World news.. 06-21-2013 ScienceTechnology

News that the U.S. National Security Agency under the Prism surveillance program secretly gathered user data from nine U.S. companies, including Google, to track people's movements and contacts makes the timing especially sensitive for Google.

France's data protection watchdog (CNIL) said Google had broken French law and gave it three months to change its privacy policies or risk a fine of up to 150,000 euros ($200,000).

Spain's Data Protection Agency (AEPD) told Google it would be fined between 40,000 euros and 300,000 for five violations of the law, that it had failed to be clear about what it did with data, may be processing a "disproportionate" amount and holding onto it for an "undetermined or unjustified" period of time.

The CNIL, which has been leading Europe's inquiry since Google launched its consolidated privacy policy in March 2012, said Britain, Germany, Italy and the Netherlands would be taking similar action against the world's No. 1 search engine.

Google could face fines totaling several million euros.

"By the end of July, all the authorities within the (EU data protection) task force will have taken coercive action against Google," said CNIL President Isabelle Falque-Pierrotin.

Last year, Google consolidated its 60 privacy policies into one and started combining data collected on individual users across its services, including YouTube, Gmail and social network Google+. It gave users no means to opt out.

National data protection regulators in Europe began a joint inquiry as a result. They gave Google until February to propose changes but it did not make any. Google had several meetings with the watchdogs and argued that combining its policies made it easier for users to understand.

The CNIL's move is seen by legal experts and policymakers as a test of Europe's ability to influence the behavior of international Internet companies.

Britain is still considering whether its law has been broken and will write to Google soon with its findings, the CNIL said.

And Google is due to answer allegations on the issue in a German court hearing late next week, a spokesman for the country's data protection regulator said.

Google said it would continue to work with the authorities in France and elsewhere.

Gottfrid Svartholm Warg was extradited to Sweden last year from Cambodia to begin a one-year jail sentence after being convicted in 2009 of internet piracy. He was then charged by authorities as part of the separate hacking investigation.

"The hacking has been very extensive and technically advanced," the Nacka district court said in a statement. "The attacker has affected very sensitive systems."

He had denied the charges.

Prosecution documents say Warg, a 28-year-old Swede, managed to transfer 24,200 Danish crowns ($4,300) online, but also attempted, in several different transactions, to transfer a total of around 683,000 euros ($915,500).

The investigation was into data infringement involving outsourcing firm Logica.

Swedish authorities have said the hackers gained access to information on several people with protected identities.

In the 2009 trial, a court in Sweden - where The Pirate Bay was founded in 2003 - fined and sentenced to jail Warg and two co-founders then behind the site for breaching copyright in a case brought by firms including Sony Universal Music and EMI.

Swedish prosecutors in May launched a new attempt to close down Pirate Bay, which provides links to music and movie files stored on other users' computers.

"If you're like me, you want a Yahoo! ID that's short, sweet, and memorable like albert@yahoo.com instead of albert9330399@yahoo.com," he wrote. The one-year period will officially begin July 15, when users can "claim" a dormant account name. They'll find out in mid-August if they got the account they wanted. It's clearly an effort by Yahoo, which has been working to redefine and rejuvenate itself under new CEO Marissa Mayer, to re-engage older users and reward active ones. But it has security experts nervous.

Security analyst Graham Cluley doesn't mince words. "In short: as an idea it sucks, and it shows Yahoo's lack of respect to customers who created accounts with them in years gone by," Cluley wrote Wednesday.

Cluley lists several scenarios where the plan could backfire. They include situations in which a user has another primary e-mail account, but has given their Yahoo address as a backup in case of security situations, lost passwords and the like.

He said the move appears to be "an underhanded way to get people to re-engage with the site" and that people who may not actively use their Yahoo mail, but use it to store old messages and other documents, could lose them without ever realizing it.

Mat Honan of CNN content partner Wired, himself the recent victim of a high-profile hack, called the move "a spectacularly bad idea." In the wake of such complaints, Yahoo released a followup statement saying it's sure the transition can be made without compromising security.

"We're committed and confident in our ability to do this in a way that's safe, secure and protects our users' data," the company said. The vast majority of inactive Yahoo IDs don't have a mailbox associated with them, the company said, and any personal data associated with the accounts will be deleted.

During a 30-day deactivation period, bounce-back e-mails will alert senders that the deactivated account no longer exists and Yahoo will unsubscribe those accounts from newsletters, commercial e-mail alerts and the like.

Reports of interest from Huawei and Microsoft show Nokia is still vulnerable but several analysts said they were more optimistic since plunging sales and alarming cash burn raised fears of default several months ago.

