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      in US Politics

      All I want for 2021 is to see Mark Zuckerberg up in court | John Naughton

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      It’s always risky making predictions about the tech industry, but this year looks like being different, at least in the sense that there are two safe bets. One is that the attempts to regulate the tech giants that began last year will intensify; the second that we will be increasingly deluged by sanctimonious cant from Facebook & co as they seek to avoid democratic curbing of their unaccountable power.On the regulation front, last year in the US, Alphabet, Google’s corporate owner, found itself facing major antitrust suits from 38 states as well as from the Department of Justice. On this side of the pond, there are preparations for a Digital Markets Unit with statutory powers that will be able to neatly sidestep the tricky definitional questions of what constitutes a monopoly in a digital age. Instead, the unit will decide on a case-by-case basis whether a particular tech company has “strategic market status” if it possesses “substantial, entrenched market power in at least one digital activity” or if it acts as an online “gateway” for other businesses. And if a company is judged to have this status, then penalties and regulations will be imposed on it.Over in Brussels, the European Union has come up with a new two-pronged legal framework for curbing digital power – the Digital Markets Act and the Digital Services Act. The Digital Markets Act is aimed at curbing anti-competitive practices in the tech industry (like buying up potential competitors before they can scale up) and will include fines of 10% of global revenues for infringers. The Digital Services Act, for its part, will oblige social media platforms to take more responsibility for illegal content on their platforms – scams, terrorist content, images of abuse, etc – for which they could face fines of up to 6% of global revenue if they fail to police content adequately. So the US and UK approach focuses on corporate behaviour; the EU approach focuses on defining what is allowed legally.All of this action has been a long time coming and while it’s difficult to say exactly how it will play out, the bottom line is that the tech industry is – finally – going to become a regulated one. Its law-free bonanza is going to come to an end.Joe Biden’s choices for top staff in his administration include a depressing proportion of former tech company stalwartsThe big question, though, is: when? Antitrust actions proceed at a glacial pace because of the complexity of the issues and the bottomless legal budgets of the companies involved. The judge in one of the big American antitrust cases against Google has said that he expects the case to get to court only in late 2023 and then it could run for several years (as the Microsoft case did in the 1990s).The problem with that, as the veteran anti-monopoly campaigner Matt Stoller has pointed out, is that the longer monopolistic behaviour goes on, the more damage (eg, to advertisers whose revenue is being stolen and other businesses whose property is being appropriated) is being done. Google had $170bn in revenue last year and is growing on average at 10-20% a year. On a conservative estimate of 10% growth, the company will add another $100bn to its revenue by 2025, when the case will still be in the court. Facebook, says Stoller, “is at $80bn of revenue this year, but it is growing faster, so the net increase of revenue is a roughly similar amount. In other words, if the claims of the government are credible, then the lengthy case, while perhaps necessary, is also enabling these monopolists to steal an additional $100bn apiece.”What could speed up bringing these monopolists to account? A key factor is the vigour with which the US Department of Justice prosecutes its case(s). In the run-up to the 2020 election, the Democrats in Congress displayed an encouraging enthusiasm for tackling tech monopolies, but Joe Biden’s choices for top staff in his administration include a depressing proportion of former tech company stalwarts. And his vice-president-elect, Kamala Harris, consistently turned a blind eye to the anti-competitive acquisitions of the Silicon Valley giants throughout her time as California’s attorney general. So if people are hoping for antitrust zeal from the new US government, they may be in for disappointment.Interestingly, Stoller suggests that another approach (inspired by the way trust-busters in the US acted in the 1930s) could have useful leverage on corporate behaviour from now on. Monopolisation isn’t just illegal, he points out, “it is in fact a crime, an appropriation of the rights and property of others by a dominant actor. The lengthy trial is essentially akin to saying that bank robbers getting to keep robbing banks until they are convicted and can probably keep the additional loot.”Since a basic principle of the rule of law is that crime shouldn’t pay, an addition of the possibility of criminal charges to the antitrust actions might, like the prospect of being hanged in the morning (pace Dr Johnson), concentrate minds in Facebook, Google, Amazon and Apple. As an eternal optimist, I cannot think of a nicer prospect for 2021 than the sight of Mark Zuckerberg and Sundar Pichai in the dock – with Nick Clegg in attendance, taking notes. Happy new year!What I’ve been readingWho knew?What We Want Doesn’t Always Make Us Happy is a great Bloomberg column by Noah Smith.Far outIntriguing piece on how investors are using real-time satellite images to predict retailers’ sales (Stock Picks From Space), by Frank Partnoy on the Atlantic website.An American dream Lovely meditation on Nora Ephron’s New York, by Carrie Courogen on the Bright Wall/Dark Room website. More

