Not All Tech Regulatory Desires Are Equal: And We Should Stop Pretending They Are

from the c'mon-people dept

The NY Times has a big (and quite interesting) article this week about how we've supposedly "reached a global tipping point" on "tech regulation." And if you look around, it may feel that way. And, sure, it's easy to point to lots of examples of tech regulation happening around the globe, as the article does:

China fined the internet giant Alibaba a record $2.8 billion this month for anticompetitive practices, ordered an overhaul of its sister financial company and warned other technology firms to obey Beijing’s rules.

Now the European Commission plans to unveil far-reaching regulations to limit technologies powered by artificial intelligence.

And in the United States, President Biden has stacked his administration with trustbusters who have taken aim at Amazon, Facebook and Google.

However, it does a disservice to readers and the truth to suggest that all of these moves towards tech regulation are coming from the same intent. The article does acknowledge that the "motivation varies" but I think that underplays reality:

Around the world, governments are moving simultaneously to limit the power of tech companies with an urgency and breadth that no single industry had experienced before. Their motivation varies. In the United States and Europe, it is concern that tech companies are stifling competition, spreading misinformation and eroding privacy; in Russia and elsewhere, it is to silence protest movements and tighten political control; in China, it is some of both.

Even within governments (hell, take the US government for example), the motivations in discussing tech regulation are extremely different and often diametrically opposed. Some are pushing for tech companies to be more aggressive in combatting "disinformation," while others are seeking to pressure them to leave up disinformation (usually the disinformation that is politically convenient for those demanding that information be left online).

It's difficult to discuss this concept without recognizing that while there are some people exploring tech regulation with an intellectually honest recognition that there are issues concerning power concentration, privacy, data control, and more -- the vast majority of the "motivation" behind these tech regulation bills is completely self-serving garbage. In some cases, it's simply about power and control. In some cases, it's about trying to limit competitors or to try to for successful tech companies to prop up failed companies (such as the news business). In other cases, it's about trying to clamp down on the tools that allow the public to speak out and call out hypocrisies.

And that's why it's unfair to lump all "global" tech regulation into one bucket, as if it's all coming from the same place and meant to do the same thing. A huge part of the push for tech regulation these days is cynical opportunism, and any story that doesn't recognize that fails its readers. The NY Times piece certainly recognizes that there are varying approaches, and that fights over "power" are driving much of movement here, but it fails to distinguish good faith efforts to explore the negative consequences of some of the tech world with the cynical exploiters of those concerns, who are simply seeking to use that momentum for their own power and benefits.

Yet while governments agree that tech clout has grown too expansive, there has been little coordination on solutions. Competing policies have led to geopolitical friction. Last month, the Biden administration said it could put tariffs on countries that imposed new taxes on American tech companies.

There's little coordination because of the extremely different -- and often competing -- interests at play. It feels like the article should have been much more explicit on that point.

There is an interesting discussion to be had about this focus on tech regulation around the globe, but I think the NY Times article fails to have that. You could read the article and come out of it with the conclusion that Myanmar and China's internet restrictions come from the same core place as explorations by thoughtful lawmakers on how to deal with misinformation online. And that's fundamentally wrong. It's a kind of "both siderism" or "view from nowhere" reporting that does tremendous disservice, and fails to enlighten.

We can look at issues regarding internet regulations, and explore the ins and outs of it by looking at what problems actually need solving and then exploring what proposed solutions will actually work and which won't. But simply lumping all kinds of internet regulations into one big article, without highlighting how a very large percentage of them are simply opportunistically exploiting a general anti-internet narrative to their own cynical purposes, is a failed attempt at journalism. The NY Times should do better. At the very least, these reporters might want to admit or acknowledge that their own company has been actively engaged in some of the cynical attempts to push for regulations on internet companies that is designed just as a wealth transfer mechanism from the companies that innovated, to the NY Times itself. But apparently that wasn't worth including.

Filed Under: antitrust, big tech, censorship, content moderation, privacy, regulations

Josh Hawley: We Must Break Up Companies Whose Politics I Disagree With For Discriminating Against People Whose Politics I Agree With

from the that's-not-how-it-works dept

Josh Hawley is gonna Josh Hawley. The Senator from Missouri, who still has not apologized or admitted to supporting the invasion of the Capitol in an attempt to overturn the election, has a long history of nonsense bills that are performative for his riled up base. His latest is more of the same. On Monday he introduced the "Bust Up Big Tech Act" and even if you're a supporter of antitrust and think that big tech should be "busted up," it should give you pause before supporting Hawley's nonsense. The bill itself is... weird. It seems to pick seemingly random activities and insist that no company can do two of them. Basically, he looked at different businesses that Amazon and Google are in, and the bill says "you're no longer allowed to do those different things." As some have pointed out, under this bill it appears that Walmart can no longer sell under a house brand, because the bill bars any company that qualifies from selling, advertising or otherwise promoting your own products.

