 Coming up on DTNS, Amazon wants to rule Internet of Things connectivity. Microsoft beefs up its gaming ownership by Bethesda. And I try to explain why everything you hear about the Tic-Tac deal seems to contradict everything else you hear about the Tic-Tac deal. This is the Daily Tech News for Monday, September 21st, 2020 in Los Angeles. I'm Tom Merritt. And from Studio Redwood, I'm Sarah Lane. And from the show's producer Roger Chang. From wherever you are, you're the show. Wherever I am. And yeah, wherever you go, you're Roger Chang. We were just talking about all kinds of devices. We're talking about a Pixel 4 with a swelling battery, a new Apple Watch Series 6. Sarah's Fitbit Versa support victory, in my opinion. You can get all of that on good day Internet. Become a member at patreon.com slash DTNS. Let's start with a few tech things you should know. One Plus will hold an event to announce details of the One Plus 8T phone on October 14th at 10 a.m. Eastern Time. One Plus launched the One Plus 8 back in April. The announcement will be streamed at oneplus.com slash launch. Amazon's got an announcement coming up. It's it's Autumn Product Line, which you're like, huh, I haven't heard any leaks about. Maybe they're not that good. It's going to happen Thursday, September 24th at 1 p.m. Easter. But the event is invite only, even though it's over the Internet. It's invite only. So only the media has been invited to stream it. It doesn't look like it will be streamed live. We'll see. NBC Universal and Roku reached an agreement late Friday to share advertising, keep existing NBC apps on Roku, and add the Peacock streaming service Peacock launched on Roku Monday. Ah, peace in our time, at least among them. Ben Mullen from the Wall Street Journal tweeted Monday, quote, Quibi, the streaming service founded by Jeffery Katzenberg, is exploring strategic options, including a possible sale, sources say. And then he did write up a story about that at Wall Street Journal.com. The other options beside a sale would include trying to raise more funding or launching an IPO. A lot of funding being raised already. That would be Microsoft updated its Android Xbox app to now support streaming games from an Xbox console to mobile for all users. The feature was previously available to Xbox insiders. The app can also be used to set up a new console, manage your game library and act as a remote control. Mozilla announced it's spinning out its open source IOT platform WebThings into an independent project under community ownership, so it's not shutting it down. It's open sourcing it. WebThings evolved from Mozilla's 2018 project, Things, and creates common IOT standards around privacy, security and interoperability. Mozilla previously canceled plans to bring consumer focused WebThings devices to market back in February. The move comes after major restructuring continues at Mozilla, which has seen more than 250 layoffs and the company's shuttering services like Firefox Send and Firefox Notes. Facebook updated its rights management platform to let certain partners claim ownership of images and decide where those images are allowed to appear across Facebook's platforms, including on Instagram. Facebook says it's starting with a small group to learn how the process will work and practice with things like memes. It also plans to open the process to everyone eventually. And NVIDIA posted a public apology Monday for the difficulties getting RTX 3080 GPUs on launch day last week. NVIDIA wrote, quote, we were not prepared for this level, nor were our partners, end quote. NVIDIA said traffic was 10 times the previous launch of its video cards. NVIDIA also said it has now manually canceled hundreds of orders made by bots and put in better capture. All right, let's talk about that Microsoft acquisition. Let's do it. Microsoft has agreed to acquire Xenomax Media, parent company of Bethesda, which makes doom fallout on the forthcoming titles, Starfield and the PS5 exclusive Deathloop. PS5 exclusive. Microsoft has said Bethesda will honor existing exclusives but take future ones on a case by case basis. Going forward, future Bethesda games will launch on Xbox Game Pass the day that they come to Xbox or PC. Microsoft says that Bethesda will retain its existing leadership, but that Bethesda sub studios include Arcane, Machine Games, Tango Gameworks and id software and now gives Microsoft 23 internal game studios in the announcement. Microsoft also revealed Xbox Game Pass has more than 15 million subscribers with over five million added in the past six months. This is a big announcement. I think for Microsoft fans, a good announcement for Bethesda fans maybe good, maybe not kind of depends. The idea that Bethesda will now be under the thumb of Microsoft is a little chafing to some people, but Microsoft's saying all the right things, which is we're going to leave this independent. It's going to run under its existing ownership. We don't want to ruin it. We want