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      in US Politics

      Facebook faces antitrust allegations over deals for Instagram and WhatsApp

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      Facebook is expecting significant new legal challenges, as the US Federal Trade Commission and a coalition of attorney generals from up to 40 states are preparing antitrust suits.
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      Although the specific charges in both cases remain unclear, the antitrust allegations are expected to center on the tech giant’s acquisition of two big apps: a $1bn deal to buy the photo-sharing app Instagram in 2012, and the $19bn purchase of the global messaging service WhatsApp in 2014. Together, the buys brought the top four social media companies worldwide under Facebook’s control. The purchases would constitute antitrust violations if Facebook believed the companies were viable competitors.
      At the time of its acquisition, Instagram had 30 million users, and, even though it was growing rapidly, it wasn’t yet making money. WhatsApp boasted more than 450 million monthly active users when it was acquired. “WhatsApp is on a path to connect 1 billion people,” Zuckerberg said in a statement at the time.
      The FTC cleared Facebook for the acquisitions when they occurred, and the company is hoping to leverage those approvals in mounting a defense. Facebook executives have also argued their company has helped the apps grow.
      But Facebook has come under greater scrutiny since the deals were done, and the FTC launched a new investigation into the potential antitrust violations in 2019.
      The FTC probe will build on findings from a separate inquiry conducted by the US House Judiciary subcommittee, which released millions of documents that appeared to show that Facebook executives, including CEO Mark Zuckerberg, were concerned the apps could become competition, before aggressively pursuing them.
      In one 2012 email, made public through the House investigation, Zuckerberg highlighted how Instagram had an edge on mobile, an area where Facebook was falling behind. In another, the CEO said Instagram could hurt Facebook even if it doesn’t become huge. “The businesses are nascent but the networks are established, the brands are already meaningful and if they grow to a large scale they could be disruptive to us,” Zuckerberg wrote. Instagram’s co-founder also fretted that his company might be targeted for destruction by Zuckerberg if he refused the deal.
      The FTC is expected to vote on a possible suit this week. Three of the five-member commission are believed to be in favor of the move, including chair Joseph Simons, who is expected to leave the agency before the new Biden administration is sworn in, Politico reported.
      Commissioners also have to decide where to file the suit: in federal court, which would leave the outcome to a judge; or in the FTC, where the commission could ultimately decide.
      The suit expected from the bipartisan coalition of states is headed by New York attorney general Letitia James. While details of their complaint are also scant, several states’ top law enforcement offices launched probes into Facebook’s acquisitions last year, adding to the pressure put on the company by federal regulators.
      Facebook did not respond to a request for comment.
      Facebook’s possible legal challenges come as a growing number of US lawmakers are arguing that companies including Amazon, Google, Facebook and Apple have amassed too much power and should be reined in.
      These companies “wield their dominance in ways that erode entrepreneurship, degrade Americans’ privacy online, and undermine the vibrancy of the free and diverse press”, the House judiciary committee concluded in its nearly 500-page report.
      “The result is less innovation, fewer choices for consumers, and a weakened democracy.”
      President-elect Joe Biden, too, has been critical of the tech companies. “Many technology giants and their executives have not only abused their power, but misled the American people, damaged our democracy and evaded any form of responsibility,” said Biden spokesperson Matt Hill to the New York Times. “That ends with a President Biden.”
      In May, Facebook took over Giphy, a hugely popular moving-image app, with plans to integrate it with Instagram. Late last month, the company also announced plans to acquire Kustomer, an e-commerce app.
      “This deal is about providing more choices and better products for consumers,” a company spokesman said in a statement to the New York Times. “The key to Facebook’s success has always been innovation, with M&A being just a part of our overall business strategy, and we will continue to demonstrate to regulators that competition in the technology sector is vibrant.” More

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      in US Politics

      If you think Biden's administration would rein in big tech, think again | John Naughton

