Category: Business

Companies won’t learn from the T-Mobile/Experian hack — Om Malik

Last Thursday, John Legere, the C.E.O. of T-Mobile, joined the ranks of the dozens of chief executives who, in the past few years, have had to inform their customers that their personal information has been stolen. “One of our vendors, Experian, experienced a data breach,” Legere tweeted, referring to a Dublin-based credit bureau that his company uses to collect, store, and secure customers’ personal information. Experian explained the details on its Web site:

The unauthorized access was in an isolated incident over a limited period of time. It included access to a server that contained personal information for consumers who applied for T-Mobile USA postpaid services or products, which require a credit check, from Sept. 1, 2013 through Sept. 16, 2015. Records containing a name, address, Social Security number, date of birth, identification number (typically a driver’s license, military ID, or passport number) and additional information used in T-Mobile’s own credit assessment were accessed. No payment card or banking information was obtained.

As one of the fifteen million people who applied for T-Mobile USA’s post-paid services during that period, I was particularly aghast to learn about this breach. T-Mobile USA has, in the past two and a half years, been selling itself as an “uncarrier,” dedicated to upending the telecom industry’s status quo by offering simpler, cheaper, and more intelligible plans. I’d bought into this spin, and believed that it was the way forward for the industry.

Although no financial information was stolen in the T-Mobile breach, the completeness of the data that was acquired is akin to a Lego set for an identity thief. The fraudsters can set up new lines of credit or file for phony tax refunds in our names, and there isn’t much we can do about it. The cybersecurity consultant Bryan Seely told the Seattle Times that, on a scale of one to ten, this breach rates a seven, because it included fifteen million Social Security numbers, along with names and addresses. “When Target had a breach, people were reissued cards. You can’t reissue Socials that easily,” he said. Over the weekend, the e-commerce security firm Trustev claimed that it had found data sets from the Experian hack for sale on the dark Web…

By now, we’re familiar with this pattern: a company discloses a data theft, executives express grave concern, and customers are left to reset their passwords and sign up for free data protection, feeling all the while like data piñatas…

An offer of a credit-watching service in the wake of a hack is sort of like getting an alert after a fire has burned down your house. Moreover, in a recent blog post, Brian Krebs, of Krebs on Security, wrote, “Identity protection services like those offered by CSID, Experian and others do little to block identity theft: The most you can hope for from these services is that they will notify you after crooks have opened a new line of credit in your name.

RTFA for more details and Om’s analysis including the political problems with trying to get business security into the 21st Century. As Om says, 800 data breaches in one year proves the status quo isn’t working.

EU court ruling says US privacy protection sucks

The Atlantic Ocean just got a little wider. The European Court of Justice’s latest ruling has determined that the US “does not afford an adequate level of protection of personal data”.

The case brought against Facebook over the potential for US government snooping on European citizens’ data, throws the differences in internet culture into stark relief. But those differences have been growing for some time.

Also reflecting comparable difference between thoughtful Americans and corporate/government hacks.

Until Tuesday, it had been US companies – principally Google and Facebook – that had been driving the wedge in. In 2012 Google enraged European privacy regulators by declaring that it would unite data from its different services, mashing different privacy agreements into one. (The row is still going on.)

Then in 2014 the European Court of Justice declared that Google, as a “data processor” was covered by the data protection principles, and so must remove links about people from its search index that were “outdated, incorrect or irrelevant” (though with exceptions for public figures). Google has implemented the so-called “right to be forgotten” more or less, but the ruling infuriated many in the US…

Now the ECJ has ruled again, and once more highlighted the gulf in attitudes either side of the pond. “Safe harbour” ostensibly means that a European citizen’s personal data being processed by a US company on US-based computers is under the same protections as if it were still in Europe on a European-owned system. But the ECJ says it doesn’t protect that data from US government snooping – and so cannot be allowed.

