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Europe agrees platform rules to tackle unfair business practices

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The European Union’s political institutions have reached agreement over new rules designed to boost transparency around online platform businesses and curb unfair practices to support traders and other businesses that rely on digital intermediaries for discovery and sales.

The European Commission proposed a regulation for fairness and transparency in online platform trading last April. And late yesterday the European Parliament, Council of the EU and Commission reached a political deal on regulating the business environment of platforms, announcing the accord in a press release today.

The political agreement paves the way for adoption and publication of the regulation, likely later this year. The rules will apply 12 months after that point.

Online platform intermediaries such as ecommerce marketplaces and search engines are covered by the new rules if they provide services to businesses established in the EU and which offer goods or services to consumers located in the EU.

The Commission estimates there are some 7,000 such platforms and marketplaces which will be covered by the regulation, noting this includes “world giants as well as very small start-ups”.

Under the new rules, sudden and unexpected account suspensions will be banned — with the Commission saying platforms will have to provide “clear reasons” for any termination and also possibilities for appeal.

Terms and conditions must also be “easily available and provided in plain and intelligible language”.

There must also be advance notice of changes — of at least 15 days, with longer notice periods applying for more complex changes.

For search engines the focus is on ranking transparency. And on that front dominant search engine Google has attracted more than its fair share of criticism in Europe from a range of rivals (not all of whom are European).

In 2017, the search giant was also slapped with a $2.7BN antitrust fine related to its price comparison service, Google Shopping. The EC found Google had systematically given prominent placement to its own search comparison service while also demoting rival services in search results. (Google rejects the findings and is appealing.)

Given the history of criticism of Google’s platform business practices, and the multi-year regulatory tug of war over anti-competitive impacts, the new transparency provisions look intended to make it harder for a dominant search player to use its market power against rivals.

Changing the online marketplace

The importance of legislating for platform fairness was flagged by the Commission’s antitrust chief, Margrethe Vestager, last summer — when she handed Google another very large fine ($5BN) for anti-competitive behavior related to its mobile platform Android.

Vestager said then she wasn’t sure breaking Google up would be an effective competition fix, preferring to push for remedies to support “more players to have a real go”, as her Android decision attempts to do. But she also stressed the importance of “legislation that will ensure that you have transparency and fairness in the business to platform relationship”.

If businesses have legal means to find out why, for example, their traffic has stopped and what they can do to get it back that will “change the marketplace, and it will change the way we are protected as consumers but also as businesses”, she argued.

Just such a change is now in sight thanks to EU political accord on the issue.

The regulation represents the first such rules for online platforms in Europe and — commissioners’ contend — anywhere in the world.

“Our target is to outlaw some of the most unfair practices and create a benchmark for transparency, at the same time safeguarding the great advantages of online platforms both for consumers and for businesses,” said Andrus Ansip, VP for the EU’s Digital Single Market initiative in a statement.

Elżbieta Bieńkowska, commissioner for internal market, industry, entrepreneurship, and SMEs, added that the rules are “especially designed with the millions of SMEs in mind”.

“Many of them do not have the bargaining muscle to enter into a dispute with a big platform, but with these new rules they have a new safety net and will no longer worry about being randomly kicked off a platform, or intransparent ranking in search results,” she said in another supporting statement.

In a factsheet about the new rules, the Commission specifies they cover third-party ecommerce market places (e.g. Amazon Marketplace, eBay, Fnac Marketplace, etc.); app stores (e.g. Google Play, Apple App Store, Microsoft Store etc.); social media for business (e.g. Facebook pages, Instagram used by makers/artists etc.); and price comparison tools (e.g. Skyscanner, Google Shopping etc.).

The regulation does not target every online platform. For example, it does not cover online advertising (or b2b ad exchanges), payment services, SEO services or services that do not intermediate direct transactions between businesses and consumers.

The Commission also notes that online retailers that sell their own brand products and/or don’t rely on third party sellers on their own platform are also excluded from the regulation, such as retailers of brands or supermarkets.

