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    Undertaxed and over here: why the UK welcomes US mega firms | Phillip Inman

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    Americans love Britain, and in many ways the British admire Americans, but the benefits of the relationship are becoming increasingly one-way.That’s the argument set out in a book published next month documenting how US companies have made inroads into the UK economy by exploiting a desperate need for investment, weak regulation and a public that seems oblivious to the cost to themselves and, ultimately, the economy.Clinton, Bush, Obama, Biden: whichever administration is pulling the levers, presidents pay lip service to a special relationship with the UK. Each one makes sure US companies leverage Washington’s power to gain entry, kill off local competition, secure monopoly control and run off with the profits largely tax-free.But UK companies that try to break into the US face huge legal and regulatory hurdles. It’s true that selling goods to America is a lucrative business. That’s not the same as setting up a US subsidiary in the US and going head-to-head with domestic corporations.Labour leaders fall into the trap of lauding energetic and profitable US companies as much as their cheering Tory counterparts do. Tony Blair and Gordon Brown were more ardent Americanophiles than most. And Keir Starmer shows every sign of rushing to Washington should he be elected, even if Trump is in charge – much as Theresa May did in 2017, before a humiliating return visit two years later.The new book is not an anti-American leftist call to arms of the kind published in the 1980s, when Margaret Thatcher’s admiration for Ronald Reagan generated tomes about the UK being the 51st state of America. Vassal State by Angus Hanton (Swift Press) examines for the first time the disparate data showing how much US companies have embedded themselves in the UK, capitalising on our willingness to pay them outlandish fees and subscriptions and afford them the hefty tax breaks needed to keep them in the UK.We know about the power and influence of Amazon, Apple, Meta/Facebook, Microsoft, Netflix and Alphabet/Google. Other high-profile names include online sellers eBay, Wayfair and Etsy, and streaming companies Sky, Disney and Apple TV.The internet’s cloud storage is mostly provided by American companies. All our data, bit by bit, is being collected by US firms, whether at the front end as we buy stuff using Amazon or travel using Google Maps, or at the back end, so to speak, as health data is scraped by US spy technology firm Palantir – which is run by Peter Thiel, the co-founder of another US web behemoth, PayPal.Hanton, a London-based entrepreneur who co-founded the Intergenerational Foundation charity, documents their rise, but also that of less well-known firms which have acquired the UK’s financial and physical plumbing.A classic example is WorldPay, a payments system used by tens of thousands of UK businesses to process card transactions. Once owned by NatWest, it was offloaded after the 2008 crash to US private equity firms Advent International and Bain Capital for £2bn.That was a European Commission order that the UK could have ignored but chose to obey. Advent and Bain floated the company on the London stock market for a handsome profit in 2015, but it soon went private again. Another Advent-owned firm, payments processing technology company Vantiv, paid $10.4bn for it in 2018, then Florida-based Fidelity National Information Services (FIS) paid $35bn in cash and shares for WorldPay in 2019.What ties these firms together is that they offer popular services that somehow we accept should be charged for, without any reference to the cost of production or market influence.It doesn’t happen on the continent in nearly the same way – and some would probably argue France, Germany, Spain and Italy are the poorer for it. WorldPay executives would no doubt say US companies are big investors, enhancing and expanding the UK businesses they buy, often with a long-term vision. Except that the vision includes domination and control of the economy, holding the government to ransom with threats of cutting investments if tax subsidies are not generous enough or tax rates low enough.Google’s soon-to-be-opened monster HQ in London’s King’s Cross is emblematic of the way the UK’s red-carpet treatment for investors has profited US companies and offset the threat of an exodus after Brexit. Google has found the UK, unlike the EU, willing to turn a blind eye to its monopolistic practices.That is great news for Brexiters. It’s not so good for the rest, who, wherever they turn, must pay for the services of an ever-expanding array of US mega-companies. More

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      Tech firms sign ‘reasonable precautions’ to stop AI-generated election chaos

