Exclusive: China's ByteDance moves to ringfence its TikTok app amid U.S. probe - sources - Reuters

NEW YORK/WASHINGTON/BEIJING (Reuters) - ByteDance has stepped up efforts to separate its social media app TikTok from much of its Chinese operations, amid a U.S. national security panel’s inquiry into the safety of the personal data it handles, people familiar with the matter said.

FILE PHOTO: The logo of the TikTok app is seen on a mobile phone screen in this picture illustration taken February 21, 2019. Picture taken February 21, 2019. REUTERS/Danish Siddiqui/Illustration

The Chinese technology company is seeking to provide assurances to the Committee on Foreign Investment in the United States (CFIUS) that personal data held by TikTok, which is widely popular with U.S. teenagers, is stored securely in the United States and will not be compromised by Chinese authorities, the sources said.

CFIUS, which reviews deals by foreign acquirers for potential national security risks, is looking into ByteDance’s $1 billion acquisition of social media app Musical.ly in 2017, which laid the foundations for TikTok’s rapid growth, Reuters reported earlier this month.

ByteDance’s response represents a key test of corporate China’s ability to operate businesses in the United States that handle personal data, as U.S. President Donald Trump’s trade war with China fans suspicion between the world’s two largest economies.

ByteDance is hoping to avoid the fate of Chinese gaming company Beijing Kunlun Tech Co Ltd (300418.SZ), which said in May it would agree to a CFIUS request to divest popular gay dating app Grindr following concerns about the security of personal data. It is also exploring exiting its investment in Grindr through an initial public offering.

ByteDance started to separate TikTok operationally before CFIUS approached it in October, because it wanted some of its staff to focus on TikTok, according to the sources.

It completed the separation of TikTok’s product and business development, marketing and legal teams from those of its Chinese social media app Douyin in the third quarter of this year, according to the sources, who requested anonymity to discuss the company’s internal arrangements.

During the summer, it also hired an external consultant to carry out audits on the integrity of the personal data it stores, the sources added. The company has said U.S. user data is stored entirely in the United States, with a backup in Singapore. It has also said that the Chinese government does not have any jurisdiction over TikTok content.

Following the approach by CFIUS, TikTok is making a new push to set up a team in Mountain View, California, that will oversee data management, according to the sources. This team will determine whether Chinese-based engineers should have access to TikTok’s database, and monitor their activity, the sources said.

TikTok is also hiring more U.S. engineers to reduce its reliance on staff in China, according to the sources.

It is not clear how effective these changes will be in appeasing CFIUS. A spokeswoman for the U.S. Treasury Department, which chairs CFIUS, said it does not comment on information relating to specific CFIUS cases.

“Shifting a company’s operations away from China, geographically and technically, can give CFIUS more comfort that the company is really independent of its Chinese owner and the Chinese government,” said Nevena Simidjiyska, a partner at law firm Fox Rothschild LLP who advises companies on CFIUS reviews and is not involved in the TikTok case.

U.S. CONCERNS

TikTok employs about 400 people in the United States, up from 20 people at the time of the Musical.ly acquisition, the sources said. Most of the new employees joined this year, as TikTok built its U.S. operations, the sources added. ByteDance has 50,000 employees around the world.

U.S. lawmakers called last month for a national security probe into TikTok, expressing concern that the Chinese company may be censoring politically sensitive content, and raising questions about how it stores personal data. Last week, U.S. Army Secretary Ryan McCarthy said the U.S. military is undertaking a security assessment of TikTok.

Facebook Inc (FB.O) CEO Mark Zuckerberg, whose social media platform competes with TikTok for younger users, has also criticized the app over censorship concerns.

The CFIUS probe is currently focused on the handling of personal data, rather than censorship, according to two of the sources. ByteDance views the CFIUS investigation as informal, and has not yet been subjected to an official review, one of the sources added.

Some of the personal data that TikTok stores, such as a person’s name, age, email address and phone number, is submitted by its users. Other information, related to a person’s location, is collected automatically, according to TikTok’s website. TikTok also stores user-generated content, such as photographs and videos.