Where transparency is concerned, the rules require that regulated marketplaces and search engines disclose the main parameters they use to rank goods and services on their site “to help sellers understand how to optimise their presence” — with the Commission saying the aim is to support sellers without allowing gaming of the ranking system.

Some platform business practices will also require mandatory disclosure — such as for platforms that not only provide a marketplace for sellers but sell on their platform themselves, as does Amazon for example.

The ecommerce giant’s use of merchant data remains under scrutiny in the EU. Vestager revealed a preliminary antitrust probe of Amazon last fall — when she said her department was gathering information to “try to get a full picture”. She said her concern is dual platforms could gain an unfair advantage as a consequence of access to merchants’ data.

And, again, the incoming transparency rules look intended to shrink that risk — requiring what the Commission couches as exhaustive disclosure of “any advantage” a platform may give to their own products over others.

“They must also disclose what data they collect, and how they use it — and in particular how such data is shared with other business partners they have,” it continues, noting also that: “Where personal data is concerned, the rules of the GDPR [General Data Protection Regulation] apply.”

(GDPR of course places further transparency requirements on platforms by, for example, empowering individuals to request any personal data held on them, as well as the reasons why their information is being processed.)

The platform regulation also includes new avenues for dispute resolution by requiring platforms set up an internal complaint-handling system to assist business users.

“Only the smallest platforms in terms of head count or turnover will be exempt from this obligation,” the Commission notes. (The exemption limit is set at fewer than 50 staff and less than €10M revenue.)

It also says: “Platforms will have to provide businesses with more options to resolve a potential problem through mediators. This will help resolve more issues out of court, saving businesses time and money.”

But, at the same time, the new rules allow business associations to take platforms to court to stop any non-compliance — mirroring a provision in the GDPR which also allows for collective enforcement and redress of individual privacy rights (where Member States adopt it).

“This will help overcome fear of retaliation, and lower the cost of court cases for individual businesses, when the new rules are not followed,” the Commission argues.

“In addition, Member States can appoint public authorities with enforcement powers, if they wish, and businesses can turn to those authorities.”

One component of the regulation that appears to be being left up to EU Member States to tackle is penalties for non-compliance — with no clear regime of fines set out (as there is in GDPR). So it’s not clear whether the platform regulation might not have rather more bark than bite, at least initially.

“Member States shall need to take measures that are sufficiently dissuasive to ensure that the online intermediation platforms and search engines comply with the requirements in the Regulation,” the Commission writes in a section of its factsheet dealing with how to make sure platforms respect the new rules.

It also points again to the provision allowing business associations or organisations to take action in national courts on behalf of members — saying this offers a legal route to “stop or prohibit non-compliance with one or more of the requirements of the Regulation”. So, er, expect lawsuits.

The Commission says the rules will be subject to review within 18 months after they come into force — in a bid to ensure the regulation keeps pace with fast-paced tech developments.

A dedicated Online Platform Observatory has been established in the EU for the purpose of “monitoring the evolution of the market and the effective implementation of the rules”, it adds.

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Epik data breach impacts 15 million users, including non-customers

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Epik has now confirmed that an “unauthorized intrusion” did in fact occur into its systems. The announcement follows last week’s incident of hacktivist collective Anonymous leaking 180 GB of data stolen from online service provider Epik. To mock the company’s initial response to the data breach claims, Anonymous had altered Epik’s official knowledge base, as reported by Ars.

Epik is a domain registrar and web services provider known to serve right-wing clients, some of which have been turned down by more mainstream IT providers due to the objectionable and sometimes illicit content hosted by the clients. Epik’s clients have included the Texas GOP, Parler, Gab, and 8chan, among others.

