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What really happened at Equifax

Your five-minute guide to what's happening in tech this Tuesday, from the future of digital banking to a report card for the web.

Good morning! This Tuesday, the DOJ blames China for Equifax, Uber and Postmates fail to temporarily block AB 5, and the Vision Fund takes its first official loss.

People Are Talking

The FTC needs an overhaul to take on big tech, Senator Josh Hawley said:

  • "Google and Facebook have acquired hundreds of companies in the last two decades, yet the FTC never once intervened to try to block any of these acquisitions."

Amazon wants Trump to testify in its JEDI case, along with other White House officials:

  • "The question is whether the President of the United States should be allowed to use the budget of the DoD to pursue his own personal and political ends."

Also, Amazon is already the company politicians want it to be, according to … its global affairs head Jay Carney:

  • "When it comes to creating jobs, raising wages, providing benefits and training employees for higher-paying jobs, Amazon is doing many good things — for the economy, and for American workers."
  • Carney also had A Big Day on Twitter dealing with criticism of his comments, which Matt Stoller summed up thusly: "That's interesting now pay your taxes."

The case against Theranos' Elizabeth Holmes should be dismissed, her attorney said:

  • "The indictment is full of ambiguity and fudging language, the government is inserting these phrases so they can shift their theory as they go along in the trial."

The Big Story

The international conspiracy behind the Equifax hack

It was the hack everyone heard about, leading to the settlement that caused us all to naively try to claim our $125. Equifax remains one of the biggest data breaches ever — and now we know what allegedly happened.

  • Attorney General William Barr said at a press conference Monday that the DOJ has identified and indicted four members of China's People's Liberation Army in connection with the hack.
  • Barr made clear how extraordinary this was: "We normally don't bring criminal charges against members of another country's military or intelligence services outside the United States … the deliberate indiscriminate theft of the vast amounts of sensitive personal data of civilians as occurred here cannot be countenanced."

Our friends at POLITICO have a good rundown of exactly how the hack worked, if you want more details.

I asked Protocol's security reporter, Adam Janofsky, what he thought of it. Here's what he said:

  • The indictment might look like a win for U.S. prosecutors and Equifax — and in some ways it is — but it's important to remember that a lot of the damage done won't be reversed.
  • The Chinese military likely has a trove of sensitive information on about half of all Americans, which it can use to spy on government officials or blackmail people who are financially stressed.
  • Perhaps even worse, the data could be fed into Chinese artificial intelligence tools to target Americans, Barr said.

Equifax might naturally want everyone to move on: One Equifax employee described the day to me as "drinking from a firehose," but also said that it's "like one of those traumatic experiences we can put behind us."

  • But the pressure might not be finished just yet. Senator Mark Warner said in a statement that, "the indictment does not detract from the myriad of vulnerabilities and process deficiencies that we saw in Equifax's systems and response to the hack."

How much time is your business spending thinking about China, or hackers at all? Or, actually, here's my real question: Did anyone reading this email ever get their $125? If so, please send me an email: david@protocol.com. I want to learn your ways.

Fintech

A finance app gets its banking wings

Varo Money took a big step to becoming a national, digital-only bank, announcing Monday that it's set to receive the first-ever "de novo national bank charter" for a banking startup. It means the company will soon be able to operate as a full-fledged bank, instead of relying on a partner to handle some services.

This is a key moment for Varo, and for the fintech industry as a whole, Varo CEO Colin Walsh told me.

  • He recalled a Bloomberg Law story from late last year saying Varo was "an important bellwether for the fate of fintech banking." If Varo couldn't get approved, there was little hope for anyone else. That's how it felt to him, too.
  • Walsh also said he doesn't expect the process to be easier for the long list of other tech companies hoping for a charter — he said that the Federal Deposit Insurance Corporation is likely to make everyone jump through the same hoops as Varo did, and many companies simply won't have the expertise or resources.

Varo's been working with regulators since the company's early days in 2016. Walsh says the process hasn't been easy: Varo filed 5,000 pages in applications, had FDIC employees prowling its offices for weeks, and had to build new teams and new systems to satisfy regulatory requirements.

