Wal-Mart tests direct-to-fridge; Amazon ups restaurant game

(Reuters) – Wal-Mart Stores Inc is testing a service to stock groceries directly to customers’ refrigerators as it seeks to take on e-commerce giant Amazon.com.

The delivery of groceries and meal kits is emerging as the next frontier of competition among retailers.

The world’s biggest brick-and-mortar retailer said on Friday it is partnering with August Home, a provider of smart locks and home accessories, to test the service with certain customers in the Silicon Valley. (bit.ly/2ffqqvT)

The grocery business is set to be upended through Amazon’s acquisition of upmarket grocer Whole Foods last month and the online retailer is also entrenching itself more deeply in the restaurants business.

Amazon Restaurants on Friday teamed up with online food ordering company Olo whose network of restaurants includes Applebee’s and Chipotle.

A Wal-Mart Stores Inc company distribution center in Bentonville, Arkansas June 6, 2013. REUTERS/Rick Wilking

The partnership will help Olo’s restaurant customers connect with Amazon’s delivery services.

The competition in the meal-kits business is also heating up. Supermarket operator Albertsons Cos Inc said it would buy meal-kit delivery service Plated while rival Kroger-owned Ralphs started selling meal kits in stores this week.

ONE-TIME PASSCODE DELIVERY

As part of the test, Wal-Mart delivery persons gain access to a customer’s house using a pre-authorized one-time passcode and put away groceries in the fridge and other items in the foyer.

Homeowners would receive notifications when the delivery is in progress and could also watch the real-time process from their home security cameras through the August Home app.

The Bentonville, Arkansas-based retailer has been exploring new methods of delivery and in June said it was testing using its own store employees to deliver packages ordered online.

Reporting by Vibhuti Sharma and Sruthi Ramakrishnan in Bengaluru; Editing by Martina D’Couto

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The SEC Hack Shows That Not Even Top Government Data Is Safe

A major computer hack at America’s top stock market regulator is the latest sign that data stored in the highest reaches of the U.S. government remains vulnerable to cyber attacks, despite efforts across multiple presidencies to limit high-profile breaches that are so frequent many consider them routine.

In recent years, nation-state and criminal hackers, as well as rogue employees, have stolen data from the Internal Revenue Service, the State Department and intelligence agencies, including millions of government employee files allegedly exfiltrated by the Chinese military, U.S. officials say.

The Sec urities and Exchange Commission ( SEC ), America’s chief stock market regulator, said on Wednesday that cyber criminals may have used data stolen last year to make money in the stock market, making it the latest federal agency to grab headlines for losing control of its data.

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JAPAN-US-IT-FINANCE-BITCOIN -COMPUTERS-HACKING-SERVICES-BANKING

At the same time, being only the latest major breach is not special, said Dan Guido, chief executive of Trail of Bits, which does cyber sec urity consulting for the U.S. government.

“It simply reflects the status quo of our digital sec urity,” said Guido, who is a former member of the cyber sec urity team at the Federal Reserve, America’s central bank.

Central bank officials have detected dozens of cases of cyber breaches, including several in 2012 that were described internally as “espionage.”

The U.S. federal government has sharply increased funding dedicated to protecting its own digital systems over the last several years, attempting to counter what is widely viewed as a worsening national sec urity liability.

But as one of the world’s largest collectors of sensitive information, America’s federal government is a major target for hackers from both the private sec tor and foreign governments.

“When you have one central repository for all this information – man, that’s a target,” said Republican Representative Bill Huizenga, chairman of the House subcommittee on Capital Markets, Sec urities, and Investment, which oversees the SEC .

Last year, U.S. federal, state and local government agencies ranked in last place in cyber sec urity when compared against 17 major private industries, including transportation, retail and healthcare, according to benchmarking firm Sec urityScorecard.

An update of the rankings in August showed the U.S. government had improved to third worst, ahead of only telecommunications and education.

“We also must recognize – in both the public and private sec tors, including the SEC – that there will be intrusions, and that a key component of cyber risk management is resilience and recovery,” said SEC Chairman Jay Clayton.

The federal government audits cyber sec urity measures every year at top agencies, producing reports that routinely expose shortfalls and sometimes major breaches. The Federal Bureau of Investigation also looks for hacking attempts and helped spot an alleged intrusion by Chinese military-backed hackers into a major banking regulator between 2010 and 2013.

Weekly scans of government systems by the Department of Homeland Sec urity showed in January that the SEC had critical cyber sec urity weaknesses but that vulnerabilities were worse at three agencies, including the Environmental Protection Agency, the Department of Health and Human Services and the General Services Administration.