Epik hack impacts millions of non-customers, too

Turns out, the leaked data dump contains 15,003,961 email addresses belonging to both Epik’s customers and non-customers, and not everyone is pleased with the news. This occurred as Epik had scraped WHOIS records of domains, even those not owned by the company, and stored these records. In doing so, the contact information of those who have never transacted with Epik directly was also retained in Epik’s systems.

Data breach monitoring service HaveIBeenPwned has now begun sending out alerts to millions of email addresses exposed in the Epik hack. The service’s founder, Troy Hunt, is one of the many impacted by the data breach but who “had absolutely nothing to do with Epik.”

In a poll last week, Hunt had asked if affected users who weren’t Epik customers preferred receiving breach alerts as well. The majority of users responded affirmatively to the question.

“The breach exposed a huge volume of data not just of Epik customers, but also scraped WHOIS records belonging to individuals and organisations who were not Epik customers,” states HaveIBeenPwned. “The data included over 15 million unique email addresses (including anonymised versions for domain privacy), names, phone numbers, physical addresses, purchases and passwords stored in various formats.”

Ars has seen a part of the leaked whois.sql data set file, roughly 16 GB in size, with emails, IP addresses, domains, physical addresses, and phone numbers of the users. We noticed WHOIS records for some domains were dated and contained incorrect information about domain owners—people who no longer own these assets.

Epik's WHOIS database, part of the 180 GB leak.
Enlarge / Epik’s WHOIS database, part of the 180 GB leak.

Ax Sharma

Prior to registering domains, domain registrars require users to provide their “WHOIS” contact information, such as email address, physical address, and phone number. This information becomes a part of the public WHOIS directory and is searchable by anyone for contacting the domain owner. Being public data, WHOIS records may be seen or scraped by anyone. Those who prefer not to disclose their personal information directly on a WHOIS directory often rely on a company or a private WHOIS provider to act on their behalf. However, what has gotten the users concerned in this case is that the presence of their contact information in Epik’s data set could falsely portray them as having a connection to Epik when there was none.

“Wonder if there is any legal recourse once can take against [Epik] for harvesting data, and keeping it longer than expected in a cache for individuals who are NOT clients, and have had 0 business dealings with them? Is there a precedent for this?” asked TapEnvy.US, a Texas-based app development shop.

Epik confirms data breach, emails impacted people

Epik has confirmed the breach and is also emailing the impacted parties about an “unauthorized intrusion,” according to screenshots shared by data scientist Emily Gorcenski and cybersecurity expert Adam Sculthorpe:

Epik begins emailing data breach notice to customers.
Enlarge / Epik begins emailing data breach notice to customers.

“As we work to confirm all related details, we are taking an approach toward maximum caution and urging customers to remain alert for any unusual activity they may observe regarding their information used for our services – this may include payment information including credit card numbers, registered names, usernames, emails, and passwords,” reads Epik’s email notice.

Although the company has not confirmed at this time if credit card information was also compromised, as a caution, users are encouraged to “contact any credit card companies that you used to transact with Epik and notify them of a potential data compromise to discuss your options with them directly.”

Previously, an Epik spokesperson had told Ars that the company was not aware of any breach and was investigating the claims.

Users whose contact information was potentially exposed as a part of this hack should keep an eye out for any phishing emails and online banking scams.

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A new app helps Iranians hide messages in plain sight

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Enlarge / An anti-government graffiti that reads in Farsi “Death to the dictator” is sprayed at a wall north of Tehran on September 30, 2009.

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Amid ever-increasing government Internet control, surveillance, and censorship in Iran, a new Android app aims to give Iranians a way to speak freely.

Nahoft, which means “hidden” in Farsi, is an encryption tool that turns up to 1,000 characters of Farsi text into a jumble of random words. You can send this mélange to a friend over any communication platform—Telegram, WhatsApp, Google Chat, etc.—and then they run it through Nahoft on their device to decipher what you’ve said.

