A drugmaker allegedly used free Las Vegas trips, fancy dinners, spa treatments, and Starbucks gift cards to bribe doctors to sell more of its expensive drug

• A company now owned by the $1 billion drugmaker Mallinckrodt allegedly paid doctors and their office staff "bribes" to increase their prescriptions, a whistleblower lawsuit from two former employees claims. 
• The US government recently decided to get involved in the whistleblowers' case.
• The alleged bribes ranged from Starbucks and Dunkin Donuts gift cards to Las Vegas trips, spa treatments and sponsored happy hours, according to the suit.
• Visit Business Insider's homepage for more stories.

To sell its expensive drug, a drugmaker allegedly resorted to bribing doctors and, when that failed, their office staffs, with everything from Starbucks gift cards to free Las Vegas trips, lavish dinners, sponsored happy hours and karaoke excursions.

That's according to allegations in a whistleblower lawsuit by two former employees of the company Questcor. Questcor was acquired by the drugmaker Mallinckrodt in 2014. The Pennsylvania district court suit was initially filed in 2012 and unsealed last month, because the US government decided to intervene.

Mallinckrodt shares dropped 14% on Tuesday after CNN reported on the lawsuit, wiping out more than $200 million in market value. 

At the heart of this lawsuit and others is a controversial, decades-old drug for infantile spasms called Acthar, which became highly profitable for Mallinckrodt thanks to big price increases and pushing doctors to use it "off-label" for new conditions, including to treat the chronic disease multiple sclerosis. 

Acthar cost as much as $150,000 per patient by 2012, according to the whistleblower complaint, much more than a generic steroid alternative, which could cost as little as $800.

The suit alleges that's why Questcor turned to bribes.

Acthar's main competitor "is cheaper, requires a shorter course of treatment and is the standard-of-care for treating exacerbations of MS. Questcor's response to this challenge has been to bribe physicians to prescribe and promote H.P. Acthar Gel instead of Solu-Medrol," the rival product, the complaint alleges.

Mallinckrodt said in a statement that the lawsuit was years old, and allegations largely have to do with "legacy Questcor conduct." The company has been cooperating with the Department of Justice and participating in "advanced settlement talks" over the last few months, it said. 

"As the lawsuit principally concerns allegations of legacy conduct prior to Mallinckrodt's acquisition of Acthar Gel, we do not envision any impact to how Mallinckrodt conducts business today," it said. "Mallinckrodt strongly disagrees with the substance of the complaint and the sensational characterization of the allegations."

Alleged bribes ranged from free junkets to Las Vegas to karaoke excursions and more, whistleblowers say

The alleged bribes given as examples in the lawsuit range dramatically. 

One star sales specialist took doctors on junkets to Las Vegas and gave them spa treatments. The salesperson bragged to one of the whistleblowers of her success going on karaoke excursions with Asian physicians, according to the complaint.

Another doctor, who practiced in Yonkers, NY, started prescribing Acthar after being taken to a lavish dinner with her husband and other doctors at a restaurant in the Ritz-Carlton Hotel in Westchester, the complaint said.

And when doctors wouldn't take meetings with salespeople, the sales personnel allegedly turned to bribing office staff with Dunkin Donuts and Starbucks gift cards. Some of those gifts were valued at as much as $500, according to the complaint.

Those alleged bribes were just some of the many ways the company allegedly pushed Acthar prescriptions, according to the lawsuit. Other methods included doling out research funds to doctors who promoted the product and "exorbitant" speaker fees of $2,000 a presentation or even more, the suit said.

One doctor at the University of Texas, for instance, was allegedly paid $500 a patient for each research trial he led testing out Acthar, plus more to promote the results to doctors all around the US.

"These trials are of dubious scientific value because they were neither placebo-controlled nor double-blind," the lawsuit says.

"None have been published in peer-reviewed journals, none have led to an application to expand the FDA approval for H.P. Acthar Gel, and none have demonstrated that H.P. Acthar Gel is any more efficacious than Solu-Medrol," the competitor.

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The FBI reportedly just raided microbiome-testing startup uBiome as part of an investigation into improper billing

• The FBI raided microbiome testing startup uBiome's San Francisco offices on Friday. 
• The Wall Street Journal, which first reported on the raid, reports that the FBI is investigating uBiome's billing practices. 
• CNBC reports that uBiome routinely charged patients twice for tests. 
• Visit Business Insider's homepage for more stories.

The FBI on Friday raided the San Francisco offices of uBiome, a startup that sells tests that sequence the microbiome, or the assortment of bacteria and other microbes that live in our bodies.

The Wall Street Journal, which first reported on the raid, reported that the FBI is investigating uBiome's billing practices.

UBiome sent Business Insider this statement: "We are cooperating fully with federal authorities on this matter. We look forward to continuing to serve the needs of healthcare providers and patients."

The FBI confirmed that its agents were "conducting court-authorized law enforcement activity" at the address of uBiome's headquarters, but declined to provide further information.

UBiome sells doctor-ordered tests including SmartJane, its test that looks at the vaginal microbiome to test for sexually transmitted diseases as well as chronic vaginal infections, and SmartGut, which looks at the gut microbiome to test for gut conditions and metabolic disorders. Both can be covered by health insurance. uBiome also sells a direct-to-consumer test that doesn't require a prescription called the "Explorer" test. 

Read more: I tried a test that let me peek inside my microbiome, the 'forgotten organ' that scientists say is the future of medicine — and what I learned shocked me

CNBC reports that uBiome routinely charged patients' plans twice for tests. CNBC also reported that health insurer Anthem had flagged the company for its over-billing practices. Anthem did not immediately return a request for comment. 

Scientists have been working on ways to use the microbiome to unlock new treatments for difficult diseases. It's led to new companies — both on the medical side and in agriculture— that are taking a range of approaches to looking at the microbiome. It's often seen as the "forgotten organ." 

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NOW WATCH: Your apartment location can affect how cockroaches, rats, and mice get in. A New York City exterminator told us the places he'd never live.

