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    Thanks to Donald Trump, Apple’s new AirPods will make America hear again | John Naughton

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    Like many professional scribblers, I sometimes have to write not in a hushed study or library, but in noisy environments. So years ago I bought a set of Apple AirPods Pro, neat little gadgets that have a limited degree of noise-cancelling ability. They’re not as effective as the clunky (and pricey) headphones that seasoned transcontinental airline passengers need, but they’re much lighter and less obtrusive. And they have a button that enables you to switch off the noise cancellation and hear what’s going on around you.I remember wondering once if a version of them could also function as hearing aids, given the right software. But then dismissed the thought: after all, hearing aids are expensive, specialised devices that are often prescribed by audiologists – and also signal to the world at large that you are hard of hearing.But guess what? On 12 September, I open my laptop, click on the Verge website and find the headline: “Apple gets FDA authorisation to turn the AirPods Pro into hearing aids.” The new generation of the headphones will be able to serve as clinical-grade hearing aids later this autumn. More importantly, they can be bought over the counter (OTC in the lingo of the healthcare industry) and they will sell for $249 in the US (and £229 in the UK). Compare that with the prices of hearing aids sold by, say, Specsavers, which start at £495 and go all the way to £2,995 for the Phonak Infinio Sphere 90.Now of course price comparisons can be misleading. Vendors of conventional hearing aids will stress that customers get the undivided attention of an audiologist etc. And for customers with severe hearing difficulties, that’s fine. But for people with “mild to moderate hearing impairment”, even the US FDA (Food and Drug Administration) has concluded that the customisation software provided by Apple will be adequate.It works like this. You take an on-demand hearing test on your iPhone’s health app, which causes the earbuds to ping each ear with different frequencies at varying volumes. You tap the phone screen if you hear the sound. After a few minutes, the app will generate an audiogram that graphs your hearing deficits and this audiogram can then be used to program the AirPods Pro as hearing aids. Alternatively, you can upload an existing audiogram if you’ve had one generated by an audiologist.Neat, eh? And also a nice example of engineering ingenuity. But, as with most things, the technology is only part of the story. The healthcare industry in the US is tightly controlled by the FDA, which insisted for years that any device that goes into a human ear needs a prescription. As Matt Stoller, an antitrust expert and campaigner, points out, since 1993, campaigners have been calling for the FDA to loosen its stance on these devices and the calls got louder over the years. In 2015, the president’s council of advisers on science and technology issued a report seeking to make these devices more widely available. The next year, the National Academies of Sciences, Engineering and Medicine issued a similar report.But eventually, in 2017, Congress passed the Over-the-Counter Hearing Aid Act, proposed by senators Elizabeth Warren and Chuck Grassley and requiring the FDA to allow hearing aids without a prescription – and Donald Trump signed it! The act imposed a deadline of 2020 on the FDA, but the agency continually prevaricated until 2022, after the Biden administration compelled it to act with an executive order. Only then did the dam that had been building up since 1993 break.The moral of this story, in Stoller’s words, is simple: “How we deploy technology is not a function of engineering and science as much as it is how those interplay with law, in this case a law that fostered a hearing aid cartel and then a different law that broke it apart. So it’s not outlandish to say that Joe Biden designed Apple’s new hearing aid AirPods, with an assist from Elizabeth Warren, Chuck Grassley and Donald Trump. It’s just what happened.”This is perhaps a bit hyperbolic, but it captures an essential truth that Silicon Valley would prefer to ignore: technology does not exist in a vacuum, and the ways it is deployed and developed are shaped by social and political forces. Social media companies escape liability because of a 26-word clause in a 1996 law, for example. And millions of people in the US suffering from hearing impairment could have had hearing aids at affordable prices at least a decade ago. The problem was not that the technology didn’t exist, but that it wasn’t in the interest of the healthcare-regulatory establishment to make it available.skip past newsletter promotionafter newsletter promotionWhat I’ve been readingBad pressJeff Jarvis, the veteran journalist and City University of New York emeritus professor, has an insightful analysis on his blog titled What’s become of The Times & Co? about why US mainstream media has gone wrong.Top MarxThe Enduring Influence of Marx’s Masterpiece is a marvellous introduction by Wendy Brown to a new translation of Das Kapital.Head case A lovely essay by Erik J Larson is The Left Brain Delusion, which argues that we’re too governed by one side of our grey matter. More

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      Why is Trump cozying up to America’s most powerful business leaders? | Robert Reich

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      The Business Roundtable is an association of more than 200 CEOs of America’s biggest corporations. It likes to think of itself as socially responsible.Last Wednesday, its chair, Joshua Bolten, told reporters that his group planned to drop “eight figures” while “putting its full weight behind protecting and strengthening tax reform”.Translated: it’s going to pour money into making sure that Donald Trump’s 2017 tax cuts – most of which benefit big corporations and the rich – don’t expire in 2025, as scheduled.On Thursday, Trump met at the Business Roundtable’s Washington headquarters with over 80 CEOs, including Apple’s Tim Cook, JP Morgan Chase’s Jamie Dimon and Walmart’s Doug McMillon.Trump reportedly promised the CEOs he would cut corporate taxes even further and curtail business regulations if elected president.Trump’s 2017 tax cuts reduced the rate of corporate income taxes from 35% to 21%. That has cost America $1.3tn.Those tax cuts, along with the tax cuts put in place by George W Bush, are the primary reason that the national debt is rising as a percentage of the economy.What have corporations done with the money they have saved? They haven’t invested it or used it to raise wages. Nothing has trickled down to average workers.A large portion has gone into stock buybacks. The year after the tax cut went into effect, corporations bought back a record $1tn of their shares. Buybacks do nothing for the economy but raise stock prices – and, not incidentally, CEO compensation, which is largely in shares of stock.Making Trump’s 2017 tax cuts permanent – as the Business Roundtable seeks – will cost $4tn over the next 10 years, $400bn per year – and cause the debt to soar.Yet every one of the CEOs that Trump met with last week has been thriving under Biden. Corporate profits are way up. Stocks are at near record levels. Inflation has plummeted.So why are they attracted to Trump, whose antics are likely to destabilize the economy? Is it mere ideology?Kathryn Wylde, the president and CEO of the Partnership for New York City (a non-profit that represents the city’s top business leaders), relates that Republican billionaires have told her “the threat to capitalism from the Democrats is more concerning than the threat to democracy from Trump.”In my experience, CEOs of large corporations are more practical than ideological. They’re coming around to Trump because they want even more tax cuts and regulatory rollbacks – which means even more money in their own pockets.The Business Roundtable’s motto – “More than Leaders. Leadership” – suggests a purpose higher than making its CEOs and corporations richer.Indeed, in August 2019 the Roundtable issued a highly publicized statement expressing “a fundamental commitment to all of our stakeholders”, including a commitment to compensating all workers “fairly and providing important benefits”, as well as “supporting the communities in which we work”, and protecting the environment “by embracing sustainable practices across our businesses”.Signed by 181 CEOs of major American corporations, the statement concluded that “each of our stakeholders is essential,” and committed “to deliver value to all of them”.The statement got a lot of favorable press. But it was rubbish. At the time, Bernie Sanders and Elizabeth Warren were gaining traction in the 2020 Democratic presidential primaries with their criticisms of corporate America, and the CEOs of the Roundtable were worried. They needed cover.Then, after the January 6 attack on the Capitol, many of these CEOs announced they would not provide campaign funds to Republican members of Congress who refused to certify the 2020 election.Now, they’re lining up to fund Trump, because they and their corporations want another giant tax cut and rollbacks of regulations.If the Business Roundtable’s CEOs were honestly committed to all their stakeholders, they wouldn’t seek massive tax cuts.If they cared about preserving American democracy, they wouldn’t support Trump or any Republican.The greedy cynicism of America’s corporate elite is now on full display.
      Robert Reich, a former US secretary of labor, is a professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His newest book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com More

