Don’t blame Amazon, it’s Corporation Tax that’s broken

Well it looks like Amazon has only paid £1.3M UK tax, based on turnover of £Sqillions. Much wringing of hands and cries of “Something should be done!”. The same goes for Google, Starbucks or any other international company doing well in the UK. But nothing is being done to solve the problem, and for various reasons depending on your economic policy outlook.

First off, it’s not true to say Amazon pays very little tax in the UK. It pays VAT and PAYE. Lots of it. What it doesn’t pay much of is corporation tax, which is the tax on profits. And if you were an international company, you wouldn’t either. For international companies, corporation tax is, for practical purposes, optional. Companies may opt to pay as much or as little as suits their purpose.

If this is news to you, it works like this: Take Starbucks, for example. They managed to make very little profit in the UK. Because of this they were paying little or no corporation tax, which may seem odd when consider their ubiquitous presence in the high street. The reason was simple: Starbucks in the UK bought its coffee from its Dutch operation and the price was so high it wiped out the profits here. In Holland they were minting it, selling coffee to the UK, but the Dutch government took a liberal view on how much tax it should pay on these profits. Basically they were allowing Starbucks to pay a cut of what should have been UK corporation tax, and trouser the rest.

If Starbucks can do this simply by finding a foreign government prepared to sell out for a share of the profits, how easy is it for a Internet company with no physical product?

Basically, corporation tax would be a farce, were it not so serious. The problem is that it’s still paid in full by our local companies, putting them at an obvious disadvantage to foreign competition. It does more damage than good.

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There are two solutions:

The left-wing idea is to make more new law against tax dodging. Somehow. And if international companies don’t like it, they can take their jobs, investment, VAT payments, PAYE payments and business rates and go somewhere else (e.g. Ireland). They’ll be gutted.

Back in the real world, if you have an unenforceable tax that damages local companies the smart thing to do is abandon it. But there is a problem with this – how do you make up the revenue you’re currently collecting from UK businesses (those that remain)? The obvious answer, and one the Conservatives won’t stomach, is to raise personal income tax. This isn’t actually a problem, because foreign companies will just have to cover it to keep take-home incomes stable (or lose staff) and local companies can afford to give everyone a pay rise out of the money that would have gone in corporation tax. Levelling the playing field won’t be painless in the short term, but this no reason to avoid it.

So Labour has a busted ideological plan and the Conservatives would be annihilated if they raised taxes. Something needs to break the deadlock, because newspapers naming and shaming global companies that are simply playing by the rules we gave them is no answer. Labour banging on about alleged “tax cuts for the rich” isn’t going to help. Neither will Conservative pledges not to raise any taxes. It’s not a question of raising or reducing taxes, it’s a question of balancing them properly.

Meanwhile the Irish government is laughing at us, all the way to the bank.

 

Google Drive Hacked to spew Spam

Early this morning (GMT) I intercepted emails trying to sell a Chinese business signage product that had been spammed to spambait addresses left on web pages. Nothing new there, but having analysed the source I discovered that the Google Drive “cloud” storage system was still being abused to sent them out. I saw the first such incident about a month ago.

Basically the crims are creating a Google Drive account and then sharing it with a large number of people using a custom message. The name of the file becomes the title, and the sales pitch goes in the body:

Dear Sirs,

From internet we know you are leading on AV/TV product reseller field.

Sysview is a digital signage software, capable change your existing smart TV to a digital signage . Sysview features following :

The only surprise about this is that no one has exploited it before. It’s going to be very difficult to filter out without hitting all Google could services, and Google’s “sign-up free without asking questions policy” is going to make it hard from them to tackle.

Come on Google! You’ve had at least a month to get this sorted, to my certain knowledge. Google could be forgiven for failing to secure the system against such abuse in the first place, but I’m not going to. This is a common sense failure.

Safe Harbour Agreement on Data Sharing with Uncle Sam ruled unlawful

Causing trouble – Court of Justice of the European Union

The long awaited ruling about whether the Safe Harbour agreement allowing free transfer of data concerning European citizens to the USA is valid under European Law has  just been published. And it’s a doozie.