But the thing that amazes me is just how upfront and blatant Hawley is that this bill is not about any principled stance regarding antitrust. It is entirely about "owning the libs," which is the performance Hawley thinks he needs to perform for his base. The fact that Hawley knows he needs to do stupid shit for his voters shows that he truly believes his supporters are a bunch of ignorant fools, and he's catering to that audience. He did it last week with his bill to attack MLB for its speech, and now he's doing it this week with this bill to go after "big tech." You can see it from the quote in his press release, in which he flat out admits he's doing it to attack "woke" companies.

“Woke Big Tech companies like Google and Amazon have been coddled by Washington politicians for years. This treatment has allowed them to amass colossal amounts of power that they use to censor political opinions they don’t agree with and shut out competitors who offer consumers an alternative to the status quo. It’s past time to bust up Big Tech companies, restore competition, and give the power back to the American consumers.”

Hawley has really embraced the phrase "woke capitalists" in the last few months as he realized that everything he used to pretend to stand for (he used to argue he was about "keeping government out of business") resulted in a bunch of companies recognizing that Josh Hawley is a power-hungry fascist in waiting. So now he has to attack the very companies he used to say he wanted the government's hands off of, so he's invented the laughable idea that these companies are "woke" (by which he means they're skeptical of his style of fascism, and therefore they need to be taken down).

But, really, that quote is quite incredible on multiple levels. He starts out by attacking the companies for their supposed (though, not actual) political beliefs ("woke"), and then says he has to do this to stop them from "censoring political opinions they don't agree with." So... that one quote alone shows Josh Hawley's true principles: punish those whose politics I dislike, and protect those whose politics I like.

Even if you dislike big tech and think the companies should be smashed to bits, that's no reason to support Josh Hawley's cynical brand of authoritarian retribution.

Filed Under: antitrust, big tech, josh hawley, woke capitalists
Companies: amazon, google

The Privacy Paradox: When Big Tech Is Good On Privacy, They're Attacked As Being Bad For Competition

from the tradeoffs.-it's-all-tradeoffs dept

For many years I've tried to point out that no one seems to have a very good conceptual framework for "privacy." Many people act as if privacy is a concrete thing -- and that we want our information kept private. But as I've pointed out for years, that doesn't make much sense. Privacy is a set of tradeoffs. It's information about ourselves, that we often offer up freely, if we feel that the tradeoff is worth it. And, related to that, there's a big question about who is controlling the data in question. On top of that, things get confusing when we consider just who is controlling what data. If we're controlling our own data, then we have some degree of autonomy over our privacy trade-offs. But when we hand that data off to a third party, then they have much more say over our privacy -- and even if they agree to "lock down and protect" that data, the end result might not be what we want. For one, we're giving those companies more power of our data than we, ourselves have. And that can be a problem!

Because of this, privacy questions are often highly contextual -- and often conflict with other issues. For example, after the Cambridge Analytica scandal, Facebook was yelled at over and over again regarding its poor data privacy efforts -- leading the company to say "okay, fine we'll lock down your data, and just keep it for ourselves." Which is a totally reasonable response to the complaints that "Oh, Facebook leaked our data." But, of course, the end result of that is... worse. Then we've handed Facebook even more control over our data, and given significantly less ability for competitors to come along. That's not good!

There's a similar issue with advertising and privacy, that we discussed just last month. Google clarified its plans to block 3rd party cookies. In many ways, this is good for privacy. 3rd party cookies are often abused in creepy ways to track people. So it's good that Google won't support them (Firefox and Safari already made this move earlier). But lots of people then vocally complained that this would only give more power to Google, because it can deal with the lack of data, while competitive (smaller) advertising firms cannot.

These issues are often in conflict -- and many of the big tech critics out there don't want to recognize that. In fact, it lets them attack these companies no matter what they do. If they do something that's good for privacy, but bad for competition, focus on how it's bad for competition. If they do something that's good for competition, but bad for privacy, focus on how it's bad for privacy.

A recent article in Wired by Gilad Edelman highlights this tension in the antitrust context. Noting that in the big antitrust fights against Facebook and against Google, the two companies are being attacked in very different ways: one for being more protective of private data in a way that gives the company more power, and one for violating privacy of users.

HERE’S SOMETHING TO puzzle over. In December, the Federal Trade Commission and a coalition of states filed antitrust lawsuits against Facebook, alleging that as the company grew more dominant and faced less competition, it reneged on its promises to protect user privacy. In March, a different coalition of states, led by Texas, accused Google of exclusionary conduct related to its plan to get rid of third-party cookies in Chrome. In other words, one tech giant is being sued for weakening privacy protections while another is being sued for strengthening them. How can this be?

