The 22 biggest tech scandals of 2020, from the unprecedented Twitter hack to the makers of 'Fortnite' declaring war on Apple
Reuters
- Good news: 2020 is finally over.
- It was a long year, and one in which the coronavirus crisis and the US presidential election dominated the news. Yet the tech industry still managed to embroil itself in scandals of its own.
- 2020 began with revelations about Amazon CEO Jeff Bezos' phone hacking and a Microsoft employee getting caught stealing millions from the company.
- Soon after, however, Silicon Valley largely closed its doors and the tech world faced a new work-from-home reality — complete with Zoom trolls.
- In the months that followed, Twitter was hacked, "Fortnite"-maker Epic Games declared war on Apple, and the much-hyped Quibi launched — and then shut down for good.
- Here are the major scandals that rocked the tech industry in 2020.
- Did we forget anything? Let us know by contacting Business Insider reporter Avery Hartmans via email (ahartmans@businessinsider.com).
- Visit Business Insider's homepage for more stories.
In January, The Guardian and The New York Times reported that a forensic analysis of Bezos' iPhone by FTI Consulting found evidence that Saudi officials were involved in the leaking of Bezos' relationship and personal messages in 2019.
The claim was backed up soon after, when the UN called for an "immediate investigation" into the crown prince.
According to the forensic report, Bezos and Saudi Crown Prince Mohammed bin Salman exchanged numbers at a dinner in April 2018 — on May 1 of that year, Bezos' iPhone is said to have been infiltrated after he received a video attachment from the crown prince's personal WhatsApp account.
Within hours of Bezos receiving the video, the report found that a "massive and ... unprecedented exfiltration of data" began, an increase of more than 29,000%.
After details of the forensic report were published, the Saudi government issued a statement calling the reporting "absurd" and said it would be investigating the claims.
FEBRUARY: A former Microsoft engineer is convicted of stealing $10 million from the companyStephen Brashear
Former Microsoft software engineer Volodymyr Kvashuk was convicted in February of stealing $10 million worth of digital currency from his former employer.
Kvashuk — who worked at Microsoft from August 2016 to June 2018, first as a contractor, then as a full-time employee — was convicted by the US District Court in Seattle after a five-day trial, the US Attorney's Office for the Western District of Washington announced at the time.
The court found that Kvashuk had stolen "currency stored value," like online gift cards, during his time testing the retail-sales platform on Microsoft's website. He then resold the currency in exchange for bitcoin and used the money to buy a lakefront home for $1.6 million and a Tesla that cost $160,000 — likely a Model X, given the price.
Kvashuk was later sentenced to nine years in prison.
MARCH: Trolls start invading Zoom calls to share porn or racial slursGetty Images
When most offices closed down in March and US workers began working from home, use of video-chat service Zoom surged.
But soon after Zoom skyrocketed in popularity, the trolls followed. Publicly shared links to Zoom calls allowed anyone to enter the chat, and the option for participants to share their screen meant that anyone could start broadcasting porn or other offensive material.
Trolls entered virtual Alcoholics Anonymous meetings, church services, and private calls with friends, and though the problem began in March, it persisted for several months. In June, a Pride event organized by TikTok was hijacked by trolls who took over the call's audio and chat features to hurl homophobic and racist slurs at attendees.
Reports also surfaced that Zoom didn't use end-to-end encryption for video meetings and had unintentionally exposed users' personal information.
Zoom CEO Eric Yuan later said in an interview with CNN's Brian Stelter that the company "moved too fast" and took some "missteps" when it comes to privacy and security. Zoom began offering end-to-end encryption for free and instituted a plan to address other security issues.
APRIL: A leaked memo reveals that Amazon planned to discredit a warehouse worker who was fired after protesting coronavirus working conditionsREUTERS/Lucas Jackson
In April, Amazon fired Chris Smalls, an assistant manager at one of Amazon's New York City warehouses. Smalls had helped organize a walkout to protest how the company was cleaning its facilities and treating warehouse workers at the start of the coronavirus pandemic. Smalls said at the time that he was fired in retaliation for organizing the protest; Amazon denied this.
