The havoc of Trump’s ‘Clean Network’

The Big Story

The 'Clean Network'

Someday this section will not be about TikTok, I promise. But today is not that day, because as the rhetoric continues to get louder and wilder, alarm bells should be going off inside every American software company. On Wednesday, Mike Pompeo spent part of a press briefing detailing "the expansion of the Clean Network." What is that? Five things, Pompeo said:

• Clean Carrier: The U.S. government is "working to ensure that untrusted Chinese telecoms" can't provide or interfere with U.S. communications.
• Clean Store: "We want to see untrusted Chinese apps removed from U.S. app stores."
• Clean Apps: Pompeo said he wants to keep Huawei and other Chinese manufacturers from preinstalling or even making available popular U.S. apps.
• Clean Cloud: Making sure Americans' data is protected and can't be accessed by cloud systems from Alibaba, China Telecom, Tencent and others.
• Clean Cable: Keeping undersea cables secure, particularly from Huawei.

"We don't want companies to be complicit in Huawei's human rights abuses, or the CCP's surveillance apparatus," Pompeo said. He called on "all freedom-loving nations and companies" to join the Clean Network program.

All the usual caveats apply here: The Trump administration is remarkably good at saying things without doing anything, there's no indication of how any of this would happen or if it's even legally possible, there are plenty of other things to worry about right now, and the most likely outcome is that nothing changes at all.

But the Clean Apps idea is a big one, with serious ramifications. Huawei is the largest smartphone manufacturer on the planet, and cutting out all Chinese manufacturers — like Oppo and Vivo — would shake up the entire smartphone ecosystem. It would also effectively lock American software companies out of countries like India, where Chinese companies own most of the smartphone market.

• More broadly, a few people have pointed out to me that all these fights could effectively kill the open, global internet. The Financial Times called the TikTok saga part of "the carve-up of the internet," and suggested forming a sort of World Trade Organization for cyberspace.
• Otherwise, we may be headed down a road where there's not just The Internet and The Chinese Internet, but a web that ends at real-world borders.

If you make phone software or run app stores — I'm looking at you, Sundar and Tim — you may soon be under a lot of pressure to pull back access on both. If you make an app that's used around the world (also known as "basically everyone in tech"), the idea of your app suddenly not being allowed on Chinese-made devices is an existentially scary one. And, right now, a surprisingly real one.

In related news:Instagram launched Reels, its feature that lets users … do TikTok. Instagram made TikTok.

You Tell Me

We haven't done this enough, but we're going to start doing it more: I want to hear what you think! Watch this space, because we're going to do trivia, giveaways, all kinds of fun stuff. But for now …

I want to know what you think about TikTok. Are you using it personally? Would you let your employees, family, friends install the app? Why or why not? Send me your thoughts to david@protocol.com, and we'll feature a few good answers in Friday's newsletter.

Phones

The enemy of my tech enemy

Samsung launched a bunch of phones Wednesday, but to me the most interesting part of the deeply awkward, BTS-featuring digital event was how prominently Microsoft featured. There's Microsoft, making it easy for users to link their Android phone and Windows PC! There's OneNote, syncing handwritten notes, and Teams, syncing to-do lists! Want Xbox Game Pass for free? Buy a Note!

Microsoft-Samsung is an odd partnership, especially as Surface continues to do well and Microsoft prepares to get back into the mobile-hardware game. But what it really means is that these two companies are more afraid of Google than they are of each other.

• The Note has always been sold as The Phone For Getting Stuff Done, but mobile productivity is now more important than ever. Microsoft has to be a first-class player there, or it'll lose to Google's preinstalled G Suite apps.
• Both sides seem to know they're each other's best hope: Samsung has a long history of making bad email apps, and is instead turning to Outlook as the default client on the Note. And I'll bet you $10 that nobody inside Microsoft thinks the Surface Duo is going to outsell the Note, so it makes sense to throw in with Samsung.

Every company wanted to be Apple for a while, to make all the hardware and software and services. That's a spectacularly profitable plan when it works, with a lot of failures strewn along the way. But if companies can instead compete by working together — by making it easy to connect and use all your devices even when they're not all made by the same company — they can take on Apple in a much more real way.

It's like they say: If you can't beat 'em, join up with somebody else, and try again together. That's what they say, right?

A MESSAGE FROM QUALTRICS

Qualtrics' Work Different free virtual event, on August 12, will explore how successful organizations like Atlassian, Microsoft, the NBA, and many others are listening to and taking action on the feedback from their customers and employees to create a "new better" for their business. Register now at Qualtrics.com.

Transportation

What Ford's new Jim will do different from its old Jim

Mike Murphy writes: Right after Jim Farley was named CEO of Ford, he made it clear that he wants to run in tech circles. "We know our competition today," he said, and it's not the Nissan Juke. "It's Amazon, Baidu, Tesla, Apple and others."

