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Nearly a year after Apple implemented privacy changes that make it harder for digital advertisers to track how consumers use their smartphone apps, the iPhone maker has already introduced two other privacy features that mask the identity of Apple device users. Together, they threaten to further constrain the online ad industry’s ability to track customers, according to ad tech company executives and advertising consultants.

The two privacy features, which Apple launched last fall, are currently available only to people who pay for its iCloud+ storage service. Some ad industry executives fear, however, that Apple could expand or promote the features to more of its customers, similar to how it launched and expanded previous privacy features. That would cause further chaos or crimp revenue for incumbents such as Google and Facebook parent Meta Platforms, whose advertisers are only now starting to recover from the implementation of earlier iPhone ad-tracking restrictions.

“It’s got the industry holding their collective breath,” said Grant Simmons, a vice president at Kochava, which helps advertisers measure the performance of online ad campaigns.

THE TAKEAWAY

• Industry execs fear Apple will expand two new privacy features

• Such a move would block industry’s iPhone privacy workarounds

• The new features obscure or block users’ email, IP addresses

Released in September, one of the Apple features, called Private Relay, acts like a virtual private network, masking the iPhone user’s IP address and encrypting web traffic when the person uses Apple’s Safari browser. The net result is that the internet provider for the phone can see the person’s IP address but not which websites they visited, while the websites can’t tell who is visiting their pages because the IP address remains hidden from them. To enable the feature, Apple iCloud+ customers must manually turn it on in their device settings.

If the Private Relay service expanded beyond Safari to stop the transmission of user IP addresses across mobile apps, ad industry executives say it would hobble the efforts many ad networks and ad tech companies have made to adapt to Apple’s earlier changes, known as App Tracking Transparency. Many of the workarounds that firms including Meta, Snap and Google developed in the wake of Apple’s changes rely in part on having access to groups of user IP addresses to measure whether ads the users saw led to sales.

The second potential new Apple threat comes from a privacy feature made available in December to iCloud+ customers, Hide My Email. The feature creates a randomly generated email address they can provide an app or website rather than sharing their real email address. That way, they can hide who they are from any app that asks for their contact information. Without that information, it is harder for the app or website to know who bought its goods or services, and it complicates efforts to target that customer with ads in the future.

App and website developers also collect such information and share it with ad networks, like the one operated by Meta, to aid the developers’ ad campaigns targeting new and existing customers. When customers voluntarily share such data, businesses are free to use it to sell ads. Apple’s iPhone restrictions, which allowed users to block the trackers advertisers use to keep tabs on their activities, made it even more crucial for developers to collect visitors’ email addresses.

‘Tax’ on Advertisers

Apple for years allowed iPhone users to manually turn on a little-noticed privacy feature blocking ad trackers before rolling it out last year as a mandatory prompt within many apps across more than a billion devices. Ad industry executives and consultants anticipate the company will do the same for the new privacy features, which work on both iPhones and Macs, or promote them to all of its customers.

“They will just continue to take out different parts of advertising and marketing,” said Robert Jewe, a consultant who helps businesses with their marketing strategies. “You can almost think of it as a tax” on advertisers, he said.

An Apple spokesperson did not have a comment for this article.

Apple isn’t alone in creating services that mask consumer email addresses by autogenerating new addresses. Search engine DuckDuckGo offers its own “email protection” service, and the Firefox browser offers a feature that creates an alternative email for users to give companies when they don’t want to share their primary email address. But Apple, which has said it powers more than 1.8 billion active devices, could have a much greater impact.

Apple’s moves also could put pressure on Google to implement similar features in its Android mobile operating system as well as its Chrome browser, which has more users than Apple’s Safari. In response to the earlier iPhone ad-tracking restrictions implemented by Apple, Google is developing new ways to measure the effectiveness of digital ads to keep its ad machine humming for the next couple of years. At that point, it too will make changes to how advertisers can target users on Android and Chrome, The Information has reported.

Killing the Workarounds?

While Apple initially said it would pull apps from its App Store if they didn’t comply with its ATT privacy rules, so far it has not taken action against Snap, Facebook or other ad-tech companies that have developed workarounds to its privacy rules. Some of these firms are using IP addresses and other methods of gleaning who saw an ad and took an action based on it, such as buying goods or downloading an app. App developers that have adopted a stricter interpretation of the rules say some of those workarounds violate their spirit.

