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Old 06-01-16, 09:39 AM   #1
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Default Peer-To-Peer News - The Week In Review - January 9th, '16

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January 9th, 2016




2015 Litigation Trends Highlight Increased Patent Litigation, Decreases in File Sharing Cases
Steve Brachmann

On Thursday, January 7th, legal data analytics firm Lex Machina published a report on litigation trends through 2015 for a range of intellectual property sectors. In general, the published data indicates that patent infringement cases rose through the 2015 calendar year while trademark infringement cases remained consistent and copyright infringement suits dropped sharply compared to recent quarters.

2015 saw the second-most patent infringement cases brought to court, according to Lex Machina’s data. A total of 5,830 patent cases were filed, a 15 percent increase over the 5,070 patent cases which were filed during 2014. 2015 still trailed behind 2013 in terms of patent infringement cases; that year set the high-water mark for patent infringement cases with 6,114 cases filed in that year.

On a quarter-by-quarter basis, there’s evidence of a fair amount of volatility in the filing of patent infringement cases. 2015 was the first year since 2012 that patent infringement filings increased between the third and fourth quarters, and this year that rise was dramatic. There were 1,117 patent infringement cases filed during the 3rd quarter, which rose to 1,577 infringement cases in the fourth quarter. That 41.2 percent increase in cases filed is the largest quarter-over-quarter rise in patent infringement case filing activity during the past ten years.

We spoke with Brian Howard, a legal data scientist with Lex Machina and the author of Thursday’s blog post, who was able to help us break down this data a little further. According to Howard, part of the reason behind the large jump in patent infringement case filings during the fourth quarter could be attributable to the U.S. Supreme Court’s decision to adopt a proposal submitted by the Federal Rules Advisory Committee to abolish Form 18 for patent infringement filings. The increased filings during the fourth quarter, which is when the decision to abolish Form 18 was implemented, “suggests that perhaps plaintiffs are aware of the rule change and are trying to get cases filed under existing Form 18 standard,” Howard said. This is reasonable given the belief that the replacement form for pleading patent infringement will likely require a higher standard of reporting than Form 18, which would allow a party alleging infringement to survive a motion to dismiss without listing the patents being infringed or what products were guilty of infringement. Howard said that the one-day patent infringement cases filed on November 30th, the final day that Form 18 would be accepted, eclipsed the previous one-day high-water mark for case filings seen in April 2014, which Howard said also came at a time when rumors of patent reforms which weren’t perceived to be plaintiff-friendly were being circulated.

2015 continued the dominance of the Eastern District of Texas as the court venue of choice for the vast majority of patent infringement cases filed in United States courts. There were 2,540 patent infringement cases filed in this district court, representing 43.6 percent of all such cases filed in 2015. Going back over the last two and a half years, there are only two quarters where a district court other than E.D. Tex. handled more patent infringement cases. However, that court, the District of Delaware, has seen its prominence dip to less than 10 percent of patent infringement cases during 2015. And yet D. Del. handled the second largest number of patent infringement filings last year, which means that E.D. Tex. handled more infringement cases than every other district court combined (without counting D. Del.). The Lex Machina report also indicates that much of the case volume at E.D. Tex. is contributed by what the report deems to be high volume plaintiffs which are filing at least 10 cases per year.

The Lex Machina report doesn’t point to a data-centric indication of why the Eastern District of Texas is so popular among patent infringement plaintiffs, but there are plenty of reasons for concern. As has been reported elsewhere on IPWatchdog, the vast majority of patent cases filed in E.D. Tex. are assigned to Judge James Rodney Gilstrap. This means that one single judge oversees as many as 20 percent of all patent infringement cases filed in the entire country, perhaps more. That seems slightly less than democratic, to put it mildly.

Activity at the Patent Trial and Appeal Board (PTAB) has been in a fairly consistent pattern of activity. Since the second quarter of 2014, inter partes review (IPR) filings at PTAB have fluctuated between about 400 filings and 460 filings per quarter. According to Howard, this up-and-down activity in IPR filings is also reflected on a month-by-month basis when looking at that data. The fourth quarter of 2015 saw 375 IPR filings, the lowest total since the first quarter of 2014. One explanation proffered by Howard is that this leveling off of IPR filings could reflect the fact that weaker patents and claims eliminated by the IPR process could be requiring fewer re-examinations, although district court actions also play a large role in IPR filing activities.

In the realm of trademarks, infringement cases have been pretty steady in the years between 2005, when 3,820 trademark infringement cases were brought to court, and 2015, which saw a total of 3,449 such cases filed. The high-water mark for trademark infringement cases this decade was set in 2014, when 4,282 trademark infringement cases were filed. According to the Lex Machina report, these 2014 totals ballooned thanks to a whopping 1,407 cases filed in the third quarter of 2014. About one-third of those cases (461) were filed in the District of Minnesota by former National Football Players suing the league for the use of their likenesses in multimedia content. Players sued the NFL for the league’s use of video recordings of former NFL players in NFL Films productions. Minus those infringement cases, 2014 falls into the same range as every other year over the past decade in terms of patent infringement cases.

A decrease in copyright infringement cases underscored a very interesting trend in that area of intellectual property enforcement. Copyright infringement cases related to file sharing technologies rose from 70 in the first quarter of 2011 up to a high point of 905 such cases filed in the first quarter of 2015, almost doubling the number of other copyright infringement cases filed in that quarter (514). However, those totals declined sharply by the end of 2015 and the 533 file sharing cases filed in that year’s fourth quarter was outstripped by the 535 other copyright infringement cases filed for the first time since the third quarter of 2014.

We were given even more insight into the unusual activity in copyright infringement cases thanks to a copyright litigation report issued by Lex Machina last August. As this report clearly indicates, the vast majority of file sharing cases have been filed by Malibu Media LLC, which has been the plaintiff in 4,332 copyright infringement cases related to file sharing since 2009; the next highest number of file sharing cases filed by one firm in that time is a paltry 274. Interesting to note is the fact that Malibu Media and other firms bringing forward file sharing cases are producers of adult media and erotic videos. This would explain why defendants are more willing to settle file sharing cases before they go to court; since 2009, file sharing cases have seen a 90.6 percent settlement rate, much higher than the 64.1 percent settlement rate seen over that time period for every other type of copyright infringement suit.
http://www.ipwatchdog.com/2016/01/08...ends/id=64774/





Dropbox Obtains Peer-To-Peer File Sharing Patent
Alice MacGregor

Cloud-based file hosting giant Dropbox has patented a new synchronisation technology which could allow users to use a peer-to-peer network to securely share and collaborate on documents without the need to store them in the company’s centralised servers.

According to the company, the development of peer-to-peer distributed sharing could boost content download speeds, eliminating bottlenecks, ‘thereby increasing the speed at which the content items can be shared among individuals.’

The patent application, filed in 2014 and published in December, details how the system could allow back up to a range of media to multiple devices simultaneously, cutting the need for users to constantly upload and download from remote hardware.

dropbox-patentTo tackle syncing errors as a result of a group of people working on the same file at the same time, Dropbox security researchers Jesse Endahl and Anton Mityagin propose a new cryptographic key system. This design will signal which version of the file the user has and how it should be synchronised across the other devices.

‘…recipients can use the cryptographic key during peer-to-peer distributed sharing of the version of the content item among the user and the recipients in a shared network (such as an intranet and/or the Internet) without synchronization conflicts,’ reads the patent application.

In acquiring the patent, the company should be able to prevent competitors developing similar systems. The Dropbox technology will face popular transfer tool BitTorrent Sync as a top rival in the peer-to-peer exchange sphere. Since 2013 BitTorrent Sync users have been able to transfer huge files without needing to store them on external servers – in the same year it claimed to be seven times faster than Dropbox.

The new system should also make Dropbox much less legally accountable for the content shared using the service, for example it will reduce its liability for the exchange of copyright-protected material.
https://thestack.com/cloud/2016/01/0...haring-patent/





Vinyl and Streaming Services Kept the Music Industry Afloat in 2015
Elfi Taylor

The buoyancy of the British music industry in 2015 was accredited to a massive rise in streaming as well as the continued revival of vinyl that provided the most assistance to the music industry. According to BPI; a trade body, the total number of songs that were streamed last year rose by 82% to an amazing 26.8 billion songs.

Vinyl sales also witnessed an impressive rise to 2.1million which was an increase of 64%. Meanwhile, according to retailer HMV, during the Christmas period, they sold a turntable every passing minute.

In general, the UKs music retail value has been on a downward trend since 2004 apart from 2015 where it rose to £1.06 billion which was an increase from £1.03 billion in 2014. The above figure represents the total value for physical albums-CD, minidiscs and cassettes, digital downloads as well as estimated revenues derived from streaming subscriptions and finally vinyl.

According to a chart by BPI showing various album sales for the last three years, it is clear to see that audio streams made the most progressive rise in sales. In 2013 and 2014, audio streams generated less than £20 million, however, in 2015, the revenues increased to nearly £30 million. Whereas singles, digital albums and physical albums dipped substantially in 2015 when compared to 2013 and 2014.

According to the chief executive at BP, Geoff Taylor; once again UK artists are responsible for influencing the growth as well as inspiring the fans. He continues to mention some of the most influential artists such as Adele, Sam Smith, One Direction, Ed Sheeran as well as trending newcomers such as Little Mix, Jess Glynne and James Bay.

In 2015, the best sellers were as follows;

Adele topped the list with her album titled 25 which sold an incredible 2 million copies in just five weeks followed by Ed Sheeran’s X album with 971,000 in sales. In third place was Sam Smith with In The Lonely Hour, which had 893,000 copies sold. An orchestral rework of Elvis Presley’s greatest hits took up the fourth position followed by Justin Bieber’s purpose album that sold 645,000 copies.

OMI’s ebullient summer anthem scooped the number one most streamed track f the year while Ed Sheeran was the most streamed artist in 2015.

On another note, it appears CDs are still going strong as the most dominant format that goes against what analysts had speculated. In spite of a 3.9% drop from 2014, there were 53.6 million discs sold last year. According to BPI, most people who subscribe to streaming are going for CDs and vinyl so as to get permanent souvenirs of their favorite songs.
http://waxra.com/vinyl-and-streaming...afloat-in-2015





Pirates are Finding it Harder to Crack New PC Games

New copy protection is putting their business model in jeopardy.
Steve Dent

Pirates at the infamous Chinese hacking forum 3DM are complaining that recent PC games are simply too darn hard to crack, according to Torrent Freak. The problem is apparently Denuvo, a copy protection scheme that prevents tampering of the underlying DRM. Two recent games that use the scheme, FIFA 16 and Just Cause 3, have still not been cracked, despite appearing in early December. Based on the current pace of encryption tech, "in two years time I'm afraid there will be no free games to play in the world," said one forlorn pirate.