Some agencies said they had improved their cyber sec urity posture since that report.

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A GSA spokeswoman said the agency has not had any critical vulnerabilities in the past six months, and that the ones identified in January were patched in under 10 days.

A Department of Labor spokesman said all identified vulnerabilities had been fixed and that its systems were not compromised by the identified flaws.

But, he added, “addressing vulnerabilities associated with legacy systems can be challenging.”

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Cloudflare Pays First $15,000 in Quest to Kill Blackbird Patent ‘Troll’

The Internet security Cloudflare is charging ahead with an unusual campaign to demolish Blackbird, a patent firm run by a group of lawyers who Cloudflare accuses of engaging in unethical practices.

On Thursday, Cloudflare announced it has paid out the first $ 15,000 to people who discovered documents that could help invalidate Blackbird’s patents. The money is part of a $ 100,000 war chest the company announced this spring, and is using in its quest to bring down Blackbird.

Cloudflare has labeled Blackbird a new breed of “patent troll”—a derogatory term for companies that don’t produce anything, but instead amass patents in order to extract money from companies that do. While patent trolling is hardly new, Cloudflare claims Blackbird is especially infamous because it is run by lawyers and may be engaging in illegal fee-splitting arrangements with patent owners.

Blackbird did not immediately respond to an email request for comment but has in the past claimed its business model is a cost efficient way for small inventors to assert their rights.

Cloudflare rejects this view, and instead likens Blackbird to a drive-by shakedown scheme. In its latest blog post, the Internet company pointed to a patent from 1998 for GPS technology that Blackbird used to sue six companies—but then quickly dismissed the lawsuits, consistent with “a pattern where Blackbird was only looking for small settlements from defendants who sought to avoid the costs and delays of litigation.”

The 1998 patent in question, titled G​P​S​-in​t​e​r​n​e​t​ ​L​i​n​k​a​g​e, is likely to raise eyebrows in the tech world since its language (an “integrated system comprising the Global Positioning System and the Internet wherein the integrated system can identify the precise geographic location of both sender and receiver communicating computer terminals”) appears to cover nearly anything related to GPS, and is supported by a simple graphic: The GPS patent is one of two for which Cloudflare paid a series of $ 500 bounties to the public in return for so-called “prior art” which can be used to challenge the validity of a patent. In the GPS patent case case, the prior art consists of research papers and other patents from 1998 and earlier that Cloudflare says will show the invention is not valid. (Under the law, the government is only supposed to a patent for inventions that are both new and not obvious.)

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Meanwhile, the company also paid for prior art related to another patent that Blackbird is asserting in court against Cloudflare itself. That patent, which dates from 1998, describes a way to provide an “internet third party data channel.

In the blog post, Cloudflare adds that it is “just warming up” and intends to pursue challenges against at least 10 other Blackbird-controlled patents. If the challenges are successful, this would likely put a major crimp in Blackbird’s operations or possibly force it out of business altogether.

Finally, Cloudflare is expanding a separate campaign that asks legal disciplinary bodies to punish Blackbird lawyers for violating the profession’s fee-splitting arrangements. Cloudflare has already lodged complaints with the state bars of Massachusetts and Illinois, which have yet to issue a ruling, and on Thursday said it has filed an additional objection with the United States Patent and Trademark Office’s Office of Enrollment and Discipline.

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Innogy to spend 1.2 billion euro on e-mobility, solar, glass fiber

FRANKFURT (Reuters) – Innogy, Germany’s largest energy group by market value, will spend up to 1.2 billion euros ($ 1.43 billion) in e-mobility, photovoltaics and glass fiber networks by 2019, it said in a statement on Thursday.

Innogy has an existing investment plan of 6.5-7.0 billion euros over the next three years and it was not immediately clear from the statement whether the 1.2 billion would come on top of that or are part of the existing budget.

The group, which is majority-owned by RWE, also said that there would be “no taboos” with regard to its portfolio on its way to become a leader in all relevant markets by 2025, not specifying further.

Reporting by Christoph Steitz; Editing by Arno Schuetze

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EU ready to move alone on digital tax if no global deal

BRUSSELS (Reuters) – The European Commission said the EU should proceed with an overhaul of taxes on digital firms even if the rest of the rich world did not follow suit, a draft report said.

The document is part of an EU push to tap more revenues from online multinationals such as Amazon and Facebook, who are accused of paying too little tax in Europe by routing most of their profits to low-rate countries such as Ireland or Luxembourg.

The draft report, to be adopted on Thursday, said that on average brick-and-mortar multinationals pay in taxes in the EU more than twice what their digital competitors do.