Edelman tries to solve this seeming paradox by suggesting that there might be a way to sort out the actual intent of these actions:

Maybe, then, the right way to think about what should happen when the privacy and competition dials diverge is to ask whether a company is cutting off access to personal data that it intends to keep using itself. That could help distinguish between a case like the Privacy Sandbox, on the one hand, and Apple’s App Tracking Transparency framework, on the other. Apple’s new policy will force all iPhone app developers to ask for permission before tracking users. That is expected to hurt companies that make money by tracking users across the web, most notably Facebook, which has reportedly considered filing an antitrust lawsuit to block the change. But since Apple doesn’t make its money by selling personalized ads based on surveilling user behavior, it’s harder to argue that it is hoarding access to user data for its own purposes. That makes the tension between privacy and competition easier to resolve.

Not that Apple will always come out ahead in this analysis. Contrast the Facebook spat with the ongoing feud between Apple and Tile, which sells tracking technology to help users find lost stuff and thus competes with Apple’s own “Find My” software. According to Tile, Apple has discriminated against the company by prohibiting certain practices, like background location tracking, that it requires to function. Apple says the rules are meant to protect user privacy. If it were to sue, Tile might have a stronger case than Facebook because its product competes more directly with Apple.

That's an interesting idea -- but I'm not sure it would be so easy in practice. There are so many competing interests at play, and so many actions may seem good for one particular concern, but less good for others.

Obviously, I've long been an advocate of simply removing much of the data from these large companies' control entirely -- via a system of protocols that moves control out to the end users. But in most versions of that system, most users are going to eventually entrust that data to some third party company, and in some ways that puts us back where we're started. My hope is that such a world would end up with more neutral 3rd party "data banks" and you could even suggest that there could be an information fiduciary model, in which these companies are legally required to act in your best interests.

But, even that model runs into some trouble, and we end up talking about questionable ideas like a DMCA for privacy, which seems like it would be a true horror online.

It would be nice, though, if we could have this kind of debate and conversation in a reasonable manner, rather than everyone jumping immediately to their own corners about who's evil and who's good. Every one of these decisions has tradeoffs, and it would be more productive if we could recognize that and debate the relative merits of all of those tradeoffs. But, having nuanced discussions about subjects with no easy answers does not seem to be in fashion these days.

Filed Under: antitrust, big tech, competition, narrative, privacy
Companies: facebook, google

Sens. Cruz, Hawley & Lee Show How To Take A Good Bill Idea And Make It Blatantly Unconstitutional

from the seriously-guys? dept

Senators Ted Cruz, Josh Hawley, and Mike Lee, all hold themselves out to be "constitutional" lawyers. All graduated from law schools and went on to clerk for Supreme Court Justices (Cruz clerked for Rehnquist, Hawley for Roberts, and Lee for Alito -- though before he moved to the Supreme Court). And yet, all three have shown that their support for the Constitution they swore to uphold and protect is a little wishy washy when they can build a culture war around it and get some silly press attention. The latest move is their new bill to strip Major League Baseball's antitrust exemption.

Now, I've explained this before, but let me be explicit about it here, because it's the part that people keep getting tripped up on: I think this is a good idea. It's silly that Major League Baseball has an antitrust exemption and it should be gotten rid of. There's no need for it and it's bad policy that it exists. And if Senators Cruz, Hawley and Lee had simply introduced such a bill, I might even cheer it on.

But... that's not what they did. They announced it in a manner that makes it blatantly unconstitutional, because they flat out admit that they're doing it to punish MLB for MLB's political expression (namely moving the All-Star Game out of Atlanta to protest Georgia's new voting law). And the Senators don't even try to hide this or come up with some Potemkin-style façade. They just out and out admit that they're doing this for unconstitutional reasons:

Following Major League Baseball’s (MLB) decision to relocate the All-Star game from the state of Georgia, U.S. Sens. Ted Cruz (R-Texas), Mike Lee (R-Utah), and Josh Hawley (R-Mo.) will hold a press conference today outlining their legislation to end MLB’s special immunity from antitrust laws.

Here's the thing that many people are missing: you can do constitutional things for unconstitutional reasons, and it makes the things you do... unconstitutional. In this case, Cruz, Lee, and Hawley are actually making it more difficult to remove MLB's antitrust exemption, because they've just handed MLB an easy response should this bill go anywhere. They can run to court and say that this was clearly vindictive behavior by Congress in response to protected 1st Amendment speech.

So even if you support removing MLB's antitrust exemption, you should be against this. Because this action, in this way, simply guarantees that if it got traction, it would get tied up in court for years solely due to the statements of Hawley, Cruz, and Lee.

