Huawei allegedly helps African governments spy on dissidents – WSJ

Huawei has worked with African governments to spy on their political opponents, including surveillance and distributing spyware, which has led to arrests and other crackdowns, the Wall Street Journal reports.

In its report (behind paywall) the newspaper highlighted Uganda and Zambia where the authorities have got direct help from Huawei employees to crack down opposition. These measures include surveillance cameras, phone tapping, and cracking encrypted communications with spyware. In the most extreme case, the report says, the pop singer turned politician Bobi Wine’s supposedly secret meeting was busted by the Ugandan police, and his driver was killed. (More details are included in the video clip included at the bottom of this page.)

In Zambia, Huawei employees were reported to have helped the government crack the password protected phones and private Facebook pages of opposition bloggers critical of the president.  The government was then able to track them down and make arrests. Algeria’s ruling party confirmed to the newspaper that they work with Huawei to monitor the opposition though refused to discuss details.

In response, Huawei rejects the allegations:

“We completely reject the Wall Street Journal’s unfounded and inaccurate allegations against Huawei’s business operations in Algeria, Uganda, and Zambia,” said a Huawei spokesperson in a statement sent to Telecoms.com. “Huawei’s code of business conduct prohibits any employees from undertaking any activities that would compromise the data or privacy of our customers or end users, or that would breach any laws.  Huawei prides itself on its compliance with local laws and regulations in all markets where it operates and we will defend our reputation robustly against such baseless allegations.”

Huawei has exported the surveillance system already common in China’s cities to many African countries. The images captured on camera are then processed by Huawei’s facial recognition and AI technologies to identify suspects, sometimes even before any crimes have been committed. Activists also accuse the governments of abusing the technology. The activist Dorothy Mukasa told WSJ that “we’ve seen the (Ugandan) government target opposition more than the criminals.”

Two Ugandan security officers also told WSJ on anonymous basis that Huawei employees directly help them break the encryption of the applications the opponents use for communication, including WhatsApp, by planting spyware on their phones. Huawei denied the allegation in their statement to WSJ that “our internal investigation shows clearly that Huawei and its employees have not been engaged in any of the activities alleged. We have neither the contracts, nor the capabilities, to do so.”

One thing worth noting is that the WSJ does not establish evidence that the alleged activities in Africa were carried out with approval, or even awareness, from Huawei headquarters.

This is not the first time Huawei has found itself in the centre of controversies in Africa. As was reported earlier, the IT and communication system at the African Union headquarters, supplied and installed by Huawei, was sending data every night from Addis Ababa to Shanghai for over four years before it was uncovered by accident. Huawei’s founder later claimed that the data leaking “had nothing to do with Huawei”, though it was not clear whether he was denying that Huawei was aware of it or claiming Huawei was not playing an active role in it.

Here is the video included in the WSJ report:

French parliament passes “Huawei Law” to govern 5G security

Both houses of the French parliament have voted in favour of the new law, dubbed the “Huawei Law”, to give the government the power to security vet 5G rollouts in the country.

The legislation process started when France, being pressured by the US to exclude Huawei from the country’s 5G networks, decided to keep the decision-making power in its own hands, hence the nickname. An earlier draft of the legislation was met with protests from the parliament as being too “open-ended” which would give the government too much power.

The final stage of the legislation process started three weeks ago, when a joint group of 14 parliamentarians (la commission mixte paritaire, or CMP) from the Senate and the National Assembly started putting the final touches to the draft. According to the announcement from the Senate when the final stage started, Senator Catherine Procaccia stressed that the Senate’s amendments have excluded the ongoing 4G rollout from the upcoming law, and demanded the authorisation process be simplified from two-stage to one-stage. Sophie Primas, the chairperson of the economic affairs committee, also believed that the amended version was more balanced than the initial proposal.

The AFP reported that, after an ultimate vote on the Senate floor, the parliament has given its final approval to the comprised text, which it is now ready for President Macron to sign into law. When it becomes effective, the Prime Minister will have the power to approve or reject the telecom operators’ plans to roll out 5G networks, considering the implications on national security. The PM’s decision needs to be made within two months of the application.

Agnès Pannier-Runacher, Secretary of State for Economy and Finance, told the AFP that the new law will establish a stable, simple, and protective legal framework without delaying France’s deployment of 5G, and the government is already in the process of finalising the implementation details. She also stressed that there will not be a city 5G and a rural 5G in France. Each operator should have 12,000 sites equipped with 5G by 2025, a quarter of which should be in the rural areas, she told the news agency.

