Start Up No.1687: Apple sues NSO over Pegasus, how Clubhouse rose and fell, Sweden moots bitcoin mining ban, and more


Ever wondered why Apple’s cheaper accessories cost $19 – not more, not less? Turns out there’s a psychological reason. CC-licensed photo by nsuan-iphone on Flickr.

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A selection of 10 links for you. Not available as an NFT. I’m @charlesarthur on Twitter. Observations and links welcome.


Apple sues Israeli spyware maker NSO Group • The New York Times

Nicole Perlroth:

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Apple, for the first time, seeks to hold NSO accountable for what it says was the surveillance and targeting of Apple users. Apple also wants to permanently prevent NSO from using any Apple software, services or devices, a move that could render the company’s Pegasus spyware product worthless, given that its core business is to give government clients full access to a target’s iPhone or Android smartphone.

Apple is also asking for unspecified damages for the time and cost to deal with what the company argues is NSO’s abuse of its products. Apple said it would donate the proceeds from those damages to organizations that exposed spyware.
Since NSO’s founding in 2010, its executives have said they sell spyware to governments only for lawful interception, but a series of revelations by journalists and private researchers have shown the extent to which governments have deployed NSO’s Pegasus spyware against journalists, activists and dissidents.

Apple executives described the lawsuit as a warning shot to NSO and other spyware makers. “This is Apple saying: If you do this, if you weaponize our software against innocent users, researchers, dissidents, activists or journalists, Apple will give you no quarter,” Ivan Krstic, head of Apple security engineering and architecture, said in an interview on Monday.

“Thousands of lives were saved around the world thanks to NSO Group’s technologies used by its customers,” an NSO representative said in a statement Tuesday. “Pedophiles and terrorists can freely operate in technological safe-havens, and we provide governments the lawful tools to fight it.”

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Related: Technology Review says the French were close to buying Pegasus (the French deny it); and Facebook was given leave to sue NSO too a few days ago, over its hacking into WhatsApp.
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Why $19 is Apple’s favourite price for accessories • WSJ

Dalvin Brown:

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Analysts say $19 is also a sweet spot for well-to-do consumers willing to pay extra for basic tech products and services. “When you go below $20, those people don’t think twice about it, even if [the item] could be competitively priced at $1,” said Gene Munster, managing partner at venture-capital firm Loup Ventures.

The cost is also low enough to be an aspirational purchase for shoppers seeking products that make them feel special.

“Apple wants to make sure that their consumers constantly feel nice,” said Abir Syed, partner at e-commerce consulting firm UpCounting. Even if shoppers aren’t getting a good deal, he said, “they just feel fancy.”

But there’s a catch. Selling cables, adapters and polishing cloths far below $20 might put them in “cheap” territory. A lot of Apple’s success is based on its products’ positioning as an attainable luxury, something that costs a bit more but is justifiably worth it.

“At $19, you get the charm-pricing benefits [of a price ending in ‘9’], but it also sends the signal that this is a premium product,” Mr. Syed said.

Much of this pricing depends on where shoppers are doing their shopping. If you’re on Apple’s website or in an Apple store, you’re not bargain hunting the way you might be if you were shopping for a specific item on Amazon or at Walmart.

“A vast majority of people would say $20 is absurd for a dust cloth on Amazon,” Mr. Syed said. “At Apple, there’s a bit less of a comparison happening.”

In the case of Apple’s polishing cloth, selling it at $19 creates more demand than pricing it at $9, experts say. The $19 cloth became an internet meme shortly after Apple introduced it, which might help explain its hard-to-get status. And you likely won’t be paying less for it soon.

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Inside the rise and fall of Clubhouse, a poster child of pandemic hype • Business Insider

Kali Hays and Melia Russell:

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In May 2020, when the pandemic raged, the comedian and TV writer Marlena Rodriguez got an invite to a new app called Clubhouse that offered the homebound online masses a way to spend some of their suddenly abundant time.