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      Major technology companies signed a pact Friday to voluntarily adopt “reasonable precautions” to prevent artificial intelligence tools from being used to disrupt democratic elections around the world.Executives from Adobe, Amazon, Google, IBM, Meta, Microsoft, OpenAI and TikTok gathered at the Munich Security Conference to announce a new framework for how they respond to AI-generated deepfakes that deliberately trick voters. Twelve other companies – including Elon Musk’s X – are also signing on to the accord.“Everybody recognizes that no one tech company, no one government, no one civil society organization is able to deal with the advent of this technology and its possible nefarious use on their own,” said Nick Clegg, president of global affairs for Meta, the parent company of Facebook and Instagram, in an interview ahead of the summit.The accord is largely symbolic, but targets increasingly realistic AI-generated images, audio and video “that deceptively fake or alter the appearance, voice, or actions of political candidates, election officials, and other key stakeholders in a democratic election, or that provide false information to voters about when, where, and how they can lawfully vote”.The companies aren’t committing to ban or remove deepfakes. Instead, the accord outlines methods they will use to try to detect and label deceptive AI content when it is created or distributed on their platforms. It notes the companies will share best practices with each other and provide “swift and proportionate responses” when that content starts to spread.The vagueness of the commitments and lack of any binding requirements likely helped win over a diverse swath of companies, but disappointed advocates were looking for stronger assurances.“The language isn’t quite as strong as one might have expected,” said Rachel Orey, senior associate director of the Elections Project at the Bipartisan Policy Center. “I think we should give credit where credit is due, and acknowledge that the companies do have a vested interest in their tools not being used to undermine free and fair elections. That said, it is voluntary, and we’ll be keeping an eye on whether they follow through.”Clegg said each company “quite rightly has its own set of content policies”.“This is not attempting to try to impose a straitjacket on everybody,” he said. “And in any event, no one in the industry thinks that you can deal with a whole new technological paradigm by sweeping things under the rug and trying to play Whac-a-Mole and finding everything that you think may mislead someone.”Several political leaders from Europe and the US also joined Friday’s announcement. Vera Jourová, the European Commission vice-president, said while such an agreement can’t be comprehensive, “it contains very impactful and positive elements”. She also urged fellow politicians to take responsibility to not use AI tools deceptively and warned that AI-fueled disinformation could bring about “the end of democracy, not only in the EU member states”.The agreement at the German city’s annual security meeting comes as more than 50 countries are due to hold national elections in 2024. Bangladesh, Taiwan, Pakistan and most recently Indonesia have already done so.Attempts at AI-generated election interference have already begun, such as when AI robocalls that mimicked the US president Joe Biden’s voice tried to discourage people from voting in New Hampshire’s primary election last month.Just days before Slovakia’s elections in November, AI-generated audio recordings impersonated a candidate discussing plans to raise beer prices and rig the election. Fact-checkers scrambled to identify them as false as they spread across social media.Politicians also have experimented with the technology, from using AI chatbots to communicate with voters to adding AI-generated images to ads.The accord calls on platforms to “pay attention to context and in particular to safeguarding educational, documentary, artistic, satirical, and political expression”.It said the companies will focus on transparency to users about their policies and work to educate the public about how they can avoid falling for AI fakes.Most companies have previously said they’re putting safeguards on their own generative AI tools that can manipulate images and sound, while also working to identify and label AI-generated content so that social media users know if what they’re seeing is real. But most of those proposed solutions haven’t yet rolled out and the companies have faced pressure to do more.That pressure is heightened in the US, where Congress has yet to pass laws regulating AI in politics, leaving companies to largely govern themselves.The Federal Communications Commission recently confirmed AI-generated audio clips in robocalls are against the law, but that doesn’t cover audio deepfakes when they circulate on social media or in campaign advertisements.Many social media companies already have policies in place to deter deceptive posts about electoral processes – AI-generated or not. Meta says it removes misinformation about “the dates, locations, times, and methods for voting, voter registration, or census participation” as well as other false posts meant to interfere with someone’s civic participation.Jeff Allen, co-founder of the Integrity Institute and a former Facebook data scientist, said the accord seems like a “positive step” but he’d still like to see social media companies taking other actions to combat misinformation, such as building content recommendation systems that don’t prioritize engagement above all else.Lisa Gilbert, executive vice-president of the advocacy group Public Citizen, argued Friday that the accord is “not enough” and AI companies should “hold back technology” such as hyper-realistic text-to-video generators “until there are substantial and adequate safeguards in place to help us avert many potential problems”.In addition to the companies that helped broker Friday’s agreement, other signatories include chatbot developers Anthropic and Inflection AI; voice-clone startup ElevenLabs; chip designer Arm Holdings; security companies McAfee and TrendMicro; and Stability AI, known for making the image-generator Stable Diffusion.Notably absent is another popular AI image-generator, Midjourney. The San Francisco-based startup didn’t immediately respond to a request for comment Friday.The inclusion of X – not mentioned in an earlier announcement about the pending accord – was one of the surprises of Friday’s agreement. Musk sharply curtailed content-moderation teams after taking over the former Twitter and has described himself as a “free-speech absolutist”.In a statement Friday, X CEO Linda Yaccarino said “every citizen and company has a responsibility to safeguard free and fair elections”.“X is dedicated to playing its part, collaborating with peers to combat AI threats while also protecting free speech and maximizing transparency,” she said. More

