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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

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      Antitrust: Hawley and Klobuchar on the big tech battles to come

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      Antitrust is hot. In February, the Minnesota senator Amy Klobuchar introduced the Competition and Antitrust Law Enforcement Reform Act of 2021. Weeks later, the Missouri senator Josh Hawley proposed the Trust-Busting for the Twenty-First Century Act. Both bills are pending before the Senate judiciary committee.Hawley and Klobuchar have both published books. Hawley offers The Tyranny of Big Tech, and Klobuchar Antitrust. There is plenty of overlap but the substantive and stylistic differences are glaring.Hawley takes pride in owning the libs. Klobuchar criticizes the Trump administration’s lack of antitrust enforcement. His book is barbed. Hers methodical.On 6 January, Hawley gave a clench-fisted salute to pro-Trump militants and voted against certifying the 2020 presidential election. On the page, he doubles down.Two weeks after the Capitol attack, Klobuchar told the presidential inauguration: “This is the day our democracy picks itself up, brushes off the dust and does what America always does.” She remains angry with Hawley and “Flyin’” Ted Cruz for the insurrection and its aftermath.Playing to type, Hawley has also provided the sole vote against a bill to crack down on anti-Asian hate crime and opposed renaming military bases named for Confederate generals. Roy Blunt, Missouri’s senior senator and the No 4 member of GOP Senate leadership, parted ways with Hawley on both. In the civil war, Missouri was a border state. A century and a half later, it looks like Hawley has picked the losing side.In his book, he upbraids corporate America, “woke capitalism”, Amazon, Google and Facebook. He demands that Google “be forced to give up YouTube and its control of the digital advertising market”.He would also have Facebook “lose” Instagram and WhatsApp, and accuses Amazon of destroying Parler, the conservative alternative to Twitter funded by Rebekah Mercer, a Hawley donor along with her father, Robert Mercer and other Trump acolytes.Hawley’s embrace of antipathy toward big business – even that in which he invests – is not exactly new.In 2008 he published a biography of Theodore Roosevelt, subtitled Preacher of Righteousness and approving of the 26th president’s relentless support for the little guy.Almost a decade later, as Missouri attorney general, Hawley launched an antitrust investigation of Google. Shortly after that, as a Senate candidate, he told Bloomberg News: “We need to have a conversation in Missouri, and as a country, about the concentration of economic power.”But Hawley is buffeted by contradictions. He has for example feted Robert Bork as a conservative martyr, even as Bork’s legal writings have served as intellectual jet fuel for those developments in the marketplace Hawley professes to abhor.The Tyranny of Big Tech makes no mention of the professor who wrote an influential anti-antitrust book, The Antitrust Paradox, in 1978, nine years before he was blocked from the supreme court.Klobuchar, by contrast, gives Bork plenty of face time.“For Bork,” she writes, “the accumulation of wealth in the hands of a few is not a relevant consideration for antitrust law.”Bork had issues with civil rights too. In 1963, when Jim Crow was still in full force, he branded what would become the Civil Rights Act of 1964 “legislation by which the morals of the majority are self-righteously imposed upon a minority”.In The Tyranny of Big Tech, Hawley also blasts corporate abuse of personal data and data mining – all while he looks to Peter Thiel of Palantir for donor dollars.Left unstated is that Palantir was embroiled in the Cambridge Analytica data scandal. Cambridge Analytica was owned by the Mercer family and Thiel was an early funder and board member of Facebook. The circle is complete.Hawley’s book can be viewed as plutocrat-populism in print. Tucker Carlson’s praise is blurbed on the jacket. Inside, Hawley defends Rupert Murdoch’s Fox News from purported predations by Mark Zuckerberg’s Facebook. Both Murdoch and Zuckerberg are billionaires many times over.Hawley is on stronger ground when he revisits the nexus between the Obama administration, Hillary Clinton’s campaign and Google. Eric Schmidt, then head of the company, was Obama’s chief corporate ally. On election night 2016, Schmidt, wore a Clinton staff badge, having spent months advising her campaign.In her book, Klobuchar furnishes an overview of the evolution of US anti-monopoly law and a call for rebalancing the relationship between capital and labor. She condemns corporate consolidation and wealth concentration, and views lax antitrust enforcement as antithetical to democracy.In a footnote, she commends Hawley for addressing the “turf wars” between the Department of Justice and the Federal Trade Commission, and their negative impact on antitrust enforcement. Unlike Hawley, however, Klobuchar vehemently disapproves of the supreme court’s Citizens United decision and characterizes it as opening “the floodgates to dark money in our politics”.In 2016, Dave Bossie, president of Citizens United, wrote an op-ed titled: “Josh Hawley for [Missouri] Attorney General”. In his maiden Senate race, Hawley’s campaign received $10,000 from the Citizens United Political Victory Fund.Unfortunately, Klobuchar goes the extra mile and calls for a constitutional amendment to overturn that decision. Her would-be cure is worse than the disease – an attack on free speech itself.The proposed amendment would expressly confer upon “Congress and the states” broad power to curtail campaign fundraising and spending. It also provides that “nothing in this article shall be construed to grant Congress or the states the power to abridge the freedom of the press”.Not so curiously, it is silent about “abridging the freedom of speech”, an existing constitutional protection. Media barons rejoice – all others start sweating.In 2020, Klobuchar came up way short in her quest for the Democratic presidential nomination. Now, she chairs the Senate’s antitrust subcommittee, where Hawley is a member.Both senators were law review editors: she at the University of Chicago, he at Yale. If Hawley has written a sort of campaign manifesto for the Republican presidential primary in 2024, Klobuchar’s book reads at times like an application for supreme court justice. It contains hundreds of pages of footnotes and pays repeated tribute to the late justice Louis Brandeis.Klobuchar also heaps praise on Stephen Breyer, a member of the court appointed by Bill Clinton and a former Harvard Law professor who in 1982 authored Regulation and Its Reform, a counter to Bork and the “Chicago School”.Klobuchar extends an array of “thank yous”. There is one for Jake Sullivan, her former counsel, now Joe Biden’s national security adviser; another for Matt Stoller, a former staffer to Bernie Sanders on the Senate budget committee and a sometime Guardian contributor; and another for Paul Krugman of the New York Times. All three come with definite viewpoints and are strategically placed.Increased antitrust enforcement by the DoJ, the FTC and the states appears to be more likely than wholesale legislative change. A government antitrust case against Google proceeds. Furthermore, Biden has already appointed two critics of big tech to key slots at the White House and the FTC. Who will lead DoJ’s antitrust division is an open question. Finding a suitable non-conflicted pick appears difficult.Klobuchar and Hawley will be heard from. Their books matter. More