But if Apple expanded Private Relay, that would automatically block some of the more aggressive workarounds. Broadening the feature also could impact the growing market for ads on internet-connected TVs; internet providers and ad tech companies currently use IP addresses to track the performance of ads viewed by streaming-app customers. Eliminating information about Apple users and what they do online would make it harder for connected-TV developers to piece together who lives in a household, what devices they have and what their preferences are. (Digiday earlier reported on ad execs’ concern about the expansion of Private Relay.)

While Meta and the rest of the ad industry have been reeling from the earlier iPhone restrictions, Apple’s own ad business has benefited. AllianceBernstein analysts say Apple’s privacy changes and its role as an App Store gatekeeper give its ad network an advantage over rivals. They estimate Apple’s ad business generated about $4 billion in revenue last year, up from $300 million in 2017.

Analysts expect Apple to expand its ad business to include selling ads in non-Apple apps, which it tried to do years ago. That effort failed in part because it restricted how those apps could share user data with advertisers. By reviving that type of business, Apple could eventually generate at least another $10 billion in new revenue, the AllianceBernstein analysts estimate.

Despite Apple CEO Tim Cook’s long history of rhetoric that criticized ad-tracking practices similar to the ones used by Meta, Apple’s decision to implement last year’s iPhone restrictions actually bubbled up from its privacy team, The Information recently reported. The group wanted to clamp down on the most egregious forms of abuse on the iPhone—for example, weather apps that sold data about users’ locations to brokers.

For his part, Cook said in an October earnings call that consumer feedback about the iPhone ad-tracking restrictions was “overwhelmingly positive.” He said individuals own their data and should have the ability to decide whether to share it.

“There’s no other motivation,” Cook said.

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Putin’s call for oil and gas deals to be paid in Russian currency would ‘violate contracts’, German energy minister says

Energy ministers of the G7 group of major economies rejected Vladimir Putin’s demand on Monday that Russian gas should be paid for in roubles in a stand-off that is raising new doubts about the fuel’s supply to Europe.

The officials unanimously rejected the Russian president’s calls for “unfriendly” countries to pay for gas imports in roubles instead of currencies such as euros and dollars, Robert Habeck, Germany’s economics and energy minister, told journalists on Monday in Berlin.

The statement raised the possibility of gas supplies to Europe being cut off should the two sides be unable to agree on a payment currency. Habeck said G7 countries were “prepared” for “all scenarios”, including a potential halt to Russian energy supplies.

Putin announced last week that Moscow would begin to invoice European gas buyers in roubles, Russia’s latest response to unprecedented western sanctions imposed in a bid to punish him for the invasion of Ukraine.

Habeck — who was speaking after a virtual meeting with ministers from the US, UK, France, Japan, Italy and Canada — said: “All G7 ministers totally agreed that [requiring payment in roubles] would be a clear and unilateral violation of existing contracts.”

Western companies typically agree long-term supply agreements for Russian gas imports and it remains unclear how Moscow will try to implement any change in payment currency. Analysts said most agreements were negotiated in international currencies and it was unlikely they contained clauses to allow for payments in roubles.

European importers of natural gas, including France’s Engie and Austria’s OMV, have said that supply contracts do not include clauses that allow for payment in roubles. They said they intend to continue paying in euros or dollars as specified in their existing deals.

Habeck said Putin’s move to bill Russian energy in roubles showed that he “has his back to the wall” because sanctions were seriously harming the Russian economy.

Laurent Ruseckas, executive director of gas in Europe, Middle East and Africa at S&P Global, said the EU and Russia were engaged in brinkmanship over the flow of gas supplies. If the EU were to introduce a law against paying in roubles, then “either someone blinks, or you go into force majeure”, meaning gas supplies to Europe would be cut off.

If Russian law mandates payment in roubles, state-owned companies such as Gazprom — Russia’s biggest gas supplier — would have to initiate discussions on modifying contracts. That would create a chance for European utilities to seek to renegotiate contract lengths and supply volumes, industry executives say.

Ruseckas said Russia appeared to be adopting an “orderly” approach to switching the payment currency for gas purchased by “unfriendly” countries, even though few signs were emerging of buyers being ready to comply without any concessions.

Officials from Gazprom, the government and the central bank will report to Putin on Thursday on how to implement plans to convert payments into roubles, according to Interfax.

European gas prices were relatively steady on Monday with Front-month futures contracts tied to TTF, Europe’s wholesale gas price, rising as much as 10 per cent to €109 per megawatt hour, before easing back.

Analysts said prices would probably have dropped without the uncertainty over payment terms because Europe had significantly replenished its gas storage levels over the weekend, lifting them to almost double the low they hit in 2018.