This piece of legislation is made at a time when the European Union is developing a pan-EU framework to assess 5G risks. Although it is one of the two most powerful driving forces in the EU (the other being Germany), France has a tradition of going its own way without waiting for the EU legislations to catch up. A recent example is the decision to go ahead with the 3% sales tax on the internet heavyweights without waiting for a European-wide single digital market regulation.

Facebook investors brush off leaked $5 billion fine

It has been widely reported that Facebook will receive a record fine for privacy violations, but investors seems strangely pleased about it.

All the usual-suspect business papers seem to have received the leak late last week that the US Federal Trade Commission voted narrowly to fine Facebook $5 billion for data privacy violations related to the Cambridge Analytica thing. The FTC, like the FCC, has five commissioners, three of which are affiliated to the Republican party and two the Democrats. As ever they voted on partisan lines, with the Democrats once more opposing the move.

The FTC has yet to make an official announcement, so we don’t know the stated reasons for the Democrat objections. But since that party seems to have decided it would have won the last general election if it wasn’t for those meddling targeted political ads, it’s safe to assume they think the fine is too lenient.

Just because the Democrats have a vested interest, that doesn’t mean they’re wrong, however. Of course Democrat politicians have criticised the decision, but many more independent commentators have noted that the fine amounts to less than a quarter’s profit for the social media giant. Nilay Patel, Editor in Chief of influential tech site The Verge, seems to speak for many in this tweet.

That Facebook’s share price actually went up after such a big fine initially seems remarkable, but all it really indicates is that Facebook had done a good job of communicating the risk to its investors, so a five bil hit was already priced in. The perfectly legitimate point, however, is that as a punishment one month’s revenue is unlikely to serve as much of a deterrent from future transgressions.

Patel seems very hostile to Facebook, stating in his opinion piece on the matter “Facebook has done nothing but behave badly from inception.” A lot of this bad behaviour consists of exploiting user data, but what is really under attack seems to be Facebook’s core business model and, to some extent, the whole-ad-funded model on which sites like The Verge rely.

Debates need to be had about the way the Internet operates and monetizes itself, but identifying Facebook as a uniquely bad actor when it comes to exploiting user data seems disingenuous. Laws and regulations are struggling to catch up with the business models of internet giants and there are many other questions to be asked about how they operate.

The fact that Facebook’s share price has now largely recovered from the Cambridge Analytica scandal of a year or so ago, as illustrated by the Google Finance screenshot below, indicates that investors consider these issues to be just another business risk, to be weighed up against obscene profits. While we have always considered the scandal to be overblown, it also seems clear that, as a meaningful punishment, even a $5 billion fine is totally inadequate in this case.

Facebook share price July 19

Trump puts social media on notice after summit

US President Trump has made it clear that he considers social media censorship to be a major concern that may require fresh legislation and regulation.

As we previously reported, this unprecedented convention of social media influencers at the White House that took place yesterday was already causing controversy before it had even taken place. Many commentators were concerned by the apparent fact that most of the people invited were conspicuous Trump supporters.

Judging by the tweet Trump has pinned to the top of his Twitter account, the premise for the social media summit was Trump’s concern about independent voices being censored by the major social media platforms such as Twitter, Facebook and YouTube. “Each of you is fulfilling a vital role in our nation,” said Trump. “You’re challenging the media gatekeepers and the corporate censors to bring the facts straight to the American people.

“Together you reach more people than any television broadcast network by far. Free Speech is a bedrock of American life. Our constitutional rights must be fiercely protected and today I’m directing my administration to explore regulatory and legislative solutions to protect free speech and the free speech rights of all Americans. We hope to see transparency, more accountability and more freedom.”

The specifics of what was discussed are thin on the ground right now, but this is a clear shot across the bows of social media companies. Trump clearly believes there is a degree of political censorship on social media and not to his benefit. At the same time he seems to value social media as a counterbalance to the mainstream media, most of which he has been at war with for years. We have seen no public response from any of the social media giants and they would be wise to do so with care. It seems inevitable that there will be increased regulatory oversight of their censorship policies and even new laws on the matter. Bizarrely a Twitter global outage coincided precisely with the the White House gathering and Trump also took the trouble to fire a warning shot to Facebook about its Libra cryptocurrency plans, which you can see below.