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      ‘Old-school union busting’: how US corporations are quashing the new wave of organizing

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      ‘Old-school union busting’: how US corporations are quashing the new wave of organizingVictories at several companies energized organizers, but hostile corporations – and an impotent labor board – stymie negotiationsUS corporations have mounted a fierce counterattack against the union drives at Starbucks, Amazon and other companies, and in response, federal officials are working overtime to crack down on those corporations’ illegal anti-union tactics – maneuvers that labor leaders fear could significantly drain the momentum behind today’s surge of unionization.The National Labor Relations Board (NLRB), the federal agency that polices labor-management relations, has accused Starbucks and Amazon of a slew of illegal anti-union practices, among them firing many workers in retaliation for backing a union. Nonetheless, many workplace experts question whether the NLRB’s efforts, no matter how vigorous, can assure that workers have a fair shot at unionizing.Serving $66 entrees for $18 an hour: the union push at an upscale New York restaurantRead more“We’re seeing the same situation over and over – workers going up against billionaires and billion-dollar companies with an endless amount of resources while our labor laws are far too weak,” said Michelle Eisen, a barista in Buffalo who helped lead the early unionization efforts of Starbucks in that city. “We’re all fighting for the same thing against different companies. We’re all in the same boat. No one denies that there are a lot of obstacles to overcome.”“The labor board is doing its job with the limited resources it has,” she added. “But Starbucks continues to break the law flagrantly.” The union asserts that Starbucks has engaged in illegal retaliation by firing 150 pro-union baristas and closing a dozen recently unionized stores.Echoing many union leaders, Eisen says US labor laws are woefully inadequate because they don’t allow regulators to impose any fines on companies that break the law when fighting against unionization. Starbucks and Amazon deny firing anyone illegally or violating any laws in their fight against unionization.“These workers were supposed to be able to get together without fear of retaliation,” said Lynne Fox, president of Workers United, the union that workers at more than 280 Starbucks have voted to join. “But companies, including Starbucks, have determined that the penalty for retaliation is minimal – and much more appealing than allowing workers to unionize. Violating workers’ rights has simply become part of the cost of doing business.” Labor leaders complain that the penalty imposed for illegal retaliation is often just an order to post a notice on a company’s bulletin boards saying that it broke the law.Newly unionized workers are also frustrated and angry that efforts to reach a first contract are taking so long, with some unions asserting that companies are deliberately and illegally dragging out negotiations – an assertion the companies deny. Workers won breakthrough union victories at Starbucks in December 2021, and the next year saw several other organizing victories. REI workers had a successful union vote in March 2022, Amazon in April, Apple in June, Trader Joe’s in July and Chipotle in August, but none of those companies have reached a first contract.The extraordinary recent wave of unionization that corporate America has faced over the past year has been met with what union supporters say is an equally extraordinary wave of union-busting that has slowed and even stopped some unionization efforts.Shortly after workers at a Chipotle restaurant in Augusta, Maine, petitioned for a unionization vote in the hope of becoming the first Chipotle in the US to unionize, the company shut down the store. The NLRB has accused Chipotle of illegal retaliation and sought to order the fast-food chain to reopen the store. Chipotle says the closing was for legitimate business reasons.Brandi McNease, a pro-union worker at the Chipotle in Augusta, said: “They closed it down because we were going to get our vote and they were going to lose. It’s much easier for a multibillion-dollar corporation to face whatever the consequences are of that then to allow a union into one of their stores.”The NLRB has accused Apple of illegally spying on and threatening workers. The company’s anti-union efforts helped pressure Apple store workers in Atlanta to withdraw their request to hold a unionization election, although workers at Apple stores in Towson, Maryland, and Oklahoma City have voted to unionize.Trader Joe’s closed its one wine shop in New York City days before that shop’s workers were to announce plans to seek a union election. The workers have accused the company of shutting the store to quash the union drive and retaliate against the workers. Trader Joe’s says it didn’t shut the store because of the employees’ organizing efforts.On 17 February, a day after employees at a Tesla plant in Buffalo announced plans to unionize, Tesla fired dozens of workers there. Union supporters complained to the NLRB that Tesla dismissed 37 workers “in retaliation for union activity and to discourage union activity”. Tesla said the terminations had nothing to do with the union drive and were part of its regular performance-evaluation process.The NLRB has brought 75 complaints against Starbucks that accuse it of more than 1,000 illegal actions. Federal judges have ordered Starbucks to reinstate numerous pro-union baristas who they say were fired illegally. The labor board has accused Starbucks of refusing to bargain with workers at 21 stores in Oregon and Washington state. The union asserts that Starbucks is deliberately dragging out negotiations to dishearten union supporters. Starbucks representatives have walked out of dozens of bargaining sessions, refusing to talk so long as union negotiators insist on letting other union members use Zoom to watch the sessions.The NLRB has accused Amazon’s CEO, Andy Jassy, of illegally coercing and intimidating workers by saying they would be “less empowered” if they unionized. NLRB judges have ruled that Amazon fired several pro-union workers illegally, and the board recently accused Amazon of unlawfully terminating one of the most effective organizers at its JFK8 warehouse on Staten Island, where the Amazon Labor Union won a landmark victory for the warehouse’s 8,300 employees last 1 April.Ohio train derailment reveals need for urgent reform, workers sayRead moreAmazon has filed a series of challenges to overturn the union’s Staten Island victory in the hope of not having to recognize or bargain with the union. In January, an NLRB judge upheld the union’s victory, but Amazon said it would appeal.“We know they plan to appeal and appeal and drag things out,” said Christian Smalls, president of the Amazon Labor Union. Smalls voiced frustration that nearly a year after the Staten Island workers voted to unionize, there have been no contract talks.Benjamin Sachs, a labor law professor at Harvard, admits to some surprise that several supposedly progressive companies are using hardball anti-union tactics. “What we have is new economy companies using the old, anti-union playbook on a national scale and in a way that people are paying attention to,” Sachs said.