The Biden administration tripled down on its commitment to reining in powerful tech companies Tuesday, proposing committed Big Tech critic Jonathan Kanter to lead the Justice Department’s antitrust division.
Kanter is a lawyer with a long track record of representing smaller companies like Yelp in antitrust cases against Google. He currently practices law at his own firm, which specializes in advocacy for state and federal antitrust enforcement.
“Throughout his career, Kanter has also been a leading advocate and expert in the effort to promote strong and meaningful antitrust enforcement and competition policy,” the White House press release stated. Progressives celebrated the nomination as a win, though some of Biden’s new antitrust hawks have enjoyed support from both political parties.
Jonathan Kanter's nomination to lead @TheJusticeDept’s Antitrust Division is tremendous news for workers and consumers. He’s been a leader in the fight to check consolidated corporate power and strengthen competition in our markets. https://t.co/mLQACA0c4j
— Elizabeth Warren (@SenWarren) July 20, 2021
The Justice Department already has a major antitrust suit against Google in the works. The lawsuit, filed by Trump’s own Justice Department, accuses the company of “unlawfully maintaining monopolies” through anti-competitive practices in its search and search advertising businesses. If successfully confirmed, Kanter would be positioned to steer the DOJ’s big case against Google.
In a 2016 NYT op-ed, Kanter argued that Google is notorious for relying on an anti-competitive “playbook” to maintain its market dominance. Kanter pointed to Google’s long history of releasing free ad-supported products and eventually restricting competition through “discriminatory and exclusionary practices” in a given corner of the market.
Kanter is just the latest high-profile Big Tech critic that’s been elevated to a major regulatory role under Biden. Last month, Biden named fierce Amazon critic Lina Khan as FTC chair upon her confirmation to the agency. In March, Biden named another noted Big Tech critic, Columbia law professor Tim Wu, to the National Economic Council as a special assistant for tech and competition policy.
All signs point to the Biden White House gearing up for a major federal fight with Big Tech. Congress is working on a set of Big Tech bills, but in lieu of — or in tandem with — legislative reform, the White House can flex its own regulatory muscle through the FTC and DOJ.
In new comments to MSNBC, the White House confirmed that it is also “reviewing” Section 230 of the Communications Decency Act, a potent snippet of law that protects platforms from liability for user-generated content.
The Biden administration has formally accused China of the mass-hacking of Microsoft Exchange servers earlier this year, which prompted the FBI to intervene as concerns rose that the hacks could lead to widespread destruction.
The mass-hacking campaign targeted Microsoft Exchange email servers with four previously undiscovered vulnerabilities that allowed the hackers — which Microsoft already attributed to a China-backed group of hackers called Hafnium — to steal email mailboxes and address books from tens of thousands of organizations around the United States.
Microsoft released patches to fix the vulnerabilities, but the patches did not remove any backdoor code left behind by the hackers that might be used again for easy access to a hacked server. That prompted the FBI to secure a first-of-its-kind court order to effectively hack into the remaining hundreds of U.S.-based Exchange servers to remove the backdoor code. Computer incident response teams in countries around the world responded similarly by trying to notify organizations in their countries that were also affected by the attack.
In a statement out Monday, the Biden administration said the attack, launched by hackers backed by China’s Ministry of State Security, resulted in “significant remediation costs for its mostly private sector victims.”
“We have raised our concerns about both this incident and the [People’s Republic of China’s] broader malicious cyber activity with senior PRC Government officials, making clear that the PRC’s actions threaten security, confidence, and stability in cyberspace,” the statement read.
The National Security Agency also released details of the attacks to help network defenders identify potential routes of compromise. The Chinese government has repeatedly denied claims of state-backed or sponsored hacking.
The Biden administration also blamed China’s Ministry of State Security for contracting with criminal hackers to conduct unsanctioned operations, like ransomware attacks, “for their own personal profit.” The government said it was aware that China-backed hackers have demanded millions of dollars in ransom demands against hacked companies. Last year, the Justice Department charged two Chinese spies for their role in a global hacking campaign that saw prosecutors accuse the hackers of operating for personal gain.
Although the U.S. has publicly engaged the Kremlin to try to stop giving ransomware gangs safe harbor from operating from within Russia’s borders, the U.S. has not previously accused Beijing of launching or being involved with ransomware attacks.
