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Court Lets Microsoft DCU Seize 42 Chinese Hacker Websites

The Microsoft Digital Crimes Unit has seized 42 websites from China-based hacking group Nickel, in attempt to thwart the group’s intelligence-gathering operations. A Virginia federal court granted Microsoft’s request to take over the U.S.-based websites run by Nickel, also known as APT15. Microsoft had since 2016 been tracking the group’s activities, determining them “highly sophisticated,” with attacks designed to install malware that facilitated surveillance and data theft attacks. Nickel was used to attack organizations in the United States and 28 other countries around the world, DCU says.

Microsoft’s DCU believes the attacks were being used to gather intelligence from government agencies, think tanks and human rights organizations, writes vice president customer security and trust Tom Burt in a blog post.

Microsoft provided details of the phishing scheme in court documents unsealed Monday, but withheld the names of individuals and organizations neutralized in the sting, according to The New York Times.

Citing immediate and irreparable harm, the U.S. District Court for the Eastern District of Virginia acceded to the request for a temporary restraining order and required the hackers to turn the websites over to Microsoft. “Obtaining control of the malicious websites and redirecting traffic from those sites to Microsoft’s secure servers will help us protect existing and future victims while learning more about Nickel’s activities,” Burt writes.

DCU has pursued an aggressive legal strategy against cybercriminals and nation-state hackers, bringing 24 lawsuits and taking down more than 10,000 malicious websites used by cybercriminals and another 600 exploited by nation-state actors, according to Burt. “We have also successfully blocked the registration of 600,000 sites to get ahead of criminal actors that planned to use them maliciously in the future,” he adds.

U.S. cybersecurity agencies had warned of the “major threat” Chinese hacking presented America and its allies, reports NYT, noting that the Biden administration in July accused the Chinese government of a hacking campaign that compromised the email of some of the world’s biggest companies and governments.

Meanwhile, “the rapidly expanding criminal industry of ransomware” is “based primarily in Russia,” according to a separate NYT article, which cites a Treasury Department estimate of $1.6 billion in ransoms paid by American companies since 2011. Typically, ransom payments are made in cryptocurrencies that are then converted to conventional currencies.

The crime wave shows no signs of slowing down. Burt acknowledges the legal interventions of Microsoft DCU, while disruptive, “will not prevent Nickel from continuing other hacking activities,” but adds that “we do believe we have removed a key piece of the infrastructure the group has been relying on for this latest wave of attacks.”

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Didi Exits NYSE for Hong Kong, China Tightens Tech Control

China is making an investment statement as it attempts to take control of its financial future and set new yen-centric standards for international monetary exchange. Much is being read into Didi Chuxing delisting itself Friday from the New York Stock Exchange, where it raised billions of dollars, capping at $39 billion for the Beijing version of Uber. The message is: with money of its own and a knack for finding more, the world’s No. 2 economy feels it no longer needs Wall Street and says it will relist on the Stock Exchange of Hong Kong.

The move comes with mistrust of Beijing running high among the U.S. and its allies. It also coincides with China exerting increased control over the nation’s own companies, even as it cracks down on foreign operators.

“It is mutual decoupling, but it is also a contest to set the rules by which international intercourse takes place,” WilmerHale law firm partner Lester Ross told The New York Times of Didi’s New York farewell. (As an aside: San Francisco-based Uber reported a Q3 loss of $2.4 billion that NYT in an earnings piece attributes to investment in Didi. Uber has a current market cap of $74 billion, per Trefis, after a tough ride through the COVID-19 pandemic — one data point in analyzing who needs whom.)

But China “has been asserting greater control over its private companies, particularly those like Didi, which has extensive data on hundreds of millions of the Chinese taxi hailers and ride sharers,” writes NYT. “It seeks a private sector more in line with the Communist Party’s growing focus on spreading wealth and meeting its policy goals — aims that Wall Street investors most likely can’t help with.”

Didi’s NYSE departure, a mere five months after its IPO, “marks the end of a cushy relationship between Wall Street and Chinese tech giants, who are under siege from authorities in Beijing and regulators in America,” according to Yahoo News, which describes “a sweeping Chinese regulatory crackdown in the past year that has clipped the wings of major Internet firms wielding huge influence on consumers’ lives — including Alibaba and Tencent.”

Following Didi’s announcement on Friday, other Chinese tech firms trading on the NYSE — like Alibaba, and Pinduoduo — saw shares drop sharply. Alibaba, “whose arrival on Wall Street in 2014 to a loud fanfare kicked off the parade of Chinese firms listing in the Big Apple,” writes Yahoo News, fell to its lowest level in almost five years on rumors that it could be the next to leave town.

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UK Regulator’s Order for Meta to Sell Giphy Shocks Big Tech

Regulators the world over have been exhibiting antitrust leanings in an effort to temper Big Tech’s unfettered growth, but the UK’s unprecedented move ordering Meta Platforms to sell animated images platform Giphy nearly a year after the purchase has shocked many. The surprise is due not only to the timing, but also for its U.S. implications, and because Giphy’s modest stature has triggered the realization that no deal is too small to escape scrutiny. Meta’s Giphy deal is being described as a “killer acquisition,” wherein an innovative startup is purchased with an intent to quash future competition.

The UK’s Competition and Markets Authority decision “marks the first time the British government has forced a major American technology company to divest one of its major acquisitions,” reports Quartz, which goes on to explain that “the British government has the power to block or unwind mergers on antitrust grounds” even when, as in this case, the companies involved are U.S.-based.

“If Facebook and Giphy both participate in the UK market, the CMA has jurisdiction over them and can, in principle, order Giphy divested,” University of Michigan Law School professor Daniel Crane is quoted as saying in Quartz.

Such cross-border oversight “is necessary for examining global companies, especially ones that serve the online world” and “an essential part of the global competition enforcement regime,” the Balanced Economy Project’s Michelle Meagher told Quartz.

Meta “isn’t pleased” by the sell order, according to Ars Technica, which reports the company “is considering all options, including an appeal.”

In a press release, the CMA said an investigation led to the decision that Meta’s Giphy purchase may stifle competition among social media platforms and a market correction “can only be addressed by Facebook selling Giphy in its entirety to an approved buyer.”

Since its 2013 launch, New York-based Giphy has become the go-to online source for shareable, animated GIFs, its high-engagement content used across the web, including by Meta’s Facebook and Instagram, competing services Snapchat, Twitter and TikTok, as well as Apple iMessage and Android message apps.

The CMA investigation concluded that Meta could thwart competition by “denying or limiting other platforms’ access to Giphy GIFs,” driving more traffic to Meta-owned sites, “which already account for 73 percent of user time spent on social media in the UK,” according to the press release.

Facebook announced its intent to acquire Giphy in May 2020. The purchase price was not disclosed, though it has been reported as between $300 and $400 million. In October 2021, the CMA fined Meta roughly $70 million for breach of an order requiring compliance reports during its investigation.

Ars Technica quotes Bloomberg Law analyst Eleanor Tyler as saying, “The same worldwide enforcers that allowed Facebook to suck up Instagram and WhatsApp are now very wary of even small purchases by the major platforms. What this shows is a change in attitude, and that’s critical.”

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