While hackers from 3DM did break an early Denuvo-locked title, Dragon Age: Inquisition, the tech has been improved over the intervening year. It's nearly unheard of for PC games to remain uncracked for more than a few weeks -- often, they're broken before they even go on sale. If the recent Denuvo games remain locked for much longer, pirates may give up and either buy them on Steam or Origin or move on to something else. Suffice to say, the gaming industry will be keeping a close eye on what happens.
http://www.engadget.com/2016/01/07/p...-new-pc-games/





German Publishers Still Upset That Google Sends Them Traffic Without Paying Them Too; File Lawsuit
Mike Masnick

Oh boy. Remember VG Media? That's the consortium of German news publishers who were so damn angry that Google News sends them all sorts of traffic without also paying them. A year and a half ago, they demanded money from Google. That failed, so they went crying to German regulators who laughed off the request. After there were some concerns that a new "ancillary copyright" right regime in Germany might require payment for posting such snippets, Google properly responded by removing the snippets for those publishers, who totally freaked out and called it blackmail.

Let me repeat that for you, in case you missed it: the publishers insisted that Google's News search was somehow illegal and taking money away from them, and thus they demanded money from Google. When Google responded, instead, by removing the snippets providing summaries to their stories, the publishers claimed it was unfair and blackmail. In short, not only do these German publishers want Google to pay them to send them traffic, they want such payments and traffic to be mandatory.

However, with Google removing the snippets, VG Media granted a "free" license to Google just to get the snippets back into Google News -- even though Google didn't need such a license. Meanwhile, they complained to German competition authorities about this supposed "blackmail" and like the earlier regulators, the German competition authorities told VG Media to go pound sand.

If you thought the situation was over, you underestimated the short-sightedness of VG Media and the German publishers. They've now apparently filed a lawsuit against Google over all this, taking the issue into court. Again: this is all because Google is sending their websites traffic... for free.

Meanwhile, these geniuses at the German publishers might want to actually play out this game strategy a little further. Should they actually win the case, they need to look no further than Spain to see what might happen. Remember, Spain passed a ridiculous law that not only put such a tax on aggregators but made it mandatory. It was clearly nothing more than a "Google tax" for Spanish publishers. Google's response? It pulled out the nuclear option and shut down Google News in Spain.

So even if VG Media and the German publishers "win" this lawsuit, there's a decent chance that they still end up shooting themselves in their collective foot, by pushing away one of the most popular news aggregators that drives a tremendous amount of traffic. It really makes you wonder about the thought process of the folks who run VG Media.
https://www.techdirt.com/articles/20...-lawsuit.shtml





Deutsche Telekom Under Scrutiny Over Working Conditions at U.S. Arm T-Mobile
Harro Ten Wolde and Malathi Nayak

Deutsche Telekom (DTEGn.DE) is facing growing pressure from investors and lawmakers to ensure proper treatment of workers at its American business T-Mobile US (TMUS.O).

The German company's biggest subsidiary has enjoyed two years of rapid expansion in a fiercely competitive U.S. market that has seen it overtake its closest rival Sprint (S.N) in terms of subscribers.

But it has been accused by its main labor union, the Communications Workers of America (CWA), of flouting employees' rights and was last year found to have engaged in illegal work practices in two U.S. National Labor Relations Board cases.

T-Mobile, which has about 45,000 employees, says it abides by the law and denies mistreating workers.

Two major investors in Deutsche Telekom have expressed concern to the company about the treatment of T-Mobile employees, according to sources. Lawmakers in Washington and Berlin have, meanwhile, called on the German government - which controls 30 percent of Deutsche Telekom - to put pressure on the company to ensure its U.S. business respects workers' rights.

Pension fund manager APG Asset Management, which owns 0.15 percent of Deutsche Telekom, told Reuters it had requested an update on T-Mobile's treatment of workers in light of rulings by the U.S. National Labor Relations Board (NLRB) and the CWA allegations. "Based on this (update), we will consider our position," it said, without elaborating.

In 2011, APG removed Wal-Mart (WMT.N) from its portfolio, citing working conditions and insufficient willingness to allow staff to unionize.

"Human capital management is very important to us," said APG sustainability specialist Anna Pot. "It is an important indicator of the quality of management."

Norges Bank Investment Management (NBIM) - Deutsche Telekom's fourth-biggest shareholder with a 1.6 percent stake - has also expressed concerns to the company about the treatment of U.S. workers, according to two sources familiar with the matter.

NBIM said it had a policy of not commenting on specific investments or companies.

A senior manager at another top-30 Deutsche Telekom shareholder, who declined to be named because his employer does not allow him to discuss individual investments, said it was also concerned about the treatment of U.S. workers, but had not raised the issue with the German company.

Deutsche Telekom declined to comment, saying discussions with its shareholders were confidential.

POLITICAL PRESSURE

Following complaints from the CWA, a judge on the National Labor Relations Board (NLRB) ruled in March that a number of T-Mobile's national policies were illegal.

The violations included those that prohibited employees from discussing wages with colleagues, speaking to the media about their work environment and seeking help from co-workers to gather evidence in disciplinary proceedings.

T-Mobile is appealing against the rulings on two of the 11 practices judged illegal, but has accepted the decisions on the other nine. At the time, it said the judge's rulings on the 11 policies were only on "a technical issue in the law", adding: "There are no allegations that any employee has been impacted by these policies."

In a second case, the NLRB ruled in August that T-Mobile's policy of prohibiting staff in call centers in South Carolina and Maine from talking to colleagues or others about employment conditions was illegal, as was asking workers to sign confidentiality agreements during internal investigations.

The company said it had changed its rules in response to the NLRB's decision, but declined to give further details. It said at the time it found the decision "puzzling, since T-Mobile's approach to confidentiality is consistent with the National Labor Relations Board's own investigation manual".

Separately from the NLRB cases, the CWA has documented several cases of alleged mistreatment of employees. They include allegations bosses yelled at call center staff, told those with low sales figures to wear "dunce" caps and banned a pregnant worker from taking bathroom breaks.

T-Mobile US declined to comment on individual cases. Deutsche Telekom said the cases documented by the union were isolated incidents.

The issue of the U.S. carrier's treatment of staff is also making political waves in Germany.

German trade union Verdi has taken up the CWA's case with the Berlin government. It organized a petition on the German parliament website, which has drawn around 50,000 signatures, demanding that the finance ministry ensure workers' rights are upheld at T-Mobile US.

Following the second NLRB ruling, 25 members of the U.S. Congress sent a letter to German Chancellor Angela Merkel, urging her to look into the matter. "We respectfully request action by your government as a significant shareholder to call on Deutsche Telekom and T-Mobile to fully respect workers' rights in the U.S.," they wrote in November.

Last April, German Green lawmaker Beate Mueller-Gemmeke made a similar appeal to the government, which said in a written response that it respected the T-Mobile US workers' rights "in accordance with U.S. law".

Asked by Reuters for comment, the German finance ministry, which is responsible for the country's shareholdings, declined to comment.

BULLYING ALLEGATIONS

By offering a slew of affordable mobile plans and perks like free music and video streaming, T-Mobile US overtook Sprint last year in a race for subscribers, though both still lag Verizon (VZ.N) and AT&T (T.N). With more than 61 million customers as of September 30, T-Mobile has a market share of about 16 percent.

The turnaround has caught the attention of potential suitors. In 2014, Sprint was in talks with Deutsche Telekom to acquire T-Mobile, but they were abandoned in the face of opposition from antitrust regulators. Talks last year over merging the business with Dish Networks (DISH.O) stalled over disagreements about valuations.

The allegations from the CWA of mistreatment of individual T-Mobile workers were compiled in a report the union published in July. The union said it had documented scores of incidents.

In T-Mobile US's Chattanooga call center, former customer service worker Julia Crouse said workers were humiliated if they did not meet their targets when she worked there in 2010.

"The person who had the lowest (sales) stats would end up wearing a dunce hat and then with the stuffed turtle ... it would be on your desk," she told Reuters.

She left the company shortly after the alleged bullying and didn't lodge complaints about her treatment.

T-Mobile US declined to comment on individual cases but said Chief Executive John Legere and other senior managers visited call centers regularly and have an "open dialogue" with staff.

The company declined to disclose its average call center staff turnover rate. However during an NLRB court case in 2014, it said the turnover rate at the Wichita center was 74 percent in the previous year.

That is more than double the overall U.S. call center industry's average across various sectors, which is 25 to 35 percent, according to Forrester Research analyst Art Schoeller.

A T-Mobile spokesperson said that "currently the average retention rates at T-Mobile call centers are better than ever and are within the range of the Forrester Research analyst."

(Additional reporting by Matthias Sobolewski in Berlin and Gwladys Fouche in Oslo; Editing by Pravin Char)
http://uk.reuters.com/article/us-deu...0UL0LL20160107





EFF Confirms: T-Mobile’s Binge On Optimization is Just Throttling, Applies Indiscriminately to All Video
Jeremy Gillula

Back in November, T-Mobile announced a new service for its mobile customers called Binge On, in which video streams from certain websites don’t count against customers’ data caps.1 The service is theoretically open to all video providers without charge, so long as T-Mobile can recognize and then “optimize” the provider’s video streams to a bitrate equivalent to 480p. At first glance, this doesn’t sound too harmful—customers can watch more video without worrying about their caps, most will consider 480p to be adequate quality (especially on a small phone screen), and the harms of treating individual video providers differently are diminished when T-Mobile offers the program to any provider for free.

However, as Marvin Ammori wrote in Slate, there is another “feature” of Binge On that has many customers complaining. Ammori pointed out that T-Mobile is applying its “optimization” to all video, not just the video of providers who have asked T-Mobile to be zero-rated. T-Mobile claims it does this to provide a better experience for its customers, saying that

“T-Mobile utilizes streaming video optimization technology throughout its network to help customers stretch their high-speed data while streaming video” and that Binge On helps “deliver a DVD quality (typically 480p or better) video experience with minimal buffering while streaming.”

Testing T-Mobile’s Binge On Optimization

We were curious what exactly this optimization technology involved, so we decided to test it out for ourselves. We posted a video on one of our servers and tried accessing it via a T-Mobile LTE connection using various methods and under various conditions.

(If you want to skip the technical details of our testing and jump directly to the results, click here.)

All of the tests were done with an account that had Binge On enabled, in the same physical location and at roughly the same time of day, using the same phone. We ensured the phone had a good 4G LTE connection at all times. For each test, we measured the throughput between our server and the phone for approximately five minutes at five second intervals. The four tests we performed were:

• Streaming a video embedded in a webpage using HTML5 (“Streaming in Browser”),
• Downloading a video file to the phone’s SD card (“Direct Download”),
• Downloading a video file to the phone’s SD card, but with the filename and the HTTP response headers changed to indicate it was not a video file (“Direct Download, Non-Video File Extension”), and
• Downloading a large non-video file for comparison (“Direct Non-Video Download”).

Each test was done over an HTTP connection, which allowed T-Mobile’s network to observe the content of the connection and perform “optimization” (labeled “Binge On” in the graph below), and over an HTTPS connection, which prevented T-Mobile’s network from observing the content of the connection, thus representing behavior without any sort of Binge-On-related optimization (“Normal”).