They said there was no contradiction between a resurfacing of M&A talk and some signs that Nokia might recover from a mauling by rivals Samsung and Apple in the key smartphone segment in recent years.

"The company's not in a crisis like it was a year ago. That makes Nokia now more likely to be a target of merger or acquisition," said Mikael Rautanen, an analyst at equities research firm Inderes.

The Wall Street Journal on Wednesday reported that Microsoft recently considered buying Nokia's devices business, but that talks failed over price.

Nokia officials declined to comment on the report on Wednesday and on Thursday.

That followed comments by a Huawei executive to the Financial Times that it was "open-minded" about acquiring Nokia, although the Chinese company later denied plans to buy Nokia.

Nokia shares have risen around 14 percent to 3 euros over the past week on the reports as well as news that Siemens was in talks to sell its stake in their equipment joint venture, Nokia Siemens Networks.

SHRUNKEN VALUE

Nokia's current market capitalization around 10 billion euros is a shadow of its peak around 200 billion in 1999.

But some analysts, who mostly have a price target of around 3 euros on Nokia shares, say the company's underlying value, including intellectual property, its navigation business HERE and stake in NSN, is closer to 5 euros.

"If I just look at the different assets, I arrive at a value of that's clearly above 3 euros," said Swedbank analyst Hakan Wranne, who also has a target of 3 euros on the shares. He was wary of predicting recovery but acknowledged improvement.

"We had the perception of a great default risk last fall and I think that's not there anymore," he said.

"It is undervalued, although it's only undervalued if they succeed," said Jyske Bank analyst Robert Jakobsen, who has a "buy" rating.

"We're not entirely out of the uncertainty. But I'm seeing improvement and I'm not seeing that reflected that much in the stock price."

Credit markets have mirrored receding fears over the future of the fallen mobile phone titan.

Its 6.625 percent bond maturing in May 2019 has recovered around 20 points over the last year and its five-year CDS has almost halved over the same period.

On a 6-2 vote with Justice Elena Kagan recused, the court, in a ruling written by Chief Justice John Roberts, said the law violates the First Amendment free speech rights of non-governmental organizations that work on HIV/AIDS prevention.

The 2003 law bars funding for organizations that operate programs overseas but do not have a blanket policy opposing prostitution and sex trafficking.

The Alliance for Open Society International and Pathfinder International - NGOs that receive funding for overseas HIV/AIDS prevention - sued in 2005, citing the First Amendment's guarantee of free speech.

The groups obtained an injunction in 2006 that has prevented the policy from being enforced since.

Thursday's ruling means groups will not be barred from seeking funds based on their views on prostitution.

In the majority opinion, Roberts wrote that Congress has considerable freedom to choose how a federal program is implemented by placing conditions on funding for outside groups.

But in this instance, the condition constituted "the affirmation of a belief that by its nature cannot be confined within the scope of the government program," meaning it violates the First Amendment, he wrote.

Justices Antonin Scalia and Clarence Thomas dissented.

The organizations challenging the provision do not want to take a stand on prostitution. They say the law interferes with their work providing advice and counseling to prostitutes about the risks of HIV infection.

The non-profit world was divided, with 46 groups, many of which focus on women's rights, supporting the law.

U.S. and Taliban officials were due to meet in Doha, the capital of Qatar, in the next few days, raising hopes for negotiated peace after 12 years of war between American-led forces and the Islamist insurgents.

Neighboring Pakistan's role in the war has been ambiguous - it is a U.S. ally but has a long history of supporting the Taliban as its proxy in Afghanistan, part of its wider jockeying with regional rival India.

Western officials believe Pakistan may now calculate that its interest is better served by helping to broker peace that would lead to the emergence of a friendly government in Kabul capable of stabilizing Afghanistan and preventing chaos spilling over the border.

Several military and civilian officials told Reuters Pakistan helped persuade the "relevant Taliban commanders" to talk to the Americans and Afghans and also sought to convince them that getting into talks was in their interest.

"It would not have been possible without our facilitation. Convincing the Taliban that it was in Afghanistan's interest and also convincing the other parties that this is what the Taliban actually have in mind," one senior army officer said.

He spoke on condition of anonymity because of the sensitivity of the subject.

Pakistan has a civilian government but the military has ruled the nation for over half of its 66 years of independence and holds sway over large areas of policy, including relations with neighbors.

A meeting between U.S. Secretary of State John Kerry, Afghan President Hamid Karzai and Pakistan military chief Gen. Ashfaq Kayani in Brussels in April was a turning point in arranging the talks in Doha, said a former senior Pakistani official.