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Here's why Facebook is paying a fine of $3 billion to $5 billion (FB)

• Facebook is estimating that it could be subject to a $3 to $5 billion fine by the Federal Trade Commission (FTC), according to the company's earnings report filed on Wednesday. 
• The fine could come as a result of Facebook violating a 2011 agreement with the FTC regarding consumer privacy. 
• As part of that agreement, Facebook agreed to get users' consent before sharing their data with third parties, such as Cambridge Analytica. It also agreed to take steps to better protect users' data.
• The FTC began investigating the social-media giant in March 2018 after news of Facebook's mishandling of user data in the case of Cambridge Analytica became public. 
• Visit Business Insider's homepage for more stories.

Facebook said it plans to pay a fine of $3 billion to $5 billion for potentially violating a previous settlement with federal regulators about the social network's privacy practices. 

"In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices," Facebook said in its first-quarter earnings report on Wednesday.

"The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome," Facebook said. 

Facebook didn't provide details about the inquiry or the specific data practices under scrutiny by the Federal Trade Commission (FTC).

So what is Facebook expecting to pay all this money for? 

The FTC began investigating the social-media giant in March 2018 after its mishandling of user data, according to reports. That incident involved the Trump-linked political-research firm Cambridge Analytica, which misappropriated personal information of tens of millions of Facebook members for use in targeted political ads. 

But that's just one of many privacy missteps by Facebook in recent years, including a hacking incident that left personal information of 30 million users exposed. As Business Insider's Rob Price reported this month, Facebook also uploaded the email contact information of 1.5 million new users without informing them or seeking their consent. 

Which of these incidents are covered by the $3 billion to $5 billion fine, and which are not, will be crucial for Facebook and its investors going forward. 

1) the settlement will likely include *all* past consent-decree violations
2) its unlikely FTC will re-open an investigation if they're in the middle of negotiations...

$3-5B will be a win for FB as it'll clear them from the more recent violations too (unencrypted passwd etc)

— ashkan soltani (@ashk4n) April 24, 2019

The settlement that Facebook may have violated was reached in 2011 over separate charges of privacy violations. As a part of that agreement — known as a consent decree — Facebook agreed to get users' consent before sharing their data with third parties, like Cambridge Analytica. It also agreed to takes steps to better protect users' data.

Reports of the potential fine became public in February, but no figures were given at the time other than estimates that it could be in the "multibillion-dollar" range. Facebook's call out of the fine in its earnings report confirms earlier estimates, though no definite numbers will be known until a settlement with the FTC is reached or the case goes to trial. 

Facebook finished Q1 with $45 billion in cash on its balance sheet. Shares of Facebook jumped 5% in after-hours trading on Wednesday.

SEE ALSO: Facebook expects to be hit with $3-5 billion fine by the FTC, as it beats Wall Street's revenue expectations for Q1

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Tim Cook said Apple's fight with the FBI in 2016 was a 'very rigged case,' and he wishes it went to court (AAPL)

• Apple CEO Tim Cook was interviewed by visiting Harvard professor Nancy Gibbs at the TIME 100 event on Tuesday.
• Gibbs asked Cook about privacy — since the last time they saw each other, Apple was in the midst of a privacy battle with the Justice Department over unlocking an iPhone.
• Cook says we've come a long way since Apple opposed the Justice Department's order to assist the FBI in unlocking a terrorist's phone, but says he wishes the case went to court since discovering it was "a very rigged case to begin with."
• Visit Business Insider's homepage for more stories.

In an interview with Nancy Gibbs at the TIME 100 event on Tuesday, Apple CEO Tim Cook said he wished his company's fight with the FBI over the ability to unlock an iPhone had actually gone to court.

"Our battle was over whether or not the government could force Apple to create a tool that could put hundreds of millions of people at risk in order to get into a phone — and we said no, the law does not support the government having the authority to do that," Cook told Gibbs.

In December 2015, the FBI obtained an iPhone 5C from one of the two perpetrators behind a mass shooting in San Bernardino, California, that killed 14 people and injured 22 others. Police killed the two attackers in a shootout, so the FBI was unable to get into the phone it recovered, as it had a 4-digit passcode enabled. The NSA was unable to unlock it, however, so the FBI asked Apple to help build a new operating system that could be installed on the phone and disable its security features — something Tim Cook called at the time the "software equivalent of cancer." Apple opposed the order, citing the security and privacy risks it would pose to other customers, and a hearing was scheduled for March 22.

But just one day before the scheduled hearing with Apple, the government said it found a third party that could help unlock the iPhone, and delayed the hearing. The FBI formally withdrew its request to Apple one week later.

"I wish that case went to court, to be honest," Cook said on Tuesday. "It was dropped the day before, and now after the Inspector General reports have come out, our worst fears have been confirmed: that it was a very rigged case to begin with."

The Inspector General report Cook alluded to, which was published in March 2018, mentioned how "there were misunderstandings and incorrect assumptions" among people working on this case at the FBI, and that Apple's involvement wasn't actually necessary in the first place. The FBI has a Remote Operations Unit (ROU) that's responsible for handling mobile devices like these — and this is the same unit that ultimately figured out how to unlock the shooter's iPhone — but the FBI failed to get the ROU involved before issuing its order to Apple for assistance.

"This was not the government's finest hour," Cook told Gibbs. "I have personally never seen the government apparatus move against a company like it did here in a very dishonest manner. I felt like the naive guy that thought these things didn't happen. They were trying to prevent a discussion or a dialogue or a debate about this. I hope that we've advanced much further than that."

Cook said privacy has become much more meaningful to mainstream Americans now, and reaffirmed Apple's stance on why it's so important.

"In the world where everything is totally open, people begin to guard what it is they will say. Think about where society goes if we're afraid to tell each other our opinions — if we're afraid that somebody's listening, or watching, or monitoring, or we're under surveillance. This is a bad thing inherently in a very broad way, not to mention the manipulation that can go on with pitting different groups against each other."

You can watch Cook's whole interview with Gibbs from the TIME 100 event below (Cook's portion begins about 45 minutes into the video, since the event is still ongoing).