Basically a Safe Harbour agreement (note the use of the indefinite article here) means that you won’t be sent down the river for doing something that might otherwise be illegal. The specific Safe Harbour agreement in this case (2000/520/EC) says it’s okay for European data controllers to send whatever they like to the American’s because Uncle Sam is a good friend. This would otherwise be a no-no because you’d be giving up control over information that would otherwise be protected by European privacy laws.

This situation is currently being misrepresented in the popular press as being about Facebook (social media being their favourite subject after themselves); it’s not. It’s about all data. The case was brought by Austrian civil rights campaigner, Max Schrems in the Irish courts to test the legality of Facebook doing just this, as a high-profile example. A lot of American companies like to base their data centres in Dublin because, up until now, the Irish courts have been quite relaxed about what goes in compared with certain other European governments. (And lets not forget the tax breaks, and that Dublin is a nice place to be).

Hanging over this is the shadow of Edward Snowden (yet again), raising public awareness and anxiety over government access to PII. The fact that this PII is already in the hands of the likes of Facebook, Amazon, Microsoft, Google and Twitter with the full knowledge of the subjects doesn’t seem to matter – it’s the principle of the thing!

Anyway, the ruling basically says that the initial ruling is incompatible with European Law, and we can’t trust the Yankees to look after it without further safeguards. Where this leaves American companies with European data centres remains to be seen.

GMail can’t send to sendmail

Gmail Fail

What’s happening with Google? Their Internet engineering used to be spot on. They’re generally a bunch of clever guys, and they follow standards and their stuff just works. Or did. Lately their halo has been getting a bit tarnished, and problems with GMail are a good case in point.

It all started quietly around a month ago on the 6th August. About a week later, people started complaining that users sending mail to them from GMail were getting bounce messages. It looks like Google had rolled out a broken software update, but they’re keeping a low profile on the subject.

After a great deal of investigation it appeared that their new MTA was attempting to make a STARTTLS connection when delivering mail on port 25. STARTTLS is a mechanism that allows encryption on a standard unencrypted channel. Basically, the sender tries a STARTTLS command and if the receiver supports it, returns a reply of “okay” and the remainder of the connection is encrypted using TLS. unfortunately Google’s implementation, which had been working for years, is now broken. The GMail lusers got a bounce back a week later that said it couldn’t negotiate a STARTTLS connection. No further explanation has been forthcoming. STARTTLS should work, and if it doesn’t GMail should try again without using it, but doesn’t.

On the servers I’ve examined there is no problem with STARTTLS. Other MTAs are continuing to use it. All certificate diagnostics pass. Presumably Google has changed the specification as to what kind of TLS/SSL its going to work with, as, presumably, it’s not happy working with all types. Not all servers have this problem. But Google isn’t telling anyone what they’ve done, at least not so far. Working out what’s wrong with their new specification using trial and error takes a while, and I have yet to find a combination that works. And besides, it’s not Google’s place to tell recipients what kind of encryption they should be using, especially when the default state is unencrypted.

Google does offer a troubleshooter but it doesn’t cover this eventuality. There is an option to report other problems, but to date I’ve had no response.

So what’s the solution? The only method I’ve found that works is to disable STARTTLS on Port 25. This means that Google can’t try and fail, and go in to sulk mode. And here’s the bit you’ve probably been waiting for: how to do it.

Assuming you have an access DB configured for sendmail, (the norm) you need to add an extra line somewhere and makemap it:


srv_features: S

On FreeBSD this file is /etc/mail/access and you can make it active using make run from the /etc/mail directory. But you probably knew that.

The srv_features stuff basically tells sendmail which services to advertise as being available. STARTTLS is option ‘S’, with a lower-case letter meaning “advertise it”, and an upper-case meaning “don’t advertise it”. This over-rides defaults, and all we want to do here is stop advertising STARTTLS. If it’s not advertised, Google doesn’t try using it (at least for now).

You might want to read this sendmail documentation for more information in the normal Sendmail easy-to-understand(!) format. If that doesn’t do it for you, look at section 5.1.4.15 of the manual, available in PDF here.