"The key was the trilateral meeting hosted by Kerry in Brussels," said the former official.

Pakistan helped get Taliban leaders to a series of secret meetings with representatives of the Afghan government in Europe in recent months that helped pave the way for the planned talks, Pakistan's foreign ministry told Reuters.

It was not immediately clear whether Abbas would accept the resignation by Hamdallah, an academic and political independent whose cabinet convened for the first time last week.

The official told Reuters Hamdallah made the abrupt, unexpected move because of a "dispute over his powers".

A note on Hamdallah's Facebook page said his decision came after "outside interferences in his powers and duties".

His cabinet consists overwhelmingly of members of the Fatah faction led by Abbas and political commentators had immediately questioned how much leeway he would have to maneuver.

Hamdallah's predecessor, American-educated economist Salam Fayyad, resigned in April after six years in power defined by tough economic challenges and rivalries with Fatah politicians eager to control the levers of power.

Abbas chose Hamdallah while considering that Western countries who help keep the struggling West Bank government afloat with aid money were keen to see clean hands at the helm.

Corruption allegations have dogged Fatah and Palestinian government officials for years, and a successor who would meet donors' expectations would be difficult to find.

AWKWARD TIMING

The timing is especially awkward, coming a week before Abbas is set to meet United States Secretary of State John Kerry as part of an American bid to revive stalled Israeli-Palestinian peace talks.

Foreign dignitaries had been streaming into Ramallah, the Palestinians' de facto capital in the Israeli-occupied West Bank, to meet the newly-minted prime minister and to back the peace drive.

In a meeting on Wednesday, European Union foreign policy chief Catherine Ashton told Hamdallah: "It has been my privilege to work with your predecessor and I am very much looking forward to working with you and as I said, I wish you every success."

Since a brief civil war in 2007 between the Western-backed secular Fatah party and the Islamist group Hamas, Palestinians have had no functioning parliament or national elections.

Abbas exercises limited self-rule in the Israeli-occupied West Bank while Hamas, which won 2006 legislative polls, has its own administration and prime minister in the Gaza Strip.

Attempts to cement a unity pact between the two parties have failed to take hold and ordinary Palestinians, enduring mounting living costs and unemployment, have grown disenchanted with bickering politicians.

Microsoft unveiled the rewards program, one of the most generous in the high-tech industry to date, on Wednesday as it sought ways to prevent sophisticated attackers from subverting new security technologies it has introduced in the latest versions of the Windows operating system.

The program is open to computer experts as young as 14, though minors need permission from their parents. Residents of countries under U.S. sanctions, such as Cuba, Iran, North Korea, Sudan and Syria, are banned from the program.

The sheer size of the bonus is likely to grab the attention of the hacking community, though claiming the big money will require them to do battle with Microsoft's latest anti-hacking technology and then detail their approach.

"It's pretty generous, though what they are asking for is a pretty high bar," said Chris Wysopal, chief technology officer of Veracode, a security firm that helps identify software bugs.

Microsoft has plenty of competition in getting elite hackers to turn their attention on its aging Windows franchise, which operates the vast majority of the world's personal computers.

Windows computers have been involved in most major attacks to date, including the recent Citadel cyber crime ring that stole more than $500 million from banks and the Stuxnet virus that attacked Iran's nuclear program in 2010 by exploiting previously unknown bugs in Microsoft software.

COMPETING FOR TALENT

The best hackers are heavily recruited by the military, intelligence agencies and big corporations, who lure them with scholarships and high-paying jobs.

Microsoft is also competing for the attention of the top hacking talent on a growing global gray market, where information about vulnerabilities is sold to criminals as well as governments that use it in military and intelligence operations. Bounties start at $50,000 for tools that enable attackers to break into computers, even when they are protected by up-to-date security software.

In the industry, exploits of such vulnerabilities are called "zero-days," because a targeted software maker has had zero days' notice to fix the hole when the malicious software is eventually discovered. (See SPECIAL REPORT: link.reuters.

"We, like others, are constantly being bombarded by people who are trying to get into our systems," said Mark DeYoung, chief executive of U.S. rocket engine and ammunition maker Alliant Techsystems (ATK).

ATK, Lockheed Martin Corp, Boeing Co and other defence companies report hundreds of thousands of attempted probes into their computer networks every day, a matter of growing concern to the U.S. government, which after years of silence has become far more open about its belief that China is actively stealing intellectual property.

Trade shows, especially in foreign countries, pose particular challenges given the large array of people coming in contact with top executives who have access to sensitive information. In recent years, training has focused heavily on avoiding any violations of U.S. export control laws, but cyber security was a huge focus this year.