Much of the mainstream media seems to have reacted with hostility to the event, putting ‘social media summit’ in scare quotes and characterising the attendees as ‘right wing’. To be fair any media that Trump has dismissed as ‘fake news’ (most of it) did have fairly good reason to feel provoked if you look at the Trump Twitter thread below, send immediately in advance of the summit. Underneath we’ll leave you with the full video of Trump’s speech at the event to make your own mind up about the relevance and utility of the event.

 

Orange CEO cleared of fraud

The interminable Tapie saga, which threatened to topple Orange CEO Stéphane Richard, has finally concluded with everyone acquitted of wrongdoing.

Richard (pictured) was accused of complicity in a fraud that involved the French state handing over €404 million to French businessman Bernard Tapie back in 2008. At that time Richard was Chief of Staff for Finance Minister Christine Lagarde, who was eventually found guilty of negligence in creating the circumstances for the payout and then not challenging it.

Part of Lagarde’s defence when she was put on trial back in 2016 was that she didn’t really know what she was doing because Richard didn’t furnish her with sufficient information. This led to the current trial, which investigated the role Richard and a few others played in the whole affair.

The reason for the payout was a claim from Tapie that he got ripped off when he sold his stake sportsware company Adidas to Credit Lyonnais, which is partly state-owned, in order to avoid a conflict of interest when he became a government minister back in 1992. The bank subsequently sold on the stake at a profit, leading Tapie to allege that it had deliberately undervalued it previously.

Tapie sued Credit Lyonnais and eventually Lagarde pushed the case to a closed arbitration panel which made the €404 million award. Not only was the matter deemed to be badly handled by Lagarde and her team, but the award was eventually reversed amid suspicions of fraud. This case seems to reverse that decision once more, so it looks like Tapie will get to keep the cash after all.

This is obviously good news for Orange, which had no involvement in any of it but has had Richard at the helm for eight years, during which he seems to have done a decent job. The whole thing still stinks of an establishment stitch-up, however, with French taxpayers handing over an enormous amount of cash to a rich former politician to compensate him for a botched business deal.  Richard will obviously be relieved too, but s Lagarde’s recent appointment to head the ECB indicates, he may have escaped any negative consequences even if he had been found guilty.

Huawei stresses how much it respects intellectual property

Embattled telecoms vendor Huawei feels so passionately about the sanctity of intellectual property that it’s published a great big white paper on the matter.

Titled ‘Respecting and Protecting Intellectual Property: The Foundation of Innovation’, the paper goes on at great length about how important innovation it and how it can only happen if people don’t go around ripping off each other’s inventions. There’s even a whole five-page section stressing how much Huawei respects third party’s IP and would definitely never nick any of it.

The paper was unveiled at a press conference in China by Huawei’s Chief Legal Officer Song Liuping (pictured). “In the past 30 years, no court has ever concluded that Huawei engaged in malicious IP theft, and we have never been required by the court to pay damages for this,” he said.

“Innovation and IP protection is the cornerstone of Huawei’s business success. Last year we generated more than 100 billion dollars in revenue. None of our key products or technologies are linked to any accusations of IP theft. No company can become a global leader by stealing from others.

“We have grown because we invest. Last year alone, we invested 15 billion US dollars in R&D – the fifth largest in the world. We have more than 80,000 R&D engineers that put their hearts and souls into the technology we create. Huawei fully supports the IPR protection system, both globally and in the United States.”

That all seems pretty clear doesn’t it? The primary purpose of the paper, however, was not to protest arguably too much about Huawei’s innocence, but to indirectly berate US President Trump for using intellectual property as a political pawn.

“Over the past 30 years, we have paid more than 6 billion US dollars in royalties to legally implement the IP of other companies,” said Song. “Nearly 80% was paid to American companies…. Disputes over IP are common in international business. Huawei has been on both sides of these disputes. We believe these disputes should not be politicized. Intellectual property is private property, protected by the law, and disputes should be resolved through legal proceedings.”

Song makes several valid points here. As we recently covered, US attempts to co-opt its own companies into its political dispute with China are increasingly causing collateral damage. Furthermore the apparent suspension of the rule of law for Huawei is not only unjust, but undermines the whole foundation on which international trade relies.

