A weekly digest of the latest news and research related to the work of the Technology, Economics, and Governance Working Group. Topics covered in the digest include cybersecurity, domestic regulation, innovation, international competition, social media disinformation, and the California exodus.
Domestic Regulation
Apple loosens rules for developers in major concession amid antitrust pressure | The Washington Post
Apple announced Thursday that it would make significant adjustments to its App Store in a proposed legal settlement with developers. The move will allow developers to use payment methods outside of those provided by Apple, which are currently the only means of paying for third party content on Apple devices and on which Apple takes a cut of the sale. With this move, Apple likely hopes to head off two lawsuits – one brought by a group of small app developers and the other by Epic Games—which allege anticompetitive practices on the part of Apple.
Biden Administration and Private Sector Leaders Announce Ambitious Initiatives to Bolster the Nation’s Cybersecurity | The White House
On Wednesday the Biden Administration conducted a meeting with private sector and education leaders to discuss how the government could leverage the cybersecurity expertise of these groups to enhance national cyber defenses. The administration secured significant commitments from large tech companies like Google and Amazon to bolster the nation’s cybersecurity defenses and also announced initiatives to train American students in basic and advanced concepts related to cybersecurity.
Government Contracting Insights: Major Changes Proposed to Buy American Rules | National Defense Magazine
Under an Executive Order adopted at the end of July, the Biden administration is attempting to strengthen the Buy American Act and encourage manufacturing in the U.S. in critical industries. It is the most significant change to the Buy American Act in almost 70 years. The proposed rules would increase the threshold by which an item is deemed domestically produced and would also create a ‘Made in America’ office which would evaluate critical infrastructure products.
Industrial Policy, International Competition and Cooperation
South Korea set to curb Google, Apple commission dominance | Reuters
In a similar move to a settlement Apple reached in the U.S. on Thursday, South Korean regulatory authorities have moved to require companies operating in the country to allow developers to use payment methods aside from those controlled by Apple and Google, which can take commissions of up to 30% on purchases. The move comes as an amendment to the larger Telecommunications Business Act, which has been popularly dubbed the ‘Anti-Google law.’
The World Economy’s Supply Chain Problem Keeps Getting Worse | Bloomberg
Analysts now believe that elevated shipping costs and disrupted international trade are likely to be a feature of the world economy for at least another year. Higher shipping costs reflect greater uncertainty associated with COVID, as China has had to close major ports after detecting cases in pursuit of its policy of total eradication of COVID-19. This reality could lead to higher prices worldwide as firms pass these shipping costs on to consumers.
California
Why Company Headquarters Are Leaving California in Unprecedented Numbers | Hoover Institution
A new report by our very own Lee Ohanian, with Joseph Vranich, president of Spectrum Location Solutions, found that the pace at which California companies are relocating their headquarters outside of the state is accelerating, currently running at twice the rate of last year. The paper cites taxes, regulations, litigation costs, labor costs, energy and utility costs, and high employee cost of living as the reasons for the relocations. Despite the exodus going on for years, political leaders have not shown a willingness to make changes to improve the state’s business climate.
Cyber
T-Mobile Hacker Who Stole Data on 50 Million Customers: ‘Their Security is Awful’ | The Wall Street Journal
Last week it was revealed that T-Mobile’s servers had been compromised and upwards of 50 million people had their data stolen. This week, a 21-year-old American man named John Binns has come forward as a perpetrator of the hack. Binns claimed that T-Mobile had very little in the way of cybersecurity in place, and outside experts consulted by WSJ agreed that the exposure of records from clients who had long ago left T-Mobile were indicative of a system in need of overhaul.
Spies for Hire: China’s New Breed of Hackers Blends Espionage and Entrepreneurship | The New York Times
As China has expanded its cyberespionage efforts, it has turned its sights towards the country’s enormous population in an effort to recruit talented hackers. While previously hackers were often employed by the military, recently they have been hired in more a freelance capacity, as intelligence agencies within the country have used dummy companies to recruit talented coders and have turned them loose on the internet in an effort to find state secrets and secure China’s objectives. This approach also means that the government has less control over what the hackers are doing.
State Department hit by cyber attack, source says | Fox Business
The State Department was made aware of a serious breach of its electronic systems on Saturday. Details are hard to come by right now, but it appears that the breach was significant, but did not affect the ongoing withdrawal from Afghanistan. The news of the breach comes just weeks after a Senate Homeland Security Committee report gave the State Department’s information security program the lowest possible rating.