“It’s not new, but it’s more prominent: firing union organizers, threatening to close stores, closing stores, not bargaining, holding captive audience meetings, selective granting of benefits. To observers of labor, this has been going on for a long time. What’s different is these companies that hold themselves as different and progressive – they’re proving they’re not. There’s a dissonance between these brands’ progressive image and their old-school union-busting.”Amazon has repeatedly denied any illegal anti-union actions. It said: “We don’t think unions are the best answer for our employees” and “our focus remains on working directly” with our them “to continue making Amazon a great place to work”. Amazon argues that the union’s win on Staten Island “was not fair, legitimate or representative of the majority” and should therefore be overturned, maintaining that the union illegally intimidated and harassed anti-union workers and illegally distributed marijuana to win support.Tesla fires more than 30 workers after union drive announcementRead moreStarbucks denies that it fired any pro-union baristas unlawfully, saying that those workers were dismissed for misconduct or violating company rules. The company denies that it is deliberately dragging out negotiations, saying: “Counter to the union’s claims, Starbucks continues to engage honestly and in good faith while ensuring actions taken align with decades of case law and precedent.” It added: “We’ve come to the table in person and in good faith for 84 single-store contract bargaining sessions since October 2022.” Starbucks acknowledges that it has walked out of bargaining sessions because the workers “insist on broadcasting” the sessions “to unknown individuals not in the room and, in some instances, have posted excerpts of the sessions online”.Leaders of the Starbucks union say they have repeatedly pledged that the workers would not broadcast, record or post excerpts of the bargaining sessions. Furthermore, they ask why Starbucks refuses to let union members watch the negotiations by Zoom when it allowed that practice during the pandemic and so many other companies allow the use of Zoom during negotiating sessions. For its part, Starbucks has accused the union of failing to bargain in good faith, a claim the union says is ludicrous.One study found that after workers won union elections, 52% of the time they were without a first contract a year later and 37% of the time without one two years later. Many companies drag out contract talks as long as they can in order to dishearten workers and show that there’s little to gain by unionizing and because they know they save money on wages and benefits by delaying – or never reaching – a first union contract. Moreover, many companies prolong contract talks in the hope that union members will grow frustrated with their union and vote to decertify it.Sarah Beth Ryther, a leader of the successful effort to unionize a Trader Joe’s in Minneapolis, said the retailer is moving far slower than she hoped in negotiations. “I have said it was like writing a novel. We were on page one for a long time, and now we’re finally on page two,” Ryther said. “It’s just folks with very little experience who have organized an independent union, and to face these union-busting tactics, it’s hard. We’re not being paid a thousand dollars an hour like some TJ’s lawyers. We do this because we want to help our fellow workers.”Even if the NLRB rules that a company broke the law by negotiating in bad faith to drag out negotiations, federal law doesn’t allow the labor board to order management to reach a contract. “Even if the NLRB issues a complaint about bad faith bargaining, it takes a long time to handle those cases. Any meaningful order is a year down the road,” said Wilma Liebman, who headed the NLRB under Barack Obama. “The remedies take too long and they’re too weak. The board can’t order parties to reach an agreement or make concessions.”Liebman pointed to the big issue that labor organizing faces right now. “Can the unionization surge be sustained by continued growth?” she asked. “Otherwise it’s going to fizzle. This is the year that’s kind of make or break.”Under federal law, employers can’t be fined for illegal delays or bargaining in bad faith. The proposed protecting the right to organize (Pro) act sought to overcome lengthy delays by providing that if the two sides failed to reach a contract within 120 days of a new union’s being certified, a panel of arbitrators should be appointed to decide on the terms of a first two-year contract. The Pro act would also allow for substantial fines against employers that violate the law when fighting unions. The House of Representatives approved the Pro act in March 2021, but, facing a filibuster and unanimous Republican opposition, the legislation went nowhere in the Senate.Sachs says corporations have sizable incentives to violate the law when battling against unions because the National Labor Relations Act doesn’t provide for any fines for illegal actions. “We need to fundamentally change the incentive structure facing employers during union drives,” he said. “You can change the incentive structure in different ways. Consumers can do it if there is a national boycott of Starbucks or Apple or Chipotle or REI. That would have a huge impact. The other way to change the incentive structure would be to have massive monetary damages for anti-union violations. That would require not only legislative change, but the courts to order damage awards – and that would be a slow process.”Eisen, the barista in Buffalo, voices keen dismay that Starbucks keeps ratcheting up the pressure against the union drive. Arguably its most effective strategy to discourage unionization was not the firings or store closings, but when its CEO, Howard Schultz, announced that the company would give certain raises and benefits to its nonunion workers while denying them to workers at its unionized stores. The NLRB has brought a complaint asserting that this Starbucks policy illegally discriminates against union members.‘The lavatory waste comes on us’: unsafe, unsanitary work conditions, airport workers claimRead more“One of the things we need to win is public pressure,” Eisen said. “Can we let billionaires and billionaire companies continue to bully their way out of union campaigns? That’s essentially what is happening. It’s not fair. We need as much help as we can get. We need the public to recognize that these companies are not as good as they say they are.”The anti-union tactics have taken their toll. Partly because Starbucks’ aggressive anti-union efforts have discouraged and frightened many workers, the number of petitions for union elections at Starbucks stores has dropped from 71 last March to about 10 per month recently. Trader Joe’s workers in Boulder, Colorado, withdrew their petition for a unionization vote a day after they filed charges accusing the retailer of illegal intimidation and coercion. With highly paid anti-union consultants on hand to press workers to vote no, the Amazon Labor Union lost a unionization vote at a warehouse outside Albany, New York, and following that loss and facing an anti-union campaign, workers at an Amazon warehouse in Moreno Valley, California, withdrew their petition for a union election.“That comes with the territory, but that’s what we signed up for as organizers,” said the Amazon Labor Union’s Smalls. “We know this is a marathon not a sprint. In the words of Mother Jones, you fight like hell. That’s what we’re doing right now, fighting like hell.”TopicsUS unionsAmazonStarbucksAppleUS politicsTeslaReuse this content More