Now Google may defend this state of affairs by saying that they’re implementing something odd with STARTTLS for “security reasons”. There may even be some justification in this. If I knew what they’d changed I might be able to comment on that, but I can’t. However, even if this was the case, they’d be wrong in principle. Since the dawn of Internet email we’ve had RFCs telling us how things should work. You can’t just change the way you do things and expect everyone else to change to suit you, however large you are. And it’s possible that what Google has done is RFC compliant, even if it is bonkers. There are unspecified aspects in RFCs, and some grey areas. However, anyone who’s been around for long enough will know that Sendmail is the de-facto MTA. If you have an argument about the interpretation of an RFC, you can settle it by asking the question “Does it work with sendmail?” If it doesn’t, it’s your problem.

And while we’re at it, it’s really good of Google to stop anyone reading your email while it’s in transit (could they be thinking of the NSA here?) After all, you don’t want email sent through GMail to be readable by anyone until they’re delivered, do you? The only snag is that they are still being read and analysed, by Google. Of course. Email is never secure unless you have end-to-end encryption, and by definition, you can’t get this with a webmail service.

Problems receiving mail from GMail – STARTTLS is a bad idea

Gmail Fail

Note: You may wish to read this follow-up article, which contains a solution.

A couple of weeks ago, users started complaining that people using GMAIL (and possibly iCloud) were having their emails bounced back to them from my servers. This is odd – most complaints on the Internet are from users of dodgy hosting companies having their mail rejected by GMail as likely spam. But I haven’t blacklisted Google, and all other mail is working, so they must have been mistaken.

But as soon as I could, I tried it for myself. And sure enough, a bounce came back. The relevent bit is:

Technical details of temporary failure:
TLS Negotiation failed: generic::failed_precondition:
               starttls error (0): protocol error

On fishing around in Sendmail logs, I found evidence that this has been going on all over the place:

sm-mta[84848]: STARTTLS=server, error: accept failed=-1, SSL_error=1, 
               errno=0, retry=-1, relay=mail-qg0-f50.google.com [209.85.192.50]
sm-mta[84848]: STARTTLS=server: 84848:error:1408A0C1:SSL
               routines:SSL3_GET_CLIENT_HELLO:no shared cipher:/usr/src/secure
               /lib/libssl/../../../crypto/openssl/ssl/s3_srvr.c:1073:
sm-mta[84848]: t7QJXCPI084848: mail-qg0-f50.google.com [209.85.192.50] did
               not issue MAIL/EXPN/VRFY/ETRN during connection to MTA

Oh my! The STARTTLS stuff isn’t working because there’s no shared cypher! Hang on a minute, there isn’t supposed to be. Who told Google they could use STARTTLS on port 25. It’d be neat if it worked, but it’s not configured – at least not with a certificate from a public CA. It actually works just fine if you are cool with self-signed (private) certificates. So what is Google playing at?

In the wake of Edward Snowden, people have started worrying about this kind of thing, so companies like Google are trying to be seen doing something about it, and encrypting mail might seem like a good idea. Unfortunately STARTTLS is a bad idea. The rationale behind STARTTLS was to add encryption to a previously unencrypted port’s traffic. If the sender issued a STARTTLS as part of the protocol it could switch in to TLS mode if it knew how; otherwise it would just work as normal. The IETF was very keen on this in the late 1990’s as an easy fix, citing all sorts of iffy reasons, generally to do with having two ports; one standard and one encrypted. They thought it would be confusing, requiring different URLs and not allow for opportunistic automatic encryption of the kind Google seems to be attempting.

As far as I’m concerned, this is rubbish. Having clearly defined encrypted and unencrypted ports means you know where you are. It either is or it isn’t. If you say something must be encrypted, turn off the unencrypted port. STARTTLS allows a fall-back to plain text if you specify the clear text port; and if you have a man-in-the-middle you’ll never know that the STARTTLS was stripped from the negotiations. It opens up a vulnerability that need not be there, all for the sake of saving a port. And time is on my side in this argument. Since 1999 the implementation of encrypted ports has really taken off, with https, smtps (in spite of 465 being rescinded), imaps – you name it – all servers and clients support it and you know where you are.

So what’s this sudden clamouring for the insecure STARTTLS? Naivety on the part of the large internet companies, or a plot to make people think their email traffic is now safe from snoopers when its not?