“The PRC’s unwillingness to address criminal activity by contract hackers harms governments, businesses, and critical infrastructure operators through billions of dollars in lost intellectual property, proprietary information, ransom payments, and mitigation efforts,” said Monday’s statement.
The statement also said that the China-backed hackers engaged in extortion and cryptojacking, a way of forcing a computer to run code that uses its computing resources to mine cryptocurrency, for financial gain.
The Justice Department also announced fresh charges against four China-backed hackers working for the Ministry of State Security, which U.S. prosecutors said were engaged in efforts to steal intellectual property and infectious disease research into Ebola, HIV and AIDS, and MERS against victims based in the U.S., Norway, Switzerland and the United Kingdom by using a front company to hide their operations.
“The breadth and duration of China’s hacking campaigns, including these efforts targeting a dozen countries across sectors ranging from healthcare and biomedical research to aviation and defense, remind us that no country or industry is safe. Today’s international condemnation shows that the world wants fair rules, where countries invest in innovation, not theft,” said deputy attorney general Lisa Monaco.
The Biden administration just introduced a sweeping, ambitious plan to forcibly inject competition into some consolidated sectors of the American economy — the tech sector prominent among them — through executive action.
“Today President Biden is taking decisive action to reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses,” a new White House fact sheet on the forthcoming order states.
The order, which Biden will sign Friday, initiates a comprehensive “whole-of-government” approach that loops in more then twelve different agencies at the federal level to regulate monopolies, protect consumers and curtail bad behavior from some of the world’s biggest corporations.
In the fact sheet, the White House lays out its plans to take matters to regulate big business into its own hands at the federal level. As far as tech is concerned, that comes largely through emboldening the FTC and the Justice Department — two federal agencies with antitrust enforcement powers.
Most notably for Big Tech, which is already bracing for regulatory existential threats, the White House explicitly asserts here that those agencies have legal cover to “challenge prior bad mergers that past Administrations did not previously challenge” — i.e., unwinding acquisitions that built a handful of tech companies into the behemoths they are today. The order calls on antitrust agencies to enforce antitrust laws “vigorously.”
Federal scrutiny will prioritize “dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by ‘free’ products, and the effect on user privacy.” Facebook, Google and Amazon are particularly on notice here, though Apple isn’t likely to escape federal attention either.
“Over the past 10 years, the largest tech platforms have acquired hundreds of companies — including alleged ‘killer acquisitions’ meant to shut down a potential competitive threat,” the White House wrote in the fact sheet. “Too often, federal agencies have not blocked, conditioned, or, in some cases, meaningfully examined these acquisitions.”
The biggest tech companies have regularly defended their longstanding strategy of buying up the competition by arguing that because those acquisitions went through without friction at the time, they shouldn’t be viewed as illegal in hindsight. In no uncertain terms, the new executive order makes it clear that the Biden administration isn’t having any of it.
The White House also specifically singles out internet service providers for scrutiny, ordering the FCC to prioritize consumer choice and institute broadband “nutrition labels” that clearly state speed caps and hidden fees. The FCC began working on the labels in the Obama administration but the work was scrapped after Trump took office.
The order also directly calls on the FCC to restore net neutrality rules, which were stripped in 2017 to the widespread horror of open internet advocates and most of the tech industry outside of the service providers that stood to benefit.
The White House will also tell the FTC to create new privacy rules meant to guard consumers against surveillance and the “accumulation of extraordinarily amounts of sensitive personal information,” which free services like Facebook, YouTube and others have leveraged to build their vast empires. The White House also taps the FTC to create rules that protect smaller businesses from being preempted by large platforms, which in many cases abuse their market dominance with a different sort of data-based surveillance to out-compete up-and-coming competitors.
Finally, the executive order encourages the FTC to put right-to-repair rules in place that would free consumers from constraints that discourage DIY and third-party repairs. A new White House Competition Council under the director of the National Economic Council will coordinate the federal execution of the proposals laid out in the new order.
The antitrust effort from the executive branch mirrors parallel actions in the FTC and Congress. In the FTC, Biden has installed a fearsome antitrust crusader in Lina Khan, a young legal scholar and fierce Amazon critic who proposes a philosophical overhaul to the way the federal government defines monopolies. Khan now leads the FTC as its chair.
