the search outfit Google saying that Europe’s right to be forgotten needs to be part of the US website.

The move means that either Google starts censoring its US site or it will face French fines.

Google is refusing to down it, after all it is a good bet that after much shouting, arm waving, mention of US cooking, the French will surrender.

CNIL, in June ordered the search engine group to de-list on request search results appearing under a person’s name from all its websites, including Google.com.

The European Court of Justice insisted that European residents were permitted to ask search engines to delete results that turn up under a search for their name when they are out-of-date, irrelevant or inflammatory.

Google complied with the ruling and has since received more than a quarter of a million removal requests, according to its transparency report. It has accepted about 41 percent of them.

However, it has limited removals to its European websites, such as Google.de in Germany or Google.fr in France, arguing that over 95 percent of searches made from Europe are done through local versions of Google.

Google said no country should have the authority to control what content someone in a second country can access. Well other than the US of course, it controls what it likes.

Peter Fleischer, Google’s global privacy counsel said that Google had worked hard to fulfil the right to be forgotten ruling thoughtfully and comprehensively in Europe, and we’ll continue to do so.

“But as a matter of principle, therefore, we respectfully disagree with the CNIL’s assertion of global authority on this issue and we have asked the CNIL to withdraw its formal notice.”

The CNIL said it would look into Google’s appeal and decide whether to surrender in two months.

“We have taken note of Google’s arguments which are mostly political. The CNIL, on the other hand, has relied on a strictly legal reasoning,” said a spokeswoman.

Watchdog actually growls at US comms companies

angry-puppyUS comms companies are in a tizzy after it is looking like the watchdog put in charge of monitoring them is actually doing its job.

For a while now the comms companies had a wizard wheeze of charging customers twice for the same service by insisting that if they stream content they will have to pay more. In the good old days they would present the plan to the FCC which would promptly roll over and do what it was told. This time the comm companies are collectively fleeing from the building with a figurative chunk of their pants missing.

On May 1st, a group of organisations including AT&T, CenturyLink, USTelecom, and wireless trade association CTIA petitioned for the FCC to delay the implementation of its Open Internet order, which would reclassifying broadband as a service. They claim that it is against the public interest because customers are keen to play more for no marked improvement of service and love to be throttled for not paying up.

Normally that would have done the trick and the FCC would have fallen into line.

But the FCC denied the petition, issuing an order that states its classification of broadband internet as a telecommunications service “falls well within the Commission’s statutory authority, is consistent with Supreme Court precedent, and fully complies with the Administrative Procedure Act.”

The petition had argued specifically against the reclassification, stating that it would lead to “unrecoverable losses” for broadband providers, and “significant costs” that would hurt people.

To be fair, the organisations involved did not complain about the three rules that stop providers from blocking legal content, throttling subscribers, and from offering paid prioritisation. What they wanted was to stop the idea of the internet being seen as a service.

FCC head Tom Wheeler is sure the Open Internet order will get through, bringing in a new and fairer set of rules for the internet, but we expect a few more problems to come.

Chinese watchdog furious at Google snub

fortuneA Chinese Internet regulator is furious that Google will no longer recognize its certificates of trust, which could stop Chrome browser users accessing sites approved by the authority.

Google said on its official security blog it would no longer recognise the China Internet Network Information Center (CNNIC) certificate authorities, after a joint investigation between the company and CNNIC into a potential security lapse last month.

Google’s Chrome users may get a warning when attempting to visit sites certified by CNNICCNNIC, which plays a central role in administering China’s internet by allocating and certifying IP addresses and web domain names, urged Google to consider user rights and interests.

“The decision that Google has made is unacceptable and unintelligible,” the agency said in a statement on its website.

CNNIC’s certificates came under scrutiny after an official Google blog post said the Chinese agency had allowed Cairo-based MCS Holdings to issue unauthorised certificates for various Google domains.

That rendered connections between users and those websites vulnerable to ‘man-in-the-middle’ hacking attacks, Google said.

Microsoft and Mozilla also removed trust of those unauthorized certificates last week, following Google’s post.

“While neither we nor CNNIC believe any further unauthorized digital certificates have been issued, nor do we believe the misissued certificates were used outside the limited scope of MCS Holdings’ test network, CNNIC will be working to prevent any future incidents,” Google said on Wednesday.

CNNIC was welcome to reapply for recognition “once suitable technical and procedural controls are in place,” and CNNIC’s existing certificates would be trusted for a limited time through a whitelist.

