The latest setback in the industry came courtesy of Apple, which unveiled a new feature on Wednesday called “Lockdown Mode” to help activists, dissidents, journalists, and other high-risk targets avoid surreptitious hacks of their Apple products. The optional tool disables several useful aspects of iPhones and iPads—including email attachments, web link previews, incoming calls—that hackers have used to bug electronic devices.

Apple acknowledged that Lockdown Mode, which will debut in the fall, offers “an extreme, optional level of security” for the “very few” users worried about spyware. 

Still, it’s a huge development for people whose jobs, or lives, depend on being able to safeguard sensitive data. And it’s another blow to private spyware companies that have been under siege from democratic nations and privacy advocates.

“Today @apple is setting an example of what tech platforms can do to positively impact this space & reduce harms,” Ron Deibert, director of the Citizen Lab at the University of Toronto and a leading spyware expert, tweeted Wednesday. “@Apple’s newly released #LockdownMode will reduce the attack surface, increase costs for spyware firms, & thus make it much harder for repressive govts to hack high risk users.”

The rollout of Lockdown Mode follows several recent triumphs against spyware companies, which for a long time appeared able to ply their trade with impunity.

The industry’s largest player, Israel’s NSO Group, is in dire financial straits after multiple news organizations reported last year that the company’s powerful spyware technology had been used in attempted and successful hacks of 37 journalists’ phones. The discovery likely represented the tip of the iceberg, given that available evidence showed NSO Group licensed the technology to at least 10 oppressive governments. (Apple specifically called out NSO Group in its “Lockdown Mode” announcement Wednesday.)

The U.S. government subsequently blacklisted NSO Group, and the Financial Times reported that the company went months without a sale in 2021. The Times added in June that American defense contractor L3Harris was in talks to acquire NSO Group’s technology and engineers, though the discussions remained preliminary.

Meanwhile, three other Israeli spyware outfits—Candiru, Nemesis, and Ace Labs—have closed or been severely hampered by domestic regulations limiting the export of hacking technology.

An Italian company, RCS Lab, also faces intense scrutiny after Google disclosed last month that the little-known firm’s spyware had been used to access private messages and contacts on Apple and Android phones in Italy and Kazakhstan.

None of that is to say that the spyware problem is about to go away.

As MIT Technology Review’s Patrick Howell O’Neill wrote last month, new players and experienced veterans are “stepping into the vacuum to provide the hacking capability that more and more governments demand.”

“American sanctions and Israeli restrictions may conceivably contribute to the end of NSO Group. But what happens next?” O’Neill wrote. “The market is bigger and more visible than ever before, encompassing hundreds of companies selling surveillance tech globally.”

At the same time, the authoritarian regimes in China, Russia, North Korea, Iran, and several Middle Eastern nations continue to build internal hacking apparatuses.

For now, though, the spyware industry is finally facing some strong resistance—and it’s got a powerful enemy in Apple.

Want to send thoughts or suggestions for Data Sheet? Drop me a line here.

Jacob Carpenter

NEWSWORTHY

Be on the lookout. Top U.S. and British security officials delivered a stern warning Wednesday about aggressive Chinese spying efforts, including those targeting technology companies’ intellectual property, Bloomberg reported. FBI Director Christopher Wray and MI5 Director-General Ken McCallum issued the rare joint message in the U.K., cautioning that Chinese state-sponsored hackers and global intelligence operatives are working to steal valuable business information. Wray said the FBI, on average, opens two new counterintelligence investigations related to China each day.

Doing his part. Elon Musk and a top executive at the neurotechnology company he runs had twins late last year, Insider reported Wednesday. The previously undisclosed relationship could raise potential conflict-of-interest questions, though Musk’s companies often shun some traditional workplace boundaries. Musk, who issues frequent warnings about the consequences of low global birth rates, now has nine children after Shivon Zilis, the director of operations and special projects at Neuralink, gave birth to their twins in November.

Weathering the storm. Samsung posted a mixed quarter ending in June, beating analyst estimates for revenue but missing profit projections, Reuters reported Wednesday. The South Korean electronics giant saw about $59 billion in sales for the quarter, up 21% year over year, as fears about declining consumer demand didn’t materialize. However, Samsung’s $10.7 billion in operating profit fell slightly short of analyst targets, as inflation-driven cost increases weighed on margins.

Finally, some good news. Rivian shares surged by 10% Wednesday after the electric automaker said it’s still on track to produce 25,000 vehicles this year, CNBC reported. The aspiring Tesla rival has warned in recent months about supply-chain challenges impacting vehicle assembly, which forced the company to cut its 2022 production target in March from 50,000 to 25,000. Rivian shares, which rose another 5% in midday trading Thursday, are still down 70% year to date following a sharp marketwide selloff of deeply unprofitable companies.

FOOD FOR THOUGHT

Not giving up yet. TikTok might be scaling back its live e-commerce ambitions, but Amazon isn’t ready to close up shop. The Financial Times reported Thursday that Amazon is increasing its investment in Amazon Live, the tech giant’s QVC-style streaming service, and aggressively courting influencers who could raise the platform’s profile. While live e-commerce is a $400 billion–plus business in China, where consumers have grown accustomed to the shopping option, Western customers haven’t yet taken to the practice. The Times reported earlier this week that ByteDance-owned TikTok abandoned its live e-commerce expansion plans for the U.S. and Europe following an underwhelming reception during a trial run in the U.K.

From the article:

This year, the company has hosted at least four events designed to attract more influencers to its platform, including a glitzy retreat at a Mexican beach resort. To the top names, it has offered up generous bonuses: thousands of dollars in added incentives to stream live on Amazon instead of elsewhere, according to leading influencer agencies.

Amazon’s goal is to establish itself as the main destination for live online shopping, ahead of competing efforts from YouTube, Instagram and TikTok, but also a host of smaller start-ups backed by prominent venture capital firms, such as Andreessen Horowitz–backed WhatNot.

IN CASE YOU MISSED IT

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Sam Bankman-Fried says FTX has a “few billion” to help failing crypto companies, but adds the worst is probably over, by Taylor Locke

Exclusive: Meta veteran David Fischer makes a move into venture capital, by Jessica Mathews

Samsung and Apple exited Russia over its invasion of Ukraine. Chinese smartphone brands have already seized their market share, by Yvonne Lau

Crypto exchange Binance.US hires Acorns and PayPal alum as CFO on its path to an IPO, by Anne Sraders and Sheryl Estrada

BEFORE YOU GO

Lost and found. The reports of CAPSTONE’s demise have been greatly exaggerated! (Including in this space yesterday.) A NASA contractor confirmed Wednesday that it had reestablished contact with CAPSTONE, the 55-pound, moon-bound probe, after it went silent for two days, Space.com reported. The disconnect caused a minor kerfuffle for NASA and contractor Advanced Space, which remained optimistic that the issue represented a minor glitch. Advanced Space officials tweeted that CAPSTONE “is looking happy and healthy,” though they didn’t elaborate on the reasons for the outage. The probe is scheduled to arrive in November near the moon, where it will test orbital stability ahead of a manned lunar mission scheduled for 2024. Onward, CAPSTONE.