The problem with safe harbour is that the US government now treats any data on computers of US-owned companies anywhere in the world as fair game for examination. Microsoft, in fact, is vigorously appealing a court case won (in the US) by the US government, which asserts that it has the right to access data held in one of the company’s Irish data centres. Safe harbour applied, in theory, to US companies but not to the US government; now the edifice has come crashing down…

Jim Killock, executive director of the Open Rights Group, commented: “In the face of the Snowden revelations, it is clear that safe harbour is not worth the paper its written on. We need a new agreement that will protect EU citizens from mass surveillance by the NSA.”…

In the longer term, the bigger problem will be the gap that is opening between the US and Europe. Privacy policies with teeth, the “right to be forgotten”, the desire to keep data inside Europe – all are at odds with the US’s treatment of data, which is more cavalier…Will Europe act as the example for the US to follow? History suggests not – which means the cultural gap is going to get wider.

I have to agree with Charles Arthur’s conclusions. The battle standard has been raised in the US by many organizations and individuals, even a few corporations – notably Apple. The rest of the tech industry will be guided by the almighty dollar and that may be aid and comfort to the rest of us.

Uncle Sugar may want to maintain a self-appointed right to snoop on everyone on Earth – while whining about cyber-spying. The ultimate in hypocrisy. But, just like the fiasco we went through in early days of global online communications – government prohibitions banning the sale of ordinary office software to keep those Dangerous Furriners from stealing our secrets :) – the paranoia of American politicians will end up limiting profits of American companies more than anything else. That won’t be allowed to last.

The TPP Free-Trade Charade

This was published just before the “resolution” of negotiations. What changed? Details of how we’re screwed.

As negotiators and ministers from the United States and 11 other Pacific Rim countries meet in Atlanta in an effort to finalize the details of the sweeping new Trans-Pacific Partnership (TPP), some sober analysis is warranted. The biggest regional trade and investment agreement in history is not what it seems.

You will hear much about the importance of the TPP for “free trade.” The reality is that this is an agreement to manage its members’ trade and investment relations – and to do so on behalf of each country’s most powerful business lobbies. Make no mistake: It is evident from the main outstanding issues, over which negotiators are still haggling, that the TPP is not about “free” trade

For starters, consider what the agreement would do to expand intellectual property rights for big pharmaceutical companies, as we learned from leaked versions of the negotiating text. Economic research clearly shows the argument that such intellectual property rights promote research to be weak at best. In fact, there is evidence to the contrary: When the Supreme Court invalidated Myriad’s patent on the BRCA gene, it led to a burst of innovation that resulted in better tests at lower costs. Indeed, provisions in the TPP would restrain open competition and raise prices for consumers in the US and around the world – anathema to free trade…

Similarly, consider how the US hopes to use the TPP to manage trade for the tobacco industry. For decades, US-based tobacco companies have used foreign investor adjudication mechanisms created by agreements like the TPP to fight regulations intended to curb the public-health scourge of smoking. Under these investor-state dispute settlement (ISDS) systems, foreign investors gain new rights to sue national governments in binding private arbitration for regulations they see as diminishing the expected profitability of their investments…

To be sure, investors – wherever they call home – deserve protection from expropriation or discriminatory regulations. But ISDS goes much further: The obligation to compensate investors for losses of expected profits can and has been applied even where rules are nondiscriminatory and profits are made from causing public harm…

Imagine what would have happened if these provisions had been in place when the lethal effects of asbestos were discovered. Rather than shutting down manufacturers and forcing them to compensate those who had been harmed, under ISDS, governments would have had to pay the manufacturers not to kill their citizens. Taxpayers would have been hit twice – first to pay for the health damage caused by asbestos, and then to compensate manufacturers for their lost profits when the government stepped in to regulate a dangerous product.

It should surprise no one that America’s international agreements produce managed rather than free trade. That is what happens when the policymaking process is closed to non-business stakeholders – not to mention the people’s elected representatives in Congress.

That presumes, of course, that our Congress is up to performing required due diligence on behalf of American workers and their families. Something I still need to be convinced of.