Soon after, Vice published a leaked memo from Amazon's public relations team in which executives laid out a plan to discredit Smalls.
"He's not smart, or articulate, and to the extent the press wants to focus on us versus him, we will be in a much stronger PR position," David Zapolsky, Amazon's general counsel, wrote in an email, adding that Amazon should "make him the face of the entire union/organizing movement."
Amazon CEO Jeff Bezos was reportedly in the meeting about the situation, along with Dave Clark, Amazon's head of worldwide operations and customer service, and Beth Galetti, head of human resources. According to Vice, Zapolsky's notes said there was "general agreement" on the strategy.
APRIL: Elon Musk rails against stay-at-home orders, calling them "fascist"AP Photo/Susan Walsh
Throughout the coronavirus pandemic, Tesla and SpaceX CEO Elon Musk has been outspoken about his thoughts on everything from ventilator shortages to possible treatments to the severity of the virus overall.
In April, Musk went one step further, calling US shelter-in-place orders "fascist" during a brief, expletive-laden rant during a conference call following Tesla's first-quarter earnings report.
"Frankly, I would call it forcible imprisoning of people in their homes against all of, their constitutional rights, in my opinion," he said. "It's breaking people's freedoms in ways that are horrible and wrong and not why they came to America or built this country. What the f---. Excuse me. Outrage. Outrage."
Shortly after, Musk got into a public spat with the state of California after coronavirus restrictions forced Tesla to temporarily close its Northern California factory. Musk restarted operations without county approval and tweeted that he'd be on the assembly line and was willing to risk arrest.
Tesla went on to file a lawsuit against California arguing it should be allowed to continue operating despite the shutdown, which it later dropped after receiving government approval.
Read more: Tesla workers reveal CEO Elon Musk's biggest strengths and weaknesses
APRIL: Bill Gates ends up in the center of coronavirus conspiracy theoryYana Paskova/Getty Images
One month into coronavirus lockdowns in the US, Microsoft cofounder and philanthropist Bill Gates ended up at the center of conspiracy theories blaming him for the virus.
Gates has been an advocate for pandemic preparedness for years, and warned as far back as 2015 that a global pandemic could result in a shocking death toll.
But by mid-April, a New York Times analysis found more than 16,000 Facebook posts falsely claiming that Gates had engineered the virus. The surge in conspiracy theories about Gates seemed to originate from a YouTube personality linked to QAnon, who claimed in January that Gates knew about the pandemic ahead of time.
Prominent right-wing and anti-vaccination figures also spread the theory, including Roger Stone, Trump's former campaign adviser, and Alex Jones.
In June, the hashtag "#ExposeBillGates" trended on Twitter due to a coordinated effort from users on Reddit, 4chan, and other websites.
MAY: People set cell towers on fire due to a 5G conspiracy theoryRobin Utrecht/SOPA Images/LightRocket via Getty Images
In the spring, another baseless conspiracy theory began to gain steam: that the rollout of faster 5G internet either caused or helped accelerate the spread of the coronavirus. People in the UK and elsewhere began setting 5G cell towers on fire, resulting in more than 70 arson attacks on cell towers by May.
The conspiracy theory has been around since at least 2019, but it accelerated online during the pandemic and was amplified by online groups, television journalists, and even celebrities like Woody Harrelson. As the theory spread, so did the attacks on cell towers and telecoms workers.
The false claims led a group of Britain's big telecoms companies to publish an open letter begging for people to stop damaging their cell towers and attacking their engineers, and social media companies like Facebook and YouTube both pledged to remove groups or content linking 5G and the virus.
JUNE: T-Mobile experiences a massive outageDown Detector
In June, T-Mobile customers around the US experienced a crippling and widespread outage, resulting in thousands of customers experiencing disruptions to their cell service.
