Trump, TikTok, Twitter and the European Union

Trump says TikTok sanctions could come in weeks, Twitter deals with the fallout of arguably its worst hack and the EU strikes down its U.S. data transfer agreement.
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iPhone with TikTok app displayed.
"Tiktok" by TheBetterDay is licensed under CC BY-ND 2.0

July 16, 2020 – Trump says TikTok sanctions could come in weeks, Twitter deals with the fallout of arguably its worst hack and the EU strikes down its U.S. data transfer agreement.

Today’s word count: 1,341 words (9 minutes)

Trump Administration Action on Risks Posed By TikTok Likely ‘In Weeks’

The timeline for sanctions against Chinese apps TikTok and WeChat could be quicker than expected. A White House official described it as “weeks, not months.” TikTok has repeatedly denied any hint of being a national security risk.

Why It Matters

TikTok has faced worldwide scrutiny due to national security concerns but has become caught in the crosshairs of the Trump administration lately. Some form of action has been expected since Secretary of State Mike Pompeo announced the U.S. was “certainly looking at” banning TikTok and other Chinese social media apps.

The situations with TikTok is indicative of souring relations between the U.S. and China over the coronavirus pandemic. This week, President Trump signed an order ending preferential treatment for Hong Kong; the territory like be treated like mainland China in response to Beijing’s new national security law. For months, the Trump administration “hinted that the U.S. would take steps to punish China for failing to prevent the virus, which was first observed in the Chinese city of Wuhan, from spreading throughout the globe,” CNBC.com writes.

Trump could take action against TikTok and other Chinese apps under the International Emergency Economic Powers Act, “which gives the president broad powers to penalize companies in response to extraordinary threats, citing people familiar with the matter.” The administration already has its eye on Tiktok, examining the app’s possible role censoring politically sensitive content and failure to safely store personal data, as well as its $1 billion acquisition of U.S. social media app Musical.ly a few years back.

While the Tencent owned WeChat has received considerably less attention, TikTok parent ByteDance is weighing all possible options, including a sale of the app to avoid the onslaught of regulator troubles in the U.S.

Read More: (REUTERS)

Widespread Twitter Hack Reaches Bill Gates, Kanye West, Elon Musk, Joe Biden and Barack Obama

Twitter suffered what security experts are calling the “most significant hacking incident” in the company’s history Wednesday when a series of compromised accounts posted messages requesting money to be sent to cryptocurrency accounts. Popular figures such as Barack Obama, Kanye West, Elon Musk, Joe Biden, the Apple Twitter account, and many other familiar users were targeted and posted a tweet offering $2,000 to any user who sent $1,000 in bitcoin.

Why It Matters

Simply put, “Nothing is safe right now on Twitter,” according to TrustedSec chief executive David Kennedy. Those aren’t the words you want to hear regarding one of the world’s leading social media companies. In addition to users victimized by the scam, those whose accounts were hacked face the possibility of stolen private information within their direct messages.

It’s a disastrous situation for the company, which hasn’t exactly been hack-free over its history. In 2009, hackers steered Twitter traffic toward an anti-American website from a group called the “Iranian Cyber Army.” In 2017, a series of prominent accounts were compromised to broadcast pro-Turkish messages. Last year, Twitter chief executive Jack Dorsey was hacked, and his account was used to send racist tweets.

There’s no good time to get hacked, but this incident happens when Dorsey has been under increasing pressure to raise revenues. Dorsey had previously clashed with Twitter investor Elliott Management Corp., which almost led to his ouster, but the two “struck a truce that kept him in place.” With Twitter set to report earnings in a week, this incident could have a drastic impact on the company’s future.

Numbers to Consider

  • 152 Million – The number of daily active users on Twitter, according to Statista.
  • $100,000 – How much the compromised message on Biden’s Twitter account unlawfully raised in bitcoin.

Read More: (WALL STREET JOURNAL)

EU’s Top Court Restricts Personal-Data Transfers to U.S., Citing Surveillance Concerns

Thousands of multinational companies are about to face a more than an inconvenient disruption. The European Union’s top court surprisingly struck down a widely used EU-U.S. data-transfer agreement Thursday, Privacy Shield, ruling that storing EU data on U.S. servers “exposed Europeans to American government surveillance without ‘actionable rights’ to challenge it.”