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      Google accused of spending billions to block rivals as landmark trial continues

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      The court battle between the US justice department and Google has entered its second day, as the United States government seeks to prove that the tech behemoth illegally leveraged its power to maintain a monopoly over internet search engines. The trial is a major test of antitrust law and could have far-reaching implications for the tech industry and for how people engage with the internet.The question at the heart of the trial is whether Google’s place as the search engine for most Americans is the result of anti-competitive practices that gave internet users no other choice but to use its services.On the first day of the trial, attorneys for the justice department and the dozens of states that have joined in the suit accused Google of shutting out competition through billion-dollar agreements with companies such as Apple and Samsung.The justice department lawyer Kenneth Dintzer alleged Google spends $10bn a year in deals to ensure it is the default search engine on devices such as the iPhone, effectively blocking meaningful competition and positioning Google as the gatekeeper of the internet.“They knew these agreements crossed antitrust lines,” Dintzer said.Google’s opening statement gave a window into how the company and its lead attorney, John Schmidtlein, plan to defend against the accusations. Schmidtlein argued that Google has achieved its dominance over online search – the government estimates it holds about a 90% market share – because it is simply a better product than alternatives such as Microsoft’s Bing search engine. Consumers are free to switch default settings with “a few easy clicks” and use other search engines if they please, Schmidtlein told the court on Tuesday.The justice department called its first witness, Google’s chief economist Hal Varian. Over the course of two hours, Dintzer presented Varian with internal memos and documents dating back to the 2000s that showed him discussing how search defaults could be strategically important. One internal communication from Varian warned over antitrust issues that “we should be careful about what we say in both public and private”.On Wednesday, the justice department called the former Google executive Chris Barton, who had worked in partnerships and was an employee from 2004 to 2011. The department questioned Barton about the value of those partnerships in establishing dominance over the market.“As we recognized the opportunity for search on mobile phones, we began to build a product team,” Barton said, according to Reuters.As with the first day of the trial, the government has tried to show that Google saw the importance early on of making deals and securing its position as the default search engine on devices. The documents and witnesses it has brought up have so far been from over a decade ago, when the government says Google was first beginning to forge agreements that helped it monopolize search.The justice department has also alleged that Google was aware of possible antitrust violations and has consciously tried to obscure its actions. The government presented a document in court from an internal Google presentation on antitrust, which warned employees to avoid mentioning “market share” or “dominance”.The trial is set to last 10 weeks and feature numerous witnesses, as well as internal Google documents that the justice department hopes will show that monopolizing search has long been a top priority at the company. Judge Amit Mehta will decide the case, and there is no jury in the trial. More

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      Republicans attack FTC chair and big tech critic Lina Khan at House hearing