In the ensuing months, Rodriguez jousted in a chat room with the celebrity Ashton Kutcher, gained more than 13,000 followers, and started a party room on Fridays that frequently swelled to over 1,000 people. She wrote a play, “Once Upon a Clubhouse,” and hired actors to perform it on the app. “I was in love,” she said.

Today, “I question why I’m even still on Clubhouse,” Rodriguez said. Her Friday-night room has dwindled to about 30 people.

More than any other startup, Clubhouse epitomizes the venture-capital-backed euphoria that swept the tech industry since lockdowns shut millions of people inside and pushed them online for connection, entertainment, and information. Marc Andreessen has called the app “the Athenian agora come to life,” referring to the hub of democracy in ancient Greece. It has raised more than $100m from his firm and other top VCs, garnering a $4bn valuation.

But with vaccinations rising and more people returning to normal life, Clubhouse has been hit particularly hard. Daily downloads of the app have plunged more than 90% since a peak in June, while daily average users are down almost 80% since February, Apptopia data indicated.

Insider interviews with creators, advertisers, VCs, and others in the tech industry show a platform struggling to build an audience and keep it. Moneymaking opportunities are also slim, which makes the app a tough sell for creators and users as there are many other options online and off.

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Plus it’s been copied on other platforms, notably Twitter with its Spaces offering. Nice while it lasted, Clubhouse.
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Europe must ban Bitcoin mining to hit the 1.5C Paris climate goal, say Swedish regulators • Euronews

Tom Bateman:

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Erik Thedéen, director of the Swedish Financial Supervisory Authority, and Björn Risinger, director of the Swedish Environmental Protection Agency, said cryptocurrency’s rising energy usage is threatening Sweden’s ability to meet its obligations under the Paris Climate Agreement.

Between April and August this year, the energy consumption of Bitcoin mining in the Nordic country rose “several hundred%,” and now consumes the equivalent electricity of 200,000 households, Thedéen and Risinger said.

In an open letter, the directors of Sweden’s top financial and environmental regulators called for an EU-wide ban on “proof of work” cryptocurrency mining, for Sweden to “halt the establishment” of new crypto mining operations and for companies that trade and invest in crypto assets to be prohibited from describing their business activities as environmentally sustainable.

…The growth of crypto mining brings with it an opportunity cost, Thedéen and Risinger said, as Sweden’s renewable energy is diverted away from industrial, transport and domestic uses, and into Bitcoin and other tokens.

“It is currently possible to drive a mid-size electric car 1.8 million kilometres using the same energy it takes to mine one single Bitcoin,” they said. “This is the equivalent of forty-four laps around the globe. 900 bitcoins are mined every day. This is not a reasonable use of our renewable energy”.

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This is going to become a recurrent refrain in the next few years, I think.
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The BABADEDA Crypter: an emerging crypter targeting the crypto, NFT, and DeFi communities • Morphisec Security

Hido Cohen and Arnold Osipov:

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As well as using cryptocurrency themselves to extract ransoms, cybercriminals are now also tailoring malware to exploit the booming market for NFTs and crypto games. In a discovery of critical importance to anyone familiar with this space, Morphisec Labs have encountered a new campaign of malware targeting cryptocurrency enthusiasts through Discord. 

Crucially, the crypter that this campaign deploys, which we have termed Babadeda (a Russian language placeholder used by the crypter itself which translates to “Grandma-Grandpa”), is able to bypass signature-based antivirus solutions. Although some variants of this crypter have been noted by other vendors, Morphisec is the first to fully disclose how it works.

For victims, this makes infections highly likely — and dangerous. We know that this malware installer has been used in a variety of recent campaigns to deliver information stealers, RATs, and even LockBit ransomware.

