Daily Business Briefing
Follow our latest coverage of business, markets and economy.
Jack Nicas and
Apple once again took aim at the vast digital-advertising industry on Monday and unveiled a number of changes to protect iPhones users’ privacy and strengthen its position as a gatekeeper between consumers and the rest of the digital industry.
Apple said that new iPhone software scheduled for this fall, called iOS 15, would add a so-called app privacy report that tells people what data apps are collecting about them. The report will display when an app has gained access to sensitive parts of the device, such as the photo album, contacts list or microphone. Google announced a similar feature for Android devices last month.
Apple also said its Mail app would now better protect the identities of users from people who send them emails and would block the ability of marketers to track whether a person opens an email.
Apple also showed off a new service that hides users’ internet traffic from internet providers, much like the virtual private network, or V.P.N., services sold by a number of other companies.
The technology routes a user’s internet traffic through computer servers designed to conceal the user’s identity and location. Such technology has been used to get around government firewalls that censor the internet, such as in China, and it’s unclear how Apple’s service would work there. The service would be available to people who pay extra for Apple’s iCloud data storage.
Apple’s privacy push has put the company at odds with some big rivals, most notably Facebook, that rely on collecting data about people to better target ads. Despite protests from some corners of Silicon Valley, Monday’s announcements show that Apple has doubled down on privacy features.
Yet the company’s public branding on privacy is also undermined by its business in China, where it is putting its Chinese customers’ data at risk and aiding the government’s censorship operation to placate authorities there, The New York Times reported last month.
On Monday, Apple also announced new features designed to make the iPhone the only item someone needs to carry with them when leaving home. Apple has already allowed people to pay for items in stores and get through subway turnstiles with iPhones. Now it is trying to move government identification cards onto the devices. Apple said people could soon scan their driver’s licenses to use digital versions of the IDs, which will be accepted in some participating states and airport security checkpoints in the United States.
Apple is also trying to replace physical keys. The company said it was making it easier to use digital keys to unlock doors at homes, offices and hotels. Hyatt Hotels plans to use the technology at more than 1,000 properties beginning in the fall, Apple said.
Apple is also greatly expanding FaceTime, its videoconferencing service. For more than a decade, FaceTime was an app exclusive to Apple users. But it soon will be opened to web browsers, which will also allow non-Apple devices like Android phones to participate in FaceTime calls.
Apple is adding a host of features that FaceTime callers can use together in a group session. A group on a video call will be able to listen to music or stream movies together. They can also use some apps together — like a delivery app to take turns adding food to an order before meeting up.
The new mobile operating system will also add a text-recognition ability to the iPhone camera, allowing a photo of handwritten text to be automatically transcribed into typed text or a photo of a billboard with a phone number to enable you to dial that phone number.
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Justice Dept. Recovers Millions from Colonial Pipeline Hack
The Justice Department said on Monday that it had recovered the majority of the ransom paid to the hackers who shut down the computer systems of the Colonial Pipeline last month.
The Department of Justice, working with our partners, is committed to using all of our tools at — all the tools at our disposal to disrupt these networks and the abuse of the online infrastructure that allows this threat to persist. After Colonial Pipeline’s quick notification to law enforcement, and pursuant to a seizure warrant issued by the United States District Court for the Northern District of California earlier today, the Department of Justice has found and recaptured the majority of the ransom Colonial paid to the DarkSide network in the wake of last month’s ransomware attack. Today, we turned the tables on DarkSide. By going after the entire ecosystem that fuels ransomware and digital extortion attacks, including criminal proceeds in the form of digital currency, we will continue to use all of our tools and all of our resources to increase the cost and the consequences of ransomware attacks and other cyber-enabled attacks.
Katie Benner and
The Justice Department said on Monday that it had seized much of the ransom that a major U.S. pipeline operator had paid last month to a Russian hacking collective, turning the tables on the hackers by reaching into a digital wallet to snatch back millions of dollars in cryptocurrency.
Investigators in recent weeks traced 75 Bitcoins worth more than $4 million that Colonial Pipeline had paid to the hackers as the attack shut down its computer systems, prompting fuel shortages, a spike in gasoline prices and chaos at airlines.
Federal investigators tracked the ransom as it moved through a maze of at least 23 different electronic accounts belonging to DarkSide, the hacking group, before landing in one that a federal judge allowed them to break into, according to law enforcement officials and court documents.
The Justice Department said it seized 63.7 Bitcoins, valued at about $2.3 million. (The value of a Bitcoin has dropped over the past month.)
