Wells Fargo does not want TikTok on its employees’ phones. According to The Information, the financial institution sent its employees a note, telling them to remove the app from corporate devices immediately. TikTok’s Wells Fargo ban would’ve come hot on the heels of a possible Amazon ban if the e-commerce giant didn’t issue a statement to deny that it’s prohibiting employees from installing the app on company-owned phones. A Wells Fargo spokesperson confirmed the company’s move to The Information, explaining that it came to the decision due to concerns about TikTok’s privacy practices:
“We have identified a small number of Wells Fargo employees with corporate-owned devices who had installed the TikTok application on their device. Due to concerns about TikTok’s privacy and security controls and practices, and because corporate-owned devices should be used for company business only, we have directed those employees to remove the app from their devices.”
A separate New York Times report claimed that Amazon told employees to remove the social networking application from devices that can access company email. The note reportedly warned them, as well, that they need to uninstall TikTok by Friday for email access to continue. However, an Amazon spokesperson told Engadget that the email was sent to some of its employees “in error” and that there’s no change to its policies “right now with regard to TikTok.”
The lip-syncing app has been under scrutiny due to concerns raised about Bytedance, its parent company that’s based in Beijing. US authorities are worried about the possibility that Bytedance could be compelled to share data with the Chinese government under the country’s laws. In India, officials even banned the app completely. TikTok denied that it has ever been asked to provide user data to the Chinese government, though, and even pulled out of Hong Kong after China’s new security laws that strengthen internet surveillance in the region came into effect.
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China is a step closer to cracking down on unscrupulous data collection by app developers. This week, the country’s cybersecurity watchdog began seeking comment on the range of user information that apps from instant messengers to ride-hailing services are allowed to collect.
The move follows in the footstep of a proposed data protection law that was released in October and is currently under review. The comprehensive data privacy law is set to be a “milestone” if passed and implemented, wrote the editorial of China Daily, the Chinese Communist Party’s official mouthpiece. The law is set to restrict data practices not just by private firms but also among government departments.
“Some leaking of personal information has resulted in economic losses for individuals when the information is used to swindle the targeted individual of his or her money,” said the party paper. “With increasingly advanced technology, the collection of personal information has been extended to biological information such as an individual’s face or even genes, which could result in serious consequences if such information is misused.”
Apps in China often force users into surrendering excessive personal information by declining access when users refuse to consent. The draft rules released this week take aim at the practice by defining the types of data collection that are “legal, proper and necessary.”
According to the draft, “necessary” data are those that ensure the “normal operation of apps’ basic functions.” As long as users have allowed the collection of necessary data, apps must grant them access.
Here are a few examples of what’s considered “necessary” personal data for different types of apps, as translated by China Law Translate.
Ride-hailing: the registered user’s real identity (normally in the form of one’s mobile phone number in China) and location information
Messaging: the registered user’s real identity and contact list
Payment: the registered user’s real identity, the payer/payee’s bank information
Online shopping: the registered user’s real identity, payment details, information about the recipient like their name, address and phone number
Games: the registered user’s real identity
Dating: the registered user’s real identity, and the age, sex and marital status of the person looking for marriage or dating
There are also categories of apps that are required to grant users access without gathering any personal information upfront: live streaming, short video, video/music streaming, news, browsers, photo editors, and app stores.
It’s worth noting that while the draft provides clear rules for apps to follow, it gives no details on how they will be enforced or how offenders will be punished. For instance, will app stores incorporate the benchmark into their approval process? Or will internet users be the watchdog? It remains to be seen.
Like many overseas Chinese, Derek Weng gets shopping requests from his family and friends whenever he returns to China. Some of the most wanted imported products are maternity items, cosmetics, and vitamin supplements. Many in China still uphold the belief that “imported products are better.”
The demand gave Weng a business idea. In 2018, he founded LemonBox to sell American health supplements to Chinese millennials like himself via online channels. The company soon attracted seed funding from Y Combinator and just this week, it announced the completion of a pre-A round of $2.5 million led by Panda Capital and followed by Y Combinator .
LemonBox tries to differentiate itself from other import businesses on two levels — affordability and personalization. Weng, who previously worked at Walmart where he was involved in the retail giant’s China import business, told TechCrunch that he’s acquainted with a lot of American supplement manufacturers and is thus able to cut middleman costs.
“In China, most supplements are sold at a big markup through pharmacies or multi-level marketing companies like Amway,” Weng said. “But vitamins aren’t that expensive to produce. Amway and the likes spend a lot on marketing and sales.”
Inside LemonBox’s fulfillment center
LemonBox designed a WeChat-based lite app, where users receive product recommendations after taking a questionnaire about their health conditions. Instead of selling by the bottle, the company customizes user needs by offering daily packs of various supplements.
“If you are a vegetarian and travel a lot, and the other person smokes a lot, [your demands] are going to be very different. I wanted to customize user prescriptions using big data,” explained Weng, who studied artificial intelligence in business school.
A monthly basket of 30 B-complex tablets, for instance, costs 35 yuan ($5) on LemonBox. Amway’s counterpart product, a bottle of 120 tablets, asks for 229 yuan on JD.com. That’s about 57 yuan ($9) for 30 tablets.
Selling cheaper vitamins is just a means for LemonBox to attract consumers and gather health insights into Chinese millennials, with which the company hopes to widen its product range. Weng declined to disclose the company’s customer size, but claimed that its user conversion rate is “higher than most e-commerce sites.”
With the new proceeds, LemonBox is opening a second fulfillment center in the Shenzhen free trade zone after its Silicon Valley-based one. That’s to provide more stability to its supply chain as the COVID-19 pandemic disrupts international flights and cross-border trade. Moreover, the startup will spend the money on securing health-related certificates and adding Japan to its sourcing regions.