SEE ALSO: Apple will help rebuild Notre-Dame Cathedral after its massive fire, according to CEO Tim Cook

DON'T MISS: The 20 best iPhone tips and tricks to make your life easier

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A group of Microsoft and GitHub employees have come out in support of Chinese tech workers protesting the infamous '996' work hours (MSFT)

• On Monday, a group of Microsoft and GitHub employees published an open letter to show their support for a project called 996.ICU, which protests a harsh tech working culture in China.
• The name of the project is a reference to the idea that many tech workers work 9 a.m. to 9 p.m., six days a week, even though such practices are illegal in China.
• Employees decided to publish this letter because they were concerned that Microsoft is facing pressure to take down this project.
• Visit Business Insider's homepage for more stories.

A group of Microsoft employees are speaking out to support an online protest in China over grueling, 12-hour workdays that organizers say are unhealthy, illegal and increasingly common.

About 20 Microsoft employees signed an open letter published on Monday in support of the so-called 996.ICU project in China.

Tech workers in China started the 996.ICU project in March on code-sharing website GitHub, which is owned by Microsoft. The numbers 996 refer to the concept of working from 9 a.m. to 9 p.m., six days a week.

Such hours, the workers say, are illegal in China even though they say many employers in the country expect it of their workers. The name 996.ICU refers to an ironic saying among Chinese workers: "工作 996,生病 ICU" or "Work by '996', sick in ICU," as in the intensive care unit of a hospital. 

The 996.ICU project is a repository of what is allegedly evidence of these working conditions, as well as a new software license designed to advocate for workers' rights. More specifically, any software project created under the terms of this license cannot be used by companies that break labor laws, per the language contained therein. 

Monday's letter was signed by 50 tech employees altogether, including several from Google, urging Microsoft and GitHub not to remove the 996.ICU project from the GitHub site. Already, Chinese browsers from Tencent, Alibaba, and others have restricted or blocked access to the 996.ICU project, the Microsoft employees' letter said.

"We, the workers of Microsoft and GitHub, support the 996.ICU movement and stand in solidarity with tech workers in China. We know this is a problem that crosses national borders. These same issues permeate across full time and contingent jobs at Microsoft and the industry as a whole," the letter said.

Censorship

The 996 schedule has become a controversial topic. Jack Ma, the cofounder of Alibaba, recently described the 996 schedule last week as a "blessing" for young workers, according to Reuters.

A Microsoft employee who wished to remain anonymous told Business Insider that employees started this petition because they were concerned that Microsoft may be facing pressure to censor the project, in the wake of the alleged moves from Tencent and Alibaba.

"We must entertain the possibility that Microsoft and GitHub will be pressured to remove the repository as well," the letter said.

The Microsoft and GitHub employees who wrote the petition want to make sure that the project to keep the project remains uncensored and available to all, especially in China.

'

Developers outside China have supported this project as well. In less than a month, this project has garnered over 2,500 contributions from 533 developers. The project has also been starred nearly 230,000 times — a way for GitHub users to show their support or interest for a project.

Standing in solidarity

Pooya Parsa, an open source developer from Iran, helped translate the project to Persian. He said a "996" schedule is not common in Iran, but he has previously had experiences with overworking.

"I used to work on such schedule for 1 to 2 years which made serious health problems to me and stopping to pay attention to other daily living matters like family, body health and even improving programming skills," Parsa told Business Insider. "Forcing or even allowing developers to work on such schedule may help short-term success but it finally takes creativity, innovation, and motivation from them."

Read more: He led open source projects in Microsoft's early days of exploring it. Now he's returning as GitHub's new product head

With this letter, employees hope to make a larger statement on labor standards around the world.

"Another reason we must take a stand in solidarity with Chinese workers is that history tells us that multinational companies will pit workers against each other in a race to the bottom as they outsource jobs and take advantage of weak labor standards in the pursuit of profit. We have to come together across national boundaries to ensure just working conditions for everyone around the globe," the letter said.

SEE ALSO: Meet the programmer-turned-drummer-turned-lawyer who's helping open source startups stand their ground against Amazon's cloud amid a 'clash of ideologies'

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NOW WATCH: A recent Harvard study found men who wore boxers had about 25% more sperm than those who wore briefs

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Facebook hired a top State Department lawyer to be its new general counsel (FB)

• Facebook has hired a new general counsel.
• Jennifer Newstead, a top lawyer at the US State Department, is joining the beleaguered social networking firm.
• She is replacing Colin Stretch, who has been planning to leave for nearly a year.
• Visit Business Insider's homepage for more stories.

Facebook has finally found a new general counsel — hiring Jennifer Newstead, a top lawyer at the US State Department, to fill the role.

The social network's previous general counsel, Colin Stretch, originally announced his intention to leave in July 2018. But as the California company lurched from scandal to scandal, he ended up staying on. He will continue to be with Facebook "through the summer to help with the transition," the company said on Monday.

Newstead most recently served as a legal adviser for the US State Department, "overseeing work on all domestic and international legal issues affecting the conduct of US foreign policy," Facebook said in a blog post announcing the news. 

She joins Facebook at a time of extreme upheaval. Over the last two years the company has faced successive crises, from the Cambridge Analytica scandal to its role spreading hate speech that fueled genocide in Myanmar. Public attitudes towards big tech — and Facebook specifically — have soured accordingly, with increasing calls for stricter legislation or even antitrust measures.

"I'm excited to be joining Facebook at an important time and working with such a fantastic team," she said in a statement. "Facebook's products play an important role in societies around the world. I am looking forward to working with the team and outside experts and regulators on a range of legal issues as we seek to uphold our responsibilities and shared values."

On Monday, Facebook also announced a new vice president of global communications — John Pinette, the former VP of marketing and communications at Vulcan, who has also worked at Google and Bill Gates' Gates Ventures. He replaced Caryn Marooney, who announced her exit in February 2019.

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Meet the programmer-turned-drummer-turned-lawyer who's helping open source startups stand their ground against Amazon's cloud amid a 'clash of ideologies'

• Open source licensing lawyer Heather Meeker, one of Business Insider's 100 people transforming business, has helped companies like MongoDB, Redis Labs, and Confluent write new software licenses.
• These companies changed their licenses in response to cloud vendors like Amazon Web Services selling the software they created -- which is completely legal.
• Meeker discusses the controversy around these licenses from advocates who say they go against the definition of open source.
• Meeker helps open source software startups find a middle ground as they strive to create a business model that works.
• See the full list of Business Insider's 100 people transforming business here.