At its peak, service tracker DownDetector showed 93,000 reports of T-Mobile outages in places like New York, Florida, Texas, Georgia, California, and the Washington, DC, area. At the time, T-Mobile's president of technology, Neville Ray, said in a tweet that the company was experiencing a "voice and data issue."
Service was fully restored several hours later, but FCC Chairman Ajit Pai said the committee would be launching an investigation into the outage.
JUNE: Fintech company Wirecard is embroiled in an accounting scandalPeter Kneffel/picture alliance via Getty Images
In mid-June, German payments processing company Wirecard, which had long been the target of speculation that it was dealing in improper accounting practices, revealed that 1.9 billion euros had gone missing from its balance sheet.
A few days later, the company's CEO, Markus Braun, resigned from his post and shortly after, Wirecard admitted that the missing 1.9 billion likely did not exist, which sent shares of Wirecard crashing. By the end of June, Braun was arrested by German police on suspicion of market manipulation and false data. Soon after, Wirecard filed for insolvency.
Wirecard's scandal hit investment giant SoftBank particularly hard: In 2019, the firm's Vision Fund had invested $1 billion in Wirecard through a convertible bond, a form of debt financing that can be repaid in stock. Wirecard's share price plummeting erased hundreds of millions of dollars in profits for SoftBank.
JUNE: The Department of Justice charges former eBay employees in connection with a cyberstalking campaign against criticsMarcio Jose Sanchez/AP Images
In June, the Department of Justice charged six former eBay employees — including two company directors — with leading an "aggressive" cyberstalking campaign. A seventh employee was charged in July.
The Justice Department alleged that eBay employees had targeted a Massachussetts-based couple who ran an ecommerce newsletter that was critical of eBay. The eBay employees sent the couple anonymous messages and packages, including live cockroaches, a bloody pig mask, a funeral wreath, and a book on "surviving the loss of a spouse," according to court documents.
The former employees were charged with conspiracy to commit cyberstalking and conspiracy to tamper with witnesses. They could face up to five years in prison and a fine of up to $250,000 for each charge.
JUNE: Microsoft shuts down its Twitch competitor, MixerScreenshot/Business Insider
Microsoft announced in June that it was shutting down its video game streaming service, Mixer.
Despite the Xbox-maker spending tens of millions of dollars and signing exclusivity deals with major streamers like Tyler "Ninja" Blevins, Mixer was unable to compete with Amazon-owned Twitch when it came to viewer numbers.
Microsoft opted to sunset Mixer, cancel its exclusivity deals, and transition to a partnership with Facebook's video game streaming portal, Facebook Gaming.
"It became clear that the time needed to grow our own livestreaming community to scale was out of measure with the vision and experiences we want to deliver to gamers now," Xbox lead Phil Spencer wrote on the Xbox blog at the time.
JUNE: Hackers leak sensitive files from over 200 police departments amid the George Floyd protestsUS Department of Homeland Security; Wikimedia Commons; Courtesy of Emma Best; Samantha Lee/Business Insider
As protests continued nationwide following the killing of George Floyd by police in Minneapolis, hackers leaked 269 gigabytes of data from police departments across the US.
The leaked files, which came to be known as BlueLeaks, showed how the FBI and police departments across the US were monitoring the social media accounts of those who were attending the protests against police brutality. Law enforcement were exchanging information about protesters' clothes, tattoos, and Twitter handles, the files showed.
The sensitive information, which appeared to have been hacked from a Houston web-services company called Netsential and shared with a freedom-of-information activist named Emma Best, was leaked in the form of a searchable database, which could be sorted by officers' badge numbers.
JULY: Twitter experiences a massive hack that compromises the accounts of Elon Musk, Jeff Bezos, Barack Obama, and other notable figuresAP Photo/Jose Luis Magana
In July, notable tech figures and former world leaders were targeted in a massive Twitter hack.
Tesla CEO Elon Musk, Microsoft cofounder Bill Gates, Amazon CEO Jeff Bezos, and more than 100 other verified accounts were hacked as part of a widespread bitcoin-giveaway scam that took place over several hours. The attack sent Twitter reeling and called into question how secure the platform really was.