Released last week on Google Play by United for Iran, a San Francisco–based human rights and civil liberties group, Nahoft is designed to address multiple aspects of Iran’s Internet crackdown. In addition to generating coded messages, the app can also encrypt communications and embed them imperceptibly in image files, a technique known as steganography. Recipients then use Nahoft to inspect the image file on their end and extract the hidden message.

Iranians can use end-to-end encrypted apps like WhatsApp for secure communications, but Nahoft, which is open source, has a crucial feature in its back pocket for when those aren’t accessible. The Iranian regime has repeatedly imposed near-total Internet blackouts in particular regions or across the entire country, including for a full week in November 2019. Even without connectivity, though, if you already have Nahoft downloaded, you can still use it locally on your device. Enter the message you want to encrypt, and the app spits out the coded Farsi message. From there you can write that string of seemingly random words in a letter, or read it to another Nahoft user over the phone, and they can enter it into their app manually to see what you were really trying to say.

“When the Internet goes down in Iran, people can’t communicate with their families inside and outside the country, and for activists everything comes to a screeching halt,” says Firuzeh Mahmoudi, United for Iran’s executive director, who lived through the 1979 Iranian revolution and left the country when she was 12. “And more and more the government is moving toward layered filtering, banning different digital platforms, and trying to come up with alternatives for international services like social media. This is not looking great; it’s the direction that we definitely don’t want to see. So this is where the app comes in.”

Iran is a highly connected country. More than 57 million of its 83 million citizens use the Internet. But in recent years the country’s government has been extremely focused on developing a massive state-controlled network, or intranet, known as the “National Information Network” or SHOMA. This increasingly gives the government the ability to filter and censor data, and to block specific services, from social networks to circumvention tools like proxies and VPNs.

This is why Nahoft was intentionally designed as an app that functions locally on your device rather than as a communication platform. In the case of a full Internet shutdown, users will need to have already downloaded the app to use it. But in general, it will be difficult for the Iranian government to block Nahoft as long as Google Play is still accessible there, according to United for Iran strategic adviser Reza Ghazinouri. Since Google Play traffic is encrypted, Iranian surveillance can’t see which apps users download. So far, Nahoft has been downloaded 4,300 times. It’s possible, Ghazinouri says, that the government will eventually develop its own app store and block international offerings, but for now that capability seems far off. In China, for example, Google Play is banned in favor of offerings from Chinese tech giants like Huawei and a curated version of the iOS App Store.

Ghazinouri and journalist Mohammad Heydari came up with the idea for Nahoft in 2012 and submitted it as part of United for Iran’s second “Irancubator” tech accelerator, which started last year. Operator Foundation, a Texas nonprofit development group focused on Internet freedom, engineered the Nahoft app. And the German penetration testing firm Cure53 conducted two security audits of the app and its encryption scheme, which draws from proven protocols. United for Iran has published the findings from these audits along with detailed reports about how it fixed the problems Cure53 found. In the original app review from December 2020, for example, Cure53 found some major issues, including critical weaknesses in the steganographic technique used to embed messages in photo files. All of these vulnerabilities were fixed before the second audit, which turned up more moderate issues like Android denial-of-service vulnerabilities and a bypass for the in-app auto-delete passcode. Those issues were also fixed before launch, and the app’s Github repository contains notes about the improvements.

The stakes are extremely high for an app that Iranians could rely on to circumvent government surveillance and restrictions. Any flaws in the cryptography’s implementation could put people’s secret communications, and potentially their safety, at risk. Ghazinouri says the group took every precaution it could think of. For example, the random word jumbles the app produces are specifically designed to seem inconspicuous and benign. Using real words makes it less likely that a content scanner will flag the coded messages. And United for Iran researchers worked with Operator Foundation to confirm that current off-the-shelf scanning tools don’t detect the encryption algorithm used to generate the coded words. That makes it less likely that censors will be able to detect encoded messages and create a filter to block them.

You can set a passcode needed to open Nahoft and set an additional “destruction code” that will wipe all data from the app when entered.