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      in US Politics

      How a top US business lobby promised climate action – but worked to block efforts

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      How a top US business lobby promised climate action – but worked to block efforts Business Roundtable aims to weaken efforts that would enable investors to hold companies accountable for their climate promisesThree years ago today, in a statement that would be described as “historic”, “monumental” and “revolutionary”, America’s most powerful and politically connected corporations promised to “protect the environment by embracing sustainable practices across our businesses”.The “Statement on the Purpose of a Corporation” came from the Business Roundtable, an influential Washington DC lobbying group whose 200-plus members include the chief executives of some of the world’s biggest companies, including Apple, Pepsi, Walmart and Google.Today, on the statement’s third anniversary, the Business Roundtable and its member CEOs continue to issue earnest statements about the climate crisis. But the organization is also working diligently – and spending liberally – to weaken efforts that would enable investors to hold companies accountable for their climate promises.An analysis by the Guardian found the lobby group has worked hard to protect a status quo in which corporations:
      Generate goodwill and positive PR by publishing bold climate goals, with little fear of being held accountable or legally liable for achieving those goals.
      Can choose to selectively disclose certain parts of their carbon footprint, or none at all.
      Are not required to reveal the greenhouse gas emissions generated throughout their supply chains – which, for most companies, make up the majority of their emissions.
      Make high-profile pledges to fight climate change, while paying to maintain memberships in the Business Roundtable and other trade associations that spend millions of dollars to lobby governments against meaningful climate action.
      In public the Business Roundtable’s leaders are still committed to change. Doug McMillon, the CEO of Walmart and previous chair of the Business Roundtable, has called the climate crisis “one of the greatest challenges facing the planet today”. In a statement on the group’s website, Mary Barra, the CEO of GM and the Roundtable’s current chair, declared that “we must act” to tackle climate change. “Meeting the scope of this challenge will require collective global action – business and government,” Barra said.The challenge “isn’t the lack of business commitment” said Johnson Controls CEO George Oliver in a video published by the Business Roundtable in January. “What we need is to be aligned with the public sector to make sure that we’ve got the proper policies in place that will enable us to do what we do so well.”Yet when the US government has tried to put the “proper policies” in place, the Business Roundtable has worked to undermine those efforts.In 2021, the organization spent millions of dollars to stop the Biden administration’s Build Back Better agenda, which included significant efforts to reduce carbon emissions and promote clean energy.And this year, after the US Securities and Exchange Commission (SEC) proposed a long-anticipated rule that would require publicly held companies to disclose their carbon emissions and the risks that climate change poses to their business models, the Business Roundtable declared its opposition to central aspects of the SEC proposal, including provisions that experts say are vital for the rule to give investors comparable and consistent information about corporations’ climate risks.Before releasing the proposed rules in March, the SEC had asked the public what such rules might look like. In its response, the Business Roundtable acknowledged that “climate challenges are creating growing risks in many parts of the economy” and deemed it “appropriate” for the SEC to regulate climate disclosures.The group noted that the present system of corporate climate reporting, in which some companies issue voluntary climate-related disclosures, has proven inadequate. “There are many conflicting demands on companies to provide disclosures under different frameworks, which is unnecessarily costly and time-consuming for companies,” the Business Roundtable’s comments read.But when the SEC shifted from requesting voluntary input to proposing mandatory requirements for climate disclosures, the organization appeared to change its tune. In a 17-page letter, the CEO lobby announced its opposition to the proposal and asked the commission to “revise and repropose the rule.”In an email to the Guardian, the Business Roundtable denied that its perspective had changed. “[Business Roundtable] members are committed to combating climate change and are supportive of a rulemaking. Our goal is for a pragmatic, attainable, and successful rule,” the group said. “Our members believe it is worth the extra time on the front end to repropose the rule.”Since April 2021, according to meeting memoranda published by the SEC, the Business Roundtable has met at least three times with the SEC about climate disclosures. (GM’s Barra, the chair of the Business Roundtable, also met separately with SEC chair Gary Gensler.)In the first half of this year, the group spent more than $9.1m lobbying the federal government directly, according to reports compiled by Open Secrets. In its public disclosures, the Roundtable reported lobbying Congress, the White House and the SEC about the climate disclosure proposal. (In an email, the Business Roundtable said it “met with the SEC to directly communicate our concerns” and “shared our point of view with members of Congress and administration officials.”)Despite asking for a new, and thus delayed, proposal, the organization’s own members continue to assure the public that they see the climate crisis as an urgent challenge. “We’re out of time,” Cummins CEO and Business Roundtable member Tom Linebarger said in the organization’s January climate video. “We’re getting ready, to get ready, to get ready to do things. And the problem is that we have to move now.”But “now”, it seems, does not mean now.One provision the Business Roundtable has rejected as “unworkable” is a requirement for companies to measure and report the greenhouse gas emissions generated by suppliers and customers throughout their supply chains, or what are known as “Scope 3” emissions. The provision would apply only to companies that have published emissions targets that include Scope 3, or for which supply-chain emissions are considered “material”.Scope 3 includes all greenhouse gas emissions that companies neither generate directly (Scope 1) nor purchase for their own energy needs (Scope 2), which means everything from the raw materials that go into creating a product to the transportation that delivers that product to a consumer.For most companies, Scope 3 emissions represent the majority of their carbon output. As Addisu Lashitew, a fellow at the Brookings Institution, has pointed out, more than three-quarters of Amazon’s 2021 emissions were considered Scope 3.Diagram showing Scope 3 emissions are everything indirectly related to productionThe Business Roundtable supports mandating Scope 1 and Scope 2 emissions disclosures, and many companies already report them, in part because these direct emissions are easier to calculate and easier to reduce (sometimes through the purchase of dubious carbon “offsets”).Perhaps more importantly, however, because most firms’ emissions are primarily Scope 3, limiting their reporting to Scopes 1 and 2 makes them appear greener.In its comments to the SEC, the Business Roundtable called the proposal to require companies to measure and report Scope 3 emissions “overly burdensome” because “many companies still have limited systems in place to identify and disclose Scope 3 emissions” and some aspects of reporting value-chain emissions “remain[] challenging”.But “if you don’t have Scope 3 as a requirement, then what you have effectively done is cut out most of the emissions from the top-emitting industries,” Allison Herren Lee, the former acting chair and commissioner of the SEC, told the Guardian. “With emissions arguably being the most important item of disclosure for investors, how is a rule without Scope 3 going to achieve what investors need?”“There is an inherent degree of uncertainty in some of the data the proposal would require companies to disclose, and much of it is largely outside their control,” the Business Roundtable said in an email.A number of experts familiar with the SEC’s climate disclosure rulemaking acknowledged that tracking and reporting Scope 3 emissions could indeed be difficult for some companies, or at least more difficult than not doing so.But they suggested that the more fundamental question was not whether complying with the SEC’s rules would be more difficult than doing nothing, but rather if doing so would provide investors with information that they have requested and that would help them make more informed investment decisions.This argument would appear to align with the stated position of the Business Roundtable, which has repeatedly expressed its support for “market-based” efforts to address climate change, a view it reiterated in its comments to the SEC.“Information is the lifeblood of the capital markets, and capital markets are a central institution of a capitalist market economy,” George S Georgiev, a professor at Emory University and an expert on securities law, told the Guardian. “Climate-related financial information is demanded by investors, not by environmentalists.”Moreover, “there is no unanimity that Scope 3 reporting is problematic”, Georgiev said, noting that Apple, whose CEO, Tim Cook, sits on the Business Roundtable’s board of directors, is among the companies that have endorsed the SEC’s Scope 3 requirement. Apple’s existing reporting “attest[s] to the feasibility of reasonably modeling, measuring, and reporting on all three scopes of emissions, including scope 3 emissions,” the company told the Commission.In its comments, the Business Roundtable said that its member companies had already set a “high bar…for voluntary ESG [environmental, social and governance] disclosures,” and that a voluntary approach to climate reporting was already “providing more valuable information for investors”.But many investors, analysts, academics, voters and experts – even companies themselves – disagree. “There is near-universal agreement among scholars that voluntary disclosure rules alone are not sufficient,” Emory’s Georgiev said. “The same logic applies to climate rules.”“Climate is one of the most significant risks facing companies and investors,” said Danielle Fugere, the president and chief counsel of As You Sow, a shareholder advocacy nonprofit. “For companies to say that it is too costly to gather Scope 1 through 3 data, we simply think that it shows signs of weak management.”In a March letter, a group of investors managing nearly $5tn of assets warned that failing to require companies to disclose their Scope 3 emissions would render the SEC rules doubly ineffective: insufficient for addressing the climate emergency, and inadequate for providing investors with useful information, because voluntary figures allow companies to publish only the information that paints them in the best light.“There is a great amount of confusion,” Larry Fink, the CEO of BlackRock, the world’s largest asset manager, said in a speech last year. “If we are really going to tackle this, if we want to have 100% participation, the easiest way you could do that is having unified standards.” Fink is also a member of the Business Roundtable.In an email, the Roundtable said it was “unlikely” that the proposed Scope 3 disclosure provisions “would result in comparable, investor-useful information”. The group “believes it’s important to have reliable climate risk and emissions data, and our companies are leaders when it comes to transparency.”The group’s objections to the SEC’s Scope 3 requirements are only one aspect of its multi-tiered opposition to the proposed climate disclosure rules. And its opposition to the proposed rules is, similarly, only one example of many in which it has rejected efforts to hold its member companies accountable for their social and environmental pledges.In the three years since the organization released the “purpose of a corporation” statement, a number of studies have shown that Business Roundtable companies have failed to follow through on their “fundamental commitment to all of [their] stakeholders”.One analysis from London Business School and Columbia Business School found that companies whose CEOs signed the 2019 statement subsequently received more federal environmental infractions and had higher carbon emissions than similar firms that did not sign the statement.In another study, two Harvard Law School professors reviewed more than 600 public documents filed by Business Roundtable companies since the statement’s publication. Time and time again, the researchers found that when firms were presented with an opportunity to formalize the pledge in their corporate governance, they declined.In addition, by advocating and lobbying against government action on issues like climate change, the Business Roundtable gives its members space to publicly endorse (and claim credit for endorsing) legislative and regulatory action – such as Apple’s support for mandatory Scope 3 reporting, or Cummins and GM’s support for Build Back Better –all while knowing that the Roundtable will work behind the scenes in opposition.“Some individual companies aren’t going to write in and rage against the proposal because they know that will raise concerns with their investors, so they let some of the trade groups do that work for them,” said Allison Herren Lee, the SEC’s former acting chair and commissioner.In its comments to the SEC, the Business Roundtable urged lawmakers to take the lead on tackling the climate crisis, arguing that “although important, disclosures simply will not solve the problem”.“These are complex issues that need to be solved through the legislative process,” the group wrote.But the Business Roundtable continues to oppose efforts to address the climate emergency through the legislative process. The latest effort to tackle the climate crisis, the Inflation Reduction Act, includes billions of dollars in clean energy tax incentives, paid for in part by making sure corporations pay at least a 15% tax rate on profits. The bill could cut America’s carbon emissions by 40% by 2030.Yet on 6 August, just shy of the third anniversary of the statement in which Business Roundtable CEOs committed to “protect[ing] the environment by embracing sustainable practices across our businesses”, the group declared its opposition to the bill, citing “tax provisions that would undermine American economic growth and competitiveness”.“I’m just so worried that our planet can no longer suffer from us debating and debating and debating,” said Cummins CEO Tom Linebarger, who, like all the CEOs named in this article, signed the 2019 statement. “It’s the existential crisis of our time.”TopicsClimate crisisApplePepsicoGoogleUS politicsanalysisReuse this content More