While it was initially believed that the hack was a sophisticated attack, it was later revealed to have been orchestrated by a Florida teen. In August, he pleaded not guilty to 30 felony charges — if convicted, he could be sentenced to up to 200 years in prison.
JULY: Major advertisers pull their ads from Facebook following its lack of action against President Donald Trump's posts threatening George Floyd protestersThe Asahi Shimbun via Getty Images
Following George Floyd's death in May and the protests that began in Minneapolis, President Donald Trump posted on Facebook that the protesters were "thugs" and seemed to threaten violence against them, writing on Facebook and Twitter: "when the looting starts, the shooting starts."
Though Twitter took action against the posts, saying they glorified violence, Facebook decided not to take any action against the posts or Trump.
In response, civil rights groups called for advertisers to boycott the site — at one point, more than 500 advertisers, including Coca-Cola, Verizon, and Ford, pulled their ads from Facebook, resulting in $60 billion in Facebook's market value being erased in two days.
Facebook didn't appear to be swayed by the boycott, with CEO Mark Zuckerberg initially saying in a message to employees that the company wouldn't be changing its approach to hate speech. COO Sheryl Sandberg later wrote on Facebook that the company would be making changes to better identify and remove hateful content on the platform, "not for financial reasons or advertiser pressure, but because it is the right thing to do."
AUGUST: Epic Games, the company behind "Fortnite," files a lawsuit against AppleEpic Games sued Apple in August, accusing it of engaging in anticompetitive behavior after Apple pulled "Fortnite" from the App Store.
The gaming company had previously announced the ability for users to make in-game purchases directly through Epic, bypassing the 30% cut Apple and Google take from in-app purchases. In response, Apple yanked "Fortnite" from the App Store, with Google's Play Store following suit later in the day.
Epic quickly filed its lawsuit, claiming Apple used its power to "impose unreasonable restraints and unlawfully maintain its 100% monopoly."
Epic also launched a short film titled "Nineteen Eighty-Fortnite," a scathing parody of Apple's famous "1984" commercial.
Since then, Facebook had pledged to support Epic in its ongoing litigation with Apple.
SEPTEMBER: Trump attempts to force the sale of TikTok to US firmsPhoto Illustration by Andrea Ronchini/NurPhoto via Getty Images
In September, the US Department of Commerce announced it would ban the apps TikTok and WeChat from US app stores beginning on September 20.
The ban was a result of months of scrutiny from US lawmakers, who felt the apps' ties to China — TikTok was created by ByteDance while WeChat is produced by Tencent, both Chinese firms — made them security risks for US users.
Trump set a deadline for ByteDance to find an American buyer for TikTok or face a ban, launching a weeks-long bidding war for the mega-popular short-form video app. (The attempted ban on WeChat is currently hitting legal roadblocks and is unlikely to be implemented anytime soon.)
While Microsoft emerged as an early frontrunner, the deal quickly fell apart. In its place, a new US-based TikTok business will be created, with US investors, including Oracle and Walmart, replacing ByteDance as the majority shareholders.
While Trump approved the deal in September, it appears to currently be at a standstill, and two federal judges have blocked the Trump administration's ban on TikTok.
SEPTEMBER: Electric-car company Nikola's $2 billion deal with GM falls apart after a string of controversiesREUTERS/Massimo Pinca
In September, electric-car company Nikola inked a $2 billion deal with General Motors to produce an electric pick-up truck.
But two days later, things began to unravel.
A short seller revealed that it gathered "extensive evidence" that it said indicated fraud and implicated founder Trevor Milton. Nikola called the short seller's findings "false and misleading," but soon after, the SEC and the DOJ began examining the allegations.
Milton resigned from the company, but around the time of his resignation, two women, one of whom was Milton's cousin, came forward alleging that he had sexually assaulted them, which Milton denied.
