CEO DailyCFO DailyBroadsheetData SheetTerm Sheet

Apple is trying to assuage critics of its controversial software update after blowback

August 10, 2021, 3:24 AM UTC

Hi Data Sheeters, today’s email is coming later than usual as I was helping to host our first-ever NFT auction today. Whew, what an adventure—I promise to share more about that another time!

In the meantime, let’s talk about a different but related subject: JPEGs, another kind of computer file type. Apple recently announced that it is rolling out a couple of software updates across its devices that will scan people’s iMessages and photos for signs of sexually explicit or child abuse imagery. The idea is to protect children from predators. The updates are slated to arrive later this year, part of the next generation of software: iOS 15, iPadOS 15, and macOS Monterey.

Here’s how the proposed system works. If a child who is 13 years old or younger receives a message flagged as containing sexually explicit material, the image will arrive blurred out and come with a couple of speed-bump warnings. People designated as parents in associated iCloud Family groups can choose to receive an alert too. It’s a similar setup, in reverse, for children who attempt to send potentially sensitive photos to others.

Apple’s other planned tweak is far more contentious. The iPhone-maker says it will begin to check images that are getting uploaded iCloud Photos against a database of known illicit material maintained by National Center for Missing and Exploited Children. If there are any hits—identified through matched “hashes,” cryptographic tools that help conceal data but still allow for cross-checking—they get flagged. If there are enough hits, then Apple will disable the apparently offensive account and alert said Center.

The well-intentioned changes have people in an uproar. Apple says all its scanning occurs on people’s devices—not in the cloud, meaning on Apple’s computer servers—thereby eliminating privacy concerns. But a chorus of security-minded privacy advocates begs to differ. If Apple can scan for illegal material on people’s phones, what’s stopping the company from broadening its definition of “illegal” to suit the whims of sundry world governments, including civil rights-stomping authoritarian regimes, in the future?

The plans jar against Apple’s self-proclaimed privacy stance. The Electronic Frontier Foundation said of the software update, “That’s not a slippery slope; that’s a fully built system just waiting for external pressure to make the slightest change.” Edward Snowden, the NSA whistleblower and ex-pat, called it a system of “mass surveillance” powered by “iNarcs” and added that “if they can scan for kiddie porn today, they can scan for anything tomorrow.”

Apple believes its proposed approach is the right one. In an email to employees, Sebastien Marineau-Mes, a VP of software at Apple, wrote in a leaked email to employees that “we will continue to explain and detail the features so people understand what we’ve built,” as reported by the blog 9to5mac. The company recently put out an FAQ to assuage people’s concerns, saying it “will not accede to any government’s request to expand” the program beyond child safety protections.

You may remember that the most recent iteration of governments’ attempts to crack down on tech companies’ use of end-to-end encryption—a privacy-protecting technology that even Facebook has begun to adoptfocuses on the threat of child predation. It’s a serious problem that corporations, like Apple, are under immense pressure to solve. Somewhere, somehow, there’s going to be a compromise—let’s hope it’s one that does not endanger people’s security and civil liberties.

Robert Hackett
@rhhackett
robert.hackett@fortune.com

NEWSWORTHY

Crypto taxes still hang in the balance. The U.S. Senate blocked a bipartisan deal that would have narrowed who must report cryptocurrency transactions to the IRS under the $550-billion infrastructure bill, following days of extensive campaigning from the cryptocurrency industry for Congress to back off the legislation's original text. It may not be the end of the conversation about the bill's crypto provisions though. Once it does pass the Senate, the House of Representatives will then take up the legislation, setting up what will likely be another intense round of lobbying. 

The climate crisis. As wildfires rage in Greece, the United Nations' Intergovernmental Panel on Climate Change issued a nerve-racking report Monday concluding it is now unlikely that the world be able to avoid global warming rising by 1.5 degrees Celsius by 2050—setting the stage for sweltering heat waves, drastically worse droughts, and the extinctions of many animal species. Scientists in the report did find that there is still a chance to stop global warming at those levels though, depending on whether humanity can move away from fossil fuels and remove carbon from the air in its quickly escalating fight against climate change.