Our findings are summarized in the graph below, where we plot the mean throughput for each test, as well as one standard deviation. The units are megabits per second.

Test Results: No Optimization, and Everything Gets Throttled

The first result of our test confirms that when Binge On is enabled, T-Mobile throttles all HTML5 video streams to around 1.5Mps, even when the phone is capable of downloading at higher speeds, and regardless of whether or not the video provider enrolled in Binge On. This is the case whether the video is being streamed or being downloaded—which means that T-Mobile is artificially reducing the download speeds of customers with Binge On enabled, even if they’re downloading the video to watch later. It also means that videos are being throttled even if they’re being watched or downloaded to another device via a tethered connection.

The second major finding in our tests is that T-Mobile is throttling video downloads even when the filename and HTTP headers (specifically the Content-Type) indicate the file is not a video file. We asked T-Mobile if this means they are looking deeper than TCP and HTTP headers, and identifying video streams by inspecting the content of their customers’ communications, and they told us that they have solutions to detect video-specific protocols/patterns that do not involve the examination of actual content.

Our last finding is that T-Mobile’s video “optimization” doesn’t actually alter or enhance the video stream for delivery to a mobile device over a mobile network in any way. 2 This means T-Mobile’s “optimization” consists entirely of throttling the video stream’s throughput down to 1.5Mbps. If the video is more than 480p and the server sending the video doesn’t have a way to reduce or adapt the bitrate of the video as it’s being streamed, the result is stuttering and uneven streaming—exactly the opposite of the experience T-Mobile claims their “optimization” will have.

Given the difference between what T-Mobile implies they do and what we found, we contacted them to get clarification. They confirmed that they don’t do any actual optimization of video streams other than reducing the bandwidth allocated to them (and relying on the provider to notice, and adapt the bitrate accordingly).

T-Mobile has claimed that this practice isn't really "throttling," but we disagree. It's clearly not "optimization," since T-Mobile doesn't alter the actual content of the video streams in any way. Even the term "downgrading" is inaccurate, because that would mean video streams are simply being given a lower priority than other traffic. If that were true, then in the absence of higher priority traffic, videos should stream at the same throughput as any other content. But that's not the case: our tests show that video streams are capped at around 1.5Mbps, even when the LTE connection and the rest of T-Mobile's network can support higher throughput between the customer and the server.

In other words, our results show that T-Mobile is throttling video streams, plain and simple.

Dear T-Mobile: Stop Futzing With Your Customer’s Traffic

Setting aside for the moment the question of when zero-rating constitutes a violation of net neutrality in and of itself (more on that later), it’s pretty obvious that throttling all traffic based on application type definitely violates the principles of net neutrality. It also obviously violates the FCC’s Open Internet Order, which says that ISPs

“…shall not impair or degrade lawful Internet traffic on the basis of Internet content, application, or service…subject to reasonable network management”, especially since throttling traffic independently of congestion (as T-Mobile is doing) makes it clear that this throttling is not being used for reasonable network management.

What should T-Mobile do instead? One option would be to stop throttling the video of providers who haven’t signed up to be zero-rated in Binge On, regardless of the status of the T-Mobile customer. This would address the complaints of video providers, since only edge providers who actually chose to be throttled would have their videos throttled.

But the best option would be to make Binge On opt-in (instead of opt-out), with clear disclosure that opting in will throttle all video traffic. Many of T-Mobile’s customers don’t realize that Binge On has this unfortunate side effect―especially since T-Mobile has buried the fact that Binge On throttles all video in their fine print. If T-Mobile were to be clear with its customers that enabling Binge On meant all of their video would be throttled, and then ask them whether or not they wanted to opt in, then they could obtain meaningful customer consent.

As an aside, it’s also obvious that T-Mobile is capable of recognizing video streams from providers who aren’t enrolled in Binge On. Given that, we don’t understand why they require providers to enroll in Binge On in order to get their videos zero-rated. If T-Mobile truly wants to be neutral, then all throttled videos should be exempt from customer data caps.

Of course, this entire argument operates on the assumption that data caps are necessary on mobile networks, since zero-rating only makes sense when there’s a cap for data to be exempt from. And even if you accept that data caps are necessary, whether or not zero-rating is a neutral practice is a completely separate question. Either way, however, we don’t think exemptions from data caps should necessarily be heralded as pro-customer moves—but these are topics for a separate blog post.

The FCC Should Investigate

In the meantime, if T-Mobile doesn’t change its behavior then it’s up to the FCC to follow up. After all, the net neutrality rules aren’t just words on a piece of paper—they’re regulations meant to protect Internet users from precisely this sort of abuse of power by ISPs. We believe the FCC should regulate lightly, but our research suggests this is a significant consumer harm that runs afoul of well-established open internet principles. The FCC can and should step in and hold T-Mobile accountable.
https://www.eff.org/deeplinks/2016/0...ttling-applies





CES 2016: Dish Offers a DVR for the Stream-and-Binge Generation

Dish Network's Hopper 3 set-top box can record programs on 16 channels simultaneously and store up to 500 hours of shows in high-definition. (Dish Network)
Jon Healey

Having settled almost all the lawsuits that the major TV networks have filed against it, Dish Network returned to the Consumer Electronics Show in Las Vegas on Tuesday with another boundary-stretching, lawyer-enriching approach to recording and viewing television shows.

Its latest set-top box is the Hopper 3, the third edition of the high-capacity TV receiver it introduced in 2012. The original one enabled Dish subscribers to record automatically every prime-time show aired on the major broadcast networks, then play them back with commercials automatically skipped. The second generation of the device added the ability to watch recorded shows via the Internet or transfer them to an iPad to view offline.

The new version can record twice as many shows at the same time -- 16 -- and has enough room to store 500 hours of high-definition video, which will make it that much easier to capture every single episode of any show one might be curious about. The box also makes it possible to watch four shows at the same time in high definition on a single TV set (Dish calls it "Sports Bar Mode," reflecting what may be the best application of that feature).

At the same time, Dish is introducing HopperGo, a portable, battery-powered storage device that can hold up to 100 hours of recorded TV. Think of it like a video iPod but without a screen, something you'd plug into a TV at a hotel or a friend's house to binge-watch "The Americans."

The Hopper 3 doesn't exactly thumb its nose at copyright owners, but some of its features operate in the same less-than-fully-settled legal area that previous versions ventured into. The Supreme Court declared in the 1984 Sony Betamax ruling that it's not copyright infringement for consumers to record broadcast TV shows in their homes for later viewing. And as long as a device has a significant non-infringing use, the court ruled, manufacturers can sell it without fear of being held liable for contributory infringement. But the court took no position on whether consumers could legally record and store entire seasons of TV shows, which is one of the things the Hoppers were built to do.

The four major networks sued Dish over the automatic copying, commercial-skipping and remote-viewing features of the Hoppers, but most reached pre-trial settlements in which Dish agreed to roll back some of the commercial-skipping functions. The lone exception was Fox, and a federal judge ruled last year that the disputed features did not violate copyright law -- but they might violate Dish's contracts with Fox. That lawsuit is still pending.

The networks are understandably nervous about technologies that can undermine their shows' value to advertisers. Nevertheless, Dish and broadcasters have a shared interest in persuading consumers to keep paying for network TV, and the Hoppers serve that interest.

Fees from cable and satellite broadcasters have become vital to the broadcasters as the prime-time audience has fragmented. Yet pay-TV subscriptions are in decline as a new generation of "digital natives" -- Americans who've grown up watching videos online and on computers, not TV sets -- eschews costly bundles of channels in favor of Netflix, Hulu and other online services.

(Recognizing the trend in favor of on-demand TV, Dish launched its own low-cost online TV service, Sling TV, at last year's CES. A growing number of broadcast and cable networks have jumped into the market too, selling subscriptions to online feeds of their programming.)

The Hoppers allows Dish customers to replicate the on-demand experience that Netflix and Amazon offer, albeit to a more limited degree. If Dish's broadband Internet service was as popular and speedy as Comcast and Time Warner Cable's, then maybe the company wouldn't have to cram so many tuners and so much hard-drive capacity into its set-top boxes, or offer 64-gigabyte portable storage devices. But it doesn't, so it continues to find new ways to give customers more control over its old-school TV broadcasts.

The Hopper 3 will be available later this month for the same fee ($12 per month) as previous models. The HopperGo is slated to be released in the spring for $99.
http://www.latimes.com/business/tech...105-story.html





Warner Bros. Will Release 35 4K Blu-Ray Movies this Year in Glorious HDR
Kwame Opam

Since 4K is quickly becoming the industry standard for home entertainment, content is finally starting to catch up. Warner Bros. recently announced that it has plans to release 35 4K Blu-ray movies by the end of 2016. It's initial launch features four titles, including Mad Max: Fury Road and The Lego Movie, and the catalog will later expand to include movies like Pacific Rim.

Companies are hedging their bets on 4K and HDR in a big way

This shift is ongoing, and Warner Bros.'s move coincides roughly with the industry converging on CES to unveil its collective vision for where home entertainment is going. Manufacturers are already hedging their bets on 4K and HDR this year, and Warners is responding in kind; in addition to the Ultra HD releases, the studio plans on expanding on its selection with HDR from digital retailers, as well as Dolby Atmos on certain films.

Of course, Warner Bros. is only the most recent studio to announce plans for 4K Blu-rays. Fox teamed up with Samsung at IFA last year to announce its own offerings, which included movies like Fantastic Four and Maze Runner at the time. Sony's catalog, including the likes of The Amazing Spider-Man 2 and Pineapple Express will see release in the early months of this year.
http://www.theverge.com/2016/1/3/107...-max-fury-road





8K TVs Are Coming to Market, and Your Eyeballs Aren’t Ready

CES 2016 - You can buy an 8K TV this year
Tim Moynihan

For the past few years at CES, we’ve seen 8K TVs from the likes of Sharp, Samsung, and LG. This year, 8K is back, but there’s one big difference: At least one of these super-high-resolution sets will actually be coming to market. The ones on display at past shows have all been prototypes.

LG’s 98-inch 8K set will be prohibitive in terms of size and price, but it’s a glimpse of what’s to come in terms of picture quality a decade or so down the line. If you think 4K is unbelievably sharp, wait till you get your eyes on 8K. Think of it this way: Full HD video has a resolution of about 2 megapixels per frame, 4K footage has a resolution of 8 megapixels per frame, and 8K will have a resolution of 32 megapixels per frame.

But what does that mean to your eyeballs? Quite a bit, actually, especially if you’re interested in buying a really big screen. The images are so sharp that they look like moving printed photographs; there is absolutely no evidence of pixelation even if your face is an inch from the set. That’s not a realistic viewing scenario, but on the production side of the equation, it means digitally zooming an image without affecting picture quality will be a reality.