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      Corporate America buckles down for culture war on Roe v Wade

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      Corporate America buckles down for culture war on Roe v WadeRepublicans are mulling retaliation against firms providing benefits such as travel assistance for employees seeking abortion After a supreme court decision that overturns Roe v Wade was leaked and signaled the impending end of federal constitutional protection for abortions, a trickle of companies have slowly started to announce policies that provide abortion access for their employees. But while the protections may keep employees and consumers happy, the threat of retaliation from conservative lawmakers looms.Abortion surveillance: in a post-Roe world, could an internet search lead to an arrest? Read moreCitigroup, one of the biggest banks in the US, quietly started covering the travel expenses of employees who want to get an abortion but are banned from getting one in their home state.The benefit was not announced publicly. Instead, the company mentioned the change in benefits in a March filing for shareholders. Once news outlets began to report on the new benefit, the Republican ire began.Conservatives in Congress asked House and Senate administrators to cancel its contract with the company, which issues credit cards to lawmakers to use for work-related flights, office supplies and other goods. A state lawmaker in Texas, infuriated by Citigroup, introduced a bill that would prevent companies from doing business with local governments in Texas if they provide abortion-related benefits to their employees.“Citigroup decided to pander to the woke ideologues in its C-suite instead of obeying the laws of Texas,” said Briscoe Cain, the Texas state representative who introduced the bill, in a statement. “We will enact laws necessary to prevent this misuse of shareholder money and hold Citigroup accountable for its violation of our state’s abortion laws”.Citigroup has now been joined by Amazon, Apple, Yelp, Match Group, Tesla and Levi Strauss & Company, all which have said they will offer travel assistance to employees who are in states that restrict abortions. Insiders at JP Morgan and Goldman Sachs have told news outlets they too are considering similar policies.“I expect there will be a significant shift and the most leading companies are going to recognize that they need to protect the healthcare of their employees,” said Shelley Alpern, director of shareholder advocacy at Rhia Ventures. “Most companies would like to avoid taking a public stance on this issue because it’s so controversial, but there are higher risks for companies when they don’t protect their employees’ healthcare access.”In today’s heated political climate – and with midterm elections looming – corporate America can expect a fiery response to any stance it takes on Roe’s fall. But given the widespread impact the end of Roe v Wade will have on much of the country – 26 states will restrict abortion access if the decision is overturned – it is unlikely that companies can get away with not responding to the issue once the supreme court makes its final decision.Neeru Paharia, an associate professor at Georgetown University McDonough School of Business, said that people expect more out of companies as trust in government has fallen.“People are enacting their political will in the marketplace,” she said. For consumers, a purchase from a company can be a symbolic sign of support. For employees, their identities can be tied to the ethical positions of the company they work for.Over the last few years, corporate America has started to become more vocal on various issues that have gotten the attention of conservative lawmakers, including voting rights and LGBTQ+ issues. But conservative politicians have gotten bolder at fighting back against what they consider to be “woke capitalism”.While the GOP has historically positioned itself as the business-friendly, tax-cutting political party, conservative lawmakers have been emboldened to threaten and punish companies who speak out on controversial issues.Last month, Florida’s governor, Ron DeSantis, revoked special land use privileges the state gave to Disney for its Disney World theme park in Orlando after the company – responding to backlash from employees and consumers – spoke out against the state’s “don’t say gay” law. The move appeared to catch people by surprise. Lloyd Blankfein, former Goldman Sachs CEO, tweeted that the move “smacks of government retaliation for exercising free speech. Bad look for a conservative.”“That was really shocking,” Paharia said. “Now you have a situation where consumers and employees want companies to take a political stance, but then you have governments that are possibly retaliating against them.”When it comes to abortion, “even though it might not be [explicitly] taking a side … [companies] are taking a position based on the kind of benefits they are going to offer their employees”.The threats lawmakers have made have so far not come to fruition, but the party seems serious on trying to penalize companies in some way. The Republican senator Marco Rubio introduced a bill this week that would not allow companies to deduct abortion-related travel benefits as regular employee benefits when a company files its taxes.“Our tax code should be pro-family and promote a culture of life,” he said in a statement.With these warnings, companies may try to keep the introduction of abortion-related quiet or downplay their significance. When Citigroup’s CEO, Jane Fraser – the first woman to lead a major American bank – was asked in a shareholders meeting about the company’s new abortion travel benefit, she said the benefit “isn’t intended to be a statement about a very sensitive issue”.“What we did here was follow our past practices,” she said, adding that the company had “covered reproductive healthcare benefits for over 20 years. And our practice has also been to make sure our employees have the same health coverage, no matter where in the US they live.”Jen Stark, senior director of corporate strategy at Tara Health Foundation, who helped coordinate the signatures of over 180 executives in a statement against abortion bans in 2019, said the potential backlash from conservative lawmakers proves that companies need to act on abortion restrictions beyond mitigating effects for their employees.“They can buy all the plane tickets their workers need, and that addresses the immediate harm, but the structural deficiency is the collateral damage,” she said. “The supreme court case didn’t happen in a bubble … you’re kind of walking over the rubble.”Beyond benefits for employees, Stark has been advocating for companies to use their lobbying powers and scrutinize political donations as state lawmakers prepare to restrict abortions.“We are at the moment everyone’s cried wolf about. It’s here, but there was also a lot of headwind,” she said. “What companies can do with a stroke of a pen to mitigate some of the harm is important, but the larger issue is getting out of this structural whirlpool that we’re in.”TopicsRoe v WadeCitigroupBankingGoldman SachsAppleUS politicsfeaturesReuse this content More