The EU has avoided sanctioning energy imports from Russia directly. However, European energy buyers could struggle to find a bank compliant with sanctions to convert euros to roubles. The EU could also respond with its own sanctions to prevent exchanges of euros into roubles.

Germany unveiled targets last week to cut dependence on Russian energy rapidly, vowing to all but wean itself off the country’s gas by mid-2024 and become “virtually independent” of its oil by the end of this year.

Spending proposal also emphasizes efforts to reduce deficit and fund law enforcement

WASHINGTON—President Biden on Monday released a $5.8 trillion budget that envisions a substantial increase in U.S. defense spending, a sign of the administration’s willingness to devote additional resources to military programs, including aiding Ukraine in its fight against Russian aggression.

The requested increase is more than double than the 1.6% boost the administration sought for military spending in last year’s budget. The proposal calls for $682 million in funding to go to Ukraine for efforts to counter Russia and shore up its security and economic interests.

Mr. Biden’s budget also emphasizes efforts to reduce the deficit and increase law-enforcement spending at the Justice Department. The budget overall is a departure from last year’s request outlining a massive boost in spending on domestic programs and detailed financial blueprint for Mr. Biden’s sweeping education, social and climate-change agenda. In Monday’s proposal, the White House largely glosses over that agenda, which has stalled in Congress.

The shift comes after Russia invaded Ukraine, Mr. Biden’s standing in opinion polls has fallen and Democratic hopes of passing a sweeping economic package have dimmed.

“I’m calling for one of the largest investments in our national security in history, with the funds needed to ensure that our military remains the best-prepared, best-trained, best-equipped military in the world,” Mr. Biden said in a statement. “In addition, I’m calling for continued investment to forcefully respond to Putin’s aggression against Ukraine with U.S. support for Ukraine’s economic, humanitarian, and security needs.”

The budget also includes $17.4 billion for law enforcement at the Justice Department, including $1.7 billion for efforts to combat gun trafficking, and provides funding for the U.S. Marshals and the Federal Bureau of Investigation to address violent crime.

The budget outlines the administration’s policy priorities, but Congress will have final approval over many of its funding requests, while a large chunk of federal spending on entitlement programs such as Social Security happen automatically every year.

The request will face the same political headwinds on Capitol Hill that have helped define Mr. Biden’s first year in office. Democrats have very narrow control of the House and 50-50 Senate, and Republicans have lined up against many of the Biden administration’s proposals. Democrats are bracing to lose control of either or both chambers of Congress in the fall’s midterm elections.

The proposed military spending level would be the largest ever, if enacted, but it wouldn’t be the biggest one-year increase when compared with some previous years during the wars in Iraq and Afghanistan. The larger budget comes after the U.S. ended its 20-year war in Afghanistan in August, but now scrambles to address the crisis in Europe.

U.S. military spending also will likely require additional long-term investments, particularly in the Navy, to stay focused on China as the larger, more strategic threat facing the U.S. U.S. officials say investments in hypersonic missiles, machine learning, artificial intelligence and other military capabilities appropriate for confronting China will require billions of dollars in new investments over time.

Biden administration officials said the 2023 budget emphasizes deficit reduction, aligning with a recent push on the issue.

The administration forecasts a yearly drop of roughly 50% in the U.S. deficit during fiscal 2022, to $1.4 trillion. Under that scenario, the deficit as a percentage of U.S. gross domestic product would fall to 5.8% in fiscal 2022 from 12.4% in fiscal 2021, the budget estimates.

The government so far in fiscal 2022 is running a $476 billion deficit, a 55% reduction from the same point in the prior fiscal year, as spending on Covid-19 relief programs wanes and a stronger economy generates more tax revenue.

Debt held by the public would fall to 101.8% of U.S. GDP in fiscal 2023, compared with the White House’s forecast of 102.4% in the current year. Debt is expected to rise in subsequent years to 106.7% of GDP by 2032. Broadly, the 2023 budget sees debt rising more gradually over time than last year’s proposal.

The budget includes a proposal for a 20% minimum tax rate on income, including unrealized gains in assets, for American households worth more than $100 million. This would apply to the top 0.01% of households, the White House said. That is likely under 20,000 households.

Under the proposal, households worth more than $100 million that don’t pay at least 20% in tax on a combination of their standard reported income and their gains on unsold assets such as stocks would owe additional tax until they have paid the new minimum 20%, according to the White House.

Under current law, capital gains are taxed only when they are realized—when assets are sold—and long-term gains are taxed at lower rates than ordinary income. The White House said that over the next decade the new tax would lower the U.S. deficit by about $360 billion and that the budget plan overall would reduce it by more than $1 trillion.

