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  • Microsoft to pay $20 million to settle Xbox Live privacy allegations | CNN Business

    Microsoft to pay $20 million to settle Xbox Live privacy allegations | CNN Business

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    Washington
    CNN
     — 

    Microsoft will pay $20 million to settle US government allegations that the tech giant violated children’s privacy by illegally collecting their personal information through its Xbox Live gaming service.

    According to the Federal Trade Commission, Microsoft broke the law by failing to tell parents about the full breadth of information it gathered from kids under the age of 13.

    That information, the FTC said in a lawsuit filed Monday, included the fact that children may share images of themselves in their account profiles, as well as video and audio recordings of themselves, their real names and logs of their activity on the platform.

    Microsoft also allegedly kept for years the personal information of millions of people, including children, who started creating accounts with Xbox Live but who never completed the sign-up process.

    “Even when a user indicated that they were under 13, they were also asked, until late 2021, to provide additional personal information including a phone number and to agree to Microsoft’s service agreement and advertising policy, which until 2019 included a pre-checked box allowing Microsoft to send promotional messages and to share user data with advertisers,” the FTC said in a release.

    In a statement, Microsoft said: “We recently entered into a settlement with the U.S. Federal Trade Commission (FTC) to update our account creation process and resolve a data retention glitch found in our system. We are committed to complying with the order.”

    Parental settings give adults some control over what their children’s accounts show to other users. For example, Xbox Live’s default settings restrict who children can interact with on the service, the FTC said. But other default settings, the agency alleged, allow kids to access third-party games and apps with minimal friction.

    Microsoft failed to sufficiently disclose to parents what information the company was collecting from kids and how it was being used, the FTC said, alleging violations of the Children’s Online Privacy Protection Act (COPPA).

    In agreeing to settle the claims, Microsoft committed to several additional measures beyond the financial penalty.

    Microsoft agreed to delete any personal information it collects from kids if they don’t complete the account registration process. It also agreed to tell third-party game publishers when a user may be a child, effectively putting the third-party publishers on notice to comply with COPPA in handling the user’s information.

    The settlement comes as the FTC has challenged Microsoft’s $69 billion acquisition of video game giant Activision-Blizzard, a proposed deal that would turn Microsoft into the world’s third-largest game publisher and give it control over popular franchises such as “Call of Duty” and “World of Warcraft.”

    US and UK officials have alleged that Microsoft’s acquisition could give it anti-competitive control over the games industry by being able to withhold titles from rival platforms, particularly in the nascent cloud gaming sector. To address the concerns, Microsoft has struck licensing deals with other companies to ensure their customers continue to have access to Activision games following the deal’s close.

    Those concessions have convinced the European Union to approve the deal, but litigation to block the deal involving US and UK regulators remains ongoing.

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  • 5 ways a debt default could affect you | CNN Politics

    5 ways a debt default could affect you | CNN Politics

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    CNN
     — 

    President Joe Biden and House Republicans may have as little as a month to prevent the US from defaulting on its debt, which would impact millions of Americans and unleash economic and fiscal chaos here and around the world.

    Treasury Secretary Janet Yellen warned Monday that the government may not be able to pay all of its bills in full and on time as soon as June 1. However, the forecast was uncertain, and the default date might come several weeks later, she said. The US hit its $31.4 trillion debt ceiling in January, and Treasury has been using cash and “extraordinary measures” to satisfy obligations since then.

    Just what would happen if the nation defaults on its debt is unknown since it’s never actually happened before. A close call in 2011 roiled the financial markets and prompted Standard & Poor’s to downgrade the US’ credit rating to AA+ from AAA.

    Yellen gave a sense of the turmoil it would cause in her letter to House Speaker Kevin McCarthy on Monday.

    “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” she wrote.

    To be clear, a debt default doesn’t mean all payments would stop and people would permanently lose out on money they are owed. Treasury would have the funds to satisfy some obligations, but it’s not certain how the agency would handle the disbursements. Much would also depend on how long it takes Congress to address the borrowing cap.

    “Tens of millions of people across the country who expect payments from the federal government may not get them on time,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

    Here are five ways that Americans could be affected by debt default:

    About 66 million retirees, disabled workers and others receive monthly Social Security benefits. The average payment for retired workers is $1,827 a month in 2023.

    Almost two-thirds of beneficiaries rely on Social Security for half of their income, and for 40% of recipients, the payments constitute at least 90% of their income, according to the National Committee to Preserve Social Security and Medicare.

    These payments could be delayed in a debt default scenario, though it’s possible Treasury could continue making on-time payments because of the entitlement program’s trust fund, Akabas said.

    The benefits are disbursed four times a month, on the third day of the month and on three Wednesdays. Roughly $25 billion a week is sent out, according to the Congressional Budget Office.

    “Even a short delay in the payment of Social Security benefits would be a burden for the millions of Americans who rely on their earned benefits to pay for out-of-pocket health care expenses, food, rent and utilities,” Max Richtman, the committee’s CEO, said in a statement.

    Many other government payments could also be affected, including funding for food stamps; federal grants to states and municipalities for Medicaid, highways, education and other programs; and Medicare payments to hospitals, doctors and health insurance plans.

    More than 2 million federal civilian workers and around 1.4 million active-duty military members could see their paychecks delayed. Federal government contractors could also see a lag in payments, which could affect their ability to compensate their workers.

    Also, certain veterans benefits, including disability payments and pensions for some low-income veterans and their surviving families, could be affected.

    “Such calamity would place further stress on our servicemembers, retirees, and veterans, as well as their families, caregivers, and survivors,” Rene Campos, senior director of government relations for the Military Officers Association of America, said in a blog post. “Though life in uniform is not always predictable, those who serve or have served their country expect their country to honor their commitment to service.”

    About $25 billion in pay or benefits for active-duty members of the military, civil service and military retirees, veterans and recipients of Supplemental Security Income is sent out on the first day of the month, according to the CBO.

    Americans’ investments would take a direct hit. Case in point: Markets had what was then their worst week since the financial crisis during the 2011 debt ceiling standoff after the Standard & Poor’s downgrade.

    Even if the debt ceiling impasse is resolved soon after a default, stocks could shed as much as a third of their value. That would wipe out around $12 trillion in household wealth, according to Moody’s Analytics.

    If a default occurs, yields on US Treasuries will inevitably rise to compensate for the increased risk that bondholders won’t receive the money they’re owed from the government.

    Since interest rates on loans, credit cards and mortgages are often based on Treasury yields, the cost of borrowing money and paying off debt would rise. That’s on top of the increased costs Americans are already facing from the Federal Reserve rate hikes.

    Families and businesses would also have a tougher time getting approved for lines of credit since banks would have to be more selective about to whom they loan money. That’s because their costs of borrowing money will also rise, which limits the amount of money they can lend out.

    A debt default could trigger an economic downturn, which would prompt a spike in unemployment. It would come at a particularly fragile time – when the nation is already dealing with rising interest rates and stubbornly high inflation.

    How much damage would be done would depend on how long the crisis continues. If the default lasts for about a week, then close to 1 million jobs would be lost, including in the financial sector, which would be hard hit by the stock market declines. Also, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent, according to Moody’s.

    But if the impasse dragged on for six weeks, then more than 7 million jobs would be lost, the unemployment rate would soar above 8% and the economy would decline by more than 4%, according to Moody’s. The effects would still be felt a decade from now.

    “It would be a body blow to the economy, and it would be a manufactured crisis,” said Bernard Yaros, an economist at Moody’s.

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  • Accelerating the EV revolution whether you like it or not | CNN Politics

    Accelerating the EV revolution whether you like it or not | CNN Politics

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    A version of this story appears in CNN’s What Matters newsletter. To get it in your inbox, sign up for free here.



    CNN
     — 

    The Environmental Protection Agency proposed a plan to remake the way car-obsessed Americans live, using public safety rules to accelerate the shift from internal combustion to electric vehicles.

    Just a fraction of the current auto market is EVs, but under standards announced by the EPA Wednesday, up to two-thirds of new vehicles sold in the US would be zero-emission or plug-in hybrid within a decade.

    The rules, which are not yet final, would use authority under the Clean Air Act to force auto companies to cut pollution and slash vehicle emissions by more than half. They would phase in with model year 2027 vehicles and be fully implemented by 2032. Read CNN’s full report.

    While ambitious, the goals are not unprecedented. They put the federal government on track to catch up with state governments, led by California, that want to stop allowing the sale of internal combustion vehicles by 2035. Read this report from CNN Business about why that’s not as crazy as it seems.

    There is a very big legal question mark looming behind California’s action and the EPA’s effort, which still has a public comment and revision period.