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They have a detailed breakdown of how the malware gets onto your (well, someone else’s) machine. It seems that it’s an empty shell that you can pour something into. Noteworthy that it’s the crypto field that’s being targeted now: fewer law enforcement types around. Though transfers are easier to track.
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About 600 Google employees sign manifesto against widened vaccine mandate • CNBC

Jennifer Elias:

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The Biden administration has ordered US companies with 100 or more workers to ensure their employees are fully vaccinated or regularly tested for Covid-19 by Jan. 4. In response, Google has asked its more than 150,000 employees to upload their vaccination status to its internal systems by Dec. 3, whether they plan on coming into the office or not, according to internal documents viewed by CNBC. The company has also said that all employees who work directly or indirectly with government contracts must be vaccinated – even if they are working from home.

“Vaccines are key to our ability to enable a safe return to office for everyone and minimize the spread of Covid-19 in our communities,” wrote Chris Rackow, Google VP of security, in an email sent near the end of October.

Rackow stated the company was already implementing requirements, so the changes from Biden’s executive order were “minimal.” His email gave a deadline of Nov. 12 for employees to request exemptions for reasons such as religious beliefs or medical conditions, and said that exceptions would be granted on a case-by-case basis.

The manifesto within Google, which has been signed by at least 600 Google employees, asks company leaders to retract the vaccine mandate and create a new one that is “inclusive of all Googlers,” arguing leadership’s decision will have outsized influence in corporate America. It also calls on employees to “oppose the mandate as a matter of principle” and tells employees to not let the policy alter their decision if they’ve already chosen not to receive the Covid-19 shot.

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Let’s see, 600 of 150,000 is 0.4%. Unless those people are in absolutely crucial positions (say, called Brin or Page), Google could just say buh-bye. There’s no halfway house between a presidential mandate requiring 100% compliance and, well, anything else. No different, in its way, from care home workers facing the same deadline – but at far lower salaries.
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AirTag competitor Tile getting acquired by location sharing app Life360 • MacRumors

Juli Clover:

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Tile, known for its range of Bluetooth-based tracking accessories that compete with the AirTag, is being acquired by location tracking service Life360, Tile announced today.

Tile will continue to be operated as a standalone brand under Tile CEO CJ Prober, but Tile says that when the acquisition is completed, it will be able to leverage Life360’s 33 million smartphone users to grow Tile’s Finding network by 10x. Tile’s network is the equivalent of Apple’s Find My network, leveraging nearby devices to locate lost items.

Life360 has what it calls a “family safety platform” that allows family members to keep tabs on one another with tracking software on smartphones. It’s primarily used by parents to track their children and teenagers, and it has raised privacy concerns.

With the Tile acquisition, Life360 founder Chris Hulls says that Life360 will be able to provide an “all-encompassing solution” for locating people, pets, and things with cross-platform tracking and combined service for tracking items and people.

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Acquisition price $205m. Which strikes me as a lot of money: I’ve never noticed Tile having much of an impact anywhere, and even if you use a 10x multiple that suggests it was doing $20m in revenue per year. Can’t think there are that many people using the Premium version (£30 per year). Especially not when Apple’s AirTags don’t need a subscription and have a bigger network.
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Facebook knew its algorithms were biased against people of colour • The Washington Post

Elizabeth Dwoskin, Nitasha Tiku and Craig Timberg:

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Last year, researchers at Facebook showed executives an example of the kind of hate speech circulating on the social network: an actual post featuring an image of four female Democratic lawmakers known collectively as “The Squad.”

The poster, whose name was scrubbed out for privacy, referred to the women, two of whom are Muslim, as “swami rag heads.” A comment from another person used even more vulgar language, referring to the four women of color as “black c—s,” according to internal company documents exclusively obtained by The Washington Post.

The post represented the “worst of the worst” language on Facebook — the majority of it directed at minority groups, according to a two-year effort by a large team working across the company, the document said. The researchers urged executives to adopt an aggressive overhaul of its software system that would primarily remove only those hateful posts before any Facebook users could see them.

