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Africa Roundup: DHL invests in MallforAfrica, Zipline launches in US, Novastar raises $200M

By Jake Bright

Events in May offered support to the thesis that Africa can incubate tech with global application.

Two startups that developed their business models on the continent — MallforAfrica and Zipline — were tapped by international interests.

DHL acquired a minority stake in Link Commerce, a turn-key e-commerce company that grew out of MallforAfrica.com — a Nigerian digital-retail startup.

Link Commerce offers a white-label solution for doing online-sales in emerging markets.

Retailers can plug into the company’s platform to create a web-based storefront that manages payments and logistics.

Nigerian Chris Folayan founded MallforAfrica in 2011 to bridge a gap in supply and demand for the continent’s consumer markets. While living in the U.S., Folayan noted a common practice among Africans — that of giving lists of goods to family members abroad to buy and bring home.

With MallforAfrica, Folayan aimed to allow people on the continent to purchase goods from global retailers directly online.

The e-commerce site went on to onboard more than 250 global retailers, and now employs 30 people at order processing facilities in Oregon and the U.K.

Folayan has elevated Link Commerce now as the lead company above MallforAfrica.com. He and DHL plan to extend the platform to emerging markets around the world and offer it to companies who want to wrap online stores, payments and logistics solution around their core business.

“Right now the focus is on Africa…but we’re taking this global,” Folayan said.

Another startup developed in Africa, Zipline, was tapped by U.S. healthcare provider Novant for drone delivery of critical medical supplies in the fight against COVID-19.

The two announced a partnership whereby Zipline’s drones will make 32-mile flights on two routes between Novant Health’s North Carolina emergency drone fulfillment center and the nonprofit’s medical center in Huntersville — where front-line healthcare workers are treating coronavirus patients.

Zipline and Novant are touting the arrangement as the first authorized long-range drone logistics delivery flight program in the U.S. The activity has gained approval by the U.S. Federal Aviation Administration and North Carolina’s Department of Transportation.

The story behind the Novant, Zipline UAV collaboration has a twist: The capabilities for the U.S. operation were developed primarily in Africa. Zipline has a test facility in the San Francisco area, but spent several years configuring its drone delivery model in Rwanda and Ghana.

Image Credits: Novant Health

Co-founded in 2014 by Americans Keller Rinaudo, Keenan Wyrobek and Will Hetzler, Zipline designs its own UAVs, launch systems and logistics software for distribution of critical medical supplies.

The company turned to East Africa in 2016, entering a partnership with the government of Rwanda to test and deploy its drone service in that country. Zipline went live with UAV distribution of life-saving medical supplies in Rwanda in late 2016, claiming the first national drone-delivery program at scale in the world.

The company expanded to Ghana in 2016, where in addition to delivering blood and vaccines by drone, it now distributes COVID-19-related medication and lab samples.

In addition to partner Novant Health, Zipline has caught the attention of big logistics providers, such as UPS — which supported (and studied) the startup’s African operations back to 2016.

The presidents of Rwanda and Ghana  — Paul Kagame and Nana Akufo-Addo, respectively — were instrumental in supporting Zipline’s partnerships in their countries. Other nations on the continent, such as Kenya, South Africa and Zambia, continue to advance commercial drone testing and novel approaches to regulating the sector.

African startups have another $100 million in VC to pitch for after Novastar Ventures’ latest raise.

The Nairobi and Lagos-based investment group announced it has closed $108 million in new commitments to launch its Africa Fund II, which brings Novastar’s total capital to $200 million.

With the additional resources, the firm plans to make 12 to 14 investments across the continent, according to Managing Director Steve Beck .

On-demand mobility powered by electric and solar is coming to Africa.

Vaya Africa, a ride-hail mobility venture founded by Zimbabwean mogul Strive Masiyiwa, launched an electric taxi service and charging network in Zimbabwe this week with plans to expand across the continent.

The South Africa-headquartered company is using Nissan Leaf EVs and has developed its own solar-powered charging stations. Vaya is finalizing partnerships to take its electric taxi services on the road to countries that could include Kenya, Nigeria, South Africa and Zambia, Vaya Mobility CEO Dorothy Zimuto told TechCrunch.

The initiative comes as Africa’s on-demand mobility market has been in full swing for several years, with startups, investors and the larger ride-hail players aiming to bring movement of people and goods to digital platforms.

Uber and Bolt have been operating in Africa’s major economies since 2015, where there are also a number of local app-based taxi startups. Over the last year, there’s been some movement on the continent toward developing EVs for ride-hail and delivery use, primarily around motorcycles.

Beyond environmental benefits, Vaya highlights economic gains for passengers and drivers of shifting to electric in Africa’s taxi markets, where fuel costs compared to personal income is generally high for drivers.

Using solar panels to power the charging station network also helps Vaya’s new EV program overcome some of challenges in Africa’s electricity grid.

Vaya is exploring EV options for other on-demand transit applications — from mini-buses to Tuk Tuk taxis.

In more downbeat news in May, Africa-focused tech talent accelerator Andela had layoffs and salary reductions as a result of the economic impact of the COVID-19 crisis, CEO Jeremy Johnson confirmed to TechCrunch.

The compensation and staff reductions of 135 bring Andela’s headcount down to 1,199 employees. None of Andela’s engineers were included in the layoffs.

Backed by $181 million in VC from investors that include the Chan Zuckerberg Initiative, the startup’s client-base is comprised of more than 200 global companies that pay for the African developers Andela selects to work on projects.

There’s been a drop in the demand for Andela’s services, according to Johnson.

More Africa-related stories @TechCrunch  

African tech around the ‘net

Before yesterdayYour RSS feeds

Palantir picks up more COVID-19 contracts, this time with the VA

By Taylor Hatmaker

Palantir, the data analytics company co-founded by Peter Thiel, is already an active tech player in the scrum for federal contracts, but it’s playing a new and increasingly prominent role in providing the government with software tools to address the COVID-19 crisis.

This month, the Department of Veterans Affairs awarded a new $5 million contract to Palantir through veteran-owned software reseller i3 Federal LLC, which lists Palantir as a partner. The contract, set to run through November, will provide the VA with Palantir’s Gotham software to “track and analyze COVID-19 outbreak areas and make timely decisions with insight into supply chain capacity, hospital inventory, social service utilization and lab diagnostics.”