Of course, it’s way too early to buy in, especially with the lack of 8K content out there. There’s literally none. But networks and cable companies will likely wait for the 8K era to upgrade their equipment, meaning this super-high-def resolution might have a brighter future than 4K for traditional content distribution.
http://www.wired.com/2016/01/8k-tvs-coming-to-market/





Panasonic to Commercialize Facebook's Blu-Ray Cold Storage Systems

Facebook has said Blu-ray can cut costs significantly for long term data storage
James Niccolai

A couple of years ago, Facebook revealed it was using Blu-ray disks as a cost-efficient way to archive the billions of images that users uploaded to its service. Now, Panasonic has said it plans to commercialize the technology for other businesses, and is working on new disks that will hold a terabyte of data.

Panasonic is calling its product line "freeze-ray," because it's used for a type of storage known as cold storage, where large amounts of data need to be stored for long periods of time and are rarely accessed.

When Facebook users upload photos, they're often viewed frequently in the first week, so Facebook stores them on solid state drives or spinning hard disks. But as time goes on the images get viewed less and less. At a certain point, Facebook dumps them onto high-capacity Blu ray discs, where they might sit for years without being looked at.

Blu-ray discs were at risk of dying out as streaming services like Netflix took over, but the interest from Facebook and other vendors has kept the technology alive and is now driving down costs. Facebook has said its Blu-ray system is 50 percent cheaper than using hard disk drives for cold storage, and 80 percent more energy efficient.

At a press conference at CES Tuesday, Panasonic didn't give many details about its plans, including release dates or prices, but Yasu Enokido, president of its B2B division, said the company hopes to make Blu-ray an "industry standard" for cold storage. He praised Blu-ray for its "longevity, immutability, backward compatibility, low power consumption and tolerance to environmental changes."

Facebook's first generation of systems used 100GB disks. Later this year it expects to deploy 300GB disks, Panasonic said, and the companies are working on 500GB and 1TB disks. Hundreds or even thousands of disks can go in a single system, giving petabytes of archival storage.

Panasonic worked with Facebook to design the freeze ray systems, Enokido said. But Panasonic won't have the market to itself. Rival Sony recently bought Optical Archive, a Facebook spin-off company that's working on similar technology. Also, Facebook planned to release its cold storage designs through the Open Compute Project, meaning other manufacturers can build similar products.

Still, with another big manufacturer like Panasonic on board, Blu-ray seems to have a bright future for long-term storage.
http://www.pcworld.com/article/30194...e-systems.html





Top Apple Supplier Plans Rare Holiday as Output Fears Rattle Investors
J.R. Wu

Foxconn, which assembles most of Apple Inc's (AAPL.O) latest iPhones, will cut working hours over the week-long Lunar New Year holiday, a person familiar with the matter said, in a rare move that analysts interpreted as a sign of softening demand.

Reports of slowing shipments and mounting inventories of the iPhone 6S and 6S Plus, as well as tepid forecasts from suppliers, have pushed Apple investors into unfamiliar territory after years of booming sales and surging shares.

Earlier on Wednesday, Japanese daily Nikkei, citing parts suppliers, said output of the models would be cut by about 30 percent in January-March so dealers could unload stock. Apple shares lost 2.5 percent, and those of suppliers similarly fell. (s.nikkei.com/1R9rxvj)

"Chinese New Year is a big holiday and there is usually overtime for workers. But this year, Foxconn will have a normal break," the person said, referring to the Lunar New Year which falls on Feb. 8.

Taiwan-based Foxconn, formally known as Hon Hai Precision Industry Co Ltd (2317.TW), assembles the latest iPhones at factories in China where it employs hundreds of thousands of people, and offers incentives such as triple overtime pay over China's biggest holiday.

Foxconn said in a statement that it was "in the midst of planning operational schedules for the Lunar New Year holiday," but gave no details. Apple was unavailable to comment.

The person with knowledge of the matter was not authorised to speak with the media so declined to be identified.

GOVERNMENT SUBSIDIES

The first quarter is usually a quieter time for suppliers and the most obvious period to cut production, adjusting for extra supply brought on for the holiday season at the end of the calendar year.

But suppliers pointed to Foxconn's unusual Lunar New Year and slower sales as evidence of a gloomy outlook, as well as 82 million yuan (£8.56 million) in subsidies that the government of Zhengzhou, Henan province, awarded Foxconn companies this week.

Foxconn confirmed the incentives to "recognise companies that provide stable employment in the province", but said they related to the large workforce it maintained there in 2014.

"We were already conservative about the first quarter," said analyst Kylie Huang at Daiwa-Cathay Capital Markets in Taipei, in response to Foxconn's Lunar New Year plans. "It's not just iPhone slowdown, but all of the Chinese economy."

China is a key growth market for Apple and the world's biggest smartphone market.

Shares of Apple suppliers fell on Wednesday, with Foxconn closing down 0.1 percent after trading during the day at lows not seen in over four months.

Shares fell between 2 percent and 6 percent at fellow assembler Pegatron Corp (4938.TW), Taiwan Semiconductor Manufacturing Co Ltd (2330.TW), LG Display Co Ltd (034220.KS), Japan Display Inc (6740.T), Murata Manufacturing Co Ltd (6981.T), Alps Electric Co Ltd (6770.T) and TDK Corp (6762.T).

BRACING FOR A CUT

Lukewarm forecasts in December from suppliers such as Dialog Semiconductor GmbH (DLGS.DE) and casing maker Jabil Circuit Inc (JBL.N) stoked fears that iPhone shipments could fall for the first time. But analysts questioned the extent of any slowdown.

"Apple has been gaining significant market share in pretty much every region, and I'm not seeing a global slowdown," said analyst Patrick Moorhead at Moor Insights & Strategy.

Nevertheless, many are bracing for a production cut.

Since early December, about a third of analysts tracked by Thomson Reuters have trimmed their estimates on Apple. On average, they expect Apple to increase revenue this year by less than 4 percent, a far cry from the 28 percent achieved in the business year that ended in September.

In contrast, Huawei Technologies Co Ltd [HWT.UL] on Wednesday said it had become the first Chinese handset vendor to ship more than 100 million smartphones a year.

($1 = 6.5464 Chinese yuan renminbi)

(Reporting by Anya George Tharakan and Lehar Maan in BENGALURU, Yimou Lee in HONG KONG, Ritsuko Ando in TOKYO, Julia Love in LAS VEGAS; Editing by Steve Coates and Christopher Cushing)
http://uk.reuters.com/article/uk-app...0UJ1XV20160106





GQ and Forbes Go after Ad Blocker Users Rather than Their Own Shitty Advertising Inventory
Timothy Geigner

And so the war on ad blockers marches on. Lots of sites have recently made ad blocking software a target of their ire, complaining that such software ruins everything and is a form of puppy genocide or whatever. We, of course, know that to be bullshit, so we think it's just fine if you block ads (in fact, we make it easy to do so). Still, some of these attempts are getting more and more aggressive, such as what two recent sites, GQ and Forbes, have decided to do.

Let's start with Forbes, in which the website was recently putting up a "none shall pass!" wall for users who attempted to access it while using an ad blocker.

Reports are coming in from Twitter, and I can confirm, that Forbes is now preventing all (most?) visitors who use an ad-block tool from viewing any articles. From what I can tell, the ban on ad blockers is only rolling out today, and it is not affecting all visitors. I have a report from a uBlock user, as well as one from the UK, which say that they got through just fine.

Those who didn't get through receive a page that reads "Hi Again. Looks like you're still using an ad blocker. Please turn it off in order to continue into Forbes' ad-light experience."

Here we get into the crux of the problem. First, anecdotally, I see these same messages from sites on occasion. My reaction is always the same: close out the tab, move on to find another source for whatever I was looking for. I have literally never shut down my ad blocker in order to continue to the site. Which, in the case of Forbes' ad-light experience, would only have caused me to frantically turn it back on to begin with, as the reports from readers indicate that ad-light translates into real-life speak as a barrage of advertisements. Add to all that, that the barrier only affects certain users using certain ad blockers, and this all devolves into a DRM-esque game of whac-a-mole. Go ask the gaming industry how well that money-pit has turned out for them.

But GQ goes one further. Instead of only giving users the choice of turning off the software or moving on, GQ additionally offers potential readers the option of paying for every single article they read! Progress!

“Turn off your ad blocker or purchase instant access to this article, so we can continue to pay for photoshoots like this one,” it concludes, pointing to an image of Amy Schumer dancing with stormtroopers.

Readers who choose to pay for their content rather than view GQ.com’s ads for beard oil and expensive clothing are directed to start an account with content, a micropayment company that allows you to pay the $.50 fee to read whatever story you were trying to reach.


GQ's advertising is notable in that it is the worst and most annoying kind. Multiple auto-playing videos with volumes ratcheted up, banner ads that fill up the space and auto-expand, and ads that follow you around as you scroll the page. Or you can pay four-bits per article, which is an appropriate phrasing of the price, since apparently GQ believes it's still operating in an old-timey online ecosystem where it can hold content hostage rather than working to make itself more attractive to readers.

And that's the crux of the issue. The war against ad blockers didn't start when users began using the software. It started when online outlets refused to understand that content is advertising and advertising is content, and if any part of that equation is bad, the whole thing falls apart. There's a reason why users use ad blockers after all: many online ads suck harder than a vacuum cleaner looking for love. But they don't have to. Everyone has their stories about ads they have liked or loved. Some readers will always block ads, but not most of them. If ads were good and fun, they wouldn't need to be blocked and users wouldn't want to block them. Fix that and the war on ad blocking can be retired.
https://www.techdirt.com/articles/20...nventory.shtml





Forbes Asked Readers to Turn Off Ad Blockers Then Immediately Served them Pop-Under Malware
Violet Blue

The real reason online advertising is doomed and adblockers thrive? Its malware epidemic is unacknowledged, and out of control.

The Forbes 30 Under 30 list came out this week and it featured a prominent security researcher. Other researchers were pleased to see one of their own getting positive attention, and visited the site in droves to view the list.

On arrival, like a growing number of websites, Forbes asked readers to turn off ad blockers in order to view the article. After doing so, visitors were immediately served with pop-under malware, primed to infect their computers, and likely silently steal passwords, personal data and banking information. Or, as is popular worldwide with these malware "exploit kits," lock up their hard drives in exchange for Bitcoin ransom.

One researcher commented on Twitter that the situation was "ironic" -- and while it's certainly another variant of hackenfreude, ironic isn't exactly the word I'd use to describe what happened.

That's because this situation spotlights what happened in 2015 to billions -- yep, billions -- of people who were victims of virus-infected ads which were spread via ad networks like germs from a sneeze across the world's most popular websites.

Less than a month ago, a bogus banner ad was found serving malvertising to visitors of video site DailyMotion. After discovering it, security company Malwarebytes contacted the online ad platform the bad ad was coming through, Atomx. The company blamed a "rogue" advertiser on the WWPromoter network.