to make money off of it. And that means letting them do the thing that they do so well. It brings a lot of great titles into Microsoft. Certainly gives them the advantage of possibly having some exclusives in the future that have been Sony exclusives in the past. I would expect that to play out, which isn't so great for PS5 users, but smart to say like, hey, man, if they've got an exclusive agreement, you know, it would be illegal to break those contracts. We're not going to do that. We're not even going to try. So, you know, there's there's a lot of fun around this. But mostly it's a very good thing for Microsoft, not a bad thing for Bethesda and not a great thing for Sony. Yeah, I mean, it it as as Rich Strathvalina was pointing out in our in our morning meeting. Twenty three internal game studios sounds like a lot. But, you know, they're there's, you know, how many there's Sony have, you know, or other companies as well. I can't imagine honoring existing exclusives. Fine. Great. I cannot imagine that futures would be a case by case basis. It seems like it would be Microsoft exclusives. And that's the whole point of the hard to imagine a Bethesda title coming out as a Sony exclusive in the future. Right. Right. Yeah. I mean, you know, it or you know, even if there was some sort of period that it was an exclusive to Xbox, you know, before it came to other platforms. Sure. But it sounds like I mean, there there would kind of be no other reason for Microsoft to take Bethesda under its its parental wing. This is the biggest acquisition game acquisition Microsoft has made since Mojang since the Minecraft makers. And by all accounts, people, you know, people have complaints always. But by all accounts, Microsoft is usually regarded to be a fairly good steward steward of Minecraft and and and people were very worried about that when Microsoft bought Minecraft. So, you know, I think the record shows that when they buy game studios, they they tend to take good care of them and put it that way. Last year, Amazon announced a low bandwidth, long distance wireless protocol called Sidewalk meant to extend the distance that Internet of Things devices can connect. So it could do things like you're trying to set up a light at the edge of your property where your Wi-Fi doesn't quite reach. And it would use its wider network to make that possible. Or or maybe you could still get motion sensing from your cameras, even if Wi-Fi is out, because it would use this the Sidewalk network. The network works by using Amazon devices and other members of the Sidewalk community. So Amazon says that compatible Echo devices, select ring floodlight and spotlight cans will be able to serve as Bluetooth bridges for Sidewalk. So it's kind of like a mesh network. Amazon also said that Tile will be the first third party Sidewalk compatible product with a new tracker coming that can use the protocol. That makes perfect sense because Tile tries to use its own network to locate stuff and being part of another network like Sidewalk would just extend that ability. Remember we talked about Tile providing a guarantee if they can't find your device. This will help them not have to cash in on that too often. Amazon also released technical details of how Sidewalk will work. Bridges talk to endpoints over Bluetooth low energy or over a long range low power wide area network using the 900 megahertz band. Amazon says traffic is encrypted between application servers and endpoints on the network layer itself and from bridges to the network. They don't look at any of the traffic themselves. Devices have to go through stringent security certification before they're allowed to even use Sidewalk. So you won't have rogue devices on that network trying to hijack it. At least Amazon says they won't. Devices will be capped at 500 megabits of band or megabytes of bandwidth with bandwidth used by Sidewalk bridge and cloud servers not exceeding 80 kilobits per second, so they shouldn't flood your usage. And you can also turn it off if you have an echo and you're like, no, I don't want this to be part of the network. You can go in there and turn it off. Company also claims the protocol has gone through extensive penetration testing. They ran a successful proof of concept trial with the Red Cross for tracking blood collection supplies out in the field. That seems to be a robust way to do this. It seems like a very secure, well thought out protocol. I just don't know who else beyond Amazon and tile are going to take advantage of it. Yeah, I think the tile that what I was thinking, OK, if you have a a light that's smart and it's at the end of your yard and your yard is big enough that your Wi-Fi isn't picking it up, like that's pretty handy, right? You also have to have the neighborhood kind of on board, right? You know, you can't just be you saying, yeah, I've I now have Sidewalk and everything just works really well. It has to, you know, so there's there's kind of convincing the