In Congress, a bipartisan flurry of bills intended to rein in the tech industry are slowly wending their way toward becoming law, though plenty of hurdles remain. Last month, the House Judiciary Committee debated the six bills, which were crafted separately to help them survive opposing lobbying pushes from the tech industry. These legislative efforts could modernize antitrust laws, which have failed to keep pace with the modern realities of giant, internet-based businesses.
“Competition policy needs new energy and approaches so that we can address America’s monopoly problem,” Sen. Amy Klobuchar, a prominent tech antitrust hawk in Congress, said of the executive order. “That means legislation to update our antitrust laws, but it also means reimagining what the federal government can do to promote competition under our current laws.”
Citing the acceleration of corporate consolidation in recent decades, the White House argues that a handful of large corporations dominates across industries, including healthcare, agriculture and tech and consumers, workers and smaller competitors pay the price for their outsized success. The administration will focus antitrust enforcement on those corners of the market as well as evaluating the labor market and worker protections on the whole.
“Inadequate competition holds back economic growth and innovation … Economists find that as competition declines, productivity growth slows, business investment and innovation decline, and income, wealth, and racial inequality widen,” the White House wrote.
It is said that the best way to lose the next war is to keep fighting the last one. The citadels of the medieval ages were an effective defense until gunpowder and cannons changed siege warfare forever. Battlefield superiority based on raw troop numbers ceded to the power of artillery and the machine gun.
During World War I, tanks were the innovation that literally rolled over fortifications built using 19th-century technology. Throughout military history, innovators enjoyed the spoils of war while those who took too long to adapt were left crushed and defeated.
Cyberwarfare is no different, with conventional weapons yielding to technologies that are just as deadly to our economic and national security. Despite our military superiority and advances on the cyber front, America is still fighting a digital enemy using analog ways of thinking.
Despite our military superiority and advances on the cyber front, America is still fighting a digital enemy using analog ways of thinking.
This must change, and it begins with the government making some difficult choices about how to wield its offensive powers against an enemy hidden in the shadows, how to partner with the private sector and what it will take to protect the nation against hostile actors that threaten our very way of life.
In the aftermath of the ransomware attack against Colonial Pipeline, the Russia-linked hacking group known as DarkSide reportedly shuttered and the Federal Bureau of Investigation recovered part of the $4.4 million ransom that was paid. These are positive developments and an indicator that our government is taking these types of attacks seriously. But it does not change the fact that cyberterrorists, acting with impunity in a hostile foreign country using a technique that has been known for years, managed to shut down the country’s largest oil pipeline and walk away with millions of dollars in ransom payments. They will likely never face justice, Russia will not face any real consequences and these attacks will no doubt continue.
The reality is that while companies can get smarter about cyber defenses and users can get more vigilant in their cyber hygiene practices, only the government has the power to bring this behavior to a halt.
Countries that permit cybercriminals to operate within their borders should be made to hand them over or be subject to crippling economic sanctions. Those found providing sanctuary or other assistance to such individuals or groups should face material support charges like anyone who assists a designated terrorist organization.
Regulators should insist that cryptocurrency exchanges and wallets help track down illicit transactions and parties or be cut off from the U.S. financial system. Law enforcement, the military and the intelligence community should be aggressively working to make it so difficult, so unsafe and so unprofitable for cyberterrorists to operate that they would not dare attempt another attack against American industry or critical infrastructure.
Our biggest vulnerability and missed opportunity is the inability of public and private entities to form a unified front against cyberwar. It is essential from both a defensive and offensive perspective that the government and private sectors share cyber risk and incident information in real time. This is not currently happening.
Companies are too scared that in revealing vulnerabilities they will be sued, investigated and further victimized by the very government that is supposed to help them defend against attack. The federal government still has no answer for the problems of overclassification of information, overlapping bureaucracies and cultural barriers that provide no incentive to proactively engage with private industry to share information and technologies.
The answer is not to strong-arm companies into coming to the table and expect one-way information flow. Private actors should be able to come forward voluntarily and share information without having to fear plaintiff litigation and regulatory action. Self-disclosed cyber data made in real time should be kept confidential and used to defend and fight back, not to further punish the victim. That is no basis for a mutual partnership.
And if federal agencies, the military or the intelligence community have intelligence about future attacks and how to prevent them, they should not sit on it until long after it will do any good. There are ways to share information with private industry that are safe, timely and mutually beneficial.
Cooperation should also go beyond the exchange of cyber event information. The private sector and academia account for a massive amount of advancement in the cyber space, with total research and development spending split roughly 90%-10% between the private and public sector over the past two decades.
