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Twitter ex-security chief tells US Congress of security concerns

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Peiter “Mudge” Zatko, former head of security at Twitter, says executives at the company ignored alarms he raised about the safety of user data
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Twitter whistleblower Peiter Zatko told the US Congress on Tuesday that the platform ignored his security concerns, as its shareholders decide whether to approve a $44 billion takeover deal that Elon Musk is trying to exit.

“I’m here today because Twitter leadership is misleading the public, lawmakers, regulators and even its own board of directors,” Zatko, a hacker widely known as “Mudge” who was Twitter’s former security chief, told the hearing.

He said that, during his time as head of security for the platform from late 2020 until his dismissal in January this year, he tried to alert management to grave vulnerabilities to hacking or data theft, to no avail.

“They don’t know what data they have, where it lives, or where it came from. And so, unsurprisingly, they can’t protect it,” Zatko said during his opening remarks to the Judiciary Committee.

“Employees then have to have too much access (…) it doesn’t matter who has the keys if you don’t have any locks on the doors.”

Zatko testified that he brought concrete evidence of problems to the executive team and “repeatedly sounded the alarm”.

“To put it bluntly, Twitter leadership ignored its engineers because key parts of leadership lacked competency to understand the scope of the problem,” he said.

“But more importantly, their executive incentives led them to prioritize profits over security.”

Twitter has dismissed 51-year-old Zatko’s complaint as being without merit.

But revelations of his whistleblower report in the US press in August were perfectly timed for Tesla chief Elon Musk, who has used it as part of his justification for abandoning his unsolicited $44 billion bid to buy Twitter.

In his report, Zatko directly refers to questions asked by Musk about bot accounts on Twitter, saying the company’s tools and teams for finding such accounts are insufficient.

Musk has listed bot accounts as among the reasons to justify his walking away from the deal. Twitter is suing to force him to complete the buyout, with a trial set to go ahead on October 17.

If the court focuses on the fact that the world’s richest man declined to do fact gathering typically associated with big-money mergers, Zatko’s allegations could wind up being moot.

“Once both parties step into court it’s a high risk/high reward scenario for both parties with the major X variable now being the Zatko whistleblower claims,” Wedbush analyst Dan Ives said in a note to investors.

“We continue to view the Zatko situation as a Pandora’s Box scenario for Twitter.”

If Twitter prevails at trial, the judge could order the Tesla chief to pay billions of dollars to the company, or even complete the purchase.

Twitter shareholders are expected to endorse the buyout deal in a special vote Tuesday.

Twitter CEO Parag Agrawal declined to testify at Tuesday’s hearing, citing the Musk litigation, Senator Chuck Grassley said.

Zatko insisted he had not made his revelations “out of spite or to harm Twitter.”

“Far from that, I continue to believe in the mission of the company,” he told Tuesday’s hearing.

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US Congress to take on TikTok ban bill — again

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TikTok est depuis plusieurs mois dans le collimateur des autorités américaines, de nombreux responsables estimant que la plateforme de vidéos courtes et divertissantes permet à Pékin d'espionner et de manipuler ses 170 millions d'utilisateurs aux Etats-Unis
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The US House of Representatives will again vote Saturday on a bill that would force TikTok to divest from Chinese parent company ByteDance or face a nationwide ban.

The measure has been written into a massive $61 billion aid bill for Ukraine, Israel and Taiwan, which could ease its passage in both chambers of the US Congress.

Under the bill, ByteDance would have to sell the app within a few months or be excluded from Apple and Google’s app stores in the United States.

It would also give the US president the authority to designate other applications as a threat to national security if they are controlled by a country deemed hostile.

TikTok slammed the bill, saying it would hurt the US economy and undermine free speech. 

“It is unfortunate that the House of Representatives is using the cover of important foreign and humanitarian assistance to once again jam through a ban bill,” a company spokesman said.

He added a ban would “trample the free speech rights of 170 million Americans, devastate 7 million businesses, and shutter a platform that contributes $24 billion to the US economy annually.”

Western officials have voiced alarm over the popularity of TikTok with young people, alleging that it is subservient to Beijing and a conduit to spread propaganda, claims denied by the company and Beijing.

Joe Biden reiterated his concerns about TikTok during a phone call with his Chinese counterpart Xi Jinping in early April.

The House of Representatives last month approved a similar bill cracking down on TikTok, but the measure got held up in the Senate.

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Taiwan chip giant TSMC’s profits surge on AI demand

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Taiwan Semiconductor Manufacturing Company -- whose clients include Apple and Nvidia -- controls more than half the world's output of silicon wafers
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Taiwanese semiconductor giant TSMC announced Thursday a nearly 9 percent increase in net profits in the first quarter of 2024, buoyed by global demand for its microchips used to power everything from mobile phones to AI technology.

Taiwan Semiconductor Manufacturing Company — whose clients include Apple and Nvidia — controls more than half the world’s output of silicon chips, which have been called the “lifeblood” of the modern world.

The company said Thursday its net profit increased 8.9 percent on-year in January-March to NT$225.4 billion ($6.97 billion) compared to NT$206.9 billion in the same period last year. 

First-quarter revenues also rose 13 percent year-on-year to $18.87 billion, it said.

