Welcome to Hillicon Valley, The Hill’s newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley.
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EU HITS GOOGLE WITH RECORD ANTITRUST FINE: The European Union (EU) hit Google with a record $5 billion antitrust fine, accusing the company of illegally using its Android mobile operating system to cement its dominance over other online services.
Margrethe Vestager, the European Commission’s competition chief, on Wednesday said that Google’s arrangements with phone manufacturers suppressed competition.
“In this way, Google has used Android as a vehicle to cement the dominance of its search engine,” Vestager said.
“These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.”
The decision tops the record previously set by the $2.7 billion fine Vestager leveled on Google last year. That fine was for the company’s practice of elevating its own comparison shopping service in search results over rivals’ services. The EU also has an open antitrust investigation into Google’s advertising practices.
Context: The fine comes amid trade tensions between the EU and the U.S. after the Trump administration imposed tariffs on steel and aluminum imports from the EU. The EU is retaliating, sparking fears of a global trade war.
EU flexing its muscles: The decision also highlights the aggressive approach European regulators are taking when it comes to Silicon Valley. In addition to last year’s massive fine against Google, the EU has also imposed sweeping privacy rules on the industry that require websites to provide increased transparency over their data practices and offer consumers more control over their information.
The technical details: The European Commission, which is the enforcement wing of the EU, cited Google’s practice of forcing manufacturers to install the company’s apps on Android phones. Device makers are required to install Google’s Search and Chrome apps in order to gain access to the Android app marketplace.
Vestager also accused Google of making illegal payments to manufacturers to ensure that its apps are preloaded on devices.
The decision also cites Google’s efforts to prevent any alternative versions of the Android system from being developed and deployed.
Under the terms of the decision, Google will have to cease all three practices and pay the $5 billion fine within 90 days. After that, the company can be fined up to 5 percent of its parent company Alphabet’s daily revenue for noncompliance.
Read more here.
GOOGLE’S RESPONSE:
Google is already vowing to appeal the fine.
“Android has created more choice for everyone, not less,” a Google spokesperson said in a statement on Wednesday. “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the Commission’s decision.”
In a blog post, Google CEO Sundar Pichai said Android is open and promotes competition.
“We’ve always agreed that with size comes responsibility. A healthy, thriving Android ecosystem is in everyone’s interest, and we’ve shown we’re willing to make changes. But we are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms.”
OTHER REACTIONS IN THE US:
Yelp SVP of public policy Luther Lowe: “The European Commission’s ruling of additional illegal conduct by Google on smartphones is another important step in restoring competition, innovation and consumer welfare in the digital economy; the EU must ensure complete compliance from a recalcitrant Google and the U.S. must take action to provide American consumers with similar protections.”
Note: Yelp has been a rival of Google’s in other enforcement actions.
Sen. Richard Blumenthal (D-Conn.): “The FTC should end its decade of inaction and deference, and confront the mounting evidence that Google’s business practices have stifled robust competition in a market that is critical to our economy and society. Europe should not be alone setting the agenda.”
Computer & Communications Industry Association CEO Ed Black: “Today’s decision punishes the most open, affordable and flexible operating system in the mobile ecosystem. Android brought more competition, innovation, and consumer choice to the market. These are precisely the things competition authorities are tasked to promote rather than jeopardize.”
ANOTHER DAY, ANOTHER RUSSIA FIRESTORM:
Shot: President Trump on Wednesday said Russia does not pose a threat to the United States, contradicting his director of national intelligence on a critical security issue and deepening a political controversy that began at his summit with Russian President Vladimir Putin.
Trump, besieged with criticism over his perceived deference to Putin at the summit, for a second day sought to do damage control on the crisis, stating that no one had been tougher than him on Russia.
“There has never been a president as tough on Russia has I have been,” Trump told reporters before a Cabinet meeting at the White House.
The president said his administration is “doing very well” in countering Russia, citing U.S. sanctions on Moscow and the expulsion of Russian nationals accused of being spies.
“I think President Putin knows that better than anybody, certainly a lot better than the media. He understands it, and he’s not happy about it,” Trump said. But seconds later, Trump said “no” when asked if Russia still poses a threat to the U.S.