“There has always been a gap between communities in need and the people who claim to work for them and develop tools for them,” Ghazinouri says. “We’re trying to shrink that gap. And the app is open source, so experts can audit the code for themselves. Encryption is an area where you can’t just ask people to trust you, and we don’t expect anyone to trust us blindly.”

In a 2020 academic keynote, “Crypto for the People,” Brown University cryptographer Seny Kamara made a similar point. The forces and incentives that typically guide cryptographic inquiry and creation of encryption tools, he argued, overlook and dismiss the specific community needs of marginalized people.

Kamara has not audited the code or cryptographic design of Nahoft, but he told WIRED that the goals of the project fit with his ideas about encryption tools made by the people, for the people.

“In terms of what the app is trying to accomplish, I think this is a good example of an important security and privacy problem that the tech industry and academia have no incentive to solve,” he says.

With Iran’s Internet freedom rapidly deteriorating, Nahoft could become a vital lifeline to keep open communication going within the country and beyond.

This story originally appeared on wired.com.

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SpaceX Starlink will come out of beta next month, Elon Musk says

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Enlarge / Screenshot from the Starlink order page, with the street address blotted out.

SpaceX’s Starlink satellite-broadband service will emerge from beta in October, CEO Elon Musk said last night. Musk provided the answer of “next month” in response to a Twitter user who asked when Starlink will come out of beta.

SpaceX began sending email invitations to Starlink’s public beta in October 2020. The service is far from perfect as trees can disrupt the line-of-sight connections to satellites and the satellite dishes go into “thermal shutdown” in hot areas. But for people in areas where wired ISPs have never deployed cable or fiber, Starlink is still a promising alternative and service should improve as SpaceX launches more satellites and refines its software.

SpaceX has said it is serving over 100,000 Starlink users in a dozen countries from more than 1,700 satellites. The company has been taking preorders for post-beta service and said in May that “over half a million people have placed an order or put down a deposit for Starlink.”

It is still possible to place pre-orders and submit $99 deposits at the Starlink website, but the site notes that “Depending on location, some orders may take 6 months or more to fulfill.” The deposits are fully refundable.

First 500,000 to order will “likely” get service

There are capacity limits imposed by the laws of physics, and SpaceX hasn’t guaranteed that every person who pre-ordered will actually get Starlink. Musk said in May that the first 500,000 people will “most likely” get service, but that SpaceX will face “[m]ore of a challenge when we get into the several million user range.”

We asked Musk today how many orders will be fulfilled by the end of 2021 and will update this article if we get a response. Musk has said the capacity limits will primarily be a problem in densely populated urban areas, so rural people should have a good chance at getting service.

SpaceX has US permission to deploy 1 million user terminals across the country and is seeking a license to deploy up to 5 million terminals. The number of Starlink pre-orders is up to 600,000 and SpaceX is reportedly speeding up its production of dishes to meet demand, as PCMag wrote last week. 

No changes to pricing yet

In beta, SpaceX has been charging a one-time fee of $499 for the user terminal, mounting tripod, and router, plus $99 per month for service. SpaceX hasn’t announced any changes to the pricing, but that could change when it moves from beta to commercial availability.

In April, SpaceX president and COO Gwynne Shotwell said that Starlink will likely avoid “tiered pricing” and “try to keep [pricing] as simple as possible and transparent as possible.” Shotwell said that SpaceX would keep Starlink in beta “until the network is reliable and great and something we’d be proud of.” SpaceX is also working on ruggedized user terminals for aircraft, ships, large trucks, and RVs.

SpaceX has a Federal Communications Commission license to launch nearly 12,000 low-Earth orbit satellites and is seeking permission to launch an additional 30,000. Amazon, which plans its own satellite constellation, has been urging the FCC to reject the current version of SpaceX’s next-generation Starlink plan. Satellite operator Viasat supported Amazon’s protest and separately urged a federal appeals court to halt SpaceX launches, but judges rejected Viasat’s request for a stay.

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