    The current Supreme Court, dominated by conservative justices, has already shown its scorn for EPA rulemaking and its indifference to addressing climate change. Last year, the court nixed the Biden administration’s plan to curb emissions from existing power plants.

    I asked CNN climate reporter Ella Nilsen for her takeaways from the EPA announcement. She offered these key points:

    ► The standards are ambitious, but doable

    If enacted, the newly proposed EPA emissions standards would be one of the Biden administration’s most aggressive climate-change policies yet – moving the US auto market decisively toward electric vehicles in the next decade.

    However, multiple experts said the standards are doable, and even lag slightly behind the California standards, which will completely phase out the sale of gas-powered cars by 2035 to usher in electric vehicles. The US is also following countries including the EU and China, which are moving more aggressively toward electric vehicles.

    ► Charging infrastructure and consumer incentives could be tricky

    This new proposed rule won’t happen overnight; it would be gradually phased in over the next decade. At the same time, the US needs to build up a network of electric charging stations in addition to the ubiquitous gas station. Federal officials have also talked about needing to incentivize more Americans to buy EVs by bringing the cost down, with federal tax credits.

    However, the new $7,500 tax credits (passed last year by Democrats in the Inflation Reduction Act) are incredibly complex due to manufacturing requirements. The credits could actually shrink the eligible number of cars that qualify (however, leased vehicles have more leeway under the new system). Regardless, it will take years for the EV infrastructure, incentives and supply to fall into place to make electric vehicles available to most Americans.

    ► This is a big deal for US climate policy

    This rule will impact the US economy, but it’s also major climate policy. The proposed EPA tailpipe standards would cut planet-warming pollution from US cars in half. Combined with the agency’s medium and heavy-duty vehicles standard, the proposals could cut nearly 10 billion tons of CO2 emissions by 2055.

    Given Americans’ reliance on cars, transportation is a big part of overall US emissions – it accounts for nearly 30% of all greenhouse gas emissions in the US, according to the EPA. Cutting down on tailpipe pollution from gas-powered cars and trucks is a big part of decarbonizing the US.

    While the federal government and key states are all in on moving toward EVs, and auto companies are spending big to get competitive in the market, Americans generally are not yet completely embracing the idea.

    Just 4% of Americans currently own an EV, and a scant 12% are seriously considering buying one, according to a Gallup poll released Wednesday. Less than half, 43%, say they would consider buying an EV in the future, and a sizable 41% are completely closed off to the idea.

    The expected partisan breakdown applies to those figures. Most of the interest in EVs is among Democrats. Most of the staunch opposition is among Republicans. Younger Americans and those making $100,000 and above are also more interested in buying an EV in the future.

    There are also key regional disparities. In the West, where states are already working to phase in EVs, only 28% say they would not buy an EV. Compare that to half of Southerners who would not consider buying an EV.

    A majority of the country is skeptical that EVs will even have an effect on the climate, according to the poll, with 61% saying EVs will help address climate change only a little or not at all.

    In a separate AP-NORC poll released this week, the most-cited major reasons for not wanting to purchase an EV – out of eight offered in the poll – were expense (60% said they cost too much) and convenience (50% said there aren’t enough charging stations available).

    Access and affordability should be addressed as inventory increases, writes CNN’s Peter Valdes-Dapena, who covers the auto industry. A decade from now, charging should be quicker and easier, EV ranges should be longer and prices should be at or below the cost of an internal combustion vehicle. Read his full report.

    Rather than fighting the rules, as the fossil fuel industry is sure to do, the auto industry is already investing heavily in EVs, responding to tougher regulation already imposed around the world and by California, which moved to ban the sale of new gas and diesel powered vehicles by 2035.

    California actually took the lead on pushing for EVs in the years when the Trump administration was dialing back on federal climate policy. Other states, like Oregon, Washington and Minnesota, have tied their standards to California’s.

    Valdes-Dapena notes that car companies with loyal customer bases are slowly making the switch. He writes:

    Currently, Toyota offers only one electric model in the United States, the BZ4X SUV, but more are planned. Honda, another Japanese brand with a loyal following, offers no EVs currently but the company is gearing up factories in Ohio to build future EV models. Honda expects to offer its first EV next year. General Motors also has a number of EV models coming in the next year or two.

    He also notes that GM has pledged to sell only electric passenger vehicles by 2035.

    And no, this does not mean internal combustion vehicles will be banned. They will still make up the vast majority of vehicles on the road in a decade even if this rule is finalized and withstands challenges in court. But it would represent a tectonic shift.

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  • FTC to seek federal court order temporarily blocking Microsoft-Activision deal | CNN Business

    FTC to seek federal court order temporarily blocking Microsoft-Activision deal | CNN Business

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    CNN
     — 

    The Federal Trade Commission on Monday sued to prevent Microsoft and Activision-Blizzard from closing their $69 billion merger.

    The filing asks the US District Court for the Northern District of California for a temporary restraining order that could keep the companies from consummating the acquisition while the FTC’s in-house court is deliberating on the deal.

    The FTC sued Microsoft in the agency’s administrative court in December, challenging the deal as anticompetitive.

    “Both a temporary restraining order and a preliminary injunction are necessary because Microsoft and Activision have represented that they may consummate the Proposed Acquisition at any time without any further notice to the Commission,” the FTC’s court filing said.

    “We welcome the opportunity to present our case in federal court,” Brad Smith, Microsoft’s president, said in a statement. “We believe accelerating the legal process in the U.S. will ultimately bring more choice and competition to the market.”

    UK competition regulators have also challenged the deal, which promises to make Microsoft the world’s third-largest video game publisher after Tencent and Sony. The acquisition would give Microsoft control over popular franchises including “Call of Duty” and “World of Warcraft.”

    Officials from the FTC and the UK have claimed that the deal could harm the gaming industry by allowing Microsoft to withhold Activision titles from rival platforms, such as Sony’s Playstation. Microsoft has struck 10-year licensing agreements with some game platforms that will ensure those titles remain available.

    Antitrust officials from the European Union blessed the deal last month, saying that Microsoft’s concessions were enough to address its competition concerns.

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  • Former Director of National Intelligence John Ratcliffe testifies to grand jury in January 6 probe | CNN Politics

    Former Director of National Intelligence John Ratcliffe testifies to grand jury in January 6 probe | CNN Politics

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    CNN
     — 

    Former Director of National Intelligence John Ratcliffe testified before a federal grand jury Thursday in Washington, DC, as part of the special counsel’s criminal probe into the aftermath of the 2020 election.

    Former President Donald Trump had sought to block testimony from Ratcliffe and other top officials from his administration, but courts have rejected his executive privilege claims.

    The investigation led by special counsel Jack Smith has focused on January 6, 2021, and other efforts to overturn the presidential election.

    Ratcliffe is likely of interest to investigators because he personally told Trump and his allies that there was no evidence of foreign election interference or widespread fraud.

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  • FTC says Meta should be barred from monetizing data from younger users | CNN Business

    FTC says Meta should be barred from monetizing data from younger users | CNN Business

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    CNN
     — 

    The Federal Trade Commission on Wednesday accused Facebook-parent Meta of violating its landmark $5 billion privacy settlement and called for toughening up restrictions on the company, after alleging Meta has improperly shared user data with third parties and failed to protect children as it has promised.

    The proposal to update the binding 2020 settlement with Meta marks a new front in the FTC’s long-running battle with the social media company, which has included multiple lawsuits aimed at breaking up the tech giant or preventing it from growing larger.

    The FTC said Meta should be banned from monetizing data it collects from younger users. It added that the company should be barred from releasing any new features or products until a third-party auditor determines the company’s privacy policies do enough to protect users. It also called for new limitations on how Meta can use facial recognition technology.

    If approved, the sweeping proposal could threaten the future of Meta’s business, including its expansion into virtual reality.

    In a statement on Wednesday, Meta spokesman Andy Stone called the FTC proposal “a political stunt” and vowed to contest the effort.

    “Despite three years of continual engagement with the FTC around our agreement, they provided no opportunity to discuss this new, totally unprecedented theory,” Stone said. “FTC Chair Lina Khan’s insistence on using any measure – however baseless – to antagonize American business has reached a new low.”

    The FTC proposal comes as policymakers at all levels of government have increasingly blamed social media for furthering a mental health crisis among young people, prompting calls for strict regulations on how tech platforms can use the personal information of users under 18, target them with automated recommendations or seek to boost their engagement in other ways. Many of those proposals have taken the form of broad-based legislation, but the FTC proposal would represent a novel approach by amending a past consent order in connection with a single company that influences more than a billion users.