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      Lina Khan, the chair of the Federal Trade Commission, faced a grueling four hours of questioning during a House judiciary committee oversight hearing on Thursday.Republicans criticized Khan – an outspoken critic of big tech – for “mismanagement” and for “politicizing” legal action against large companies such as Twitter and Google as head of the powerful antitrust agency.In his opening statement, committee chair Jim Jordan, an Ohio Republican, said Khan has given herself and the FTC “unchecked power” by taking aggressive steps to regulate practices at big tech companies such as Twitter, Meta and Google.He said Khan carried out “targeted harassment against Twitter” by asking for all communications related to Elon Musk, including conversations with journalists, following Musk’s acquisition because she does not share his political views.Khan, a former journalist, said the company has “a history of lax security and privacy policies” that did not begin with Musk.Other Democrats agreed. “Protecting user privacy is not political,” said congressman Jerry Nadler, a Democrat of New York, in response to Jordan’s remarks.Republicans also condemned Khan for allegedly wasting government money by pursuing more legal action to prevent mergers than her predecessors – but losing. On Tuesday, a federal judge ruled against the FTC’s bid to delay Microsoft from acquiring video game company Activision Blizzard, saying the agency failed to prove it would decrease competition and harm consumers. The FTC is appealing against that ruling.“She has pushed investigations to burden parties with vague and costly demands without any substantive follow-through, or, frankly, logic, for the requests themselves,” said Jordan.Another Republican member, Darrell Issa, of California, called Khan a “bully” for trying to prevent mergers.“I believe you’ve taken the idea that companies should have to be less competitive in order to merge, [and] that every merger has to be somehow bad for the company and good for the consumer – a standard that cannot be met,” Issa said.Khan earlier came under scrutiny from Republicans participating in an FTC case reviewing Meta’s bid to acquire a virtual reality company despite a recommendation from an ethics official to recuse herself. She defended her decision to remain on the case Thursday, saying she consulted with the ethics official. Khan testified she had “not a penny” in the company’s financial stock and thus did not violate ethics laws.But enforcing antitrust laws for big tech companies such as Twitter has traditionally been a bipartisan issue.“It’s a little strange that you have this real antipathy among the Republicans of Lina Khan, who in many ways is doing exactly what the Republicans say needs to be done, which is bringing a lot more antitrust scrutiny of big tech,” said Daniel Crane, a professor on antitrust law and enforcement at the University of Michigan Law School.“There’s a broad consensus that we need to do more, but that’s kind of where the agreement ends,” he said.Republicans distrust big tech companies over issues of censorship, political bias and cultural influence, whereas Democrats come from a traditional scrutiny of corporations and concentration of economic power, said Crane.“I don’t fundamentally think she’s doing something other than what she was put in office to do,” he said.Congress has not yet passed a major antitrust statute that would be favorable to the FTC in these court battles and does not seem to be pursuing one any time soon, said Crane. “They’re just going to lose a lot of cases, and that’s foreseen.”The FTC’s list of battles with big tech companies is growing.Hours earlier on Thursday, Twitter – which now legally goes by X Corp – asked a federal court to terminate a 2011 settlement with the FTC that placed restrictions on its user data and privacy practices. Khan noted Twitter voluntarily entered into that agreement.Also on Thursday, the Washington Post reported the FTC opened an investigation in OpenAI on whether its chatbot, ChatGPT, is harmful to consumers. A spokesperson for the FTC would not comment on the OpenAI investigation but Khan said during the hearing that “it has been publicly reported”.In 2017, Khan, now 34, gained fame for an academic article she wrote as a law student at Yale that used Amazon’s business practices to explain gaps in US antitrust policy. Biden announced he intended to nominate the antitrust researcher to head the FTC in March 2021. She was sworn in that June.“Chair Khan has delivered results for families, consumers, workers, small businesses, and entrepreneurs,” White House spokesperson Michael Kikukawa said in a statement. More

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      Amazon and Google fund anti-abortion lawmakers through complex shell game