Upping the ante. Amazon is raising the stakes to try and persuade its still unvaccinated workers to become inoculated against COVID-19. The e-commerce retailer had been offering its employees on the frontlines upwards of $80, if they were vaccinated. Now, Amazon has rolled out a "Max Your Vax" campaign that offers a chance for certain workers in its warehouses, at Whole Foods Market, and at its own Amazon Fresh grocery stores to win 18 prizes valued at nearly $2 million, which include eight awards of at least $100,000, five new cars, and five vacations.   

India's e-commerce antitrust case. Walmart-owned Flipkart and Amazon lost court challenges Monday in India when the country's Supreme Court said an antitrust investigation could continue. The ruling marks the latest setback for the e-commerce giants, whose pushes into India have been met with mounting backlash in recent years from smaller retailers concerned about the "Walmart Effect" and "Amazon Effect" both parent companies have already inflicted on other parts of the world like the U.S. 

Alibaba fires manager accused of rape. A week after an employee at the Chinese tech giant reportedly told senior managers of an incident wherein a client groped her and her boss raped her, Alibaba has fired the manager, according to an internal memo released Monday. Two other officials at the company have resigned, while Alibaba's top human-resources executive was given a warning for not reacting to the employee's allegations quickly enough. 

This edition of Data Sheet comes courtesy of Declan Harty.

FOOD FOR THOUGHT

Asian Americans speak out on Silicon Valley discrimination. Diversity has long been talked about in the tech business as a guiding principle. And though the lack of Black and Hispanic workers is a known problem in Silicon Valley, one group—Asian Americans—have been often heralded as a point of reference for how diverse tech companies are. But the story is "more complicated, and discouraging," Bloomberg Businessweek reported last week. For many Asian Americans working in tech, whether they be the former head of Reddit Ellen Pao, venture capitalist Eric Bahn, or a 20-something-year-old working at Facebook, discrimination persists in more ways than one as the industry's top ranks have largely been turning a blind eye toward it.

From the article:

The cruel twist is that the stereotypes that make entry-level Asian American workers attractive to hiring managers may be the same ones that block them from becoming leaders. Bahn, the early-stage investor, says that after arriving in Silicon Valley it was easy to forget about his racial identity. "You're part of an even more welcomed, privileged class here," he says. Now he see how that can become a complacency trap. "The story that Silicon Valley tells is really clean: We don't care what you look like, we care about your ideas—and to some degree, for Asians that's true. But it feels like a rule is being set: What's the bare minimum to keep us happy? A reasonable salary? The ability to buy a nice house in a good school district in Mountain View or Fremont? I see a big chunk of people in that range, and a lot fewer Asian leaders who break through and make it to the top."

IN CASE YOU MISSED IT

How Nasdaq's SEC approval could spur board diversity by Emma Hinchliffe

EV sales are booming just about everwhere—except in the U.S. by Christiaan Hetzner

Tesla's Bitcoin bet is back in the black—big time by Shawn Tully

This hot startup is now valued at $1 billion for its A.I. skills by Jonathan Vanian

U.K. payments fintech Checkout.com taps T. Rowe rice's Dufétel as CFO by Anne Sraders

Some of these stories require a subscription to access. Thank you for supporting our journalism.

BEFORE YOU GO

Planetary pleats, black hole formalwear, and cosmic cosmos: Since Jeff Bezos ventured into space in July, debate has ensued as to whether or not the Amazon founder is an astronaut. Having reached 62 miles above sea level, Bezos did meet the milage requirement that many organizations, including NASA and the Air Force, classify as the barrier between space and the atmosphere. But the Federal Aviation Administration has cast a cloud of doubt over Bezos' status as an astronaut with its newly implemented criteria that passengers must have "demonstrated activities during flight that were essential to public safety, or contributed to human space flight safety."

None of that mattered to Lauren Sanchez though. The girlfriend (or, maybe fiancée?) of the world's second-richest man hosted an "Out of This World" themed-party this past week to celebrate Bezos' recent trip to the edge of space, Page Six reported Friday. 

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.