Traditional large firms face a median 23.2 percent tax rate, while digital giants do not pay more than 10.1 percent – and when they sell directly to customers, rather than to firms, their effective rate goes down to 8.9 percent, data cited by the Commission showed.

An earlier report by a European lawmaker said EU states may have lost in tax revenues up to 5.4 billion euros ($ 6.5 billion) just from Facebook and Google, now part of Alphabet, between 2013 and 2015.

“A level playing field is a pre-condition for all businesses to be able to innovate, develop and grow,” the Commission said, adding that fairer taxation of the digital economy was urgently needed.

Partly because of the uneven taxation, revenues in the EU retail sector grew on average by only 1 percent a year between 2008 and 2016, while in the same period revenues of the top-five online retailers, such as Amazon, grew on average by 32 percent per year, the Commission’s report says.

NEXT STEPS

The document, seen by Reuters, will be presented at a summit of EU leaders on September 29 dedicated to digital issues. Despite divergences and scepticism among some smaller states, the 28 EU countries are expected to find common ground on digital taxation by December.

The Commission is seeking a compromise among rich countries worldwide in a bid to reduce opposition from EU states that fear losing competitiveness if the EU moves ahead on its own in this field.

But “in the absence of adequate global progress, EU solutions should be advanced within the single market”, the document said, adding that a legislative proposal may be presented in the spring regardless of global developments.

The best way to tackle distortions would be to review the notion of “permanent establishment” so that firms could be taxed also in countries where they do not have a physical presence, the Commission said.

At the moment online companies can often avoid paying taxes in countries where they generate large revenues because they do not have a physical presence there.

A proposal to change the corporate tax base is already under discussion in the EU. The Commission believes it represents “a basis to address these key challenges”, but needs the unanimous support of EU states to turn the plan into law.

To move ahead more quickly, the Commission said short-term solutions could be considered. They include an “equalization” tax on turnover, as proposed by France and backed by 10 EU countries, the report said.

Alternative short-term options would be a withholding tax on payments to digital businesses and a levy on revenues from advertisements or other services provided by digital firms.

But short-term options “have pros and cons, and further work is needed”, the Commission said, warning that they may go against double-taxation treaties, state aid rules, fundamental freedoms and EU international commitments under free trade agreements and the World Trade Organization (WTO).

Reporting by Francesco Guarascio @fraguarascio; Editing by Philip Blenkinsop and Gareth Jones

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Uber reviews Asia business over bribery allegations in U.S.: Bloomberg

(Reuters) – Uber Technologies Inc [UBER.UL], which is the subject of a federal probe into whether it broke bribery laws, has started a review of its Asia operations and notified U.S. officials about payments made by staff in Indonesia, Bloomberg reported, citing people with knowledge of the matter.

A source familiar with the matter told Reuters that the Bloomberg report was accurate.

Uber said in August it was cooperating with a preliminary investigation led by the U.S. Department of Justice into whether company managers violated U.S. laws against bribery of foreign officials, specifically the Foreign Corrupt Practices Act.

Uber hired law firm O‘Melveny & Myers LLP to investigate how it obtained the medical records of an Indian woman who was raped by an Uber driver in 2014, Reuters reported in June.

O’Melveny & Myers is now examining records of foreign payments and interviewing employees, raising questions about why some potentially problematic business dealings were not disclosed sooner, Bloomberg said on Tuesday. bloom.bg/2xdk6PT

Attorneys are focused on suspicious activity in at least five Asian countries: China, India, Indonesia, Malaysia and South Korea, Bloomberg said, adding that Uber’s law firm is reviewing financial arrangements tied to the Malaysian government that may have influenced lawmakers there.

Uber and the DoJ could not immediately be reached for comment.

Reporting by Ismail Shakil in Bengaluru and Peter Henderson in San Francisco; Editing by Leslie Adler

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Why Apple iOS 11 Won’t Run Some of Your Apps

After users download iOS 11 to their iPhones and iPads starting today, they might discover some of their apps no longer work.

Apple’s iOS 11 will not support slow and old apps that use a technology called 32-bit, rendering those programs useless. Additionally, Apple will not allow users to find 32-bit apps in its App Store, effectively killing them off until the app developers update their older apps to support the new 64-bit process, which speeds up apps and makes them more usable on newer iPhones and iPads.

When users download iOS 11, they’ll get a notification from the operating system, saying that a particular app “needs to be updated.” Apple’s notification says that the app “will not work with iOS 11” and it will be banned from use until it’s updated.