But now Varo, which focuses on lower- and middle-income customers, can offer more to users. "We're not going to open branches, we're not going to open cash vaults, we're not planning to buy an ATM network anytime soon," Walsh said. But it does plan to have a pretty complete product line soon after it becomes an official national bank in the second quarter of this year.

Do you use an app like Varo, Robinhood, or Chime? What would entice you to switch? Let me know: david@protocol.com.

A MESSAGE FROM NASDAQ

Reimagining Markets Everywhere

Nasdaq Technology is reshaping the future of global markets by redefining what a marketplace can be.

Learn more here.

State of the Web

Twitter's up, Yahoo's down, and Google basically owns the web

SimilarWeb published its annual report on the state of the web on Monday, and it's full of interesting tidbits.

First, the not-so-surprising stuff:

  • Desktop web browsing is down slightly from last year (and has been decreasing for a while) while mobile traffic continues to climb.
  • Google still absolutely dominates the web. Twitter's traffic climbed last year, while Yahoo and Facebook's dropped — though Instagram and WhatsApp both grew significantly.

Then there's the somewhat-surprising stuff:

  • Amazon Prime Day has become a top-notch shopping holiday, up there with Black Friday.
  • The most mobile-friendly category on the web? Porn. Number two? Gambling. Turns out anything people want to do privately, they do on their phones. Though they pretty much do everything on their phones — the only category still dominated by the desktop is "Arts & Entertainment," which is mostly streaming media.

The report hits on everything from President Trump's continuing reign as the most popular search term on the planet to the remarkable rise of Google Flights and what it means for the online travel business. Flip through this and Benedict Evans' 2020 tech trends, and you'll have 2020 pretty much in focus.

Making Moves

Facebook is hiring a communications manager for its new Oversight Board. Key requirements: lots of experience, good relationships, and (I'm guessing) a remarkable tolerance for chaos.

Eileen Naughton, Google's head of HR, is leaving the company later this year. She's been involved in many of the company's high-profile internal clashes over the last few years.

Amazon's video efforts have a new leader: Mike Hopkins. Previously the chairman of Sony Pictures Television and before that the CEO of Hulu, Hopkins will oversee Prime Video and Amazon Studios.

In Other News

  • The White House officially announced its budget proposal for 2021 with a huge increase in AI and quantum spending. Keep in mind that the details will change — a lot — before anything actually passes.
  • Amazon is still winning the smart speaker war. A new report found about 70% of people playing music and setting timers and irritatedly shouting "no, I said the LIVING ROOM lights," are doing it with Alexa.
  • From Protocol: Uber and Postmates lost their bid for a temporary injunction against AB 5. That means California can enforce the gig-economy law while the fight continues in court.
  • The court challenge of the T-Mobile / Sprint merger is coming to a close. The NYT reports that a judge in Manhattan is planning to rule in favor of the deal.
  • A Business Insider story caused confusion about Slack. The story implied that IBM had decided to sign up 350,000 employees; Slack's stock spiked on the news, and even paused trading at one point. But in an SEC filing Slack said that IBM has actually been its largest customer for several years — it didn't sign up all 350,000 employees overnight.
  • The Bloomberg campaign made a plea to Silicon Valley: send us your best people, and help us win the election.
  • From POLITICO: Google is appealing a 2017 antitrust ruling against the company, giving Europe's big-tech fighters their first major public test.
  • Bill Gates may not be buying that superyacht after all, the BBC reports. But honestly, he should be. If he's not, get on it. And send me pictures.
  • From Protocol: Brandless became the first Vision Fund-backed company to shut down. Biz Carson reports that the company is stopping all orders and laying off nearly 90% of its staff.

One More Thing

When your car-share is a getaway car

One time, I rented a car only to find the windshield had been shattered. Turns out that was nothing: NBC News reports that users of car-sharing services like Getaround and Turo are increasingly finding their cars have been broken into — and even used to commit crimes. Why? Because as NBC puts it, "the app gives precise locations of cars, even for people just browsing without a reservation — and the keys are always left inside." Getaround responded to the story, explaining all the new and existing safety measures it's taking for people's cars.

A MESSAGE FROM NASDAQ

Reimagining Markets Everywhere

Nasdaq Technology is daring to think differently.