The tax, which is unlikely to advance in Congress, could have its biggest impact on billionaires such as Jeff Bezos and Mark Zuckerberg, whose fortunes are largely composed of unrealized capital gains in the companies that they founded. Using the broader definition of income proposed by the administration, it is possible that they would pay less than 20% and owe the new tax.

Other people might have enough wealth to potentially be subject to the tax but not pay it. That could happen for athletes, entertainers and executives who pay high income-tax rates on their annual earnings. That might also be the case for wealthy people who have recently inherited money and don’t have significant unrealized capital gains.

The administration’s budget proposal sidesteps questions about Mr. Biden’s efforts on a broad climate, education and healthcare package that Democrats have tried—and so far failed—to advance through Congress. Democrats are still in the early stages of figuring out how to resurrect the package in a way that can win the support of centrists such as Sen. Joe Manchin (D., W.Va.), who scuttled the House version of the legislation in the 50-50 Senate.

Rather than lay out possible ways to overhaul the legislation, the White House budget broadly reiterates the Biden administration’s goals for the bill, listing a series of policy ideas—including free community college—that died during talks among Democrats last year.

Administration officials said they had segmented ideas related to the economic bill away from the broader budget to give space for Democrats on Capitol Hill to continue talking. While the White House has sought to craft the economic bill such that it reduces the deficit, the budget assumes it will have no impact on the deficit.

“We’ve been clear that the president wants to sign legislation that cuts costs for families and reduces the deficit, but to be conservative the budget” assumes it won’t impact the deficit, said Shalanda Young, director of the White House Office of Management and Budget.

The White House said Monday it expects inflation, which is trending at four-decade highs, to begin to ease.

The budget projects a sharp drop in the consumer-price index both in the current year and next. The index, which measures what Americans are paying for everyday items, rose at an annual rate of 7.9% in February. The budget projects the index will rise 4.7% in calendar year 2022 and 2.3% in 2023. Cecilia Rouse, chair of the White House Council of Economic Advisers, noted that the projections were completed in November, before the start of Russia’s war in Ukraine.

The situation in Ukraine “will have ramifications that are not reflected in our forecast,” Ms. Rouse said. “The invasion will likely put upward pressure on energy and food prices. That in turn could reinforce inflation that was already an issue prior to the invasion,” she added.

The budget forecasts annual U.S. GDP growth of 3.8% in 2022 and 2.5% in 2023, measured on a fourth-quarter and inflation-adjusted basis. That is a rosier outlook than that of the Federal Reserve, which most recently projected annual GDP growth of 2.8% and 2.2% in 2022 and 2023, respectively.

Request comes after bank asked investors to destroy documents related to wealthiest clients’ assets

US lawmakers have requested that Credit Suisse share details on its handling of sanctions against Russian oligarchs after the bank asked investors to destroy documents related to assets of its wealthiest clients.

Carolyn Maloney, chair of the US congressional committee on oversight and reform, and Stephen Lynch, a member of the committee, asked Thomas Gottstein, Credit Suisse chief executive, in a letter dated March 28 to share information in connection with a Financial Times report that the bank had asked investors to destroy documents related to its richest clients’ private jets and yachts.

The move was intended to stop details from leaking about a Credit Suisse division that has made loans to oligarchs who were later sanctioned.

The FT report “raises significant concerns about Credit Suisse’s compliance” with sanctions imposed by the US and its allies in response to Russia’s invasion of Ukraine, the letter stated.

The committee was “particularly concerned” that the Swiss bank’s request to destroy documents coincided with Switzerland’s announcement it would join the US, EU and others in imposing sanctions on Moscow in response to its invasion of Ukraine, according to the letter, which was first reported by the Wall Street Journal.

Hedge funds and other investors earlier this month received letters from Credit Suisse requesting they destroy documents linked to a securitisation of loans backed by “jets, yachts, real estate and/or financial assets”.

They were also asked to “destroy and permanently erase” any confidential information Credit Suisse previously provided in relation to the transaction, citing a “recent data leak to the media” that it said had been “verified by our investigators”.

The timing and nature of Credit Suisse’s requests raised “significant concerns that it may be concealing information about whether participants in the securitisation deal” — including Credit Suisse, investors and owners of underlying assets — “may be evading sanctions” linked to the conflict in Ukraine, the letter said.

US lawmakers have asked Credit Suisse to produce information dating back to January 2017, including a list of all participating investors in the securitisation deal; communications linked to the storage, destruction or holding of confidential information about loans backed by yachts and private jets; and know-your-customer and due diligence documents related to loans securitised as part of the transaction. The letter asked the bank to submit the material by April 11.