Screenshot of Lemonbox’s WeChat-based store
In the decade or so when Weng was living in the U.S., the Chinese internet saw drastic changes and gave rise to an industry largely in the grip of Alibaba and Tencent. Weng realized he couldn’t simply replicate America’s direct-to-customer playbook in China.
“In the U.S., you might build a website and maybe an app. You will embed your service into Google, Facebook, or Instagram to market your products. Every continent is connected with one other,” said Weng.
“In China, it’s pretty significantly different. First off, not a lot of people use web browsers, but everyone is on mobile phones. Baidu is not as popular as Google, but everybody is using WeChat, and WeChat is isolated from other major traffic platforms.”
As such, LemonBox is looking to diversify beyond its WeChat store by launching a web version as well as a store through Alibaba’s Tmall marketplace.
“There’s a lot of learning to be done. It’s a very humbling experience,” said Weng.
OTV (formerly known as Olive Tree Ventures), an Israeli venture capital firm that focuses on digital health tech, announced it has closed a new fund totaling $170 million. The firm also launched a new office in Shanghai, China to spearhead its growth in the Asia Pacific region.
OTV currently has a total of 11 companies in its portfolio. This year, it led rounds in telehealth platforms TytoCare and Lemonaid Health, and its other investments include genomic machine learning platform Emedgene; microscopy imaging startup Scopio; and at-home cardiac and pulmonary monitor Donisi Health. OTV has begun investing in more B and C rounds, with the goal of helping companies that have already validated products deal with regulations and other issues as they expand.
OTV focuses on digital health products that have the potential to work in different countries, make healthcare more affordable, and fill gaps in overwhelmed healthcare systems.
Jose Antonio Urrutia Rivas will serve as OTV’s Head of Asia Pacific, managing its Shanghai office and helping the firm’s portfolio companies expand in China and other Asian countries. This brings OTV’s offices to a total of four, with other locations in New York, Tel Aviv and Montreal. Before joining OTV, Rivas worked at financial firm LarrainVial as its Asian market director.
OTV was founded in 2015 by general partners Mayer Gniwisch, Amir Lahat and Alejandro Weinstein. OTV partner Manor Zemer, who has worked in Asian markets for over 15 years and spent the last five living in Beijing, told TechCrunch that the firm decided it was the right time to expand into Asia because “digital health is already highly well-developed in many Asia-Pacific countries, where digital health products complement in-person healthcare providers, making that region a natural fit for a venture capital firm specializing in the field.”
He added that OTV “wanted to capitalize on how the COVID-19 pandemic has thrust the internationalized and interconnected nature of the world’s healthcare infrastructures into the limelight, even though digital health was a growth area long before the pandemic.”
An executive order was just issued from the White House regarding “the Use of Trustworthy Artificial Intelligence in Government.” Leaving aside the meritless presumption of the government’s own trustworthiness and that it is the software that has trust issues, the order is almost entirely hot air.
The EO is like others in that it is limited to what a president can peremptorily force federal agencies to do — and that really isn’t very much, practically speaking. This one “directs Federal agencies to be guided” by nine principles, which gives away the level of impact right there. Please, agencies — be guided!
And then, of course, all military and national security activities are excepted, which is where AI systems are at their most dangerous and oversight is most important. No one is worried about what NOAA is doing with AI — but they are very concerned with what three-letter agencies and the Pentagon are getting up to. (They have their own, self-imposed rules.)
The principles are something of a wish list. AI used by the feds must be:
lawful; purposeful and performance-driven; accurate, reliable, and effective; safe, secure, and resilient; understandable; responsible and traceable; regularly monitored; transparent; and accountable.
I would challenge anyone to find any significant deployment of AI that is all of these things, anywhere in the world. Any agency claims that an AI or machine learning system they use adheres to all these principles as they are detailed in the EO should be treated with extreme skepticism.
It’s not that the principles themselves are bad or pointless — it’s certainly important that an agency be able to quantify the risks when considering using AI for something, and that there is a process in place for monitoring their effects. But an executive order doesn’t accomplish this. Strong laws, likely starting at the city and state level, have already shown what it is to demand AI accountability, and though a federal law is unlikely to appear any time soon, this is not a replacement for a comprehensive bill. It’s just too hand-wavey on just about everything. Besides, many agencies already adopted “principles” like these years ago.
The one thing the EO does in fact do is compel each agency to produce a list of all the uses to which it is putting AI, however it may be defined. Of course, it’ll be more than a year before we see that.
Within 60 days of the order, the agencies will choose the format for this AI inventory; 180 days after that, the inventory must be completed; 120 days after that, the inventory must be completed and reviewed for consistency with the principles; plans to bring systems in line with them the agencies must “strive” to accomplish within 180 further days; meanwhile, within 60 days of the inventories having been completed they must be shared with other agencies; then, within 120 days of completion, they must be shared with the public (minus anything sensitive for law enforcement, national security, etc.).
In theory we might have those inventories in a month, but in practice we’re looking at about a year and a half, at which point we’ll have a snapshot of AI tools from the previous administration, with all the juicy bits taken out at their discretion. Still, it might make for interesting reading depending on what exactly goes into it.
This executive order is, like others of its ilk, an attempt by this White House to appear as an active leader on something that is almost entirely out of their hands. To develop and deploy AI should certainly be done according to common principles, but even if those principles could be established in a top-down fashion, this loose, lightly binding gesture that kind-of, sort-of makes some agencies have to pinky-swear to think real hard about them isn’t the way to do it.