DealBook Briefing: How Facebook Let Gadgets Tap Your Data

Partnerships with at least 60 device makers provided access to the data of users’ friends, even without their explicit consent.

Warren Buffett Rick Wilking/Reuters

The New York Times

June 4, 2018Good Monday morning. (Was this email forwarded to you? Sign up here.)
Today, we’ll be watching to see what announcements are made at Apple’s latest developer conference. Read on for more details about what you can expect to hear.

 Dado Ruvic/Reuters

Facebook gave hardware firms deep access to your information

The technology giant struck data-sharing partnerships with at least 60 device makers — including Amazon, Apple, BlackBerry, Microsoft and Samsung — over the last decade. The company claimed that those deals were supposed to make it easier for people to use Facebook before its app was widely available on smartphones. But an NYT investigation found that the deals provided wide-ranging access to user data, and that many arrangements still exist, even though Facebook said that it had cut such off third-party access in 2015.More from Gabriel J.X. Dance, Nicholas Confessore and Michael LaForgia:Facebook allowed the device companies access to the data of users’ friends without their explicit consent, even after declaring that it would no longer share such information with outsiders. Some device makers could retrieve personal information even from users’ friends who believed they had barred any sharing.Facebook argues that these arrangements are “very different” to the ones with third-party app developers that were brought into focus by the Cambridge Analytica scandal. But the company is still struggling to repair its reputation, and this will do little to help matters.
More Facebook news: Ben Thompson, founder of the influential tech newsletter Stratechery, says Facebook’s acquisition of Instagram was the “greatest regulatory failure of the last 10 years.” And the company’s efforts to rein in fake political ads fell short in one California race.
Today’s DealBook Briefing was written by Andrew Ross Sorkin, who’s traveling on assignment, and Michael J. de la Merced and Jamie Condliffe in London.
Commerce Secretary Wilbur Ross

Commerce Secretary Wilbur Ross Andy Wong/Agence France-Presse — Getty Images

Without a trade deal, millions of jobs could be on the line

Commerce Secretary Wilbur Ross ended a round of trade talks in Beijing yesterday. They didn’t go well. He left without announcing any deals, and Chinese officials refused to commit to buying more American goods without the Trump administration agreeing not to impose further tariffs on Chinese exports. (There was also no news on the fate of the telecom company ZTE.)All that makes the prospect of a trade war look increasingly likely. And, as the WSJ’s Harriet Torry notes, tariffs on steel and aluminum imported from Canada, the E.U. and Mexico — and any retaliation — could hurt the U.S. Economists told the WSJ that as many as three million jobs could be at risk.A big question: Will the (currently) strong domestic economy lead President Trump to think he can win the trade wars anyway?
The trade tug of war: With the Trump administration’s trade policies ricocheting between conciliatory and militant, leaders in other countries have one question: Who is calling the shots inside the White House? For Treasury Secretary Steve Mnuchin, at least, that’s a careful balancing act.

 Elaine Thompson/Associated Press

Microsoft shows just how much it’s changed

A roughly $2 billion deal for the popular computer code repository GitHub, which Bloomberg reports could be announced today, would demonstrate how much the tech giant is shifting to fit the times.GitHub is the world’s biggest platform for programmers choosing to collaborate on coding projects — many of which are open-source projects, where software is shared freely. Microsoft made its name by selling proprietary software, and its former C.E.O. Steve Ballmer was famously critical of open-source software. The GitHub deal, if it happens, would show how Microsoft has changed under its current C.E.O., Satya Nadella, who has gone all-in on technology to help other companies build things, from cloud services to A.I.What’s in it for GitHub? There’s a chance to overcome internal turmoil, and the financial support of a deep-pocketed backer without the risk of an I.P.O.
Elsewhere in deals
• UniCredit of Italy is reportedly weighing a merger with Société Générale of France. (FT)
• Lyft is said to be in talks to buy Motivate, the owner of New York City’s bike-sharing program. (The Information)
• To win relief from U.S. sanctions, the Russian metal producer En+ has reportedly hired Rothschild to reduce Oleg Deripaska’s stake in the company below 50 percent. (FT)
• Discovery Communications will pay $2 billion for the international TV rights to the PGA Tour. (Bloomberg)

