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Wikimedia Foundation expresses deep concerns about India’s proposed intermediary liability rules

Wikimedia Foundation, the nonprofit group that operates Wikipedia and a number of other projects, has urged the Indian government to rethink the proposed changes to the nation’s intermediary liability rules that would affect swathes of companies and the way more than half a billion people access information online.

The organization has also urged the Indian government to make public the latest proposed changes to the intermediary rules so that all stakeholders have a chance to participate in a “robust and informed debate about how the internet should be governed in India.”

India proposed changes to intermediary rules (PDF) in late December last year and it is expected to approve it in the coming months. Under the proposal, the Indian Ministry of Electronics and IT requires “intermediary” apps — which as per its definition, includes any service with more than 5 million users — to set up a local office and have a senior executive in the nation who can be held responsible for any legal issues.

Amanda Keton, general counsel of Wikimedia Foundation, said on Thursday that India’s proposed changes to the intermediary rules may have serious impact on Wikipedia’s business — as it operates an open editing model that relies on users to contribute new articles and make changes to existing articles on Wikipedia — as well as those of other organizations.

The rules may also create a “significant financial burden” for nonprofit technology organizations and impede free expression rights for internet users in India, she said. Wikimedia Foundation conveyed its concerns to Ravi Shankar Prasad, the Minister of Electronics and IT in India. The company also published the letter on its blog for the world to see.

India’s latest changes to intermediary rules, which have been drafted to make the internet a safer experience for local residents, also require intermediaries to deploy automated tools “for proactively identifying and removing or disabling public access to unlawful information or content.”

The proposed changes have raised concerns for many. In a joint letter (PDF) earlier this year, Mozilla, Microsoft’s GitHub and Wikimedia had cautioned the Indian government that requiring intermediaries to proactively purge their platforms of unlawful content “would upend the careful balance set out in the existing law which places liability on the bad actors who engage in illegal activities, and only holds companies accountable when they know of such acts.”

The groups also cautioned that drafted measures “would significantly expand surveillance requirements on internet services.” Several trade bodies in India, that represent a number of major firms including Google and Facebook, have also suggested major changes to the proposal.

In the open letter published today, Wikimedia’s Keton reiterated several of those concerns, adding that “neither participants in the consultation nor the public have seen a new draft of these rules since [last year].” She also requested the government to redefine, how it has in another recently proposed set of rules, the way it classifies an entity as an intermediary as the current version seems to have far-reaching scope.

India is the fifth largest market for Wikipedia — more than 771 million users from the country visited the online encyclopaedia last month. Wikimedia has run several programs in India to invite people to expand the online encyclopaedia in Indic languages.

Keton urged the government to rethink the requirement to bring “traceability” on online communication, as doing so would interfere with the ability of Wikipedia contributors to freely participate in the project. (On the point of traceability, WhatsApp has said complying to such requirement would compromise encryption for every user.)

Fresh out of Y Combinator, Tandem lands millions from Andreessen Horowitz

Tandem, one of the most sought after companies to graduate from Y Combinator’s summer batch, will emerge from the accelerator program with a supersized seed round and an uncharacteristically high valuation.

The months-old business, which is developing communication software for remote teams after pivoting from crypto, is raising a $7.5 million seed financing at a valuation north of $30 million, sources tell TechCrunch. Airbnb investor Andreessen Horowitz is leading the round.

Tandem and a16z declined to comment for this story. The round has yet to close, which means the deal size is subject to change. Y Combinator startups raise capital using SAFE agreements, or simple agreements for future equity, which allow investors to buy shares in a future priced round at a previously agreed-upon valuation.

We’re told several top venture capital firms were vying for a stake in Tandem. One firm even gifted the founders a tandem bike, sources tell TechCrunch, resorting to amusing measures to sway the Tandem team. But it was a16z — which has an established interest in the growing future of work sector, evidenced by its recent investment in the popular email app Superhuman — that ultimately won the coveted lead investor spot.

Tandem provides a virtual office for remote teams, complete with video-chatting and messaging capabilities, as well as integrations with top enterprise tools including Notion, GitHub and Trello. The service launched one month ago and has signed contracts with Airbnb, Dropbox and others. The company claims to be growing 50% week-over-week.

“Every company is a remote company,” Tandem chief executive officer Rajiv Ayyangar said during his pitch to investors on day two of Y Combinator Demo Days this week. “You have salespeople in the field, [companies with] multiple offices, people working from home. Tandem isn’t just building the future of remote work, it’s building the future of work.”