    As part of the FTC’s call for changes, the agency said Meta had misled the public about its compliance with the historic settlement that resolved allegations surrounding the Cambridge Analytica data fiasco, as well as prior agreements with the agency.

    Meta had allowed personal information to leak to apps that users of the platform were no longer using, the FTC alleged. That data sharing, the FTC claimed, contrasted with Meta’s public statements about how it cuts off a third-party app’s access to Facebook users’ information if the users stop using the third-party app for 90 days.

    The FTC also alleged that multiple coding errors in a messaging app marketed to children, Messenger Kids, allowed users to connect to “unapproved contacts” in group video calls, and that the flaws went unresolved for weeks.

    Those flaws meant parents could not control who their kids were speaking to on the app, in contrast to claims by Meta that they could, according to the FTC.

    In addition to being a breach of Meta’s prior settlements, the alleged violations surrounding Messenger Kids also ran afoul of a federal children’s privacy law known as COPPA, the FTC said, because parents were not provided an opportunity to give Meta their consent before the company collected information on their kids.

    Meta will have 30 days to respond to the proposed findings and changes, the FTC said, before the commission votes to finalize them. The FTC can unilaterally approve updates to the settlement, but Meta would have the opportunity to appeal that move in federal court, according to an agency fact sheet.

    The FTC voted 3-0 to issue the proposed findings and changes, but one commissioner, Alvaro Bedoya, questioned whether the agency has the authority to impose such sweeping restrictions on Meta in light of the alleged violations.

    In a statement, Bedoya said he was skeptical whether there was enough of a connection between Meta’s alleged harms and the proposed remedies to legally sustain a complete ban on monetizing the data of young users.

    “I look forward to hearing additional information and arguments and will consider these issues with an open mind,” Bedoya said.

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  • US judge temporarily blocks Microsoft acquisition of Activision | CNN Business

    US judge temporarily blocks Microsoft acquisition of Activision | CNN Business

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    A US judge late on Tuesday granted the Federal Trade Commission’s (FTC) request to temporarily block Microsoft Corp’s acquisition of video game maker Activision Blizzard and set a hearing next week.

    US District Judge Edward Davila scheduled a two-day evidentiary hearing on the FTC’s request for a preliminary injunction for June 22-23 in San Francisco. Without a court order, Microsoft could have closed on the $69 billion deal as early as Friday.

    The FTC, which enforces antitrust law, asked an administrative judge to block the transaction in early December. An evidential hearing in the administrative proceeding is set to begin Aug. 2.

    Based on the late-June hearing, the federal court will decide whether a preliminary injunction — which would last during the administrative review of the case — is necessary. The FTC sought the temporary block on Monday.

    Davila said the temporary restraining order issued on Tuesday “is necessary to maintain the status quo while the complaint is pending (and) preserve this court’s ability to order effective relief in the event it determines a preliminary injunction is warranted and preserve the FTC’s ability to obtain an effective permanent remedy in the event that it prevails in its pending administrative proceeding.”

    Microsoft

    (MSFT)     and Activision

    (ATVI)     must submit legal arguments opposing a preliminary injunction by June 16; the FTC must reply on June 20.

    Activision, which said Monday the FTC decision to seek a federal court order was “a welcome update and one that accelerates the legal process,” declined to comment Tuesday.

    Microsoft said Tuesday “accelerating the legal process in the U.S will ultimately bring more choice and competition to the gaming market. A temporary restraining order makes sense until we can receive a decision from the court, which is moving swiftly.”

    The FTC declined to comment.

    Davila said the bar on closing will remain in place until at least five days after the court rules on the preliminary injunction request.

    The FTC has argued the transaction would give Microsoft’s video game console Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony Group Corp’s PlayStation out in the cold.

    Microsoft’s bid to acquire the “Call of Duty” video game maker was approved by the EU in May, but British competition authorities blocked the takeover in April.

    Microsoft has said the deal would benefit gamers and gaming companies alike, and has offered to sign a legally binding consent decree with the FTC to provide “Call of Duty” games to rivals including Sony for a decade.

    The case reflects the muscular approach to antitrust enforcement taken by the administration of US President Joe Biden.

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  • Inside the furious week-long scramble to hunt down a massive Pentagon leak | CNN Politics

    Inside the furious week-long scramble to hunt down a massive Pentagon leak | CNN Politics

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    CNN
     — 

    Jack Teixeira, wearing a green t-shirt and bright red gym shorts with his hands above his head, walked slowly backward toward the armed federal agents outside his home in North Dighton, Massachusetts, who took him into custody on charges of leaking classified documents.

    The carefully choreographed arrest of the 21-year-old Air National Guardsman stood in stark contrast to the Biden administration’s scramble one week earlier to deal with the fallout from the revelation that highly classified documents had been sitting publicly on the internet for weeks.

    Those leaked documents, which appeared to catch the Biden administration flat-footed, disclosed a blunt US intelligence assessment of the war in Ukraine, as well as details revealing US intelligence collection on allies.

    The Biden administration raced to determine the identity of the leaker who had posted pictures of folded-up documents online, to understand the full scope of what had been leaked and to soothe allies who were varying degrees of angry that their secrets had spilled out for the world to see.

    While the suspected leaker has been arrested, the administration’s damage assessment is still ongoing. It remains unclear whether the full extent of the impact of the leaks is known, as details from additional classified documents continued to be published throughout the week – even on Friday morning, the day after his arrest.

    Inside the Pentagon, Chairman of the Joint Chiefs of Staff Gen. Mark Milley was “pissed” at the leak and “deeply concerned” about its national security implications, a US official told CNN. The Defense Department has been holding daily meetings on the leak since Defense Secretary Lloyd Austin was first briefed last Thursday.

    The episode represents the most egregious disclosure of classified documents in years. The leaked documents have exposed what officials say are lingering vulnerabilities in the management of government secrets, even after agencies overhauled their computer systems following the 2013 Edward Snowden leak, which revealed the scope of the National Security Agency’s intelligence gathering apparatus.

    It is unlikely, however, that those safeguards would have prevented the most recent leak, sources said. “All classified systems have multiple levels of risk controls, but a determined insider will find the weak points over time,” said a former US official.

    The Pentagon has already taken steps to clamp down on who can access sensitive classified material, while Austin has ordered a review over access to classified documents. And Congress is vowing to investigate exactly what happened and why the US intelligence community failed to discover its secrets were sitting on a public internet forum for weeks.

    In a statement acknowledging the extent of the problem that the leaks exposed, President Joe Biden said Friday that he had directed both the military and intelligence community to “take steps to further secure and limit distribution of sensitive information.”

    “This is a breakdown,” Chris Krebs, the former head of the Department of Homeland Security’s cybersecurity agency, told CNN. “There’s no question that there will be a lot of introspection inside the intelligence community and across the government of where were those breakdowns? How do we ensure that we tighten that system of military discipline that that was referred to earlier to ensure that these things do not happen?”

    According to charging documents unsealed on Friday, Teixeira allegedly began posting classified information on the Discord server in December 2022.

    Teixeira is believed to be the head of obscure invite-only Discord chatroom called “Thug Shaker Central,” multiple US officials told CNN, where information from the classified documents was first posted.

    One of the users on the Discord server told FBI investigators that Teixeira began posting photographs of documents that appeared to be classified in January 2023, according to the affidavit unsealed Friday after Teixeira was arraigned.

    Investigators wrote in the affidavit that at least one of the documents that described the status of the Russia-Ukraine conflict, including troop movements, was classified at the TS-SCI level, meaning it contains top-secret, sensitive compartmentalized information.

    “The Government Document is based on sensitive U.S. intelligence, gathered through classified sources and methods, and contains national defense information,” the affidavit states.

    Teixeira, an airman first class stationed at Otis Air National Guard Base, was assigned to the 102nd Intelligence Wing, which is a “24/7 operational mission” that takes in intelligence from various sources and packages it into a product for some of the most senior military leaders around the globe, a defense official said.

    His job was not to be the one packaging the intelligence for those senior commanders, but rather to work on the network on which that highly classified intelligence lived. For that purpose, the official said Teixeira would be required to have a TS/SCI clearance, in the instance that he was exposed to that level of intelligence.

    “It’s not like your regular IT guy where you call a help desk and they come fix your computer,” the official said. “They’re working on a very highly classified system, so they require that clearance.”

    CNN has reviewed 53 documents that were posted on social media sites, which include US intelligence assessments of Ukrainian and Russian forces, as well as details about other countries providing weapons to Ukraine and other intelligence matters. The Washington Post has reported on an additional tranche of documents from the server.