Heather Meeker has seen her share of career changes. She's been a software programmer and a drummer in a rock band. Now, she's very likely the most prominent lawyer working specifically with the world of open source software. 

She's made a name for herself as one of the top experts in the field, especially in the last year. Companies like MongoDB, Redis Labs, and Confluent turned to Meeker to help them write new, more restrictive licenses that prevent big cloud providers like Amazon Web Services, Alibaba, and Tencent from using their code freely. 

She calls 2018 a "watershed year" for these new licenses, which sparked fierce debate in the open source software community. The companies in question argued that while it's completely legal for the big tech companies to take open source code and resell it as a commercial service for profit, it's not especially fair — especially since Amazon, in particular, is seen as not contributing enough code back to the open source communities in return.

"[These companies] were concerned about cloud providers free riding on their development efforts without sharing their modifications," Meeker told Business Insider. "They were concerned about sustaining a business and big companies were just using it for free and making a lot of money from making it available for others. They thought, that's a business problem for us."

The result, as we've seen over the last several months, is a dramatic industry-wide debate over the future of open source: Some companies have chosen to find new monetization models for open source, while others have doubled down and actually released their entire product line-up as open source code.

This all comes as investors flock to open source startups, in the wake of mega-deals like IBM's$34 billion acquisition of Red Hat and Microsoft's $7.5 billion GitHub buy.

Read more: A CEO is calling out Amazon Web Services for encroaching on his company's turf — and some experts are supporting Amazon

Besides her licensing work, Meeker is involved in the startup scene as a founding portfolio partner at OSS Capital, a VC firm specifically aimed at commercial open source software startups. She helps these startups with their business and licensing models, helping them solve a problem that's now decades-old: How do you make money with a business built on free, open source software? 

"I've always understood that you could make money doing open source development, but there were a lot of people who were really skeptical for a long time," Meeker said. "You can make money with an open source business very effectively if you plan it properly."

"Flavor of the month"

Meeker graduated from Yale in 1978 and spent the early '80s as a programmer. Her degree is in economics, but she learned to program on her own as a child, picking up some basics from her computer scientist father. 

"I was a nerd. I love technology all my life," Meeker said. "I learned about it at an early age which at the time was very unusual."

After five years as a programmer, she says she became bored. At the time, she was developing accounting applications, and felt that she had hit a roadblock in her career. So instead, she pursued what she says was her first passion, and became a musician. She was a drummer and a leader of a band that played blues, college radio rock, and anything people wanted them to play.

It was a good time, she says, but it didn't pay the bills. 

"It's easy to explain why I changed from being a musician to a lawyer," Meeker said. "I wanted health insurance. It was fun, but it was not a career. Compared to other lawyers, I deeply appreciate the practice of law as a career because I've been through something much more difficult. I have loved being a lawyer much more than I expected."

She went into law school at UC Berkeley, thinking she would combine law with music and entertainment to become an entertainment lawyer. But soon enough, she realized interesting things were cropping up in technology law, and she changed course.

As a lawyer, she started off doing intellectual property and licensing. It wasn't until a couple years later when she discovered the niche field of open source licensing — open source software is, by definition, free for anybody to use and modify, but licensing is a crucial element that controls what's allowed and what isn't, legally speaking. 

"I set out to learn all I could about it," Meeker said. "In any organization, if you learn a little bit more than the person in the next office, you're the expert. Then they came to me with questions, so I learned more about it. Open source to me is really an interesting thing to focus on."

Meeker expected open source to be like a "flavor of the month;" a fad that would eventually disappear. But it never did.

'A clash of ideologies'

Today, using open source is the rule in the modern software industry, rather than the exception, Meeker says. The world is embracing open source, and more clients have asked her about it. They wanted to use open source software, but they weren't sure how — and when she first started, most corporate counsels simply advised clients to stay away. 

"I thought there has to be a better answer than 'no,'" Meeker said. "I thought there has to be a 'yes, if.' That's how I started my practice by trying not to say no. If you want to be a good business lawyer, you have to give your clients more practical and nuanced advice."

Generally, her clients want to make sure they're in compliance with open source licenses when they use or modify the code. Some clients want to learn how to set up a foundation to run an open source project of their own, or they may have a dispute over the interpretation of a license. Lately, she's been involved in writing new software licenses.

"Most open source licenses don't have any requirements until you distribute the software," Meeker said. "The advent of cloud computing has changed how people deploy software. A lot of people are asking what is that activity that invokes distribution of open source. There is some sort of doctrinal ambiguity about it."

These new licenses have been controversial, as free software activists argue that some of the licenses she's helped write go against the definition of open source. Meeker says she cannot comment on her clients directly, but that she only does what she's been asked to do. 

Read more: An influential group sponsored by the Silicon Valley tech titans warns that efforts are underway to 'undermine the integrity of open source'

More broadly, Meeker says, open source startups are only seeking new ways to protect their business, and that change always comes as a shock to any community.

"Some software that was previously open source became not open source, so people didn't like that," Meeker said. "There was also a clash of ideologies. You have some people who are free software advocates who object to anyone who uses anything but a free software license, and you have businesses saying we can't sustain a business with a free software license."

A problem, she says, is that advocates, developers, and businesses may all have different ideas on what open source should be. For those advocates, open source is an ideal, while developers find it to be an easier way to work together on large software projects. Open source software-based businesses have to balance these principles, while also finding ways to make money. 

In theory, these "ideologies," can't meet, Meeker says, but in practice, they're combined all the time. For example, most of these companies follow a so-called "open core model," which means that they have a free version of their software, and sell an enterprise version that carries more features for businesses and other power users. 

Meeker says that it's important to find these moments of balance as a way to grow the overall open source community, commensurate with its outsized impact in the world.

"In open source world, there's a lot of philosophical debate that gets very contentious," Meeker said. "While it's important to air ideas and have debate, to people outside who are looking in and are not thinking about open source issues everyday, it's very confusing and concerning to them. I would like to see open source be a big tent instead of a little tent."

