The Media Today

Pressure increases on Bloomberg to verify its China hack story

October 24, 2018

It was a certified bombshell: Bloomberg News reported on October 4 that the Chinese government had been able to infiltrate both Apple and Amazon’s hardware systems by putting hacked microchips into the third-party motherboards they used in their servers. But as the days following the report have turned into weeks, doubts about the validity of the story have continued to grow, while the amount of independent verification and/or supporting material proving such a hack actually occurred remains at zero.

In a column on Tuesday, Washington Post media critic Erik Wemple argued the chorus of voices in opposition to the allegations in the piece—including strenuous and detailed denials from the companies involved—have put the onus on Bloomberg to come up with additional verification, or else risk casting even more doubt on its scoop. “The relentlessness of the denials and doubts from companies and government officials obligate Bloomberg to add the sort of proof that will make believers of its skeptics,” Wemple wrote. “Assign more reporters to the story, re-interview sources, ask for photos and emails. Should it fail in this effort, it’ll need to retract the entire thing.” Wemple also criticized the news outlet for using a photo of a generic microchip on the cover of Bloomberg BusinessWeek magazine, despite the fact that the news outlet has no photos of the actual chip that was allegedly used in the hacks.

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Bloomberg, meanwhile, has remained steadfast and largely uncommunicative since the initial doubts surfaced, saying only that the report is based on more than a year of reporting, involving more than 100 interviews with 17 sources, “including government officials and insiders at the companies,” and that it stands by its story and is confident in its reporting.

Wemple isn’t the only one who argues Bloomberg needs to do more to bolster the reporting around its scoop. Patrick Kennedy, a hardware expert who writes a blog about server infrastructure, recently published a long and detailed takedown of some of the allegations contained in the Bloomberg story. In it, he describes what he calls “some fairly astounding plausibility and feasibility gaps” in the piece. Kennedy’s post requires some in-depth knowledge of how chips work, but the bottom line is he says the description of how the alleged chip was able to take control of a motherboard “is not plausible,” and in many cases is not even physically possible. Parts of the Bloomberg description are “nonsensical,” he says, and include “patently false technical details.” Motherboard editor Jason Koebler has said that the story “is at the point where everyone we have talked to believes the story has significant holes or was outright fabricated. Bloomberg has to say or do something.”

Apple CEO Tim Cook recently called publicly for Bloomberg to retract its story, saying “there is no truth” in it. Denials from companies on such hacking or security stories are not uncommon, but even veteran technology reporters have noted that the denials from both Apple and Amazon are detailed and specific, and they have even denied that any of their senior executives are under a gag order (as they might be if the alleged government investigation was top secret). But for now at least, Bloomberg is sticking to its guns.

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Here’s more on the Bloomberg story and its aftermath:

  • More calls for a retraction: Executives at both Amazon and Super Micro (the company whose motherboards were supposedly compromised) have joined the calls from Apple’s CEO for a retraction. Amazon Web Services manager Andy Jassy said in a tweet: “Tim Cook is right. Bloomberg story is wrong about Amazon, too,” and Super Micro’s CEO said Bloomberg “should act responsibly and retract its unsupported allegations.”
  • Hypothetical examples: One of the named sources in the Bloomberg story has also cast some doubt on the alleged incident, saying the details are similar to a scenario he described to the reporter, but that scenario was one he came up with as a hypothetical example of how such a thing might be done.
  • Letter to Congress: It might not be surprising that Apple’s CEO has denied the facts of the story, but Apple’s vice president of information security has also written a letter to Congress denying the allegations. “Our internal investigations directly contradict every consequential assertion made in the article.”
  • A denial from the FBI: After the Bloomberg story first came out, Apple’s former general counsel Bruce Sewell says he called his counterpart at the Federal Bureau of Investigation, and after looking into it for 24 hours, the FBI’s then-general counsel said no one had heard of any investigation similar to the one described in the story.
  • More intelligence denials: Although the Bloomberg story says the company spoke to security officials who work for the government, spokesmen for both the Department of Homeland Security and Britain’s Government Security Headquarters have said they have no knowledge of any hack similar to what the story describes.


Other notable stories:

  • The Telegraph newspaper in Britain says a businessman has been granted an injunction that prevents the paper from identifying him or talking about the multiple sexual harassment and racial abuse allegations against him, because of non-disclosure agreements that were signed by the victims in those cases.
  • Elizabeth Hewitt writes for CJR about Sarah Kliff, a writer with Vox Media who has spent a year compiling a database of more than 1,600 individual emergency room bills and has been writing about the personal stories behind those charges.
  • WikiTribune, the community-edited news site started by Wikipedia co-founder Jimmy Wales has laid off all 13 of the professional journalists who were working for the site, but says it plans to hire new staff that are more oriented to a community-first model.
  • Refinery29, a media and entertainment news site, is laying off about 10 percent of its editorial staff or roughly 40 employees, according to a report in The Wall Street Journal. An internal memo said the company plans to stop producing as much short-form video and will produce 50 percent less content for social media.
  • Veteran Mexican journalist Emilio Gutiérrez-Soto pleaded for his life with the judge who is re-hearing his deportation case. The case was reopened after protests by a number of journalistic organizations including the National Press Club, who said the judge hadn’t considered evidence that Gutiérrez-Soto’s life would be in danger. (Gutiérrez-Soto wrote for CJR about being detained in September.)
  • Mark Little, co-founder and former CEO of the social-media verification and licensing company Storyful, has launched a new digital media startup called Kinzen, which he says is an attempt to build a community of curators sharing high-quality news as well as readers who are willing to pay for access to that kind of content.
  • Former Times editor and BBC News Director James Harding talked about why he and several other British media executives are launching a “slow news” startup called Tortoise. The site has already raised about $500,000 through a crowdfunding campaign.

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Mathew Ingram is CJR’s chief digital writer. Previously, he was a senior writer with Fortune magazine. He has written about the intersection between media and technology since the earliest days of the commercial internet. His writing has been published in the Washington Post and the Financial Times as well as by Reuters and Bloomberg.