Why It Matters

The decision is a win for privacy activists who have long argued that the U.S.’s surveillance practices “should make it ineligible to store European data.” However, the actual ruling was a surprise. A court adviser recommended much narrower restrictions, giving the EU latitude to investigate and block specific companies. The European Court of Justice typically sides with such advice but took a harder line stance this time around.

When the EU invalidated Privacy Shield’s predecessor in 2015, Safe Harbor, many companies survived after on legal mechanisms that allowed them to get around the ruling. But now, regulators can challenge and block data transfers if companies can’t guarantee compliance with EU privacy laws.

The move threatens to upend billions of dollars of trade from cross-border data activities such as cloud services, human resources, advertising and marketing. More importantly, Amazon, Facebook, Alphabet, Apple and other tech giants could be put to a decision between a costly shift to data centers in Europe or “cutting off business with the region.”

Numbers to Consider

  • 5,378 – The number of companies that are active users of the Privacy Shield framework.
  • 70 Percent – The share that is comprised of small- and medium-sized businesses.

Read More: (WALL STREET JOURNAL)

A Quick Look

American Airlines Plans to Furlough Up to 25,000 Workers This Fall

  1. As the worsening coronavirus trends continue to threaten air travel, American Airlines expects to have 20,000 more employees than it needs this fall. Just a week after United Airlines did so with 36,000 of its employees, American notified 25,000 of potential furloughs.
  2. Despite U.S. airlines receiving $25 billion in government aid under the $2.2 trillion stimulus package approved in March, American had previously cut 5,000 jobs.
  3. Among those who received notice of the potential furlough were 9,950 flight attendants (37 percent of the airline’s total), 2,500 pilots and thousands of other workers. American’s passenger revenue experienced a steep 80 percent year-over-year decline in June.

Read More: (WALL STREET JOURNAL)

Worth Your Time

Times Gettin’ Tougher Than Tough: Bank of America became the latest U.S. bank to report a significant profit drop as the industry gears up for a wave of Covid-19-related defaults. The bank, which reported a multi-billion, 52 percent drop, joins an esteemed group of other institutions experiencing similar woes. JPMorgan, Citigroup and Wells Fargo “collectively socked away $28 billion in the second quarter for loan losses.” (WALL STREET JOURNAL)

Like Spinning Plates: In a bid to simplify capital structures and create additional long-term enterprise value, Dell Technologies confirmed it is considering spinning off its stake in VMware. The move could isolate the value of VMware for investors, which has buoyed Dell’s share price, and allows the firm to pay down some of its $48 billion debt load. Dell said the earliest a deal could be completed is Sept. 2021 and would be designed to be exempt from U.S. federal income tax. (THE INFORMATION).

A Public Affair: Sports data provider Sportradar is reportedly exploring plans to go public. The company, backed by high-profile private investors such as Mark Cuban, Michael Jordan and Ted Leonsis, has built a notable business providing in-depth sports data to media companies, bookmakers, sports federations and government authorities. It boasts data partnerships with the NBA, NFL and MLB. Sportradar is expected to hit the market through a special purpose acquisition company, but the timeline isn’t immediately known. (SPORTICO)

Tidbits

A day after the U.S. reached a record-high in daily Covid-19 cases north of 67,000, the world reported a single-day record of 230,000 Wednesday.

Microsoft, Amazon and Google could face trouble in Illinois as a set of new lawsuits allege the three tech giants violated state laws prohibiting the use of personal biometric data without permission.

A Couple Cents Content

Check out Justin Oh’s video breaking down the pros and cons of investing in Fisker stock ($SPAQ). (YOUTUBE)

I wrote about Byte as an unlikely but potential successor in the short-form video space if TikTok is banned. (POST)

Read Justin Oh’s analysis of BurgerFi’s stock ($OPES). (POST)

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Thanks for reading!

— Justin Birnbaum

Image: “Tiktok” by TheBetterDay is licensed under CC BY-ND 2.0

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