Palantir’s Gotham tool, best known for its use by law enforcement agencies, is one of the company’s main products and collects disparate data streams onto one platform. Twitter user Jack Poulson first spotted the contract, which was later reported by FedScoop.

A smaller contract also listed this month awards Palantir $2 million to provide the National Institutes of Health within the U.S. Department of Health and Human Services (HHS) a”COVID-19 dataset aggregation proof of concept.”

Palantir moved early to provide its services to governments grappling with the threat of the coronavirus and by mid-March was already working with the CDC to model infection patterns and anticipate hospital equipment needs.

In April, HHS awarded two contracts worth nearly $25 million to the company for a software platform called HHS Protect Now, intended to inform public health decisions made by the White House’s Coronavirus Task Force. HHS didn’t solicit competition for those contracts, noting that the COVID-19 crisis created a situation of “unusual and compelling urgency.”

Google Cloud earns defense contract win for Anthos multi-cloud management tool

By Ron Miller

Google dropped out of the Pentagon’s JEDI cloud contract battle fairly early in the game, citing it was in conflict with its “AI principals.” However, today the company announced a new 7 figure contract with DoD’s Defense Innovation Unit (DIU), a big win for the cloud unit and CEO Thomas Kurian.

While the company would not get specific about the number, the new contract involves using Anthos, the tool the company announced last year to secure DIU’s multi-cloud environment. In spite of the JEDI contract involving a single vendor, the DoD has always used solutions from all three major cloud vendors — Amazon, Microsoft and Google — and this solution will provide a way to monitor security across all three environments, according to the company.

“Multi-cloud is the future. The majority of commercial businesses run multi-cloud environments securely and seamlessly, and this is now coming to the federal government as well,” Mike Daniels, VP of Global Public Sector at Google Cloud told TechCrunch.

The idea is to manage security across three environments with help from cloud security vendor Netskope, which is also part of the deal.”The multi-cloud solution will be built on Anthos, allowing DIU to run web services and applications across Google Cloud, Amazon Web Services,  and Microsoft Azure — while being centrally managed from the Google Cloud Console,” the company wrote in a statement.

Daniels says that while this is a deal with DIU, he could see it expanding to other parts of DoD. “This is a contract with the DIU, but our expectation is that the DoD will look at the project as a model for how to implement their own security posture.”

Google Cloud Platform remains way back in the cloud infrastructure pack in third place with around 8% market share. For context, AWS has around 33% market share and Microsoft has around 18%.

While JEDI, a $10 billion, winner-take-all prize remains mired in controversy and an on-going battle between The Pentagon, Amazon and Microsoft, this deal shows that the defense department is looking at advanced technology like Anthos to help it manage a multi-cloud world regardless of what happens with JEDI.

Dear Sophie: What is required of employers laying off foreign workers?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie:

Fallout from COVID-19 is forcing our startup to downsize. What legal requirements do we need to consider if we’re laying off foreign-born employees or scaling back their hours?

— HR Manager in San Mateo

 

Dear HR Manager:

Thank you for your question; a lot of people are going through the same thing. Keep in mind that terminating an employee that your company sponsored for a visa or green card can have ramifications for future hiring.

Huawei admits uncertainty following new US chip curbs

By Rita Liao

Following the U.S. government’s announcement that would further thwart Huawei’s chip-making capability, the Chinese telecoms equipment giant condemned the new ruling for being “arbitrary and pernicious.”

“Huawei categorically opposes the amendments made by the U.S. Department of Commerce to its foreign direct product rule that target Huawei specifically,” said Huawei Monday at its annual analyst summit in Shenzhen.

The new curbs, which dropped on Friday, would ban Huawei from using U.S. software and hardware in certain strategic semiconductor processes. This will affect all foundries using U.S. technologies, including those located abroad, some of which are Huawei’s key suppliers.

Earlier on Monday, the Nikkei Asian Review reported citing sources that Taiwanese Semiconductor Manufacturing Co., the world’s largest contract semiconductor that powers many of Huawei’s high-end phones, has stopped taking new orders from Huawei, one of its largest clients. Huawei declined to comment while TSMC said the report was “purely market rumor”.

Decisions from TSMC point to its attempt to strengthen bonds with the U.S. though, as it’s planning a new $12 billion advanced chip factory in Arizona with support from the state and the U.S. federal government.

At the Monday conference, Huawei’s rotating chairman Guo Ping admitted that while the firm is able to design some semiconductor parts such as integrated circuits (IC), it remains “incapable of doing a lot of other things.”

“Survival is the keyword for us at present,” he said.

Huawei stated the latest U.S. ban would not only affect its own business in over 170 countries, where it has spent “hundreds of billions of dollars,” but also the wider ecosystem around the world.

“In the long run, [the U.S. ban] will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries.”

Huawei has announced a raft of contingency measures ever since the Trump administration began slapping technology sanctions on it, including one that had cut it off certain Android services from Google.

Huawei said at the summit that it had doubled down on investment in overseas developers in an effort to lure them to its operating system. Some 1.4 million developers have signed up for Huawei Mobile Services or HMS, a 150% jump from 2019. In its search to identify alternatives to Google’s app suite in Europe, it has partnered up with navigation services TomTom and Here, search engine Qwant and news app News UK. 

TSMC reportedly stops taking orders from Huawei after new U.S. export controls

By Catherine Shu

Taiwanese Semiconductor Manufacturing Co., the world’s largest contract semiconductor maker, has stopped taking new orders from Huawei Technologies, one of its largest customers, according to the Nikkei Asian Review. The report said the decision was made to comply with new United States export controls, announced last Friday, that are meant to make it more difficult for Huawei to obtain chips produced using U.S. technology, including manufacturing equipment.

Orders taken before the ban or already in production will not be affected, if they can ship before September 14. Huawei, the world’s largest telecom equipment maker, is TSMC’s second-biggest customer after Apple. TSMC makes many of the advanced chips used by Huawei, including in its smartphones.

The U.S. Commerce Department released its new orders on Friday, which specifically target Huawei by making it harder for the company to create chips using U.S. software and technology, even in foundries located abroad.