Our private sector — with technology companies employing the best and brightest spanning from Silicon Valley to Austin, Texas, to the technology corridor of Northern Virginia — has a tremendous amount to offer to the government yet remains a largely untapped resource. The same innovations driving private-sector profit should be used to strengthen national security.
China has already figured this out, and if we cannot find a way to leverage private-sector innovation and young talent in the United States, we will fall behind. If there has ever been a call to action where the Biden administration, Democrats and Republicans in Congress can set politics aside and embrace bipartisan solutions, this is it.
Thankfully, there is a model public-private dynamic that in many ways is working. Weapons systems today are almost exclusively manufactured by the Defense Industrial Base, and when deployed to the battlefield there is constant two-way communication with warfighters about vulnerabilities, threats and opportunities to improve effectiveness. This relationship was not forged overnight and is far from perfect. But after decades of efforts, secure collaboration platforms were developed, security clearance standards were established and trust was formed.
We must do the same between cyber authorities in the federal government and actors throughout the private sector. Financial institutions, energy companies, retailers, manufacturers and pharmaceuticals must be able to engage the government to share real-time cyber data in both directions. If the federal government learns of a threat group or technique, it should not only take the offensive to shut it down but also push that information securely and quickly to the private sector.
It is not practical for the FBI, the Department of Homeland Security or the military to assume the burden of defending private networks against cyberattacks, but the government can and should be a shoulder-to-shoulder partner in the effort. We must adopt a relationship that recognizes this is both a joint battle and burden, and we do not have years to get it right.
When you look at the history of war, the advantage has always gone to those who innovate first. With respect to cyberwarfare, the solution does not lie solely in advanced technologies like artificial intelligence, quantum computing or blockchain. The most powerful development in today’s war against cyberterrorism might be as simple as what we all learned in preschool: the value of sharing and cooperation.
The government, the technology industry and the broader private sector must come together not only to maintain our competitive edge and embrace advances like cloud computing, autonomous vehicles and 5G, but to ensure that we defend and preserve our way of life. We have been successful in building public and private partnerships in the past and can evolve from an analog relationship to a digital one. But the government must take the reins and lead the way.
Seattle-based Edge Delta, a startup that is building a modern distributed monitoring stack that is competing directly with industry heavyweights like Splunk, New Relic and Datadog, today announced that it has raised a $15 million Series A funding round led by Menlo Ventures and Tim Tully, the former CTO of Splunk. Previous investors MaC Venture Capital and Amity Ventures also participated in this round, which brings the company’s total funding to date to $18 million.
“Our thesis is that there’s no way that enterprises today can continue to analyze all their data in real time,” said Edge Delta co-founder and CEO Ozan Unlu, who has worked in the observability space for about 15 years already (including at Microsoft and Sumo Logic). “The way that it was traditionally done with these primitive, centralized models — there’s just too much data. It worked 10 years ago, but gigabytes turned into terabytes and now terabytes are turning into petabytes. That whole model is breaking down.”
He acknowledges that traditional big data warehousing works quite well for business intelligence and analytics use cases. But that’s not real-time and also involves moving a lot of data from where it’s generated to a centralized warehouse. The promise of Edge Delta is that it can offer all of the capabilities of this centralized model by allowing enterprises to start to analyze their logs, metrics, traces and other telemetry right at the source. This, in turn, also allows them to get visibility into all of the data that’s generated there, instead of many of today’s systems, which only provide insights into a small slice of this information.
While competing services tend to have agents that run on a customer’s machine, but typically only compress the data, encrypt it and then send it on to its final destination, Edge Delta’s agent starts analyzing the data right at the local level. With that, if you want to, for example, graph error rates from your Kubernetes cluster, you wouldn’t have to gather all of this data and send it off to your data warehouse where it has to be indexed before it can be analyzed and graphed.
With Edge Delta, you could instead have every single node draw its own graph, which Edge Delta can then combine later on. With this, Edge Delta argues, its agent is able to offer significant performance benefits, often by orders of magnitude. This also allows businesses to run their machine learning models at the edge, as well.
“What I saw before I was leaving Splunk was that people were sort of being choosy about where they put workloads for a variety of reasons, including cost control,” said Menlo Ventures’ Tim Tully, who joined the firm only a couple of months ago. “So this idea that you can move some of the compute down to the edge and lower latency and do machine learning at the edge in a distributed way was incredibly fascinating to me.”
