Los Angeles Times - 02.11.2019

LATIMES.COM/BUSINESS C3

cautious,” the Rodeo Realty

agent said. “Instead of pay-

ing an arm and a leg, maybe

they just pay an arm.”

The numbers from

DQNews represent closed

deals, meaning many buyers

would have opened escrow

in August and July.

The increase in sales,

along with fewer new listings

coming onto the market, has

now pushed inventory levels

below those seen last year.

The number of homes

listed for sale had swelled

through much of 2018 and

2019. But inventory in L.A.
      County in September was
      nearly 12% below year-ago
      levels, according to online
      real estate brokerage
      Redfin. And similar drops
      were seen elsewhere in
      Southern California.
      If inventory continues to
      decline, and California’s
      economy continues to defy
      recession fears, that could
      put upward pressure on
      prices.
      But whether demand
      continues to rise is an open
      question. The jump in sales
      in September was just the
      second increase seen in a
      year. The 10.4% increase was
      from September 2018, which
      had the lowest sales for that
      month in at least seven
      years. Setting aside that
      month, September 2019 still
      had the lowest number sales
      for a September since 2014.
      Sales did rise in all coun-

ties compared with a year

earlier. But in Orange, San

Diego and Ventura, the me-

dian price dropped, indicat-

ing that affordability re-

mains a challenge.

8 In Los Angeles County,

the median rose 3.9% to

$618,000, while sales climbed

7.3%.

8 In Orange County, the

median fell 2.3% to $723,000,

while sales climbed 13.1%.

8 In Riverside County, the

median rose 2.1% to $393,000,

while sales climbed 11.5%.

8 In San Bernardino

County, the median rose

5.7% to $351,000, while sales

climbed 6.5%.

8 In San Diego County,

the median fell 0.9% to

$570,000, while sales climbed

14.7%.

8 In Ventura County, the

median fell 0.3% to $588,500,

while sales climbed 15.5%.

According to the Califor-

nia Assn. of Realtors, sales

are likely to rise further in

coming months, given the

number of people who have

recently entered escrow. But

the trade group cautioned

that several factors still

threaten to blunt growth.

“We should be mindful

that economic uncertain-

ties, supply constraints and

low housing affordability

could continue to hold de-

mand back in the long run,”

Leslie Appleton-Young, the

association’s chief econo-

mist, said in a recent state-

ment.

Home prices and

sales on the rise

[Home prices, from C1]

a software update to Model S
and Model X cars that lim-
ited charging to 80% of ca-
pacity and, many owners
have complained, decreased
the car’s range.
The company said at the
time that the update was is-
sued out of an “abundance of
caution” to “protect the bat-
tery and improve its longev-
ity” but offered no detail on
what the trouble was, and it
has yet to address the issue
publicly.
Another parked Model S
burst into flames in Shang-
hai in June. Tesla said at the

time that the fire involved a

single battery module and

was not a system defect. (A

Model S battery pack is com-

posed of 16 battery modules;

together they contain about

7,000 high-energy battery

cells that look similar to AA

consumer batteries but

larger.)

It’s the battery system

that NHTSA is focused on,

with emphasis on battery

management software.

The battery limitation

update has sparked a class-

action lawsuit and a barrage

of customer complaints.

The lawsuit, filed in fed-

eral court, claims that the

range for the Model S and

Model X, which sell for

around $100,000, is less than

what buyers paid for, and

that the vehicles’ resale val-

ue has been reduced.

NHTSA said early last

month it had received a

petition from a lawyer repre-

senting car owners asking

the agency to investigate.

Malibu resident and

Model S owner Robert

Karpuk is not part of the

lawsuit, but he’s upset with

Tesla about the range reduc-

tion. “We have two Teslas; I

think they’re the greatest

cars ever,” he said. But, he

said, he wants a “straight an-

swer” from Tesla. “What is it

about this update that spe-

cifically affects my battery

pack? They won’t tell me,”

he said.