On the same day as the Commerce Department’s announcement, TSMC said that it is opening a new $12 billion advanced chip foundry in Arizona with support from the state and the U.S. federal government. Once opened, the plant will allow more of TSMC’s American clients to fabricate their chips domestically.

TSMC’s announcement came after the Wall Street Journal reported that White House officials were in discussions with TSMC and Intel to build foundries in the U.S. in order to reduce reliance on factories in Asia and the international supply chain.

In an email, a TSMC representative told TechCrunch that the company does not disclose customers’ order details. She added that TSMC complies with laws and applicable regulations, and is “following the U.S. export rule change closely” and “working closely with outside counsels to conduct legal analysis and ensure a comprehensive examination and interpretation of these rules.”

This is the latest restriction the U.S. government has leveled against Huawei citing national security concerns. Along with ZTE, Huawei was identified as a potential threat to security by the House Intelligence Committee in 2012.

 

The two companies have denied the charges, but under the Trump administration, the U.S government’s efforts to stop both from doing business with U.S. companies has intensified. According to the Nikkei Asian Review report, Huawei anticipated the Commerce Department’s new orders and has been building a year’s worth inventory of chips needed for its telecom equipment.

TechCrunch has contacted Huawei for comment.

Dear Sophie: Can I still get a green card given COVID-19, layoffs and recent H-1B changes?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie:

I was recently laid off but found another position at a growing biotech company. My new employer just submitted the H-1B petition before the end of my grace period. I would like to stay permanently in the United States. How long do I have to apply for a green card?

If my employer isn’t willing to sponsor me, I heard I can self-petition for an EB-1A or EB-2 NIW green card?

—Hopeful in Hayward

Dear Hopeful:

Congrats on your new job offer and H-1B transfer. Many companies are hiring talented individuals right now. Every company has the right to their own immigration sponsorship policy, so it can be worthwhile to discuss this going into your new role to make sure that everybody’s on the same page as to how things can unfold with respect to your green card.

Dear Sophie: How will President Trump’s order ‘suspending immigration’ affect me?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie:

The president said he would stop immigration due to COVID-19. I work at a biotech firm that’s doing research on a coronavirus treatment. I’m currently in the U.S. on an H-1B visa, and my company is sponsoring me for a green card. How will this affect me?

— Scientist in South San Francisco

Dear Scientist:

Thank you for everything you do! As you mentioned, the president tweeted last week that immigration would be suspended. However, the crazy thing is that the proclamation has been issued, and it’s really just a rehashing of the status quo. However, a lot of people haven’t learned this yet, so they’re scared. I just recorded a video about how immigration is still possible. So employers and immigrants can take a deep breath, things are ok.

The proclamation that President Trump signed last Wednesday falls far short of the outright suspension of immigration he tweeted about on Monday. The order places a very limited 60-day moratorium on issuing green cards to individuals seeking to come to the U.S. from abroad. Aimed at protecting job opportunities for unemployed Americans and relieving U.S embassies and consulates of the green-card processing workload, this “temporary suspension” has already begun. It’s possible that it could be extended beyond 60 days.

Most people with U.S. immigration needs are not affected by this proclamation, such as people who are:

  • Adjusting status from a temporary visa to a green card while in the U.S. (Form I-485)
  • Coming to the U.S. on temporary visas for work or travel subject to the existing travel restrictions (such as travel to China or the Schengen area in the last 14 days).
  • Filing for a non-immigrant status extension in the U.S., such as H-1B.
  • Beginning the green card process in the U.S. with PERM, I-140 and I-130
  • Changing status from one non-immigrant status to another within the United States.

What this new policy actually means is that no employment- or family-based green cards will be issued to candidates living outside of the U.S. except for spouses and dependent children of American citizens, physicians, nurses, or other healthcare professionals who are coming to the U.S to perform research or work to combat COVID-19 in the next couple of months. The Migration Policy Institute estimates 26,000 individuals will be blocked from getting green cards for each month the order remains in effect.

However, to me it seems like there’s not really that much of a marginal effect, since all the U.S. consulates around the world have been closed anyway for weeks due to COVID-19 concerns and visas are only being issued in emergency (think life-or-death) situations.

Also exempt from this proclamation are foreign nationals who are:

  • Applying for an EB-5 investor green card.
  • Members of the U.S. armed forces and their spouses and dependent children.
  • Deemed to have skills or knowledge that is in the national interest.
  • Important in helping U.S. law enforcement.
  • Prospective adoptees.
  • Seeking asylum.
  • Iraqi or Afghan nationals who have worked for the U.S. government and qualify for special green cards.

Legal challenges to the new policy are expected and a temporary stay could occur.

Even before Trump’s latest order, the issuance of both visas and green cards has temporarily stopped due to coronavirus-related closures and travel restrictions. U.S. embassies and consulates have been closed to routine visa and green card processing and travel bans from some countries are in effect through at least June 30. In addition, U.S. Citizenship and Immigration Services (USCIS) offices have been closed to the public due to COVID-19, effectively canceling all green-card interviews. An interview with an immigration official is required for all green cards. USCIS announced last week it may reopen offices as early as June 4.

The good news for you is that the temporary policy will not impact your prospects for getting a green card. Your employer will still be able to submit a green-card petition on your behalf including PERM and the I-140.

The U.S. Department of Labor is expected to continue processing labor certifications (PERM), which is the first step your employer needs to take in the green-card process. Before the COVID-19 pandemic, the Labor Department took anywhere from four to seven months to review labor certifications, so you and your employer should take that timing into consideration. Remember your employer should submit an I-140 green-card petition and labor certification at least one year before the sixth year of your H-1B so you can qualify for AC21 extensions.

Additional immigration restrictions may be coming down the pike: Trump’s order calls on the Secretaries of Labor, Homeland Security, and State to review temporary visa programs and recommend changes that would “stimulate the United States economy and ensure the prioritization, hiring, and employment of United States workers.” Earlier this week, Trump said another, more restrictive executive order on immigration is under consideration. He didn’t offer any details other than saying that migrant farmworkers would not be affected. We’ll continue to monitor the situation and keep our readers updated.

Remember: Immigration still remains possible. The U.S. is a democracy with checks and balances. The president’s authority to change immigration policy is limited and any overreaching is sure to prompt additional legal challenges.

