TheChek News Flow

The Snap co-founder was speaking at the WSJ CEO Council that brings together senior business leaders to discuss global issues affecting their industries

Lessons Learned From Snap’s IPO

Evan Spiegel, the co-founder and chief executive of Snap Inc., told an audience at The Wall Street Journal’s CEO Council that consumers were starting to understand how the online advertising market works and that understanding is beginning to drive them toward demanding more privacy.

Privacy has been a top concern among regulators in Europe, but it has also started to become an issue around the world, including in the U.S. Mr. Spiegel said users “will want to use services that are more protective of privacy.” He said consumers are starting to “understand how internet advertising works and how their data flows through different parties. So, increasingly, consumers are going to be thoughtful about the services they are using.”

Another debate raging on both sides of the Atlantic: Are the giants of Silicon Valley, like Facebook Inc., Google’s Alphabet Inc. and Amazon.com Inc., too big and should they be broken up? Chris Hughes, who helped Mark Zuckerberg create Facebook, made a splash last week calling for a Facebook breakup and invoking the historical breakups of Standard Oil and AT&T.

Mr. Spiegel said that in the U.S., concern over size has mostly been about prices and the consumer impact. Taking Amazon as an example, he said, bigger hasn’t translated into higher prices for consumers. So, he said, it is “hard to make the case” that size is becoming an issue.

Mr. Spiegel was also asked about Snap’s IPO in 2017, in the shadow of Uber Technologies Inc.’s public offering last week. He said he would now do “a bunch” of things differently in his own market debut. He said a big change Snap has made since the public offering was issuing quarterly guidance. “We’ve learned public markets appreciate this,” he said.

Kingdom insists no disruption to production or exports as Brent rises

Two Saudi Arabian oil pumping stations along a pipeline were targeted in a drone attack on Tuesday morning, the kingdom’s energy minister said.

The incident comes shortly after Yemeni Houthi rebels said they launched attacks on vital installations in the kingdom and a day after Saudi Arabia said two of its oil tankers were among those hit off the coast of the UAE on Sunday.

Energy minister Khalid al-Falih said in a statement that the attack resulted in a fire in one of the stations in the central region, leaving limited damage after the blaze was controlled.

State oil company Saudi Aramco has suspended operations on an east-west pipeline that transfers crude from the kingdom’s Eastern Province to Yanbu port on the Red Sea coast while the damage is being assessed.

The kingdom said oil production and exports from the country are continuing without disruptions. Still Brent crude, the international oil benchmark, rose 78 cents to $71 a barrel.

A television station run by Yemen’s Houthi rebels on Tuesday cited an official as saying the Iran-backed group had launched a drone attack on vital Saudi installations without providing details.

“The Kingdom of Saudi Arabia condemns this cowardly attack,” Mr Falih said, adding that “these attacks prove again that it is important for us to face terrorist entities, including the Houthi militias in Yemen that are backed by Iran”.

A spokesman for Saudi State Security said authorities were investigating the drone strike.

Shift in Chinese economy has fuelled concerns on outlook for sector

The metals and mining industry can “transcend” its biggest customer China as rising global living standards and the shift to cleaner forms of energy drives demand for raw materials, according to Ivan Glasenberg, the billionaire boss of Glencore.

For more than a decade miners have looked to China, ploughing billions of dollars into new projects and deals to feed the country’s seemingly insatiable appetite for commodities.

But a shift towards consumer-led growth in China has raised concerns among investors about the growth prospects for the mining sector.

Speaking at an investor conference in Barcelona, Mr Glasenberg said urbanisation in Africa and parts of Asia along with the energy transition meant the industry had a bright future.

“Our industry can transcend China’s journey to a consumption-led economy,” he said.

“The future need for the commodities we produce is likely to be similar to the past — it is all about demographics.”

He said lifting global living standards to developed world levels by 2050 will require an extra 428m tonnes of copper by 2050 — around two-and-half times the current global stock.

The electrification of transport will also spur metal demand with an extra 3m tonnes of copper a year needed by 2030, as well as 2.3m tonnes of nickel and 263,000 tonnes of cobalt.

“By 2030 . . . EV demand is equivalent to almost double total new supply from all probable [copper] projects,” he said.

However, Mr Glasenberg said growing mine supply was difficult because easy-to-develop, high-quality resources were running out.

“Remaining resources are increasingly hard to mine and often complicated by challenging locations, lower grades, more complex mineralogy, poor infrastructure and sub scale size.”

Glencore is one of the world’s biggest producers of copper, nickel and cobalt. It is also a major supplier of thermal coal, a dirty polluting fossil fuel that is burnt in power stations to generate electricity.

Its shares have struggled to advance this year, hit by concerns about slowing global growth, revised guidance for its copper and nickel businesses and news of an investigation by the US commodity markets regulator into potential corrupt practices.