"The threat is not exaggerated," Dave Hess, president of Pratt & Whitney, a unit of United Technologies Corp, said. "It's a significant issue that we're all struggling with."

ATK disclosed several months ago that its networks had been attacked, but DeYoung said no classified or protected information was lost.

He said every ATK employee attending this year's air show took part in an extensive security briefing before coming and the company has invested millions of dollars in recent years to stay ahead of constantly changing data security threats.

Only new, encrypted laptops may be used, and executives are warned about disclosing sensitive information in any phone call, text message, email or even conversation, "whether you think you're in a private room or car or not," DeYoung said.

Two weeks ago, half a dozen FBI experts joined by officials from other government agencies gave a two-hour briefing on cyber security issues for DeYoung's top dozen executives.

"The sophistication of the people who are trying to get into our systems continues to increase," DeYoung said.

"If you're comfortable, you're probably in trouble, but we're quite confident that we're putting in place all the right kinds of protocols, processes, training and people to keep up with the threat."

Raytheon executives also participate in a lengthy security briefing before the show, but they are not allowed to travel with a laptop at all, said William Swanson, chief executive of Raytheon Co.

Their addiction? "Candy Crush Saga," an easy-to-play, hard-to-master puzzle game that's seemingly ensnared everyone from your kids to your co-workers to your Aunt Sally. Launched last year, the game is now the most popular app on Facebook, where it has almost 32 million fans.

"Candy Crush," as it's usually called, also is among the most-downloaded mobile games for Android and Apple devices and has more than 15 million daily users, according to AppData, an analytics firm. The game has been such a hit for its creator, London-based game publisher King, that the company has plans to go public, according to a report Tuesday in the Wall Street Journal.

Like predecessor "Bejeweled," to which it's often compared, "Candy Crush" requires players to form chains of brightly colored tiles -- shaped like jelly beans, lemon drops and other candy pieces -- to earn points and advance. The game also borrows from mobile-game blockbuster "Angry Birds" in that players must successfully complete one level before going on to the next.

"It looks like the most childish, simple, throwaway game you could ever think of. And then you start playing it," said Byler, a pastor to young adults in Wichita, Kansas. "It's challenging, and a real test on your brain, because you really have to think about what your next move is going to be."

The phone version of the game has 365 increasingly difficult levels, and it's not unusual for daily players to be stuck on a level for several weeks at a time -- a source of much frustration for many Facebook commenters.

The basic version of the game is free, although players only get five "lives," or chances, a day without paying for more. Some obsessed players have even hacked the game to get access to unlimited play.

Enright, of Waukesha, Wisconsin, got hooked after she began playing the game three months ago with her boyfriend. Now she's on level 213.

"I got a lot further than he did, and now he's given up," she said, with a trace of pride. "I've always liked puzzle games -- 'Tetris' and games like that." Players also can share their "Candy Crush" progress with friends via Facebook -- something that Byler was reluctant to do at first because he was weary of friends posting "FarmVille" updates.

Marlon, 13, had tried one sport and after-school activity after another, but none of them stuck. That was until he started going to Pixel Academy, an extracurricular tech wonderland for kids in Brooklyn, NY.

"Every parent's constant anxiety is screen time," said Broach, who lives in New York's East Village. "At Pixel Academy, he's spending time in front of a screen and learning at the same time."

Marlon, like the other 50 kids who go to Pixel Academy, learns to code, make movies with special effects and use the 3-D printer. He made Broach a 3-D heart from the printer for Mother's Day.

Mike Fischthal, a former 3-D animator at Nickelodeon, started Pixel earlier this year. It's grown so quickly that the academy is ready to hire an eighth employee this summer and will run a 3-week camp in July, after parents pleaded for one. The youngest coder at the academy is six years old.

The conditions are just right for a place like Pixel Academy to thrive. Earlier this year, the kid coding craze heated up after tech executives Microsoft (MSFT, Fortune 500) founder Bill Gates, Facebook (FB) founder Mark Zuckerberg and Twitter's Jack Dorsey released a video urging kids to learn how to code.

Add to that the recent tech wunderkind stories -- David Karp sold blogging site Tumblr, which he built at 20-years-old, to Yahoo (YHOO, Fortune 500) for $1.1 billion, and 17-year-old Nick D'Aloisio sold his news-reading app also to Yahoo for tens of millions. Karp dropped out of high school, and D'Aloisio started coding at the age of 12. Similar schools across the country and online, including Codeacademy and CoderDojo, with branches in Minneapolis, Seattle and Bismark, ND, have also cropped up to meet the growing demand.