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      Facebook faces antitrust allegations over deals for Instagram and WhatsApp

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

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      in US Politics

      Texas sues four states over election results in effort to help Donald Trump

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      The state of Texas, aiming to help Donald Trump upend the results of the US election, decisively won by Joe Biden, said on Tuesday it has filed a lawsuit against the states of Georgia, Michigan, Pennsylvania and Wisconsin at the US supreme court, calling changes they made to election procedures amid the coronavirus pandemic unlawful.
      The extraordinary and probably long-shot lawsuit, announced by the Republican attorney general of Texas, Ken Paxton, was filed directly with the supreme court, as is permitted for certain litigation between states.
      The supreme court has a 6-3 conservative majority, including three justices appointed by Trump.
      The lawsuit represents the latest legal effort intended to reverse the Republican president’s loss to Democratic candidate Biden in the 3 November election, which had appeared to be running out of steam after dozens of losses by the Trump campaign in its court challenges over the past month.
      Republican-governed Texas in the lawsuit accused election officials in the four states of failing to protect mail-in voting from fraud, thus diminishing “the weight of votes cast in states that lawfully abide by the election structure set forth in the constitution”.
      State election officials have said they have found no evidence of such fraud that would change the results, and local and national officials have declared it the most secure election in US history.
      There was an increase in voting by mail in the election due to the pandemic, as many Americans stayed away from polling places to avoid the spread of Covid-19.
      Texas is asking the supreme court to block the electoral college votes in the four states – a total of 62 votes – from being counted.
      Biden has amassed 306 electoral votes – exceeding the necessary 270 – compared with 232 for Trump in the state-by-state electoral college that determines the election’s outcome, while also winning the national popular vote by more than 7m votes.
      Texas also is asking the supreme court to delay the 14 December deadline for electoral college votes to be cast.
      Paul Smith, a professor at Georgetown University’s law school, said Texas did not have a legitimate basis to bring the suit.
      “There is no possible way that the state of Texas has standing to complain about how other states counted the votes and how they are about to cast their electoral votes,” Smith said.
      Trump’s campaign and his allies have pursued unsuccessful lawsuits in Georgia, Michigan, Pennsylvania, Wisconsin and other states, making unfounded claims of widespread election fraud. Judges appointed under Democratic and Republican administrations, including Trump’s, have ruled against the president’s campaign, often in excoriating tones.
      Trump lost those four states after winning them in 2016.
      The supreme court is not obligated to hear the case and has said in previous decisions that its “original jurisdiction” that allows litigation between states to be filed directly with the nine justices should be invoked sparingly. More

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      Pardon me! Will Trump be indicted? Politics Weekly Extra podcast

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      As the US justice department investigates an alleged ‘bribery for pardon’ scheme at the White House, Jonathan Freedland and David Smith delve into the many possible legal issues Donald Trump could face after 20 January

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      Might Donald Trump, once stripped of the near-total immunity that came with his office, face the full might of the law? Could he be charged with crimes, or even go to jail? Or might he pardon himself in advance? Jonathan Freedland and the Guardian’s Washington bureau chief, David Smith, go through the many potential scenarios that could play out once Trump is no longer the commander-in-chief. Let us know what you think of the podcast and send us your questions to podcasts@theguardian.com Help support the Guardian by going to gu.com/supportpodcasts More

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      in Elections

      Ivanka Trump calls New York fraud inquiries 'harassment'