“The company has already flagged likely further downgrades to full year production guidance in copper,” said Sam Catalano, an analyst at Credit Suisse, in a report.

“Furthermore, following the relatively weak first quarter, we see production being heavily second-half end weighted across most divisions and flag the risk of more wide ranging cuts to full-year guidance.”

Messaging app discovers vulnerability that has been open for weeks

A vulnerability in the messaging app WhatsApp has allowed attackers to inject commercial Israeli spyware on to phones, the company and a spyware technology dealer said.

WhatsApp, which is used by 1.5bn people worldwide, discovered in early May that attackers were able to install surveillance software on to both iPhones and Android phones by ringing up targets using the app’s phone call function. 

The malicious code, developed by the secretive Israeli company NSO Group, could be transmitted even if users did not answer their phones, and the calls often disappeared from call logs, said the spyware dealer, who was recently briefed on the WhatsApp hack.

WhatsApp, which is owned by Facebook, is too early into its own investigations of the vulnerability to estimate how many phones were targeted using this method, a person familiar with the issue said.

As late as Sunday, as WhatsApp engineers raced to close the loophole, a UK-based human rights lawyer’s phone was targeted using the same method. 

Researchers at the University of Toronto’s Citizen Lab said they believed that the spyware attack on Sunday was linked to the same vulnerability that WhatsApp was trying to patch.

NSO’s flagship product is Pegasus, a program that can turn on a phone’s microphone and camera, trawl through emails and messages and collect location data.

NSO advertises its products to Middle Eastern and Western intelligence agencies, and says Pegasus is intended for governments to fight terrorism and crime. NSO was recently valued at $1bn in a leveraged buyout that involved the UK private equity fund Novalpina Capital

In the past, human rights campaigners in the Middle East have received text messages over WhatsApp that contained links that would download Pegasus to their phones. 

WhatsApp said that teams of engineers had worked around the clock in San Francisco and London to close the vulnerability. It began rolling out a fix to its servers on Friday last week, WhatsApp said, and issued a patch for customers on Monday.

“This attack has all the hallmarks of a private company known to work with governments to deliver spyware that reportedly takes over the functions of mobile phone operating systems,” the company said. “We have briefed a number of human rights organisations to share the information we can, and to work with them to notify civil society.”

WhatsApp disclosed the issue to the US Department of Justice last week, according to a person familiar with the matter. A justice department spokesman declined to comment.

NSO said it had carefully vetted customers and investigated any abuse. Asked about the WhatsApp attacks, NSO said it was investigating the issue. 

“Under no circumstances would NSO be involved in the operating or identifying of targets of its technology, which is solely operated by intelligence and law enforcement agencies,” the company said. “NSO would not, or could not, use its technology in its own right to target any person or organisation, including this individual [the UK lawyer].”

The UK lawyer, who declined to be identified, has helped a group of Mexican journalists and government critics and a Saudi dissident living in Canada, sue NSO in Israel, alleging that the company shares liability for any abuse of its software by clients. 

John Scott-Railton, a senior researcher at the University of Toronto’s Citizen Lab, said the attack had failed. 

“We had a strong suspicion that the person’s phone was being targeted, so we observed the suspected attack, and confirmed that it did not result in infection,” said Mr Scott-Railton. “We believe that the measures that WhatsApp put in place in the last several days prevented the attacks from being successful.”

Other lawyers working on the cases have been approached by people pretending to be potential clients or donors, who then try and obtain information about the ongoing lawsuits, the Associated Press reported in February.

“It’s upsetting but not surprising that my team has been targeted with the very technology that we are raising concerns about in our lawsuits,” said Alaa Mahajne, a Jerusalem-based lawyer who is handling lawsuits from the Mexican and Saudi citizens. “This desperate reaction to hamper our work and silence us, itself shows how urgent the lawsuits are, as we can see that the abuses are continuing.”

On Tuesday, NSO will also face a legal challenge to its ability to export its software, which is regulated by the Israeli ministry of defence.

Amnesty International, which identified an attempt to hack into the phone of one its researchers, is backing a group of Israeli citizens and civil rights group in a filing in Tel Aviv asking the ministry of defence to cancel NSO’s export licence. 

“NSO Group sells its products to governments who are known for outrageous human rights abuses, giving them the tools to track activists and critics. The attack on Amnesty International was the final straw,” said Danna Ingleton, deputy director of Amnesty Tech. 

“The Israeli ministry of defence has ignored mounting evidence linking NSO Group to attacks on human rights defenders. As long as products like Pegasus are marketed without proper control and oversight, the rights and safety of Amnesty International’s staff and that of other activists, journalists and dissidents around the world is at risk.”