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The Kitchen Sync

October 2, 2020

Ransomware concerns grow as election nears

What’s new: Ransomware attacks on election infrastructure, a hospital chain, and IoT devices are raising concerns about what could happen as we near the US presidential elections.

Why this matters: Federal officials are worried that ransomware attacks could be prevalent in the days before the election or in its wake, sowing further chaos in what already promises to be a highly contested outcome.

Key points:

  • Over the last year, there have been more than 1,000 ransomware attacks against big cities, small towns, and contractors who administer their voting systems, according to the New York Times.

  • Last week, a Texas company that more than 20 cities and states use to aggregate and display election results was hit by an attack lasting more than two days.

  • Another attack shut down the systems of Universal Health Services, a healthcare and hospital network with more than 400 locations in the US, Puerto Rico, and the UK. 

  • A patient at another hospital in Germany died after a ransomware attack there forced her to be moved to a more distant facility, according to Wired Magazine.

  • Finally, a cybersecurity researcher demonstrated how a so-called “smart” coffee maker could be hacked so that it turned on the burner, dispensed water, engaged the bean grinder, and displayed a ransom message. 

  • Previous IoT attacks have also shown how these devices can be used to build “zombie networks,” where attackers leverage millions of hacked devices to conduct massive denial of service and other attacks.

What we’re thinking: We have previously spun out some frightening scenarios about how ransomware attacks might evolve. And, if someone wants to cause further chaos during this fraught election cycle, this is good way to do it. We have two pieces of advice: (1) backup your phone, tablet, and computer and (2) switch to pour-over coffee (it’s better anyway).

SCOTUS issue goes cyber

What’s new: A religious group associated with SCOTUS nominee Amy Coney Barrett has suffered a data breach, according to the Catholic News Agency.

Why this matters: It is unclear if the attack is simple harassment, intimidation, or if it will feed efforts to oppose Judge Barrett’s nomination. Whatever the motive, it demonstrates that every public figure should assume some sort of cyber vulnerability.

Key points:

  • The People of Praise religious group was founded in 1971 and consists of more than 1,500 mostly Catholic and Christian members across 22 cities in North America and the Caribbean.

  • The group has been under increased scrutiny since Judge Barrett was identified as being a part of President Trump’s Supreme Court shortlist.

  • “On September 23, 2020, our security staff identified an incident via our website involving unauthorized access to contact information in our membership directory,” People of Praise spokesperson Sean Connolly told CNA.

  • “No further details, such as parties that may have initiated this incursion, are known, and we have provided our members with resources should they notice suspicious activity,” he said, according to CNA, adding: “Steps were immediately taken to address the incident, including notifying appropriate federal law enforcement and our members.”

Preview: Tech’s growing role in geopolitics

What’s new: I (Klon) have a new essay that will soon be published in National Affairs. 

Why this matters: The essay, The New Superpowers: How and Why the Tech Industry is Shaping the International System, is part of a broader series examining the policy implications of tech’s growing influence.

Key points:

  • National Affairs is a quarterly journal of essays about domestic policy, political economy, society, culture, and political thought.

  • My article is part of “a series of essays by conservative and libertarian experts on the various ways internet-platform companies affect modern life.”

  • The series frames these essays according to different kinds of “power” tech companies wield—or are accused of wielding—in American life: geopolitical power, market power, political power, cultural power, and informational power.

Below is a quick summary of the essay, but we also plan to do a deep dive in next week’s newsletter. 

Technology is always a key variable in geostrategic change, but the so-called “fourth industrial revolution” is re-shaping the contours of the emerging global order and the companies at the heart of this revolution often challenge the authority, sovereignty, and capacity of governments.

This migration of geopolitical influence into the private sector is provoking a range of government responses, each rooted in a nation’s specific political form, its relative economic strength, and its broader global ambitions. What is common, however, is that all governments must acknowledge and adapt to the fact that they no longer wield exclusive power and influence on the global stage.

While states are far from irrelevant, effective modern governance requires a new level of cooperation between public and private sectors — but persistent barriers to this cooperation must be clearly understood and addressed. It is especially important that Conservatives and others on the political right think deeply about these issues and shape them so that the United States can realize the many benefits of this new era while also mitigating its attendant risks.

Apple’s Epic fight

What’s new: A growing list of application (app) developers are joining forces to oppose what they claim are Apple’s “anti-competitive policies.”

Why this matters: Apple’s App Store is worth about $15 billion in revenue and is at the heart of the company’s “walled garden” strategy of hardware and software development.

Key points:

  • More than 13 app developers have formed the “Coalition for App Fairness,” billing the coalition as “an independent nonprofit organization founded by industry-leading companies to advocate for freedom of choice and fair competition across the app ecosystem,” according to Ars Technica.

  • The coalition includes heavyweights like Epic Games, Spotify, ProtonMail, Basecamp, and Tile.

  • While developers have complained about Apple’s App Store for a while, the issue took on new urgency after the company banned Epic’s smash-hit game Fortnite.

  • At the root of the new coalition’s complaint are policies they say favor Apple’s apps over competitors’, the 15-30 percent fee Apple charges developers to be in the App Store, and the company’s ban on apps using non-Apple payment methods.

What we’re thinking: All the recent anti-trust talk by the DOJ, State Attorneys General, and Congress is creating a perception that now is the time to push back on industry leaders like Apple. But it can’t be lost on everyone that Apple is the one who built and sold more than 218 million iPhones in 2018 alone, providing app developers customers they might not have had otherwise. Also, while not an unassailable argument, Apple’s claims that their restrictive policies help protect user data is reasonable and is reflected in high user trust and satisfaction. Bottom line: it’s perfectly fine for app developers to leverage one another and to advocate for better terms, but we don’t think we’ll be seeing any government action on this in the near-term.

Tech hits record share of S&P 500

What’s new: Alphabet, Amazon, Apple, Facebook, and Microsoft now have a share of the S&P 500 that is 9% greater by market-cap than the index’s 300 smallest companies.

Why this matters: We are now at a place where a few large US tech companies constitute a concentration of wealth significantly greater than before the 90s dot-com bubble popped, according to an Axios review of data from the Leuthold Group.

Key Points: 

  • “These trillion-dollar tech juggernauts have boosted their market-cap weight in 11 of the past 12 months — zooming from 15.8% of the S&P 500 last September, to 23.9% in August,” Phil Segner, a Leuthold Group research analyst, said in a recent note to clients.

  • “What’s even more remarkable is that this trend has persisted during a 33% downdraft and a 60% updraft. September’s relative wobble in the ‘Top 5’ has trimmed its weight back to 21.7%, which is the largest month-to-month decline since 2000.”

  • “Even with the trim, the current weight of the S&P 500’s Top 5 is still well above the Tech Bubble’s high of 18.1%.”

Klon Kitchen is a managing director at Beacon Global Strategies and a nonresident senior fellow at the American Enterprise Institute.