SEE ALSO: The leader of one of Google's most important cloud businesses explains why it took her 14 years of convincing to join the company

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Facebook may have broken the law by harvesting 1.5 million users' email contacts, experts say (FB)

• Facebook harvested 1.5 million users' email contact data without their consent, Business Insider revealed on Wednesday.
• In doing so, Facebook might have violated US and EU laws, experts say.
• The social network says it unintentionally collected the contacts and is now deleting them.
• It is already under investigation by US regulator the FTC for potentially violating a consent decree.

Facebook harvested 1.5 million users' email contact data without their consent, and experts say that in doing so the company may have violated American and European Union laws.

On Wednesday, Business Insider revealed that the California social network had since May 2016 been scraping some new users' email contact books after asking for their email passwords to "verify" their accounts. Around 1.5 million users ultimately had their data taken without permission; Facebook says this was done "unintentionally" and it is now deleting the data.

Experts speaking to Business Insider on Thursday said that they believed Facebook's actions had potentially violated multiple laws — including a US FTC consent decree, the EU General Data Protection Regulation (GDPR) — the European Union's data privacy regulation — and while there would likely be a strong defence for Facebook, perhaps even the Computer Fraud and Abuse Act (CFAA), a US criminal statute involving computer fraud and abuse.

If their theories are accurate, and regulators ultimately decide to take action against Facebook over the issue, then it could further exacerbate the legal headaches facing the company, which has been battling scandals on multiple fronts for the past two years — from Cambridge Analytica's misappropriation of tens of millions of users' data to the social network's role spreading hate speech that fueled genocide in Myanmar.

A Facebook spokesperson declined to comment.

Facebook is already under investigation by the FTC

Since 2011, Facebook has been subject to a consent decree by US regulator the FTC (Federal Trade Commission), after it settled charges that alleged it had misled users over privacy issues. The FTC is now investigating Facebook over its subsequent privacy practices, namely the Cambridge Analytica scandal. The FTC is inquiring whether the incident violated the 2011 consent decree, and is reportedly close to negotiating a settlement with Facebook that may be in the billions of dollars.

Ashkan Soltani, a former chief technologist for the FTC, said he believed Facebook's actions with users' email contacts may itself have broken the terms of the consent decree if it was using the data. "In my opinion, Facebook's collection and use of users' address books would be another clear violation of the Consent decree and merit an investigation," he said.

"The FTC enforces unfair and deceptive trade practices. On its own, downloading and using users' address books under a deceptive pretext of 'security' would constitute a deceptive practice, even IF the company wasn't under order," he said, speaking in the abstract.

Dina Srinivasan, a Yale Law graduate who recently wrote a paper called "The Antitrust Case Against Facebook," argued that the company's behavior was potentially illegal "on the grounds that Facebook was deceiving consumers when it came to their data and privacy. This can be a violation of 3 things. (1) Federal antitrust laws. (2) Unfair competition laws which every state has a version of. (3) The FTC consent decree."

That said, it's not yet clear whether the FTC will ultimately attempt to take any action against Facebook on this issue, and a spokesperson for the organization didn't respond to a request for comment.

"There are so many different potential violations at this point that I don't know that FTC will investigate this latest ... particularly because it's under a lot of pressure to act on the Cambridge Analytica [incident]," said Sally Hubbard, the director of enforcement strategy at the Open Markets Institute, a research and advocacy group that focuses on issues around corporate power.

She explained that, even if this did constitute a violation, it would be difficult to investigate. "Once there's a revised consent decree in place, it will be hard for the FTC to go back and investigate any misconduct that came before it (depending on the terms of the negotiated agreement settling the claims — it likely will resolve all liability for violations up to the date it's agreed to)."

The Silicon Valley firm could face trouble in Europe too

In May 2018, the European Union started enforcing GDPR, its tough new data protection legislation. Facebook hasn't yet said if any of the affected users signed up in Europe after that data, but it seems extremely likely — in which case some believe Facebook may have fallen afoul of GDPR. 

"It is especially problematic because it was not just data of the user being verified that was ... processed, but the personal data of their contacts too," London-based data protection researcher and Alan Turing institute fellow Michael Veale said in an email.

"It might just have been 1.5m users that were directly affected, but considering the number of unique emails that were harvested and the network information linking them, the total number of individuals affected is likely in the hundreds of millions."

He suggested there may have been multiple breaches of the law, including not informing users, and processing people's data for advertising purposes without informing them. "This could be construed as a general security breach, as Facebook were not aware their system was effectively compromised," he added.

The Irish Data Protection Commission, which is responsible for regulating Facebook's data practices in the EU under GDPR, said it's now in contact with Facebook over the issue and is considering its next move.

"We are currently engaging with Facebook on this issue and once we receive further information we will decide what steps to take," said Graham Doyle, the head of communications at the Irish DPC.

The question of intent

Julian Sanchez, a senior fellow at the Cato Institute, discussed the possibility that Facebook had potentially violated the Computer Fraud and Abuse Act — which would veer into criminal territory. 

"It's an offense under 18 USC 1030 to, among other things, intentionally exceed authorized access to a protected computer. A 'protected computer' is, for practical purposes, any computer connected to the Internet," he said. "So with respect to Facebook's access to users' e-mail contacts, the relevant questions are whether there's any viable argument that it was 'authorized,' which seems like a very hard sell when it's represented as being specifically for the purpose of authentication, and if not, whether the access in excess of authorization was intentional."

He added: "If we were talking about a rapidly-corrected coding mistake that had removed language about scraping the user's contacts, you'd have a plausible case for saying this was access in excess of authorization, but not intentional. But that becomes more difficult to buy the longer they were doing it."

Facebook says that the action was purely unintentional — that it previously notified users that it would be accessing their contacts, but a change inadvertently stripped that warning out. Such an argument would be a defense under the CFAA.

"Can they plead incompetence? In principle, though boy is that embarrassing," Sanchez said. "You'd need to look through internal correspondence to see whether anyone noticed the issue and Facebook decided not to fix it."