It was estimated the adware broadcast through DailyMotion put 128 million people at risk. To be specific, it was from the notorious malware family called "Angler Exploit Kit." Remember this name, because I'm pretty sure we're going to be getting to know it a whole lot better in 2016.

Last August, Angler struck MSN.com with -- you guessed it -- another drive-by malvertising campaign. It was the same campaign that had infected Yahoo visitors back in July (an estimated 6.9 billion visits per month, it's considered the biggest malvertising attack so far).

October saw Angler targeting Daily Mail visitors through poisoned ads as well (monthly ad impressions 64.4 million). Only last month, Angler's malicious ads hit visitors to Reader's Digest (210K readers; ad impressions 1.7M). That attack sat unattended after being in the press, and was fixed only after a week of public outcry.

It's crazy to consider what a perfect marriage this is, between the advertisers and the criminals pushing the exploit kits. They have a lot in common.

Both try to trick us into giving them something we don't want to. We've recently learned that both entities surveil and track us beyond what we're OK with. And both are hard to get rid of. You know, like those gross toenail and skin condition ad-banners found at the bottom of every cheapo blog you've ever seen, forever burned into the "can't unsee" section of your brain.

It actually makes business sense to think about malware attacks like an advertiser. You want to deliver your infection to, and scrape those dollars from, every little reader out there. You need a targeted delivery system, with the widest distribution, and as many clueless middlemen as possible.

It's easy to want to blame Reader's Digest, or Yahoo, or Forbes, or Daily Mail, or any of these sites for screwing viewers by serving them malicious ads and not telling them, or not helping them with the cleanup afterward. And it's a hell of a lot easier when they've compelled us to turn off our ad blockers to simply see what brought us to their site.

But the problem is coming through them, from the ad networks themselves. The same ones, it should be mentioned, who control the Faustian bargains made by bartering and selling our information.

What should the websites do? The ad networks clearly don't have a handle on this at all, giving us one more reason to use ad blockers. They're practically the most popular malware delivery systems on Earth, and they're making the websites they do business with into the same poisonous monster. I don't even want to think about what it all means for the security practices of the ad companies handling our tracking data or the sites we visit hosting these pathogens.

So, to my friend on the Forbes 30 Under 30 list -- a malware researcher, which I'll concede is actually ironic -- I'm sorry I won't be seeing your time in that particular spotlight. What we need is a word for the fact that ad blockers have become our first line of defense against a malware epidemic. Especially during a time when the sites we visit are begging, pleading, demanding and practically tricking us into turning off Ad Block Plus.
http://www.engadget.com/2016/01/08/y...-that-malware/





Malvertising Campaign Via Pop-under Ads Sends CryptoWall 4
Jérôme Segura

We have caught a new malvertising campaign on the PopAds network launching the Magnitude exploit kit via pop-under ads.

A pop-under is an ad window that appears behind the main browser window and typically remains open until the user manually closes it. Unsuspecting victims running outdated versions of the Flash Player were immediately infected with the CryptoWall ransomware.

This campaign started around January 1st with ads mostly placed on various adult and video streaming sites and lead to an increase in Magnitude EK activity.

According to our data, this attack mainly targeted European users:

Once a system is infected, personal files are encrypted and usable as indicated in the dreaded CryptoWall ransom page:

To recover pictures, documents and other import files, users are asked to pay in order to receive a “decryption” key.

Prevention

Ransomware is one particular type of malware where prevention and backups are more important than ever. Since this particular attack relies on web exploits to infect the machine, it is crucial to keep your browser and related plugins up to date.

You may also want to consider disabling or removing the Flash Player altogether since it has suffered a high number of zero-day exploits in recent history (even the latest version was vulnerable).

Malwarebytes Anti-Exploit users were already protected against this exploit kit and never even saw the CryptoWall payload.

We have notified the ad network and hope they can shutdown this campaign.
https://blog.malwarebytes.org/malver...-cryptowall-4/





Malvertising Campaign Used a Free Certificate from Let's Encrypt

The organization says revoking certificates isn't the answer to abuse
Jeremy Kirk

Cybercriminals are taking advantage of an organization that issues free digital certificates, sparking a disagreement over how to deal with such abuse.

On Wednesday, Trend Micro wrote that it discovered a cyberattack on Dec. 21 that was designed to install banking malware on computers.

The cybercriminals had compromised a legitimate website and set up a subdomain that led to a server under their control, wrote Joseph Chen, a fraud researcher with Trend.

If a user went to the site, the subdomain would show a malicious advertisement that would redirect the user to sites hosting the Angler exploit kit, which looks for software vulnerabilities in order to install malware.

The subdomain used an SSL/TLS (Secure Sockets Layer/Transport Layer Security) certificate, which encrypts traffic between a server and a user's computer.

The certificate was issued by Let's Encrypt, a project that is run by the ISRG (Internet Security Research Group) and is backed by Mozilla, the Electronic Frontier Foundation, Cisco, and Akamai, among others.

Let's Encrypt is the first large-scale project to issue free digital certificates, part of a broad movement to improve security across the Internet.

Chen wrote that Trend Micro had been anticipating that cybercriminals would try to get free certificates from Let's Encrypt for their own malicious purposes. In this case, encrypting traffic to the malicious server better masks the cybercriminals' activities.

It is possible to revoke digital certificates. However, Let's Encrypt had decided as policy not to revoke certificates. In October, the organization explained that certification authorities (CAs) are not equipped to police content.

But Let's Encrypt does check with Google's Safe Browsing API to see if a domain for which a certificate is requested has been flagged for phishing or malware.

Chen disagrees with this approach, writing, "CAs should be willing to cancel certificates issued to illicit parties that have been abused by various threat actors."

Josh Aas, ISRG's executive director, wrote via email that although the certificate in question could be used again, it's unlikely the cybercriminals would get very far because the domains are known malvertising sites.

The attackers could still just generate new certificates for different domains, and those actions would be difficult for any CA to stop, he wrote.

"CAs cannot detect and respond quickly enough," he wrote.

An alternative approach would be for online ad brokers to implement internal controls to stop malicious ads, Aas wrote.

The online advertising industry has recognized the problems with malicious ads, but cybercriminals use a variety of techniques to sneak harmful ones in.
http://www.csoonline.com/article/301...s-encrypt.html





Clickjacking Campaign Plays on European Cookie Law
Jérôme Segura

We’ve spotted an advertising campaign that tricks users into clicking on what looks like a notification alert that actually hides a legitimate advert, therefore abusing both the advertiser and the ad network hosting the ad (Google Ads Services).

The rogue actors behind this fraudulent activity are cleverly leveraging a European law on the use of cookies to seemingly prompt visitors to answer a question.

“The Cookie Law is a piece of privacy legislation that requires websites to get consent from visitors to store or retrieve any information on a computer, smartphone or tablet. All websites owned in the EU or targeted towards EU citizens, are now expected to comply with the law.”

We took apart one such page to describe exactly how it works.

A legitimate ad banner is loaded via an iframe and placed right on top of the warning message. However, that ad is invisible to the naked eye because of a parameter within that iframe which sets its opacity to zero.

To that effect, when a user clicks anywhere on the pop up message it acts as though they clicked on the ad banner itself, which loads the advertiser’s website.

While simple, this technique, also known as clickjacking, is pretty effective at generating clicks that look perfectly legitimate and performed by real human beings as opposed to bots.

This is costing advertisers and ad networks a lot of money while online crooks are profiting from bogus Pay Per Click traffic. We have notified Google about this fraudulent scheme.
https://blog.malwarebytes.org/fraud-...an-cookie-law/





Top U.S. Officials to Meet With Tech CEOs on Terror Concerns

Discussion to focus on whether social-media firms can do more to thwart terrorists
Devlin Barrett and Damian Paletta

Senior Obama administration officials will hold high-level discussions with Silicon Valley CEOs on Friday, an escalation of their attempts to persuade the executives to do more to block terrorists from using the Internet to recruit and incite violence, according to people familiar with the plans.

Some of the most powerful officials in government, including Attorney General Loretta Lynch, Federal Bureau of Investigation Director James Comey, White House chief of staff Denis McDonough and Director of National Intelligence James Clapper plan to take part in the meeting, signaling the urgency the White House places on the matter.

Mr. Comey intends to fly to California to attend the meeting in person, according to people familiar with the plans. It wasn’t immediately clear how many of the other senior U.S. officials would make the trip with him and how many may join instead by teleconference.

From the industry side, top executives from a host of household-name firms are expected to take part, including Facebook, Google, Yahoo and others, these people said. “I can confirm that we were invited to the meeting tomorrow and we plan on sending someone,” said a Facebook spokeswoman, declining further comment.

The gathering is tentatively scheduled for 11 a.m. Pacific time in San Jose.

The primary purpose is for government officials to press the biggest Internet firms to take a more proactive approach to countering terrorist messages and recruitment online, these people said. That issue has long vexed U.S. counterterrorism officials, as terror groups use Twitter, Tumblr, Facebook and a host of other social-media sites to spread terrorist propaganda, cultivate followers and steer them toward committing violence.

But the companies have resisted some requests by law-enforcement leaders to take action, making it clear they are very wary of being seen to be helping the government spy on their customers.

Advocates on both sides have been watching to see whether recent terror attacks in Paris and San Bernardino, Calif., would make the public more receptive to law-enforcement arguments, though so far there is no clear indication of such a mood swing. Some members of Congress have introduced bills intended in part to pressure Silicon Valley to take a more cooperative approach.

Friday’s meeting highlights this renewed push by law enforcement and intelligence officials. Other top officials expected to attend are Mike Rogers, director of the National Security Agency, Lisa Monaco, the president’s counterterrorism aide, and Megan Smith, the White House chief technology officer, these people said.

On the industry side, the list of attendees is still in flux, but invitations have been issued to more than a dozen of the top Internet firms’ CEOs.

While the main focus will be countering terrorists’ online messages, other subjects will also be broached, according to people familiar with the matter.

One such secondary topic will be officials’ concerns that tech companies provide highly encrypted communications that terrorists use to hide their planning. The two sides also plan to discuss possible ways to encourage outside groups to create online counter-messages to more effectively attack the propaganda of groups like Islamic State, according to people familiar with the meeting agenda.

Washington and Silicon Valley have been increasingly at odds since revelations by former National Security Agency contractor Edward Snowden about the extent of government spying on electronic communications.

—Deepa Seetharaman contributed to this article.
http://www.wsj.com/article_email/top...ODA0NzkwODc2Wj





Silicon Valley Appears Open to Helping US Spy Agencies After Terrorism Summit

Obama administration acknowledges ‘complicated first amendment issues’ after top counter-terrorism officials traveled to California to woo technology executives from companies including Apple, Facebook and Twitter
Danny Yadron, Julia Carrie Wong

Technology giants appeared to be open to helping the US government combat Islamic State during an extraordinary closed-door summit on Friday that brought together America’s most senior counter-terrorism officials with some of Silicon Valley’s most powerful executives.