It's quite likely that none of the three actually care, of course. They're all just grandstanding for an ignorant base who wants these Senators to embrace "cancelling" Major League Baseball for daring to... care about voting rights. And, in doing so, these three Senators show (yet again) that they're not interested in actually doing what's right, or what's constitutional. They're only interested in frothing up some grist for an ignorant base who revels in the politics of petty grievances.

Filed Under: 1st amendment, antitrust, exemption, free speech, josh hawley, mike lee, retaliation, ted cruz, voting rights
Companies: mlb

Senator Elizabeth Warren Goes Over The Line; Threatens To Punish Amazon For 'Snotty Tweets'

from the that's-not-how-any-of-this-works dept

It's no secret that Elizabeth Warren thinks the big internet companies should be broken up. She's made that argument emphatically over the years. I'm not exactly clear what breaking them up actually accomplishes beyond punishing the companies, but as a Senator, she can certainly make the arguments for why it makes sense, or pass laws that impact how antitrust works.

However, what she cannot and should not do, is threaten to punish a company for its speech. And, yet, that's exactly what she did. Amazon tweeted at Warren after Warren said that Amazon exploits loopholes and tax havens, and that she was introducing a bill to make the company pay more taxes. In response, Amazon said in a short tweet thread:

You make the tax laws @SenWarren; we just follow them. If you don’t like the laws you’ve created, by all means, change them. Here are the facts: Amazon has paid billions of dollars in corporate taxes over the past few years alone. In 2020, we had another $1.7B in federal tax expense and that’s on top of the $18 billion we generated in sales taxes for states and localities in the U.S. Congress designed tax laws to encourage investment in the economy. So what have we done about that? $350B in investments since 2010 & 400K new US jobs last year alone. And while you’re working on changing the tax code, can we please raise the federal minimum wage to $15?

It's maybe not the most politically savvy way of doing that, but that's how Amazon chose to go about it. Warren responded thusly:

That is her saying:

I didn’t write the loopholes you exploit, @amazon – your armies of lawyers and lobbyists did. But you bet I’ll fight to make you pay your fair share. And fight your union-busting. And fight to break up Big Tech so you’re not powerful enough to heckle senators with snotty tweets.

Neither party comes out of this looking very good, frankly. It seems kinda silly for Amazon to get snarky about this. And Warren has every right to look into changing tax laws -- or to complain about lawyers/lobbyists seeking loopholes. That's her job.

But, even if you hate Amazon and love Elizabeth Warren her last sentence should greatly trouble you. It doesn't matter if Warren has lots of other good policy ideas regarding Amazon, or well documented reasons for breaking up the company. It doesn't matter that she was being snarky on Twitter in response to probably uncalled-for tweets from Amazon. At no point should a government official say that anyone should be punished for their speech. And that's what Warren has said by saying that she would "fight to break up Big Tech so you’re not powerful enough to heckle senators with snotty tweets."

Everyone should have the power to heckle Senators with snotty tweets. That's a core, fundamental principle of the 1st Amendment. Warren wipes away whatever goodwill she might have, and undermines her policy proposals and ideas when she attacks a private company for its speech. It no longer seems like a principled position. It no longer seems like a position based on what's best for the country. It now allows people to say she got upset over nasty tweets.

And, yes, that's even given everything else. Yes, she has plenty of other reasons to want to break up Amazon. Yes, this isn't a change in her position. Yes, she's being snarky on Twitter, and that's what Twitter is for. But none of that matters, just like it didn't matter when former President Donald Trump threatened companies for their speech, and his supporters said "aw, he's just joking" when people called him on that.

At no point is it appropriate for government officials to threaten to retaliate against speech, even jokingly.

It is an inherent threat and is blatant censorial intimidation. Amazon may not care, but lots of other companies are also watching this, and noting that when challenged, Warren threatens to attack companies for their speech and harm them to the point that they no longer feel comfortable speaking. That's a real problem. And courts have recognized this over the years. Even if you think what someone is saying is bad, government officials aren't supposed to intimidate them. That was the lesson in the Backpage v. Dart case a few years back:

