Welcome to Hillicon Valley, The Hill’s newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley. If you don’t already, be sure to sign up for our newsletter with this LINK.
Welcome! Follow the cyber team, Maggie Miller (@magmill95), and the tech team, Emily Birnbaum (@birnbaum_e) and Chris Mills Rodrigo (@chrisismills).
SOME ANSWERS ON EQUIFAX: Attorney General William Barr on Monday announced indictments against four members of the Chinese military for hacking into the systems of credit agency Equifax in 2017, stealing the personal information of more than 145 million Americans in one of the biggest data breaches in history.
The nine-count indictment alleges that four members of the Chinese People’s Liberation Army (PLA)– Wu Zhiyong, Wang Qian, Xu Ke and Liu Le — worked to steal personal information including Social Security numbers and drivers license numbers.
“This was a deliberate and sweeping intrusion into the private information of the American people,” Barr said on Monday. “Today, we hold PLA hackers accountable for their criminal actions, and we remind the Chinese government that we have the capability to remove the Internet’s cloak of anonymity and find the hackers that nation repeatedly deploys against us.”
The indictment, which was passed down by a federal grand jury in Atlanta, also charged the four Chinese nationals with stealing trade secrets, such as Equifax’s database designs, and noted that the defendants took steps to evade detection, such as routing online traffic through servers in 20 different countries to mask their location.
“This was an organized and remarkably brazen criminal heist of sensitive information of nearly half of all Americans, as well as the hard work and intellectual property of an American company, by a unit of the Chinese military,” Barr said.
Equifax responds: Equifax CEO Mark Begor said in a statement on Monday that the company was “grateful” to both the Justice Department and the FBI for their work to prosecute the data breach, noting that “the attack on Equifax was an attack on U.S. consumers as well as the United States.”
JUST HAVE A FEW QUESTIONS: Amazon is seeking to depose President Trump and top administration officials amid its court battle with the Pentagon over a $10 billion cloud computing contract.
In a court filing made public on Monday, Amazon asked the U.S. Court of Federal Claims for permission to depose Trump, Defense Secretary Mark Esper and former Defense Secretary James Mattis as it works to prove that Trump improperly intervened in the contract process to keep the lucrative award away from tech behemoth.
“President Donald J. Trump has repeatedly demonstrated his willingness to use his position as President and Commander in Chief to disrupt the orderly administration of government functions, including federal procurements, to advance personal motives,” Amazon said in the court filing. “There is no question he did so here.”
Amazon is suing the Pentagon over its decision to award the cloud computing contract, called the Joint Enterprise Defense Infrastructure, to Microsoft, claiming Amazon was the clear front-runner before Trump publicly intervened in the process last year.
Now, Amazon is asking the court to move into a discovery period that could allow Amazon to amass more documents and evidence to prove whether Trump interfered in the process behind closed doors.
It would be unprecedented to depose a sitting president as part of a company’s government contract protest.
Amazon in a footnote wrote “a deposition of a sitting President of the United States presents unique circumstances” but vowed to “develop appropriate protocols and safeguards” to navigate the sensitive situation.”
NEW COUNTERINTEL STRATEGY: The National Counterintelligence and Security Center (NCSC) on Monday unveiled the new National Counterintelligence Strategy, which emphasizes the need to defend against foreign operations aimed at democratic systems and at taking down critical infrastructure.
The strategy, which was signed and approved by President Trump in January, zeros in on digital threats to the country, focusing far more on these types of threats than the previous strategy released in 2016.
The new strategy identifies five areas of focus for the nation to defend against, including protecting critical infrastructure systems from attacks by foreign actors, defending against the theft of American intellectual property and protecting against influence campaigns designed to undermine American democratic institutions such as elections.
The NCSC also underlined the growing number of foreign threat actors that pose national security risks to the U.S., writing in the strategy that while Russia and China “have a broad range of sophisticated intelligence capabilities,” countries such as Iran, North Korea, and Cuba also pose threats.
The agency noted that Russia remains a threat to the “security of our elections,” while China was more focused on “stealing our technology and intellectual property in an effort to erode United States economic and military superiority.”
A WIN FOR AI AND QUANTUM: President Trump’s budget proposal unveiled Monday includes significant funding increases for research and development of artificial intelligence (AI) and quantum computing.
If approved, the fiscal 2021 budget would double non-defense AI spending from roughly $973 million to almost $2 billion.
It would also significantly boost quantum information science research by 50 percent compared with last year, with plans to double investment by 2022.
“Last year, the President committed to investing in the Industries of the Future,” Michael Kratsios, the White House’s chief technology officer, said in a statement.
“Now, he’s delivering on this promise with a historic doubling of AI and quantum R&D investments that will fuel American leadership in these critical technologies for years to come. In the face of intense global competition, the FY 21 Budget affirms the importance of technology leadership to America’s economic strength and national security,” Kratsios added.
Overall, though, President Trump’s budget includes cuts to domestic spending across the board including other federal research and development programs such as the Advanced Research Projects Agency-Energy.