Then, at the end of September, a report surfaced alleging Milton had bought the designs for the Nikola semi-truck rather than designing it himself, as he had previously claimed.
By November, GM said it would no longer take a stake in Nikola or produce a consumer truck, but will still sell its hydrogen fuel cells to the company.
Read more: Nikola founder Trevor Milton's cousin alleges he sexually assaulted her when they were teenagers
OCTOBER: Twitter blocks a New York Post story about Hunter Biden, inciting backlash from conservativesAssociated Press/Evan Vucci, AP
In October, Twitter faced backlash for an initial decision to ban users from sharing links to a New York Post story about Hunter and Joe Biden. The story was based in part on files and emails that the Post said were taken from Hunter Biden's laptop, and multiple media outlets, including Business Insider, called the story's reporting into question.
Twitter's move to ban sharing links to the story — which it temporarily did, citing its policy on sharing hacked materials — resulted in swift reactions from users, particularly from Republicans who felt Twitter was showing bias against conservatives.
Dorsey said the platform's decision to ban links to the story was "wrong" and said blocking a URL without providing context was "unacceptable."
OCTOBER: Mobile-video service Quibi announces it's shutting downReuters
Quibi announced it October that it was shutting down just six months after launch.
The streaming service, which was founded by Jeffrey Katzenberg with former HP CEO Meg Whitman at the helm, raised $1.75 billion from investors like Walmart, PepsiCo, and Anheuser-Busch ahead of its launch.
But Quibi struggled to gain viewers, which has resulted in lucrative advertising deals being put on hold. The service was intended to be used on the go, but the timing of its launch coincided with the coronavirus outbreak, which meant fewer people commuting and an economic downtown that may have made customers hesitant to pay for a subscription.
And despite a roster of impressive Hollywood talent — including Liam Hemsworth and Anna Kendrick — none of Quibi's shows became major hits.
NOVEMBER: Former Zappos CEO Tony Hsieh dies suddenly at age 46Andy Cross/The Denver Post/Getty Images
One day after Thanksgiving, Tony Hsieh, the former CEO of Zappos, died after sustaining injuries in a house fire.
Following Hsieh's sudden death, reports emerged of a troubling final few months for the legendary and beloved entrepreneur, who stepped down from his longtime role at the helm of Amazon-owned Zappos earlier this year.
In June, Hsieh experienced what friends described as a "psychotic break" that marked a dark turning point and may have led to his departure from Zappos.
During his final months, Hsieh had relocated from his longtime home of Las Vegas to Park City, Utah, where he became increasingly physically and digitally isolated from longtime friends and started drinking heavily and inhaling nitrous oxide, according to Business Insider's reporting.
According to The Wall Street Journal, Hsieh had been planning to check into a rehabilitation center the day before he died.
DECEMBER: Hackers breach IT firm SolarWinds, resulting in an unprecedented attack on federal agenciesReuters/Brendan McDermid
In December, Reuters revealed that US-based information technology firm SolarWinds was the subject of a cyberattack went undetected for months.
As a result of the hack, foreign attackers — who top officials believe are Russian intelligence — were able to spy on private companies as well as government agencies, including the Treasury Department and the Department of Homeland Security. According to SolarWinds, up to 18,000 of its customers may have been vulnerable to the attack.
Given the stealthy nature of the hack and the fact that it went undetected for nine months, experts have said that it could be years before federal networks are secure again.
DECEMBER: The highly anticipated launch of "Cyberpunk 2077" is derailed by major bugsCD Projekt Red
"Cyberpunk 2077," the highly anticipated game that took years to build, finally debuted in December.
But soon after launch, players reported major bugs and crippling performance issues, particularly on the PlayStation 4 and Xbox One. Only one week after launch, the game was pulled from PlayStation's digital store, and both Sony and Microsoft offered full refunds to anyone who bought the game.
Following the game's messy launch, the development studio behind "Cyberpunk," CD Projekt Red, saw its stock value tank by nearly a third. Soon after, the studio issued an apology and offered refunds to some players.
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