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      Facebook’s very bad year. No, really, it might be the worst yet

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      Facebook’s very bad year. No, really, it might be the worst yet From repeated accusations of fostering misinformation to multiple whistleblowers, the company weathered some battles in 2021It’s a now-perennial headline: Facebook has had a very bad year.Years of mounting pressure from Congress and the public culminated in repeated PR crises, blockbuster whistleblower revelations and pending regulation over the past 12 months.And while the company’s bottom line has not yet wavered, 2022 is not looking to be any better than 2021 – with more potential privacy and antitrust actions on the horizon.Here are some of the major battles Facebook has weathered in the past year.Capitol riots launch a deluge of scandalsFacebook’s year started with allegations that a deadly insurrection on the US Capitol was largely planned on its platform. Regulatory uproar over the incident reverberated for months, leading lawmakers to call CEO Mark Zuckerberg before Congress to answer for his platform’s role in the attack.In the aftermath, Zuckerberg defended his decision not to take action against Donald Trump, though the former president stoked anger and separatist flames on his personal and campaign accounts. Facebook’s inaction led to a rare public employee walkout and Zuckerberg later reversed the hands-off approach to Trump. Barring Trump from Facebook platforms sparked backlash once again – this time from Republican lawmakers alleging censorship.What ensued was a months-long back-and-forth between Facebook and its independent oversight board, with each entity punting the decision of whether to keep Trump off the platform. Ultimately, Facebook decided to extend Trump’s suspension to two years. Critics said this underscored the ineffectiveness of the body. “What is the point of the oversight board?” asked the Real Oversight Board, an activist group monitoring Facebook, after the non-verdict.Whistleblowers take on FacebookThe scandal with perhaps the biggest impact on the company this year came in the form of the employee-turned-whistleblower Frances Haugen, who leaked internal documents that exposed some of the inner workings of Facebook and just how much the company knew about the harmful effects its platform was having on users and society.Haugen’s revelations, first reported by the Wall Street Journal, showed Facebook was aware of many of its grave public health impacts and had the means to mitigate them – but chose not to do so.For instance, documents show that since at least 2019, Facebook has studied the negative impact Instagram had on teenage girls and yet did little to mitigate the harms and publicly denied that was the case. Those findings in particular led Congress to summon company executives to multiple hearings on the platform and teen users.Facebook has since paused its plans to launch an Instagram app for kids and introduced new safety measures encouraging users to take breaks if they use the app for long periods of time. In a Senate hearing on 8 December, the Instagram executive Adam Mosseri called on Congress to launch an independent body tasked with regulating social media more comprehensively, sidestepping calls for Instagram to regulate itself.Haugen also alleged Facebook’s tweaks to its algorithm, which turned off some safeguards intended to fight misinformation, may have led to the Capitol attack. She provided information underscoring how little of its resources it dedicates to moderating non-English language content.In response to the Haugen documents, Congress has promised legislation and drafted a handful of new bills to address Facebook’s power. One controversial measure would target Section 230, a portion of the Communications Decency Act that exempts companies from liability for content posted on their platforms.Haugen was not the only whistleblower to take on Facebook in 2021. In April, the former Facebook data scientist turned whistleblower Sophie Zhang revealed to the Guardian that Facebook repeatedly allowed world leaders and politicians to use its platform to deceive the public or harass opponents. Zhang has since been called to testify on these findings before parliament in the UK and India.Lawmakers around the world are eager to hear from the Facebook whistleblowers. Haugen also testified in the UK regarding the documents she leaked, telling MPs Facebook “prioritizes profit over safety”.Such testimony is likely to influence impending legislation, including the Online Safety Bill: a proposed act in the UK that would task the communications authority Ofcom with regulating content online and requiring tech firms to protect users from harmful posts or face substantial fines.Zuckerberg and Cook feud over Apple updateThough Apple has had its fair share of regulatory battles, Facebook did not find an ally in its fellow tech firm while facing down the onslaught of consumer and regulatory pressure that 2021 brought.The iPhone maker in April launched a new notification system to alert users when and how Facebook was tracking their browsing habits, supposedly as a means to give them more control over their privacy.Facebook objected to the new policy, arguing Apple was doing so to “self-preference their own services and targeted advertising products”. It said the feature would negatively affect small businesses relying on Facebook to advertise. Apple pressed on anyway, rolling it out in April and promising additional changes in 2022.Preliminary reports suggest Apple is, indeed, profiting from the change while Google and Facebook have seen advertising profits fall.Global outage takes out all Facebook productsIn early October, just weeks after Haugen’s revelations, things took a sudden turn for the worse when the company faced a global service outage.Perhaps Facebook’s largest and most sustained tech failure in recent history, the glitch left billions of users unable to access Facebook, Instagram or Whatsapp for six hours on 4 and 5 October.Facebook’s share price dropped 4.9% that day, cutting Zuckerberg’s personal wealth by $6bn, according to Bloomberg.Other threats to FacebookAs Facebook faces continuing calls for accountability, its time as the wunderkind of Silicon Valley has come to a close and it has become a subject of bipartisan contempt.Republicans repeatedly have accused Facebook of being biased against conservatism, while liberals have targeted the platform for its monopolistic tendencies and failure to police misinformation.In July, the Biden administration began to take a harder line with the company over vaccine misinformation – which Joe Biden said was “killing people” and the US surgeon general said was “spreading like wildfire” on the platform. Meanwhile, the appointment of the antitrust thought leader Lina Khan to head of the FTC spelled trouble for Facebook. She has been publicly critical of the company and other tech giants in the past, and in August refiled a failed FTC case accusing Facebook of anti-competitive practices.After a year of struggles, Facebook has thrown something of a Hail Mary: changing its name. The company announced it would now be called Meta, a reference to its new “metaverse” project, which will create a virtual environment where users can spend time.The name change was met with derision and skepticism from critics. But it remains to be seen whether Facebook, by any other name, will beat the reputation that precedes it.TopicsFacebookTim CookMark ZuckerbergUS CongressUS Capitol attackAppleUS politicsfeaturesReuse this content More

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      Lawmakers seek to rein in big tech with bills aimed at competition and liability