community that this is a good idea and that they're safe. Amazon does, like you said, seems like they've gone through many hoops to make sure that it's it's a very safe encrypted network. And they've thought through all of that stuff, but you still have to convince people to turn it on and why it's a good thing. I think the tile stuff is a really good selling point. You know, the Red Cross tracking blood collection supplies. Well, you know, not that many of us are working for the Red Cross, but that's something where you go, oh, that's really important, right? If you lose your dog, well, you know, if your dog has has run a little bit farther than your property or maybe a lot farther, that would be a great thing as well. Or, you know, where you left your phone somewhere, whatever tile may be tracking for you. But some of the other stuff, especially in more dense urban areas where I'm like, people don't have floodlights and, you know, these kind of like fancy home devices that sound really good when you've got, you know, a larger house and a lot of smart, smart devices and maybe a big yard where you're getting creative. That's cool. But I think, you know, for for even for me, I'm like, yeah, I'm not sure about this. If you're surrounded by Google Home and Nest users, you know, this is going to be working as well for you. And 5G is doing a lot of this stuff. And 5G is going to be everywhere, right? So I feel like a lot of device makers will probably opt to just go with 5G or something else rather than working within Amazon's system. But we'll see. Cryptographic engineer Tony Arcieri noted over the weekend that Twitter's automatic cropping algorithm for presenting image previews in the timeline seemed to focus on white faces. You might have seen that this got a lot of attention if you hung out on Twitter over the weekend, as did I. Twitter's Liz Kelly said that the company had checked for bias before and found none, but had more analysis to do given the finding. The next web pointed to a 2018 Twitter blog post that indicated that the algorithm uses saliency, the part of an image that catches your attention first to determine the crop point. Twitter's chief design officer, Dantley Davis, said that the choice of cropping sometimes takes brightness of the background into consideration as well. Either way, Twitter says it plans to open source its algorithm to let others review and replicate the results and work to address the problem. Yeah, there were some examples out there where it wasn't preferencing white faces. So it's not as simple as that. And I think what Twitter's trying to say is it's not that we didn't check our training set. We did. But there's something else going on and we want to fix it. They're not trying to make excuses. They're saying, huh, maybe saliency introduces this kind of bias or maybe it's the brightness of the background and we need to do something to correct for that. So it's very interesting. I don't think it's Twitter maliciously trying to do this. I don't think it's Twitter being negligent. I think it's we're still in the early days of these algorithms and finding out, A, how they work and, B, how human biases can sneak into them in all kinds of interesting ways. And I think this was an unanticipated way. So it's good that Twitter is going to look at this and try to figure out why. What's funny is I didn't even notice it because I don't I usually use Twitter on a phone and on the phone. It doesn't show you these previews. So I wasn't even seeing this stuff. I use I I mostly use tweet bot on my Mac, but, you know, third party app. And so all I saw was just a big white square. And when you click on the square, then you'd get the image. But I didn't understand what anyone was talking about. It took me a while. I finally went to Web Twitter and I was like, OK, I understand what this experiment is. What I thought was interesting is, sure, yeah, you're bringing up something that Twitter says, we need to address this and just kind of figure out how we can make this better because we don't certainly want to come across as as as being biased in that way. But a lot of other people jumped on the bandwagon. They were like, all right, well, what if you like put sunglasses on somebody? What if you yeah, brighten the background of the image that, you know, the human face is unchanged? What if you change the colors on someone's clothes? And there were a lot of different results. So that's all interesting information that Twitter can now take back and say, all right, how do we make this better? Yeah, again, I think even if it turns out as whistles saying in our chat, you know, put a pink shirt on a black guy and he shows up, that's something that Twitter wants to take into account and say, like, oh, if people with dark complexions are wearing dark clothes, they don't get focused on, we need to fix the algorithm to not do that, to look for faces, not light, you know, to adapt to saliency, et cetera. I think that that's