The remarkable rendezvous between Apple, Facebook, Twitter, Microsoft and others and a delegation from the White House revealed a willingness on the part of tech firms to work with the government, and indicated that the Obama administration appears to have concluded it can’t combat terrorists online on its own.

Top officials – including National Security Agency director Michael Rogers, White House chief of staff Denis McDonough and FBI director James Comey – appeared to want to know how they could launch a social media campaign to discredit Isis, a person familiar with the conversation said.

A briefing document sent to tech executives Friday morning in advance of the meeting and shared with the Guardian laid out a wish list from the government delegation, which included America’s most senior spy, director of national intelligence James Clapper.

“We are interested in exploring all options with you for how to deal with the growing threat of terrorists and other malicious actors using technology, including encrypted technology,” the briefing document said. “Are there technologies that could make it harder for terrorists to use the internet to mobilize, facilitate, and operationalize?”

Despite recent fights over civil liberties, encryption, and surveillance, tech executives appeared receptive to this message, according to sources familiar with conversations at the meeting.

“I was pleasantly surprised by the tone of the conversation,” said one attendee, Matthew Prince, chief executive of CloudFlare, a San Francisco-based security and network company. Christopher Young, head of Intel’s security group, who was also in the room, added it was “a good discussion today”.

In Washington earlier, White House press secretary Josh Earnest told reporters “many of these technology companies that are participating in the meeting today are run by patriotic Americans” and would want to cooperate.

Earnest acknowledged there are “obviously a lot of complicated first amendment issues and other things” but added: “you know, our sense here is that there’s some common ground that we should be able to find”.

One area of discussion was over how a system used by Facebook to deal with users at risk of suicide could serve as a model for identifying terrorist sympathizers.

The social network’s chief operating officer, Sheryl Sandberg, walked government officials through how Facebook currently enables users to flag people who appear to be posting suicidal thoughts, a person familiar with the conversation said. The government officials in the room wondered if such a system could be used to flag terrorist content or detect a user who appears to be radicalizing, added the person, declining to be quoted on the record.

“This meeting confirmed that we are united in our goal to keep terrorists and terror-promoting material off the Internet,” a Facebook spokeswoman said. “Facebook does not tolerate terrorists or terror propaganda.”

It wasn’t all agreement. At another point, Apple’s chief executive Tim Cook told the government it needs to state publicly that it supports strong encryption. Over the past year, Apple has faced repeated attacks from the FBI for selling products that, officials say, criminals could use to communicate in secret.

Other technology companies present included LinkedIn, DropBox, YouTube, Yahoo and PayPal.

This was not the first time such a senior delegation has traveled to Silicon Valley, but the attempt by America’s leading counter-terrorism officials to court tech executives was an unusual sight.

Flanked by Secret Service agents, secretary of homeland security Jeh Johnson and McDonough smiled as they popped out for a Starbucks run about 20 minutes before the scheduled 11am start of a meeting in San Jose, California.

The top Obama administration officials walked past a Mexican restaurant; a sign on an office window describes the region as “the world’s innovation incubator”. Moments later, Johnson was seen shaking hands with Drew Houston, founder and CEO of Dropbox.

No tech executive would want to be seen supporting terrorism online, but the government’s ask is trickier than it may seem.

Ideally, the Obama administration wants technology companies to be able to find terrorists on social media and chat apps for them, current and former US officials said. This would involve piecing together communications networks and message content to map terrorist cells. The government’s assumption, these people said, is that technology firms are doing much of this anyway for business purposes.

However, since Edward Snowden leaked western government secrets to the Guardian and other outlets in 2013, Silicon Valley has become increasingly cautious about seeming too cozy with Washington’s three-letter agencies.

Government requests also raise legal issues. Under current US law, tech firms only are supposed to share user content with authorities if faced with a court order for a specific user or there is a credible, immediate threat of harm.

“It’s a very fine line to get that information,” said Andre McGregor, a former FBI terrorism investigator and now director of security at Tanium Inc, a Silicon Valley security company. “You’re essentially trying to take what is in someone’s head and determine whether or not there’s going to be some violent physical reaction associated with it.”

Companies provide some voluntary assistance now – such as when it removed a Facebook page last month linked to the shootings in San Bernardino – but it’s unclear how much further they would go.

The government also appears conscious of the risks. In the briefing document sent to tech executives before the meeting it asked if any terrorist content flagging system “were clearly independent from government involvement, would that increase its viability”.

They also face competing demands from different US officials. Public-facing politicians – such as Hillary Clinton and Donald Trump, the respective Democratic and Republican presidential frontrunners – have called on technology companies to effectively kick terrorists off the internet. That’s impossible, the companies respond.

Others, such as those inside the FBI and NSA, sometimes want American firms to keep terrorist accounts up – and keep authorities in the loop.

“It’s a no-brainer to keep Isis using US products,” said Christopher Soghoian, principal technologist at the American Civil Liberties Union and a privacy advocate. Soghoian countered however that it’s up to the government to find terrorists online and it would be impractical to ask companies to do it.

Referring to the armies of overseas contractors tech companies use to police social media he said, “are you going to entrust that decision to someone getting paid $2 an hour in the Philippines?”

After the meeting wrapped up, the nation’s top spies demonstrated their skills of evasion. Attendees slipped out various side doors. Others exited the building. None were available to comment.
http://www.theguardian.com/technolog...tter-microsoft





The Father of Online Anonymity Has a Plan to End the Crypto War
Andy Greenberg

It’s been more than 30 years since David Chaum launched the ideas that would serve as much of the groundwork for anonymity online. In doing so, he also helped spark the debate that’s endured ever since, over the anarchic freedoms that digital secrecy enables—the conflict between privacy advocates and governments known today as the “crypto wars.”

Now Chaum has returned with his first online privacy invention in more than a decade. And with it, he wants to bring those crypto wars to an end.

At the Real World Crypto conference at Stanford University today, Chaum plans to present for the first time a new encryption scheme he calls PrivaTegrity. Like other tools Chaum has spent his long career developing, PrivaTegrity is designed to allow fully secret, anonymous communications that no eavesdropper can crack, whether a hacker or an intelligence agency. But PrivaTegrity, which Chaum’s been developing as a side project for the last two years along with a team of academic partners at Purdue, Radboud University in the Netherlands, Birmingham University and other schools, is meant to be both more secure than existing online anonymity systems like Tor or I2P and also more efficient; he claims it will be fast enough to work as a smartphone app with no perceptible delay. Chaum wouldn’t comment on whether the project, which has yet to be fully coded and tested, would be commercialized or run as a non-profit, but he says an alpha version for Android is in development that functions as an instant-messaging app. In future versions, Chaum and his collaborators plan to add features like larger file sharing for photos and video, the ability to follow Twitter-like feeds, and even financial transactions, all under the cover of strong anonymity with untraceable pseudonyms. “It’s a way to create a separate online reality,” says Chaum, “One in which all the various things we now know people like to do online can be done in a lightweight manner under a completely different and new and very attractive privacy and security model.”

That ambitious privacy toolset aside, Chaum is also building into PrivaTegrity another feature that’s sure to be far more controversial: a carefully controlled backdoor that allows anyone doing something “generally recognized as evil” to have their anonymity and privacy stripped altogether.

Whoever controls that backdoor within PrivaTegrity would have the power to decide who counts as “evil”—too much power, Chaum recognizes, for any single company or government. So he’s given the task to a sort of council system. When PrivaTegrity’s setup is complete, nine server administrators in nine different countries would all need to cooperate to trace criminals within the network and decrypt their communications. The result, Chaum argues, is a new approach that “breaks the crypto wars,” satisfying both the law enforcement agencies who argue that encryption offers a haven for criminals, and also those who argue that it’s necessary to hobble mass spying.

“If you want a way to solve this apparent logjam, here it is,” says Chaum. “We don’t have to give up on privacy. We don’t have to allow terrorists and drug dealers to use it. We can have a civil society electronically without the possibility of covert mass surveillance.”

Inventing Anonymity

Chaum’s quest for a shield against Internet surveillance began before most of the world was even aware of the Internet at all. His inventions include the first-ever cryptocurrency, a 1990s venture known as DigiCash, and DC Nets, a scheme he invented in the early ’80s to allow theoretically perfect anonymity within a group of computers. But perhaps the most influential of Chaum’s privacy ideas was an earlier, simpler scheme he called a “mix network,” a term he coined in 1979.

Mix networks anonymize messages by encrypting them in layers and routing them through a series of computers that serve as intermediaries. Each of those middlemen machines collects messages in batches, shuffles them, strips off one layer of their encryption that only that computer can decrypt, and then passes them on to the next computer in the chain. The result is that no one, not even the individual intermediary computers themselves, can trace the messages from origin to destination. Today, anonymity tools inspired by mix networks are used by everyone from the nearly 2 million inhabitants of the Tor anonymity network—whose messages are routed through a sort of mutated mix network of thousands of volunteer machines—to Bitcoin spenders hiding drug transactions on the Dark Web.

With PrivaTegrity, Chaum is introducing a new kind of mix network he calls cMix, designed to be far more efficient than the layered encryption scheme he created decades ago. In his cMix setup, a smartphone communicates with PrivaTegrity’s nine servers when the app is installed to establish a series of keys that it shares with each server. When the phone sends a message, it encrypts the message’s data by multiplying it by that series of unique keys. Then the message is passed around all nine servers, with each one dividing out its secret key and multiplying the data with a random number. On a second pass through the nine servers, the message is put into a batch with other messages, and each server shuffles the batch’s order using a randomized pattern only that server knows, then multiplies the messages with another random number. Finally, the process is reversed, and as the message passes through the servers one last time, all of those random numbers are divided out and replaced with keys unique to the message’s intended recipient, who can then decrypt and read it.

Chaum argues that PrivaTegrity’s setup is more secure than Tor, for instance, which passes messages through three volunteer computers which may or may not be trusted. Unlike PrivaTegrity, Tor also doesn’t deliver its messages in batches, a decision designed to allow fast Web browsing. But that tradeoff means a spy who watches both ends of Tor’s network of intermediary computers might be able to identify the same message going in one at one place and coming out at another, a problem PrivaTegrity batch system is designed to solve.

PrivaTegrity’s protocol will be speedier than past attempts at implementing mix networks, Chaum claims. That supposed efficiency comes from the fact that the collections of random numbers it uses, both before and after the messages are shuffled, can be precomputed and passed between the servers during moments when the servers are idle, instead of being created in real-time and slowing down conversations. And because the entire cMix process is a series of simple multiplications and divisions, it’s far faster than the public key computations necessary in older mix networks, says Aggelos Kiayas, a computer science professor at the University of Connecticut who’s reviewed Chaum’s system. “It is well known that mix nets can be better than Tor in terms of privacy…The real question is latency,” Kiayas writes in an email, cautioning that he can’t fully judge the scheme’s efficiency without seeing the final app. “PrivaTegrity appears to be a decisive step forward in this direction.”