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      As North Carolina’s 12-week abortion ban is due to come into effect on 1 July, an analysis from the non-profit Center for Political Accountability (CPA) shows several major corporations donated large sums to a Republican political organization which in turn funded groups working to elect anti-abortion state legislators.The Republican State Leadership Committee (RSLC) received donations of tens of thousands of dollars each from corporations including Comcast, Intuit, Wells Fargo, Amazon, Bank of America and Google last year, the CPA’s analysis of IRS filings shows. The contributions were made in the months after Politico published a leaked supreme court decision indicating that the court would end the right to nationwide abortion access.Google contributed $45,000 to the RSLC after the leak of the draft decision, according to the CPA’s review of the tax filings. Others contributed even more in the months after the leak, including Amazon ($50,000), Intuit ($100,000) and Comcast ($147,000).Google, Amazon, Comcast, Wells Fargo and Bank of America did not respond to requests for comment. An Intuit spokesperson pointed out that the company also donates to Democratic political organizations, and that “our financial support does not indicate a full endorsement of every position taken by an individual policymaker or organization.“Intuit is non-partisan and works with policymakers and leaders from both sides of the aisle to advocate for our customers,” an Intuit spokesperson said in a statement. “We believe engagement with policymakers is essential to a robust democracy and political giving is just one of the many ways Intuit engages on behalf of its customers, employees, and the communities it serves.”A Bank of America spokesperson pointed to the company’s policy that donations to so-called 527 organizations such as the RSLC come with the caveat that they only be used for operational and administrative purposes, not to support any candidates or ballot initiatives. The CPA, meanwhile, argues that since the RSLC’s operations are explicitly designed to support candidates and ballot initiatives, such a policy is a distinction without a difference.Although these companies did not directly give these vast sums to North Carolina’s anti-abortion lawmakers, the CPA’s analysis is a case study in how corporate contributions to organizations such as the RSLC can end up being funneled into anti-abortion causes. When Republican state legislators successfully overturned a veto from the Democratic governor last month to pass the upcoming abortion ban, nine of lawmakers voting to overturn the veto had received campaign contributions from a group with links to the RSLC.The RSLC, which works to elect Republican lawmakers and promote rightwing policies at the state level, is at the top of a chain of spending and donations which eventually connected to rightwing candidates in North Carolina. This type of spending, which relies on channeling money through various third-party groups from larger organizations, is a common part of modern political campaign financing.skip past newsletter promotionafter newsletter promotionIn this case, the RSLC gave $5m to the Good Government Coalition political organization between June and November last year, which in turn gave $6.45m to the rightwing political group Citizens for a Better North Carolina. Finally, that organization gave $1m in independent expenditures to support nine anti-abortion state lawmakers who later voted to overturn the governor’s veto of the abortion bill.These donations are evidence that corporations are proving to be complicit in the broader movement to limit abortion rights, the CPA non-profit argues, even as many of these companies publicly tout women’s empowerment and employee access to healthcare.“Companies need to know where their money is ending up,” said Bruce Freed, the president of the CPA. “This should be a lesson – a lesson that they should have taken a while ago but that frankly is driven home right now with what has been happening in North Carolina.”Several of the companies, including Intuit and Bank of America, made statements last year offering to cover healthcare costs for employees who needed to travel out of state for medical procedures, in some cases explicitly mentioning abortion as an example. Google sent an email to employees acknowledging that Roe v Wade had been overturned and informed them about options for relocating to Google offices in different states.“Equity is extraordinarily important to us as a company, and we share concerns about the impact this ruling will have on people’s health, lives and careers,” the email stated.The companies which donated to the RSLC are also large donors to Democratic political groups, and tech giants such as Google and Amazon tend to spend millions each year more broadly on lobbying efforts.The RSLC, whose board members include former lawmakers, governors and White House advisers such as Karl Rove, boasts on its website that it spent more than $45m on supporting Republican candidates during the 2021 and 2022 election cycle.In addition to North Carolina’s abortion ban, South Carolina also passed a bill last week that would criminalize most abortions at six weeks into a pregnancy – generally a period before people know they are pregnant. A state judge issued a temporary halt on the ban within hours of Governor Henry McMaster signing it into law, and it will now be reviewed by the state supreme court.North Carolina’s 12-week abortion ban is scheduled to go into effect on 1 July, drastically curtailing abortion access as many other southern states have passed near total bans. More

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      Justice department alleges Google tried to ‘eliminate’ ad market rivals in lawsuit