Credit Suisse’s move came after the FT reported how the bank offloaded risks relating to $2bn of loans to a group of hedge funds. The FT report quoted extensively from the transaction’s investor presentation, which lifted the lid on closely guarded business secrets of the bank’s international wealth management franchise.

One slide said a third of the defaults on its yacht and aircraft loans in 2017 and 2018 were “related to US sanctions against Russian oligarchs”. Press reports at the time indicated Oleg Deripaska and brothers Arkady and Boris Rotenberg terminated private jet leases with the bank in those years.

Credit Suisse declined to comment on the letter and directed the FT to a previous statement it made about the investor presentation.

“No data, client-related or otherwise, has been erased within Credit Suisse and, for clarity, this is in no way linked to the recent implementation of additional sanctions — with which we are fully compliant,” the statement said.

The bank is also under investigation by Switzerland’s attorney-general over the investor presentation, following a complaint filed by Swiss politician Carlo Sommaruga this month.

A person close to the bank said the complaint was based on a misunderstanding of the presentation and a misinterpretation of the FT article.

Getting hold of niche vessels would be tricky, and supply of the ships will not improve right away

US president Joe Biden’s promise to deliver more liquefied natural gas to Europe will be welcomed in continental capitals. But getting the gas into energy short Germany could be tricky thanks to a dearth of floating terminals to turn that LNG back into gas.

America can offer a virtual gas pipeline to Europe, using specialist LNG tankers. Its export capacity is fairly full but Biden still promised to find 15bn cubic metres for its European allies. Some of that will be diverted from Asian spot cargo routes already offering record-high prices. Though that only replaces less than a tenth of Russia’s supply, everything helps.

Germany, which has no regasification terminals open yet, wants to use floating terminals to receive LNG offshore, turn the fuel into gas and transfer it on to onshore networks. Floating storage and regasification units (FSRU) can be set up in under a year, if you can find them.

France, on Monday, also announced plans for floating terminals. For good reason. Building a regasification terminal can take four years, points out Rystad Energy, never mind any Nimbyism.

Each FSRU has about a quarter of the capacity of bigger onshore plants taking in perhaps 20mn tonnes (27bn cubic metres) of LNG. But the time advantage makes renting these for probably $140,000 daily worthwhile over a few years.

Getting hold of these FSRUs is another story. Only 33 of these vessels exist worldwide, according to VesselsValue, most of them built since 2014. Worse, with no new orders currently recorded, supply will not improve soon.

That means certain Asian shipyards, and current FSRU owners, could do well in the next couple of years. Korean shipbuilders — Hyundai, Samsung and Daewoo — dominate construction of FSRUs which cost up to $350mn to build from scratch over two plus years.

Among owners, Norway’s BW Gas, Hoegh LNG and New Fortress Energy control over half the fleet, almost all of which are already chartered. US listed shares of the related Hoegh LNG Partners and New Fortress Energy have recently surged. Another, Excelerate Energy, plans to hold an initial public offering.

Just finding new sources of natural gas for Europe looks hard enough. But getting the molecules where they are most needed could require a lot more of these niche floating LNG vessels.

The Russian oligarch and others developed symptoms they blamed on hard-liners in Moscow who they say want to sabotage talks to end the war

Russian oligarch Roman Abramovich and Ukrainian peace negotiators suffered symptoms of suspected poisoning after a meeting in Kyiv earlier this month, people familiar with the matter said.

Following the meeting in the Ukrainian capital, Mr. Abramovich, who has shuttled among Moscow, Lviv and other negotiating venues, as well as at least two senior members of the Ukrainian team developed symptoms that included red eyes, constant and painful tearing, and peeling skin on their faces and hands, the people said.

They blamed the suspected attack on hard-liners in Moscow who they said wanted to sabotage talks to end the war. A person close to Mr. Abramovich said it wasn’t clear who had targeted the group.

Mr. Abramovich and the Ukrainian negotiators, who include Crimean Tatar lawmaker Rustem Umerov, have since improved and their lives aren’t in danger, the people said. Ukraine’s president, Volodymyr Zelensky, who has met with Mr. Abramovich, wasn’t affected, they said. Mr. Zelensky’s spokesman said he had no information about any suspected poisoning.

Western experts who looked into the incident said it was hard to determine whether the symptoms were caused by a chemical or biological agent or by some sort of electromagnetic-radiation attack, according to the people familiar. 9i,.89z