FILE PHOTO: TikTok logo is displayed on the smartphone while standing on the U.S. flag in this illustration picture taken, November 8, 2019. REUTERS/Dado Ruvic

Launched just two years ago, TikTok has been downloaded 1.5 billion times, making it the third most downloaded non-gaming app of the year, after Facebook’s WhatsApp and Messenger apps, according to research firm SensorTower.

ByteDance is one of China’s fastest growing startups. It owns the country’s leading news aggregator, Jinri Toutiao, as well as TikTok, which has attracted celebrities like Ariana Grande and Katy Perry.

ByteDance counts Japanese technology giant SoftBank Group Corp (9434.T), venture capital firm Sequoia Capital, and private equity firms such as KKR & Co Inc (KKR.N), General Atlantic and Hillhouse Capital Group as backers.

Reporting by Echo Wang in New York, Alexandra Alper in Washington and Yingzhi Yang in Beijing; Editing by Greg Roumeliotis and Lisa Shumaker

Our Standards:The Thomson Reuters Trust Principles.

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2019-11-27 08:06:00Z
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Tesla Beats Ford in Tug of War. Why Ford Is Right to Be Upset. - Barron's

Tesla CEO Elon Musk decided to pick on Ford’s popular F-150 during the Cybertruck launch—and Ford Motor (ticker: F) isn’t happy about it.

During his reveal event in Los Angeles Musk played a “tug of war” video showing a Cybertruck pulling an F-150 with ease. It was a fun video. Ford isn’t laughing and they might be challenging the Cybertruck to an apples-to-apples pull-off. Musk tweeted “bring it on” in response to the suggestion. The winners in this truck-war are investors who will learn a lot about truck design as well as physics.

Apples-to-apples is the key phrase in this debate. Investors and onlookers don’t know which Cybertruck configuration was used or which F-150 was battling Cybertruck in the Tesla’s video. Configuration and conditions matter a lot. Here’s what investors need to know to evaluate who might win the truck wars.

Configuration

Tesla is offering the Cybertruck in three configurations: a one motor rear wheel drive option, a two motor all wheel drive option and a three motor all wheel drive option. A three motor all wheel drive Cybertruck is a $70,000 vehicle with about 1,000 foot-pounds of torque.

(A foot-pound is a common unit of torque—or twisting force—that correlates to how much and how easily a vehicle can pull something.)

A base model F-150 isn’t comparable to the three motor Cybertruck. A $70,000 Ford truck is more like a F-450 super duty pickup. A truck like that can also generate about more than 1,000 foot-pounds of torque—similar to the top-level configuration of Cybertruck.

Tires

A Ford F-450 also has more tires—six of them, with four in the back. That matters. A lot. Torque, for instance, is no good on ice. Surface contact with the road is critical. That raises another point. Onlookers don’t know what kind of tires were on both vehicles in the Telsa-filmed tug of war. Both Ford and Tesla didn’t respond to request for comments about the tug of war or truck configurations used in the original video.

Curb Weight

Weight obviously matters when towing. What’s less obvious is Tesla sedans tend to be heavier than comparable cars because of the battery pack. The weigh and distribution of the battery weight is one reason Tesla model cars handle so beautifully. Complete specifications aren’t available for Cybertruck, but a Tesla Model X sport-utility vehicle is about 1,000 pounds heavier than a base model Ford F-150.

Driving

Most people tend to believe they are above average drivers, which, by definition, can’t be true. There is a lot of skill in maximizing car performance. Just ask a race car driver. Original tug-or-war onlookers don’t know how both trucks were operated. Electric motors have peak torque at zero rpm. Traditional internal combustion engines don’t. How the F-150 engine is revved matters to pulling results.

“Tesla should have the advantage at zero rpm,” a retired automotive engineer tells Barron’s. “Ford will have to rev the engine and pop the clutch like we did in the old days.”

Functionality

No one is going to buy a truck to pull a friend’s car backward. And no one has yet answered Barron’s question about boats. Tesla’s base warranty doesn’t cover deep water, presumably because of the battery packs. Many people with boats know launching the craft requires backing into the river, lake or ocean. Tesla hasn’t responded to multiple request for comment about warranties.