Duke Energy to pay $7 million for coal ash pollution case

Duke Energy agreed…to pay North Carolina regulators $7 million to settle allegations of groundwater pollution at its coal ash pits and to perform accelerated cleanups costing millions of dollars at four sites.

The agreement came as lawyers for the country’s largest electric company and the state were preparing courtroom arguments regarding a $25 million fine over groundwater pollution at a Wilmington plant, the state’s largest-ever penalty for environmental damage.

The settlement resolves that case and any other groundwater contamination allegations by state regulators at Duke Energy’s coal ash basins around the state.

The settlement also triggers accelerated cleanup at the retired Wilmington plant and three other plants that showed signs of offsite groundwater pollution during recent assessments. The state estimated the cleanups would cost between $10 and $15 million total.

The state’s pursuit of groundwater violations represented one facet of stepped up regulations and enforcement after a 2014 coal ash spill at the utility’s Eden power plant coated 70 miles of the Dan River in toxic, gray sludge…

Of course, this “pursuit” didn’t start until public outcry forced the state into action. The state’s Republican governor was a loyal employee of Duke Energy for 28 years.

The agency said the settlement will save the state from a protracted court fight over the Wilmington fine and allow it to focus its resources on overseeing cleanup efforts.

What? You expected something more than a polite note from the state of North Carolina. Who owns whom, eh?

Exxon’s research confirmed fossil fuels’ role in global warming in 1977

At a meeting in Exxon Corporation’s headquarters, a senior company scientist named James F. Black addressed an audience of powerful oilmen. Speaking without a text as he flipped through detailed slides, Black delivered a sobering message: carbon dioxide from the world’s use of fossil fuels would warm the planet and could eventually endanger humanity.

“In the first place, there is general scientific agreement that the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels,” Black told Exxon’s Management Committee, according to a written version he recorded later.

It was July 1977 when Exxon’s leaders received this blunt assessment, well before most of the world had heard of the looming climate crisis.

A year later, Black, a top technical expert in Exxon’s Research & Engineering division, took an updated version of his presentation to a broader audience. He warned Exxon scientists and managers that independent researchers estimated a doubling of the carbon dioxide (CO2) concentration in the atmosphere would increase average global temperatures by 2 to 3 degrees Celsius (4 to 5 degrees Fahrenheit), and as much as 10 degrees Celsius (18 degrees Fahrenheit) at the poles. Rainfall might get heavier in some regions, and other places might turn to desert.

“Some countries would benefit but others would have their agricultural output reduced or destroyed,” Black said, in the written summary of his 1978 talk…

Exxon responded swiftly. Within months the company launched its own extraordinary research into carbon dioxide from fossil fuels and its impact on the earth. Exxon’s ambitious program included both empirical CO2 sampling and rigorous climate modeling. It assembled a brain trust that would spend more than a decade deepening the company’s understanding of an environmental problem that posed an existential threat to the oil business.

Then, toward the end of the 1980s, Exxon curtailed its carbon dioxide research. In the decades that followed, Exxon worked instead at the forefront of climate denial. It put its muscle behind efforts to manufacture doubt about the reality of global warming its own scientists had once confirmed. It lobbied to block federal and international action to control greenhouse gas emissions. It helped to erect a vast edifice of misinformation that stands to this day.

Read it and weep, folks. Not that anyone who’s wandered intentionally into these pages is surprised by disclosures like this. It doesn’t take the fear-softened intellect of conspiracy nuts to understand how cover-ups work in the bastion of 19th Century capitalist minds.

We witness the same process in the day-to-day machinations of creeps like the Koch Brothers. We get to hear the blather of bought-and-paid-for flunkies in both of the political parties we’re allowed whenever they open their mouths on the topic of climate change.

Science means nothing compared to short-term profits. The lives of innocents have never counted. Why would we expect them to start keeping track of climate death, now?