CFO Wendell Huang also said during an earnings call Thursday that TSMC expects its second-quarter revenues to increase by 27.6 percent.

TSMC, which produces some of the most advanced microchips in the world, dominates the chip-making industry, as well as its customer US-based Nvidia. 

The bulk of its fabrication plants making its most high-tech products are based in Taiwan, a self-ruled island that is claimed by neighbouring China — which has in recent years ramped up political and military pressures on Taipei. 

With a supply chain so vulnerable to shocks, customers — as well as governments concerned about critical supplies — have called for the firm to move more chip production lines off the island, which is also prone to natural disasters like earthquakes. 

Earlier this month, a massive magnitude-7.4 quake hit Taiwan and “a certain number of wafers in process were impacted and had to be scrapped”, Huang said. 

“But we expect most of the lost production to be recovered in the second quarter and thus minimum impact to the second quarter revenue,” he said. 

– ‘Significant progress’ –

The firm had also earlier this month announced plans to build a third semiconductor factory in Arizona — adding to the two fabrication units already in progress there. 

The preliminary agreement with the US Commerce Department — tied to a major investment law called the Chips and Science Act — would see TSMC receiving up to $6.6 billion in direct funding from the US government. 

That would raise its total investment in the United States to $65 billion.

“In Arizona, we have received the strong commitment and support from our US customers and plan to build three fabs… We have made significant progress in our first fab, which has already entered engineering wafer production in April,” said CC Wei, the company’s CEO.

“We are well on track for volume production in first half of 2025.”

He added that the second fab in Arizona has been upgraded “to utilise 2-nanometre technologies to support the strong AI-related demand in addition to the previously announced 3-nanometre” chips. 

TSMC’s projects in Arizona have faced some obstacles in the past year, which the company had attributed to a lack of human resources, as making microchips requires a highly specialised skillset. 

But if successful, the TSMC fabs in Arizona would be the “first time” that super-advanced chips will be made on American soil, said US Commerce Secretary Gina Raimondo earlier this month. 

The company had also in February launched a new $8.6 billion plant in the southern Japanese island of Kyushu — a coup for Japan as it vies with the United States and Europe to woo semiconductor firms with huge subsidies.

It is also planning another facility in Kumamoto for more advanced chips.

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Meta shouldn’t force users to pay for data protection: EU watchdog

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Meta in November launched a 'pay or consent' system -- a model that has faced several challenges
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Facebook owner Meta and other online platforms must not force users to pay for the right to data protection enshrined in EU law when offering ad-free subscriptions, the European data regulator said Wednesday. 

“Online platforms should give users a real choice when employing ‘consent or pay’ models,” the European Data Protection Board (EDPB) chair Anu Talus said in a statement. 

“The models we have today usually require individuals to either give away all their data or to pay,” she said. “As a result, most users consent to the processing in order to use a service, and they do not understand the full implications of their choices.”

Meta in November launched a “pay or consent” system allowing users to withhold use of their data for ad targeting in exchange for a monthly fee — a model that has faced several challenges from privacy and consumer advocates.

Meta has long profited from selling user data to advertisers but this business model has led to multiple battles with EU regulators over data privacy.

The latest announcement came after the data protection authorities of The Netherlands, Norway and the German state of Hamburg went to the EDPB for an opinion regarding the pay-or-consent model used by Meta.

The Silicon Valley company allows users of Instagram and Facebook in Europe to pay between 10 and 13 euros (around $11 and $14) a month to opt out of data sharing.

Meta pointed to an EU court ruling last year that it said opened the way for subscriptions as a “legally valid” option. “Today’s EDPB opinion does not alter that judgment and subscription for no ads complies with EU laws,” a Meta spokesperson said.

Meta is waiting for a decision on its model by the data privacy regulator in Ireland where the company is headquartered.

– ‘Binary choice’ –

All digital platforms must comply with the European Union’s mammoth general data protection regulation (GDPR), which has been at the root of EU court cases against Meta.

The EDPB in its opinion argued that Meta’s model was at odds with the GDPR’s requirement that consent for data use must be freely given.

“In most cases, it will not be possible for large online platforms to comply with the requirements for valid consent if they confront users only with a binary choice between consenting to processing of personal data for behavioural advertising purposes and paying a fee,” the opinion read.

The EDPB also warned the type of subscription service put forward by Meta “should not be the default way forward” for platforms.

It suggested that platforms should consider an alternative that would give users the right to reject being tracked for advertising purposes without the need to pay.

Privacy defenders welcomed the opinion.

“Overall, Meta is out of options in the EU. It must now give users a genuine yes/no option for personalised advertising,” said prominent online privacy activist Max Schrems.

“We know that ‘Pay or Okay’ shifts consent rates from about three percent to more than 99 percent — so it is as far from ‘freely given’ consent as North Korea is from a democracy,” said Schrems.

Tech lobby group CCIA however warned the EDPB risked “opening a Pandora’s Box”.

“Forcing businesses to offer services at a loss is unprecedented and sends the wrong signals,” said CCIA Europe’s senior policy manager, Claudia Canelles Quaroni.

“All companies should be able to offer paid-for versions of their services.”

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