Taking on tech sounds good, but this actually isn't a new tactic. The Previous Jim In Charge, Jim Hackett, spent years focusing on autonomy and a future where people don't own cars like they used to.

• He pushed acquisitions of on-demand ride services, electric scooter companies, and had an aggressive timeline for pushing ahead with commercial autonomous vehicles. (Though not all of those initiatives paid off.)
• The company has pushed new electric vehicles, like the Mustang Mach-E crossover, and decreased focus on sedans, with a plan to have over a dozen hybrid and electric vehicle options available by 2022.

Farley's job for the short term, it seems, is to help carry out the $11 billion restructuring plan that Hackett launched in 2018. After that, he'll have to grapple with a COVID-ravaged world, and is going to hit a put-up-or-shut-up moment with Ford's transformation pretty quickly.

• "I just don't see a light at the end of the tunnel for the traditional automakers until they make a bigger push into EVs," one investor said Wednesday.
• Meanwhile, Tesla's stock continues hitting ludicrous levels, and Nikola announced its first earnings, posted a big loss, and is still up more than 3x this year.

But grappling with the future isn't just a Ford problem: Until Farley or anyone else can prove they're actually building the tech they've been promising for years, it's still a car company. There are still dealerships to work with, gas-powered trucks and cars to build for today's consumers, and decades of tradition to overcome. Meanwhile, all those tech companies Farley named are learning how the auto industry works — and quickly.

People Are Talking

All the bluster about Section 230 "requiring neutrality" is nonsense, Ron Wyden said:

• "That's just a bunch of baloney! There is not a single word — not a word, not a comma, not a parenthesis, nothing — that suggests that 230 was about neutrality. In fact, what we designed it to be is if you had a conservative website, good for you! Do what you want with it! If you had a progressive website, same thing."

A letter from 20 U.S. state attorneys general said Sheryl Sandberg and Mark Zuckerberg need to do more to fight disinformation:

• "Content that violates Facebook's own policies too often escapes removal just because it comes as coded language, rather than specific magic words. And even where Facebook takes steps to address a particular violation, it often fails to proactively address the follow-on actions by replacement or splinter groups that quickly emerge."

On Protocol: Amazon admitted to selling Echo speakers below cost, which Sonos CEO Patrick Spence called "predatory pricing":

• "They just take money from their monopoly business, they just subsidize, subsidize, subsidize."

In Other News

• It was a tale of two listings yesterday: While BigCommerce's shares closed 201% above their IPO price, Rackspace's were down 22%. Still, at least Rackspace didn't leave any money on the table, right?
• From Protocol: Microsoft launched Open Service Mesh, a competitor to Google's Istio. But unlike Istio, Microsoft is transferring its product to a foundation as soon as possible — avoiding Google's protracted back-and-forth on the issue.
• First Garmin, now Canon: The camera maker has been hit by a ransomware attack, with Maze claiming that it's stolen 10TB of data. Another reminder to shore up your own systems.
• Kodak, meanwhile, is under an SEC investigation for last week's stock surge, The Wall Street Journal reports. And Congress has asked for records about why the government gave it a $765 million loan to make pharmaceuticals in the first place.
• New York state introduced a new antitrust bill that would make it easier to sue Big Tech. Sponsored by Sen. Mike Gianaris and supported by Letitia James, it's one to watch: If successful, other states may follow its lead.
• DoorDash launched an online convenience store, called DashMart, in eight U.S. cities. It puts DoorDash squarely in competition with 7-Eleven and CVS, which it has partnerships with — and gives you yet another way to get cheesecake delivered.
• Teladoc bought Livongo for $18.5 billion, creating a full-stack telehealth and remote monitoring behemoth worth $38 billion. Investors aren't too pleased, though: Shares of both companies plummeted Wednesday.
• TSMC and Foxconn are interested in investing in Arm, according to Nikkei. They could also reportedly join a consortium if Nvidia acquires the company.
• Virginia's the first U.S. state to use the Apple-Google contact tracing API. Its COVIDWISE app is available to download — now we just need to see if anyone will actually use it.
• The Twitter hackers' Zoom court hearing was relentlessly Zoombombed on Wednesday, culminating in a screenshared porn video. Because of course it was.

One More Thing

A Tesla engineer's delicious side project

By day, Remy Labesque is an industrial designer at Tesla. But on nights and weekends, he's spent three years working with Dandelion Chocolate to build a better … chocolate chip. Turns out, the perfect chocolate chip looks like a smooth, polygonal space rock from a Marvel movie, and manages to both melt in your mouth and hold up to serious baking. Forget the future of transportation, these are the problems I'm glad our best minds are working on.

A MESSAGE FROM QUALTRICS

Qualtrics' Work Different free virtual event, on August 12, will explore how successful organizations like Atlassian, Microsoft, the NBA, and many others are listening to and taking action on the feedback from their customers and employees to create a "new better" for their business. Register now at Qualtrics.com.