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      Warren Buffett, Amazon, Starbucks and others condemn voting restrictions in letter

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      Amazon, BlackRock, Google, Starbucks, billionaire investor Warren Buffett and hundreds of other companies published a letter on Wednesday condemning “discriminatory legislation” designed to hinder voting rights in the US.The letter – the biggest statement yet from corporate America – follows weeks of heated debate over corporate opposition to a series of Republican-sponsored bills that critics charge will restrict voting rights in states across the US.“We Stand for Democracy,” the double-page, centrefold advertisement published in the New York Times and Washington Post, begins. “Voting is the lifeblood of our democracy and we call upon all Americans to take a nonpartisan stand for this basic and most fundamental right of all Americans,” the statement reads.The statement was organized by two of the US’s most prominent Black executives, Kenneth Chenault, former chief executive of American Express, and Kenneth Frazier, the chief executive of Merck. Both executives have been prominent in opposition to restrictive voting laws and in leading a response from the business community.The statement does not address specific election legislation in states but it is the clearest indication yet that US corporations are looking to present a united front despite calls from several senior Republicans, including the former president Donald Trump and Senator Mitch McConnell, to stay out of politics.In an interview with the Times, Chenault said: “It should be clear that there is overwhelming support in corporate America for the principle of voting rights.” Frazier added that the statement was intended to be non-partisan.“These are not political issues,” he said. “These are the issues that we were taught in civics.”The effort to rise above partisan politics comes after several companies, including Coca-Cola and Delta Airlines, found themselves at the center of a dispute over voting rights legislation passed in Georgia. Lawmakers in the state threatened to withdraw tax breaks after the companies spoke out against the measures and others, including Trump, called for boycotts.The new statement comes after Chenault and Frazier convened a Zoom call of 100 CEOs over the weekend and is notable also for several companies that did not add their names, including Coca-Cola, Delta, Home Depot and JP Morgan.Coca-Cola and Delta declined to comment, according to the Times, while Home Depot said in a statement on Tuesday that “the most appropriate approach for us to take is to continue to underscore our belief that all elections should be accessible, fair and secure.”The JPMorgan Chase chief executive, Jamie Dimon, made a statement on voting rights before many other companies, saying: “We believe voting must be accessible and equitable.”Some signatories, including Buffett, chief executive of Berkshire Hathaway, elected to sign personally rather than on behalf of their companies. Buffett has previously stated that businesses should not be involved in politics but he did not put his personal political views “in a blind trust at all when I took the job”.The statement follows a declaration on Tuesday by automakers ahead of voting legislation hearings in Michigan that they oppose election laws that would inhibit voting.In a separate statement, GM posted on Twitter: “We are calling on Michigan lawmakers and state legislatures across the nation to ensure that any changes to voting laws result in protecting and enhancing the most precious element of democracy.“Anything less falls short of our inclusion and social justice goals,” the company said. More