Despite the current climate of uncertainty and unpredictability, one thing remains crystal clear: Immigrants are key to maintaining and restoring America’s physical and economic health. More than three million immigrants work in the health care system in the U.S. as doctors, nurses, researchers, and health-care workers, according to a research article published last year. That means about 1 in 4 health-care workers are immigrants. Moreover, immigrant-owned businesses employed more than 7.9 million workers, according to data from the U.S. Census Bureau’s 2017 American Community Survey analyzed by the New American Economy. In 2017 alone, households led by immigrants contributed more than $400 billion in tax revenues to federal, state, and local governments. Most unicorn startups have at least one international founder. Immigrants create a plethora of jobs for U.S. workers.

Be well, do good work and keep in touch.

— Sophie


Have a question? Ask it here; we reserve the right to edit your submission for clarity and or space. The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer here. You can contact Sophie directly at Alcorn Immigration Law.

Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms; if you’d like to be a guest, she’s accepting applications!

An LA-led, public-private partnership pitches a $150B green infrastructure package to Congress

By Jonathan Shieber

Representatives from the government and the utility managing the power of Los Angeles are proposing a sweeping infrastructure package worth roughly $150 billion centered on the broad electrification of transportation and industry.

Drafted by the Los Angeles-based public-private Transportation Electrification Partnership, a collaboration between the Office of Mayor Eric Garcetti, Southern California Edison, the Los Angeles Department of Water and Power and the Los Angeles Cleantech Incubator, the proposal lays out a number of initiatives based on work that’s already being done in Los Angeles to electrify the city’s infrastructure.

As the nation’s second-largest metropolitan area, boasting an over $1 trillion economy, decisions made in the city can have broad economic and social implications that ripple far beyond the Southern California region. Alongside New York, Los Angeles has set some of the nation’s most aggressive targets for the rollout of renewable and sustainable industries.

The proposal sets out four big initiatives, including zero-emissions vehicle manufacturing, assembly and adoption; zero-emissions infrastructure investments; commitments to public transit investments; workforce development; and job training. There’s also a relatively modest request (of only $4 billion) for funding devoted to pilot projects, startup companies, and public clean technology investment initiatives (like LACI).

The initiative reserves the largest cash pile for the development of electric charging infrastructure around the country, according to the proposal seen by TechCrunch and sent to House and Senate leadership including House Speaker Nancy Pelosi, Minority Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer.

Image Credits: Monty Rakusen / Getty Images

Of the $85 billion set aside for the deployment of zero-emission vehicle infrastructure, the TEP proposal reserves roughly one-fourth for upgrades to the electricity grid. The funding would include $20 billion for utility upgrades. Of that, $10 billion will go toward solar and energy storage projects designed to make grids more resistant to climate-related catastrophes like extreme weather events, wildfires and other disasters. The remaining $10 billion would support commercial and residential vehicle charging, solar energy development and energy storage projects.

Another $15 billion is dedicated to medium- and heavy-duty vehicle charging that would be administered by state governments, transit agencies or regional agencies. New developments could be added to truck yards, truck stops and plazas, as well as strategic locations, such as ports and airports.

Funding of the scale proposed here could enable a transformation not only in the LA metropolitan area, but across the country, as well as provide opportunities where possible for local hire through community benefit agreements, which are an effective mechanism to ensure charging infrastructure projects include workers living local to a project, as well as other targeted hiring policies, such as US Veteran hiring, are achieved,” writes LACI chief executive, Matt Peterson.  

Light-duty charging infrastructure occupies another $10 billion of the suggested stimulus measures. The goal, is to get local, shovel-ready projects the financing they’d need to start the process of hiring workers immediately. One project that’s already being rolled out in Los Angeles is the development of curbside charging infrastructure on streetlight poles to serve drivers who don’t have access to charging infrastructure at home.

Finally under the infrastructure bucket, the proposal recommends that Congress set aside $11 billion for transit and school bus charging to be administered via states, transit agencies and school districts;  $5 billion for state and local government fleets; and $4 billion to support the Low-Income Home Energy Assistance Program.

The LIHEAP money is critical for the over 12 million Americans who have recently lost their job, the consortium argues and could also help finance the Department of Energy’s Weatherization program.

Popular programs like Opportunity Zones, New Market Tax Credits and Community Development Finance Institutions could be used to boost the government’s commitment with private capital, the plan’s authors argue.

Non-Electric vehicles fill a parking lot in Rosemead, California, where two Electric Vehicle charging stations are offered on September 12, 2018.

All of that charging infrastructure and grid upgrades are in part designed to help meet the increased power demands that the proposal expects to bring onto the grid through another $25 billion in government funding for electric vehicles of all types. The funds could be allocated through existing programs including the extension of the electric vehicle tax credit for automakers and new programs that would allow consumers to trade in older model vehicles for newer, preferably electric, vehicles.

An additional way the government could juice the auto industry — and specifically electric vehicles — is by providing point of sale rebates for all vehicles that could be issued through car dealerships, according to the proposal. “This will also help dealerships increase sales and bring needed sales tax revenues to local and state governments,” Peterson writes.

There’s $25 billion in money set aside for public transit and $12.5 billion set aside for workforce retraining and education.

For startups, the programs that could have the most impact — aside from the broad infrastructure package that could mean additional demand for new technologies — is a far smaller and more targeted proposal for roughly $4 billion that would allocate money directly to small and medium sized businesses and local incubation and corporate development programs.

“Startups and small businesses are the engine of every local and regional economy,” writes Peterson. “Targeting resources to this sector is critical to help entrepreneurs continue America’s leadership in technology innovation, restart small businesses, and help put people back to work.”

TEP is proposing a $1 billion grant for early stage research and development of cleantech and zero-emission mobility innovations and $1 billion for shovel ready pilot projects deployed by startups and small businesses via local governments.

Still more money would include $500 million in emergency loans and grants for cleantech startups and small businesses that are involved in solar installations, energy storage, and electric vehicle technology development. Revenues for these companies have dropped precipitously as consumer-facing demand has fallen off a cliff.

There’s also a $500 million pot targeted for startups and small businesses founded by women and people of color and $500 million for nonprofit cleantech and innovation incubators.

Alongside LACI, there are a few of these nonprofit investment programs which have cropped up across the Midwest that could be a boon to budding entrepreneurs.