Apple (aapl) started to use 64-bit apps in 2013 after the company launched the iPhone 5S, the first smartphone from the company to come with a 64-bit processor. At that time, Apple pressured developers to start taking advantage of the faster chip technology, but still allowed 32-bit apps to be developed and brought to its App Store. In 2015, however, Apple announced that all new apps and updates would need to run on 64-bit.

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While the majority of app developers heeded Apple’s warning and updated their programs, there are still some that have not, which means they haven’t been updated in over two years.

Apple announced last year that it would start to inform users of older and outdated apps, and this year, decided to finally stop supporting the older programs. Since last year, users have only been informed that their older apps would “slow down” their devices but Apple would allow them to be used. Now, though, Apple has seen enough and is stopping them in their tracks.

Apple’s iOS 11 will be available for download starting today. The software is free and users will get a notification on their iPhones and iPads when it’s ready to be downloaded.

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Apple iPhone X Might Be Cannibalizing iPhone 8

Apple’s iPhone 8 pre-orders are a little slower than previous models, and the handset might have an unlikely foe to thank for it.

In a note to investors this week, KGI Securities analyst Ming-Chi Kuo said that iPhone 8 and iPhone 8 Plus pre-orders are sluggish because of strong demand for Apple’s upcoming iPhone X. In the note, which was earlier reported on by Apple-tracking site 9to5Mac, Kuo said pre-order shipment dates after initial orders are placed usually stands around three to six weeks. Depending on the model they want, if consumers order an iPhone 8 or iPhone 8 Plus today, they might be able to get it on Friday’s launch day or need only to wait a week for the handset to arrive.

Apple (aapl) has been offering pre-orders on new iPhones for years. And in most cases, the handsets it starts selling in September see their initial supply run out soon after the company turns on pre-order sales. By mid-morning of pre-order day, it’s not uncommon for new purchasers to have to wait weeks, if not a couple of months, for their smartphones to arrive.

But the iPhone 8 and iPhone 8 Plus were different. The smartphones were announced alongside the iPhone X, a major upgrade, featuring a big screen that nearly entirely covers the face and a revamped design featuring glass and stainless steel. Apple has called the iPhone X the “future” of smartphone technology, which might have made some would-be iPhone 8 customers feel like they were buying outdated hardware.

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For its part, Apple (aapl) tried to allay some of those fears by bringing a similar glass finish to the iPhone 8 line. Apple’s handsets are also running the same A11 Bionic chip that users would find in the iPhone X, and all three of the company’s new smartphones support wireless charging.

Still, iPhone 8 and iPhone 8 Plus models are readily available, marking a stark departure from Apple’s recent iPhone pre-orders.

According to Kuo, it appears a large number of Apple customers are simply waiting for Apple to offer pre-orders on the iPhone X starting on October 27. And although the iPhone X comes with a hefty $ 999 price tag to start, at least the early adopters don’t seem concerned.

While Apple hasn’t commented on pre-orders, it’s unlikely the company would bemoan customers waiting to buy the iPhone X.

On Monday, researcher Susquehanna International Group estimated that Apple pays $ 581 for the components inside its iPhone X, giving the company a profit margin of $ 418 per unit before it factors in assembly cost. Last year’s iPhone 7, which cost $ 649, cost Apple $ 401 for its components. That translated at the time to a $ 401 profit. Apple, in other words, should make a surprisingly high margin on the sale of each iPhone X.

Tech

Tencent, Guangzhou Auto agree to collaborate on connected cars

HONG KONG (Reuters) – Chinese internet giant Tencent Holdings and Guangzhou Automobile Group Company Ltd said on Monday they had agreed to collaborate on connected cars.

The two companies will also explore investment in areas such as auto-related e-commerce, new energy cars and auto insurance, Guangzhou Automobile said in a filing.

Guangzhou Automobile Group said it would aim to tap Tencent’s expertise in mobile payments, social networking, big data and artificial intelligence.

Reporting by Sijia Jiang; Editing by Edwina Gibbs

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AI Research Is in Desperate Need of an Ethical Watchdog

About a week ago, Stanford University researchers (posted online)[https://osf.io/zn79k/] a study on the latest dystopian AI: They’d made a machine learning algorithm that essentially works as gaydar. After training the algorithm with tens of thousands of photographs from a dating site, the algorithm could, for example, guess if a white man in a photograph was gay with 81 percent accuracy. The researchers’ motives? They wanted to protect gay people. “[Our] findings expose a threat to the privacy and safety of gay men and women,” wrote Michal Kosinski and Yilun Wang in the paper. They built the bomb so they could alert the public about its dangers.