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      'Your business model is the problem': tech CEOs grilled over role in Capitol attack

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      The CEOs of America’s biggest technology companies faced a grilling from Congress about the 6 January insurrection at the Capitol, as protesters outside the hearing denounced the platforms for playing a role in fueling the violence.Sundar Pichai of Google, Mark Zuckerberg of Facebook and Jack Dorsey of Twitter on Thursday were called to testify before two committees of the House of Representatives on social media’s role in promoting extremism and misinformation.Protesters who had gathered outside the Capitol building ahead of the hearing portrayed the tech executives as the violent insurrectionists whose images went viral in the days after the 6 January riots. One cutout erected on the grounds showed Zuckerberg as the “QAnon Shaman”, a part-time actor with a horned furry hat who participated in the riot.“The platforms’ inability to deal with the violence, hate and disinformation they promote on their platforms shows that these companies are failing to regulate themselves,” said Emma Ruby-Sachs, the executive director of SumofUs, the human rights organization behind the protests. “After the past five years of manipulation, data harvesting and surveillance, the time has come to rein in big tech.”Lawmakers opened the hearing with video testimonies, criticizing the platforms for their role in the 6 January violence, as well as in the spread of medical misinformation about the Covid-19 vaccine.“You failed to meaningfully change after your platform has played a role in fomenting insurrection and abetting the spread of the virus and trampling American civil liberties,” said the Democratic representative Frank Pallone, the chair of the energy and commerce committee. “Your business model itself has become the problem and the time for self-regulation is over. It’s time we legislate to hold you accountable,” he added.“You’re not passive bystanders – you are not non-profits or religious organizations that are trying to do a good job for humanity – you’re making money,” Pallone later said. “The point we’re trying to make today is that when you spread misinformation, when extremists are actively promoted and amplified, you do it because you make more money.”“The witnesses here today have demonstrated time and time again, that self-regulation has not worked,” echoed Jan Schakowsky, a Democratic representative from Illinois. “They must be held accountable for allowing disinformation and misinformation to spread.”Meanwhile, Republican lawmakers quickly turned to the topic of “cancel culture” and perceived, but unproven, bias against conservatives on social media.In his opening statement, Facebook’s Zuckerberg, argued that the tech companies should not be making the decisions around what is allowed online, and stressed Facebook’s efforts to combat misinformation and its spread of vaccine information.Google’s Pichai, too, sought to highlight his company’s role in connecting users with vaccine information and other Covid-19 resources.Thursday’s session is the latest in a record number of hearings for the big technology players in the past year, as executives have repeatedly been called to the Hill to testify on antitrust issues, misinformation and hate speech.The hearing, which was titled “Disinformation nation: social media’s role in promoting extremism and misinformation”, was held by the House of Representatives’ energy and commerce committee.Lawmakers repeatedly pressed the CEOs on how their platforms were tackling hate speech and misinformation more widely.The Democratic representative Doris Matsui, of California, raised the issue of anti-Asian hate speech and directly asked Dorsey and Zuckerberg what they are doing to address it. She also asked why they took so long to remove racist hashtags that promoted blame for the coronavirus pandemic on Asian Americans, citing the recent attack on Asian women in Atlanta as a consequence of these policies.“The issues we are discussing here are not abstract,” she said. “They have real world consequences and implications that are too often measured in human lives.”She also cited a study that showed a substantial rise in hate speech the week after Donald Trump first used the term “China flu” in a tweet.Dorsey countered by saying he will not ban the racist hashtags outright because “a lot of these hashtags contain counter speech”, or posts refuting the racism the hashtags initiated. Zuckerberg similarly said that hate speech policies at Facebook are “nuanced” and that they have an obligation to protect free speech.Congressman Tony Cárdenas of California has asked Zuckerberg how the company addresses the major problem of misinformation that targets Latino users, noting that studies have shown Facebook catches less false content in Spanish than in English.Zuckerberg responded that Facebook has an international factchecking program with workers in more than 80 countries speaking “a bunch of languages” including Spanish. He also said Facebook translates accurate information about Covid-19 vaccines and other issues from English into a number of languages.Cárdenas noted the example of his Spanish-speaking mother-in-law saying she did not want to get a vaccine because she heard on social media it would place a microchip in her arm.“For God’s sake, that to me is unbelievable, that she got that information on social media platforms,” he said. “Clearly Spanish language misinformation is an issue.” More

