Start Up No.1376: Epic v Apple battle intensifies, Facebook’s African push, Google’s Aussie disinformation, Huawei under pressure, and more


Fortnite’s iOS stats could look a lot worse if Apple revokes its developer licences in, uh, a fortnight. CC-licensed photo by Veselin Rogelov on Flickr.

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A selection of 12 links for you. Last one standing? I’m @charlesarthur on Twitter. Observations and links welcome.

Epic Games asks court to stop Apple pulling its developer tools next week • Engadget

Nicole Lee:

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Epic Games has filed yet another lawsuit against Apple. The Fortnite developer is now suing the Cupertino-based company for allegedly retaliating against it for its other lawsuit last week. Apple has not only removed the game from the App Store but has told Epic that it will “terminate” all its developer accounts and “cut Epic off from iOS and Mac development tools” on August 28th.

According to the filing, Epic claims that Fortnite’s removal from the App Store in conjunction with the termination of the developer accounts will likely result in “irreparable harm” to Epic. The company adds that cutting off access to development tools also affects software like Unreal Engine Epic, which it offers to third-party developers and which Apple itself has never claimed to have violated any policy. Without them, the company states that it can’t develop future versions of Unreal Engine for iOS or macOS.

“Not content simply to remove Fortnite from the App Store, Apple is attacking Epic’s entire business in unrelated areas,” the lawsuit states. “Left unchecked, Apple’s actions will irreparably damage Epic’s reputation among Fortnite users and be catastrophic for the future of the separate Unreal Engine business.” The company says that the preliminary injunctive relief is necessary to prevent Epic’s business from being crushed before the case even goes to judgement.

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Apple’s response, in part: “Epic agreed to the App Store terms and guidelines freely”. And the Apple Developer Guidelines include the deathless phrase “Apple may terminate or suspend you as a registered Apple Developer at any time in Apple’s sole discretion. If Apple terminates you as a registered Apple Developer, Apple reserves the right to deny your reapplication at any time in Apple’s sole discretion.” Squeaky bum time for Epic.

While Epic might have gamed out that Apple would eject Fortnite from the App Store for offering its own payment system, it pretty clearly didn’t expect this nuclear response. Hard to see why a court would grant Epic an injunction for prima facie breaking Apple’s App Store guidelines. (Also: Apple’s kicking Fortnite’s devs out in a fortnight, so it’s the last one standing? Emblematic, at least.)
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Epic’s Fortnite standoff is putting Apple’s cash cow at risk • The Verge

Chaim Gartenberg:

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The 30% “Apple tax” is the beating heart for Apple’s services business, which it has emphasized as growth as the iPhone business starts to slow. That line of revenue has become a critical part of Apple’s business, the bright star executives have been able to point to on earnings reports in recent quarters.

Labeling the revenue line as “services” lets Apple obscure where the money is really coming from — and onstage, Apple executives tend to talk about the prestige products like Apple Music, Apple TV Plus, Apple News Plus, or Apple Arcade. But the money from those services is dwarfed by Apple’s cut of the money flowing through its App Store and its power to force major players like Adobe, Spotify, and even Epic to pay the toll. So when Apple squares off over Fortnite, it’s not just fighting over one app or one policy. It’s protecting one of the key sources of revenue in the years to come — a source it could lose permanently if Epic comes out on top.

The App Store may have started out small, but today, it makes Apple a staggering amount of money. In 2019 alone, Apple’s percentage taken on digital content sold through the App Store accounted for an estimated $18.3bn, or nearly 40% of Apple’s total service revenue. (To reach that number, Apple says that $61bn of digital content was sold through the App Store in 2019, of which it took an estimated $18.3bn cut, compared to the $46.3bn Apple reported in services revenue on its collected 2019 quarterly earnings.)

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Just so we know what’s at stake.
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Toxic trade-offs at Facebook • The New York Times

Shira Ovide:

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Beginning in 2017, Facebook started a revamp to emphasize personal posts and interactions and to steer us away from aimlessly scrolling past news articles and puppy videos in the news feed. Among the changes was pushing people to Facebook Groups, or online forums of like-minded people.

For many people, groups can be a wonderful resource and social outlet. But they also have become places for people to wallow in fake health treatments, plot violence or spread false theories like QAnon.

Groups that post frequently and have a lot of avid back-and-forth — and that often applies to discussions of fringe ideas — tend to get circulated more in the Facebook news feed, which funnels more people into those groups. [eg Holocaust denial or QAnon or domestic terror groups.]