A Backdoor Security Council

On top of those security and efficiency tricks, PrivaTegrity’s nine-server architecture—with a tenth that works as a kind of “manager” without access to any secret keys—also makes possible its unique backdoor decryption feature. No single server, or even eight of the nine servers working together, can trace or decrypt a message. But when all nine cooperate, they can combine their data to reconstruct a message’s entire path and divide out the random numbers they used to encrypt it. “It’s like a backdoor with nine different padlocks on it,” Chaum says.

For now, Chaum admits the prototype of PrivaTegrity that he plans to distribute to alpha testers will have all its servers running in Amazon’s cloud, leaving them open to the usual threats of American government surveillance, from subpoenas to National Security Letters. But in the app’s final version, Chaum says he plans to move all but one of those servers abroad, so that they’re spread out to nine different countries, and require each server to publish its law enforcement cooperation policy. Chaum won’t yet detail his suggested privacy policies for those servers, but suggests that decryption and tracing could be reserved for “serious abuse, something that leads to death and real harm to people or major economic malfeasance.” Or perhaps the system could limit the frequency of covert traces to some number, such as 100 decryptions per year. Chaum has yet to reveal the full list of the countries where PrivaTegrity would place its servers. But he suggests they’ll be in the jurisdiction of democratic governments, and names Switzerland, Canada and Iceland as examples.

“It’s like the UN,” says Chaum. “I don’t think a single jurisdiction should be able to covertly surveil the planet…In this system, there’s an agreement on the rules, and then we can enforce them.”

The mere mention of a “backdoor”—no matter how many padlocks, checks, and balances restrict it—is enough to send shivers down the spines of most of the crypto community. But Chaum’s approach represents a bold attempt to end the stalemate between staunch privacy advocates and officials like FBI director James Comey, CIA deputy director Michael Morrell and British Prime Minister David Cameron who have all opposed tech companies’ use of strong, end-to-end encryption. Comey, Cameron, and Morell have lashed out at firms like Apple and Whatsapp, for instance, for using systems in which even the company itself doesn’t possess the key to decrypt communications or stored data, and thus can’t cooperate with law enforcement. (Those same privacy features have earned the companies praise from privacy groups.) The debate between encryption fans and surveillance hawks has only intensified in the wake of ISIS’s attacks in Paris, and in last month’s Democratic presidential debate Hillary Clinton called for a “Manhattan-like Project” to develop a system that “would bring the government and the tech communities together.”2

Most encryption experts insist, however, that any backdoor would lead to abuse by hackers, if not by the very law enforcement or national security agencies it was created for. Chaum counters that spreading the keys to decrypt communications among nine servers would solve both of those problems, preventing abusive government surveillance and making his backdoor far harder to hack. He suggests that the servers’ administrator will eventually develop their own security protections and even distinct code to implement PrivaTegrity’s protocol, avoiding any single bug that could be common to all nine nodes. “These systems would be far more hardened than even corporate systems, and to abuse the backdoor you’d have to break all of them,” he says.

Whether PrivaTegrity lives up to its efficiency and security promises will only become clear when the finished app is released, and Chaum himself, despite spending two years perfecting its crypto system, hasn’t even tried the final demo of the app’s private alpha. He remains cagey about naming a date for releasing the public beta and publishing its code so that it can be scoured for flaws, but he says there’s “no technical reason why it couldn’t be ready for the first quarter of 2016.”

If PrivaTegrity’s reality matches Chaum’s descriptions of its potential, he hopes it could serve as a model for how other encryption systems can protect innocent people from spying without offering impunity to criminals. “You have to perfect the traceability of the evil people and the untraceability of the honest people,” says Chaum. “That’s how you break the apparent tradeoff, this standoff called the encryption wars.”

For more technical information on the cMix idea that PrivaTegrity will use, here’s Chaum’s and his co-authors’ still-unpublished paper on the system:1

cMix: Anonymization by High-Performance Scalable Mixing
http://www.wired.com/2016/01/david-c...e-crypto-wars/





Dutch Government Backs Strong Encryption, Condemns Backdoors
Patrick Howell O'Neill

The Netherlands government issued a strong statement on Monday against weakening encryption for the purposes of law enforcement and intelligence agencies.

The move comes as governments in the United Kingdom and China act to legally require companies to give them access to wide swaths of encrypted Internet traffic. U.S. lawmakers are also considering introducing similar legislation.

The Dutch executive cabinet endorsed “the importance of strong encryption for Internet security to support the protection of privacy for citizens, companies, the government, and the entire Dutch economy,” Ard van der Steur, the Dutch minister of security and justice, wrote in the statement. “Therefore, the government believes that it is currently not desirable to take legal measures against the development, availability and use of encryption within the Netherlands.”

Encryption scrambles data so that only those with the keys to unscramble it can access it. For example, Internet users utilize encryption whenever they access a website that has an HTTPS connection, which protects their Web traffic from interception, and Apple iOS devices and Google Android devices are encrypted by default when the user turns on the lock screen.

Last month, the Netherlands parliament committed €500,000 in funding to OpenSSL, a free set of encryption tools used widely and sponsored in part by the United States government.

“Confidence in secure communication and storage data is essential for the future growth potential of the Dutch economy, which is mainly in the digital economy,” Van der Steur wrote.

“Encryption supports respect for privacy and the secret communication of citizens by providing them a means to communicate protected data confidentially and with integrity. This is also important for the exercise of the freedom of expression. For example, it enables citizens, but also allows empowers important democratic functions like journalism by allowing confidential communication.”

Encryption is protected under privacy laws in Articles 10 and 13 in the Dutch constitution, Van der Steur argued, as well as Article 8 of the European Convention on Human Rights and Articles 7 and 8 in the European Union Charter.

Weakening encryption will also expose Internet traffic to eavesdropping by criminals, terrorists, and foreign intelligence services, Van der Steur said. That's an argument supported by a wide variety of technologists warning against the weakening of encryption.

“The protection of these fundamental rights is applicable to the digital world,” he wrote.

The minister of security and justice described at length the virtues of encryption, from protecting laptops against theft to allowing the Dutch government itself to communicate online safely with its citizens about taxes and digital IDs.

“Cryptography is key to security in the digital domain,” Van der Steur argued.

The rights are not absolute, however, and “infringement is permissible” given “a legitimate purpose” as well as regulation and restriction by law, he said.

The global debate over encryption took on new urgency in 2015 after terrorist attacks in Paris and San Bernardino, California. Despite the lack of a direct connection between the violence and encryption—the Paris attackers used unencrypted text messages to coordinate—some lawmakers in the U.S. and other nations have renewed a fight to ban or limit strong end-to-end encryption.

If strong end-to-end encryption is banned in major Western nations, countries like the Netherlands may become important islands of legal cryptography that stymie anti-encryption efforts.
http://www.dailydot.com/politics/dut...inet-backdoor/





A Redaction Re-Visited: NSA Targeted “The Two Leading” Encryption Chips
Glenn Greenwald

On September 5, 2013, The Guardian, the New York Times and ProPublica jointly reported — based on documents provided by whistleblower Edward Snowden — that the National Security Agency had compromised some of the encryption that is most commonly used to secure internet transactions. The NYT explained that NSA “has circumvented or cracked much of the encryption, or digital scrambling, that guards global commerce and banking systems, protects sensitive data like trade secrets and medical records, and automatically secures the emails, web searches, internet chats and phone calls of Americans and others around the world.” One 2010 memo described that “for the past decade, NSA has led an aggressive, multipronged effort to break widely used internet encryption technologies.”

In support of the reporting, all three papers published redacted portions of documents from the NSA along with its British counterpart, GCHQ. Prior to publication of the story, the NSA vehemently argued that any reporting of any kind on this program would jeopardize national security by alerting terrorists to the fact that encryption products had been successfully compromised. After the stories were published, U.S. officials aggressively attacked the newspapers for endangering national security and helping terrorists with these revelations.

All three newspapers reporting this story rejected those arguments prior to publication and decided to report the encryption-cracking successes. Then-NYT Executive Editor Jill Abramson described the decision to publish as “not a particularly anguished one” in light of the public interest in knowing about this program, and ProPublica editors published a lengthy explanation along with the story justifying their decision.

All three outlets, while reporting the anti-encryption efforts, redacted portions of the documents they published or described. One redaction in particular, found in the NYT documents, from the FY 2013 “black budget,” proved to be especially controversial among tech and security experts, as they believed that the specific identity of compromised encryption standards was being concealed by the redaction.

None of the documents in the Snowden archive identify all or even most of the encryption standards that had been targeted, and there was a concern that if an attempt were made to identify one or two of them, it could mislead the public into believing that the others were safe. There also seemed to be a concern among some editors that any attempt to identify specific encryption standards would enable terrorists to know which ones to avoid. One redaction in particular, from the NYT, was designed to strike this balance and was the one that became most controversial:

The issue of this specific redaction was raised again by security researchers last month in the wake of news of a backdoor found on Juniper systems, followed by The Intercept’s reporting that the NSA and GCHQ had targeted Juniper. In light of that news, we examined the documents referenced by those 2013 articles with particular attention to that controversial redaction, and decided that it was warranted to un-redact that passage. It reads as follows:

The reference to “the two leading encryption chips” provides some hints, but no definitive proof, as to which ones were successfully targeted. Matthew Green, a cryptography expert at Johns Hopkins, declined to speculate on which companies this might reference. But he said that “the damage has already been done. From what I’ve heard, many foreign purchasers have already begun to look at all U.S.-manufactured encryption technology with a much more skeptical eye as a result of what the NSA has done. That’s too bad, because I suspect only a minority of products have been compromised this way.”

NSA requested until 5 p.m. today to respond but then failed to do so. (Update: The NSA subsequently emailed to say: “It would be accurate to state that NSA declined to comment.”)
https://theintercept.com/2016/01/04/...ryption-chips/





The FBI's 'Unprecedented' Hacking Campaign Targeted Over a Thousand Computers
Joseph Cox

In the summer of 2015, two men from New York were charged with online child pornography crimes. The site the men allegedly visited was a Tor hidden service, which supposedly would protect the identity of its users and server location. What made the case stand out was that the Federal Bureau of Investigation (FBI) had used a hacking tool to identify the IP addresses of the individuals.

The case received some media attention, and snippets of information about other, related arrests started to spring up as the year went on. But only now is the true extent of the FBI’s bulk hacking campaign coming to light.

In order to fight what it has called one of the largest child pornography sites on the dark web, the FBI hacked over a thousand computers, according to court documents reviewed by Motherboard and interviews with legal parties involved.

“This kind of operation is simply unprecedented,” Christopher Soghoian, principal technologist at the American Civil Liberties Union (ACLU), told Motherboard in a phone interview.

A new bulletin board site on the dark web was launched in August 2014, on which users could sign up and then upload whatever images they wanted. According to court documents, the site's primary purpose was “the advertisement and distribution of child pornography.” Documents in another case would later confirm that the site was called “Playpen.”