Alas, their good intentions fell on deaf ears. In a joint statement, LGBT advocacy groups Human Rights Campaign and GLAAD condemned the work, writing that the researchers had built a tool based on “junk science” that governments could use to identify and persecute gay people. AI expert Kate Crawford of Microsoft Research called it “AI phrenology” on Twitter. The American Psychological Association, whose journal was readying their work for publication, now says the study is under “ethical review.” Kosinski has received e-mail death threats.

But the controversy illuminates a problem in AI bigger than any single algorithm. More social scientists are using AI intending to solve society’s ills, but they don’t have clear ethical guidelines to prevent them from accidentally harming people, says ethicist Jake Metcalf of Data and Society. “There aren’t consistent standards or transparent review practices,” he says. The guidelines governing social experiments are outdated and often irrelevant—meaning researchers have to make ad hoc rules as they go.

Right now, if government-funded scientists want to research humans for a study, the law requires them to get the approval of an ethics committee known as an institutional review board, or IRB. Stanford’s review board approved Kosinski and Wang’s study. But these boards use rules developed 40 years ago for protecting people during real-life interactions, such as drawing blood or conducting interviews. “The regulations were designed for a very specific type of research harm and a specific set of research methods that simply don’t hold for data science,” says Metcalf.

For example, if you merely use a database without interacting with real humans for a study, it’s not clear that you have to consult a review board at all. Review boards aren’t allowed to evaluate a study based on its potential social consequences. “The vast, vast, vast majority of what we call ‘big data’ research does not fall under the purview of federal regulations,” says Metcalf.

So researchers have to take ethics into their own hands. Take a recent example: Last month, researchers affiliated with Stony Brook University and several major internet companies released a free app, a machine learning algorithm that guesses ethnicity and nationality from a name to about 80 percent accuracy. They trained the algorithm using millions of names from Twitter and from e-mail contact lists provided by an undisclosed company—and they didn’t have to go through a university review board to make the app.

The app, called NamePrism, allows you to analyze millions of names at a time to look for society-level trends. Stony Brook computer scientist Steven Skiena, who used to work for the undisclosed company, says you could use it to track the hiring tendencies in swaths of industry. “The purpose of this tool is to identify and prevent discrimination,” says Skiena.

Skiena’s team wants academics and non-commercial researchers to use NamePrism. (They don’t get commercial funding to support the app’s server, although their team includes researchers affiliated with Amazon, Yahoo, Verizon, and NEC.) Psychologist Sean Young, who heads University of California’s Institute for Prediction Technology and is unaffiliated with NamePrism, says he could see himself using the app in HIV prevention research to efficiently target and help high-risk groups, such as minority men who have sex with men.

But ultimately, NamePrism is just a tool, and it’s up to users how they wield it. “You can use a hammer to build a house or break a house,” says sociologist Matthew Salganik of Princeton University and the author of Bit by Bit: Social Research In The Digital Age. “You could use this tool to help potentially identify discrimination. But you could also use this tool to discriminate.”

Skiena’s group considered possible abuse before they released the app. But without having to go through a university IRB, they came up with their own safeguards. On the website, anonymous users can test no more than a thousand names per hour, and Skiena says they would restrict users further if necessary. Researchers who want to use the app for large-scale studies have to ask for permission from Skiena. He describes the approval process as “fairly ad hoc.” He has refused access to businesses and accepted applications from academics affiliated with established institutions who have proposed “what seem to be reasonable topics of study.” He also points out that names are public data.

The group also went through an ethics review at the company that provided training list of names, although Metcalf says that an evaluation at a private company is the “weakest level of review that they could do.” That’s because the law does not require companies to follow the same regulations as publicly-funded research. “It’s not transparent at all to you or me how [the evaluation] was made, and whether it’s trustworthy,” Metcalf says.

But the problem isn’t about NamePrism. “This tool by itself is not likely to cause a lot of harm,” says Metcalf. In fact, NamePrism could do a lot of good. Instead, the problem is the broken ethical system around it. AI researchers—sometimes with the noblest of intentions—don’t have clear standards for preventing potential harms. “It’s not very sexy,” says Metcalf. “There’s no Skynet or Terminator in that narrative.”

Metcalf, along with researchers from six other institutions, has recently formed a group called Pervade to try to mend the system. This summer, they received a three million dollar grant from the National Science Foundation, and over the next four years, Pervade wants to put together a clearer ethical process for big data research that both universities and companies could use. “Our goal is to figure out, what regulations are actually helpful?” he says. But before then, we’ll be relying on the kindness—and foresight—of strangers.

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