MCS Holdings said in a statement on its website last week that the security lapse was the result of human error following testing of certificates issued to it by CNNIC, which was meant to take place in a controlled environment.


US State Department wasted $630,000 on Facebook 'likes'

The cash-strapped US State Department wasted $630,000 to get more Facebook “likes” in a desperate attempt to buy fans on social media.

The department’s Bureau of International Information Programs spent the money to increase its “likes” count between 2011 and March 2013.

This sort of spending has fallen foul of the government’s auditor, the inspector general, who thought the whole idea was ridiculous.

He pointed out that advertising campaigns were ‘buying fans’ who may have once clicked on an ad or ‘liked’ a photo but have no real interest in the topic and have never engaged further.

The spending increased the bureau’s English-language Facebook page likes from 100,000 to more than 2 million and to 450,000 on Facebook’s foreign-language pages.

But the inspector general said that the effort failed to reach the bureau’s target audience, which is largely older and more influential than the people liking its pages.

Less than two percent of fans actually engage with the pages by liking, sharing or commenting.

Since September 2012 Facebook also changed its approach to users’ news feeds, and the expensive fan campaigns became much less valuable.

“The bureau now must constantly pay for sponsored ads to keep its content visible even to people who have already liked its pages,” the IG wrote.

Currently the bureau lacks its own social media strategy, but various State Department bureaus have more than 150 social media accounts that are uncoordinated and often overlap, according to the IG.

So basically it appears that a government department decided to throw money at the problem without much in the way of understanding.

EFF growls at DRM in HTML 5

The Electronic Frontier Foundation (EFF) watchdog has formally growled at the inclusion of digital rights management (DRM) in HTML5.

The activist group argued that a draft proposal from the World Wide Web Consortium (W3C) could stymie web innovation and block access to content for people across the globe.

The W3C’s HTML working group is creating a technical standard for HTML5, an upcoming revision to the computer language that creates web pages and otherwise displays content online.

The working group has accepted a draft that includes discussion of Encrypted Media Extensions (EME), which will hard-wire the requirements of DRM vendors into the HTML standard.

EFF international director Danny O’Brien said that the proposal stands apart from all other aspects of HTML standardisation because it defines a new ‘black box’ for the entertainment industry. This black box is fenced off from control by the browser and end-user.

“While this plan might soothe Hollywood content providers who are scared of technological evolution, it could also create serious impediments to interoperability and access for all,” O’Brien said.

DRM always fails to protect media while dragging in legal mandates that throttle free speech. It also ends up locking down technology, and violating property rights by seizing control of personal computers from their owners.

Accepting EME could lead to other rights holders demanding the same privileges as Hollywood, leading to a web where images and pages cannot be saved or searched and ads cannot be blocked, O’Brien said.

EFF filed this objection as its first act as a full member of W3C. EFF’s goal is to broaden the discussion of the consequences of accepting DRM-based proposals like EME for the future of the web.

O’Brien said that the W3C needs to develop a policy regarding DRM and similar proposals, or risk having its own work and the future of the web become buried in the demands of businesses that would rather it never existed in the first place. 

EU watchdog snuffles around Apple distribution deals

EU watchdogs are snuffling around Apple’s iPhone distribution deals.

Anti-trust regulators are concerned about allegations that Apple may not have won such a sizable chunk of smartphone market with its rounded rectangle design after all.

iPhone distribution deals with mobile telecoms operators were aimed at shutting out rival smartphones makers, it is alleged.

A nine-page questionnaire sent to mobile telecoms companies last week and obtained by Reuters suggests a stiff reaction from the European Commission, which says such behaviour may breach EU antitrust rules.

The questionnaire asked about handset subsidies and marketing for outfits which carried Apple’s smartphones and tablets.

Such surveys are a typical procedure in antitrust cases which helps the Commission determine whether to open a case against companies or reject complaints.

It is not clear what these agreements actually were, but the Commission thinks that they might have resulted in other smartphone manufacturers being shut out from the market.

The questionnaire asks if Apple obliged its partners to buy a minimum volume of iPhones, provide preferential treatment for marketing iPhones, set a certain level of subsidies and ensure Apple receives the same or better terms given to rivals.

Regulators were particularly interested to find out if Apple restricted the companies from using the iPhone 5 in their 4G/LTE networks. 

Microsoft finds a niche among the price conscious

While software giant Microsoft has been touting its software at the top end of smartphone land, it is actually Steve Ballmers’ considerable bottom end where the dosh is likely to be made.