“The sophisticated use of technology to hold businesses and even whole cities hostage for profit is decidedly a 21st-century challenge, but the old adage ‘follow the money’ still applies,” Lisa O. Monaco, the deputy attorney general, said at the news conference at the Justice Department.
Law enforcement officials highlighted the seizure in an effort to warn cybercriminals that the United States planned to take aim at their profits, which are often gained through cryptocurrencies like Bitcoin. It was also intended to encourage victims of ransomware attacks — which occur every eight minutes, on average — to notify the authorities to help recover ransoms.
For years, victims have opted to quietly pay cybercriminals, calculating that the payment would be cheaper than rebuilding data and services. But the payments — which collectively total billions of dollars — have funded and emboldened ransomware groups.
Justice Department officials said that Colonial’s willingness to quickly loop in the F.B.I. helped recoup the ransom portion, and they credited the company for its role in a first-of-its-kind effort by a new ransomware task force in the department to hijack a cybercrime group’s profits.
The Justice Department’s announcement also came before President Biden’s scheduled meeting with President Vladimir V. Putin of Russia next week in Geneva, where Mr. Biden is expected to address what American officials see as the Kremlin’s willingness to provide protection for hackers. Russia typically does not arrest or extradite suspects in ransomware attacks.
The New York Times reported last month that Colonial Pipeline’s ransom payout had moved out of DarkSide’s Bitcoin wallet, though it was not clear who had orchestrated the move.
On Monday, the government filled in some of the blanks. DarkSide operates by providing ransomware to affiliates. In exchange, DarkSide reaps a cut of their profits.
Officials said they had identified a virtual currency account, often referred to as a wallet, that DarkSide used to collect payment from a ransomware victim — identified in court papers only as Victim X, but whose hacking details match Colonial’s.
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The Atlantic intends to voluntarily recognize a newly formed union of editorial workers, the magazine’s editor in chief, Jeffrey Goldberg, said Monday.
Staff members announced on Monday morning that they were forming a union affiliated with the NewsGuild, which also represents employees at The New York Times and many other outlets. The union will cover about 85 employees, including writers, editors, fact checkers and producers.
The Atlantic Union said in a statement posted on Twitter that although the magazine was thriving, “the American press — its freedoms, its stability and its future — is at a precarious moment.”
“We believe that we are stronger collectively than individually, and that the future of journalism is brighter when its workers are united,” the statement said.
Mr. Goldberg said in a note to staff on Monday that the company had received the request to recognize the union that morning.
“I’m writing to let you know that we have decided to work with the organizers of this effort on an agreement to voluntarily recognize the Atlantic editorial bargaining unit,” Mr. Goldberg wrote in the email. “We look forward to meeting together to chart a path forward.”
The Atlantic Union is the latest in a recent spate of organizing efforts across digital media. Journalists at Insider and tech workers at The New York Times announced in April that they had formed unions with the NewsGuild. The New York Times leadership has said it will not voluntarily recognize the tech workers’ union, pushing the matter to a formal vote with the National Labor Relations Board.
A group of investors, including the Blackstone Group and the Carlyle Group, agreed to buy the medical supplies provider Medline Industries for more than $30 billion, the company announced on Saturday. It’s the biggest leveraged buyout since the 2008 financial crisis — and a sign that private equity firms are ready to open their wallets for more (and bigger) deals.
Buyout firms that take over companies using lots of debt are now sitting on $1.6 trillion in so-called dry powder, according to Preqin, or capital committed by investors to private equity funds that’s not yet spent. These firms have also continued fund-raising at a healthy pace.
That has filled private equity’s war chests with cash that managers are increasingly under pressure to spend — or risk the ire of investors who don’t want their money just sitting around. Some of those investors have also wanted to invest directly in deals alongside the private equity firms, in hopes of capturing some of the same investment returns that the buyout firms enjoy.
That has led to a revival of strategies used before the financial crisis. Beyond the growing size of leveraged buyouts, private equity shops are teaming up to buy targets, a practice that had fallen out of favor (and ran into concerns about potential antitrust violations). That said, the Medline deal isn’t exactly like the club deals of before: It involves less debt than previous buyouts, and the private equity buyers are keeping the current management.
Medline, which is based in Northfield, Ill., makes a wide variety of medical supplies for hospitals and other health care centers. The company, which collected $17.5 billion in revenue last year, has been privately held for decades and will continue to count its founding Mills family as its largest shareholder after the leveraged buyout.
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Global Minimum Tax Would ‘End the Race to the Bottom,’ Yellen Says
Janet L. Yellen, the Treasury secretary, said a minimum tax for corporations would improve global economic conditions and encourage countries to compete on positive bases, like infrastructure. G7 leaders agreed on Saturday to back a global corporate tax rate of at least 15 percent.