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      The Other Side of the Indian Farmers’ Protests

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      In November 2020, the Friedrich Ebert Foundation published an article by Paul Nemitz and Matthias Pfeffer on the threat to digital sovereignty in Europe. They called attention to the need in Europe for “decentralised digital technologies” to combat a trend they see as essential for preserving “a flourishing medium-sized business sector, growing tax revenues, rising prosperity, a functioning democracy and rule of law.” 

      The authors felt encouraged by the fact that the European Council was at last looking at challenging the US tech platforms that dominate global cyberspace: Google, Amazon, Facebook, Apple and Microsoft. Europe appears ready to draft laws that would impose targeted regulation strategies different from those that apply to “small and medium-sized actors, or sectoral actors generally.”

      Indian Farmer Protests Explained

      READ MORE

      There are multiple reasons for such a move, which will inevitably be attacked by the corporations as violating the sacrosanct principle of free trade. Nemitz and Pfeffer recognize the complexity of the implicit goal, to ensure “strategic autonomy while preserving an open economy.” Besides the threat to traditional businesses incapable of competing with the platforms, they cite the fact that “unregulated digitalisation of the public sphere has already endangered the systemic role of the media in two respects” to the extent that 80% of “online advertising revenues today flow to just two corporations: Google and Facebook.” This threatens the viability of “costly professional journalism that is vital for democracy.”

      Europe is struggling to find a solution. In the context of the farmers’ protests in India, the Joint Action Committee Against Foreign Retail and E-commerce (JACAFRE) recently took an emphatic stand on the same subject by publishing an open letter addressed to Prime Minister Narendra Modi. In this case, the designated culprits are the US powerhouses of retail commerce, Amazon and Walmart, but the authors include what they see as a Quisling Indian company: the mega-corporation, Reliance Industries.

      The giant conglomerate claims to be “committed to innovation-led, exponential growth in the areas of hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and telecommunications.” JACAFRE suspects it may also be committed to the idea of monopolistic control. It complains that Reliance’s propensity for establishing partnerships with Facebook and Google is akin to letting the fox in the henhouse. This has less to do with the platforms’ direct action than the coercive power their ever-increasingly possession and control of data represents. “If the new farm laws are closely examined,” the JACAFE’s authors claim, “it will be evident that unregulated digitalisation is a very important aspect of them.”

      Today’s Daily Devil’s Dictionary definition:

      Unregulated digitalization:

      A pandemic that grew slowly in the first two decades of the 21st century with the effect of undermining most human economic activities, personal relationships and even mental equilibrium

      Contextual Note

      Three years ago, Walmart purchased the Indian retailer Flipkart. Interviewed at the time, Parminder Jeet Singh, the executive director of IT for Change, complained that the data controlled by e-commerce companies is no longer limited to patterns of consumption but also extends to production and logistics. “They know everything, who needs it, when they need it, who should produce it, who should move it, when it should be moved, the complete control of the data of the whole system,” he said. That capacity is more than invasive. It is tantamount to omniscient and undetectable industrial spying combined with forms of social control that are potentially as powerful as China’s much decried social credit system.