good stuff. Hey, folks, if you want to get all the tech headlines each day in about five minutes, be sure to subscribe to DailyTechHeadlines.com. So, Sarah. Yes, Tom. Tick-tock stuff, man. Right? Am I right? Isn't it fun? I'll tell you, it's a story that changes so rapidly that I was I was enrapt in it all weekend. I couldn't, you know, you walk away for an hour, you come back, you're like, oh, the story is updated. It's not necessarily my favorite story of all time, but it certainly has kept things interesting. And a lot of the updates were not very substantial updates. There are also a lot of updates that are taking what one person says and making it sound like they're entirely in contradiction with another person. There are some legitimate contradictions between the sides in this and there are some things that look contradictory that aren't. So let's talk about what appears to be happening and try to help you understand why you may hear some opposite things about the same deal from different sides. Let's start with the ownership deal itself. They want to create a new company called Tiktok Global that would be headquartered in the United States. That's easy enough. Tiktok currently is headquartered in Santa Monica, California. The president said something about it being headquartered in Texas. But let's ignore that for the moment. It will be U.S. based and that's easy. Tiktok Global will be 80 percent owned by Bike Dance, or will it? Oracle will own 12.5 percent and Walmart will own 7.5 percent. That makes up 100 percent. Bike Dance has been calling this a wholly owned subsidiary. Now, that's a very common corporate arrangement that can mean a lot of different things. Hulu, for instance, is majority owned by Disney, but Comcast still owns a small percentage of Hulu. Disney had to get Comcast to change the ownership structure to let Disney take full control of Hulu, even though Comcast was a minority owner. In this Tiktok case, one would assume that the opposite is going to happen, that the structure will allow the minority investors much more control and not give Bike Dance full control. You're going to hear both Bike Dance owns it all and Bike Dance owns nothing. These stretch the truth. Here's what you need to know. U.S. companies own 41 percent of Bike Dance. Bike Dance is a Chinese company, but it's 41 percent owned by Americans. Sequoia and General Atlantic are the two big U.S. based investors in Bike Dance. So if you want to make the argument of U.S. control, you say that those Bike Dance investors will have more control over Tiktok Global and with the Oracle and Walmart states that effectively makes Tiktok Global U.S. controlled. In fact, it comes out to 53 percent if you prorate it. If you don't want to make that argument, you round that 80 percent of Bike Dance up and just say, well, it's pretty much a fully Bike Dance operation. And you ignore the stakes in Bike Dance owned by U.S. investors. That's what Bike Dance has been pitching to China. But there's a hitch. Oracle claims that the shares in Tiktok Global will be distributed directly to the Bike Dance investors, not to Bike Dance. This is a subtle but important distinction. It makes that 53 percent number a little more solid. After an IPO, which Bike Dance says it wants to do next year, share the Bike Dance share of Tiktok Global could even fall to 31 percent. Bike Dance, on the other hand, says it will directly hold its shares of the company. And if it did that, it would hold 80 percent, not 47 percent and still hold a majority of it after an IPO. There's a chance that this disagreement over how the shares should be dispersed could sour the whole deal. So as we're recording this right now, there's some crosstalk on that. We'll wait and see if there's anything substantive behind it or if it's just dot nyes and cross and tease and a lot of squawking. Another way you can spin the ownership is the board of directors. Bike Dance has said that CEO Zhang Yeming and Walmart's chief executive, Doug McMillan, will be on the board of Tiktok Global. The rest will be current Bike Dance directors. Oracle, on the other hand, said four out of the five board directors will be from the U.S. Both those things can be true because those Bike Dance board members might be U.S. investors. Sequoia's Neil Shen and General Atlantic's Bill Ford both hold seats on Bike Dance's board so they could count as American investors, but also count as current Bike Dance board members. All right, if we get this deal, how is it going to work? Oracle will host U.S. data for Tiktok. Now, the best I can tell, Google is currently Tiktok's host provider. And that data was kept in the U.S. primarily with a backup in Singapore. So Google would lose that contract and going forward, all U.S. data would be held held by Oracle in data centers in the United States. Oracle would also get some added stuff that Google didn't have. Google was just a customer. Oracle will be able to do code reviews. This