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| Welcome to today's Inside Tech newsletter! Here are quick highlights of our top stories: - A congressional probe found that tax prep firms shared "extraordinarily sensitive" data about taxpayers with Meta and Google.
- Consumer app spending has rebounded after experiencing a slowdown in 2022.
- The EU has cleared Broadcom's $61B takeover of VMWare, under certain conditions.
- Domino's to list on Uber Eats and Postmates to drive $1B in sales.
Beth
p/beth-duckett | |
| 1 | | Three major tax prep companies illegally shared taxpayers' sensitive financial data with tech giants Google and Meta for years, according to the results of a congressional investigation. A group of seven lawmakers, led by Sen. Elizabeth Warren (D-MA), has called for potential criminal charges against the companies, citing violations of taxpayer privacy laws, along with new policies and the creation of a government-run electronic tax free-file system. More: - The lawmakers presented their own findings in a report, building on reports from The Markup and The Verge, which initially exposed the data sharing.
- They urged the IRS, DOJ, and other agencies to investigate and potentially take legal action against H&R Block, TaxAct, and TaxSlayer for the highly personal data they shared on millions of taxpayers.
- The tax prep companies allegedly used tracking technology, known as Meta Pixels, on their sites to send info such as income sources, tax deductions, and exemptions to the tech company without consent or proper disclosures, according to the findings.
- The data was used for targeted advertising and to train Meta's AI models.
Response: - According to the report, the tax prep firms were "careless" with their treatment of taxpayer data and didn't understand the extent to which that data would be shared and used by the tech firms.
- H&R Block said it has taken steps to prevent information sharing, while TaxAct and TaxSlayer did not immediately respond to inquiries.
- Google and Meta placed the blame on the tax prep companies and asserted that their policies aim to prevent the collection of sensitive data.
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| 2 | | What happened: The mobile app market has made a comeback in 2023, showing signs of rebounding after a slowdown in 2022. Background: Last year, consumer spending fell 2% to $167B, the first drop since the App Store's launch in 2008. The year prior, spending had experienced 19% YoY growth. What's new: Following the slowdown, mobile app consumer spending has rebounded with YoY growth of 5.3%, according to a new report from app intelligence provider data.ai. Downloads were also up by 3.2%. What the numbers say: During the first half of 2023, global consumer app spending reached a record $67.5B, with 76.8 billion app downloads across iOS and Google Play. According to data.ai, iOS growth has outpaced Android, with $43.5B in consumer spending on iOS and $24B on Android. The bigger picture: The mobile app resurgence benefits developers, publishers, and marketers. When it comes to apps, TikTok leads in consumer spending, achieving 31% year-over-year growth and becoming the first app to surpass $2B in just six months. Across both stores, the top apps by downloads globally were TikTok, Instagram, Facebook, WhatsApp, CapCut, Snapchat, and Telegram, while the top games were Subway Surfers, Free Fire, Roblox, and Candy Crush Saga. 
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| 3 | | The EU has approved Broadcom's $61B acquisition bid for virtualization software firm VMware, with certain conditions regarding access and interoperability. The European Commission's antitrust approval could pave the way for the U.S. chipmaker to complete the deal by Nov. 1, pending reviews by U.S. and U.K. regulators. More: - VMware's virtualization software is compatible with hardware components, including adapters supplied by Broadcom.
- The deal has faced scrutiny over concerns that Broadcom could limit competition in those hardware markets.
- Specifically, antitrust regyulators were worried about restrictions on interoperability between VMware's software and Broadcom's hardware rivals, like Marvell.
- The EU's conditions require Broadcom to provide "guaranteed access" and interoperability, including APIs, materials, and technical support, to competitors, enabling them to continue using VMware's software.
Zoom out: - If successful, this acquisition would be one of the largest in the tech industry, allowing Broadcom to expand its presence in enterprise infrastructure software.
- Additionally, Broadcom's software division would undergo rebranding as VMware.
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| 4 | | Chinese cyberspies breached the email accounts of around 25 organizations, including U.S. government agencies, according to Microsoft and others. The hacking group, referred to as Storm-0558, used forged identity authentication tokens to access some individual Outlook webmail accounts. More: - Chinese hackers exploited a critical loophole in Microsoft's cloud infrastructure, allowing them to conduct a targeted hack on unclassified U.S. email accounts.
- The vulnerability was discovered by the U.S. government in June, about a month after the hacking incidents started.
- Although Microsoft didn't disclose the specific agencies affected, the company said the hacking group primarily targets Western European governments for espionage and data theft.
- Adam Hodge from the White House's National Security Council confirmed no classified U.S. networks were affected, and investigations continue to assess the extent of the information breach.
Zoom out: - The targeted and sophisticated nature of the attack suggests involvement either by or on behalf of China's intelligence service.
- While the breach is smaller in scale compared to recent incidents, it still poses a threat to U.S.-China relations.
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| 5 | | Domino's has signed a deal with Uber to list its menus on Uber's Eats and Postmates food delivery apps. The world's largest pizza company initially resisted U.S. third-party delivery apps but is now targeting $1B in new sales through the Uber apps. More: - According to The Wall Street Journal, Domino's will list its menu on the food delivery apps in 28 markets, including the U.S., U.K., and Canada.
- The rollout will begin in four pilot markets in the U.S. and expand nationwide by the end of the year.
- While Domino's will still handle pizza delivery itself, the collaboration aims to expose the company to a wider customer base.
Zoom out: - The rise of delivery apps during the pandemic has impacted pizzerias, with third-party apps accounting for 14% of pizza sales in the year prior to May 28, up from 4% before lockdowns, according to market research firm Circana.
NOTE: Inside.com founder and CEO Jason Calacanis is an investor in Uber. | | | |
| 6 | | Anthropic, a Google-backed generative AI startup, has released its latest AI chatbot to the public. People in the U.S. and U.K. can now try out the beta version of Claude 2 at claude.ai. More: - Claude 2 can summarize up to 75,000 words and has outperformed the previous version, scoring 76.5% on the Bar exam's multiple-choice section compared to the prior version's 73%, for example.
- Anthropic's AI models have undergone testing by companies such as Slack, Notion, and Quora.
- The company has amassed a waitlist of over 350,000 individuals wanting to access Claude's API and consumer products.
- In terms of funding, Anthropic has raised $750M since March, resulting in a pre-investment valuation of $4.1B.
Zoom out: - According to Crunchbase, the startup has received external investments totaling $1.45B, positioning it as the third best-funded generative AI startup.
- Notable backers include Google, Zoom Ventures, and other investors.
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 | AI and technology writer | | Beth is a writer and editor at Inside.com covering artificial intelligence and daily technology news. She has written the Inside AI newsletter since 2019. You can reach her at Beth.Duckett@inside.com. | | This newsletter was edited by Eduardo Garcia | |
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