The Tesla Model 3, the

company’s latest car, is not

part of the NHTSA probe.

Its battery system differs

from that of the Models S

and X.

It uses different battery

cells, for example, and its liq-

uid battery cooling system

differs significantly from the

Models S and X cooling de-

sign.

Agency probes Tesla battery fires

[Tesla, from C1]

The U.S. government has

launched a national security

review of the popular music-

video app TikTok, which is

owned by China’s

ByteDance Inc., according

to a person familiar with the

investigation.

Beijing-based

ByteDance bought Musi-

cal.ly two years ago for al-

most $1 billion to merge it

with TikTok. Musical.ly,

based in Shanghai and Los

Angeles and a fast-growing

hit in the U.S. at the time,

was seen as a way for the Chi-

nese company to expand

abroad and capitalize on an

increasing appetite for short

video. TikTok has since be-

come wildly popular, one of

the few Chinese internet

companies to catch on in the

U.S., and is one of the most-

downloaded apps.

The Committee on For-

eign Investment in the U.S.,

which reviews deals by for-

eign acquirers for potential

national security risks, has

begun to review the pur-

chase amid increasing con-

cern about TikTok’s growing

influence.

U.S. lawmakers have

been calling for a national se-

curity review, referring to

TikTok as a “potential coun-

terintelligence threat we

cannot ignore.”

TikTok, has been down-

loaded more than 110 million

times in the U.S. and its

growing popularity creates

“national security risks,”

Sens. Charles E. Schumer

(D-N.Y.) and Tom Cotton

(R-Ark.) wrote in a letter last

week to the U.S. Acting Di-

rector of National Intelli-

gence Joseph Maguire.

Their concerns include the

safety of data on the plat-

form, potential censorship

and possible foreign influ-

ence campaigns in the U.S.,

they said.

Sen. Marco Rubio

(R-Fla.) also wrote to the

Treasury Department,

which chairs CFIUS, earlier

last month to review

ByteDance’s purchase of

Musical.ly.

“I remain deeply con-

cerned that any platform or

application that has Chi-

nese ownership or direct

links to China, such as Tik-

Tok, can be used as a tool by

the Chinese Communist

Party to extend its authori-

tarian censorship of infor-

mation outside China’s bor-

ders and amass data on mil-

lions of unsuspecting users,“

Rubio said in a statement

Friday. “I welcome today’s

news that an investigation

has reportedly been

opened.”

Reuters earlier reported

the CIFIUS review.

A TikTok representative

in the U.S. said in a state-

ment that while the com-

pany “cannot comment on

ongoing regulatory proc-

esses, TikTok has made

clear that we have no higher

priority than earning the

trust of users and regulators

in the U.S. Part of that effort

includes working with Con-

gress and we are committed

to doing so.”

The Treasury Depart-

ment didn’t respond to a re-

quest for comment.

CFIUS is talking with

TikTok about measures it

could take to avoid divesting

the Musical.ly assets it ac-

quired, Reuters reported.

TikTok has been

installed by about 564 mil-

lion users this year and has

been installed 1.45 billion

times since launching. New

U.S. users grew 11% to 3 mil-

lion in July, according to

Sensor Tower, up from 2.7

million a year earlier. The

app has become a rival to

Facebook and Instagram.

Facebook Chief Execu-

tive Mark Zuckerberg even

sounded the alarm on Tik-

Tok during a speech at

Georgetown University in

Washington in mid-October.

Zuckerberg said that while

WhatsApp, the encrypted

messaging app his company

owns, is used around the

world by protesters and oth-

ers who need free speech

protections, TikTok doesn’t

offer that.

Cheng writes for

Bloomberg.

U.S. examines

TikTok app

TIKTOK has been downloaded more than 110 million

times in the U.S., raising national security concerns.

Joel SagetAFP via Getty Images

Review will see if

Chinese product has

security, data flaws.