Finally, the proposal advocates for at least $500 million in funding to train unemployed or underemployed would-be laborers along with veterans and the formerly incarcerated.

Some of these initiatives have been tried in the past, and despite partisan complaints, proved effective. The Obama-era loan program established to boost clean energy companies generated revenues for the government despite the much-publicized flameout of the solar startup, Solyndra. Even Tesla benefited from the program, paying back a $460 million loan from the program a decade ahead of schedule.

With increasing volatility in oil prices, the move to an increasingly electric infrastructure makes sense because it offers more stability for energy buyers, including consumers and businesses.

Dear Sophie: How can we support our immigrant colleagues during layoffs?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Borders can’t stop germs. But borders will also never be able to stop ideas, or love, either.

Last night Trump tweeted that he will temporarily suspend immigration. I’m still waiting to review the text of the executive order, which at the time of this late writing, hasn’t been published yet. I expect significant litigation, as only Congress has the authority to cease immigration pursuant to the Immigration and Nationality Act. I’m hopeful that a court will issue a temporary restraining order in the near future.

We’re monitoring the situation closely and will continue to provide updates. Stay tuned, and be well. We all share this one Earth. We’ve got this. We’ll figure things out, one step at a time. Together.

Big hugs,
S


Dear Sophie:

We’ve decided to wind down our existing startup to move on to a new biotech opportunity. A co-founder is on H-1B and we sponsored an employee for a TN. How can we support both of them to stay in the U.S.?

— Winding Down in Woodside

 

Dear Winding Down,

It sounds like you’re handling the transition with grace. Every new experience teaches us what we want and what we don’t want, so I’m excited for all of you that you’ll be freeing yourselves to pursue new ideas. The fact that you care so much about your team makes you a strong leader. Your international colleagues will greatly appreciate your support as everybody transitions to new roles and new adventures.

YouTube sellers found touting bogus coronavirus vaccines and masks

By Natasha Lomas

YouTube has been criticized for continuing to host coronavirus disinformation on its video sharing platform during a global health emergency.

Two US advocacy groups which campaign for online safety undertook an 18-day investigation of the video sharing platform in March — finding what they say were “dozens” of examples of dubious videos, including videos touting bogus vaccines the sellers claimed would protect buyers from COVID-19.

They also found videos advertising medical masks of unknown quality for sale.

There have been concerns about shortages of masks for front-line medical staff, as well as the risk of online scammers hawking low grade kit that does not offered the claimed protection against the virus.

Google said last month that it would temporarily take down ads for masks from its ad network but sellers looking to exploit the coronavirus crisis appear to be circumventing the ban by using YouTube’s video sharing platform as an alternative digital shop window to lure buyers.

Researchers working for the Digital Citizens Alliance (DCA) and the Coalition for a Safer Web (CSW) initiated conversations with sellers they found touting dodgy coronavirus wares on YouTube — and were offered useless ‘vaccines’ for purchase and hundreds of masks of unknown quality.

“There was ample reason to believe the offers for masks were dubious as well [as the vaccines], as highlighted by interactions with representatives from some of the sellers,” they said.

Their report includes screengrabs of some of the interactions with the sellers. In one a seller tells the researchers they don’t accept credit cards — but they do accept CashApp, PayPal, Google or Amazon gift cards or Bitcoin.

The same seller offered the researchers vaccines priced at $135 each, and suggested they purchase MMR/Varicella when asked which one is “the best”. Such a vaccine, even if it functioned for MMR/Varicella, would obviously offer no protection against COVID-19.

Another seller was found to be hawking “COVID-19 drugs” using a YouTube account name “Real ID Card Fake Passport Producer”.

“How does a guy calling himself ‘Real ID Card Fake Passport Producer’ even get a page on YouTube?” said Eric Feinberg, lead researcher for CSW, in a statement accompanying the report. “It’s all too easy to get ahold of these guys. We called some of them. Once you contact them, they are relentless. They’ll call you back at all hours and hound you until you buy something. They’ll call you in the middle of the night. They are predators looking to capitalize on our fear.”

A spokesman for the DCA told us the researchers compiled the report based on content from around 60 videos they identified hawking coronavirus-related ‘cures’ or kit between March 6-24.

“There are too many to count. Everyday, I find more,” added Feinberg.

The groups are also critical of how YouTube’s platform risks lending credibility to coronavirus disinformation because the platform now displays official CDC-branded banners under any COVID-19 related material — including the dubious videos their report highlights.

“YouTube also mixes trusted resources with sites that shouldn’t be trusted and that could confuse consumers — especially when they are scared and desperate,” said DCA executive director, Tom Galvin, in a statement. “It’s hard enough to tell who’s legitimate and who’s not on YouTube.”

The DCA and CSW have written letters to the US Department of Justice and the Federal Trade Commission laying out their findings and calling for “swift action” to hold bad actors accountable.

YouTube, and its parent company Google, are shirking their formal policy that prohibits content that capitalizes off sensitive events,” they write in a letter to attorney general Barr.

“Digital Citizens is sharing this information in the hopes your Justice Department will act swiftly to hold bad actors, who take advantage of the coronavirus, accountable. In this crisis, strong action will deter others from engaging in criminal or illicit acts that harm consumers or add to confusion and anxiety,” they add.

Responding to the groups’ findings a YouTube spokesperson said some of the videos the researchers had identified had not received many views.

After we contacted it about the content YouTube also said it had removed three channels that had been identified by the researchers in the report for violating Community Guidelines.

In a statement YouTube added:

Our thoughts are with everyone affected by the coronavirus around the world. We’re committed to providing helpful information at this critical time, including raising authoritative content, reducing the spread of harmful misinformation and showing information panels, using WHO / CDC data, to help combat misinformation. To date, there have been over 5B impressions on our information panels for coronavirus related videos and searches. We also have clear policies against COVID-19 misinformation and we quickly remove videos violating these policies when flagged to us.

The DCA and CSW also recently undertook a similar review of Facebook’s platform — finding sellers touting masks for sale despite the tech giant’s claimed ban on such content. “Facebook promised CNN when they did a story on our report about them that the masks would be gone a week ago, but the researchers from CSW are still finding the masks now,” their spokesman told us.