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      Authorities conducting fraud investigations into Donald Trump and his businesses are reportedly looking at consulting fees that may have gone to his daughter Ivanka Trump, prompting her to accuse them of “harassment”.The New York Times said there were twin New York investigations, one criminal and one civil.The criminal inquiry, led by the Manhattan district attorney, Cyrus Vance Jr, and a civil investigation by the state attorney general, Letitia James, are just some of many legal challenges that will probably face the president and his family business when he returns to being a private citizen. The report provoked a sharp response from Trump’s eldest daughter, who is a senior presidential adviser.“This is harassment pure and simple,” Ivanka Trump said on Twitter, linking to the report in the New York Times. “This ‘inquiry’ by NYC democrats is 100% motivated by politics, publicity and rage. They know very well that there’s nothing here and that there was no tax benefit whatsoever. These politicians are simply ruthless.”The Times, which said the two investigations have subpoenaed the Trump Organization in recent weeks, follows publication of Trump’s long-sought tax records and revelations that he personally guaranteed debt running into the hundreds of millions that could soon be called in or come due.Trump’s financial and legal stresses appear to be mounting. Earlier this month, Reuters reported that Trump’s main lender, Deutsche Bank, is looking for ways to end its relationship with the president.Deutsche Bank has about $340m in loans outstanding to the Trump Organization, the president’s umbrella group that is currently overseen by his two sons. The loans, which are against Trump properties and start coming due in two years, are current on payments and personally guaranteed by the president, according Reuters.Among the latest revelations is that he reduced his tax exposure by deducting about $26m in fees to unidentified consultants as a business expense on several projects in the past decade.Some of those fees, the Times said, appear to have been paid to Ivanka Trump, including a payment of $747,622 from a consulting company that exactly matched consulting fees claimed as tax deductions by the Trump Organization.Trump Organization counsel Alan Garten described the development as “just the latest fishing expedition in an ongoing attempt to harass the company”.Details of the twin investigations have been scarce. The Manhattan DA’s inquiry was originally focused on Trump Organization payments to the porn star Stormy Daniels ahead of the Trump’s 2016 election victory but has since expanded to include insurance and bank-related fraud, tax evasion and grand larceny.The civil investigation began earlier this year after Trump’s former lawyer Michael Cohen told Congress that the president had boosted the value of his assets to secure bank loans and reduced them for tax purposes.In a TV interview this month, James, the New York attorney general, said the outcome of this month’s election was irrelevant to the investigations. She said: “We will just follow the facts and the evidence, wherever they lead us.”But Trump has dismissed the investigations as “the greatest witch-hunt in history”. More

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      Justice Alito takes aim at abortion rights, gay marriage and Covid rules

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      The inability of people to say, without fear of being branded as bigots, that marriage is exclusively between a man and a woman is threatening to make freedom of speech “a second-tier constitutional right”, supreme court justice Samuel Alito said at a virtual conference on Thursday.In a bleak address, Alito took aim at abortion rights, same-sex marriage, gun control and other conservative bugbears.The remarks were made to the Federalist Society, the conservative legal group that has helped Donald Trump remake the judiciary in the last four years.While supreme court justices have in the past waded into politics in public forums, Alito’s 30-minute speech stood out for its provocative engagement on fronts in the culture wars that had not seemed to be particularly hot, at least before the confirmation of Justice Amy Coney Barrett last month.Alito’s speech fueled concerns that Barrett’s elevation, which established an ironclad 6-3 conservative majority on the court, could lead the court to revisit basic anti-discrimination protections, marriage equality, reproductive rights and other issues.“This was a hyper-political, partisan speech, and his message in sum was: I’m free to say this now. We have the votes,” tweeted Chris Geidner, director of strategy at the justice collaborative advocacy group.As the United States continues to shatter daily records for new Covid-19 cases, Alito blasted coronavirus mitigation measures for imposing “previously unimaginable restrictions on individual liberty”.He singled out restrictions in Nevada limiting religious services to 50 attendees. “The states’s message is this: forget about worship and head for the slot machines, or maybe a Cirque du Soleil show,” Alito said.Although by any measure conservative jurisprudence under Trump has flourished, securing minority legal views for a generation, Alito spun a conservative victimization narrative, in which citizens are threatened in their freedom to speak and act as they please.“When I speak with recent law school graduates, what I hear over and over is that they face harassment and retaliation if they say anything that departs from the law school orthodoxy,” he said.“It pains me to say this,” Alito said, “but in certain quarters, religious liberty is fast becoming a disfavored right.” As an example, Alito decried a Washington state law requiring a pharmacist to fill prescriptions for “morning-after pills, which destroy an embryo after fertilization”, as he put it.“Even before the pandemic, there was growing hostility to the expression of unfashionable views,” Alito continued, using the rubric of “the rule of law and the current crisis” to mount an attack on same-sex marriage, secured by the court in Obergefell v Hodges (2015), a ruling from which he dissented.“You can’t say that marriage is a union between one man and one woman,” Alito complained. “Until very recently, that’s what the vast majority of Americans thought. Now it’s considered bigotry.”Alito went on:
      That this would happen after our decision in Obergefell should not have come as a surprise. Yes, the opinion of the court included words meant to calm the furors of those who cling to traditional views on marriage. But I could see, and so did the other justices in dissent, where the decision would lead. I wrote the following: ‘I assume that those who cling to old beliefs will be able to whisper their thoughts in the recesses of their homes, but if they repeat those views in public they will risk being labeled as bigots and treated as such by governments, employers and schools.’ That is just what is coming to past.
      One of the great challenges for the supreme court going forward will be to protect freedom of speech. Although that freedom is falling out of favor in some circles we need to do whatever we can to prevent it from becoming a second-tier constitutional right.”
      Legal analysts said the speech displayed thinking familiar from the 70-year-old justice’s opinions – but they called his decision to give voice to those opinions unusual.“I’m not surprised that Justice Alito believes any of those things,” tweeted University of Texas law professor Steve Vladeck. “One need only read his written opinions to see most of them. I’m surprised that he decided to *say* them in a public speech that was live-streamed over the internet – clips of which will now be recirculated for ever.”Alito unleashed will make him a hero to more people looking for a leader of the conservative Court — but it also will make people outside of the SCOTUS world realize how he comes off (and it’s not good). pic.twitter.com/Gqt7uyHW07— Chris Geidner (@chrisgeidner) November 13, 2020
      Alito is a George W Bush appointee who previously worked as a federal prosecutor in New Jersey and a circuit court judge. The speech was pre-recorded for the 2020 National Lawyers Federation sponsored by the Federalist Society. “Today I’m talking to a camera, and that feels really strange,” Alito said.To capture the mood of what he described as an assault on religious liberties and free speech, Alito quoted a 1997 Bob Dylan song.“To quote a popular Nobel laureate,” Alito said, “it’s not dark yet, but it’s getting there.” More