…Facebook now wants to become a place for us to have more private and meaningful conversations — a continuing evolution from a global public message board to the more cloistered space that Zuckerberg started to emphasize in 2017. I worry that this may create Facebook’s next unintended consequence.

Part of this privacy plan is a march to encrypt, or scramble, all activity so that there are no digital trails of what we post or say. There are good reasons for this. Facebook wouldn’t be able to peer into our private messages, and authoritarian rulers couldn’t demand that Facebook identify the person behind an account critical of the government.

But the potential pitfalls terrify me. Encrypting Facebook apps including Instagram and Messenger will make it difficult or impossible for Facebook to help law enforcement figure out who is selling drugs on Instagram or calling for violence in its groups. It will be harder to trace a propaganda campaign to a foreign government. Facebook will be able to say, truthfully, that it can’t see behind its own curtain.

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Inside Facebook’s new power grab • WIRED UK

James Ball on Facebook’s latest push, into Africa:

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The scale of Facebook’s programmes, and their reach across dozens of countries, is for some, alarming. While it might seem odd to complain about free or cheap internet, concerns range from fears on misinformation, to worries that Facebook’s intervention could stifle potential local challengers, to suspicions about what the company might do with browsing data – something on which Facebook has hardly earned a glowing reputation.

“In my opinion, the ongoing expansion of the project has not received the scrutiny it deserves,” says Nothias. “Increasing connectivity, in general, benefits Facebook’s products. Facebook is pretty transparent about this.”

“Most importantly, for Free Basics users, Facebook becomes the homepage of the Internet. Free Basics builds brand loyalty among users. It contributes to Facebook’s dominant position in emerging markets with tremendous demographic growth.”

“Facebook is adamant that Free Basics is not a data extraction exercise – on the basis that information is aggregated or de-identified. But aggregated data is still valuable.”

Back in 2016, similar concerns were enough to trigger protests in India, and mobilise civil society groups around the world. So, what’s happened since for the outcry to be so muted? There’s several things going on, says Dr Anri van der Spuy, a senior associate at Research ICT Africa, a policy and regulation think-tank.

“In a lot of these contexts, people have to decide between buying a loaf of bread for their children or meal a day, and buying data,” she says. “Yes, [Facebook’s programme] is not perfect internet – [but] you can’t be highbrow about this. If people want to go on social media, they want to go on social media.”

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Here’s the reality: in countries that use Free Basics, levels of disinformation and misinformation and (for want of a better phrase) “fake news” are worse than in those which don’t. WhatsApp and Facebook become “the internet”, they don’t prevent the spread of lies and outrage, and the effects are malevolent.
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Google lobbies Australian users against plans to make it pay for news • The Verge

Jon Porter:

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Google has published an open letter about a newly proposed government regulation that would compel it to pay media outlets for news content. Australians visiting their local Google homepage are presented with an ominous pop-up which warns that “the way Aussies use Google is at risk” and “their search experience will be hurt by new regulation.” It’s a bold lobbying move that puts Google’s arguments against the change in front of millions of Australians.

Australia’s consumer watchdog pushed back, saying the letter “contains misinformation,” adding that “a healthy news media sector is essential to a well-functioning democracy.”

Australia’s proposed News Media Bargaining Code law, which is currently in draft and targets Facebook alongside Google, follows a 2019 inquiry in Australia that found the tech giant to be taking a disproportionately large share of online advertising revenue, even though much of their content came from media organizations.

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Google is really over-egging it by claiming peoples’ search experience will be hurt. The consumer watchdog letter says, in part,

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Google will not be required to charge Australians for the use of its free services such as Google Search and YouTube, unless it chooses to do so.

Google will not be required to share any additional user data with Australian news businesses unless it chooses to do so. The draft code will allow Australian news businesses to negotiate for fair payment for their journalists’ work that is included on Google services.

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Essentially, it’s the copyright fight that has been brewing ever since Google was first created on a PC at Stanford University by copying the whole web – a much simpler tasks then.

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U.S. tightening restrictions on Huawei access to technology, chips • Reuters

David Shepardson:

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The Trump administration announced on Monday it will further tighten restrictions on Huawei Technologies, aimed at cracking down on its access to commercially available chips.

The US Commerce Department actions will expand restrictions announced in May aimed at preventing the Chinese telecommunications giant from obtaining semiconductors without a special license – including chips made by foreign firms that have been developed or produced with US software or technology.

The administration will also add 38 Huawei affiliates in 21 countries to the US government’s economic blacklist, the sources said, raising the total to 152 affiliates since Huawei was first added in May 2019.