I’ve reported this problem and I await an answer from Google, but my best guess is that they’re speculatively using STARTTLS, and then barfing and throwing their toys from the pram when it doesn’t work because the verify can’t be done. Having thought about it, I’m okay with the idea of trying STARTTLS as long as you don’t mind about the CA used for the certificate; and if you can’t negotiate a TLS link, go back to plain text. In many ways it’d be better to use the well known port 465 for TLS, and if it can’t be opened, go to plain text on 25. Except there’s no guarantee that port 465 is on the same server as port 25, and it’s normally configured to require SASL authentication. As everyone knows, apart from Google it seems, assumption is the mother of all foul-ups.

Encryption is a good idea, but making assumptions about Port 25 being anything other that straight SMTP is asking for trouble.

 

Security certificates broken on Google Chrome 41

Don’t install the latest release of Google Chrome (41), released on Thursday (Friday UK time). They’ve messed up. Twice.

Broken SSL when talking to routers etc.

The first problem comes when accessing the web interface on a device such as a router over SSL (encrypted). Unfortunately, because the software in theses is embedded, the security certificate it uses isn’t going to match the name of the device you use to access it. This would be impossible – when it leaves the factory it hasn’t had its IP address assigned on your site; never mind the DNS entry. Previously browsers have allowed you to ignore this mis-match; the encryption works as long as you’re comfortable that you’re really talking what you think you are using some other check, and once the exception has been stored, this should be the end of the matter.

But not with Chrome release 41. Now it will show you the screen below:

ChromeMessedUp

If you ask for more details it doesn’t really give you much:

A secure connection cannot be established because this site uses an unsupported protocol.
Error code: ERR_SSL_VERSION_OR_CIPHER_MISMATCH
This comes from a DrayTek 2820 modem/router, but the problem seems to exist on other networking kit.

More adverts too – and a malware backdoor

(Please see update below – there may be an innocent explanation for this)
As an extra surprise, those nice people seem to have found a way of blocking URL keyword filters used to keep adverts out from objectionable sources, circumventing methods of blocking Google’s syndicated advertising. I’m still researching this, but the way they appear to have done it means that embedded content from other sources than the site you’re looking at is extremely difficult to block.
It appears Google has done this to protect its revenue stream from adverts, with little regard from the site policies that may exist for reasons Google may not realise. But that’s not the worst of it: how long will it be before this feature of Chrome is used for drive-by downloads. If you’re firewall isn’t able to cross-check the source of the content on a page, it can be coming from anywhere.
Unfortunately there is no way of rolling back a bad version of Chrome. They really don’t like you doing that, however dangerous a release might be.
I have, of course, made urgent representations to the Chrome project but we will have to wait and see. In the mean time, all I can suggest is that you prevent Chrome from updating beyond version 40.

Update 2015-03-23
On further investigation, the updated Chrome isn’t doing a DNS lookup to find the Google ad-server. I’m unsure whether this is because it somehow cached the DNS results internally or whether its hard-wired. It certainly wasn’t using the system cache, but I know Chrome has kept its own cache in the past. If it is from an internal cache, the mechanism used to get the IP address in there in the first place is a mystery, however Google’s ad servers change from time to time and it’s not impossible that the perimeter firewall simply hadn’t kept up and allowed some through.

My next research will be looking more closely at the DNS traffic.

Interesting security issue with Google Apps for Education

I’ve come across a feature of Google Apps for Education that people should really be aware of. It goes like this…

When a school or college signs up for Google Apps for Education, a single email account is used to register a local administrator. This administrator then has control over the sub-accounts, including creation, passwords and monitoring. This would be someone at the school you can trust, right? Because they have access to all your children’s data. And it’s only for school use, so where’s the problem?

Well here’s the problem: that data will probably include a GMail account, and they may not be using it for education-related matters. Creepy. Assuming you trust the monitor, do you snoop on the pupils for their own protection or leave it completely unmoderated, with all the implications for child safety. You’re between a rock and a hard place. By forcing pupils to use an insecure channel you’re responsible for the consequences: if you look you could be accused of voyeurism; if you don’t you can be accused of allowing abuse which you could have prevented.