“For too long, there has been a global race to the bottom in corporate taxes, where countries compete by lowering their tax rates instead of the well-being of their citizens and natural environments. The G7 has taken significant steps this weekend to end the existing harmful dynamic, making commitments today that provide tremendous momentum towards achieving a robust global minimum tax at a rate of at least 15 percent. That global minimum tax would end the race to the bottom in corporate taxation and ensure fairness for the middle class and working people in the U.S. and around the world. The global minimum tax would also help the global economy thrive by leveling the playing field for businesses and encouraging countries to compete on positive bases such as educating and training our workforces, and investing in research and development and infrastructure.” Reporter: “The French wanted to target Amazon and Facebook. What impact does today’s deal have on companies like those?” “It will include large, profitable firms and those firms, I believe, will qualify by almost any definition. And essentially what we have agreed is that we will reallocate taxing rights for a portion of the excess or residual profits of those companies to jurisdictions where they have market activity on the basis of the distribution of that activity. And so, that is intended to replace an approach that focused on just a few U.S. digital giants. And the agreement is that this new approach will replace an approach that we found objectionable, that targeted large, successful U.S. digital firms.”
Finance leaders from the Group of 7 countries unveiled a broad agreement on Saturday that aims to stop large multinational companies from seeking out tax havens and force them to pay more of their income to governments.
The New York Times’s Alan Rappeport covered the news from London. Here are the key elements of the plan.
The agreement aims for a new global minimum tax rate of at least 15 percent that companies would have to pay regardless of where they locate their headquarters.
Some of the largest multinational companies — technology giants like Amazon, Facebook and Google as well as other big global businesses — may also have to pay taxes to countries based on where their goods or services are sold, regardless of whether they have a physical presence in that nation.
To prevent individual countries from imposing dozens of digital taxes around the world, the agreement would apply a new tax to large businesses with a profit margin of at least 10 percent. The tax would be applied to at least 20 percent of profit exceeding that 10 percent margin “for the largest and most profitable multinational enterprises.”
Huge sums of money are at stake. A report this month from the EU Tax Observatory estimated that a 15 percent minimum tax would yield an additional 48 billion euros, or $58 billion, a year. The Biden administration projected in its budget last month that the new global minimum tax system could help bring in $500 billion in tax revenue over a decade to the United States.
Treasury Secretary Janet Yellen, who traveled on Friday to the G7 meeting in London to win support for the landmark tax agreement, defended the plan on Sunday. “I honestly don’t think there’s going to be a significant impact on corporate investment,” she said.
Next month, the Group of 7 countries must sell the concept to finance ministers from the broader Group of 20 nations that are meeting in Italy. If that is successful, officials hope that a final deal can be signed by Group of 20 leaders when they reconvene in October.
Stocks were mixed on Monday, with the S&P 500 ticking down less than 0.1 percent and the Nasdaq composite gaining 0.5 percent.
Biogen shares rose 40 percent after the Food and Drug Administration approved an Alzheimer’s drug manufactured by the company. Biogen is expected to reap billions of dollars from the drug.
A measure of investor confidence in the eurozone for June, published by Sentix, jumped to its highest reading since March 2018. Economists at Pantheon Macroeconomics noted that most of the increase was because of an improving assessment of the current situation of the region’s economy, pointing out that future expectations dipped slightly.
European indexes were mostly higher. The Stoxx Europe 600 rose 0.2 percent. Asian indexes were mixed. The Hang Seng in Hong Kong fell 0.5 percent and the Nikkei 225 in Japan rose 0.3 percent.
Over the weekend, finance leaders from the Group of 7 countries agreed to back a new global minimum tax rate of at least 15 percent that companies would have to pay regardless of where they were based. The tax is expected to affect some large technology companies. The technology-composite Nasdaq was slightly lower at the start of trading.
Bonds
The 10-year yield on U.S. Treasury notes rose to 1.57 percent, reversing some of Friday’s decline, when the yield dropped seven basis points, or 0.07 percent, after May’s jobs report by the Labor Department showed less hiring than analysts expected. On Friday, investors pulled back on expectations about how soon the Federal Reserve might consider reducing its monetary stimulus.
On Sunday, Treasury Secretary Janet L. Yellen said “a slightly higher interest rate environment” would “actually be a plus for society’s point of view and the Fed’s point of view,” Bloomberg reported.
Oil
Oil prices fell. Futures on West Texas Intermediate, the U.S. crude benchmark, declined 0.5 percent to $69.23 a barrel.