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      TechnologyLawmakers seek to rein in big tech with bills aimed at competition and liabilityOne bill would prevent platforms from giving preference to their own products, the other would remove Section 230 protections Kari PaulThu 14 Oct 2021 17.58 EDTLast modified on Thu 14 Oct 2021 18.37 EDTUS lawmakers announced two major new proposals seeking to rein in the power of big tech, days after the revelations from a former Facebook employee spotlighted the company’s sweeping impact.The first bill, proposed by a group of senators headed by Democrat Amy Klobuchar and Republican Chuck Grassley would bar big tech platforms from favoring their own products and services.The second bill, put forward by House Democrats, would remove some protections afforded tech companies by Section 230, a portion of the Communications Decency Act that exempts them from liability for what is posted on their platforms.Facebook whistleblower’s testimony could finally spark action in CongressRead moreThe proposals are part of a slew of bills from this Congress aimed at reining in tech firms, including industry leaders Facebook and Apple. Thus far, none have become law although one, a broader measure to increase resources for antitrust enforcers, has passed the Senate.Klobuchar and Grassley’s bill would specifically prohibit platforms from requiring companies operating on their sites to purchase the platform’s goods or services and ban them from biasing search results to favor the platform. It is a companion bill to a measure which has passed the House judiciary committee and must pass both houses of Congress to become law.The bill would address concerns that tech giants have become gatekeepers, giving preference to their own products, blocking rivals from accessing markets and imposing onerous fees and terms on smaller businesses.“As dominant digital platforms – some of the biggest companies our world has ever seen – increasingly give preference to their own products and services, we must put policies in place to ensure small businesses and entrepreneurs still have the opportunity to succeed in the digital marketplace,” Klobuchar said in a statement.The legislation comes as Congress is increasingly working on a bipartisan basis to address antitrust issues in big tech. Traditionally lawmakers have differed on their critiques of the industry – with Democrats claiming the companies are monopolies and Republicans criticizing what they perceive as an anti-conservative bias on the platforms.“This bill is welcome proof that the momentum in Congress to tackle big tech’s monopoly power is rapidly gaining force on both sides of the aisle,” read a statement from the Institute for Local Self-Reliance, a non-profit that fights against corporate monopolies. “We agree with their view that the tech giants cannot continue to abuse their power at the expense of competition, innovation, and entrepreneurship.”Meanwhile, the debate around Section 230 – a portion of the Communications Decency Act that protects companies from legal liability for content posted on their platforms – has continued. Its impact has long been a hot-button issue but became increasingly so during the Donald Trump’s presidency.The bill House Democrats introduced on Thursday would create an amendment in Section 230 that would hold companies responsible for the personalized algorithmic amplification of problematic content.In other words it seeks to simply “turn off” the Facebook news algorithm, said Evan Greer, director of digital rights group Fight For the Future.The law would apply only to large tech firms with 5,000,000 or more monthly users, but could still have negative consequences for firms large enough to qualify but that still have fewer resources than Facebook.“Facebook would likely be able to survive this, but smaller competitors wouldn’t,” Greer said. “That’s why Facebook has repeatedly called for changes to Section 230 – they know it will only serve to solidify their dominance and monopoly power.“This bill is well-intentioned, but it’s a total mess,” added Greer. “Democrats are playing right into Facebook’s hands by proposing tweaks to Section 230 instead of thoughtful policies that will actually reduce the harm done by surveillance-driven algorithms.”Lawmakers are “failing to understand how these policies will actually play out in the real world”, she added.Earlier this year more than 70 civil rights, LGBTQ+, sex worker advocacy and human rights organizations sent a letter cautioning lawmakers against changing Section 230.They instead prefer an approach to reining in Facebook and other platforms by attacking the data harvesting and surveillance practices they rely on as a business model.Democrats should instead “pass a privacy bill strong enough to kill Facebook’s surveillance driven business model while leaving the democratizing power of the internet intact”, Greer said.Reuters contributed to this reportTopicsTechnologyFacebookUS politicsSocial mediaApplenewsReuse this content More

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      ‘They should be worried’: how FTC chair Lina Khan plans to tackle big tech

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      US politics‘They should be worried’: how FTC chair Lina Khan plans to tackle big tech Within weeks of her appointment to the commission, Facebook and Amazon asked that she be recused from antitrust investigationsKari PaulSun 15 Aug 2021 01.00 EDTLast modified on Sun 15 Aug 2021 01.01 EDTLina Khan has some of the biggest companies in the world shaking in their boots.The 32-year-old antitrust scholar and law professor in June became the youngest person in history and the most progressive in more than a decade to be appointed as chair of the Federal Trade Commission (FTC).Khan’s appointment places her at the helm of the federal agency charged with enforcing antitrust law just as it is poised to tackle the giants of the technology industry after years of unchecked power. And it’s clear that big tech isn’t happy about it.Within weeks of Khan’s appointment, both Facebook and Amazon requested that Khan be recused from the FTC’s antitrust investigations into their companies, arguing that her intense criticism of them in the past meant she would “not be a neutral and impartial evaluator” of antitrust issues.Is Biden’s appointment of a pioneering young lawyer bad news for big tech? | John NaughtonRead moreKhan has forcefully argued for the need to rein in powerful firms like Amazon, Facebook, Apple and Google, developing an innovative antitrust argument that has revolutionized the way we think about regulating monopolies.“She understands how these companies are harming workers, innovation and ultimately democracy and is committed to taking them head on,” said Stacy Mitchell, co-director of Institute for Local Self-Reliance, an antimonopoly advocacy organization.“This is a gamechanger.”‘A meteoric rise’Before Khan took it on, antitrust law enforcement in the US had atrophied. For decades, it had functioned under the “consumer welfare standard”, which meant that the government would only take action against a company for anti-competitive practices if consumers were hurt by increased prices. But by the time Khan was a student at Williams and then Yale Law School, tech behemoths had built de facto monopolies by giving away their products for free or at such low prices that no one else could compete.In the early years of the tech boom it was widely assumed that the industry would essentially regulate itself, according to Rebecca Allensworth, a professor of antitrust law at Vanderbilt University. That Yahoo’s popularity gave way to Google and Myspace to Facebook appeared to be proof that “competition in tech was intensive without any government involvement”, she said. “But we have seen how that has really changed, as has our understanding of how these companies can abuse the market.” Slipping through the cracks of these old antitrust standards, tech companies amassed unchecked power, acquiring competitors and scooping up billions of customers. In 2020, Apple became the first American company to be valued at $2tn. That same year, Amazon eclipsed $1tn, joining Microsoft, at $1.6tn, and Google parent Alphabet at $1tn.In her now-famous 2017 Yale Law Journal article, Khan argued that the rise of these mega companies proved that modern American antitrust law was broken, and that the traditional yardsticks by which regulators determine monopolies need to be re-examined for the digital age.Keeping prices low has allowed Amazon to amass a large share of the market, giving it a disproportionate impact on the economy, stifling competition and further perpetuating monopoly, she argued.“The long-term interests of consumers include product quality, variety and innovation – factors best promoted through both a robust competitive process and open markets,” she wrote.She also investigated mergers and examined the impact the resulting tech monopolies have on product quality, suppliers and company conduct. Even if these companies’ practices resulted in some benefits for consumers, they were harmful to markets and democracy at large, she said.The immediate impact of her thesis was undeniable, with the New York Times announcing Khan had “singlehandedly reframed decades of monopoly law”. Politico called her “a leader of a new school of antitrust thought”. Christopher Leslie, a professor of antitrust law at University of California, Irvine, characterized Khan’s rise in recent years as “meteoric”.“It’s unprecedented to have somebody ascend to such an important leadership role in antitrust enforcement so soon after graduating from law school,” he said. “But it’s also unprecedented to have somebody make such a significant impact on antitrust public policy debates so quickly after graduating.”Big tech in the hot seatIn 2019, Khan brought her new approach to antitrust to Congress, serving as counsel to the US House judiciary committee’s subcommittee on antitrust, commercial, and administrative law. Spearheading the committee’s investigation into digital markets, she played a large role in the publication of its landmark report: a 451-page treatise on how companies including Google and Amazon abuse their market power for their own benefit.Khan also served as legal director at the political advocacy group Open Markets Institute and taught antimonopoly law at Columbia until her appointment to the FTC in 2021.Khan’s appointment marked a break from the “revolving door” between the FTC and the private sector, in which people with years of experience defending companies in Silicon Valley become regulators. Her new role also comes at a time when reining in big tech is one of the only issues that unites a deeply divided Congress.The Massachusetts senator Elizabeth Warren said Khan’s leadership of the FTC was “a huge opportunity to make big, structural change” to fight monopolies and Senator Amy Klobuchar praised Khan as “a pioneer in competition policy” who “will bring a critical perspective to the FTC”. The Republican Ted Cruz told Khan he “looked forward” to working with her on these issues.Khan has her critics. The former Republican senator Orrin Hatch has condemned her thesis as “hipster antitrust”. Mike Lee of Utah said she “lacks the experience necessary” for the FTC and that her views on US antitrust laws were “wildly out of step with a prudent approach to the law”.But her appointment coincides with a growing drive among lawmakers to take on the major tech companies, Allensworth said. “Politicians, small businesses and the academic establishment are clamoring for it,” she added.Shortly after naming Khan as chair, Joe Biden signed an executive order calling on federal regulators to prioritize action promoting competition in the American economy – including in the tech space. “Let me be very clear: capitalism without competition isn’t capitalism. It’s exploitation,” he said regarding the order, which contained 72 initiatives to limit corporate power. Biden asked the FTC to better vet mergers and acquisitions and to establish rules on surveillance. He also called for easing of restrictions on repairing tech devices and data collection on consumers.‘A different set of rules’In her first hearing as chair in July, Khan indicated that she was ready to get started, saying the US needs “a different set of rules”.She cited bad mergers – in the past she had criticized Facebook’s acquisitions of Instagram, Giphy and WhatsApp as anti-competitive – as potentially fueling large tech monopolies: “In hindsight there’s a growing sense that some of those merger reviews were a missed opportunity.”One of Khan’s first tasks as chair is likely to be rewriting an FTC antitrust complaint against Facebook that was dismissed in June after the agency failed to demonstrate that the tech giant maintains a monopoly.Meanwhile, Apple and others are set to face FTC scrutiny over repair policies that restrict third-party companies from fixing devices. The agency voted unanimously in July to ramp up enforcement of the right to repair.The attempts by Amazon and Facebook to force Khan’s recusal are signs that big tech won’t go down without a fight. But critics say these efforts amount to intimidation tactics and not much more. Khan does not have any conflicts of interest under federal ethics laws, which typically apply to financial investments or employment history, and the requests are not likely to go far.This is “a PR move”, said Allensworth. “She has made a lot of very public, extremely influential arguments about exactly how tech suppresses competition and now she’s the chairperson of the largest and most important federal agency to do with competition,” she said.“They should be worried,” she added.TopicsUS politicsFacebookAppleGoogleAmazonfeaturesReuse this content More