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      Before the US presidential election I wondered aloud if Mark Zuckerberg had concluded that the re-election of Trump might be better for Facebook than a Biden victory. There were several reasons for thinking this. One was the strange way Zuckerberg appeared to be sucking up to Trump: at least one private dinner in the White House; the way he jumped on to Fox News when Twitter first placed a warning on a Trump tweet to say that Facebook would not be doing stuff like that; and the majority report of the House subcommittee on tech monopolies, in which it was clear that the Democrats had it in for the companies.But the most significant piece of evidence for the belief that a Biden administration would finally tackle the tech giants, and Facebook in particular, came in the long interview Biden gave last January to the New York Times, in which he was highly critical of the company.“I’ve never been a big Zuckerberg fan,” Biden said. “I think he’s a real problem … I’ve been in the view that not only should we be worrying about the concentration of power, we should be worried about the lack of privacy and them being exempt, which you’re not exempt. [The New York Times] can’t write something you know to be false and be exempt from being sued. But he can. The idea that it’s a tech company is that Section 230 should be revoked, immediately should be revoked, number one. For Zuckerberg and other platforms.” As readers of this column know only too well, section 230 of the 1996 US Telecommunications Act is the clause that exempts tech platforms from legal liability for anything that users post on their platforms. It’s the nearest thing social media has to a kill switch. Pull it and their business models evaporate. Trump had been threatening to pull it before the election, but he lacked the attention span to be able to do anything about it. Biden, on the other hand, had already talked about it in January and would have people around him who knew what they were doing. So maybe we were going to get some real progress in getting tech giants under control.And then he gets elected and what do we find? Biden’s transition eam is packed with tech industry insiders. Tom Sullivan, from Amazon, is earmarked for the Department of State. Mark Schwartz, also from Amazon, is heading for the Office of Management and Budget, as are Divya Kumaraiah from Airbnb and Brandon Belford from Lyft, the ride-hailing company. The US Treasury gets Nicole Isaac from LinkedIn, Microsoft’s department of spam, and Will Fields, who was Sidewalk Labs’ senior development associate. (Sidewalk Labs was the organiser of Google’s attempt – eventually cancelled – to turn Toronto’s waterfront into a data-geyser for surveillance capitalism.) The Environmental Protection Agency, a body that Trump looted and sidelined, gets Ann Dunkin, who is Dell’s chief technology officer. And so on.Well, I thought, perusing this sordid list, at least there’s nobody from Facebook on it. How innocent can you be? Politico reveals that the joint chair of Biden’s transition team, Jeff Zients, is a former Facebook board member. Another former board member is an adviser. And two others, one who was a Facebook director and another who was a company lobbyist, have, according to Politico “taken leadership roles”. And then, to cap it all, it turns out that Biden himself has a friendly relationship with a guy called Nick Clegg, who was once a serious politician and now doubles as Mark Zuckerberg’s bagman and representative on Earth.Truly, you couldn’t make this up. And just to add a touch of satire to it, the woman who is now a heartbeat away from the presidency, Kamala Harris, has a career-long record of cosying up to Silicon Valley. She participated, for example, in the marketing campaign for Lean In, Sheryl Sandberg’s anthem of capitalist feminism, even though at the time Harris was California’s law enforcement official most responsible for overseeing Facebook. As the state’s attorney general, she took a semi-comatose view of the way the big tech companies were allowed to gobble up potential rivals and bulldoze their way into new industries. Facebook’s controversial acquisitions of WhatsApp and Instagram, perhaps the most obvious anti-competitive mergers in the short history of the tech industry, happened on her watch and triggered no regulatory reflex. If Silicon Valley could be said to have a darling, then Ms Harris is it. And all those campaign donations from tech companies and moguls may turn out to have been a shrewd investment after all.Given these sobering circumstances, how should we calculate the odds of a Biden administration taking on the power of the tech giants? The answer: slightly better than those of a snowball staying cool in hell. But only slightly.What I’ve been readingIs 2020 just a taster?Graeme Wood has written a riveting essay, titled The Next Decade Could Be Even Worse, on the work of Peter Turchin, a quantitative historian who believes he has discovered iron laws that predict the rise and fall of societies.Birth of an iNationWhat if we viewed tech giants as countries? A thoughtful essay in Tortoise Media considers Apple as a one-party state as secretive as China. But more liberal. Phew!Is less Moore?I enjoyed a lovely post by Venkatesh Rao on the Ribbonfarm blog, about the mindset induced by living in a world governed by Moore’s Law. More

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      in US Politics

      Is the internet breaking our grasp on reality? The 11 November Guardian Weekly

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      One of the many worrying aspects of 2020 has been a rise in online conspiracy theories, with supporters of some of the wildest – such as QAnon – even rising to elected office. Others have documented losing their loved ones down the conspiracy rabbit hole. In the first of a new Guardian series on how big tech has thrived during the pandemic, Alex Hern investigates why people are losing their grip on reality online and what Facebook, and others, are doing to stem the flow.The spread of online disinformation may even be influencing the man still sitting in the Oval Office in his refusal to concede. More than two weeks after election day in the US, Donald Trump has continued to proclaim his “victory” on social media and to delay the transition to the incoming Biden administration. As Simon Tisdall writes, this mess doesn’t just have implications for Americans but is giving cover to enemies of democracy elsewhere to play out their worst impulses while Trump causes a distraction. Also in the US, we look at what a mixed performance in the elections means for the Democrats – can Joe Biden keep his own party united, let alone a whole nation? We also look at the five intrinsic flaws that are causing democracy in the US to wobble.Britain is about to enter an absolutely vital few weeks when it comes to finalising post-Brexit trade terms – not to mention its Covid response. So it’s perhaps not surprising that last week No 10 was preoccupied by a toxic war between staff that culminated in the dramatic departure of Boris Johnson’s top aide, Dominic Cummings, and the PM finding himself back in Covid self-isolation … We look back at a wild week. What does it mean for the future of the government?Get the magazine delivered to your home More

