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A popular app that promised to remove the burden of remembering passwords sparked an adverse reaction by requiring, weeks after it was acquired by two private equity firms, that users pay or face restrictions on accessing their online accounts.
LastPass has encouraged millions of people to replace weak passwords on retail websites, Internet banks and other online services. Instead, the software handles authentication automatically using long, complex passwords that are impossible to guess – or remember.
Two investment firms, Elliott Management and Francisco Partners, acquired the service as part of their $ 4.3 billion purchase from Internet software group LogMeIn in September last year.
Now, the app is warning users that they must pay up to $ 36 a year if they want to access these heavy passwords on all of their devices. Those who refuse to pay will have to choose between synchronizing only with their desktop computers or only with mobile devices, such as phones.
The move, which took effect on March 16, was a blow to Scott Rothrock, a Tokyo-based software developer who said he immediately realized that “there was no way to get back to my old life in a practical way”.
Before switching to the password manager a few years ago, Rothrock used a memorable algorithm to create passwords that mixed letters from the web addresses he visited with punctuation marks and mythical beast names.
Now, your passwords generated by LastPass “are, I’m uncomfortable to admit, known only to my password manager. The LastPass policy change was, for me, an ultimatum. “
The move to limit what LastPass gives away for free underscores how financially sophisticated owners are looking to make more money from popular Silicon Valley products.
Last month, Twitter said it would experiment with tools that would allow users to tip or pay for exclusive content, ideas that could allow the microblogging platform to receive a share of the revenue.
That announcement also came after an investment by Elliott, which acquired a 4 percent stake last year and tried to oust Twitter chief executive Jack Dorsey.
Elliott invested in LogMeIn through Evergreen Coast Capital, a Silicon Valley outpost created in 2015.
The technology investment venture marks a departure from the New York company’s long-standing strategy of pursuing aggressive public campaigns against public companies and defaulting debtors. His previous targets were from health insurer Athenahealth to the Republic of Argentina, which in 2012 had one of its navy ships seized in a dispute over defaulted securities owned by the New York fund.
Francisco Partners, which invested alongside Elliott, is another tough company, having owned, until 2019, the NSO Group, a maker of surveillance software being sued by Facebook for alleged attack on 1,400 users of the social network WhatsApp messaging service .
Experts say it is difficult to know whether the new limitations of the free version of LastPass will encourage more paying users to sign up.
“Without the ability to sync, there are very few users who will actually be able to use [LastPass]”Said Joseph Bonneau, a crypto researcher and computer security expert at New York University. “They are making the free version so difficult to use that most people will be forced to pay or use another solution.”
LastPass, which claimed more than 25 million users last year, said it warned the change 30 days in advance and did not delete any user data. He added that the free version of LastPass still offers features that rivals lack, and that “a large number of users” have accepted their discounted subscription offers.
But a free password app, BitWarden, has seen a five-fold increase in new users since LastPass announced its most restrictive policy last month, according to Gary Orenstein, its director of customer service. “We are understandably moved,” he said.
Among the new users of BitWarden is Rothrock, who said that, in his experience, the two services were “functionally identical”.
Some of his friends offered to include him in his LastPass “family package” subscription, but he declined.
“I just didn’t trust LastPass anymore,” he said.
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