Commerce Secretary Wilbur Ross told Fox Business the restrictions on Huawei-designed chips imposed in May “led them to do some evasive measures. They were going through third parties,” Ross said. “The new rule makes it clear that any use of American software or American fabrication equipment is banned and requires a license.”

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That’s a noose tightening – although it will also push Huawei (and all of China) to develop chips in its own right.
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Secret Service bought phone location data from apps, contract confirms • Vice

Joseph Cox:

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The Secret Service paid for a product that gives the agency access to location data generated by ordinary apps installed on peoples’ smartphones, an internal Secret Service document confirms.

The sale highlights the issue of law enforcement agencies buying information, and in particular location data, that they would ordinarily need a warrant or court order to obtain. This contract relates to the sale of Locate X, a product from a company called Babel Street.

In March, tech publication Protocol reported that multiple government agencies signed millions of dollars worth of deals with Babel Street after the company launched its Locate X product. Multiple sources told the site that Locate X tracks the location of devices anonymously, using data harvested by popular apps installed on peoples’ phones.

Protocol found public records showed that U.S. Customs and Border Protection (CBP) purchased Locate X. One former Babel Street employee told the publication that the Secret Service used the technology. Now, the document obtained by Motherboard corroborates that finding.

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Lax protections lead to abuses. Or do European and British intelligence agencies just have carve-outs that let them grab this data without reference? (Thanks G for the link.)
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Covid-19 is creating a wave of heart disease • The New York Times

Dr Haider Warraich (who is a cardiologist):

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An intriguing new study from Germany offers a glimpse into how SARS-CoV-2 affects the heart. Researchers studied 100 individuals, with a median age of just 49, who had recovered from Covid-19. Most were asymptomatic or had mild symptoms.

An average of two months after they received the diagnosis, the researchers performed M.R.I. scans of their hearts and made some alarming discoveries: nearly 80% had persistent abnormalities and 60% had evidence of myocarditis. The degree of myocarditis was not explained by the severity of the initial illness.

Though the study has some flaws, and the generalizability and significance of its findings not fully known, it makes clear that in young patients who had seemingly overcome SARS-CoV-2 it’s fairly common for the heart to be affected. We may be seeing only the beginning of the damage.

Researchers are still figuring out how SARS-CoV-2 causes myocarditis — whether it’s through the virus directly injuring the heart or whether it’s from the virulent immune reaction that it stimulates. It’s possible that part of the success of immunosuppressant medications such as the steroid dexamethasone in treating sick Covid-19 patients comes from their preventing inflammatory damage to the heart. Such steroids are commonly used to treat cases of myocarditis. Despite treatment, more severe forms of Covid-19-associated myocarditis can lead to permanent damage of the heart — which, in turn, can lead to heart failure.

But myocarditis is not the only way Covid-19 can cause more people to die of heart disease.

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It’s all so jolly.

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Why did a small Pennsylvania town keep winning T-Mobile’s promotional contests? • CNBC

Megan Graham:

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Earlier this summer, players of a T-Mobile Tuesdays giveaway contest took to Reddit to discuss a strange discovery: the company in certain weeks gave away tens, sometimes hundreds, of thousands of dollars in gift cards, prizes and cash to winners. In one of the contests, nearly a third of the publicly listed winners came from a Pennsylvania town with a population of less than 4,000.

Players wondered: What was in the water in Chadds Ford, Pennsylvania? 

The theories began to blossom in threads as others posted publicly on social media asking T-Mobile for answers. Some surmised it could be the result of accidental coding. Maybe entries that were missing zip codes appeared to be from the town. Others suspected someone had figured out where, geographically speaking, someone could enter the contest to have a slight time advantage and set their server location as such. Some drew similarities to “McMillions,” an HBO series and podcast following a 2018 Daily Beast story titled “How an Ex-Cop Rigged McDonald’s Monopoly Game and Stole Millions.” 

The promotional app and contest, a ploy to foster goodwill with customers from a carrier known for such perks, offer occasional giveaways like tablets, Chromebooks, tickets to a “James Bond Fan Event,” a trip for two to Spanish-language awards show Premio lo Nuestro and more.

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If I tell you that you could enter via a web form, you’ll probably get there, but it’s an entertaining read nonetheless.
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Level of cryptocurrency scams ‘unprecedented in modern markets’ • Yahoo Finance

Oscar Williams-Grut:

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Researchers found 355 incidents of price manipulation across several cryptocurrency exchanges over a period of just seven months. $350m (£267m) of suspicious trading activity was linked to “pump and dump” scams that reaped an estimated profit of $6m for organisers.