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Read more:

• Car-bomb fears and stolen prototypes: Inside Facebook's efforts to protect its 80,000 workers around the globe
• Facebook quietly killed its Building 8 skunkworks unit as it reshuffles its cutting-edge experiments and hardware
• Leaked Andreessen Horowitz data reveals how much Silicon Valley startup execs really get paid, from CEOs to Sales VPs

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Facebook updated a blog post and said the number of unencrypted Instagram user passwords was in the 'millions' not its previous estimate of 'tens of thousands' (FB)

• Facebook has stored millions of Instagram users' passwords in an unencrypted format easily readable by its employees for years. 
• The news came on Thursday by way of an update to an existing company blog post, which in March, announced that unencrypted passwords for hundreds of millions of Facebook and Facebook Lite users had been accessible on its internal servers.
• At the time, the company also said the same issue affected "tens of thousands" of Instagram users.
• On Thursday, that number was updated to "millions." 
• Visit BusinessInsider.com for more stories.

Facebook has stored millions of Instagram users' passwords in an unencrypted format easily readable by its employees for years, the latest in a series of high-profile security missteps committed by the Silicon Valley giant. 

The news came on Thursday by way of an update to an existing company blog post, which in March, announced that unencrypted passwords for hundreds of millions of Facebook and Facebook Lite users had been accessible on its internal servers. At the time, the company also said the same issue affected "tens of thousands" of Instagram users. 

On Thursday, that number was updated to "millions." 

Facebook said that since its previous post — on March 21 — it had discovered "additional logs of Instagram passwords being stored in a readable format," but that its "investigation has determined that these stored passwords were not internally abused or improperly accessed." 

The company said it would notify affected users. 

Back in March, Facebook said it discovered the vulnerability during a "routine security review" at the beginning of the year. The cybersecurity journalist Brian Krebs said the issue existed as far back as 2012. 

The incident adds to a long line of serious scandals and crises to wrack Facebook over the past two years — many of which have been security- or privacy-related. Just yesterday, Business Insider discovered that the tech giant had been harvesting the email contacts of 1.5 million new users without their knowledge or consent.

Read more: Facebook says it 'unintentionally uploaded' 1.5 million people's email contacts without their consent

SEE ALSO: An EU government data watchdog is 'engaging' with Facebook after it harvested 1.5 million users’ email contacts without consent

Join the conversation about this story »

NOW WATCH: We tried the Samsung Galaxy S10 to find out if it's worth the $1,000

source https://www.businessinsider.com/millions-of-unencrypted-instagram-passwords-2019-4

People are pooping more than ever on the streets of San Francisco

• San Francisco is one of the wealthiest cities in America, with an annual household income that's nearly double the national median household income.
• As its wealth has increased, so has economic inequality — a chart of reported incidents of human feces illustrates that division.
• Since 2011, San Francisco has gone from around 5,000 reported instances to over 25,000 in 2018.
• Visit BusinessInsider.com for more stories.

One of America's wealthiest cities has a huge problem with public poop.

Between 2011 and 2018, San Francisco experienced a massive increase in reported incidents of human feces found on public streets.

In 2011, just over 5,500 reports were logged by the San Francisco Department of Public Works; in 2018, the number increased to over 28,000.

Government watchdog Open the Books documented the sharp increase over time in a stunning chart, first spotted by BuzzFeed editor John Paczkowski.

Notably, this is only a chart of documented reports — the actual amount of feces on San Francisco's streets is likely to be even higher than these statistics suggest.

"I will say there is more feces on the sidewalks than I've ever seen growing up here," San Francisco mayor London Breed told NBC in a 2018 interview. "That is a huge problem, and we are not just talking about from dogs — we're talking about from humans."

San Francisco has struggled with a feces problem for years. The city even employs a "Poop Patrol" that aims to keep the streets clean, which focuses on the Tenderloin neighborhood.

But the problem is bigger than just keeping the streets clean — it's a demonstration of the city's struggle to accommodate its homeless population amidst skyrocketing rent prices and a decreasing supply of affordable housing.

A 2017 survey of San Francisco's homeless population counted just shy of 7,500 people living on the street. That population faces limited public resources, and public bathrooms are no exception.

Whether the Poop Patrol is able to reverse the trend on San Francisco's streets remains to be seen, but it's evident that the crew is a bandage on a much bigger problem than dirty streets.

SEE ALSO: The San Francisco Bay Area’s economy is ‘defying gravity’ — and it reveals how powerful the tech industry has become

Join the conversation about this story »

NOW WATCH: Watch Google unveil Stadia, its new video-game platform that streams across devices without a console

source https://www.businessinsider.com/san-francisco-human-poop-problem-2019-4

An EU government data watchdog is 'engaging' with Facebook after it harvested 1.5 million users’ email contacts without consent (FB)

• Ireland's top privacy regulator is in contact with Facebook about the social network's collection of more than one million user email contacts without their consent.
• Business Insider reported on Thursday that Facebook had harvested the contact information since 2016.
• Facebook has said the move was "unintentional" and that it is deleting the data.
• Visit BusinessInsider.com for more stories.

Ireland's Data Protection Commission has reached out to Facebook for information as it considers what steps to take about the revelation that Facebook harvested email contacts of 1.5 million users without their consent.

Business Insider reported on Wednesday that Facebook has collected the contact lists of 1.5 million users new to the social network. The Silicon Valley company said the contact data was "unintentionally uploaded to Facebook," and it is now deleting it.

"We are currently engaging with Facebook on this issue and once we receive further information we will decide what steps to take," Graham Doyle, the head of the Irish Data Protection Commission (DPC) told Business Insider on Thursday. 

The Irish DPC is the official data regulator in the country, and under GDPR — the EU's data protection law — it is responsible for handling all data protection issues relating to Facebook in the 28-country bloc.