    The photos showed crumpled documents laid on top of magazines and surrounded by other random objects, such as zip-close bags and Gorilla Glue, suggesting they had been hastily folded up and shoved into a pocket before being removed from a secure location.

    A Discord user told investigators that Teixeira had become concerned “he may be discovered making the transcriptions of text in the workplace, so he began taking the documents to his residence and photographing them,” according to the affidavit.

    Four Discord users active in a different Discord chatroom where the documents later appeared told CNN they began circulating on Thug Shaker. Another user who was in the Thug Shaker chatroom told CNN they saw the original posts of classified documents but declined to speak further about them.

    While the documents were being shared on Discord, there’s no indication that the US intelligence community was aware they were on the internet. Discord servers are typically small, private online communities that require an invitation to join.

    On April 6, The New York Times first reported on the leaked documents and the Pentagon having launched an investigation into who may have been behind the leak.

    The investigation into finding the leaker quickly moved into the hands of the Justice Department, while the Pentagon investigation focused on a damage assessment of the leaks themselves.

    But the number of leaked documents continued to grow in the hours and days that followed the initial disclosure, revealing new intelligence assessments on everything from South Korea’s hesitance to provide the US weapons that might be sent to Ukraine to intelligence suggesting Egypt planned to supply rockets to Russia.

    US diplomats were forced to deal with the fallout. Seoul said it would hold “necessary discussions with the US” following the leak.

    The documents that were leaked appear to be part of a daily intelligence briefing deck prepared for the Pentagon’s senior leaders, including Milley, the top US military general. On any given day, the slides in that deck can be properly accessed by hundreds, if not thousands, of people across the government, officials said.

    Last Friday’s announcement of a Justice Department investigation underscored just how high a priority the leak was considered.

    By Monday, FBI agents from Washington to California to Boston were combing through evidence, conducting interviews and tracking volumes of computer data that within days pointed to Teixeira. They worked with Army CID investigators experienced in classified document probes.

    Anthony Ferrante, a former FBI agent, said that the “first few hours are critical” in a case like the Discord leaks as investigators rush to preserve digital evidence before it becomes harder to find online or vanishes altogether.

    FBI agents likely worked backward from the initial Discord posts to build a profile of the leaker, combing through his other online accounts to “put a human behind a keyboard,” Ferrante, who is now global head of cybersecurity at FTI Consulting, told CNN.

    Even though Teixeira emerged quickly as the most obvious suspect, counterintelligence agents trained in uncovering foreign spies looked through Teixeira’s background to try to find any sign that he could be working with a foreign intelligence service.

    The FBI agents’ work was made more urgent because the trove of documents had set off a media frenzy and reporters found ready interviews among members of Teixeira’s Internet social circle.

    On Monday, the FBI interviewed a user of the Discord chatroom where the classified information had been posted, according to the affidavit. That person told investigators that a user who went by “Jack” and said he was in the Air National Guard was the server’s administrator.

    A day earlier, the investigative news outlet Bellingcat posted an interview with a member of that same chatroom.

    On Wednesday, a day before Teixeira’s arrest, the FBI obtained records from Discord that included the subscriber information of the server’s administrator, which had Teixeira’s name and address, according to the affidavit.

    By day 5 of the FBI’s search, agents believed they had enough to charge Teixeira, and they began surveilling him.

    In a different scenario, without the intense public attention, agents might have watched him for weeks to see if he was meeting anyone suspicious or if he had accomplices.

    Instead, they moved to make an arrest Thursday, as news helicopters flew above.

    Teixeira was charged under the Espionage Act with unauthorized retention and transmission of national defense information and unauthorized removal of classified information and defense materials. He will next appear on Wednesday in federal court in Massachusetts.

    For the Biden administration, the episode has already prompted the Pentagon to begin to limit who across the government receives its highly classified daily intelligence briefs, amid lingering questions over why a 21-year-old junior Air National Guardsman had access to such classified information – and why it wasn’t discovered more quickly.

    Austin and Milley spent time on the phone speaking with US allies and partners around the world regarding the sensitive intelligence and top-secret documents suddenly thrust into the public sphere. Those conversations were expected to continue through the end of the week, another US official said.

    Deputy Secretary of State Wendy Sherman was tapped to lead the diplomatic response to the leaked US intelligence documents, according to a US official familiar with the matter.

    Biden was continually briefed on the state of the investigation while abroad, as well as the efforts of his top officials to engage with allies over the leaked information, officials said. Behind the scenes, that effort was a reality that loomed over a deeply personal and important foreign trip for Biden, one official acknowledged. 

    Still, the leaks didn’t arise when Biden met Wednesday with British Prime Minister Rishi Sunak, a Five Eyes intelligence sharing ally.

    Biden publicly downplayed the significance of the leak when he made his first comments on the matter. “I’m concerned that it happened, but there is nothing contemporaneous that I’m aware of that is of great consequence,” Biden told reporters Thursday.

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  • SolarWinds chief vows to fight any legal action from US regulators over alleged Russian hack | CNN Business

    SolarWinds chief vows to fight any legal action from US regulators over alleged Russian hack | CNN Business

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    CNN
     — 

    The chief executive of US software firm SolarWinds told employees Friday that “we intend to vigorously defend ourselves” in the face of potential legal action from US regulators over the firm’s handling of a sweeping 2020 breach by alleged Russian hackers, according to an internal SolarWinds email obtained by CNN.

    The US Securities and Exchange Commission has informed current and former SolarWinds executives that it intends to recommend “civil enforcement action” alleging the company broke federal securities laws in its public statements and “internal controls” related to the hack, SolarWinds said in a filing with regulators on Friday.

    The hackers – who the Biden administration said worked for the Russian foreign intelligence service – allegedly used SolarWinds software to access the unclassified email networks of the departments of Justice, Homeland Security and other agencies in a cybersecurity and counterintelligence failure that US officials vowed to rectify.

    The SEC notice is an indication that US regulators are moving closer to bringing a civil lawsuit against SolarWinds that could result in fines or other penalties. A so-called Wells notice from the enforcement agency is not a formal charge or determination that a defendant broke the law.

    “Despite our extraordinary measures to cooperate with and inform the SEC, they continue to take positions we do not believe match the facts,” SolarWinds CEO Sudhakar Ramakrishna said in the email to employees.

    SolarWinds “will continue to explore a potential resolution of this matter before the SEC makes any final decision,” Ramakrishna said, adding that the SEC investigation could be a “distraction” to employees in the coming months.

    The SEC did not respond to CNN’s request for comment Friday night. The Biden administration has increasingly embraced regulation as a means of forcing big software providers and critical infrastructure firms to improve their cybersecurity practices.

    “We are cooperating in a long investigative process that seems to be progressing to charges by the SEC against our company and officers,” a SolarWinds spokesperson said in a statement to CNN. “Any potential action will make the entire industry less secure by having a chilling effect on cyber incident disclosure.”

    Austin, Texas-based SolarWinds maintains that it acted appropriately in responding to the hack, which cybersecurity experts have called notable in its sophistication and scope. For several months in 2020, hackers used software made by SolarWinds and other technology firms to burrow into US government agencies and corporate victims in an apparent spying campaign.

    Moscow has denied involvement.

    After the hack became public, US lawmakers demanded answers from federal cybersecurity officials on why the hackers were undetected for so long, as well as criticized SolarWinds for its security practices prior to the hack.

    But SolarWinds says it has instituted numerous security reforms in the years since the hack, and has pushed that message of reform in public appearance with federal officials.

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  • Microsoft faces off against US government over Activision deal, with top execs set to testify | CNN Business

    Microsoft faces off against US government over Activision deal, with top execs set to testify | CNN Business

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    CNN
     — 

    Microsoft

    (MSFT)     and the video game giant Activision Blizzard

    (ATVI)     will face off Thursday against the US government in a high-stakes battle over one of the largest technology acquisitions in history.

    The showdown in federal court will have the CEOs of both companies taking the stand to defend their $69 billion merger against claims that the combination could violate US antitrust law and harm millions of consumers.

    The outcome of the fight will shape the future of the multibillion-dollar games industry. It will also impact enormously popular gaming franchises such as “Call of Duty” and “World of Warcraft,” which Activision owns and would be transferred to Microsoft under the deal.

    Also testifying will be the top financial executives from both companies; senior leaders from Microsoft’s Xbox division; the CEO of Microsoft Gaming, Phil Spencer; and a vocal critic of the deal, Sony gaming CEO Jim Ryan.

    The days-long affair begins Thursday and is scheduled to run through next week.