Of course, it is impossible to design a perfect comparison. The Cybertruck, for instance, seats six in its base configuration. There is more room in electric vehicles because there is no internal combustion engine taking up space. The batteries in an EV are typically in the floor. That’s one positive for EVs that consumer may not typically consider.

And aside from being wildly entertaining, the tow off is important for Tesla, Ford and General Motors (GM). The two truck encumbents will be highly motivated to demonstrate their vehicles are as good or better than Cybertruck. Both will want to relegate the futuristic pickup to niche status.

Early results show Cybertruck might have wider appeal than many predicted. Telsa achieved a win collecting more than 200,000 orders for its latest model. But with a reservation price of only $100, which is fully refundable, it isn’t clear what reservation-to-delivery conversion the EV pioneer with realized. What’s more, the top configuration—with three electric motors—won’t be available until 2022, according to Tesla’s website. Both Ford and GM should have all electric trucks by then.

Since the launch event Tesla shares are down about 5.2%. Design disappointment might be responsible, but the stock is still up about 56% over the past three months. Ford shares have risen 3.3% since the Cybertruck launch event. The S&P 500, for comparison, is up 1% since the Tesla reveal gala.

Write to Al Root at allen.root@dowjones.com

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2019-11-26 15:59:00Z
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5 things to know before the stock market opens Tuesday - CNBC

1. Dow set for higher open after another record close

Traders work on the floor of the New York Stock Exchange (NYSE) on November 04, 2019 in New York City.

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U.S. stock futures were pointing to a modestly higher open Tuesday on Wall Street. The Dow Jones Industrial Average, S&P 500 and Nasdaq all closed at record highs Monday, putting year-to-date gains at 20%, 25% and 30%, respectively. Optimism surrounding U.S.-China talks on a "phase one" trade deal boosted the stock market Monday and there's further evidence of possible progress Tuesday. China's Ministry of Commerce said its top trade negotiator, Vice Premier Liu He, spoke with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Tuesday morning local time. "Both sides discussed resolving core issues of common concern," the ministry said.

2. Powell: Rates probably won't rise anytime soon

Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., U.S., on Wednesday, on Wednesday, Oct. 30, 2019.

Al Drago | Bloomberg | Getty Images

With the final 2019 meeting of Federal Reserve policymakers just two weeks away, Fed Chairman Jerome Powell signaled interest rates are unlikely to rise anytime soon, saying Monday the central bank remains firmly committed to seeing the inflation rate go up to 2%. Inflation has been well below that level for 2019, despite three rate cuts over the past four months. Dallas Fed President Robert Kaplan told CNBC on Tuesday he expects fourth-quarter growth to be "weak" as business cut inventories due to trade concerns. Investors will be looking for more clues on the U.S. economy Tuesday morning, when the September S&P/Case-Shiller report on home prices and government data on October new home sales are released.

3. House Democrats preparing final impeachment report

House Intelligence Committee Chairman Adam Schiff, D-Calif., joined by other House Democrats, speaks during a press conference after the House Intelligence Committee hearing on the impeachment inquiry of President Trump in Longworth Building on Wednesday Nov. 13, 2019.

Caroline Brehman | CQ-Roll Call, Inc. | Getty Images

House Intelligence Committee Chairman Adam Schiff, D-Calif., said impeachment investigators are pulling together their findings. House Democrats could deliver a finalized report as early as next week after several closed-door depositions and two weeks of public hearings looking into President Donald Trump's intention when he asked Ukraine's leader in a July phone call to investigate political rival Joe Biden. Trump has repeatedly said he's done nothing wrong, calling the impeachment inquiry a "hoax" and a "witch hunt." He said there was "no quid pro quo" on that call. If the Democratically controlled House were to vote for impeachment, the Republican-controlled Senate would hold a trial on the evidence.

4. Google fires four workers for alleged wrongdoing

Alphabet's Google has terminated four employees for allegedly sharing sensitive information after weeks of internal dissent related to the mistrust of leadership. At least two of the employees were at the center of recent worker protests. Rebecca Rivers, who previously spoke out about Google's contracts with U.S. Customs and Border Protection, tweeted she was one of them. Last week, a group of 20 Google employees in San Francisco protested the interrogation of Rivers and another employee, Laurence Berland, who had been placed on sudden and indefinite administrative leave for allegedly sharing sensitive information.