is similar to what Chinese companies do with Amazon and Microsoft in China. And they would be able to look at the Tiktok recommendation algorithm, but they won't get it and will remain the property of Bike Dance. Now, a couple of bits of paperwork, a block on Tiktok downloads from U.S. app stores was supposed to happen Sunday. It has been delayed until September 27th to give the new deal time to be finalized. So they kicked that can down the road. And this entire deal must be approved by the Committee on Foreign Investment in the U.S. before it can go forward. Now, you may have also heard that Bike Dance is paying the U.S. for this or teaching history classes or something. The President claimed the deal will result in five billion dollars invested in U.S. education. Bike Dance says we're unaware of such a provision, but we are going to pay five billion in taxes based on estimated income and other taxes we need to pay over the next few years. So there is five billion going somewhere. Presumably the U.S. could say we're going to take this five billion from Bike Dance and put it towards education. Maybe that explains that. The other thing is, did it address the concerns? There were three main concerns. The first one was user data going to China. And potentially, because it was going to China, going to the Chinese government, there was never any evidence that this was happening. The U.S. data was not even in China. It was in Singapore as a backup. That's the closest it got to China. But hey, who knows? Maybe it could have. Now user data will go from being on Google servers to being on Oracle servers with stricter controls. Oracle can do more about what it has the data. What can do more about it? User data will still be collected on as great a level as before, but for the benefit of Oracle and Walmart, not for the benefit of Bike Dance. Also, TikTok Global still faces a complaint from U.S. child advocacy groups that TikTok violated the terms of its 2019 settlement with the FTC about collecting data from children. So that will have to be dealt with as well. Number two of the three concerns was that TikTok might push malware. Oracle's code reviews will address that. And number three of the three was the idea that moderation of TikTok content and the algorithm could somehow push a political agenda. There's not much being done about this. The algorithm is under Bike Dance control. Presumably Oracle can bring some oversight there, but Bike Dance will still control the algorithm. So this is the one that is addressed the least. Also, a few other notes. Committee on Foreign Investment in the U.S. will likely put some kind of oversight mechanism on this, which that would go along with the reports we told you about last week, that there would be a security oversight board with a former intelligence officer possibly on it. That will not be made public, but the information leaked that last week. We might get a leak about it again. You may be wondering why Walmart even wants to be part of this. Walmart wants to build e-commerce into TikTok. We talked about last week that e-commerce on short video services in China have been great for like bringing farm produce into urban areas. And Walmart wants to do stuff like that. They wanna sell you stuff through TikTok. Bike Dance's Du Yan and other apps in China have been very successful about that. Oracle claims the deal will result in 25,000 new U.S. jobs. Some are skeptical how that might happen, but Oracle says don't worry, we'll make it happen. China is preparing its own list of foreign companies that threaten China, so we may see some retaliation. Although the Wild Street Journal says that there's a debate within China about whether to release this list before or after the U.S. election. We also have the EU now considering giving itself the power to make companies sell or break off European operations. That would be targeted at U.S. companies, but saying, hey, if China and the U.S. are doing this, maybe we should do it too. And the Wild Street Journal has a good article about how Chinese companies are really shifting their focus to the domestic market. So there you go. We're moving U.S. data out of Singapore from Google servers to Oracle servers and overseeing the code to make sure there's no malware on it. Wow. All right. First of all, good explainer. Learned a lot. But I think what I'm stuck on the most, what seems to be the biggest sticking point to me is, okay, U.S. companies owning a minority stake of ByteDance. 