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      Justice department alleges Google tried to ‘eliminate’ ad market rivals in lawsuitThe DoJ and eight states have filed a complaint against the tech company for violating antitrust laws The US justice department and eight states filed a lawsuit against Alphabet’s Google on Tuesday over allegations that the company abused its dominance of the digital advertising business, according to a court document.Google parent firm Alphabet to cut 12,000 jobs worldwideRead more“Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the government said in its antitrust complaint.The government alleges that Google’s plan to assert dominance has been to “neutralize or eliminate” rivals through acquisitions and to force advertisers to use its products by making it difficult to use competitors’ products.The antitrust suit was filed in federal court in Alexandria, Virginia. Attorney general Merrick Garland said in a press conference Tuesday that Google’s dominance in the ad market means fewer publishers are able to offer their products without charging subscription or other fees, because they can’t rely on competition in the advertising market to keep ad prices low.As a result of Google’s dominance, he said, “website creators earn less and advertisers pay more”.The justice department asked the court to compel Google to divest its Google Ad manager suite, including its ad exchange AdX.The department’s suit accuses Google of unlawfully monopolizing the way ads are served online by excluding competitors. This includes its 2008 acquisition of DoubleClick, a dominant ad server, and subsequent rollout of technology that locks in the split-second bidding process for ads that get served on Web pages.Google’s ad manager lets large publishers who have significant direct sales manage their advertisements. The ad exchange, meanwhile, is a real-time marketplace to buy and sell online display ads.The lawsuit demands that Google break off three different businesses from its core business of search, YouTube and other products such as Gmail: the buying and selling of ads and ownership of the exchange where that business is transacted.Garland said that “for 15 years, Google has pursued a course of anti-competitive conduct” that has halted the rise of rival technologies and manipulated the mechanics of online ad auctions to force advertisers and publishers to use its tools.In so doing, he added, “Google has engaged in exclusionary conduct” that has “severely weakened”, if not destroyed competition in the ad tech industry.Alphabet Inc., Google’s parent company, said in a statement that the suit “doubles down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow”.The lawsuit is the second federal antitrust complaint filed against Google, alleging violations of antitrust law in how the company acquires or maintains its dominance. The justice department lawsuit filed against Google in 2020 focuses on its monopoly in search and is scheduled to go to trial in September.Eight states joined the department in the lawsuit filed on Tuesday, including Google’s home state of California. The states taking part in the suit include California, Virginia, Connecticut, Colorado, New Jersey, New York, Rhode Island and Tennessee.Dina Srinivasan, a Yale University fellow and adtech expert, said the lawsuit is “huge” because it aligns the entire nation – state and federal governments – in a bipartisan legal offensive against Google.Google shares were down 1.3% on the news.While Google remains the market leader by a long shot, its share of the US digital ad revenue has been eroding, falling to 28.8% last year from 36.7% in 2016, according to Insider Intelligence. Google’s advertising business is responsible for about 80% of its revenue.TopicsGoogleAlphabetUS politicsAdvertisingnewsReuse this content More

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      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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      Capitol attack panel subpoenas Google, Facebook and Twitter for digital records

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      Capitol attack panel subpoenas Google, Facebook and Twitter for digital recordsSelect committee seeks records related to January 6 attackMove suggests panel is ramping up inquiry of social media posts The House select committee investigating the Capitol attack subpoenaed Twitter, Meta, Alphabet and Reddit on Thursday for records related to the 6 January insurrection, as it seeks to review data that could potentially incriminate the Trump White House.Facebook is part of Meta and Google is part of Alphabet.The move by the select committee suggests the panel is ramping up its examination of social media posts and messages that could provide evidentiary evidence as to who might have been in contact with the Trump White House around 6 January, one source said.Congressman Bennie Thompson, the chairman of the select committee, said in a statement that he authorized the four subpoenas since those platforms were used to communicate plans about the Capitol attack, and yet the social media companies ignored earlier requests.The subpoenas to the four social media companies were the last straw for the select committee after repeated engagements with the platforms went unheeded, Thompson said in letters that amounted to stinging rebukes over the platforms’ lack of cooperation.Thompson said in the subpoena letter to Twitter that the select committee was interested in obtaining key documents House investigators suspect the company is withholding that could shed light on how users used the platform to plan and execute the Capitol attack.The chairman said the select committee was interested in records from Reddit, since the “r/The_Donald” subreddit that eventually migrated to a website of the same name hosted significant discussion and planning related to the Capitol attack.Thompson said House investigators were seeking materials from Alphabet, the parent company of YouTube, which was a platform for significant communications by its users who played key roles in the Capitol attack.The select committee has been examining digital fingerprints left by the Trump White House and other individuals connected to the Capitol attack since the outset of the investigation, on everything from posts that show geolocations to metadata, the source said.To that end, the select committee issued data preservation requests to 35 telecom and social media companies in August, demanding that they save the materials in the event the panel’s technical team required their release, the source said.The Guardian first reported that month that the select committee, among other individuals, had requested the telecom and social media firms preserve the records of the former Trump White House chief of staff Mark Meadows in addition to a dozen House Republicans.The select committee gave the social media companies a 27 January deadline to comply with the subpoenas, but it was not clear whether the organizations would comply. A spokesperson for Twitter and Meta did not immediately respond to requests for comment.Congressman Kevin McCarthy, the Republican House minority leader who refused a request for cooperation late on Wednesday by the select committee, has previously threatened telecom and social media companies if they comply with the bipartisan panel’s investigation.“If these companies comply with the Democrat order to turn over private information, they are in violation of federal law,” McCarthy said at the time in August. “A Republican majority will not forget and will stand with Americans to hold them fully accountable under the law.”TopicsUS Capitol attackFacebookGoogleUS politicsSocial networkingAlphabetnewsReuse 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