Having said that, Huawei’s unprompted protestations of angelic innocence when it comes to intellectual property are likely to raise some eyebrows. For example, a recent investigation into Huawei’s historical activities in this area paints a somewhat more nuanced picture. Huawei is using MWC Shanghai to make a bunch of self-aggrandizing announcements but the real action will take place when Trump meets Chinese President Xi in Japan this weekend.

FedEx sues US Department of Commerce over entity list

US courier company FedEx is suing its own government over its ‘entity list’, which it claims puts undue burden of enforcement on companies.

The action follows the recent story of FedEx refusing to ship a Huawei smartphone from one private individual to another because it thought it might get into trouble with the government. The reason it thought this is that Huawei is on a list compiled by the US Department of Commerce that identifies certain organisations US companies aren’t allowed to do business with.

It seems there was some confusion at a FedEx sorting office that resulted in the package being sent back even though it should have been allowed, so long as it wasn’t sent by Huawei themselves. While FedEx eventually admitted to making a mistake, that may have been too late for Chinese authorities, who are presumably itching for any opportunity to add US companies to its own ‘unreliable entities’ list.

FedEx quite reasonably feels it has been put in an impossible position when it comes to enforcing the Export Administration Regulations (EAR) that accompany this entities list, since it can’t possibly be 100% sure every one of the millions of packages it handles comply with the regulations and feels the punishments associated with getting it wrong, in either direction, are too severe.

“FedEx believes that the EAR violate common carriers’ rights to due process under the Fifth Amendment of the U.S. Constitution as they unreasonably hold common carriers strictly liable for shipments that may violate the EAR without requiring evidence that the carriers had knowledge of any violations,” said FedEx’s statement on the litigation. “This puts an impossible burden on a common carrier such as FedEx to know the origin and technological make-up of contents of all the shipments it handles and whether they comply with the EAR.

“As a company that is committed to complying with all laws and regulations in the countries we serve, FedEx strongly supports the objectives of U.S. export control laws. We have invested heavily in our internal export control compliance program. However, we believe that the EAR, as currently constructed and implemented, place an unreasonable burden on FedEx to police the millions of shipments that transit our network every day. FedEx is a transportation company, not a law enforcement agency.”

You can read the full lawsuit here if that sort of thing floats your boat. This seems to be an inevitable consequence of the US’s increasing inclination to use trade bans as a political weapon. The burden of enforcing them falls on private companies and there’s almost no limit to how vindictive the US state is prepared to be to anyone who gets them wrong, just ask ZTE. The longer this trade war goes on there more collateral damage there will be – yay.

US Senator moves to strip social media giants of platform status

The issue of social media censorship has caught the attention of the US Senate, where one member has proposed stripping tech giants of their legal protection as platforms.

Section 230 of the absurdly-named Communications Decency Act states “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”. It’s considered a vital piece of legislation for the internet as without it platforms such as forums, social media and YouTube wouldn’t be able to allow their users to instantly upload their own comment and content.

The key feature concerns legal protection. If you’re considered a publisher as, for example, Telecoms.com is, then you’re legally liable for everything that appears on your site as you are considered to have published it yourself. If US law views you as a platform, however, you are spared such liability because you’re deemed to have no influence over what gets whacked up on your site by its users.

When you start censoring them, however, that line becomes blurred. If, say, Facebook decides certain types of content are not allowed on its platform and actively censors them, then the implication is that it approves of everything it doesn’t censor. That, in turn could be perceived as it acting more like a publisher than a platform and should therefore lose its legal protections.

This seems to be the view of US Senator Josh Hawley, who has introduced new legislation he’s calling the Ending Support for Internet Censorship Act. “With Section 230, tech companies get a sweetheart deal that no other industry enjoys: complete exemption from traditional publisher liability in exchange for providing a forum free of political censorship,” said Hawley. “Unfortunately, and unsurprisingly, big tech has failed to hold up its end of the bargain.

“There’s a growing list of evidence that shows big tech companies making editorial decisions to censor viewpoints they disagree with. Even worse, the entire process is shrouded in secrecy because these companies refuse to make their protocols public. This legislation simply states that if the tech giants want to keep their government-granted immunity, they must bring transparency and accountability to their editorial processes and prove that they don’t discriminate.”

The long and short of it is that Section 230 protection will no longer be an automatic right for any tech company that has either: more than 30 million active monthly users in the U.S., more than 300 million active monthly users worldwide, or who have more than $500 million in global annual revenue. Instead they would have to earn that status by regularly convincing the FTC that their algorithms and content-removal practices are politically neutral.