Chaser: Shortly after, White House press secretary Sarah Sanders said Trump did not say that Russia is no longer targeting the United States, seeking to clean up Trump’s earlier comments that further fueled outrage about his handling of Moscow.
Sanders said she spoke with Trump who said he was “saying ‘no’ to answering questions” and not to the reporter’s question itself.
“He does believe that they would target certainly U.S. election,” Sanders said.
Trump’s remarks came two days after Director of National Intelligence Dan Coats issued a statement that recognized Russia’s “ongoing, pervasive efforts to undermine our democracy.”
Other top U.S. officials have described ongoing Russian efforts to use social media and other avenues to amplify divisive issues and sow discord among the American public.
ICYMI: Trump’s Russia remarks put intel chiefs in tough spot.
MEANWHILE, IN THE SENATE: Sens. Jeff Flake (R-Ariz.) and Chris Coons (D-Del.) are introducing a resolution supporting the intelligence community’s assessment that Russia meddled in the 2016 election days after Trump voiced skepticism about Moscow’s election interference.
Flake and Coons said on Wednesday that they will try to pass their resolution on Thursday. Under Senate rules, any one senator will be able to block them. More on the measure here.
TRACTION ON ELECTION SECURITY BILL? A legislative proposal aimed at securing U.S. election systems from cyberattack is picking up additional support in the Senate as lawmakers grapple with how to respond to Russian election interference.
The bill, spearheaded by Sens. James Lankford (R-Okla.) and Amy Klobuchar (D-Minn.), is designed to help states upgrade their digital voting systems and boost information sharing between state and federal officials on potential cyber threats to U.S. elections.
Lankford is also hoping that Special Counsel Robert Mueller’s recent indictment of 12 Russian intelligence officers for launching cyberattacks in an effort to interfere with the 2016 election will add more urgency to passing the bill.
“It was further evidence in great detail that the Russian not only were trying to engage, but how they were engaged,” Lankford told The Hill in an interview Wednesday.
The bill is necessary to ensure confidence in future votes and securing state systems, he said, and future elections will be more at risk from hacking or interference if it is not passed.
Lawmakers have demonstrated increased interest in election security in recent weeks. The Senate Rules Committee has held two hearings on the issue. Lankford also said his staff is sitting down with counterparts on the Rules Committee to work out any issues with the bill before the committee ultimately votes on whether to advance it to the Senate floor. It is unclear when, and if, the Rules Committee will vote on the legislation.
Why the delay so far? Most of the hang-ups with the legislation have centered on state concerns with the bill. State officials have broadly been weary of federal efforts to address election security, fearing a federal takeover of elections that have historically been run by the states.
Lankford said that he met with state secretaries of state last week on the latest version of the bill and that the officials were “very supportive of where we are.” “They recognized how much input they have already given,” Lankford said Wednesday.
“I would assume it will continue to have tweaks all the way to the bitter end,” Lankford said. “I don’t expect large changes tough.”
Read more here.
VOTER DATA DUMP: A Virginia-based political robocall firm reportedly left thousands of U.S. voter records exposed on an online server, including personally identifiable information.
Robocent had stored voters’ full names, phone numbers, addresses, political affiliations, as well as age and gender on a public Amazon S3 bucket without any password protection, according to Kromtech Security’s Bob Diachenko.
“Robocent cloud storage, with 2594 listed files, was available for anybody on the internet searching for a ‘voters’ keyword, long before I have spotted it,” wrote Diachenko, who discovered the unprotected data and potested his findings to a LinkedIn blog post.
“What’s more disturbing is that company’s self-titled bucket has been indexed by GrayhatWarfare, a searchable database where a current list of 48,623 open S3 buckets can be found.”
Robocent markets itself as having “reliable voter data” for just three cents per record as well as the ability to “reach thousands of voters instantly with robocalls,” according to its website.
Diachenko contacted the company’s lead developer to notify them of his findings.
Robocent did not immediately respond to a request for comment on the data leak, but Robocent co-founder Travis Trawick told ZDNet in a statement that all the exposed data was publicly available information. Trawick also said he would contact the affected individuals “if required by law.”
Read more here.
SINCLAIR TRIES AGAIN: Sinclair is revising its plan to sell some of its companies in an attempt to appease the Federal Communications Commission (FCC) after the agency outlined issues with the broadcaster’s pending merger with Tribune Media.