Edge Delta is able to offer a significantly cheaper service, in large part because it doesn’t have to run a lot of compute and manage huge storage pools itself since a lot of that is handled at the edge. And while the customers obviously still incur some overhead to provision this compute power, it’s still significantly less than what they would be paying for a comparable service. The company argues that it typically sees about a 90 percent improvement in total cost of ownership compared to traditional centralized services.
Edge Delta charges based on volume and it is not shy to compare its prices with Splunk’s and does so right on its pricing calculator. Indeed, in talking to Tully and Unlu, Splunk was clearly on everybody’s mind.
“There’s kind of this concept of unbundling of Splunk,” Unlu said. “You have Snowflake and the data warehouse solutions coming in from one side, and they’re saying, ‘hey, if you don’t care about real time, go use us.’ And then we’re the other half of the equation, which is: actually there’s a lot of real-time operational use cases and this model is actually better for those massive stream processing datasets that you required to analyze in real time.”
But despite this competition, Edge Delta can still integrate with Splunk and similar services. Users can still take their data, ingest it through Edge Delta and then pass it on to the likes of Sumo Logic, Splunk, AWS’s S3 and other solutions.
“If you follow the trajectory of Splunk, we had this whole idea of building this business around IoT and Splunk at the Edge — and we never really quite got there,” Tully said. “I think what we’re winding up seeing collectively is the edge actually means something a little bit different. […] The advances in distributed computing and sophistication of hardware at the edge allows these types of problems to be solved at a lower cost and lower latency.”
The Edge Delta team plans to use the new funding to expand its team and support all of the new customers that have shown interest in the product. For that, it is building out its go-to-market and marketing teams, as well as its customer success and support teams.
The U.S. Federal Aviation Administration (FAA) has given Virgin Galactic the green light to begin transporting commercial passengers to space aboard its VSS spacecraft. This is an expansion of the company’s existing license, which had granted it permission to fly professional test pilots and astronauts to space using its spaceplane. The updated license comes on the heels of Virgin Galactic’s successful test flight on May 22.
This means that the way is cleared for Virgin Galactic to being operating as the first official ‘spaceline’ — which is like an airline, but for space. The company aims to provide regular service for space tourists and researchers to suborbital space, with an experience that includes unparalleled views of Earth and a few minutes of weightless during the roughly 2 hour trip.
The FAA’s approval is a big step, but it’s not the final one before Virgin Galactic begins its actual regular service flights for paying customers: The company still needs to complete three remaining test flights before that happens. These will be the first flights of the Virgin spacecraft and its carrier plane while carrying a full crew, and at the goal is still to fly the first of those sometime “this summer,” according to CEO Michael Colglazier.
A report from earlier this month claims that Virgin Galactic backer Sir Richard Branson could fly on the next test flight, and that it might occur as early as the coming July 4 weekend, which would mean he makes it to space faster than his billionaire rocket riding rival Jeff Bezos, who is set to make a trip on his own Blue Origin New Shepard spaceship on July 20. Virgin Galactic hasn’t said officially when its next test flight would occur, however.
Illumio, a self-styled zero trust unicorn, has closed a $225 million Series F funding round at a $2.75 billion valuation.
The round was led by Thoma Bravo, which recently bought cybersecurity vendor Proofpoint by $12.3 billion, and supported by Franklin Templeton, Hamilton Lane, and Blue Owl Capital.
The round lands more than two years after Illumio’s Series E funding round in which it raised $65 million, and fueled speculation of an impending IPO. The company’s founder, Andrew Rubin, still isn’t ready to be pressed on whether the company plans to go public, though he told TechCrunch: “If we do our job right, and if we make our customers successful, I’d like to think that would be part of our journey.”
Illumio’s latest funding round is well-timed. Not only does it come amid a huge rise in successful cyberattacks which show that some of the more traditional cybersecurity measures are no longer working, from the SolarWinds hack in early 2020 to the more recent attack on Colonial Pipeline, but it also comes just weeks after President Joe Biden issued an executive order pushing federal agencies to implement significant cybersecurity initiatives, including a zero trust architecture.
“And just a couple of weeks ago, Anne Neuberger [deputy national security adviser for cybersecurity] put out a memo on White House stationary to all of corporate America saying we’re living through a ransomware pandemic, and here’s six things that we’re imploring you to do,” Rubin says. “One of them was to segment your network.”