Ayyangar was previously a data scientist at Yahoo before joining Yakit, a startup seeking to simplify ecommerce delivery, as the director of product. Co-founders Bernat Fortet Unanue and Tim Su are also Yahoo alums.

We’re told Tandem’s fundraise was nearly complete before it pitched to investors Tuesday afternoon. Startups that participate in YC are often flooded with offers from VCs throughout the three-month program. Firms are hungry for the batch’s Airbnb, Dropbox or Stripe — graduates of the program — and will pay premiums on startup equity for their chance to invest in a future ‘unicorn.’

As a result, the median seed deal for U.S. startups in 2018 was roughly $2 million — a record high — with typical pre-money valuations hovering north of $10 million. Tandem’s seed financing represents both a trend of swelling seed deals and valuations, as well as a tendency for VCs to dole out more cash to fresh-from-YC companies amid heightened competition amongst their peers.

The previous YC batch, which wrapped up in March, included ZeroDown, Overview.AI and Catch, a trio of companies that pocketed venture capital ahead of demo day. ZeroDown, a financing solution for real estate purchases in the Bay Area, raised upwards of $10 million at a $75 million valuation before demo day, sources told TechCrunch at the time (months after demo day, Zero Down announced a whopping $30 million financing). ZeroDown was an outlier, of course, as the company’s founders had previously co-founded the billion-dollar HR software company Zenefits.

As for the summer batch, we’re told Actiondesk, Taskade and Tandem are amongst the startups to garner the most hype from investors. Some even forwent the demo day pitch altogether. BraveCare, which is creating urgent care clinics intended just for kids, raised $4.1 million ahead of demo day, we’re told. The company opted not to pitch to additional investors this week.

You can read about all the company’s that pitched during demo day one here and demo day two here.

North Korea skirts US sanctions by secretly selling software around the globe

Fake social media profiles are useful for more than just sowing political discord among foreign adversaries, as it turns out. A group linked to the North Korean government has been able to duck existing sanctions on the country by concealing its true identity and developing software for clients abroad.

This week, the US Treasury issued sanctions against two tech companies accused of running cash-generating front operations for North Korea: Yanbian Silverstar Network Technology or “China Silver Star,” based near Shenyang, China, and a Russian sister company called Volasys Silver Star. The Treasury also sanctioned China Silver Star’s North Korean CEO Jong Song Hwa.

“These actions are intended to stop the flow of illicit revenue to North Korea from overseas information technology workers disguising their true identities and hiding behind front companies, aliases, and third-party nationals,” Treasury Secretary Steven Mnuchin said of the sanctions.

As the Wall Street Journal reported in a follow-up story, North Korean operatives advertised with Facebook and LinkedIn profiles, solicited business with Freelance.com and Upwork, crafted software using Github, communicated over Slack and accepted compensation with Paypal. The country appears to be encountering little resistance putting tech platforms built by US companies to work building software including “mobile games, apps, [and] bots” for unwitting clients abroad.

The US Treasury issued its first warnings of secret North Korean software development scheme in July, though did not provide many details at the time. The Wall Street Journal was able to identify “tens of thousands” of dollars stemming from the Chinese front company, though that’s only a representative sample. The company worked as a middleman, contracting its work out to software developers around the globe and then denying payment for their services.

Facebook suspended many suspicious accounts linked to the scheme after they were identified by the Wall Street Journal, including one for “Everyday-Dude.com”:

“A Facebook page for Everyday-Dude.com, showing packages with hundreds of programs, was taken down minutes later as a reporter was viewing it. Pages of some of the account’s more than 1,000 Facebook friends also subsequently disappeared…

“[Facebook] suspended numerous North Korea-linked accounts identified by the Journal, including one that Facebook said appeared not to belong to a real person. After it closed that account, another profile, with identical friends and photos, soon popped up.”

Linkedin and Upwork similarly removed accounts linked to the North Korean operations.

Beyond the consequences for international relations, software surreptitiously sold by the North Korean government poses considerable security risks. According to the Treasury, the North Korean government makes money off of a “range of IT services and products abroad” including “website and app development, security software, and biometric identification software that have military and law enforcement applications.” For companies unwittingly buying North Korea-made software, the potential for malware that could give the isolated nation eyes and ears beyond its borders is high, particularly given that the country has already demonstrated its offensive cyber capabilities.

Between that and sanctions against doing business with the country, Mnuchin urges the information technology industry and other businesses to exercise awareness of the ongoing scheme to avoid accidentally contracting with North Korea on tech-related projects.