    In bringing the case, the Federal Trade Commission is asking a US district court judge for an injunction that would temporarily halt the deal. That would keep the companies from closing their merger, at least until the FTC’s in-house court rules in a separate proceeding on whether the acquisition is anticompetitive.

    But this week’s fight over a preliminary injunction may prove decisive for the deal as a whole. Microsoft has said that a victory for the FTC at this stage “will effectively block the transaction” overall.

    In this hearing, the FTC does not need to prove that the deal is anticompetitive. It just needs to show that the agency would be likely to succeed in doing so if the case moves ahead, and that otherwise its ability to enforce US antitrust law would be harmed.

    The clash comes as Microsoft and Activision face down a contractual July 18 deadline to consummate the deal. Failure to close, or any permanent court order to block the merger, could force Microsoft to pay a $3 billion breakup fee to Activision, according to the deal’s terms.

    The FTC lawsuit has put Microsoft under the harshest antitrust scrutiny in the US in more than two decades. It also could be a crucial test for the FTC at a time when it’s trying to rein in the tech industry broadly, with mixed success.

    In its initial challenge to the merger in its in-house court last year, the FTC alleged the deal would harm competition by turning Microsoft into the world’s third-largest video game publisher — allowing it to raise video game prices with impunity, restrict Activision titles from rival platforms and harm game quality and player experiences on consoles and gaming services.

    Some of those concerns have also been raised internationally. The UK government has challenged the acquisition, and the New Zealand government on Tuesday warned that the deal could be anticompetitive.

    Microsoft has sought to address the concerns by hammering out multi-year licensing agreements with competitors such as Nintendo and Nvidia to ensure that their platforms will continue to receive popular titles if the deal goes through.

    The company has also put forth an 11-point pledge to keep its platforms open, a commitment that applies not only to the Activision Blizzard deal but to virtually all of Microsoft’s gaming business going forward.

    Last month, Microsoft said the European Union would require it to license Activision games “automatically” to competing cloud gaming services as a condition of allowing the merger to proceed in the EU. That commitment, Microsoft said, “will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.”

    Although EU regulators have said the concession addresses their concerns, officials in the US and the UK are continuing with their legal opposition to the deal.

    The standoff particularly focuses attention on FTC Chair Lina Khan, a tech industry critic who has argued for litigating difficult cases and for introducing novel legal theories to help adapt US antitrust law to the digital age.

    Khan won a significant victory last year when the FTC forced Nvidia to abandon its attempted acquisition of the chipmaker Arm. The deal would have combined two companies in adjacent industries in what is known as a vertical merger, a type of deal that is rarely blocked in the United States.

    But Khan also suffered a setback when the FTC unsuccessfully tried to block Facebook-parent Meta from acquiring Within Unlimited, a virtual reality startup. The FTC had argued that the acquisition was an attempt by Meta to quash competition in the nascent VR industry, but earlier this year, a federal judge declined to issue a preliminary injunction of the kind the FTC now seeks against Microsoft. The FTC dropped its case against Meta soon after.

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  • Fertility app fined $200,000 for leaking customer’s health data | CNN Business

    Fertility app fined $200,000 for leaking customer’s health data | CNN Business

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    CNN
     — 

    The company behind a popular fertility app has agreed to pay $200,000 in federal and state fines after authorities alleged that it had shared users’ personal health information for years without their consent, including to Google and to two companies based in China.

    The app, known as Premom, will also be banned from sharing personal health information for advertising purposes and must ensure that the data it shared without users’ consent is deleted from third-party systems, according to the Federal Trade Commission, along with the attorneys general of Connecticut, the District of Columbia and Oregon.

    Wednesday’s proposed settlement targeting Premom highlights how regulators have stepped up their scrutiny of fertility trackers and health information in the wake of the US Supreme Court’s decision last year striking down federal protections for abortion.

    The sharing of personal data allegedly affected Premom’s hundreds of thousands of users from at least 2018 until 2020, and violated a federal regulation known as the Health Breach Notification Rule, according to an FTC complaint against Easy Healthcare, Premom’s parent company.

    Premom didn’t immediately respond to a request for comment.

    As part of the alleged violation, Premom collected and shared personally identifiable health information with Google and with a third-party marketing firm in violation of Premom’s own privacy policy, which had promised to share only “non-identifiable data” with others, according to the complaint.

    In addition, Premom allegedly shared location information and device identifiers — such as WiFi network names and hardware IDs — with two China-based data analytics companies, known as Jiguang and Umeng, according to the complaint. That information, the FTC alleged, “could be used to identify Premom’s users and disclose to third parties that these users were utilizing a fertility app,” according to an FTC complaint filed against Easy Healthcare, Premom’s parent company.

    Since the Supreme Court’s decision in Dobbs v. Jackson, a wave of anti-abortion legislation has raised the prospect that fertility apps, search engines and other technology platforms could be forced to hand over user data in potential prosecutions of abortion-seekers.

    “Now more than ever, with reproductive rights under attack across the country, it is essential that the privacy of healthcare decisions is vigorously protected,” said DC Attorney General Brian Schwalb in a statement. “My office will continue to make sure companies protect consumers’ personal information to protect against unlawful encroachment on access to effective reproductive healthcare.”

    Samuel Levine, director of the FTC’s consumer protection bureau, said the agency “will not tolerate health privacy abuses.”

    “Premom broke its promises and compromised consumers’ privacy,” Levine said in a statement. “We will vigorously enforce the Health Breach Notification Rule to defend consumer’s health data from exploitation.”

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  • The FTC should investigate OpenAI and block GPT over ‘deceptive’ behavior, AI policy group claims | CNN Business

    The FTC should investigate OpenAI and block GPT over ‘deceptive’ behavior, AI policy group claims | CNN Business

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    Washington
    CNN
     — 

    An AI policy think tank wants the US government to investigate OpenAI and its wildly popular GPT artificial intelligence product, claiming that algorithmic bias, privacy concerns and the technology’s tendency to produce sometimes inaccurate results may violate federal consumer protection law.

    The Federal Trade Commission should prohibit OpenAI from releasing future versions of GPT, the Center for AI and Digital Policy (CAIDP) said Thursday in an agency complaint, and establish new regulations for the rapidly growing AI sector.

    The complaint seeks to bring the full force of the FTC’s broad consumer protection powers to bear against what CAIDP portrayed as a Wild West of runaway experimentation in which consumers pay for the unintended consequences of AI development. And it could prove to be an early test of the US government’s appetite for directly regulating AI, as tech-skeptic officials such as FTC Chair Lina Khan have warned of the dangers of unchecked data use for commercial purposes and of novel ways that tech companies may try to entrench monopolies.

    The FTC declined to comment. OpenAI didn’t immediately respond to a request for comment.

    “We believe that the FTC should look closely at OpenAI and GPT-4,” said Marc Rotenberg, CAIDP’s president and a longtime consumer protection advocate on technology issues.

    The complaint attacks a range of risks associated with generative artificial intelligence, which has captured the world’s attention after OpenAI’s ChatGPT — powered by an earlier version of the GPT product — was first released to the public late last year. Everyday internet users have used ChatGPT to write poetry, create software and get answers to questions, all within seconds and with surprising sophistication. Microsoft and Google have both begun to integrate that same type of AI into their search products, with Microsoft’s Bing running on the GPT technology itself.

    But the race for dominance in a seemingly new field has also produced unsettling or simply flat-out incorrect results, such as confident claims that Feb. 12, 2023 came before Dec. 16, 2022. In industry parlance, these types of mistakes are known as “AI hallucinations” — and they should be considered legally enforceable violations, CAIDP argued in its complaint.

    “Many of the problems associated with GPT-4 are often described as ‘misinformation,’ ‘hallucinations,’ or ‘fabrications.’ But for the purpose of the FTC, these outputs should best be understood as ‘deception,’” the complaint said, referring to the FTC’s broad authority to prosecute unfair or deceptive business acts or practices.

    The complaint acknowledges that OpenAI has been upfront about many of the limitations of its algorithms. For example, the white paper linked to GPT’s latest release, GPT-4, explains that the model may “produce content that is nonsensical or untruthful in relation to certain sources.” OpenAI also makes similar disclosures about the possibility that tools like GPT can lead to broad-based discrimination against minorities or other vulnerable groups.

    But in addition to arguing that those outcomes themselves may be unfair or deceptive, CAIDP also alleges that OpenAI has violated the FTC’s AI guidelines by trying to offload responsibility for those risks onto its clients who use the technology.

    The complaint alleges that OpenAI’s terms require news publishers, banks, hospitals and other institutions that deploy GPT to include a disclaimer about the limitations of artificial intelligence. That does not insulate OpenAI from liability, according to the complaint.