Illumio focuses on protecting data centers and cloud networks through something it calls micro-segmentation, which it claims makes it easier to manage and guard against potential breaches, as well as to contain a breach if one occurs. This zero trust approach to security — a concept centered on the belief that businesses should not automatically trust anything inside or outside its perimeters — has never been more important for organizations, according to Illumio.
“Cyber events are no longer constrained to cyber space,” says Rubin. “That’s why people are finally saying that, after 30 years of relying solely on detection to keep us safe, we cannot rely on it 100% of the time. Zero trust is now becoming the mantra.”
Illumio tells TechCrunch it will use the newly raised funds to make a “huge” investment in its field operations and channel partner network, and to invest in innovation, engineering and its product.
The late-stage startup, which was founded in 2013 and is based in California, says more than 10% of Fortune 100 companies — including Morgan Stanley, BNP Paribas SA and Salesforce — now use its technology to protect their data centers, networks and other applications. It saw 100% international growth during the pandemic, and says it’s also broadening its customer base across more industries.
The company has raised more now raised more $550 million from investors include Andreessen Horowitz, General Catalyst and Formation 8.
The AI-powered defense company founded by tech iconoclast Palmer Luckey has landed a $450 million round of investment that values the startup at $4.6 billion just four years in.
In April, reports suggested that the company was on the hunt for fresh investment and headed for a valuation between four and five billion, up from $1.9 billion in July 2020.
The new Series D round was led by angel investor and serial entrepreneur Elad Gil, a former Twitter VP and Googler with a track record of investments in companies with exponential growth. Andreessen Horowitz, Founders Fund, 8VC, General Catalyst, Lux Capital, Valor Equity Partners and D1 Capital Partners also participated in the round.
“Just as old incumbent institutions with little to no organizational renewal impacted our ability to respond to COVID, the defense industry has undergone significant consolidation over the last 30 years,” Gil wrote in a blog post on the investment. “There has not been a new defense technology company of any scale to directly challenge these incumbents in many decades…”
Anduril launched quietly in 2017 but grew quickly, picking up contracts with Customs and Border Protection and the Marine Corps during the Trump administration. Luckey, the young high-flying founder who sold Oculus to Facebook before being booted from the company, emerged as one of President Trump’s most prominent boosters in the generally Trump-averse tech industry.
The company makes defense hardware, including long-flying drones and surveillance towers that connect to a shared software platform it calls Lattice. The technology can be used to secure military bases, monitor borders and even knock enemy drones out of the sky, in the case of Anduril’s counter-UAS tech known as “Anvil.”
Anduril co-founder and CEO Brian Schimpf describes the company’s mission as one of “transformation,” pairing relatively affordable hardware with sensor fusion and machine learning technologies through a contract partner more nimble than established giants in the defense sector.
“This new round of funding reflects our confidence that the Department of Defense sees the same problems we do, and is serious about deploying emerging technologies at scale across land, sea, air and space domains,” Schimpf said.
The company set its sights on work with the Department of Defense from its earliest days and last year was one of 50 vendors tapped by the DoD to test tech for the Air Force’s own piece of the Joint All-Domain Command & Control (JADC2) project, which seeks to build a smart warfare platform to connect all service members, devices and vehicles that power the U.S. military.
The company’s work with U.S. Customs and Border Protection also matured from a pilot into a program of record last year. Anduril supplies the agency with connected surveillance towers capable of autonomously monitoring stretches of the U.S. border.
In April, Anduril acquired Area-I, a company known for small drones that can be launched from a larger aircraft. Area-I counted the U.S. Army, Air Force, Navy and NASA among its customers, relationships that likely sweetened the deal.
The Biden administration is outlining new plans to combat domestic terrorism in light of the January 6 attack on the U.S. Capitol and social media companies have their own part to play.
The White House released on Tuesday a new national strategy on countering domestic terrorism. The plan acknowledges the key role that online platforms play in bringing violent ideas into the mainstream, going as far as calling social media sites the “front lines” of the war on domestic terrorism.
“The widespread availability of domestic terrorist recruitment material online is a national security threat whose front lines are overwhelmingly private-sector online platforms, and we are committed to informing more effectively the escalating efforts by those platforms to secure those front lines,” the White House plan states.