And it gets worse, because you’re basically logging in using a Google Account. How many people log out when they’re finished? And if a child logs in on a home computer and someone else uses it afterwards without realising, the administrator at the school gets to snoop on data inadvertently added to the account by other members of the household.

Are you a parent, and were you aware of this? You are now!

If you’re a school, my advice is to (a) monitor the monitor; and (b) make sure children know to log out after use; and (c) make very sure that you have parents’ specific permission to allow their children to use the system, being aware of the above. If not and you end up monitoring someone you don’t have permission to (i.e. not your pupil), you’re probably looking at an offence under the Misuse of Computer Act 1990 in the UK, and a class action law suit in the USA. Remember that school in Philadelphia that took snapshots using students’ Macbook webcams without telling anyone? (Robbins v. Lower Merion School District). There was no suggestion of foul play, just naivety on the part of the school district. And it cost them $600K to settle, plus a great deal of embarrassment.

“Right to be forgotten” and police body cam footage posted forever on YouTube

In Europe, the court has decided that people who don’t like search engines like Google turning up embarrassing details about them now have the right to get the offending pages removed from the index. A Spanish lawyer by the name of Mario Costeja Gonzálezping hated people typing his in his name and finding an article in his local rag alluding to his past financial difficulties, and when they refused to pull the historical record he took all and sundry to court until Google (in particular) was forced to stop indexing the page. If you want to read the page from La Vanguardi, click here. Whilst I have some sympathy for the guy, taking Google to the European Court over the matter is not the best way to keep out of the public eye.

This isn’t without controversy – it’s censorship by the back door, handed down by a bunch of un-elected judges and everyone in Europe now has to comply. However, our colonial cousins, with their First Amendment, have e completely different problem – too much free speech.

Someone is exploiting the system, and the fact that publicly generated records in the USA are public, by requesting all police body camera images in order to provide content for a new YouTube channel, as reported by Komo News. Basically they’re slurping all the footage shot by Poulsbo Police in Washington and posting the “best bits”. The privacy issues are mind-boggling! Forget getting drunk and posting an unfortunately selfie on your Facebook page – if you get a visit from the cops in Poulsbo, it could end up on YouTube forever.

What is Google (owner of Facebook) doing about THIS? Absolutely nothing (thus far);  it’s free speech, isn’t it?

Google Apps for Schools – how safe are they?

So-called Group Work is probably the bane of every tutor in higher education, myself included. As to the poor students having to collaborate; it’s always the motivated one dragging the hangers-on and possibly university’s resident idiot along with them. It’s a nightmare. The most common complaint is that they never turn up to meetings to work on the project because it’s too difficult to organise. Yeah, right!

So this week, one of my colleges persuaded me to get them all working with Google Apps. The theory is that they don’t need to be co-located in time or space to work on a common document. I suspect the lack of physical presence will actually make it easier for some of the group to loaf off, but perhaps I’ve been at this too long to be optimistic.

Google Apps, on the other hand, is gaining ground in education. Cloud-based applications that allow easy sharing of documents has to be a good thing, and I have to say I’m very impressed at the ability of several people to edit the same document at once. And it comes with the ultimate feature that will guarantee sales – it’s free.

When I say “free”, that means that Google gets to harvest your personal data instead of hard cash, and feed you targeted advertising. And this is a worry. You may be okay with this, but if it’s to be adopted in colleges or schools, supposing some students aren’t as relaxed about it? Those in the know keep away from Facebook for just this reasons, but it’s optional. If you make Google Apps part of coursework you’re forcing students to accept terms they’d otherwise reject.

So, in 2006, Google announced Google Apps for Education, with the advertising stripped out. It’s actually a pretty good deal. Features may change over time, but it’s basically business version of Google Apps with one difference – it’s also free.

Unsurprisingly, Microsoft is really hacked off about this. They’ve been giving their Windows and Office software to educational establishments at a huge discount (or free) in order to get kids hooked on it, and as a result we have a generation that believes Microsoft Office is necessary to do anything. Kids come out of education knowing nothing else, which forces companies to purchase Microsoft Office at the full price in order to make them feel at home.