Just add yourself one more reason to throw your local bum out of office if he or she is butt-kissing some oil company, coal company, taking their catechism from ALEC and legislating on behalf of the thugs who foul the planet we all live on.

China adopts emissions policy that won’t get through U.S. Congress

George HW Bush signing Clean Air Act legislation including cap-and-trade in 1990

Last Thursday night news broke of the impending announcement of a national cap-and-trade program for carbon in China, as part of a U.S.-China joint climate announcement. This market-based approach, pioneered in the U.S. with the sulfur dioxide trading program, has clearly come to be seen as an essential policy tool to combat climate change, increasingly embraced by countries, policymakers, and global business leaders of all political persuasions.

The 1990 Clean Air Act Amendments that established the Acid Rain program to limit emissions of sulfur dioxide (SO2) and nitrogen oxides was a milestone for market-based environmental policies. It led to the creation of the SO2 trading program, which has helped cut those emissions at a lower cost than many had envisioned at the start of the program. The experience with this program also provides critical lessons on the importance of good policy design that can help inform future policies. (For example, the need for updating emissions caps to reflect the latest science and declining technology costs.)

Since then, cap-and-trade systems have been successfully established in Europe (the EU ETS), California (via AB32), and the nine Northeast RGGI states, among other places. Many other places, including the Canadian province of British Columbia, have a carbon tax or plan to implement one…

Starting in 2013, China began to pilot carbon cap-and-trade programs at the sub-national level. The pilot programs now extend to six cities (Beijing, Chongqing, Hangzhou, Shanghai, Shenzhen, and Tianjin) and two provinces (Guangdong and Hubei). The experiment has had some encouraging results, and (together with lessons from the EU ETS, California, RGGI, and other carbon trading regimes) provide the real-world experience needed to design a national system to limit emissions in a cost-effective way. China’s INDC announced earlier this year signaled the country’s intention to use carbon pricing to help meet its goal of peaking CO2 emissions by 2030, if not earlier…

Last week was a momentous one for climate action, book-ended by the Pope’s address to Congress and the joint climate announcement from Presidents Obama and Xi. The economist in me cannot help but wonder: If China can do it, why not the U.S.? It’s time for a national price on carbon in the country that invented the concept.

You needn’t be a cynic to understand why the United States will not keep its fair share of the bargain struck between Presidents Obama and Xi. Congress must be part of the equation funding efforts of this size. Between Flat Earth Republicans and Blue Dog Democrats, nothing will be accomplished. That’s just a realistic view of what our national-level politicians have become.

China’s pilot programs have moved forward. Just as their experiments with individual cities becoming Free Trade Zones worked out, other cities are already in line waiting not-very-patiently to acquire the benefits of progressive reforms.

While this system can sort about half the polluting problems of excess carbon, the last-mile question also needs to be answered, as well. China needs to replace coal home fires for heating and cooking with natural gas. That process began a few years ago; but, in many ways, it is more demanding because it requires upgraded infrastructure — nationwide.

Nevertheless, both are on the way. Which is about two orders of magnitude more than we can say about the dungheap of backwardness that stretches from SCOTUS to Congress.

Here’s how West Virginia University researchers caught VW cheating

WVU test rig

This photo shows how researchers caught VW cheating on its emissions tests

Revelations that as many as 11 million Volkswagen cars have been cheating on their emissions tests have become big news this week. But the research that demonstrated that VW’s diesel vehicles were generating excessive pollution has been publicly available for more than a year — ever since a team at West Virginia University published their findings in the spring of 2014.

Volkswagen reportedly programmed its vehicles to behave differently during emissions testing than in real-world driving conditions. To detect this, the West Virginia researchers developed a method for measuring a vehicle’s emissions performance as it drove down the highway…

This equipment rode around in the back of the vehicles they were testing, collecting gas from the exhaust pipe and analyzing it. The gear included an onboard generator, to make sure that the power demands of the testing equipment didn’t change the performance of the engine.