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SKIP ADVERTISEMENTJeff Bezos announced on Monday that he would be on board when his rocket company, Blue Origin, conducts its first human spaceflight next month. He said his brother Mark Bezos would join him on the flight. Blue Origin is also auctioning off a passenger seat on the New Shepard space capsule, which is set to take off on July 20. Bidding has reached almost $3 million with nearly 6,000 participants from 143 countries, the company said. “Ever since I was five years old, I’ve dreamed of traveling to space,” Mr. Bezos said on Instagram, calling the trip, “The greatest adventure, with my best friend.”
Bre Starr, a 34-year-old pizza delivery driver who has been out of work for more than a year, will be among the first to lose her jobless benefits in the next few weeks. That’s because Ms. Starr lives in Iowa, where the governor has decided to withdraw from all federal pandemic-related jobless assistance on June 12.
Iowa is one of 25 states, all led by Republicans, that have recently decided to halt some or all emergency benefits months ahead of schedule. With a U.S. Labor Department report on Friday showing that job growth fell below expectations for the second month in a row, Republicans stepped up their argument that pandemic jobless relief is hindering the recovery, The New York Times’s Patricia Cohen and Sydney Ember report.
The assistance, renewed in March and funded through Sept. 6, doesn’t cost the states anything. But business owners and managers have argued that the income, which enabled people to pay rent and stock refrigerators when much of the economy shut down, is now dissuading them from applying for jobs.
“I’m a Type 1 diabetic, so it’s really important for me to stay safe from getting Covid,” Ms. Starr said, explaining that she was more prone to infection. “I know that for myself and other people who are high risk, we cannot risk going back into the work force until everything is good again.”
Most economists say there is no clear, single explanation yet for the difficulty that some employers are having in hiring. Government relief may play a role in some cases, but so could a lack of child care, continuing fears about infection, paltry wages, difficult working conditions and normal delays associated with reopening a mammoth economy.
The particular complaints that government benefits are sapping the desire to work have, nonetheless, struck a chord among Republican political leaders.
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SKIP ADVERTISEMENTAt least 12,000 people descended on Miami on Friday and Saturday, flocking to the largest Bitcoin conference in the world and the first major in-person business conference since the pandemic began.
Bitcoin 2021, an occasional gathering of digital currency enthusiasts run by a magazine named after the cryptocurrency, heralded the receding of the pandemic, with comfortingly familiar and mundane elements of a business conference: the branded plastic sunglasses, brightly colored sponsor booths, lanyards and panels.
The exuberance of being in person, indoors, in a crowd for the first time in more than a year was electric, reports Erin Griffith for The New York Times. Everyone hugged, no one masked. The money zipped between digital wallets. The conference swag included neon fanny packs, festival bracelets and a Lamborghini car. The jargon — stablecoin, peer-to-peer, private key — flowed. So did the liquor.
It was another sign that the often absurd world of digital currencies was inching its way toward mainstream acceptance, or at least mainstream curiosity. Since late last year, Bitcoin has been on a wild ride, setting price records. Even a plunge from a high of $64,000 in April to $36,000 now did not dampen spirits. They’re BTD — buying the dip. Wall Street bankers, institutional investors and Senator Cynthia Lummis, a Republican from Wyoming, all came to Miami.
There was a reason we were in Miami and not New York, San Francisco or Los Angeles. The city has gone full crypto.
Bitcoin A.T.M.s sprinkled the Wynwood neighborhood. A cryptocurrency exchange called FTX recently bought the naming rights to the Miami Heat’s arena. Miami’s mayor, Francis Suarez, announced this year that the city would accept tax payments in cryptocurrency, let its employees collect salaries with it and explore holding some on its balance sheet.
Onstage, Tyler and Cameron Winklevoss, entrepreneurs and cryptocurrency billionaires, preached to the choir. Cameron Winklevoss wore a T-shirt with a picture of the Federal Reserve building captioned “Rage Against the Machine,” a reference to how cryptocurrency was not controlled by a central government or bank.
Later, Jack Dorsey, chief executive of Twitter and the payments company Square, offered his own endorsement. “If I were not at Square or Twitter, I would be working on Bitcoin,” he said.
On Saturday, the conference played a video of Nayib Bukele, the president of El Salvador, announcing a bill to make Bitcoin legal tender in the country. The audience leapt to a roaring standing ovation.
Today in the On Tech newsletter, Shira Ovide shares what you need to know about the dispute between some developers and Apple, where the tech giant and the unhappy app makers both have a point, and her suggestions for reaching app peace.