By Candy Cheng

Google is jumping into
the fitness-tracker business,
buying Fitbit Inc. for about
$2.1 billion.
The deal could put the in-
ternet giant in direct compe-
tition with Apple Inc. and
Samsung Electronics Co. in
the highly competitive mar-
ket for smartwatches and
other wearable gadgets. But
it also raises questions
about privacy and Google’s
dominance in the tech in-
dustry.
The announcement Fri-
day came with a promise
that Google won’t sell ads
using the intimate health
data that Fitbit devices col-
lect.
San Francisco-based Fit-
bit is a pioneer in wearable
fitness technology, making a
range of devices that have
become pop-culture acces-
sories, from basic trackers
that count how many steps
you take each day to smart-
watches that display phone
messages and notifications.

They can track activities

such as running, cycling and

swimming and record heart

rates and sleep patterns. Fit-

bit typically asks for date of

birth, gender, height and

weight to help with such

things as estimating calories

burned. Some people use

Fitbit’s app to record what

they eat and how much wa-

ter they drink, or to track

their periods.

Fitbit has 28 million ac-

tive users worldwide and has

sold more than 100 million

devices.

Google, meanwhile,

makes software for use in

other manufacturers’ wear-

able devices, but those prod-

ucts haven’t gained much

traction. And Google

doesn’t sell a device of its

own.

The deal to buy Fitbit

could give Google a boost.

“Google doesn’t want to

be left out of the party,” said

analyst Daniel Ives of Wed-

bush Securities. “If you look

at what Apple has done with

wearables, it’s a missing

piece of the puzzle for

Google.”

Google’s pledge not to

sell ads using Fitbit health

data is a continuation of

promises previously made

by Fitbit.

Privacy experts, though,

were skeptical.

Consumer Reports

health privacy expert Dena

Mendelsohn expressed con-

cern that people enrolled in

wellness programs through

their employers that use Fit-

bit devices could lose control

over their data.

“While a person may not

have had concerns about

Fitbit holding their data,

they may have concerns over

Google holding their data,”

Mendelsohn said.

Google’s promise is also

unlikely to stop it from gath-

ering other information

from Fitbit devices.

For example, Fitbit has

GPS models that could

track users’ locations. That

could help Google know, for

example, that a runner

stopped at a coffee shop af-

ter a workout. Google could

then display ads for rival cof-

fee shops.

More important, having a

Google device on the wrist

could drive wearers to use

Google services even more,

giving the company more

ways to sell ads.

The deal is likely to face

scrutiny from state and U.S.

Department of Justice an-

titrust authorities, who are

already investigating

Google and other big tech

companies over whether

they have abused their mar-

ket power.

“Why should Google be

permitted to acquire even

more companies while

they’re under [Justice De-

partment] antitrust investi-

gation?” tweeted Sen. Josh

Hawley (R-Mo.).

Still, analysts at equity

research firm Cowen said

they believe regulators are

unlikely to block the deal be-

cause of Fitbit’s relatively

small size and its focus on

hardware.

Although Fitbit all but

created the field, it has been

shredded by the competi-

tion. It was worth nearly $10

billion after it went public in

2015. But its value this week
      is well below $2 billion.
      When rumors of a poten-
      tial buyout by Google sur-
      faced this week, Fitbit stock
      soared almost 30%. On Fri-
      day it jumped an additional
      15.5% to $7.14 a share.
      Google agreed to pay
      $7.35 a share. Shares of
      Google’s parent company,
      Alphabet Inc., rose 1.1%.
      Fitbit has been expand-
      ing its partnerships with
      major healthcare compa-
      nies such as Humana Inc. to
      encourage healthier living.

JAMEY POWELL,left, and Julianne Hough lead an exercise class in New York in which participants are

introduced to a fitness tracker. Google has announced it is buying San Francisco-based Fitbit Inc.

Mark LennihanAssociated Press

Is Fitbit a fit for Google?