5. Cybertruck vs. F-150 — Elon Musk says 'bring it on'

Tesla's futuristic pickup truck appears set to go head to head against the Ford F-150 in an "apples-to-apples" battle. The anticipated showdown, which could take place next week, comes after Tesla this week unveiled its all-electric Cybertruck and showed a promotional video of the vehicle towing a F-150.

Critics of the demonstration have argued the test was unfavorable to Ford. Sundeep Madra, vice president at Ford X, tweeted Monday, apparently urging Tesla CEO Elon Musk to send over a Cybertruck for a tug-of-war test. In a tweet directly replying to the Ford X vice president, Musk replied, "Bring it on."

CNBC's before the bell news roundup

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2019-11-26 12:36:00Z
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Google tensions deepen over firings of 'Thanksgiving Four' - Yahoo News

Google employees contend that four of their colleagues were fired in retaliation for worker organizing (AFP Photo/Ben STANSALL)

San Francisco (AFP) - Google on Monday fired four employees on the grounds they had violated data security policies, but the tech titan was accused of persecuting them for trying to unionize staff.

The dismissals of the quartet -- dubbed the "Thanksgiving Four" on social media -- deepened staff-management tensions at a company once seen as a paradigm of Silicon Valley freedoms but now embroiled in numerous controversies.

A memo to employees titled "Securing our data" sought to correct what Google contended was misinformation about the purported wrongdoing, saying it involved "systematic searches for other employees' materials and work."

Google, the money-making engine of parent company Alphabet, confirmed a copy of the note published by Bloomberg News but declined to comment further to AFP.

The memo said the information accessed by the individuals, "along with details of internal emails and inaccurate descriptions about Googlers’ work, was subsequently shared externally."

But the Tech Workers Coalition said the employees had been fired for "organizing at work" and urged others at Google to speak out.

"This is meant to scare workers, don't let it," the campaign group tweeted, appealing for other employers to step in and hire the four. At least one job offer came through in response.

One of the workers fired was connected to a petition condemning Google for working with the US customs and border patrol agency, which has been involved in President Donald Trump's crackdown on illegal immigration.

"Four of our colleagues took a stand and organized for a better workplace," read a Medium post by Google Walkout for Real Change, which organised a staff protest last year over the issue of sexual misconduct.

"This is explicitly condoned in Google's Code of Conduct, which ends: 'And remember ... don't be evil, and if you see something that you think isn't right — speak up.'

"When they did, Google retaliated against them."

Authors of the post contended that Google policies on data security were tightened simply to provide cover for getting rid of the workers.

"This is classic union busting dressed up in tech industry jargon, and we won't stand for it," they said.

- Global disputes -

The Google workplace has been disrupted by employee opposition to top-level decisions ranging from forging contracts with the US military to tailoring a version of the search engine for China.

A year ago, Google employees poured out of premises at its Mountain View campus and around the world to protest the company's handling of sexual misconduct allegations.

When they were still suspended prior to the firings, two of the quartet on Friday addressed a protest rally at the company's San Francisco offices, according to US media.

Jeffrey Hirsch, a University of North Carolina law professor and former National Labor Relations Board attorney, said Google could face legal problems unless it could show a consistent approach towards other staff accused of the same conduct as the four.

"If not, Google will likely have to reinstate the employees and pay them back pay," he told Bloomberg.

Google's virtual monopoly on internet searches has provoked accusations that it abuses its global dominance to attract more advertising money at the expense of others, such as the news media.

In France, an alliance of press groups is fighting back with a complaint under the European Union's new copyright law. AFP has brought a separate complaint against Google.

Like Facebook and Twitter, Google also stands accused of turning a blind eye to political disinformation on its platforms.

Last week, the search leader updated how it handles political ads, stepping up actions it says it is taking in the buildup to the US presidential election next year.

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2019-11-26 11:23:00Z
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Ford challenged Tesla to an 'apples to apples' tug-of-war between pickup trucks — Musk says 'bring it on' - CNBC

Tesla co-founder and CEO Elon Musk gestures while introducing the newly unveiled all-electric battery-powered Tesla Cybertruck at Tesla Design Center in Hawthorne, California on November 21, 2019.