Earlier this week the Tech Transparency Project also reported still being able to find masks for sale on Facebook’s platform. It found examples of masks showing up in Google’s targeted ads too.

Dear Sophie: How do we craft a strong H-1B petition? If I’m not selected, what are my options?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Most “Dear Sophie” columns are only accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie:

If I’m selected in this year’s lottery, how do we craft a strong H-1B petition? If I’m not selected, what are my other options?

— Hoping in Hayward

Dear Hoping:

Thank you for asking the questions that are on the minds of many H-1B first-timers. Don’t worry! Several options exist if you’re not selected.

It’s really important, especially for early-stage companies, to work with experienced attorneys to guide them through this process. Now that USCIS has changed it’s system, if you’re already selected, then having a great attorney is really important to mitigate any remaining risk in the rest of the process. There are lots of wonderful, experienced immigration lawyers out there to choose from.

This year’s new H-1B online lottery registration process ended on March 20. By March 31, U.S. Citizenship and Immigration Services (USCIS) will notify companies whose H-1B candidates have been selected.

If USCIS selects you, your sponsoring employer will have 90 days to submit a complete H-1B petition. Employers can file an H-1B petition up to six months before a candidate’s intended start date.

Sophie Alcorn Alcorn Immigration Law Silicon Valley San Francisco 03

Immigration law attorney Sophie Alcorn

It’s great that you’re already here in the U.S. H-1B candidates living outside of the U.S. seeking consular processing may face delays coming here for their employment start date depending on when coronavirus-related consulate closures and travel restrictions are lifted. These situations need to be addressed individually.

If meeting a deadline during any step of the process becomes difficult or impossible due to COVID-19, it’s possible to request special handling from the government. The federal government grants extensions under special circumstances, such as floods and hurricanes. The COVID-19 pandemic is a special circumstance.

Because COVID-19 is prompting policy and procedural changes with little or no warning, I recommend consulting an immigration attorney for assistance.

If you haven’t already, assemble the necessary documents as soon as possible. Obtaining documents may take longer now that most universities and companies are closed due to the pandemic.

Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms.

Your sponsoring employer will need to assemble documents that demonstrate the appropriate policies and cash flow to hire you. Startups need to be extra careful to meet all the requirements. You should have easily accessible:

  • Current resume
  • Transcripts
  • Diplomas and certificates
  • Passports used to enter U.S.
  • Past immigration documents (I-20, DS-2019, I-797, etc.)

A Labor Condition Application (LCA) approved by the U.S. Department of Labor is required with all H-1B petitions. For the LCA, your startup must promise to pay at least the prevailing wage to you and ensure that your employment conditions won’t negatively affect other workers.

If this is a startup and it’s the company’s first H-1B, it must get its Federal Employer Identification Number (FEIN) verified by the Labor Department’s Office of Foreign Labor Certification before starting. That process typically takes a week or so. Timing is key to filing an LCA. Keep in mind that the Labor Department typically makes a decision on whether to certify an LCA within seven business days.

Employers do not need to submit evidence to the Labor Department for an LCA, but they must post a copy of the H-1B notification, which can be done electronically, as well as keep all supporting documents in a file and make it available for public viewing.

The employer will also need to fill out Form I-129 (Petition for a Nonimmigrant Worker), and assemble compelling evidence and supporting documents. Check and double check the form and your documents to avoid mistakes and omissions, which can prompt USCIS to deny a petition. Make sure the info contained in the LCA matches Form I-129. Remember to include all required signatures.

USCIS recently announced that scanned or photocopied signatures will be allowed on all documents and petitions during the COVID-19 emergency. Make sure you pay the proper fees and send your package to the correct address with a way to track that package.

USCIS recently announced the temporary suspension of premium processing for H-1B petitions. The agency expects to resume premium processing for individuals changing status from an F-1 student visa by May 27, and all others by June 29. For an extra fee, premium processing enables employers to receive a decision on a petition within 15 days. Without premium processing, the USCIS California Service Center is currently taking two to four months.

If you don’t get selected in the H-1B lottery, relax! Your startup can sponsor you for an H-1B again next year because there’s no limit on the number of years you can be entered in the lottery, whether you’re inside or outside the U.S. and whether you’re currently employed by them or not. In the meantime, several other visa options exist for individuals like you who qualify for an H-1B:

  • O-1A Visa: If have “extraordinary ability” in the sciences, education or business, you could be eligible for an O-1A. However, the bar for qualifying for an O-1A is higher than for an H-1B.
  • J-1 Visa: Most employers cannot directly sponsor an individual for a J-1 visa, which is a work-and-study visitor exchange program. The U.S. State Department designates public and private sponsor organizations to supervise the exchange programs and application process that can be used to support a J-1 at a specific company.
  • L-1 Visas: If your employer has an office outside of the U.S. — or you can set up one for them — and you can work in that overseas office for 12 months or more, your employer can then transfer you back to the U.S. under an L-1A visa for executives and managers or an L-1B visa for employees with specialized knowledge. No annual quotas exist for L-1 visas, and these visas are “dual intent” and can lead to a green card.
  • F-1 Visa: You could become a full-time student at an accredited college or university under an F-1 visa. Some graduate programs require Curricular Practical Training (CPT) or allow Optional Practical Training (OPT). Both training programs enable students to gain work experience in their field of study.

The following options are available to you if you’re a citizen of Chile, Singapore, Australia, Canada or Mexico:

  • H-1B1 Visa: If you’re a citizen of Chile or Singapore, you’re eligible for an H-1B1. Each year, 1,400 H-1B1 visas are reserved for Chileans and 5,400 are reserved for Singaporeans. Rarely are those visas exhausted.
  • E-3 Visa: If you’re an Australian national, you’re eligible for an E-3 for “specialty occupation” professionals who have specialized theoretical or practical knowledge. An LCA is required. A maximum of 10,500 E-3 visas is available annually, but they rarely are exhausted.
  • TN Visa: If you’re from Canada or Mexico, you could work temporarily under a TN (Treaty National) visa for certain occupations. TN visas have no annual quota and allow for unlimited extensions as long as the employer and conditions of employment remain the same.

Fingers crossed that you get selected in the lottery!

All my best,

Sophie


Have a question? Ask it here; we reserve the right to edit your submission for clarity and or space. The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer here. You can contact Sophie directly at Alcorn Immigration Law.

Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms; if you’d like to be a guest, she’s accepting applications!

IBM, Amazon, Google and Microsoft partner with White House to provide compute resources for COVID-19 research

By Frederic Lardinois

During today’s White House coronavirus task force press conference, President Trump announced the launch of a new public/private consortium to “unleash the power of American supercomputing resources.” The members of this consortium are the White House, the Department of Energy and IBM . Other companies, including Google, Amazon and Microsoft, as well as a number of academic institutions, are also “contributing lots of different things,” the president said.

While Trump’s comments were characteristically unclear, IBM provided more details, noting that it is working with a number of national labs and other institutions to offer a total of 330 petaflops of compute to various projects in epidemiology, bioinformatics and molecular modeling. Amazon, Google and Microsoft are also part of the consortium, which is being led by IBM, the White House Office of Science and Technology Policy, and the Department of Energy.

IBM and its partners will coordinate the efforts to evaluate proposals and provide access to high-performance computing resources to those that are most likely to have an immediate impact.

“How can supercomputers help us fight this virus? These high-performance computing systems allow researchers to run very large numbers of calculations in epidemiology, bioinformatics, and molecular modeling. These experiments would take years to complete if worked by hand, or months if handled on slower, traditional computing platforms,” writes Dario Gil, IBM’s Director of Research.

AWS has already dedicated $20 million to support COVID-19 research while Microsoft has already announced a number of different initiatives, though mostly around helping businesses cope with the fallout of this crisis. Google has now launched its own coronavirus website (though it’s very different from the one Trump once promised) and Alphabet’s Verily is helping Bay Area residents find testing sites if needed. It’s unclear what exactly Google and Microsoft will contribute to these current efforts, though.

“Today I’m also announcing the launch of a new public/private consortium organized by the White House, the Department of Energy and IBM to unleash the power of American supercomputing resources to fight the Chinese virus,” Trump, who continues to insist on calling COVID-19 ‘the Chinese virus,’ said in today’s press briefing. “The following leaders from private industries, academia and government will be contributing and they are gonna be contributing a lot of different things, but compute primarily — computing resources to help researchers discover new treatments and vaccine. They will be working along with NIH and all of the people working on this. But tremendous help from IBM, Google, Amazon, Microsoft, MIT, Rensselaer Polytechnic Institute, the Department of Energy’s, the National Science Foundation and NASA. They are all contributing to this effort.”

Justice Dept. files its first coronavirus takedown: a bogus vaccine website

By Zack Whittaker

U.S. federal prosecutors have filed and won a temporary restraining order against a website offering a fraudulent coronavirus vaccine, which the Justice Department said is its first enforcement action related to the pandemic.

In a statement, the Justice Dept. said the action was taken against a website, said to be engaging in a wire fraud scheme, seeking “to profit from the confusion and widespread fear” surrounding the coronavirus strain, known as COVID-19.

The website, seen by TechCrunch, claims the World Health Organization is “giving away vaccine kits,” if unsuspecting victims pay a small fee for shipping. The website asks for a victim’s credit card information.

“In fact, there are currently no legitimate COVID-19 vaccines and the WHO is not distributing any such vaccine,” the Justice Department’s statement said.

A federal judge issued the temporary restraining order against the website’s owners, whose names are not known. The order also demanded that Namecheap, the site’s domain host, of the fraudulent statements, pull the site offline.

Although the Justice Dept. names the website, we are not. The website remains accessible at the time of writing.

A spokesperson for Namecheap  did not immediately respond to a request for comment.

Assistant attorney general Jody Hunt said: “The Department of Justice will not tolerate criminal exploitation of this national emergency for personal gain. We will use every resource at the government’s disposal to act quickly to shut down these most despicable of scammers, whether they are defrauding consumers, committing identity theft, or delivering malware.”

As it stands, there are more than 300,000 confirmed cases around the world. But as government authorities continue to lack testing equipment, the global number of infections is said to be far higher.

Some 80 million Americans are under lockdown, including California, New York, and Illinois as of Friday, in an effort to limit the spread of the respiratory illness.

The spread of the virus also prompted the U.S. and Canada to mutually agree to close the northern border, and the U.S. to close its southern border with Mexico to all but essential travel.

On Thursday, the U.S. ordered an unprecedented “do not travel” warning to all Americans.

Rigetti Computing took a $71 million down round, because quantum computing is hard

By Jonathan Shieber

The $71 million in financing that quantum computing technology developer Rigetti Computing recently raised came at a significant cut to the company’s valuation, according to several sources with knowledge of the company.

The company declined to comment on its valuation or the recent round of funding it secured.

Rigetti is one of a handful of startups attempting to make quantum computing commercially viable. It’s a vitally important emerging technology with implications for national security and a broad swath of industries that depend on better data analysis and more powerful computing to continue innovating around materials science, genetics and … well… pretty much anything else.

In July, Rigetti acquired QxBranch, a quantum computing and data analytics software startup, to build on Rigetti’s full-stack strategy and expand the company’s ability to deliver quantum algorithms, solutions and services, according to a statement

“Our mission is to deliver the power of quantum computing to our customers and help them solve difficult and valuable problems,” said Chad Rigetti, founder and CEO of Rigetti Computing, in a statement at the time. “We believe we have the leading hardware platform, and QxBranch is the leader at the application layer. Together we can shorten the timeline to quantum advantage and open up new opportunities for our customers.”

Huge corporations, including Google and IBM, have invested hundreds of millions to develop quantum computers, and there’s a growing push among politicians in the U.S. government to devote more money to the technology — out of fear that China’s scientists and national efforts have outpaced American advances in the field.

Quantum computing is an area that’s set for a windfall of government dollars under the budget proposed earlier this year by the Trump administration. The National Science Foundation will receive $210 million for quantum research, while the Department of Energy will receive a $237 million boost and an additional carve out of $25 million for the Department of Energy to begin development of a nationwide Quantum Internet.

Fundamentally, quantum computing is hard, and there are few commercially viable applications for a technology that’s still in its infancy. The “computers” are notoriously difficult to operate, so not many companies are pursuing the creation of the hardware itself. Instead, companies in the market are pitching the ability to adapt into a form amenable to solving by quantum computing the hard questions that corporations and research institutions would like to pose, as well as flexible access to shared quantum hardware.