      Embed from Getty Images

      In 2018, Singh appeared to worry more about Walmart than Facebook or Amazon, because it represents the physical economy. The day US companies dominate both the data and the physical resources of the Indian economy, Singh believes it would “game over” for Indian economic independence. He framed it in these terms: “If these two companies become a duopoly in the e-commerce sector, it’s actually a duopoly over the whole economy.” 

      On the positive side, he insisted that, contrary to many other countries, India has the “digitally industrialized” culture that would allow it not only to resist the domination of a US-based global company, but also permit it to succeed in building a native equivalent. He viewed Flipkart before Walmart’s takeover as a successful Indian company that had no need of a monopolistic US company to ensure its future growth. 

      Historical Note

      Fair Observer’s founder, CEO and editor-in-chief, Atul Singh, recently collaborated with analyst Manu Sharma on an article debunking the simplistic view shared across international media that persists in painting India’s protesting farmers as a David challenging a globalized Goliath insidiously promoted by Narendra Modi’s government. The Western media’s narrative puts the farmers in the role of resistance heroes against a new form of market-based tyranny.

      But as Singh and Sharma point out, this requires ignoring history and refusing to recognize the pressing need to move away from a “Soviet-inspired model” that ended up creating pockets of privilege and artificial dependence. These relics of India’s post-independence past became obstacles not only to productivity but to justice as well, to the extent that the existing system favored those who had learned to successfully exploit it.

      Singh and Sharma highlight the incoherence of a system that risks provoking deeper crises. Does that mean that Modi’s proposed reform is viable and without risk? The two authors acknowledge the very real fear farmers feel “that big private players will offer good money to farmers in the beginning, kill off their competition and then pay little for agricultural produce.” They realistically concede that, once in place, “India’s agricultural reforms will have intended and unintended consequences, both positive and negative.”

      But there may be more to the story. From the JACAFE’s perspective, the farmers’ instincts are correct. Their fear of the big players leveraging their clout in the traditional marketplace by exercising discretionary control of production and distribution becomes exponentially greater when considering that, thanks to their mastery of data, their control is not limited to the commodities themselves. It extends to all the data associated not only with the modes and means of production, but also with the channels of distribution and even habits of consumption. That explains why the JACAFE sees the 2018 takeover of Flipkart by Walmart as particularly foreboding.

      This dimension of the issue should also help us to understand why Prime Minister Modi has recently been playing cat and mouse with both Jeff Bezos of Amazon and Mark Zuckerberg of Facebook. At some point, the purely rhetorical game that even a mouse with a 56-inch chest can play while dodging the bite of a pair of voracious and muscular cats (Amazon and Walmart) has its limits. India is faced with a major quandary. It needs to accelerate its development of domestic resources in a manner that allows it to control the future economic consequences for its population but must, at the same time, look abroad for the investment that will fund such endeavors.

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      In a recent article on foreign direct investment (FDI) and foreign portfolio investment (FPI) in India, Singh and Sharma noted that the recent flood of cash can be attributed to the fact that “corporations from the US and the Gulf have bought big stakes in Reliance Industries, India’s biggest conglomerate. They are also buying shares in Indian companies. In effect, they are betting on future growth.” The problem with all foreign investment is that while it is focused on growth, the growth that investors are targeting is the value of their own investment and its contribution to augmenting their global power. From the investors’ point of view, the growth of the Indian economy is at best only a side-effect. The case of Reliance in particular will need to be monitored.

      In December 2020, Reliance’s chairman, Mukesh Ambani, promised a “more equal India … with increased incomes, increased employment, and improved quality of life for 1 billion Indians at the middle and bottom of the economic pyramid” thanks to the achievement of a $5-trillion economy by 2025. While reminding readers that “Facebook and Google are already partnered with Reliance and own stakes in Jio Platforms,” the Deccan Herald reports that the three companies have joined hands again to “to set up a national digital payment network.” The question some may be asking is this: When three partners occupy a central place in expanding Asia’s second-largest economy, who are the foxes and who are the hens?