ANTITRUST OVERHAUL: Sen. Josh Hawley (R-Mo.) in a proposal published Monday accused the country’s top consumer protection agency — the Federal Trade Commission (FTC) — of failing to intervene as the world’s most powerful tech companies amassed reams of personal information about their millions of U.S. users and gobbled up hundreds of smaller companies.
In response, Hawley is proposing a total overhaul of the FTC, an effort to streamline and beef up the federal government’s ability to take on large, valuable tech companies like Facebook and Google.
“It is time for Congress to overhaul the FTC and bring it into the 21st century,” reads the plan published by Hawley’s office.
The proposal says the FTC in its current structure “lacks teeth,” has a “divided” jurisdiction, and “wastes time in turf wars with the Department of Justice (DOJ).”
Hawley’s proposal would relocate the FTC to the DOJ, replace the five-member commission with a single director, and offer the agency a new set of tools to specifically take on Big Tech.
“The FTC has proven lethargic, unwieldy, susceptible to agency capture, and prone to turf wars,” Hawley’s office wrote.
Hawley’s office told The Hill the senator will propose legislation similar to the proposal in the coming weeks.
CORORNAVIRUS GOES ONLINE: Hackers are using concerns about the how the coronavirus might affect global shipping to target various industries, new research released Monday from cybersecurity group Proofpoint found.
Proofpoint found that hackers, most likely based in Russia and Eastern Europe, recently used malicious emails containing information on the impact of the coronavirus on the global shipping industry to target the manufacturing, industrial, financial, pharmaceutical, cosmetics and transportation sectors.
As part of these emails, a Microsoft Word document was attached to the email, with the document containing an information-stealing malware virus known as “AZORult” that exploited an old vulnerability to install the malware on the victim’s system.
Sherrod DeGrippo, the senior director of threat research and detection at Proofpoint, said in a statement that the attacks show the hackers are “economically sophisticated” and are looking at the impact of the coronavirus on the global economy instead of just at related health concerns.
SEE YA: Sony and Amazon are among the latest tech companies to pull out of an industry show in Barcelona this month over fears of the spreading coronavirus.
Sony announced it would be pulling its appearance at the Mobile World Congress fair, citing the World Health Organization’s declaration of the virus outbreak as a global emergency.
“As we place the utmost importance on the safety and wellbeing of our customers, partners, media and employees, we have taken the difficult decision to withdraw from exhibiting and participating at MWC 2020 in Barcelona, Spain,” Sony said in a statement.
The tech company will instead share news of its new products on Feb. 24 on its YouTube channel.
Amazon also announced over the weekend it would be skipping its scheduled appearance at the conference due to concerns over the outbreak.
Amazon was expected to have a big presence at the show.
Additionally, NTT DoCoMo, a Japanese-based mobile phone operator, canceled over concerns about safety, according to a company statement.
The show organizer, GSMA, said in a statement Sunday it is “moving ahead as planned” with the industry event Feb. 24 to 27.
SEEMS LIKE A GOOD CHOICE: Amazon has quietly removed Nazi-themed books from its website in an adjustment to its original vow to sell “the good, the bad and the ugly,” The New York Times reported Monday.
The retail giant that began as a bookstore reportedly removed two books by David Duke, the former leader of the Ku Klux Klan, and a few by George Rockwell, the founder of the American Nazi Party. The volumes, “The Ruling Elite: The Zionist Seizure of World Power” and “A History of Central Banking and the Enslavement of Mankind,” have also been banned from Amazon’s website, according to the Times.
Another book, “The Man in the High Castle: Creating the Alt World,” based on the retailer’s own show had its photos adjusted to digitally erase swastikas.
“Amazon reserves the right to determine whether content provides an acceptable experience,” one recent removal notice obtained by the Times read.
HOUSTON, WE HAVE A PROBLEM: Boeing is reviewing the software for its Starliner spacecraft after the first test flight in December raised concerns for a potentially disastrous outcome for the newly-designed space capsule.
Boeing officials said on Friday that they are now reviewing all 1 million lines of code in the capsule’s computer systems, with an indefinite timeframe on the project’s completion, according to The Washington Post’s report.
The company has also been handling software issues that emerged in the analysis of the crashes of two Boeing 737 Max airplanes that killed 346 people and led to the plane’s grounding since early last year. Doug Loverro, the head of human exploration for NASA, said it was unclear if the Starliner’s software difficulties and the issues with the 737 Max were connected.
“We don’t know how many software errors we have — if we have just two or many hundreds,” Loverro said. “[The] bottom line is that industry is very bad at doing software.”
A LIGHTER CLICK: A well-deserved win
NOTABLE LINKS FROM AROUND THE WEB:
Iran foils a cyberattack that targeted internet service providers (AFP)
Website for Israeli election app exposes personal data of 6.5 million Israelis (The New York Times / Daniel Victor, Sheera Frenkel, and Isabel Kershner)
How big companies spy on your emails (Motherboard / Joseph Cox)