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      in Elections

      Facebook and Twitter CEOs face Senate hearing over handling of 2020 US election – video

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      The chief executive officers of Twitter and Facebook appear before a US Senate hearing to testify about allegations of anti-conservative bias and their handling of the 2020 election. Jack Dorsey and Mark Zuckerberg face questioning for the second time in as many months, with Republican lawmakers alleging – without evidence – censorship of conservative views
      Twitter and Facebook CEOs testify on alleged anti-conservative bias More

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      in US Politics

      Twitter and Facebook CEOs testify on alleged anti-conservative bias

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      The chief executive officers of Twitter and Facebook took the stand on Tuesday to testify, again, about allegations of anti-conservative bias on their platforms.
      Mark Zuckerberg and Jack Dorsey were subpoenaed in October to appear at Tuesday’s hearing with the Senate judiciary committee in order to “review the companies’ handling of the 2020 election”.
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      Republican lawmakers frequently allege – without evidence – censorship of conservative views, but this particular hearing was called in response to the companies’ handling of a New York Post article about Joe Biden.
      When the story was published in October, Twitter took unprecedented steps to limit its circulation, blocking users from posting links or photos of the report. At the time, Twitter said the measures were taken due to “the origins of the materials” included in the article, which were allegedly pulled from a computer that had been left by Hunter Biden at a Delaware computer repair shop in April 2019. Twitter policies prohibit “directly distribut[ing] content obtained through hacking that contains private information”.
      The company later walked back on its response, tweeting that the communication around the actions on the article “was not great”. It also changed its hacked materials policies in response to the outcry. Facebook took a less aggressive stance, placing some limitations on the article due to questions about its validity.
      In his opening statement, Dorsey explained again the company took action against the New York Post tweet due to “the origins of the materials” included in the article and said that Twitter upon further review decided that action was wrong. “I hope this illustrates the rationale behind our actions and demonstrates our ability to take feedback,” Dorsey said. “Mistakes and changes were all transparent to the public.” More

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      in Elections

      The misinformation media machine amplifying Trump's election lies

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      The networks have made their calls, world leaders have begun paying their respects, and even Fox News and Rupert Murdoch’s other media outlets appear to have given up on a second term for Donald Trump. But in a video posted on Facebook on 7 November and viewed more than 16.5m times since, NewsMax host and former Trump administration official Carl Higbie spends three minutes spewing a laundry list of false and debunked claims casting doubt on the outcome of the presidential election.
      “I believe it’s time to hold the line,” said Higbie, who resigned from his government post over an extensive track record of racist, homophobic and bigoted remarks, to the Trump faithful. “I’m highly skeptical and you should be too.”
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      The video, which has been shared more than 350,000 times on Facebook, is just one star in a constellation of pro-Trump misinformation that is leading millions of Americans to doubt or reject the results of the presidential election. Fully 70% of Republicans believe that the election was not “free and fair”, according to a Politico/Morning Consult poll conducted since election day. Among those doubters, large majorities believe two of Trump’s most brazen lies: that mail-in voting leads to fraud and that ballots were tampered with.
      Trump himself is the largest source of election misinformation; the president has barely addressed the public since Tuesday except to share lies and misinformation about the election. But his message attacking the electoral process is being amplified by a host of rightwing media outlets and pundits who appear to be jockeying to replace Fox News as the outlet of choice for Trumpists – and metastasizing on platforms such as Facebook and YouTube.
      Since election day, 16 of the top 20 public Facebook posts that include the word “election” feature false or misleading information casting doubt on the election in favor of Trump, according to a Guardian analysis of posts with the most interactions using CrowdTangle, a Facebook-owned analytics tool. Of those, 13 are posts by the president’s own page, one is a direct quote from Trump published by Fox News, one is by the rightwing evangelical Christian Franklin Graham, and the last is the Newsmax Higbie video.
      The four posts that do not include misinformation are congratulatory messages by Barack Obama and Michelle Obama for Biden and Kamala Harris and two posts by Graham, including a request for prayers for Trump and a remembrance by Graham of his father, the televangelist Billy Graham.
      On YouTube, hosts such as Steven Crowder, a conservative YouTuber with more than 5 million followers, have also been pushing out content questioning the election results. A video from Crowder called Live Updates: Democrats Try to Steal the Election was viewed 5m times, and a nearly two-hour video headlined Fox News is NOT your friend has already racked up more than a million views. More