41%, less than 50. Although it's a big chunk, but not enough to necessarily sway a decision within ByteDance itself, there's that. So there's some influence, but you can't necessarily push through what you need to push through, even though you're a U.S. investor. But then kind of adding that up with the Walmart and Oracle stakes in TikTok Global, which is under ByteDance, is not exactly the same thing. It's like, yeah, you're adding up some numbers, but you're talking about two different things here. I think that the point of TikTok Global being distributed evenly to ByteDance's investors is an important one, but then again, ByteDance is saying, but that's not the way it's gonna go. So that seems to be, no matter what anybody's saying here, that seems to be is the deal gonna happen or not because the party, well, the multiple parties, not the two parties, the many parties involved are gonna have to agree on that. Yeah, that is the key right now as we're recording the show, which is just saying like, well, Sequoia and General Atlantic, they own 41%, so 41% of 80% is 33%, and then if you add that to the 20% Oracle and Walmart have, that's 53% is not the same as owning unless the shares are distributed directly. And that's where the hangup is. The U.S. right now is saying, no, those shares are gonna go to Sequoia. They'll hold them, not ByteDance. And so it really will be 53% owned by U.S. investors. It still leaves ByteDance as the larger holder of things because it's split up between Oracle and Walmart and Sequoia and General Atlantic. So it will, it's all a matter of how many people want to feel about it at this point, right? Yeah, yeah, yeah, because those companies that you met, the U.S. companies are not just gonna all merge and become one super company, I don't think so soon anyway, to be like ByteDance, we got ya. It doesn't work that way. And it may or may not solve any of these problems, right? I mean, the other thing to remember is that TikTok data is still collected. There's nothing in here that says, and we'll also collect less data. No, we're just collecting the same amount of data and giving it to Oracle and Walmart as, and putting it under their control versus putting it entirely under ByteDance's control. So make of that what you will as well. Well, a story continues to unfold. Who knows what we might have for you tomorrow. But for now, if you have thoughts, you can join the conversation in our Discord. Don't need to have to be about TikTok, if we've got anything. And you can join by linking to a Patreon account at patreon.com slash dtns. All right, what's in the mail bag? Oh, Tom, I'm glad you asked. Andrew wrote in about our conversation with Shannon Morse last Friday, and it was a kind of terrible story about a patient who died after a hospital had been attacked and the hospital's system went down and patient had to be transferred to another hospital and died on the way. So it's sort of like, huh, hackers shouldn't attack hospitals, but who's at fault here? Andrew says, assuming the patch from Citrix, which is what the hospital was using, was for the vulnerability exploited by the ransomware, what are your thoughts on the liability to the hospital? Could a wrongful death type suit be brought since one could argue that the patient would have lived if the hospital had applied the patch? There are a lot of what-ifs here, but the liability on the hospital is as interesting, if not more than the fallout for the hacking group. Yes, I don't know what German law is as far as liability in these cases. So I would hesitate to say, you might want to jump to the conclusion to say, like, well, obviously they should have patched it or this person would be alive, but it's usually not as straightforward as that. If there are any compliance officers in Germany that can weigh in on this feedback at dailytechnewshow.com. Then we also got an email from Jason, who was listening to our pre-shared, Good Day Internet, about sharing activity while running and wants us to start a DTNS sharing group. Well, maybe talk about that more on Good Day Internet. I don't know if I want to be sharing my heart rate with the entire audience. But they'll cheer or they'll be concerned. Yeah, but it's a cool idea, Jason. So maybe we'll do something with that. Thank you. Yeah. Hey, shout out to patrons speaking of patrons at our master and grandmaster levels, including Mike Aikens, Tim deputy, and Daniel Dorado. Oh, and don't forget, folks, because you support us on Patreon, and if you don't, we'll wait. Head on over, patreon.com slash DTNS. Sign up for $2 a month and you'll get an RSS feed without commercials and all kinds of bonus content. But because of that, we're able to do special stuff. And Monday, October 5th, we start our creators theme week, looking at how technology has changed and is still changing how people create things like visual effects, costume and props, narrative game design. Got a bunch of excellent guests that Roger has been setting up for us. You won't want to miss it. It all starts Monday, October 5th. Our email address is feedback at dailytechnewshow.com. We love your feedback. Coming, we're also live Monday through Friday. Join us if you can for 30 p.m. Eastern 2030 UTC and find out more at dailytechnewshow.com slash live. Back tomorrow with Patrick Beja. Talk to you then. This show is part of the Frog Pants Network. Get more at frogpants.com. Diamond Club hopes you have enjoyed this program.