While names like bitcoin and ethereum dominate coverage of the cryptocurrency space, price manipulation occurs with smaller coins. There are over 6,000 cryptocurrencies in circulation, according to CoinMarketCap.com, with huge variations in market capitalisation and liquidity.

“You have a large number of coins that you can essentially play trading games with,” Dhawan said.

15% of all the nearly 200 cryptocurrencies Dhawan and his co-author Tālis J. Putniņš looked at were manipulated at least once during the seven month period they observed.

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The researchers write: “Puzzlingly, people join in despite negative expected returns. In a simple framework, we demonstrate how overconfidence and gambling preferences can explain participation in these schemes, and find strong empirical support for both mechanisms. Pumps generate extreme price distortions of 65% on average, abnormal trading volumes in the millions of dollars, and large wealth transfers between participants. These manipulation schemes are likely to persist as long as regulators and exchanges turn a blind eye.”

Regulators? Exchanges? Zero chance that exchanges will lift a finger, and regulators might decide they have easier targets than people on crypto who can hide behind hard-to-trace accounts. All of which confirms to me that the crypto space is just a gaggle of greater fools.
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5G smartphones could crush your home Wi-Fi. So where’s the 5G? • WSJ

Joanna Stern went back, a year on, to see where 5G has got to. The answer hasn’t changed:

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When I asked executives at each of the big carriers where I’d really experience the 5G speed on a smartphone, they all said variations of the same thing: 5G will unlock the technology of the future, but for now…hefty downloads!

David Christopher, executive vice president and general manager of AT&T Mobility, talked about downloading the entire Harry Potter movie collection in 2 minutes. Verizon’s Ms. Hemmer mentioned downloading “Stranger Things” and HD video calling. And Karri Kuoppamaki, T-Mobile vice president of radio network technology and strategy? Video and game downloads!

Even so, how often do any of us even download movies anymore? Maybe before a flight? But…where are you flying these days?

I found 5G to be far faster than the nationwide average home-internet speed, 86 Mbps, reported by Ookla. As you’ll see in my video, I moved 15 of my home gadgets into an RV—laptops, tablets, a 32-inch TV, an Xbox One, a Ring doorbell, etc.—to see if the connections could handle it. The only real bottlenecks were the 5G phones themselves, which aren’t meant to serve as hotspots for so many devices at a time and don’t have the range of a wireless router.

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So basically it’s great for anyone living in an RV, as they’re called in the US (caravans, as they’re called more sensibly in the UK).
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What’s in a hedcut? Depends how it’s made • WSJ

Francesco Marconi, Carrie Reynolds and Emily Anderson:

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The hedcut is a drawing created largely out of dots and hatched lines. It stems from a centuries-old tradition that is also used around the world to illustrate currency. At the Journal, we typically use hedcuts to depict notable subjects in our stories and our journalists who write them. We also use this stippled style of drawing to illustrate our daily feature known as the A-Hed.

Hedcuts first appeared on the front page of the Journal in 1979. Their classical feel suited the paper’s formal, famously text-heavy style at the time. Even as the Journal embraced more visuals across all our platforms in the decades since, the hedcut has persisted—becoming something of a status symbol for politicians, celebrities and reporters alike.

“The hand-drawn hedcut portraits are highly coveted,” said the Journal’s chief art director John Nichols. “They are the mark that you’ve made it at the Journal.”

Mr. Nichols oversees a team of five artists who create these drawings each day, typically spending four to five hours per image.

Not far from some of the illustrators is the Journal’s 21-month-old R&D Lab. These data scientists and machine-learning experts aim to bring science into the art of storytelling. In the case of the Journal’s hedcuts, this meant figuring out the best technical methods to mimic the stippling (dots) and hatching (lines) that give hedcuts their classic feel.

One initial challenge was deciding whether to use artificial intelligence at all. A simple way to create automated hedcuts could have been to use the light-contrast technology available in Adobe Photoshop to mimic the dark and light parts of a photograph in a stipple style.

…Wall Street Journal artists will continue to create the hedcut drawings you see on our stories each day. But our new AI-driven tool offers WSJ members a chance to partake in the tradition by creating their own here.

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You have to have a WSJ account to get the portrait. Having tried it, I’d say it’s nice, but you’d need a certain sort of vanity to use it if you don’t work for the WSJ (but if you do, that’s totally appropriate).
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Errata, corrigenda and ai no corrida: none notified

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