US Senator Mark Warner called for legislators to look into Chinese app makers and their connections to the Chinese government, ominously comparing them to two major telecom companies, Huawei and ZTE, which were just banned from US government use in light of longstanding security concerns.
The Virginia Senator told BuzzFeed News today that Congress desperately needs to examine a variety of tech-related issues, both for national security reasons as well as the safety of US citizens and businesses.
"Under Chinese law, all Chinese companies are ultimately beholden to the Communist Party, not their board or shareholders, so any Chinese technology company -- whether in telecom or mobile apps -- should be seen as extensions of the state and a national security risk," Warner said in his interview with BuzzFeed News, adding that the unchecked power of conglomerates like Google was exacerbating the loopholes of an environment in desperate need of regulation.
"I don't know how, when they have such top-to-bottom control at every touchpoint along the advertising process, how self-regulating alone there will fix the issue," he said, adding that it was "enormously worrisome to me that Google allowed these highly over-permissioned apps to gain such prominence in the app store even as they hoovered up user data."
Warner's interview comes on the heels of a series of groundbreaking BuzzFeed News reports about fraudulent apps using bots to make millions off of ad sales and the nefarious data collection practices of popular platforms connected to the Chinese government. A vast amount of senators on both sides of the political aisle believe that many, if not all, major tech companies based in China are to some extent forced to hand over their information to the government.
The accusations came to a head in August, when congress decided to ban all US government employees and contractors from using devices made by Huawei and ZTE after years of congressional investigations and reports from US intelligence agencies found that China was actively collecting information from a variety of devices. They also found that in addition to information collected or stolen from the US government, Chinese government security teams also had access to vast stores of data from the millions of US users of a variety of popular Chinese apps. President Donald Trump tried to lift the ban and wrote a series of tweets about the situation with ZTE, but ultimately was overruled by Republican members of congress.
"All this information is ending back up in data repositories in China. Beyond the [ad] fraud, just all the personal information that is being collected on Americans" was problematic, Warner said, calling it "very consistent with what we're seeing in terms of a very, very aggressive government-sanctioned and government-supported efforts to penetrate our economy."
Google has been at the center of a corresponding firestorm that dovetails with Senator Warner's concerns about Chinese government snooping. The internet giant was forced to remove many popular apps from Chinese app companies Cheetah Mobile and Kika Tech because they were involved in a complex bot scheme that defrauded businesses with fake page views in an effort to steal millions in ad revenue.
BuzzFeed cites estimates from Juniper Research that say $19 billion will be stolen this year by digital ad fraudsters, adding that others believe the number could be triple that amount. The two Chinese companies denied any involvement in an ad fraud scheme, but Google removed two of their apps from the Google Play store this week, and they have deleted at least 30 others as they continue to look at their systems and root out similar schemes.
But Google itself has been implicated in the fraudulent advertising schemes, which involve a practice known as "click flooding and click injection." Companies create bot networks and mix them in with an app's real user base, allowing them to double and triple their ad revenue through the fake users. Google defended itself by saying the apps that these companies were buying had already been approved by Google Play security teams, allowing the new companies to rewrite or add code without Google knowing.
Security experts have said this is a common tactic of Chinese app makers and last year Google even touted their ad work with the very same two apps that they were forced to remove from the Play Store this week. Google denied any involvement in the scheme, but they deleted the press release about their work increasing the advertising sales of Cheetah Mobile and continue to dodge regulation from a lackadaisical FTC, which Warner himself criticized in a letter to the agency yesterday.
"The FTC's failure to act has had the effect of allowing Google to structure its own market; through a series of transactions, the company has accomplished a level of vertical integration that allows it in effect to act as the equivalent of a market-maker, commodities broker, and commodities exchange for digital advertising, in the process creating a range of conflicts of interest," Warner wrote in his letter to Federal Trade Commission (FTC) Chairman Joseph J. Simons.
"As we've seen in other contexts - such as the rampant proliferation of online disinformation - major platforms including Google have often proved unwilling to address misuse of their platforms until brought to the wider publics attention by Congress or media outlets. As long as Google stands to profit from the sale of additional advertisements, the financial incentive for it to voluntarily root out and address fraud remains minimal."
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- US Senator Mark Warner wants congress to scrutinize Chinese app makers because of their rampant data collection practices and ties to the Chinese government.
- He compared Chinese app companies to Huawei and ZTE, Chinese companies that had their devices banned from government use due to fears of spying.
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