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Tesla's futuristic pickup truck appears set to go head-to-head against the Ford F-150 in an "apples to apples" tug-of-war battle.

The anticipated showdown, which could take place as early as next week, comes shortly after Tesla unveiled its all-electric Cybertruck.

During the promotional event in Los Angeles last week, which turned into a somewhat embarrassing debut for the company's first electric pickup truck, Elon Musk showcased a promotional video of the vehicle engaging in a tug-of-war battle against a Ford F-150.

The 16-second clip, which has since been viewed more than 12 million times, shows Tesla's Cybertruck hardly breaking a sweat during the display, as it comfortably pulls a screeching Ford F-150.

However, critics of the demonstration have since argued the test was unfavorable to the U.S. automaker.

Sundeep Madra, vice president at Ford X, sent a message via Twitter to Musk on Monday, apparently urging the Tesla CEO to send over a Cybertruck for an "apples to apples" tug-of-war test.

In a tweet directly replying to the Ford X vice president, Musk replied: "Bring it on."

A Ford spokesperson was not immediately available to comment when contacted by CNBC Tuesday morning.

Astrophysicist Neil deGrasse Tyson — who has previously suggested that he believes Musk is more important than Jeff Bezos, Steve Jobs and Mark Zuckerberg — was one of those skeptical about the legitimacy of the original tug-of-war test.

Tyson said the stunt may not have demonstrated the pickup truck's engine power, challenging Musk to "fully load" the Ford F-150, "giving highest traction to its rear wheels, then try to drag that up the hill."

Musk agreed to do that next week.

He has since suggested the next tug-of-war test will be available to watch via webcast.

Botched demo

On Sunday night, Musk said Tesla had received 200,000 orders for its Cybertruck, despite a botched demo that led to a broken window and sparked meme's making fun of the vehicle's steel trapezoid shape.

At the unveiling, Musk tried to showcase the Cybertruck's durability by having the company's design chief hurl a metal ball at one of the Cybertruck's armored glass windows.

The window ended up cracking. Then another ball was thrown at another window and it shattered, too.

— CNBC's Lora Kolodny contributed to this report.

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2019-11-26 10:12:00Z
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Here's what advisors can anticipate amid the $26 billion Charles Schwab-TD Ameritrade tie-up - CNBC

A pedestrian passes in front of a Charles Schwab Corp. office building in New York.

Gabriella Angotti-Jones | Bloomberg | Getty Images

Charles Schwab's proposed acquisition of TD Ameritrade is stirring up worry among financial advisors.

Schwab on Monday announced it would acquire TD in a $26 billion all-stock transaction. Together, the firms will serve 24 million brokerage accounts, accounting for more than $5 trillion in client assets.

Both firms also have massive footprints in the registered investment advisory industry, where they custody investors' assets and execute trades.

They also provide firms with the technology to simplify their workflow and allow advisors to focus on financial planning.

"Together we can deliver the ultimate client experience for retail investors and independent registered investment advisors," said Stephen Boyle, TD Ameritrade's newly announced interim president and CEO, in a statement.

The merger will create a massive custodian in a field that often has little choice for these RIAs.

Clients may stay put

Clients are likely to keep their financial advisor, even amid a change in custodians, industry experts say.

That's because RIA businesses generally have so-called negative consent provisions in their paperwork when they take on new clients, meaning if the firm changes a service provider, the client has agreed to go along.

"I might change custodians if I think it's the best thing for you, and by signing this you are agreeing that you will go, unless you opt out," said Danny Sarch, founder and owner of Leitner Sarch Consultants.

Nevertheless, a client who is content with the service he or she receives will likely stay put.

"The client is generally loyal to the advisor, as long as the advisor keeps the client front of mind as he makes a decision," Sarch said.

Market concentration

Ariel Skelley | DigitalVision | Getty Images

In the RIA world, there are four custodians that make up the lion's share of the market: Fidelity, Pershing, Charles Schwab and TD Ameritrade.

Schwab, Fidelity, TD and Pershing collectively hold 80% of the RIA firms' $4 trillion in advisory assets, according to Cerulli Associates.

TD's specialty has been on the small RIA market, centering to firms with fewer than $100 million in assets under management, Sarch said.