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      Is Biden’s appointment of a pioneering young lawyer bad news for big tech? | John Naughton

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      A flashback: it’s Wednesday 29 July 2020. I’m sitting glued to the US TV network C-Span, which is relaying – live – a hearing of the House of Representatives subcommittee on antitrust, commercial and administrative law. The hearing is being held following the publication of a sprawling report of a year-long investigation into the market dominance of Amazon, Apple, Facebook and Google.Arrayed on big screens before the members of the subcommittee are the four bosses of the aforementioned tech giants: Amazon’s Jeff Bezos, then midway through his Star Trek makeover; Tim Cook of Apple, looking like the clean-living lad who never understood the locker-room jokes; Facebook’s Mark Zuckerberg, wearing his trademark glued-on hairdo; and the Google boss, Sundar Pichai, every inch the scholarship boy who can’t understand why he’s been arrested by the Feds. And on the vast mahogany bench towering above these screened moguls sits David Cicilline, subcommittee chairman and the politician who has overseen the investigation.To be honest, I was watching out of duty and with low expectations. All the previous congressional interrogations of Zuckerberg and co had alternated between political grandstanding and farce. I expected much the same from this encounter. And then I noticed a young woman wearing a black mask standing behind Cicilline. She looked vaguely familiar, but it took me a few moments before I twigged that she was Lina Khan. At which point I sat up and started taking notes.I had been following her for years, ever since a paper she had published as a graduate student in the Yale Law Journal in January 2017. The title of the paper – Amazon’s Antitrust Paradox – signalled that there was something radical coming up, because since the mid-1970s US antitrust philosophy had been shaped by a landmark book by another lawyer, Robert Bork. Its title was The Antitrust Paradox and it argued that the prime focus of action against monopolies should not be corporate power, per se, but consumer harm as measured by unreasonably high prices. And since many of the products and services offered by the tech giants were “free” to their users they could hardly be accused of this; their wielding of monopoly power should not therefore be penalised by the state, for doing so would be tantamount to “penalising excellence”. Thus was shaped the legal doctrine that allowed a small number of tech companies to acquire immense power without being unduly troubled by legislators.This was the doctrine that Khan set out to demolish in her paper. She argued that Amazon was a dangerous monopoly that charged unsustainably low prices because the company knew that its shareholders would allow it to lose money for longer than its competitors. And it was also able to operate a “marketplace” that competed with the businesses that relied on it to reach customers, while amassing data on them that further entrenched its advantages. In other words, it wielded significant power for which there was no real redress.Khan’s paper lit a fuse that’s been fizzing ever since. It informed the Cicilline investigation and the subsequent report. And it’s what underpinned four of the five new bills that were unveiled last week, each one co-sponsored by Republican as well as Democratic politicians and each one targeted at monopolistic abuses identified in the report. The “Cicilline Salvo” is how the incomparable tech analyst Ben Thompson summarises them. The American innovation and choice online bill forbids platforms from giving advantages to their own products and services on marketplaces that they operate. The platform competition and opportunity bill outlaws pre-emptive acquisitions by tech giants of startups that might threaten their dominance (such as Facebook acquiring Instagram and WhatsApp, for instance). The ending platform monopolies bill bans platforms from owning any product or service that rests on top of its platform and competes with third parties in any way. And the augmenting compatibility and competition by enabling service switching bill requires tech platforms to make it easy for users to switch platforms (and take their data and social graph with them); in other words, it imposes on platforms what many jurisdictions now enforce on mobile phone operators, energy companies and other businesses.Of course, there’s many a slip ’twixt drafting and the statute book, but these are very significant pieces of legislation that go some way towards bringing tech companies under democratic control. And, to cap it all, last week also saw the announcement that Khan was to become chair of the Federal Trade Commission, the agency that, along with the US Department of Justice, has the legal muscle to enforce compliance with whatever these new laws stipulate.Which leaves us with two reflections. One is, as David Runciman pointed out in The Confidence Trap, his landmark study of the recent history of democracy, that while democracies can take a long time to awaken from their slumbers, once aroused they can be very effective. The other is a confirmation of the power of ideas, even those of a young graduate student, to change history.What I’ve been readingSituation vacant On Algorithmic Communism is a long, thoughtful review by Ian Lorrie in the LA Review of Books of Nick Srnicek’s and Alex Williams’s book, Inventing the Future, about a world without work.What’s in a phrase?There Is Nothing so Deep as the Gleaming Surface of the Aphorism is a nice – aphoristic – essay by Noreen Masud.Net costsThe Cost of Cloud: A Trillion-Dollar Paradox is a perceptive piece by Sarah Wang and Martin Casado on the expensive technology on which our networked world now depends. More