    Citing a March FTC advisory on chatbots, CAIDP wrote: “Recently [the] FTC stated that ‘Merely warning your customers about misuse or telling them to make disclosures is hardly sufficient to deter bad actors. Your deterrence measures should be durable, built-in features and not bug corrections or optional features that third parties can undermine via modification or removal.’”

    Artificial intelligence also stands to have vast implications for consumer privacy and cybersecurity, said CAIDP, issues that sit squarely within the FTC’s jurisdiction but that the agency has not studied in connection with GPT’s inner workings.

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  • How Meta got caught in tensions between the US and EU | CNN Business

    How Meta got caught in tensions between the US and EU | CNN Business

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    CNN
     — 

    Facebook-parent Meta has perhaps become the most high-profile casualty of a long-running privacy dispute between Europe and the United States — but it may not be the last.

    Meta has been fined a record-breaking €1.2 billion ($1.3 billion) by European Union regulators for violating EU privacy laws by transferring the personal data of Facebook users to servers in the United States. Meta said Monday it would appeal the ruling, including the fine.

    The historic fine against Meta — and a potentially game-changing legal order that could force Meta to stop transferring EU users’ data to the United States — isn’t just a one-off decision limited to this one company or its individual business practices. It reflects bigger, unresolved tensions between Europe and the United States over data privacy, government surveillance and regulation of internet platforms.

    Those underlying and fundamental disagreements, which have simmered for years, have now come to a head, casting a significant shadow over thousands of businesses that depend on processing EU data in the United States.

    Beyond its huge economic implications, however, the fine has once again highlighted Europe’s deep mistrust of US surveillance powers — right as the US government is trying to build its own case against foreign-linked apps such as TikTok over similar surveillance concerns.

    The origins of Meta’s fine this week trace back to a 2020 ruling by Europe’s top court.

    In that decision, the European Court of Justice struck down a complex transatlantic framework Meta and many other companies had been relying on until then to legally move EU user data to US servers in the ordinary course of running their businesses.

    That framework, known as Privacy Shield, was itself the outgrowth of European complaints that US authorities didn’t do enough to protect the privacy of EU citizens. At the time Privacy Shield was created, the world was still reeling from disclosures made by National Security Agency leaker Edward Snowden. His disclosures highlighted the vast reach of US surveillance programs such as PRISM, which allowed the NSA to snoop on the electronic communications of foreign nationals as they used tech tools built by Google, Microsoft, and Yahoo, among others.

    PRISM relied on a basic fact of internet architecture: Much of the world’s online communications take place on US-based platforms that route their data through US servers, with few legal protections or recourse for either foreigners or Americans swept up in the tracking.

    A 2013 European Parliament report on the PRISM program captured the EU’s sense of alarm, noting the “very strong implications” for EU citizens.

    “PRISM seems to have allowed an unprecedented scale and depth in intelligence gathering,” the report said, “which goes beyond counter-terrorism and beyond espionage activities carried out by liberal regimes in the past. This may lead towards an illegal form of Total Information Awareness where data of millions of people are subject to collection and manipulation by the NSA.”

    Privacy Shield was a 2016 US-EU agreement designed to address those concerns by making US companies certifiably accountable for their handling of EU user data. For a time, it seemed as if Privacy Shield could be a lasting solution facilitating the growth of the internet and a globally connected society, one in which the free flow of data would not be impeded.

    But when the European Court of Justice invalidated that framework in 2020, it reiterated longstanding surveillance concerns and insisted that Privacy Shield still didn’t provide EU citizens’ personal information the same level of protection in the US that it enjoys in EU countries, a standard required under GDPR, the EU’s signature privacy law.

    The loss of Privacy Shield created enormous uncertainty for the more than 5,300 businesses that rely on the smooth transfer of data across borders. The US government has said transatlantic data flows support the more than $7 trillion dollars of economic activity that occurs every year between the United States and the European Union. And the US Chamber of Commerce has estimated that transatlantic data transfers account for about half of all data transfers in both the US and the EU.

    The Biden administration has moved to implement a successor to Privacy Shield that contains some changes to US surveillance practices, and if it is fully implemented in time, it could prevent Meta and other companies from having to suspend transatlantic data transfers or some of their European operations.

    But it’s unclear whether those changes will be enough to be accepted by the EU, or whether the new data privacy framework could avoid its own court challenge.

    The possibility that US-EU data transfers may be seriously disrupted is refocusing scrutiny on US surveillance law just as the US government has been sounding its own alarms about Chinese government surveillance.

    US officials have warned that China could seek to use data collected from TikTok or other foreign-linked companies to benefit the country’s intelligence or propaganda campaigns, using the personal information to identify spying targets or to manipulate public opinion through targeted disinformation.

    But US moral authority on the issue risks being eroded by the EU criticism, a problem for the US government that may only be compounded by its own missteps.

    Just last week, a federal court described how the FBI improperly accessed a vast intelligence database meant for surveilling foreign nationals in a bid to gather information on US Capitol rioters and those who protested the 2020 killing of George Floyd.

    The improper access, which was not “reasonably likely” to retrieve foreign intelligence information or evidence of a crime, according to a Justice Department assessment described in the court’s opinion, has only inflamed domestic critics of US surveillance law, and could give ammunition to EU critics.

    The intelligence database at issue was authorized under Section 702 of the Foreign Intelligence Surveillance Act — the same law used to justify the NSA’s PRISM program and which the EU has repeatedly cited as a danger to its citizens and a reason to suspect transatlantic data sharing.

    While the US distinguishes itself from China based on commitments to open and democratic governance, the EU’s concerns about the US are not much different in kind: They come from a place of deep mistrust of broad surveillance authority and suspicions about the potential misuse of user data.

    For years, civil liberties advocates have alleged that Section 702 enables warrantless spying on Americans on an enormous scale. Now, the FBI incident may only further validate EU fears; add to the existing concerns that led to Meta’s fine; contribute to the potential unraveling of the US-EU data relationship; and damage US credibility in its push to warn about the hypothetical risks of letting TikTok data flow to China.

    If a new transatlantic data agreement is delayed or falls apart, Meta won’t be the only company stuck with the bill. Thousands of other companies may get caught in the middle, and the United States will have to hope nobody looks too closely at why while still trying to make a case against TikTok.

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  • Trump campaign says it saw surge in donations after indictment | CNN Politics

    Trump campaign says it saw surge in donations after indictment | CNN Politics

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    CNN
     — 

    Former President Donald Trump raised a combined $18.8 million in the first quarter of 2023 through his joint fundraising committee and his campaign – and saw a spike in donations after being indicted by a Manhattan grand jury on March 30 – according to new figures provided by his campaign.

    The campaign told CNN it also raised $15.4 million in the two weeks after charges were filed against the former president, showing how much his supporters have rallied around Trump after learning of the indictment.

    The Trump campaign said the fundraising figures suggest his legal woes have benefited him both politically and financially – at least in the short term – and energized his base as he continues to campaign for his third shot at the presidency.

    Politico first reported Trump’s first quarter fundraising numbers.

    Trump’s campaign previously said on March 31 that it had raised $4 million in the 24 hours since his indictment was first announced. The former president has pleaded not guilty to 34 felony criminal charges of falsifying business records.

    During the first quarter, from January 1 to March 31, Trump received a total of 541,971 donations, according to the figures provided by his campaign. The average donation was roughly $34.

    Comparatively, Trump received 312,564 donations in the two weeks after charges were filed against the former president, beginning on March 30, with the average donation totaling roughly $49.

    Prior to the indictment, the former president was bringing in roughly $168,000 per day between January 1 to March 30. It’s unclear whether the boost the Trump campaign says it received since his indictment will continue into the second quarter.

    The former president has been raising money for his 2024 presidential bid through both his campaign and his political action committee, Save America PAC. Filings Saturday night with the Federal Election Commission show that $14.4 million of the first-quarter haul went to Trump’s main campaign account.

    The figure lags behind the $30 million he raised during the first quarter of the 2020 election cycle, when he still occupied the Oval Office.

    In all, the Trump campaign spent $3.5 million in the first quarter and had $13.9 million in cash on hand as of March 31.

    More than $727,000 of his campaign dollars during the three-month period funded payroll, filings show. A little more than $488,000 went to TAG Air Inc. – the Trump-owned company that operates his airplanes.

    Other Republicans who have announced their 2024 candidacies include Nikki Haley, a former United Nations ambassador and ex-South Carolina governor, whose campaign has said she collected $11 million in the six weeks since she launched her bid on February 15. But the filings show she raised less than that, and her campaign appears to have double-counted money routed among various committees. In all, Haley raised $8.3 million across three committees connected to her campaign.