The new Nokia Lumia 521 is a much lower-priced smartphone launching with Windows on board, and is being seen as Microsoft’s boldest move to win mass market share.

The new model will go on sale at Walmart at an unsubsidised price under $150. This is good value for a phone running up-to-date software without a long-term contract.

Terry Myerson, head of the Windows Phone unit at Microsoft’s campus near Seattle, told Reuters that it was an opportunity for it to offer a very high quality device in the mainstream.

It is starting to look like the Vole is right. The Nokia Lumia 521 went on sale on the Home Shopping Network (HSN) last week, where it has already sold out.

The 4G phone which we know across the pond as the Nokia 520 is a mid-range device with some high-end features, such as a four-inch touch screen, five megapixel camera and high-definition video display.

What is surprising is that Android, which is open source, is supposed to be a lot cheaper for the likes of Samsung to put in the shops. Microsoft phones with their Vole Tax should be much more expensive.

So far Microsoft has done better overseas with its phones. It has 20 percent of the market in Mexico and Poland, and almost seven percent in Britain.

Myerson said that outside the US, Microsoft was doing better because there was not the influence of the carriers such as AT&T and Verizon Wireless.

US phone retailers pay heavy up-front subsidies from AT&T and Verizon, in return for long-term service contracts, which mean that mean US customers can afford the most expensive hardware from Apple and Samsung. This has made it hard for Microsoft to get its foot in the door.

Myerson says Microsoft has to differentiate on more than just price and introduce some “killer hardware” to use Microsoft’s Office and Xbox products to turn the phone into a work tool or advanced toy. 

Watchdog snarls at Activision

A key watchdog has bitten the rump of the boss of Activision claiming that his fat cat salary is taking the Michael.

Activision is doing rather well but its supreme Dalek Bobby Kotick appears to be making more cash than seems reasonable. According to Bloomberg his total cash-and-prizes compensation jumped from $8.1 million in 2011 to $64.9 million in 2012.

In terms of CEOs he is the second-highest paid CEO among publicly traded US companies and given there is a lot of competition for the top slots the idea that a games software CEO is worth that much is raising a few eyebrows. After all when the only person keeping you from winning the top slot is Larry Ellison you have to question how much you are getting paid.

Kotick is due for another $16 million if the company hits performance targets. Most of his dosh came in the form of stock awards valued at $55.9 million. His actual cash salary is still the same $8.33 million which it always was.

Nell Minow, of GMI Ratings, told Bloomberg that she did not like any element of Kotick’s pay package and has moaned about it before.

Minow said Activision isn’t being clear about how Kotick earned the money and the fact that there is little information provided by the compensation committee was a red flag.

She implied that the company’s committee was just picking numbers out of the air and not giving shareholders enough information as to how they came up with their reasoning.

Stock awards were sufficiently tied to Kotick’s performance and the whole compensation package is out of line with the rest of the video game industry. 

Skype faces tough laws in Saudi Arabia

Saudi Arabia’s watchdog has claimed that Skype and Whatsapp flout Saudi Arabia’s telecom laws.

The kingdom’s Communications and Information Technology Commission (CITC) has ordered telecom operators that use these services to quickly ensure they comply.

Unlike western countries were such warnings are usually bogged down in lots of legal cases, in Saudi justice is swift with bits of a company being lopped off in a public square in front of a cheering crowd.

Skype received a warning last week when the local press claimed the government had asked telecom companies to look at ways to monitor or block these services.

CITC said in a statement on its website that it had become evident that some communication applications through the Internet don’t meet regulatory requirements.

Basically, if Skype cannot conform to Saudi laws then things will look grim for the service in the kingdom.

In a typically Kafkaesque move, neither the CITC nor the Saudi government have said what law has been broken.  While it is likely to be something involving censorship, it is up to Skype to confess and conform.  The government or the CITC did not say how long Skype had to fix the situation either or which body part will be lopped off if they don’t do it.

The CITC said it was acting to “protect society from any negative aspects that could harm the public interest”.

Saudi is making a greater push for greater control over cyberspace as internet and smartphone usage soars.  It is worried that people might mix and talk.  This of course is a dangerous thing for a monarchy.  If subjects start communicating they might become informed and start to wonder what the hell they are doing with their lives and why they are ruled by people who only got the job by shagging.

Over the weekend the English-language Arab News daily said Saudi Arabia may try to end anonymity for Twitter users in the country by limiting access to the site to people who register their IDs.