Then they drove the vehicles up and down the West Coast, testing their performance in a variety of real-world driving conditions, from city streets to mountain roads. They found that one of the vehicles they tested (we now know it was a VW Jetta) was emitting 15 to 35 times the legal limit of nitrous oxide, while another (a VW Passat) was emitting five to 20 times the limit.

At this point, the researchers didn’t know why the cars were emitting so much pollution. But when they presented their results at a 2014 conference in San Diego, there were EPA officials in the audience. They picked up the investigation from there and eventually forced Volkswagen to admit that they had programmed the vehicles to cheat on emissions tests.

Gotta love all the directions capable of basic science. Catching corporate crooks is just one avenue – but, surely, important enough to deserve applause from ordinary consumers, recognition from bureaucrats who didn’t catch on to the crime until these folks at WVU pointed out discrepancies.

Shkreli already under criminal investigation before he screwed AIDs patients

The world’s most hated man this week could well be Martin Shkreli, whose pharmaceutical company inexplicably raised the price last month of a decades-old drug needed to treat a complex parasitic infection by more than 5,400 percent. But there is a group of folks who are probably delighted that Shkreli thrust himself into the public eye in such a negative way: Federal prosecutors.

Since at least in January, Shkreli has been under criminal investigation by the United States Attorney’s Office for the Eastern District of New York, court records show. And Shkreli is not alone—some of his business associates have also received grand jury subpoenas in the case.

After being notified of the investigation that month, Shkreli—a former hedge fund manager turned drug company entrepreneur—has invoked his Fifth Amendment right against self-incrimination because of the criminal case whenever his testimony has been sought in the many civil lawsuits filed against him about his business dealings…

According to the court records and people with knowledge of the case, the allegations against Shkreli that are under investigation involve insider trading, disguising the purpose of corporate payments for his benefit, defrauding shareholders by snatching business opportunities for himself, destruction of evidence, failure to disclose material facts to shareholders and other potential crimes…

Suffice to say, Shkreli not only has engendered public contempt, he has left a very troubling and strange trail in his career that has won him plenty of enemies, including members of his former company’s board of directors. Now, with Shkreli the latest corporate executive condemned as a villain, he has an enormous target on his back. And federal prosecutors are holding a loaded gun.

Couldn’t happen to a nicer guy, eh?

Egg prices have doubled in the last year. Here’s why

Click to enlargeEgg farmer looking for a subsidy – See any chickens?

If you look at a graph of the price of eggs, it usually resembles the flight path of a chicken: It bounces up a little bit, then flutters back to earth. But in the last few months egg prices have been soaring like — well, if not like eagles, at least like a flock of enthusiastic pigeons. The price is twice what it was this time last year.

What’s going on here? This year, avian flu hit a lot of egg farmers, wiping out their hens. Now this loss of birds is translating to a scarcity of eggs. Interestingly, the price of specialty eggs — like organic, and vegetarian-fed — hasn’t increased in the same way, which means they are pretty competitive.

That doesn’t mean that organic chicken operations are immune to avian flu. Donald Carr looked into this and found that small egg operations are probably just as prone to disease as big ones.

Congress is currently considering a bailout to help chicken farmers, which might help bring down the cost of eggs. From the perspective of someone living in poverty, cheaper eggs are important: Eggs have long been a healthy and inexpensive mainstay. They are easy to cook, too.

Our family eats eggs from cage-free chickens. If you’ve ever seen photos or visited a so-called battery chicken farm you’d probably make the same decision. The eggs we also eat are brown not white. While color variations to some extent are genetic, the popularity of white eggs comes from the same Anglo-Saxon fixation on white means clean, white means pure. Now, centuries out-of-date.

Growing up in New England, folks generally have more sense than to believe that myth – which is why most folks eat eggs with brown shells from chickens that didn’t have extra minerals added to their diet to produce white shells. Not any different from ignoring bleached, all-purpose flour. Yankees buy King Arthur unbleached flour instead of the stuff that keeps the stock market happy.

The eggs my wife and I eat have increased in price 10% year-over-year.