With very limited exceptions, none applicable to this case, censorship—“an effort by administrative methods to prevent the dissemination of ideas or opinions thought dangerous or offensive,” Blue Canary Corp. v. City of Milwaukee, 251 F.3d 1121, 1123 (7th Cir. 2001), as distinct from punishing such dissemination (if it falls into one of the categories of punishable speech, such as defamation or threats) after it has occurred—is prohibited by the First Amendment as it has been understood by the courts. “Threatening penalties for future speech goes by the name of ‘prior restraint,’ and a prior restraint is the quintessential first-amendment violation.” Fairley v. Andrews, 578 F.3d 518, 525 (7th Cir. 2009). The Supreme Court, in enjoining a state commission from sending threatening letters to distributors of books that the commission deemed obscene, found that the “notices, phrased virtually as orders, reasonably understood to be such by the distributor, invariably followed up by police visitations, in fact stopped the circulation of the listed publications.” Bantam Books, Inc. v. Sullivan, supra, 372 U.S. at 68. The court held the state’s “system of informal censorship” unconstitutional, pointing out that “though the Commission is limited to informal sanctions—the threat of invoking legal sanctions and other means of coercion, persuasion, and intimidation—the record amply demonstrates that the Commission deliberately set about to achieve the suppression of publications deemed ‘objectionable’ and succeeded in its aim.” Id. at 67. The distributor of the plaintiffs’ books, corresponding to the credit card companies in this case, received first from the Commission a written request for ”cooperation” and then “follow up” visits from police, corresponding to the follow-up calls promised in Sheriff Dart’s letter. Id. at 63, 68. The distributor bowed to the Commission’s demand “rather than face the possibility of some sort of a court action against ourselves, as well as the people that we supply.”

In other words, even if "informal," the mere threat of speech suppression is intimidation and when done by a government official is a violation of the 1st Amendment. Elizabeth Warren should apologize.

Incredibly, when I tweeted this argument out this morning, many people got very angry with me. They mostly seemed to come from people who like Warren and dislike Amazon. And that's fine. You can like Warren and dislike Amazon. You can even agree with Warren's policy proposals regarding antitrust. But no one should accept it as okay when a Senator directly says that she wants to break up a company to the point that they can no longer tweet snarky tweets at a Senator. That is intimidation and it is an unconstitutional attack on speech.

Warren has great power at her disposal, and she is going to try to use that on Amazon. If so, she should defend that on the merits, not even hint (or even joke) about the idea that it may have been due to snarky, but protected, speech.

And that's true, even with the additional context of the big angry fight over unionization in an Amazon warehouse, or other mishaps with Amazon's snarky ill-targeted tweets -- such as telling Rep. Mark Pocan that its employees have not had to pee in bottles, a charge that Amazon's social media person mocked:

For many, many, many reasons this was a poorly thought out tweet, not the least of which was that it presented a wide open opportunity for the media to point out not only that Amazon workers have, in fact, at times needed to pee in bottles, but that there are Amazon memos detailing this.

Amazon may be deserving of mockery or contempt for its tweets. But the 1st Amendment is pretty clear that it should not face legal consequences from them -- and Warren should never have done so, even if she was just being snarky back. If she doesn't like being heckled, she has every right to leave her government job. Other than that, it is the public's right -- and often civic duty -- to heckle government officials even in snarky ways.

Filed Under: 1st amendment, antitrust, elizabeth warren, intimidation, snotty tweets
Companies: amazon

Canadian Telecom Embraces Mindless Consolidation With Yet Another Major Megamerger

from the growth-for-growth's-sake dept

We've noted repeatedly how the United States has an unhealthy fascination with the growth for growth's sake mindset. That's best exemplified by our near-endless adoration of megamergers in sectors like telecom, which result in extremely harmful monopolization and consolidation problems that are extremely obvious, but we choose to ignore anyway. Time after time after time in telecom (and banking, and airlines, and...), companies promise a universe of investment, job creation, innovation, and synergies in exchange for merger regulatory approval. And time after time after time, reality shows that these pre-merger promises are meaningless and harmful... unless you're one of the few investors or executives who benefit.

Despite the steady drumbeat of market, employment, and consumer harms from such mergers, we insist on learning nothing from the experience here in the States; the job and competition killing Sprint T-Mobile deal being just the latest in a long line of examples of companies promising all manner of job growth, competition, and innovation, right before the exact opposite happens. With no meaningful penalty whatsoever, unless you're a consumer or employee.

While you might think things are different up in Canada, often they're even worse. This week, two of the nation's biggest telecom giants, Shaw and Rogers, announced they'd struck a new $26 billion deal that would dramatically reduce overall competition in the already not-particularly-competitive Canadian telecom market. The announcement is rife will all manner of dodgy claims of amazing "synergies" and job creation:

"Rogers to maintain and grow local Shaw jobs so that teams across Alberta, British Columbia, Manitoba and Saskatchewan will continue to serve customers and support local communities."

And:

"New technology and network investments will create up to 3,000 net new jobs across Alberta, British Columbia, Manitoba and Saskatchewan."

Of course this sort of job creation and retention never actually happens. What almost always does happen is the merging companies put on a good show for about a year to pretend nothing is really going to change. Then, once the press and policymakers stop paying attention, a massive stream of pink slips arrive as redundant positions and headquarters are inevitably eliminated.