Read Business Insider's full report about Facebook's collection of user email contacts here »

• And read more about Facebook's struggles with privacy and fake news:
• Britain is coming for big tech — here's how Silicon Valley is responding
• New Zealand's privacy commissioner lashes out at Facebook, calling those behind the company 'morally bankrupt pathological liars'
• Mark Zuckerberg gets taste of privacy invasion as New York Times reports the contents of his trash
• Facebook is asking some new users for their email passwords and appears to be harvesting their contacts without consent

Join the conversation about this story »

NOW WATCH: A mathematician gave us the easiest explanation of pi and why it's so important

source https://www.businessinsider.com/ireland-dpc-agency-info-facebook-collection-1-5-million-email-contacts-2019-4

House Democrats set April 23 deadline for IRS to turn over Trump's tax returns

• Democratic chairman of the House Ways and Means Committee Richard Neal has set an April 23 deadline for the IRS to release six years of President Donald Trump's tax returns.
• The previous deadline was set for April 10.
• Treasury Secretary Steve Mnuchin and Trump's personal attorney have pushed back on the request, saying that it may go past Congressional authority. 
• Visit BusinessInsider.com for more stories.

The Democratic chairman of the US House Ways and Means Committee on Saturday set a new April 23 deadline for the Internal Revenue Service to comply with his request for six years of President Donald Trump's personal and business tax returns.

In a letter to IRS Commissioner Charles Rettig, Ways and Means Chairman Richard Neal said the tax agency's failure to comply with the new deadline would be interpreted as a denial of his request. The Trump administration has already failed to comply with an earlier April 10 deadline set by Neal.

Neal has argued that the committee is entitled to Trump's returns as part of its duty to oversee taxes, and says that Treasury Secretary Steve Mnuchin is obligated to fulfill the request.

Read more: A fiery congressional meeting over obtaining Trump's tax returns turned into a verbal melee between Democrats and Republicans

Trump's personal attorney William S. Consovoy has pushed back against Congressional efforts to secure the president's tax returns, saying that requests raise "serious issues concerning the constitutional scope of congressional investigative authority." Mnuchin raised the same point on Wednesday.

In his two-page letter, Neal dismissed those concerns, saying they "lack merit."

Trump's tax returns have been a point of contention since his 2016 campaign. Trump is one of the only elected presidents in recent memory who has not released his tax returns. Trump has refused to release the returns, claiming he is under audit. 

Limited information from Trump's taxes suggest that he used tax loopholes to save or recover millions of dollars.

SEE ALSO: Steven Mnuchin unable to meet deadline for Trump's tax return demand, says Treasury Department needs more time to 'carefully' review request

Join the conversation about this story »

source https://www.businessinsider.com/house-panel-chairman-gives-irs-april-23-deadline-on-trump-taxes-2019-4

Australia's prime minister says Assange 'won’t be getting special treatment' as he faces extradition to the US

• Australian Prime Minister Scott Morrison affirmed that WikiLeaks founder Julian Assange will not be receiving "special treatment" following his arrest and potential extradition to the US.
• Morrison told the Australian Broadcasting Corporation that the Australian-born citizen would be at the mercy of the judicial system overseas.
• "It doesn't matter what particular crime it is they've alleged to have committed," Morrison told ABC. "That's the way the system works."
• Visit BusinessInsider.com for more stories.

Australian Prime Minister Scott Morrison affirmed that WikiLeaks founder Julian Assange will not be receiving "special treatment" following his arrest and potential extradition to the US.

Morrison on Thursday told the Australian Broadcasting Corporation that Assange would be receiving the same consular assistance as other Australian citizens.

"When Australians travel overseas and they find themselves in difficulties with the law, well they face the judicial systems of those countries, it doesn't matter what particular crime it is they've alleged to have committed," Morrison told ABC. "That's the way the system works."

"Mr. Assange will get the same support that any other Australian would ... he's not going to be given any special treatment," he said.

Australian-born Assange was arrested by UK police on Thursday morning at the Ecuadorean embassy where he had been holed up for nearly seven years. After his arrest, Assange was taken to court in London and was convicted on a charge of skipping bail in 2012.

Read more: Video shows Julian Assange being forcibly removed from Ecuadorian Embassy after arrest by UK police

US authorities charged Assange with conspiracy to hack classified US government information, The Washington Post reported, and the charges remained under seal until after his arrest. On Thursday, US law enforcement issued an extradition request in relation to Assange's activities with former US Army intelligence analyst Chelsea Manning, who was convicted in 2013 of leaking state secrets to WikiLeaks. (Manning's sentence was later commuted by former President Barack Obama, however she was jailed again this year for refusing to testify before a grand jury.)

The 47-year-old Assange has been living inside Ecuador's embassy in London since 2012, where he was granted asylum. The whistleblower faced allegations of sexual assault in Sweden before seeking protection inside the embassy.

Assange refused to step foot outside the embassy over fears of arrest. Ecuador granted citizenship to Assange in 2018, Reuters reported, as part of an effort to give Assange a pathway out of the embassy. But on Thursday, Ecuador revoked his political asylum, with President Lenín Moreno claiming that the country's patience had "reached its limit."

On May 2, he will appear in a London court via video regarding the extradition request.

SEE ALSO: US asks to extradite Julian Assange over leaked state secrets after he was arrested and forcibly removed from Ecuador's London embassy

Join the conversation about this story »

NOW WATCH: Alexandria Ocasio-Cortez is being praised for her line of questioning at Michael Cohen's hearing — watch it here

source https://www.businessinsider.com/australia-prime-minister-scott-morrison-says-wikileaks-julian-assange-wont-be-getting-special-treatment-2019-4

Uber may owe another $128 million to Google for awards related to Uber vs. Waymo (GOOGL)

• Uber may owe Google $128 million related to arbitration demands against Uber's former VP of Engineering Anthony Levandowski.
• The awards stem from Google v. Levandowski & Ron, and Google v. Levandowski. These two cases are separate from, but related to, the Uber vs. Waymo case that kept both companies in the spotlight last spring.
• The $128 million awards, issued on March 26, were disclosed Thursday in Uber's S-1 filing to go public. 
• Uber could be held liable for the awards granted against Levandowski and his co-defendant Lior Ron because the company previously agreed to cover the pair's legal fees.
• Visit Businessinsider.com for more stories.

An earlier version of this story had an incorrect number, $227 million, in the headline. It has since been updated.

One year after settling the blockbuster Uber vs. Waymo lawsuit, Uber may be on the hook for another $128 million to Google stemming from two separate but related legal issues, according to a disclosure in Uber's S-1 filing to go public.