    Another South Carolinian, Republican Sen. Tim Scott – who announced a presidential exploratory committee on Wednesday, after the end of the first quarter – reported Saturday that he had nearly $22 million remaining in his Senate campaign account as of March 31. That’s money Scott could transfer directly into a presidential campaign account.

    Biotech entrepreneur Vivek Ramaswamy, who declared his bid for the GOP nomination in February, loaned his campaign $10.25 million and raised about $1.2 million from contributors through March 31. He had nearly $9.4 million in cash on hand at the end of the quarter, his FEC filing shows.

    Florida Gov. Ron DeSantis, who is expected to launch a 2024 GOP presidential bid, has built a sizable war chest through his state-level fundraising committee. Friends of Ron DeSantis has more than $85 million remaining in its coffers, recent state records show.

    He faces restrictions on the use of that money for a presidential bid, but it could potentially be transferred to another committee backing his candidacy.

    Already, a pro-DeSantis super PAC, Never Back Down, which launched in March, has announced that it had raised $30 million as of early April. The group debuted its first national TV ad Sunday, taking direct aim at the former president.

    “Donald Trump is being attacked by a Democrat prosecutor in New York, so why is he spending millions attacking the Republican governor of Florida?” the ad said. “What happened to Donald Trump?” The one-time buy on Fox will be followed by a seven-figure national ad buy beginning Monday, according to a source familiar with the super PAC’s plans.

    Details on Trump’s fundraising after the first quarter ended on March 31 won’t be disclosed to regulators for several months.

    On Friday, the former president filed his personal financial disclosure report with the FEC – offering the public a first look at his post-presidential finances. The 101-page report provided some new insights into Trump’s finances since he left office, including his social media business venture, and last year’s sale of digital trading cards known as NFTs, or non-fungible tokens.

    This story has been updated with additional information.

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  • Biden picks Air Force general to lead NSA and Cyber Command | CNN Politics

    Biden picks Air Force general to lead NSA and Cyber Command | CNN Politics

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    CNN
     — 

    President Joe Biden has nominated an Air Force general to head the nation’s powerful electronic spying agency and the US military command that conducts offensive cyber operations – a crucial position as the US continues to battle Russia, China and other foes in cyberspace.

    Lt. Gen. Timothy Haugh, who has served for years in senior US military cyber positions, is Biden’s choice to replace outgoing Army Gen. Paul Nakasone as head of the National Security Agency and US Cyber Command, an Air Force official confirmed to CNN.

    Politico first reported on Haugh’s nomination.

    The White House did not respond to a request for comment.

    Haugh’s nomination could face a roadblock in the Senate after Republican Sen. Tommy Tuberville of Alabama put a hold on senior military nominations because he objects to the department’s abortion travel policy.

    Haugh is currently deputy of US Cyber Command, a command of thousands of US military personnel who conduct offensive and defensive cyber operations to protect US critical infrastructure. Officials from the command traveled to Ukraine in late 2021 to prepare Kyiv for an onslaught of Russian cyberattacks that accompanied the full-scale Russian invasion.

    The command and NSA also have taken an increasingly active role in helping defend American elections from foreign interference under Nakasone’s leadership over the last five years.

    During the 2020 election, Iranian hackers accessed a US municipal website for reporting unofficial election results and Cyber Command kicked the hackers off the network out of concern that they might post fake results on the website, a senior US military official revealed last month.

    Haugh’s nomination signals a continued emphasis on election security work at Fort Meade, the sprawling military base in Maryland where the NSA and Cyber Command are housed. As a senior US military cyber official, Haugh has been involved in election security discussions in recent midterm and general elections.

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  • Tax prep companies shared private taxpayer data with Google and Meta for years, congressional probe finds | CNN Business

    Tax prep companies shared private taxpayer data with Google and Meta for years, congressional probe finds | CNN Business

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    CNN
     — 

    Some of America’s largest tax-prep companies have spent years sharing Americans’ sensitive financial data with tech titans including Meta and Google in a potential violation of federal law — data that in some cases was misused for targeted advertising, according to a seven-month congressional investigation.

    The report highlights what legal experts described to CNN as a “five-alarm fire” for taxpayer privacy that could lead to government and private lawsuits, criminal penalties or perhaps even a “mortal blow” for some industry giants involved in the probe including TaxSlayer, H&R Block and TaxAct.

    Using visitor tracking technology embedded on their websites, the three tax-prep companies allegedly sent tens of millions of Americans’ personal information to the tech industry without consent or appropriate disclosures, according to the congressional report reviewed by CNN.

    Beyond ordinary personal data such as people’s names, phone numbers and email addresses, the list of information shared also included taxpayer data — details about people’s filing status, adjusted gross income, the size of their tax refunds and even information about the buttons and text fields they clicked on while filling out their tax forms, which could reveal what tax breaks they may have claimed or which government programs they use, according to the report.

    The report, which drew on congressional interviews and written testimony from Meta, Google and the tax-prep companies, also found that every taxpayer who used TaxAct’s IRS Free File service while the tracking was enabled would have had their information shared with the tech companies. Some of the tax-prep companies still do not know whether the data they shared continues to be held by the tech platforms, the report said.

    “On a scale from one to 10, this is a 15,” said David Vladeck, a law professor at Georgetown University and a former consumer protection chief at the Federal Trade Commission, the country’s top privacy watchdog. “This is as great as any privacy breach that I’ve seen other than exploiting kids. This is a five-alarm fire, if what we know about this so far is true.”

    It is also an example, Vladeck said, of why the United States needs federal legislation guaranteeing every American a basic right to data privacy — an issue that has languished in Congress for years despite electronic data becoming an ever-larger part of the global economy.

    The congressional findings represent the latest claims of wrongdoing to hit the embattled tax-prep industry after a report last year by the investigative journalism outlet The Markup highlighted the tracking practice.

    Wednesday’s bombshell report adds to those earlier revelations by identifying a previously unreported category of data that was allegedly being collected and shared: the webpage titles in online tax software that can reveal what tax forms users have accessed, said an aide to Democratic Sen. Elizabeth Warren, who helped lead the congressional probe. For example, taxpayers who entered information about their college savings contributions or rental income may have done so on webpages bearing titles reflecting that information, which would then have been shared with the tech companies, the aide said.

    During the probe, Meta told investigators it used the taxpayer data it received to target third-party ads to users of its platform and to train its artificial intelligence algorithms, the report said. The Warren aide told CNN it was unclear whether Meta knew it was inappropriately using taxpayer data at the time. A Meta spokesperson said the company instructs its partners not to use its tools to share sensitive information and that Meta’s systems are “designed to filter out potentially sensitive data it is able to detect.”

    The technology behind the data collection, known as a tracking pixel, is commonly used across the entire internet. A small snippet of code that website owners can insert onto their sites, tracking pixels gather information that can help companies, including but not limited to Meta and Google, understand the behavior or interests of website visitors.

    Because of the tracking technology used by TaxAct, TaxSlayer and H&R Block, “every single taxpayer who used their websites to file their taxes could have had at least some of their data shared,” the report said.

    The tax-prep companies at the center of the investigation told lawmakers the collected data had been scrambled to help protect privacy, according to the report. But the report also said some of the tax-prep firms themselves were not fully aware of how much information was being exposed to the tech platforms, and the report cited past FTC research concluding that even “anonymized” data can be easily reverse-engineered to identify a person.

    The pixels’ use in a taxpayer context resulted in the “reckless” sharing of legally protected data that could put taxpayers at risk, according to the report by Warren and her Democratic colleagues Sens. Ron Wyden; Richard Blumenthal; Tammy Duckworth; and Sheldon Whitehouse; Sen. Bernie Sanders, an independent who caucuses with Democrats; and Democratic Rep. Katie Porter.

    The FTC, the Internal Revenue Service, the Justice Department and the Treasury Inspector General for Tax Administration “should fully investigate this matter and prosecute any company or individuals who violated the law,” the lawmakers wrote in a letter dated Tuesday to the agencies and obtained by CNN. The FTC and DOJ declined to comment; the IRS and TIGTA didn’t immediately respond to a request for comment.

    In a statement, H&R Block said it takes client privacy “very seriously, and we have taken steps to prevent the sharing of information via pixels.” Wednesday’s report said H&R Block had testified to using the tracking technology for “at least a couple of years.”

    TaxAct and TaxSlayer didn’t immediately respond to a request for comment. The report said TaxAct had been using Meta’s tools since 2018 and Google’s since about 2014, while TaxSlayer began using Meta’s tools in 2018 and Google’s in 2011. The investigation found that all three tax-prep companies had discontinued their use of Meta’s pixel after The Markup’s report last November.