It's not really something that's debatable; it's more akin to physics. The deals create massive new debt pressure that's only relieved by trimming rosters, and usually, trimming investment. The end result: Americans and Canadians alike pay some of the highest prices for fixed and wireless broadband in the developed world. So while Rogers and Shaw are promising that the deal will create jobs and is necessary to help fund 5G deployments, the reality is the deal will inevitably result in stunted deployment and fewer new jobs. How do we know? Because this has happened after every major telecom merger for going on forty years now.

One of the reasons we keep making the same mistakes is thanks to regulatory capture and blatant corruption. But another major culprit is the press, which routinely stenographs these announcements without including any historical context. Case in point: dig through these news reports on the Rogers Shaw deal, and try to find any that clearly spell out the historical human costs of monopolization and consolidation in any specific way. They literally don't exist. This Deadline's report on the deal can't even be bothered to mention the word "competition." Just mindless repetition of baseless claims of "synergies":

"Both companies are family founded and publicly traded on the Toronto Stock Exchange but have significant U.S. shareholders. Shares are both jumped Monday on the deal news. The scale created by the combination will allow for infrastructure expansion critical to drive growth and technology adoption and attract new consumer and business customers, the companies said. It will remain one of the biggest employers in Western Canada."

Most press reports on these US and Canadian mergers are pure stenography. And few if any of the outlets that hype pre-merger promises can be bothered to circle back around to report on the very real human impact of these deals. There's just no money in it. Wash, rinse, and repeat. Over and over and over again.

Filed Under: antitrust, canada, competition, mergers, telecom
Companies: rogers, shaw

Google's Efforts To Be Better About Your Privacy, Now Attacked As An Antitrust Violation

from the wait,-what? dept

We've talked a lot in the past about how almost no one seems to actually understand privacy, and that leads to a lot of bad policy-making, including policy-making that impacts the 1st Amendment and other concepts that we hold sacred. Sometimes, it creates truly bizarre scenarios, like the arguments being made by Texas's Attorney General in the latest amended antitrust complaint against Google.

As you'll likely recall, back in December, Texas's Attorney General Ken Paxton -- along with nine other states -- filed an antitrust lawsuit against Google. There were some bits in the laws that suggested some potentially serious claims, but the key pars were heavily redacted. Of the non-redacted parts there were really embarrassing mistakes, including claiming that Facebook allowing WhatsApp users to backup their accounts to Google Drive was giving Google a "backdoor" into WhatsApp communications.

That makes the latest amended complaint even more bizarre. It attacks Google for doing more to protect its users' privacy. As you remember, a couple weeks ago, Google noted that as it got rid of 3rd party cookies in Chrome, it wasn't going to replace it with some other form of tracking. This is, clearly, good for privacy. It is, also, good for Google, since it's better positioned to weather a changing ad market that doesn't rely on 3rd party cookies tracking you everywhere you go.

So the new amended complaint takes a move that is clearly good for everyone's privacy and whines that this is an antitrust violation.

Google’s new scheme is, in essence, to wall off the entire portion of the internet that consumers access through Google’s Chrome browser. By the end of 2022, Google plans to modify Chrome to block publishers and advertisers from using the type of cookies they rely on to track users and target ads. Then, Google, through Chrome, will offer publishers and advertisers new and alternative tracking mechanisms outlined in a set of proposals that Google has dubbed Privacy Sandbox. Overall, the changes are anticompetitive because they raise barriers to entry and exclude competition in the exchange and ad buying tool markets, which will further expand the already dominant market power of Google’s advertising businesses.

Google’s new scheme is anticompetitive because it coerces advertisers to shift spend from smaller media properties like The Dallas Morning News to large dominant properties like Google’s. Chrome is set to disable the primary cookie-tracking technology almost all non-Google publishers currently use to track users and target ads. A small advertiser like a local car dealership will no longer be able to use cookies to advertise across The Dallas Morning News and The Austin Chronicle. But the same advertiser will be able to continue tracking and targeting ads across Google Search, YouTube, and Gmail—amongst the largest sites in the world—because Google relies on a different type of cookie (which Chrome will not block) and alternative tracking technologies to offer such cross-site tracking to advertisers. By blocking the type of cookies publishers like The Dallas Morning News currently use to sell ads, but not blocking the other technologies that Google relies on for cross-site tracking, Google’s plan will pressure advertisers to shift to Google money otherwise spent on smaller publishers.

No good deed goes unpunished. Yes, it is true that Google's move will undoubtedly harm companies that rely on intrusive 3rd party cookies. But that's good for privacy. And it's funny that this is coming in the very same antitrust lawsuit that whines that one of Google's antitrust problems is that it snoops on WhatsAspp (when it doesn't). Here, Google is clearly taking a stand -- the same stand that Mozilla and Apple took earlier -- against creepy and problematic 3rd party cookies, and it gets spun by Texas's AG as an attack on "small advertisers."

