SCOTUS on privacy case: The Supreme Court of the United States has agreed to review a landmark 2016 decision that barred the federal government from obtaining personal emails stored on a Microsoft server in Ireland.
The Court of Appeals for the Second Circuit had sided with Microsoft in July 2016, but the Department of Justice appealed to the higher court. Microsoft had argued its case on ground that the Electronic Communications Privacy Act, which was created decades before the cloud era, was never meant to have authority within the borders of foreign countries, general counsel Brad Smith said in a blog post:
But as we have said from the beginning of this litigation, there’s a broader dimension to this issue as well. The continued reliance on a law passed in 1986 will neither keep people safe nor protect people’s rights. If U.S. law enforcement can obtain the emails of foreigners stored outside the United States, what’s to stop the government of another country from getting your emails even though they are located in the United States?
We believe that people’s privacy rights should be protected by the laws of their own countries and we believe that information stored in the cloud should have the same protections as paper stored in your desk. Therefore, Congress needs to modernize the law and address these fundamental issues.
POV: There is already bipartisan legislation drafted that would create modernized versions of the ECPA that take into account today's realities while also being mindful of law enforcement needs. Microsoft will continue pressing its case that the DoJ's interpretation of the ECPA is erroneous, Smith wrote.
Redmond will no doubt continue enjoying broad support from other tech vendors, privacy advocates and trade associations in its effort as well. However, the DoJ has its own argument to make, namely that data such as the emails in Ireland is the property of companies, not users, and therefore a warrant served on U.S. corporations for information held abroad is a domestic order and thereby applicable under the ECPA.
The mere fact the DoJ's petition will be heard by the Supreme Court underscores how important the case is. It's not clear when it will be heard, but some reports suggest it could be within a few months. The bottom line? A major decision on how U.S. law treats personal electronic data is coming down soon.
IBM unveils blockchain service for cross-border payments: Big Blue has made a sizable bet indeed on blockchain, with a particular focus on financial services applications. In its latest such move, IBM is partnering with Stellar.org and KlickEx Group on a blockchain service for cross-border payments. Here are the key details from its announcement:
Today, making international payments can be costly, laborious and error-prone. Transactions in different currencies can require multiple intermediaries and take days or weeks to complete.
Using a blockchain distributed ledger, all appropriate parties have access and insight into the clearing and settlement of financial transactions. It is designed to augment financial flows worldwide, for all payment types and values, and allows financial institutions to choose the settlement network of their choice for the exchange of central bank-issued digital assets.
For example, in the future, the new IBM network could make it possible for a farmer in Samoa to enter into a trade contract with a buyer in Indonesia. The blockchain would be used to record the terms of the contract, manage trade documentation, allow the farmer to put up collateral, obtain letters of credit, and finalize transaction terms with immediate payment, conducting global trade with transparency and relative ease.
The service is already processing transactions in 12 "currency corridors" in the Pacific Islands, Australia, New Zealand and the UK. It is powered by IBM's Hyperledger Fabric-based blockchain platform. Stellar.org provides an open-source blockchain network for trading digital assets, and has a custom-built cryptocurrency called lumens that is being used to settle transactions done through IBM's service. KlickEx is a Pacific region financial services company.
POV: Major financial institutions such as TD Bank and Australia National Bank are also associated with the project, which will be expanded to other regions next year. Overall, it's an example of major tech and financial players joining forces with scrappy blockchain upstarts to tackle a vexing problem. IBM and its partners will discuss the effort in more detail during the Sibos 2017 conference this week in Toronto.
Facebook launches food ordering service: More than anything, Facebook wants to keep users inside its environment. It is launching a new food-ordering service that aggregates third-party options from inside the social network. Here's how Facebook explains it in a blog post:
People already go to Facebook to figure out what to eat by reading about nearby restaurants, and seeing what their friends say about them. So, we’re making it even easier.
Facebook combines options from a number of food ordering services like EatStreet, Delivery.com, DoorDash, ChowNow and Olo, as well as restaurants like Jack in the Box, Five Guys, Papa John’s, and Panera, so you don’t have to search through multiple places to find what you’re looking for. From local spots to national chains, Facebook connects you with old favorites and new discoveries in just a few taps. You can even check out what your friends have to say about a restaurant before you order your food.
The service has been in testing since last year but it now available throughout the US on iOS, Android and desktops.
POV: "I think this is a fantastic development for customer experience," says Constellation VP and principal analyst Cindy Zhou. "Facebook’s advantage is the ability to connect one’s friends, to perhaps order together, and it becomes more of a 'social' outing." Moreover, the ability to integrate reviews is powerful Zhou adds. "I think the risk is for these third-party delivery platforms," she says. "Facebook could take them out by working directly with the brands."
Tech earnings season begins: IBM and SAP are two tech bellwethers set to announce third-quarter earnings this week, followed by Amazon, Microsoft and Google/Alphabet next week. All told, the enterprise market should get a clear snapshot of customer buying patterns and trends.
POV: Eyes will be on whether SAP can continue delivering rapid growth in its cloud applications, as well as updated numbers for S/4HANA adoption and a sense of what momentum SAP's Leonardo product-and-services digital transformation strategy has gained.
IBM is not expected to break its long streak of revenue declines, but it will be interesting to see how Big Blue's newly launched z14 mainframes are tracking in initial sales. The big selling point for the z14 is full encryption with no appreciable performance hit.