      *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in Elections

      Zuckerberg faces Capitol attack grilling as Biden signals tougher line on big tech

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      Mark Zuckerberg, the head of Facebook, could be in for a rough ride on Thursday when he testifies to Congress for the first time about the 6 January insurrection at the Capitol in Washington DC and amid growing questions over his platform’s role in fuelling the violence.The testimony will come after signs that the new administration of Joe Biden is preparing to take a tougher line on the tech industry’s power, especially when it comes to the social media platforms and their role in spreading misinformation and conspiracy theories.Zuckerberg will be joined by Sundar Pichai and Jack Dorsey, the chief executives of Google and Twitter respectively, at a hearing pointedly entitled “Disinformation nation: social media’s role in promoting extremism and misinformation” by the House of Representatives’ energy and commerce committee.The scrutiny comes after a report found that Facebook allowed groups linked to the QAnon, boogaloo and militia movements to glorify violence during the 2020 election and weeks leading up to the deadly mob violence at the US Capitol.Avaaz, a non-profit advocacy group, says it identified 267 pages and groups on Facebook that spread “violence-glorifying content” in the heat of the 2020 election to a combined following of 32 million users. More than two-thirds of the groups and pages had names aligned with several domestic extremist movements.The top 100 most popular false or misleading stories on Facebook related to the elections received an estimated 162m views, the report found. Avaaz called on the White House and Congress to open an investigation into Facebook’s failures and urgently pass legislation to protect American democracy.Fadi Quran, its campaign director, said: “This report shows that American voters were pummeled with false and misleading information on Facebook every step of the 2020 election cycle. We have over a year’s worth of evidence that the platform helped drive billions of views to pages and content that confused voters, created division and chaos, and, in some instances, incited violence.“But the most worrying finding in our analysis is that Facebook had the tools and capacity to better protect voters from being targets of this content, but the platform only used them at the very last moment, after significant harm was done.”Facebook claimed that Avaaz had used flawed methodology. Andy Stone, a spokesperson, said: “We’ve done more than any other internet company to combat harmful content, having already banned nearly 900 militarized social movements and removed tens of thousands of QAnon pages, groups and accounts from our apps.”He acknowledged: “Our enforcement isn’t perfect, which is why we’re always improving it while also working with outside experts to make sure that our policies remain in the right place.”But the report is likely to prompt tough questions for Zuckerberg in what is part of a wider showdown between Washington and Silicon Valley. Another flashpoint on Thursday could be Section 230 of the 1996 Communications Decency Act, which shields social media companies from liability for content their users post.Repealing the law is one of the few things on which Biden and his predecessor as president, Donald Trump, agree, though for different reasons. Democrats are concerned that Section 230 allows disinformation and conspiracy theories such as QAnon to flourish, while Trump and other Republicans have argued that it protects companies from consequences for censoring conservative voices.More generally, critics say that tech companies are too big and that the coronavirus pandemic has only increased their dominance. The cosy relationship between Barack Obama’s administration and Silicon Valley is a thing of the past, while libertarian Republicans who oppose government interference are a fading force.Amazon, Apple, Facebook and Google have all come under scrutiny from Congress and regulators in recent years. The justice department, the Federal Trade Commission (FTC) and state attorneys general are suing the behemoths over various alleged antitrust violations.In a letter this week to Biden and Merrick Garland, the new attorney general, a coalition of 29 progressive groups wrote: “It’s clear that the ability of Big Tech giants like Google to acquire monopoly power has been abetted by the leadership deficit at top enforcement agencies such as the FTC … We need a break from past, failed leadership, and we need it now.”There are signs that Biden is heeding such calls and spoiling for a confrontation. On Monday he nominated Lina Khan, an antitrust scholar who wants stricter regulation of internet companies, to the FTC. Earlier this month Tim Wu, a Columbia University law professor among the most outspoken critics of big tech, was appointed to the national economic council.There is support in Congress from the likes of David Cicilline, chairman of the House judiciary committee’s antitrust panel, which last year released a 449-page report detailing abuses of market power by Apple, Amazon, Google and Facebook.The Democratic congressman is reportedly poised to issue at least 10 legislative initiatives targeting big tech, a blitz that will make it harder for the companies and their lobbyists to focus their opposition on a single piece of legislation.Cicilline, also working on a separate bill targeting Section 230, told the Axios website: “My strategy is you’ll see a number of bills introduced, both because it’s harder for [the tech companies] to manage and oppose, you know, 10 bills as opposed to one.“It also is an opportunity for members of the committee who have expressed a real interest or enthusiasm about a particular issue, to sort of take that on and champion it.” More