Just a month after launch, Playpen had nearly 60,000 member accounts. By the following year, this number had ballooned to almost 215,000, with over 117,000 total posts, and an average of 11,000 unique visitors each week. Many of those posts, according to FBI testimony, contained some of the most extreme child abuse imagery one could imagine, and others included advice on how sexual abusers could avoid detection online.

An FBI complaint described the site as “the largest remaining known child pornography hidden service in the world.”

A section of one of the complaints involved in the Playpen investigation, showing that 1300 true IP addresses were obtained.

A month before this peak, in February 2015, the computer server running Playpen was seized by law enforcement from a web host in Lenoir, North Carolina, according to a complaint filed against Peter Ferrell, one of the accused in New York. (Data hosts in Lenoir contacted by Motherboard declined to comment. One of them, CentriLogic, wrote “We have no comment on the matter referenced by you. Our obligations to customers and law enforcement preclude us from responding to your inquiry.”)

But after Playpen was seized, it wasn't immediately closed down, unlike previous dark web sites that have been shuttered by law enforcement. Instead, the FBI ran Playpen from its own servers in Newington, Virginia, from February 20 to March 4, reads a complaint filed against a defendant in Utah. During this time, the FBI deployed what is known as a network investigative technique (NIT), the agency's term for a hacking tool.

While Playpen was being run out of a server in Virginia, and the hacking tool was infecting targets, “approximately 1300 true internet protocol (IP) addresses were identified during this time,” according to the same complaint.

The legal counsel for one of the accused believes that the number of eventual cases may even be slightly higher.

“Fifteen-hundred or so of these cases are going to end up getting filed out of the same, underlying investigation,” Colin Fieman, a federal public defender handling several of the related cases, told Motherboard in a phone interview. Fieman, who is representing Jay Michaud, a Vancouver teacher arrested in July 2015, said his estimate comes from what “we've seen in terms of the discovery.”

“There will probably be an escalating stream of these [cases] in the next six months or so,” Fieman added. “There is going to be a lot in the pipeline.”

Fieman has three cases pending in his defenders office, he said. According to court documents, charges have also been filed against defendants in Connecticut, Massachusetts, Illinois, New York, New Jersey, Florida, Utah, and Wisconsin.

In court filings, Fieman describes the use of this broad NIT as an “extraordinary expansion of government surveillance and its use of illegal search methods on a massive scale.”

NITs come in all sorts of different forms, and have been used since at least 2002. Malware has been delivered to bomb threat suspects via phishing emails, and the FBI has also taken over hosting services and surreptitiously exploited a known bug in Firefox to identify users connecting with the Tor Browser Bundle.

In 2011, “Operation Torpedo” was launched, which saw the agency place an NIT on the servers of three different hidden services hosting child pornography, which would then target anyone who happened to access them. The NIT used a Flash application that would ping a user's real IP address back to an FBI controlled server, rather than routing their traffic through the Tor network and protecting their identity.

When WIRED reported on that operation in 2014, “over a dozen alleged users of Tor-based child porn sites” were headed for trial. And within a two-week period, the FBI reportedly collected IP addresses for at least 25 of the site's US visitors.

But the case of Playpen appears to be much, much broader in scope.

A section of an affidavit in support of application for a search warrant, as part of the Playpen case, showing what sort of data the NIT sent to the FBI.

“We're not talking about searching one or two computers. We're talking about the government hacking thousands of computers, pursuant to a single warrant,” said Soghoian, the ACLU technologist.

With earlier cases, the FBI's broad NIT attacks had used already known and patched vulnerabilities. But because the Tor Browser Bundle had no auto-update mechanism in August 2013—around the time of one of the FBI's attacks—only those users who bothered or remembered to patch their systems were safe. Evidentially, some people forgot.

The same might be true of the Playpen NIT: automatic updates to the Tor Browser Bundle were introduced in August 2015, months after the FBI had already obtained over a thousand IP addresses.

“There is no public information revealing whether or not the FBI used a zero-day in this case, or an exploit that targeted a known flaw,” Soghoian said.

Some clues about the Playpen NIT exist however. The NIT is likely different to the one used in Operation Torpedo because according to court filings that one is “no longer in use.” As for how the Playpen NIT operates, it’s not totally clear exactly how it was deployed, but the warrant allowed for anyone who logged into the site to be hacked.

“Basically, if you visited the homepage, and started to sign up for a membership, or started to log in, the warrant authorised deployment of the NIT,” Fieman said. From here, the NIT would send a target's IP address, a unique identifier generated by the NIT, the operating system running on the computer and its architecture, information about whether the NIT had already been deployed to the same computer, the computer's Host Name, operating system username, and the computer's MAC address.

Experts say that the true nature of NITs—that is, as powerful hacking tools—is kept from judges when law enforcement ask for authorisation to deploy them.

“Although the application for the NIT in this case isn't public, applications for NITs in other cases are,” said Soghoian. “Time and time again, we have seen the Department of Justice is very vague in the application they're filing. They don't make it clear to judges what they're actually seeking to do. They don't talk about exploiting browser flaws, they don't use the word 'hack.'”

“And even if judges know what they're authorizing, there remain serious questions about whether judges can lawfully approve hacking at such scale,” Soghoian added.

Magistrate Judge Theresa C. Buchanan in the Eastern District of Virginia, who signed the warrant used for the NIT, did not respond to questions on whether she understood that the warrant would grant the power to hack anyone who signed up to Playpen, or whether she consulted technical experts before signing it, and her office said not to expect a reply.

But Fieman said that the warrant “effectively authorizes an unlimited number of searches, against unidentified targets, anywhere in the world.”

While Soghoian warned about what this scale of hacking may signal for the future of policing. “This is a scary new frontier of surveillance, and we should not be heading in this direction without public debate, and without Congress carefully evaluating whether these kind of techniques should be used by law enforcement," he said.

The FBI did not provide a response in time for publication.

Plenty of questions remain about this law enforcement hacking operation, such as the exact wording used in the authorisation for the NIT, the technical aspects of the NIT itself, and how many computers were targeted outside of the United States.

The UK's National Crime Agency (NCA), which often receives intelligence from the FBI, told Motherboard in a statement that "The NCA does not routinely confirm or deny the receipt of specific intelligence for reasons of operational security. We work closely with international partners both in law enforcement and industry to share intelligence and work collaboratively to bring those involved in the sexual exploitation of children to account." Europol, Europe’s law enforcement agency, did not respond to a request for comment.

Regardless, in taking down one of the biggest dark web child pornography sites, the FBI also engaged in likely the largest law enforcement hacking campaign to date.
https://motherboard.vice.com/read/th...sand-computers





Defense Lawyers Claim FBI Peddled Child Porn in Dark Web Sting
Joseph Cox

On Tuesday, Motherboard reported that the FBI had carried out an “unprecedented” hacking campaign, in which the agency targeted at least 1,300 computers that were allegedly used to visit a site hosting child pornography.

While it looks like several of those already charged will plead guilty to online child pornography crimes, one defense team has made the extraordinary step of arguing to have their client's case thrown out completely. Their main argument is that the FBI, in briefly running the child pornography site from its own servers in Virginia, itself distributed an “untold” amount of illegal material.

“There is no law enforcement exemption, or statutory exemption for the distribution of child pornography,” Colin Fieman, one of the federal public defenders filing the motion to dismiss the indictment, claimed in a phone interview earlier this week. Jay Michaud, a Vancouver teacher arrested in July 2015, is also being represented by Linda Sullivan.

“THE GOVERNMENT'S OPERATION OF THE WORLD'S LARGEST ‘HIDDEN SERVER’ CHILD PORNOGRAPHY SITE AND ITS GLOBAL DISTRIBUTION OF UNTOLD NUMBERS OF PICTURES AND VIDEOS IS OUTRAGEOUS CONDUCT THAT SHOULD RESULT IN DISMISSAL OF THE INDICTMENT,” a court filing dated November 20, 2015 reads.

Fieman and Sullivan reason that if the methods of the investigation that supposedly identified his client “cannot be reconciled with fundamental expectations of decency and fairness,” then the indictment should be dismissed.

In February 2015, the FBI seized the server of “Playpen,” which court documents described as “the largest remaining known child pornography hidden service in the world.” Instead of shutting the site down straight away, however, the FBI moved Playpen to a government controlled server in Virginia, and deployed a network investigative technique (NIT)—the agency's term for a hacking tool—in an attempt to identify people logging into the site. This NIT, according to other court documents, collected approximately “1300 true internet protocol (IP) addresses” between February 20 and March 4.

In their argument, Fieman and Sullivan point to the Department of Justice's own view on the harm caused by the proliferation of child pornography. “Once an image is on the Internet, it is irretrievable and can continue to circulate forever,” the Department of Justice website reads. In an April 2015 press release, US Attorney Josh J. Minkler said that “Producing and distributing child pornography re-victimizes our children every time it is passed from one person to another.”

In essence, the lawyers' point is that the FBI was, by running Playpen from its own servers, essentially distributing child pornography.

So, according to their argument, it is unclear how the “Government can possibly justify the massive distribution of child pornography that it accomplished in this case.”

They then posit that, rather than taking over the site to deploy a bulk hacking technique, and allowing the site to continue to distribute child pornography material in the process, the FBI could have posted individual links to malware-laden files on the site without running it from their own servers. Or, after seizing the site, the agency could have redirected users to a spoofed version of it, minus the child pornography material.

Instead, the FBI “continued to distribute thousands of illicit pictures and videos to thousands of visitors,” the filing states. It compares the case to “Operation Fast and Furious”: Between 2009 and 2011, law enforcement agents infamously proliferated illegal weapons in an attempt to trace them to Mexican drug cartels. Some of the weapons, however, ended up being used in the murder of a US Border Patrol agent.

The Department of Justice did not reply to repeated requests for comment. The FBI did not respond to a request for comment in time for publication, but a spokesperson previously told Motherboard, “We are not able to comment on ongoing investigations, or describe the use of specific investigative techniques.”

This argument to dismiss the indictment is just one of the more recent phases of a heated legal back-and-forth between Michaud's lawyers and the government. Since October, dozens of documents have been filed in the case, including motions to seal documents, affidavits, modifications to protective orders, and delays to responses.

“We are in a protracted street fight with the Department of Justice and the FBI,” Fieman told Motherboard.

Some of the issues circle around evidence: the defense argues that its client has not had access to important discovery information. It has had some success on that front though: on December 10, the Government wrote that the defense counsel will be provided with the computer code of the NIT under a protective order. The defense is also expected to receive a detailed list of the number of child pornography materials on Playpen while it was being run from an FBI server.

The government's response to the motion to dismiss the indictment is currently sealed. It's unclear how the government has replied to the lawyer's arguments, but this move to have the indictment against a suspected online child pornographer totally scraped is a surprising and dramatic turn in a case that continues to grow in scope.
https://motherboard.vice.com/read/de...dark-web-sting

















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