The Biden administration committed to more information sharing with the tech sector to fight the tide of online extremism, part of a push to intervene well before extremists can organize violence. According to a fact sheet on the new domestic terror plan, the U.S. government will prioritize “increased information sharing with the technology sector,” specifically online platforms where extremism is incubated and organized.
“Continuing to enhance the domestic terrorism-related information offered to the private sector, especially the technology sector, will facilitate more robust efforts outside the government to counter terrorists’ abuse of Internet-based communications platforms to recruit others to engage in violence,” the White House plan states.
In remarks timed with the release of the domestic terror strategy, Attorney General Merrick Garland asserted that coordinating with the tech sector is “particularly important” for interrupting extremists who organize and recruit on online platforms and emphasized plans to share enhanced information on potential domestic terror threats.
In spite of the new initiatives, the Biden administration admits that domestic terrorism recruitment material will inevitably remain available online, particularly on platforms that don’t prioritize its removal — like most social media platforms, prior to January 2021 — and on end-to-end encrypted apps, many of which saw an influx of users when social media companies cracked down on extremism in the U.S. earlier this year.
“Dealing with the supply is therefore necessary but not sufficient: we must address the demand too,” the White House plan states. “Today’s digital age requires an American population that can utilize essential aspects of Internet-based communications platforms while avoiding vulnerability to domestic terrorist recruitment and other harmful content.”
The Biden administration will also address vulnerability to online extremism through digital literacy programs, including “educational materials” and “skills-enhancing online games” designed to inoculate Americans against domestic extremism recruitment efforts, and presumably disinformation and misinformation more broadly.
The plan stops short of naming domestic terror elements like QAnon and the “Stop the Steal” movement specifically, though it acknowledges the range of ways domestic terror can manifest, from small informal groups to organized militias.
A report from the Office of the Director of National Intelligence in March observed the elevated threat to the U.S. that domestic terrorism poses in 2021, noting that domestic extremists leverage mainstream social media sites to recruit new members, organize in-person events and share materials that can lead to violence.
In an S-1 filing on Thursday, the security company revealed that for the three months ending April 30, its revenues increased by 108% year-on-year to $37.4 million and its customer base grew to 4,700, up from 2,700 a year prior. Despite this pandemic-fueled growth, SentinelOne’s net losses more than doubled from $26.6 million in 2020 to $62.6 million.
“We also expect our operating expenses to increase in the future as we continue to invest for our future growth, including expanding our research and development function to drive further development of our platform, expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, and reaching customers in new geographic locations,” SentinelOne wrote in its filing.
The Mountain View-based company said it intends to list its Class A common stock using the ticker symbol “S” and that details about the price range and number of common shares to be put up for the IPO are yet to be determined. The S-1 filing also identifies Morgan Stanley, Goldman Sachs, Bank of America Securities, Barclays and Wells Fargo Securities as the lead underwriters.
SentinelOne raised $276 million in a funding round in November last year, tripling its $1 billion valuation from February 2020 to $3 billion. At the time, CEO and founder Tomer Weingarten told TechCrunch that an IPO “would be the next logical step” for the company.
SentinelOne, which was founded in 2013 and has raised a total of $696.5 million through eight rounds of funding, is looking to raise up to $100 million in its IPO, and said it’s intending to use the net proceeds to increase its visibility in the cybersecurity marketplace and for product development and other “general corporate processes.”
It added that “may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions, or businesses that complement our business.” The company’s sole acquisition so far took place back in February when it bought high-speed logging startup Scalyr for $155 million.
SentinelOne is going public during a period of heightened public interest in cybersecurity. There has been a wave of high-profile cyberattacks during the COVID-19 pandemic, with hackers taking advantage of widespread remote working necessitated as a result.
One of the biggest attacks saw Russian hackers breach the networks of IT company SolarWinds, enabling them to gain access to government agencies and corporations. SentinelOne’s endpoint protection solution was able to detect and stop the related malicious payload, protecting its customers.
“The world is full of criminals, state actors, and other hostile agents who seek to exfiltrate and exploit data to disrupt our way of life,” Weingarten said in SentinelOne’s SEC filing. “Our mission is to keep the world running by protecting and securing the core pillars of modern infrastructure: data and the systems that store, process, and share information. This is an endless mission as attackers evolve rapidly in their quest to disrupt operations, breach data, turn profit, and inflict damage.”