On March 26, Uber's VP of Engineering Anthony Levandowski was found liable for $127 million, according to the Uber S-1. Levandowksi and Lior Ron, his cofounder at trucking startup Otto, are also jointly liable for a second $1 million award to Google, according the filing. Otto was purchased by Uber in 2016. 

The awards stem from two separate arbitration demands: Google v. Levandowski & Ron, and Google v. Levandowski. Uber may be liable to pay out the awards because the company previously agreed to cover the pair's legal fees. 

The $128 million in awards follow allegations made by Google in October 2016 that Levandowski and Ron broke their employment agreements with Google, and committed fraud related to proprietary self-driving car LIDAR technologies.

Read more: Uber spent $3.3 billion on acquisitions in 2018 and 2019 — 10-times more than Lyft

The total cost of those awards could go up significantly if the panel decides to award Google more money to compensate for the costs associated with its lawsuits, including attorney's fees, according to the S-1.

Uber already settled with Waymo

Uber already paid Google's self-driving car unit an award in a separate but related lawsuit, Uber vs. Waymo. The companies settled after Uber agreed to pay Waymo $245 million in equity. 

That settlement saw Waymo awarded 0.34% of Uber equity pegged to a $72 billion valuation for the ride-hailing company, a person familiar with the settlement told Business Insider at the time. Uber is reportedly expected to IPO with a valuation close to $100 million, which means that today that equity is worth even more.

Because Uber had previously agreed to cover Levandowski and Ron's legal fees, the company said in its filing that it may be obligated to cover their awards owed to Google as well.

However, the company also said it may contest its obligations here.

Uber declined to comment. Google was not immediately available for comment. 

More from Uber's IPO filing:

Uber has filed to go public in what could be the biggest IPO in years

'I won't be perfect, but I will listen to you.' Uber CEO outlines the company's 'enormous' opportunity while acknowledging its turbulent past in letter to investors

SEE ALSO: 'I won't be perfect, but I will listen to you.' Uber CEO outlines the company's 'enormous' opportunity while acknowledging its turbulent past in letter to investors

Join the conversation about this story »

NOW WATCH: Watch Google's Stadia video-game-platform event in 5 minutes

source https://www.businessinsider.com/uber-google-waymo-s-1-2019-4

An American Airlines pilot pleaded guilty to drinking before a flight (AAL)

• American Airlines pilot David Copeland pleaded guilty on Wednesday to performing an aviation task while intoxicated, the Manchester Magistrates' Court confirmed to Business Insider.
• Copeland was scheduled to work a flight from Britain to Philadelphia in February, but was arrested at Britain's Manchester Airport after being suspected of excessive alcohol consumption.
• Copeland's sentencing hearing is scheduled for May 5.
• Visit BusinessInsider.com for more stories.

American Airlines pilot David Copeland pleaded guilty on Wednesday to performing an aviation task while intoxicated, the Manchester Magistrates' Court confirmed to Business Insider. Copeland's sentencing hearing is scheduled for May 5.

American Airlines did not immediately respond to a request for comment.

Read more: Boeing's reputation has been stained by the 737 Max, and it's going to have to fight to convince people the plane is safe

Copeland was scheduled to work a flight from Britain to Philadelphia in February, but was arrested at Britain's Manchester Airport after being suspected of excessive alcohol consumption. According to the Daily Mail, a security guard at the airport smelled alcohol on Copeland's breath during an examination of Copeland's baggage.

Copeland was reportedly instructed to leave the plane's cockpit while it was on the runway before failing a breathalyzer test. He was found to have a blood alcohol concentration of 0.027, according to the Daily Mail report, and said he had consumed alcohol 12 hours earlier.

Are you a flight attendant? Do you have a story to share? Contact this reporter at mmatousek@businessinsider.com.

• Read more:
• Pilots who fly for Amazon Air are protesting poor working conditions and pushing for a better contract
• Boeing reportedly made the flight-control system that mistakenly activated during 2 deadly crashes 4 times stronger while creating the 737 Max
• JetBlue is going to London in 2021
• Delta Air Lines beats on earnings and guidance, announces record revenue

SEE ALSO: 21 things flight attendants wish passengers would stop doing

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source https://www.businessinsider.com/american-airlines-pilot-pleads-guilty-to-drinking-before-flight-2019-4

Amazon helped police plant fake packages to try and trap thieves

• Amazon has helped police lure potential thieves with fake packages that are rigged with GPS devices, according to a report by Motherboard.
• The tech giant reportedly helped the Hayward, California police department carry out a sting called "Operation Safe Porch."
• "Operation Safe Porch" is different from Amazon's internal stings, in which the company plants empty packages with fake labels in delivery trucks to try and catch drivers who might be stealing. 
• Visit BusinessInsider.com for more stories.

Amazon has helped police lure potential thieves with fake packages, according to a report by Motherboard, a Vice site specializing in technology news. 

The tech giant helped the Hayward, California police department carry out a sting, called "Operation Safe Porch," that involved planting Amazon-branded "bait" packages on porches last fall that were rigged with GPS tracking devices, Motherboard reported. 

The report cites emails between Amazon's "national package theft team" and the Hayward Police Department, which reveal details of the program. Amazon provided the police department with boxes, tape, and lithium ion stickers for the sting, according to the emails. 

Read more: Amazon plants fake packages in delivery trucks as part of an undercover ploy to 'trap' drivers who are stealing

In response to the report, an Amazon spokesperson told Motherboard: "We appreciate the effort by local law enforcement to tackle package theft in their communities, and we remain committed to assisting them in their efforts however we can." 

It's not known whether the sting resulted in any arrests.

This isn't the first time Amazon has been involved in a sting operation to catch potential thieves.

As Business Insider reported in September, Amazon plants empty packages with fake labels in delivery trucks to try and catch drivers who might be stealing. 

SEE ALSO: Missing wages, grueling shifts, and bottles of urine: The disturbing accounts of Amazon delivery drivers may reveal the true human cost of 'free' shipping

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source https://www.businessinsider.com/amazon-helped-police-plant-fake-packages-to-try-and-trap-thieves-report-2019-4