 

The political flyaround
• Lawmakers are worried that President Trump will play chicken with the federal government’s funding deadline in September, risking a costly shutdown. (Axios)
• A White House plan to prop up coal and nuclear power plants could leave consumers footing the bill. (Bloomberg Opinion)
• The British government’s worst-case scenario for Brexit reportedly includes shortfalls of food and medicine within two weeks, if it leaves the E.U. without a deal. (Sunday Times, NYT)
• President Trump’s unprecedented tease of the jobs report last Friday will have traders scrutinizing his tweets for future announcements.
Apple’s next tricks: More ads, and maybe encouragement to put your phone down
In recent years, the company has cast itself as a hardware company that makes money from gadgets, not ads. But the WSJ reports, citing people familiar with the matter, that may change:Over the past year, Apple has met with Snap Inc., Pinterest Inc. and other companies about participating in an Apple network that would distribute ads across their collective apps, the people said. Apple would share revenue with the apps displaying the ads, with the split varying from app to app, they said.If that’s accurate, Apple must tread carefully to avoid comparisons to Facebook.
What to expect at Apple’s developer conference: Predictions include tools to temper overuse of smartphones, new augmented reality features, simpler apps (with fewer bugs), more uses for the iPhone’s wireless payment chip, and new iPads. You can watch the keynote here, at 1 p.m. Eastern.
The tech flyaround
• Google won’t renew an A.I. contract with the Pentagon, after pushback from employees. (NYT)
• The tech industry is stepping back from this year’s election cycle. (NYT)
• Automatic software updates fixed the Tesla Model 3’s braking — but have caused other problems. (Verge)
• SpaceX promised to launch a pair of space tourists on a trip around the moon this year. That’s unlikely to happen. (WSJ)
• Germans spies will be allowed to continue monitoring the world’s biggest internet hub. (ZDNet)Mike Sitrick
How Mike Sitrick, the crisis handler for celebs, works
The NYT profile of Mr. Sitrick, who briefly represented Harvey Weinstein as the #MeToo scandal broke, provides a fascinating insight into his business:One advantage to being retained by lawyers for a client rather than by the client himself is that Mr. Sitrick is technically a member of the legal team, and therefore protected by attorney-client privilege. And though he is not a lawyer, Mr. Sitrick views himself as a litigator in the court of public opinion. He also charges lawyerly rates — as much as $1,100 an hour.Warren Buffett

The cost of a steak with Warren Buffett? $3.3 million

That’s how much the anonymous winner of this year’s “Power Lunch with Warren Buffett” charity auction was willing to pay for lunch with the Oracle of Omaha. The bid tops last year’s $2.7 million but falls short of 2016’s $3.5 million.Most of the time, the winner gets to ask Mr. Buffett for investing advice. But lunch has led to a job offer: Mr. Buffett ultimately hired Ted Weschler, who won the auctions in 2010 and 2011, as one of his two investing lieutenants.

Nikesh Arora

Nikesh Arora Jean-Christophe Bott/European Pressphoto Agency

Revolving door

Nikesh Arora, SoftBank’s former president and Google’s onetime chief business officer, is now the C.E.O. of Palo Alto Networks. (Palo Alto Networks)

• Petrobras named Ivan Monteiro, its C.F.O., as its new chief executive, after the sudden resignation of Pedro Parente. (WSJ)

Jack Lew, the former Treasury secretary, has joined the board of the banking nonprofit Financial Services Volunteer Corps. (DealBook)The speed read

• Marc Jacobs lost his way in fashion, and put the kibosh on his label’s I.P.O. in the process. (NYT)

• Lower isn’t always better for unemployment rates and the stock market. (Bloomberg Opinion)

• How a former Blackstone executive used complex derivatives trades to become a thorn in Wall Street’s side. (FT)

• Why no one talks on the phone these days. (The Atlantic)

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