Internet giant buys

the fitness-tracking

pioneer for $2.1 billion.

associated press

The opening ceremony at

BlizzCon, an annual conven-

tion that draws tens of thou-

sands of fans of Blizzard En-

tertainment’s video games

to Anaheim for a weekend of

sneak peeks and communal

geekery, typically features a

splashy announcement of a

new title or installment in a

popular game series.

This year, it kicked off

with an apology. Blizzard

President J. Allen Brack

took to the stage at the Ana-

heim Convention Center on

Friday to address the roiling

controversy around the

company’s early October

punishment of a player who

spoke out in support of the

pro-democracy protests in

Hong Kong.

“Blizzard had the oppor-

tunity to bring the world to-

gether,” Brack said. “We did

not. We moved too quickly in

our decision making, and

then, to make matters

worse, we were too slow to

talk with all of you.”

The player, known as

Blitzchung, had won a tour-

nament of Blizzard’s popu-

lar card battle game

“Hearthstone.” After he

spoke out in a postgame in-

terview, saying “liberate

Hong Kong” in Mandarin on

a live broadcast, the com-

pany moved to strip him of

his $10,000 winnings and ban

him from future competi-

tions for a year.

Fans and some employ-

ees protested the decision,

claiming that it went

counter to Blizzard’s stated

principles of “Every voice

matters” and “Think glob-

ally.” In response, the com-

pany walked back most of its

punishment, returning the

winnings to the player and

shortening his ban to six

months. But in a statement,

the company said it would

continue to enforce limits on

nongaming speech in official

company broadcasts.

“When I think about what

I’m most unhappy about,

there’s really two things,”

Brack continued from the

stage Friday. “The first one

is, we didn’t live up to the

high standards that we

really set for ourselves, and

the second is, we failed in our

purpose, and for that, I am

sorry and I accept account-

ability.”

The crowd inside cheered

at that point in Brack’s

speech. Some convention-

goers told The Times they

were satisfied as well.

This year was the first

that Bill Jones, 28, has at-

tended BlizzCon. He and his

wife, Janee Jones, 27,

dressed up as Ana and

Otaku Roadhog from “Over-

watch.” Both believed the

company had earnestly ad-

dressed what it had done

wrong.“But I don’t keep up

with politics much, and I

would keep playing ‘Over-

watch’ whether or not they

had made a statement,” Ja-

nee Jones said after watch-

ing Brack’s speech.

Other attendees were not

placated. “He was correct to

admit that the company

acted too harshly too fast to

punish Blitzchung and were

too slow to respond to criti-

cism,” said Michael Wilson,

19. “But it was more a PR
    move than anything.”
    Wilson attends BlizzCon
    nearly every year with his
    brother and parents; his
    mother used to work for
    Blizzard, so he grew up
    playing the games. His fa-
    ther, David Wilson, designed
    and printed “I stand with

Hong Kong” stickers ahead

of the event for the family to

pass out.

The elder Wilson said it

was a complex situation but

that he is concerned that

American companies are

not standing up for core val-

ues such as free speech. “We

have to stand up for free-

dom,” he said. “We should be

standing up for the people in

Hong Kong.”

Outside the venue, a

small crowd condemned the

company’s actions.

A man in a Winnie the

Pooh costume carrying a yel-

low can labeled “HUNNY”

filled with fake money and a

photo of Chinese President

Xi Jinping taped to his face

marched around the protest

area handing out the fake

bills. Giving only his first

name, Doug, the man said he

took the day off from work so

he and his wife could join the

protest. He was one of sev-

eral protesters dressed as

Pooh, a character censored

in China because of his sup-

posed resemblance to Chi-

na’s president.

“We don’t need these

empty platitudes after the

fact,” he said of Brack’s

apology. “They shouldn’t be

doing whatever the Chinese

market wants them to do.”

‘I am sorry,’ Blizzard exec says

BlizzCon opens with

apology over handling

of gamer’s comments.

By Sam Dean

and Suhauna Hussain