This move has probably been urged by US President Trump, who has made it clear that he thinks social media censorship is biased against conservatives and probably thinks it’s also biased against him personally. It’s no secret that Silicon Valley is a largely Democrat, as opposed to Republican, environment and there’s plenty of anecdotal evidence of political bias in social media censorship and if this bill went through they would be under immense pressure to stop it.

The companies themselves don’t seem to have publicly commented on the proposed bill, but the internet seems split. Plenty of commentators such as the EFF and Techdirt think the move is unconstitutional and would give too much power of censorship to the government. The Verge, however, has adopted a neutral stance for now and independent YouTube Journalist Tim Pool seems to think it’s a positive development.


We think it’s right that social media companies should be stripped of their Section 230 protection if they start acting as censors, and thus publishers, but don’t think the answer is for the state to have power of censorship over them. If, instead, they just passed a law banning the censorship of all legal material that would solve the problem without making these private companies beholden to the whims of the state.

 

HMD moves Nokia phone user data storage to Finland

HMD Global, the maker of Nokia-branded smartphones, announced that it is moving the storage of user data to Google Cloud servers located in Finland, to ease concerns about data security.

The phone maker announced the move in the context of its new partnership with CGI, a consulting firm that specialises in data collection and analytics, and Google Cloud, which will provide HMD Global with its machine learning technologies. The new models, Nokia 4.2, Nokia 3.2 and the Nokia 2.2, will be the first ones to have the user data stored in the Google Cloud servers in Hamina, southern Finland. Older models that will be eligible for upgrading to Android Q will move the storage to Finland at the upgrade, expected to take place from late 2019 to early 2020. HMD Global commits to two years’ OS upgrades and three years’ security upgrades to its products.

HMD Global claims the move will support its target to be the first Android OEMs to bring OS updates to its users, and to improve its compliance with European security measures and legislation, including GDPR. “We want to remain open and transparent about how we collect and store device activation data and want to ensure people understand why and how it improves their phone experience,” said Juho Sarvikas, HMD Global’s Chief Product Officer. “This change aims to further reinforce our promise to our fans for a pure, secure and up to date Android, with an emphasis on security and privacy through our data servers in Finland.”

Sarvikas denied to the Finnish news outlet Ilta-Sanomat that the move was a direct response to privacy concerns triggered by the controversy earlier this year when Nokia-branded phones sold in Norway were sending activation data to servers in China. At that time HMD Global told Telecoms.com that user data of phones purchased outside of China is stored in AWS servers in Singapore, which, the company said, “follows very strict privacy laws.” However, according to GDPR, to take user data outside of the EU, the company would have had to obtain explicit consent from its EU-based users.

Sarvikas claimed that the latest decision to move storage to Finland has been a year in the making and is part of the company’s overall cloud service vendor swap from Amazon to Google. “Staying true to our Finnish heritage, we’ve decided to partner with CGI and Google Cloud platform for our growing data storage needs and increasing investment in our European home,” Sarvikas added in the press release.

Francisco Jeronimo, Associate VP at IDC, saw this move a positive action by HMD Global, calling it a good move “to address concerns about data privacy” on Twitter.

US moves to protect Verizon from Huawei patent claim – report

Apparently Huawei thinks Verizon owes it a billion bucks in unpaid patent licence fees, but a US Senator want to block its ability to sue.

The Senator in question is Marco Rubio, who has form with Huawei as you can see from the tweet below. According to Reuters Rubio filed legislation yesterday designed to block Huawei from seeking damages in US patent courts. The move was an apparent reaction to Huawei getting in touch with Verizon to demand the US operator cough up for 230 of its patents that it used without paying for the privilege.

If this legislation goes through it would set an alarming precedent. The US has made three main claims against Huawei: flouting US sanctions, industrial espionage against US companies and assisting the Chinese government in its own espionage efforts. Rubio seems to be saying that some or all of these allegations also disqualify the company from basic legal rights in the US.

It’s not unreasonable to view Huawei’s alleged claim against Verizon as an escalation, but if it’s without merit then what does the US have to fear from letting the legal process run its course? Talking of escalation, if the US starts suspending the rule of law for Chinese companies, what’s to stop China returning the favour? We can only assume US companies with interests in China, especially those with patent claims such as Qualcomm, are watching this story nervously.