I'm kind of curious what the AGs bringing this lawsuit are aiming for here. Yes, I get that the entire point is just to attack Google, but if they win, do they want to require Google to be worse about privacy? Because that's ridiculous.

The complaint does try to argue that Google's Privacy Sandbox isn't really about privacy, and that it's all a "ruse." It even (selectively) quotes an old EFF blog post that rightly calls out some of the problems with the Privacy Sandbox approach. But the EFF blog post is not -- as the amended complaint implies -- suggesting that Google should allow more 3rd party cookie tracking. It's just calling out some of the other problems of the Privacy Sandbox. No one is arguing that Privacy Sandbox is a panacea for privacy issues. And no one is arguing that Google is magically all "good" for online privacy -- indeed there are plenty of legitimate reasons to be concerned about Google's impact on privacy. But the announcement it made recently was, quite clearly, a step in the right direction for privacy, and while it may make life difficult for intrusive advertisers who rely on other methods of advertising, that's really on those advertisers to be better.

There are other things in these lawsuits that may be damning for Google and its practices. I'm still really interested in learning about the redacted sections, which might reveal actual bad practices. But, it's not encouraging at all that Texas's AG is taking a step towards better protection of user privacy as some sort of evidence of nefariousness -- and doing so in the very same complaint arguing that part of the reason Google violates antitrust laws is that it "violates the privacy" of Android users (via the WhatsApp backup feature).

Filed Under: 3rd party cookies, advertising, antitrust, ken paxton, privacy, privacy sandbox, texas, tracking
Companies: google

Misguided Crusade For Tech Antitrust Will Exacerbate Inequality

from the that's-not-how-this-should-work dept

After a week of congressional hearings following a 16-month, bipartisan investigation into competition in the digital marketplace, it’s clear Republican and Democratic congresspersons alike are skeptical of Big Tech. That’s fine—healthy, even. But that doesn’t make rewriting antitrust legislation to allow Congress to pick winners and losers in the marketplace a good idea.

A couple weeks ago, representatives on the House Committee on the Judiciary reconvened to discuss potential antitrust legislation and enforcement. Bipartisanship is usually a welcomed departure from petty politics, but last week, it may have established something far worse: consensus that antitrust laws should be rewritten to address Big Tech’s bigness. Without exception, all committee members expressed their desire to reign in the “gatekeepers,” but few considered the impact of their proposed solutions.

During the hearing, congressmen levelled bold accusations against the so-called monopolies, from anticompetitive business practices to outright bullying. The most ironic of these criticisms came from Democratic Representative Pramila Jayapal, who rightly highlighted a “nexus between inequality and antitrust law,” but erroneously attributed it to Big Tech. If limited access, higher prices, and worsening consumer experience afflict the digital marketplace, the culprit will be the committee’s antitrust actions — not technology companies.

Representative Jayapal and her ilk are pursuing antitrust reform because of their growing disdain for large technology platforms. Amazon, Apple, Google, and Facebook are too big and too powerful — that’s certainly arguable. These companies are far from perfect, but the application of antitrust law necessitates more than dissatisfaction with market dominance. Antitrust is built on the “consumer welfare standard,” which evaluates business conduct in the context of consumer harm. This standard has become controversial in recent years, but nevertheless has prevailed since 1979. It remains vitally important to ensure that consumers remain the focus of antitrust action, while simultaneously discouraging arbitrary and heavy-handed government interference in the market.

Though the committee and its witnesses highlighted many instances in which small businesses are worse off than their larger competitors, they failed to clearly identify consumer harm. Americans should not be swayed by any government offer to make some businesses more successful than others. Success should be determined by consumers and the market, not legislators on Capitol Hill.

Consumer harm is, however, a likely consequence of antitrust action. Many committee members and their witnesses expressed support for data portability mandates, which, similar to Europe’s GDPR and California’s CCPA, would require technology companies to provide users with access, copying, and transferring data capabilities. Data portability allows users to take their information from one platform and transfer it to a competing service, such as Twitter to Parler. This proposal received the most support because it’s innocuous. Unlike a telephone number, which still has value when transferred to another carrier, user data may not provide the same consumer power. For instance, if a consumer exports their data about buying preferences from Amazon, there isn’t much they can do with it. Another e-commerce platform may not be able to make use of the information, especially if it does not sell comparable merchandise. Most of these business silos will still exist, even if the digital barrier is broken down. As a result, data portability requirements will not be enough to reign in Big Tech.