That’s a variation on the wildly successful cloud computing and software as a service business models now all the rage among technology companies developing services for other industries.

If commercial traction is one issue for quantum computing startups — which lack access to the billions available to companies like Alphabet (Google’s parent company) or even the struggling tech giant IBM — then recent trends in venture capital investment have proven to be another.

It’s very likely that the company fell victim to the irrational exuberance of the stupid money unicorn era, where firms raised billions of dollars in capital in an effort to compete with massive sovereign wealth-backed corporate investment firms led by people who had previously burned dumpsters full of cash in the dot-com era made billions off well-timed investments in Chinese e-commerce companies.

That said, financing a company that can achieve a quantum breakthrough is one of those moonshot investments where the return on a successful investment is basically unlimited. There’s so much potential in the technology, and so little viable commercial business, that the first to break through the noise could be a real win.

Recently, investors are gambling more on the middleware layer of a quantum computing stack. These are companies like Zapata, Q-CTRL, Quantum Machines and Aliro, which improve the performance of quantum computers and create an easier user experience.

In 2017, Rigetti announced that it had raised $64 million over a period of several years while it developed its quantum computing technology. That was followed with another $50 million investment later that year, as Bloomberg reported. This latest investment was led by Battery Ventures, according to data available on Crunchbase.

The lack of available, non-dilutive capital for companies like Rigetti may be a problem going forward, if the U.S. wants to provide a broad base of support for the pursuit of quantum technology innovations, according to some industry observers.

This is a national security issue. We should be trying to be doing everything we can,” said one industry observer. “If we don’t fight this war and somebody else wins this war it’s going to have significant ramifications for the U.S. For some of these things… private companies and government have to collaborate. For our own national security.”

US threatens to pull big tech’s immunities if child abuse isn’t curbed

By Zack Whittaker

The Department of Justice is proposing a set of voluntary principles that take aim at tech giants in an effort to combat online sexual abuse.

The principles are part of a fresh effort by the government to hold the tech companies accountable for the harm and abuse that happens on their platforms, amid the past two years of brewing hostilities between the government and Silicon Valley. But critics also see it as a renewed push to compel tech companies to weaken or undo their “warrant-proof” encryption efforts under the guise of preventing crime and terrorism.

U.S. Attorney General William Barr announced the proposals at the Justice Department on Thursday with international partners from the U.K., Canada, Australia, and New Zealand.

The principles, built by the five countries and tech leaders — including Facebook, Google, Microsoft, and Twitter — aim to incentivize internet companies and social media giants to do more to prevent child sexual abuse on their platforms.

Barr said he hopes that the principles “set new norms” across the tech industry to “make sure there’s no safe space on the internet for offenders to operate.”

The principles come ahead of anticipated bipartisan legislation to Congress — the so-called Earn-It Act, which reports say could effectively force the tech companies’ hands by threatening to pull their legal immunities for what their users post if the companies fail to aggressively clamp down on online child sexual abuse.

Sens. Lindsey Graham (R-SC) and Richard Blumenthal (D-CT) are expected to announce the legislation on Wednesday.

Justice takes aim at big tech’s immunities

Barr warned that the government is “analyzing the impact” of Section 230 of the Communications Decency Act, which protects tech platforms from legal liability for content created by their users.

Under Barr, the Justice Department has taken a particular interest in dismantling Section 230. Last month, the Justice Department hosted a “workshop” on Section 230, arguing that the immunity it provides interferes with law enforcement and needs to be reexamined.

“We must also recognize the benefits that Section 230 and technology have brought to our society, and ensure that the proposed cure is not worse than the disease,” Barr said last month.

Any change to Section 230, widely regarded as the legal underpinning of all online platforms, could radically alter the landscape of the modern internet and give the government more power to control online speech. Privacy advocates view the government’s interest in wielding Section 230 as a cudgel as an existential threat to the internet as we know it.

Last month, Oregon Senator Ron Wyden, one of Section 230’s co-authors, condemned the Trump administration’s scrutiny of the law and argued that repealing the law would not be a successful punishment for large tech companies. “… The biggest tech companies have enough lawyers and lobbyists to survive virtually any regulation Congress can concoct,” Wyden wrote. “It’s the start-ups seeking to displace Big Tech that would be hammered by the constant threat of lawsuits.”

Encryption enters the limelight

UK Security Minister James Brokenshire lauded the initiative’s existing six tech partners, encouraging the rest of the industry to fall in line. “It’s critical that others follow them by endorsing and acting on these principles.” The minister claimed that plans to encrypt tech platforms are “sending predators back into the darkness” and away from “artificial intelligence advances that can expose them.”

Brokenshire admitted that encryption “remains the elephant in the room.”

But privacy groups remain wary of legislative action, fearing that any law could ultimately force the companies to weaken or break encryption, which government officials have for years claimed helps criminals and sexual predators evade prosecution.

End-to-end encryption has become largely the norm in the past few years since the Edward Snowden revelations into the vast surveillance efforts by the U.S. and its Five Eyes partners.

Apple, Google, and Facebook have made encryption as standard in its products and services, a frequent frustration for investigators and prosecutors.

But last year, the Five Eyes said it would contemplate forcing the matter of encryption if tech giants wouldn’t acquiesce to the pact’s demands.

The government has called for “responsible encryption,” a backdoor-like system that allows governments access to access encrypted communications and devices with a key that only it possesses. But security experts have universally panned the idea, arguing that there is no way to create a “secure backdoor” without it somehow being vulnerable to hackers.

The anticipated bill has already received heavy opposition. Facebook said that child safety is a “top priority,” but warned that the Earn-It Act would “roll back encryption, which protects everyone’s safety from hackers and criminals.”

The Electronic Frontier Foundation said the bill would “undermine the law that undergirds free speech on the internet.” Firefox browser maker Mozilla said the bill “creates problems rather than offering a solution.”

“The law enforcement community has made it clear this law is another attempt to weaken the encryption that is the bedrock of digital security,” said Heather West, Mozilla’s head of Americas policy. “Encryption ensures our information — from our sensitive financial and medical details to emails and text messages — is protected.”

“Without it, the world is a far more dangerous place,” said West.

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