Learn more here.

Thoughts, questions, tips? Send them to me, david@protocol.com, or our tips line, tips@protocol.com. Enjoy your Tuesday, see you tomorrow.

Climate

The West’s drought could bring about a data center reckoning

When it comes to water use, data centers are the tech industry’s secret water hogs — and they could soon come under increased scrutiny.

Lake Mead, North America's largest artificial reservoir, has dropped to about 1,052 feet above sea level, the lowest it's been since being filled in 1937.

Photo: Mario Tama/Getty Images

The West is parched, and getting more so by the day. Lake Mead — the country’s largest reservoir — is nearing “dead pool” levels, meaning it may soon be too low to flow downstream. The entirety of the Four Corners plus California is mired in megadrought.

Amid this desiccation, hundreds of the country’s data centers use vast amounts of water to hum along. Dozens cluster around major metro centers, including those with mandatory or voluntary water restrictions in place to curtail residential and agricultural use.

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Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Every day, millions of us press the “order” button on our favorite coffee store's mobile application: Our chosen brew will be on the counter when we arrive. It’s a personalized, seamless experience that we have all come to expect. What we don’t know is what’s happening behind the scenes. The mobile application is sourcing data from a database that stores information about each customer and what their favorite coffee drinks are. It is also leveraging event-streaming data in real time to ensure the ingredients for your personal coffee are in supply at your local store.

Applications like this power our daily lives, and if they can’t access massive amounts of data stored in a database as well as stream data “in motion” instantaneously, you — and millions of customers — won’t have these in-the-moment experiences.

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Jennifer Goforth Gregory
Jennifer Goforth Gregory has worked in the B2B technology industry for over 20 years. As a freelance writer she writes for top technology brands, including IBM, HPE, Adobe, AT&T, Verizon, Epson, Oracle, Intel and Square. She specializes in a wide range of technology, such as AI, IoT, cloud, cybersecurity, and CX. Jennifer also wrote a bestselling book The Freelance Content Marketing Writer to help other writers launch a high earning freelance business.
Workplace

Indeed is hiring 4,000 workers despite industry layoffs

Indeed’s new CPO, Priscilla Koranteng, spoke to Protocol about her first 100 days in the role and the changing nature of HR.

"[Y]ou are serving the people. And everything that's happening around us in the world is … impacting their professional lives."

Image: Protocol

Priscilla Koranteng's plans are ambitious. Koranteng, who was appointed chief people officer of Indeed in June, has already enhanced the company’s abortion travel policies and reinforced its goal to hire 4,000 people in 2022.

She’s joined the HR tech company in a time when many other tech companies are enacting layoffs and cutbacks, but said she sees this precarious time as an opportunity for growth companies to really get ahead. Koranteng, who comes from an HR and diversity VP role at Kellogg, is working on embedding her hybrid set of expertise in her new role at Indeed.

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Amber Burton

Amber Burton (@amberbburton) is a reporter at Protocol. Previously, she covered personal finance and diversity in business at The Wall Street Journal. She earned an M.S. in Strategic Communications from Columbia University and B.A. in English and Journalism from Wake Forest University. She lives in North Carolina.

Climate

New Jersey could become an ocean energy hub

A first-in-the-nation bill would support wave and tidal energy as a way to meet the Garden State's climate goals.

Technological challenges mean wave and tidal power remain generally more expensive than their other renewable counterparts. But government support could help spur more innovation that brings down cost.

Photo: Jeremy Bishop via Unsplash

Move over, solar and wind. There’s a new kid on the renewable energy block: waves and tides.

Harnessing the ocean’s power is still in its early stages, but the industry is poised for a big legislative boost, with the potential for real investment down the line.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Entertainment

Watch 'Stranger Things,' play Neon White and more weekend recs

Don’t know what to do this weekend? We’ve got you covered.

Here are our picks for your long weekend.

Image: Annapurna Interactive; Wizard of the Coast; Netflix

Kick off your long weekend with an extra-long two-part “Stranger Things” finale; a deep dive into the deckbuilding games like Magic: The Gathering; and Neon White, which mashes up several genres, including a dating sim.

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Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

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