But Facebook’s leaders balked at the plan. According to two people familiar with the internal debate, top executives including Vice President for Global Public Policy Joel Kaplan feared the new system would tilt the scales by protecting some vulnerable groups over others. A policy executive prepared a document for Kaplan that raised the potential for backlash from “conservative partners,” according to the document. The people spoke to The Post on the condition of anonymity to discuss sensitive internal matters.

The previously unreported debate is an example of how Facebook’s decisions in the name of being neutral and race-blind in fact come at the expense of minorities and particularly people of color. Far from protecting Black and other minority users, Facebook executives wound up instituting half-measures after the “worst of the worst” project that left minorities more likely to encounter derogatory and racist language on the site, the people said.

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Amazing how Kaplan’s name always pops up when right-wing interests are threatened, and subsequently they’re salved.
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If you want a deeper understanding of why we respond as we do to content on social networks, and what it’s doing to society, politics and journalism, read Social Warming, my latest book, and find answers – and more.


Qualcomm has an exclusivity deal with Microsoft for Windows on ARM – expiring soon • XDA Developers

Rich Woods:

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Last week, we reported that MediaTek is planning to build a chipset for Windows on ARM. As it turns out, the Windows on ARM chipset space could be even hotter than that, because there’s a reason that we’ve only seen Qualcomm SoCs in ARM PCs so far. Qualcomm actually has an exclusivity deal with Microsoft for Windows on ARM, and speaking with people familiar with it, we’ve learned that the deal is set to expire soon.

Other than the fact that Microsoft has publicly said that anyone who wants to can build a Windows on ARM chip, this really shouldn’t come as a surprise. Qualcomm didn’t just start building PC chips hoping that Microsoft would compile Windows to support it. No, these two companies worked together to make it happen. Because of that, Qualcomm gets to enjoy a bit of exclusivity.

One thing I wasn’t able to learn is when the deal will expire, only that it’s the thing holding back other chip vendors from competing in the space. It’s possible that Samsung might want to throw its hat into the ring with its Exynos processors too, especially given its recent partnership with AMD for graphics power. This is also presumably why Apple Silicon Macs aren’t officially supported for running Windows 11, so hopefully that will change as well.

…Between MediaTek’s Executive Summit and Qualcomm’s Investor Day, there’s been a very clear message that ARM SoC vendors absolutely believe that the ‘Wintel’ partnership is going to fade and that the transition to ARM isn’t just happening, it’s inevitable.

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‘Buy the Constitution’ aftermath: everyone very mad, confused, losing lots of money, fighting, crying, etc • Vice

Jordan Pearson and Jason Koebler:

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The community of crypto investors who tried and failed to buy a copy of the U.S. Constitution last week has descended into chaos as people are realizing today that roughly half of the donors will have the majority of their investment wiped out by cryptocurrency fees. Meanwhile, disagreements have broken out over the future of ConstitutionDAO, the original purpose of the more than $40m crowdfunding campaign, and what will happen to the $PEOPLE token that donors were given in exchange for their contributions.  

Over the weekend, the next steps of the project repeatedly changed. In the immediate aftermath of the Sotheby’s auction, in which ConstitutionDAO lost to hedge fund CEO Ken Griffin, the founders of the project asserted on its official Discord that, though they lost, “we still made history tonight.”  

“We have educated an entire cohort of people around the world—from museum curators and art directors to our grandmothers asking us what eth is when they read about us in the news —about the possibilities of web3,” an admin of the project posted on Thursday.

Many donors are indeed getting an education about Ethereum and web3, but it’s certainly not all positive as the community tries to quickly come up with a reason it should exist at all after failing in its initial goal.

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The problem being that if they try to get a refund, it’ll essentially get eaten up by “gas fees” – the charge for doing the transfer. Which we always get told isn’t an issue for cryptocurrencies compared to those Evil Fiat Currencies. (Update: the Constitution DAO is going to close down, and everyone can get refunded. Or try to.)
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Errata, corrigenda and ai no corrida: none notified

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