Their next solution, structural separation, would pack a bigger punch, but would simultaneously exacerbate inequality. These restrictions would prohibit large tech companies from operating in adjacent lines of business and force divestment where these lines are crossed. For example, antitrust regulators are entertaining the possibility of separating Amazon’s inventory storage and delivery business from the larger corporation. This would result in higher, inaccessible prices in a time when contact-free delivery serves vulnerable populations. Breaking up Big Tech would have significant consequences for consumers, especially those who are cost-conscious.

These disastrous, unintended consequences have happened before. In 2012, to allay concerns about anti-competitive behavior from book publishers, Amazon was forced to raise the prices of its Kindle e-books. This had a real and burdensome effect, especially on young consumers. College students who struggle today to pay hundreds of dollars for their textbooks each semester were paying as little as $9.99 per book prior to antitrust enforcement..

Line of business restrictions would also hamper human rights. Suppose Facebook is mandated by antitrust legislation to unwind its recent acquisitions. Facebook would need to sell WhatsApp, the encrypted messaging app used by human rights advocates and victims of totalitarian regimes. Since WhatsApp does not generate meaningful revenue, a sell-off would mean that it could no longer benefit from Facebook’s scale and may necessitate functional changes. This could manifest in the form of a paid subscription model, which would be less accessible, or the introduction of advertisements, which would compromise security for those who desperately need it.

Antitrust will not create a fairer digital marketplace, but congressmen are still intent on using it to take down Big Tech. They’d like Americans to focus on gatekeeper power, but consumer welfare and equality are the real values on the line, and not in the way congressmen describe.

Rachel Chiu is a Young Voices contributor who writes about technology and employment policy. Her writing has been published in USA Today, The American Conservative, and elsewhere. Follow her on Twitter: @rachelhchiu.

Filed Under: antitrust, competition, consumer welfare

Parler Drops Its Loser Of A Lawsuit Against Amazon In Federal Court, Files Equally Dumb New Lawsuit In State Court

from the that-ain't-gonna-work-champ dept

As you may recall, Parler had filed a ridiculously weak antitrust lawsuit against Amazon the day after it had its AWS account suspended. A judge easily rejected Parler's request for an injunction, and made it pretty clear Parler's chances of succeeding were slim to none. Parler, which has since found a new host, had indicated it would file an amended complaint, but instead it chose to drop that lawsuit in federal court and file an equally laughable lawsuit in state court in Washington (though with some additional lawyers).

Rather than claiming antitrust (which was never going to work) the new complaint claims breach of contract, defamation and deceptive and unfair practices. The complaint makes a big deal over the fact that in December Twitter and Amazon signed an agreement to use AWS for hosting some Twitter content, and hints repeatedly that Amazon's move a month later was to help Twitter stomp out a competitor. But this is all just random conspiracy theory nonsense, and not at all how any of this actually works.

The defamation claim is particularly silly.

On January 9, 2021, AWS sent an email to Parler declaring that AWS would indefinitely suspend Parler’s service, claiming that Parler was unable or unwilling “to remove content that encourages or incites violence against others.” AWS or one of its employees publicly leaked that email in bad faith to BuzzFeed at or around the same time AWS sent the email to Parler.

AWS’s email was false and AWS knew it was false. Parler was willing and able to remove such content and AWS knew that, because there was a lengthy history between the parties of Parler removing such content as quickly as AWS brought it to Parler’s attention. What is more, AWS was well aware that Parler was testing a new AI-based system to remove such content before it was even posted, that Parler had success with initial testing of the program, and that Parler had in fact shared those testing results with AWS.

The AWS email received wide play in the media.

This itself is kind of fascinating. Because even though we had highlighted that Parler takes down content, publicly it had claimed over and over again that it did not take down content. In fact, nearly all of Parler's brand was built on it's (misleading) claim to not do content moderation. So, how the hell could Amazon claiming that Parler wasn't doing content moderation be defamatory when that's the very reputation that Parler itself tried to highlight for itself?!?

Also, uh, this isn't going to fly in any court:

Parler is not a public figure and the success of its “content moderation” policies was not a matter of public concern until Google and AWS decided to make it one, but the defendant cannot by a defamatory statement turn a private matter into a public one or all matters would be public in nature.

No, sorry, Parler was very much a public figure way before Google and AWS's decisions.

The complaint also argues, repeatedly, that AWS had always been happy with Parler until it told it was suspending the account, but the filings in the original lawsuit in federal court clearly indicated otherwise, and noted that Amazon had reached out to Parler months earlier. I'm confused as to whether Parler's lawyer thinks that Amazon won't immediately point that out? Also, it seems decently likely that Amazon is going to try to get the case removed right back to federal court, so it's not clear why Parler thinks it can avoid federal court with this case. The whole thing, once again, seems performative and stands just as much of a chance as the original.

Filed Under: antitrust, aws, breach of contract, content moderation, defamation
Companies: amazon, parler