So, free or otherwise, Google Apps is probably more suited to college use, and Microsoft isn’t going to like it, so is fighting back with lawyers (no surprise there).

For example, last year Microsoft backed a bill in the US state of Massachusetts to block the use of Google Apps in schools.

To quote: “An Act prohibiting service providers who offer cloud computing services to K-12 educational institutions from processing student data for commercial purposes.”

Pernicious as Microsoft’s education offering is, this bill does have a point and I find myself siding with Microsoft for once. In fact I’d go further – no one should be forced to use applications collecting personal data, even in further or higher education.

This is becoming more relevant as I understand many schools are now considering the use of Google for Education. If their students are under 18, how can they even give informed consent? And once the parents understand the issues, who would give consent on their behalf? In most Judistictions, you need to be 13 or over (or 16+ in some parts of Europe) before you are allowed by Google to have a Google account, so it’s not like Google isn’t sensitive to the issue.

My sources inside the chocolate box tell me that the new Apps for Education will be advert free. When pushed, there was no guarantee that tracking wouldn’t happen – only that no adverts would be shown in the Apps themselves. Whether they will appear, based on tracking data, on other web sites remains to be seen and when the child reaches an “appropriate” age they’ll come with years of profile data. I’m awaiting clarification from Google on this matter.

(Update: Google has now publically declared that they will not scan Apps for Education data for advertising purposes, however the devil is in the detail. They don’t say that they don’t scan it for other profiling reasons. And then I found this court document, unearthed by SafeGov, in which Google’s own lawyers admit that they do profile students email and suchlike, meaning they can target adverts in other circumstances.)

And then there’s the question of whether it’s a secure environment. Well, no, it’s not. But that applies to Office 365, most LMS (see blogs passim) and anything else that has public messaging – in this case GMail. Given the problems I’ve had with users of freemail accounts, including GMail, I can’t help but question of the wisdom of allowing children access to it. When you’re signed up for Apps for Education you are supposed to be getting 24/7 support from Google, unlike Joe Public. Whether this helps resolve the issues remains to be seen. It’s also possible to turn off features centrally, such as Chat (an obvious thing to disable). Unfortunately, if you do turn off GMail there’s no other closed
messaging system to use instead.

As with my earlier papers and articles concerning LMS systems, I’m not saying that Google Apps are inherently insecure. In fact, I’ve got a lot of confidence that Google data centres, in particular, are robust. If Google does deliver on it’s data use policy, and is providing this service free of charge and with no strings attached, that’s great news. Microsoft has had their way for far to long for it to be healthy. Google has stated that as Google was born out of a research project at Stanford, they now want to give something back to education and that’s their only motive. It’s nothing to do with scuppering Microsoft; how could you possibly think that?

Like all Internet connect IT for use in schools, it’s the social risks that worry me the most, such as abuse of Internet email. If your school plans to use Google Apps, Office 365 or any other system with open email, just ask to see the risk assessment first.

That said, I’d still prefer to see educational establishments return to the open source model; Linux if you must, and OpenOffice. Computing by and for the people. Or perhaps those days are gone. We’re already stuck with a generation that now believes computing comes from large companies like Google and Microsoft. Sadly, I feel that it’s unlikely that most will have the technical talent in-house to make it happen.

Update:

Some of the concerns expressed here about data usage have now been addressed after Google signed up to this code of conduct IN THE USA.

Google Nexus TV uses Atom

The Nexus TV box that Google just announced is the company’s latest attempt to take over the living room (after Chromecast). This one runs Android 5, so punters can download and run apps from Google Play. This will include games, of course, and there is to be an optional games hand controller. However, what no one seems to have noticed is that the NExus TV box has an Intel processor, not an ARM.

Although simple Apps are written in CPU independent Java code, or, strictly speaking, a similar VM either Dalvik or ART depending on which version of Android you. It’s interpreted on the target platform, and therefore slow. When high performance is needed then code has to be written C and compiled to native code (i.e. using the NDK). This hasn’t been a problem thus far, as all Android devices on the market used the ARM core, and were machine-code compatible. I wonder how many games are written this way? Quite a few, probably.

Tesco has also just launched a non-ARM Hudl tablet. The mass media had yet to comment.