"Pershing ignores that space, but Fidelity, Schwab and TD have traditionally competed," he said.

Advisors have raised concerns about the prospect of less competition.

"What does it mean for costs for advisors like me and for our end clients?" asked Daniel Tobias, a certified financial planner with Passport Wealth Management in Cornelius, North Carolina. His firm handles custody of client assets with TD.

"Or what if the service goes down, we have fewer options and we're that much more captive?" Tobias asked.

Small firms

Compassionate Eye Foundation | Getty Images

RIAs who are just starting out on their own or whose business model isn't centered on gathering assets have also turned to TD for their services.

In 2016, XY Planning Network, a network of fee-only advisors who charge clients a subscription fee rather than a percentage of assets under management, partnered with TD to make its services available to those advisors without requiring them to manage a minimum level of assets under management.

Indeed, 600 of the 1,100 fee-only advisors on XY Planning Network are using TD's services through this agreement and manage less than $10 million, said Alan Moore, co-founder of XY Planning Network.

"The question is, 'Will they continue to support the smaller RIA market?'" Moore asked. "I hope they see the value of working with people who are starting in the business and growing their firms and who may never have $50 million in assets."

"The custodians have to make money, but there are firms that will never meet those minimum asset requirements, and we're losing the only option we have," he said.

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2019-11-25 15:05:00Z
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Uber stopped from operating in London - The - The Washington Post

Henry Nicholls Reuters A photo illustration shows the Uber app and a bus in London, Britain, June 25, 2018.

LONDON — London’s transport authorities on Monday announced they will not renew Uber’s license to operate in the British capital after thousands of trips were made with someone other than the booked driver.

In a statement, Transport for London (TfL) said that there were “several breaches that placed passengers and their safety at risk.”

Uber’s license expires at midnight on Monday. The company, which announced it will appeal the decision, can continue to operate until a final decision is made. 

This is the second time in two years that transport authorities have rejected the ride-hailing app’s bid to renew its operating license in London, one of its largest European markets.

[Uber: The ride-hailing app that says it has ‘zero’ drivers]

The app, which employs tens of thousands of drivers, is hugely popular with users in London — and unpopular with London’s iconic black cabbies.

Uber said it will appeal the decision and that, for its 3.5 million users in London and 45,000 drivers, it will be business as usual during that time. “We have fundamentally changed our business over the last 2 years, setting the standard for safety in the industry. TfL’s decision on our London licence is wrong and we will appeal,” the corporation tweeted.

Dara Khosrowshahi, Uber’s chief executive, said even though the company should be “held to a high bar,” the decision was “just wrong.”

This is the latest setback for Uber, which has clashed with transport bodies and traditional taxi-driver markets around the world. Uber has been banned, or stopped service in, countries including Denmark, Hungary and Bulgaria.

In London, transport authorities in September 2017 dropped the bombshell that they would not renew Uber’s license amid safety concerns. The company successfully appealed that decision and was granted an extension.

TfL said that Uber had made a number of improvements since then, but they didn’t go far enough. One key concern, they said, was a change to Uber’s system that “allowed unauthorised drivers to upload their photos to other Uber driver accounts.” They said that this allowed at least 14,000 trips where passengers were picked up by someone other than the booked driver.

The transport body also said that some of the drivers that were dismissed or suspended were able to open new Uber accounts, potentially “compromising passenger safety and security.”

Uber’s rivals wasted little time in applauding the move.

The Licensed Taxi Drivers Association, a trade body for London’s black cab industry, said that “The Mayor and TfL have taken the right and only decision to keep Londoners safe.”

Bolt, an Estonian ride-hailing company that has thousands of London drivers on its books, said in a statement that “we continue to pay the utmost attention to the credentials of drivers we permit to use our platform.”

London Mayor Sadiq Khan, who will face a mayoral election contest next year, said “I know this decision may be unpopular with Uber users but their safety is the paramount concern.”

Read more

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Inside the new Uber: Weak coffee, vanishing perks and fast-deflating morale

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Could Europe’s Uber ruling affect the future of the gig economy?

Today’s coverage from Post correspondents around the world

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2019-11-25 14:03:00Z
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