Cyber Week in Review: October 11, 2019 – Council on Foreign Relations

Top Chinese AI Firms Added to Export Blacklist

The United States added twenty-eight Chinese companies and government offices to the export blacklist this week, citing their role in the oppression of the minority Muslim population in Xinjiang. Included in the blacklist are some of Chinas top AI companies, including surveillance firm Hikvision, speech recognition firm iFlyTek, and facial recognition firms SenseTime and Megvii. While the Commerce Departments action is unlikely to significantly disrupt the companies operations, which have worked to diversify their supply chains in recent months, it is a symbolic hit at Beijings AI ambitions, targeting six of the fifteen teams designated by China as part of its AI national team. China has signaled it will retaliate to the blacklist additions. The final status of Washingtons efforts to blunt Chinese tech development will not be known until the trade talks are resolved, as President Trump once again suggested he may be open to allowing the sale of non-sensitive goods to blacklisted companies, namely Huawei.

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Iranian Hackers Target 2020 Campaigns

Cyberattacks sponsored by the Iranian government are targeting U.S. presidential campaigns, laying the groundwork for possible interference in the 2020 presidential election. Microsoft reported that it observed over 2,700 attempts by Iranian hackers to access the accounts of current and former U.S. officials, journalists covering campaigns, and the campaigns themselves, though no accounts associated with a presidential campaign or official were compromised. Anonymous sources have said that President Trumps reelection campaign was targeted. Researchers from ClearSky Cyber Security, which exposed the hackers operations last month, say they have also been targeted by the Iranian hackers.

Uncertain Future for Libra Cryptocurrency

The viability of Libra, the Facebook-led cryptocurrency-based payments network, suffered a serious blow this week. PayPal, eBay, MasterCard, and Stripe have pulled out of the originally 28-member association, with Visa and other financial partners also reconsidering their involvement due to intense political and regulatory scrutiny over money laundering, tax evasion, data privacy, and financial stability concerns. The Bank of England this week said that Libra, with the potential to be systemically important to the financial system, must meet its highest standards to be approved, including joining the U.K.s financial services deposit protection scheme, holding reserves, participating in central bank stress tests, and providing rigorous end-to-end security across the payment chain. Likewise, French officials have said they will block the development of Libra until their concerns over consumer risk and governments monetary sovereignty were addressed. Facebook CEO Mark Zuckerberg this week agreed to testify before the House Financial Services Committee later this month on Facebooks cryptocurrency plans.

U.S. Companies Confronted by Beijings Censors on Hong Kong

Several U.S. tech and entertainment companies have buckled under Chinese pressure this week as anti-government protests in Hong Kong rage on. Apple and Google this week both removed the HKmap.live app, which crowdsourced information on Hong Kong police activityand Google removed The Revolution of Our Times app that allowed players to role-play as protestersafter facing criticism from China. Similarly, American gaming company Blizzard suspended a prominent gamer after he voiced support for the Hong Kong protests. U.S. officials widely pushed back against companies who seemed to be bending to the will of Beijing, leading the NBA to reaffirm players, employees, and owners right to free speech after initially apologizing for a tweet from the general manager of Houston Rockets supporting the protesters. Also this week, Senator Marco Rubio, a loud critic of Beijings censorship, requested an investigation of TikTok, the Chinese-owned social media app, out of concerns the company is censoring content to satisfy Beijing. NSA Director Nakasone also spoke out against the Chinese governments role in weaponizing technology and spreading disinformation about the Hong Kong protests.

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Twitter Used User Email Addresses and Phone Numbers for Advertising

On Tuesday, Twitter announced that email addresses and phone numbers used for two-factor identification had accidentally been used to target users for advertising purposes. Twitter said that email addresses and phone numbers were used for its Tailored Audiences product, which allows advertisers to target ads to customers based on the advertisers own marketing lists. While Twitter does not have an estimate of how many users were impacted by the error, the company has apologized for the oversight and assured users that no data was shared with third parties that used the feature. This mishandling of user data by Twitter is similar to a case where Facebook did not disclose to users that it was using their phone numbers for advertising purposes, which resulted in a $5 billion fine by the Federal Trade Commission.

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Cyber Week in Review: October 11, 2019 - Council on Foreign Relations