    Intuit, the maker of TurboTax, received an initial inquiry letter from the lawmakers in December but was not a focus of Wednesday’s report because the company did not use tracking pixels to the same extent, the investigation found.

    Tax preparation firms have faced mounting scrutiny in recent years amid reports that many have turned to data harvesting as a business model and that the largest among them have spent millions lobbying against legislation that could make it easier for Americans to file their tax returns. An IRS report this year found that 72% of Americans would be interested in using a free, electronic tax filing service if it were provided by the agency as an alternative to private online filing services. The IRS plans to launch a pilot version of that service to a limited number of taxpayers in the 2024 tax filing season.

    Google told CNN it prohibits business customers from uploading to its platform sensitive data that could be traced back to a person.

    “We have strict policies and technical features that prohibit Google Analytics customers from collecting data that could be used to identify an individual,” a Google spokesperson said. “Site owners — not Google — are in control of what information they collect and must inform their users of how it will be used. Additionally, Google has strict policies against advertising to people based on sensitive information.”

    Wednesday’s report focuses more heavily on Meta’s use of taxpayer data, the Warren aide told CNN, because Google did not appear to have used the information for its own commercial purposes as overtly as Meta and the investigation was unable to fully determine whether Google may have used the data for other applications.

    The allegations could nevertheless create extensive legal risk for both the tech companies as well as the tax-preparation firms, according to tax and privacy legal experts.

    The tax-prep companies could face billions in fines under US tax law if the federal government decides to sue, said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. In addition, the US government could seek criminal penalties.

    “The scope of ‘taxpayer information’ is broad by design,” Rosenthal said, adding that tax-prep companies can be sued for “knowingly” or “recklessly” leaking that information. “The companies shouldn’t be sharing it in a way that some third party could obtain it.”

    Theoretically, he said, the tax code also affords individual taxpayers the right to file private lawsuits against the tax-prep companies. But most if not all of those firms require customers to submit to mandatory arbitration that could realistically make bringing a private claim more challenging, said the Warren aide.

    Apart from the tax code, both the tech giants as well as the tax-prep firms could also face civil liability from the FTC — which can police data breaches and hold companies accountable for their commitments to user privacy — and potentially from state governments that have their own privacy laws on the books, said Vladeck.

    Depending on the strength of the allegations, the tax-prep companies could quickly be forced into a binding settlement, said a former FTC official who requested anonymity in order to speak more freely.

    “If the facts are really strong, these companies would probably rather settle than go to court. This is very embarrassing,” the former official said. “It could be a mortal blow to the tax prep companies.”

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  • Hot box detectors didn’t stop the East Palestine derailment. Research shows another technology might have | CNN

    Hot box detectors didn’t stop the East Palestine derailment. Research shows another technology might have | CNN

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     — 

    A failing, flaming wheel bearing doomed the rail car that derailed and created a catastrophe in East Palestine earlier this month, but researchers have offered a solution to the faulty detectors that experts say could have averted the disaster unfolding in the small Ohio town.

    These wayside hot box detectors, stationed on rail tracks every 20 miles or so, use infrared sensors to record the temperatures of railroad bearings as trains pass by. If they sense an overheated bearing, the detectors trigger an alarm, which notifies the train crew they should stop and inspect the rail car for a potential failure.

    So why did these detectors miss a bearing failure before the catastrophe?

    An investigation into hot box detectors published in 2019 and funded by the Department of Transportation found that one “major shortcoming” of these detectors is that they can’t distinguish between healthy and defective bearings, and temperature alone is not a good indicator of bearing health.

    “Temperature is reactive in nature, meaning by the time you’re sensing a high temperature in a bearing, it’s too late, the bearing is already in its final stages of failure,” Constantine Tarawneh, director of the University Transportation Center for Railways Safety (UTCRS) and lead investigator of the study, told CNN.

    As part of the investigation, the UTCRS researchers developed a new system to better detect a bearing issue long before a catastrophic failure. The key: measuring the bearing’s vibration in addition to its temperature and load.

    The vibration of a failing bearing, Tarawneh says, often begins intensifying thousands of miles before a catastrophic failure. So his team created sensors that can be placed on board each rail car, near the bearing, to continuously monitor its vibration throughout its travels.

    “If you put an accelerometer on a bearing and you’re monitoring the vibration levels, the minute a defect happens in the bearing, the accelerometer will sense an increase in vibration, and that could be, in many cases, up to 100,000 miles before the bearing actually fails,” he said.

    Tarawneh, who argues the technology should be federally mandated, says had it been on board Norfolk Southern’s line it would have prevented the derailment in East Palestine.

    “It would have detected the problem months before this happened,” he said. “There wouldn’t have been a derailment.”

    A preliminary report from the East Palestine derailment, released Thursday by the National Transportation Safety Board, found hot box sensors detected that a wheel bearing was heating up miles before it eventually failed and caused the train to derail. But the detectors didn’t alert the crew until it was too late.

    The bearing, according to the report, was 38 degrees above ambient temperature when it passed through a hot box 30 miles outside East Palestine. No alert went out, the NTSB said.

    Ten miles later, the next hot box detected that the bearing had reached 103 degrees above ambient. Video of the train recorded in that area shows sparks and flames around the rail car. Still, no alert went to the crew.

    It wasn’t until a further 20 miles down the tracks, as the train reached East Palestine, that a hot box detector recorded the bearing’s temperature at 253 degrees above ambient and sent an alarm message instructing the crew to slow and stop the train to inspect a hot axle, the report said.

    The crew slowed the train, the report added, leading to an automatic emergency brake application. After the train stopped, the crew observed the derailment.

    The reason those first two hot box readings didn’t trigger an alert, the report said, is because Norfolk Southern’s policy is to only stop and inspect a bearing after it has reached 170 degrees above ambient temperature. The NTSB is planning to review Norfolk Southern’s use of wayside hot box detectors, including spacing and the temperature threshold that determines when crews are alerted.

    “Had there been a detector earlier, that derailment may not have occurred,” said NTSB Chair Jennifer Homendy at a Thursday press conference.

    In a statement responding to the NTSB report, Norfolk Southern stressed that its hot box detectors were operating as designed, and that those detectors trigger an alarm at a temperature threshold that is “among the lowest in the rail industry.” CNN has reached out to Norfolk Southern for comment on vibration sensor technology.

    Hot box detectors are unregulated, so companies like Norfolk Southern can turn them on and off at their own discretion and choose the temperature threshold at which crews receive an alert.

    There are several causes for overheated roller bearings, including fatigue cracking, water damage, mechanical damaging, a loose bearing or a wheel defect, according to the NTSB, and the agency says they’re investigating what caused the failure in East Palestine.

    “Roller bearings fail, but it is absolutely critical for problems to be identified and addressed early so these aren’t run until failure,” Homendy said. “You cannot wait until they’ve failed. Problems need to be identified early, so something catastrophic like this does not occur again.”

    Hum Industrial Technology, a rail car telematics company, has licensed the vibration sensor technology created by Tarawneh and his team. And it has launched pilot programs with several rail companies. But at this point, those sensors are on very few trains operating in the United States, which Tarawneh largely blames on the cost of retrofitting and monitoring cars and what he sees as companies prioritizing profit.

    It’s not clear exactly what it would cost to retrofit every train car in operation with sensors today, but Hum Industrial Technology stressed that it would cost less to put a sensor on a bearing than to replace a bearing.

    “They see it as, well, why should we do it if it’s not mandated?” Tarawneh said. “It’s like a lot of people are saying, ‘well, I’m willing to take the risk. It’s not that many derailments per year.’”

    But Steve Ditmeyer, a former Federal Railroad Administration official, says equipping every rail car with on board sensors may not be financially feasible.

    “What they’re proposing will work, but it’s very, very expensive,” Ditmeyer told CNN. “And one does have to take cost into consideration.”

    It would take more than 12 million on board sensors, according to Tarawneh, to fully equip the roughly 1.6 million rail cars in service across North America.

    Ditmeyer says railroads should invest more heavily in wayside acoustic bearing detectors, which sit along the tracks – much like hot box detectors – and monitor the sound of passing trains. They listen for noise that indicates a bearing failure well before a potential catastrophe.

    As of 2019, only 39 acoustic bearing detectors were in use across North America compared to more than 6,000 hot box detectors, according to a 2019 DOT report.

    “They are the only way that I can think of that would have prevented the accident by having caught a failing bearing earlier,” Ditmeyer said.

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