The telecommunications company announced Wednesday that it is withdrawing or revising its planned sale of several stations in Houston, Dallas and Chicago, deals that it had planned to make with closely aligned media companies.
Sinclair said that it now plans to keep the Chicago station, WGN, and is working to still divest from the Houston and Dallas stations, KIAH and KDAF, respectively, via a divestiture trust, operated by an independent trustee.
Sinclair said the proposed changes come in response to FCC Chairman Ajit Pai indicating that the agency is questioning the sales.
The broadcasting company had planned to make divestitures in an attempt to comply with FCC media ownership rules that prevent a single broadcaster from controlling too many local stations across the U.S.
Read more here.
MARK YOUR CALENDARS: The Department of Homeland Security is hosting a “National Cybersecurity Summit on July 31 in New York City. The event will feature officials from across government departments and agencies — including the Pentagon, FBI, NSA, and Energy Department — as well as representatives from academia and the private sector. The aim of the summit is to “lay out a vision for a collective defense model to protect our nation’s critical infrastructure,” according to a department release issued Wednesday afternoon.
“This summit is another opportunity to gather our interagency and private partners and chart our shared path to protect our nation’s critical infrastructure against cyber threats and achieve a secure and resilient cyberspace,” Homeland Security Secretary Kirstjen Nielsen said in a statement.
THE HOT TAKE SOCIAL NETWORK: Facebook CEO Mark Zuckerberg said in a recent interview that Holocaust-deniers should not be removed from his social platform if they are not “intentionally getting it wrong.”
“Let’s take this a little closer to home,” Zuckerberg said in an interview with Recode released on Wednesday. “So I’m Jewish, and there’s a set of people who deny that the Holocaust happened. I find that deeply offensive.”
“But at the end of the day, I don’t believe that our platform should take that down because I think there are things that different people get wrong — I don’t think that they’re intentionally getting it wrong,” Zuckerberg continued. “It’s hard to impugn intent and to understand the intent.”
“I just think as important as some of those examples are, I think the reality is also that I get things wrong when I speak publicly,” he said, further adding that he doesn’t think “that it is the right thing to say we are going to take someone off the platform if they get things wrong, even multiple times.”
Read more here.
NEW INFO ON CAMBRIDGE ANALYTICA DATA: Personal Facebook data gathered without users’ knowledge by Cambridge Analytica prior to the 2016 election was possibly accessed from Russia and other countries, a member of British Parliament said Tuesday.
Damian Collins, a Conservative MP leading an investigation into Cambridge Analytica’s activities, told CNN that the U.K.’s Information Commissioner’s Office (ICO) had discovered that some of the systems linked to the investigation had been accessed by IP addresses linked to several countries, including Russia.
“I think what we want to know now is who were those people and what access did they have, and were they actually able to take some of that data themselves and use it for whatever things they wanted,” Collins said.
Read more here.
ON TAP:
FBI Director Christopher Wray speaks on cyberterrorism and counterintelligence this evening at the Aspen Security Summit. His remarks are scheduled for 7:30 p.m. ET.
Tomorrow, attendees of the summit will hear from Homeland Security Secretary Kirstjen Nielsen at 11 a.m., and Director of National Intelligence Dan Coats at 3:15 p.m.
The House Appropriations Committee will mark up the fiscal 2019 Homeland Security appropriations bill at 9:30 a.m.
The House Intelligence Committee is holding an open hearing on the Chinese threat to American government and private sector research beginning at 8:30 a.m.
A LIGHTER TWITTER CLICK: Hat tip to Shonda Rhimes.
NOTABLE LINKS FROM AROUND THE WEB:
Wife of Papadopoulos interviews with House Intel Dems. (The Hill)
A top intelligence official at the National Security Council is leaving. (The Daily Beast)
BuzzFeed unearths some interesting comments from former NSA director Mike Rogers.
Homeland Security Chair Michael McCaul wants the U.S. to go on offense in cyber. (CyberScoop)
State Department silent on anniversary of Malaysia airliner downed by Russians in 2014. (Foreign Policy)
Here’s the full Zuckerberg interview that’s making the rounds today. (Recode)