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      Uber bought itself a law. Here's why that's dangerous for struggling drivers like me | Cherri Murphy

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      Last week, Uber bought itself a law.Along with Lyft, Instacart, DoorDash and Postmates, app companies spent more than $200m – the most spent on any ballot campaign in US history – to bankroll Proposition 22 in California. With its passage, the law will now exempt drivers like me from basic protections afforded to most other workers in the state.And in the aftermath of their bought-and-paid-for victory, these companies are promising to roll out this model nationwide, foretelling a grim future for gig workers across the US.But let’s be absolutely clear: Prop 22 is a dangerous law. Voters in California, inundated with ads promising drivers a “living wage”, flexibility and greater benefits, believed they were ensuring drivers a better future in the middle of a pandemic and recession.But voters were hoodwinked. Drivers are now neither employees, guaranteed rights and benefits such as healthcare, nor true independent contractors, since we can’t set our own rates, choose our own clients, or build wealth on the apps.Instead, Prop 22 promises substandard healthcare, a death sentence to many in the middle of a pandemic. We’re promised a sub-minimum wage in the middle of a recession that an independent study showed would be as low as $5.64 an hour – not the eventual $15 state minimum. We’re given no family leave, no paid sick days and no access to state unemployment compensation. Most importantly, while we’re already prevented from unionizing under federal law, the measure also makes it nearly impossible for California to pass laws protecting drivers who organize collectively, a fundamental right that companies undermine to silence worker power. More

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      The Guardian view on the election endgame: end Trump’s war on the truth | Editorial

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      Since he took office Donald Trump has posed a grave threat to democracy. His wild, relentless post-poll fight against reality this week has shown just how dangerous he can be. Designed to give his supporters a rationale for their anger over losing the popular vote, the falsehoods raised troubling questions about when, and how, Mr Trump will leave the White House.The bad news is that it won’t be anytime soon. Democracy in America is rare in giving a president more than 10 weeks of power after losing an election. Mr Trump is using this time to ratchet up the rhetoric to a fever pitch, seeding the idea that society is irreconcilably at odds with itself. This is profoundly damaging to America, a fact that cable networks have thankfully and belatedly woken up to after election day. Around the world former democracies are slipping into autocracy. The United States is not immune.The fact is Mr Trump will lose the popular vote by millions of votes and only America’s outdated electoral college has saved him from a crushing defeat. The president should be preparing to leave the White House, not be instructing his lawyers. Perhaps Mr Trump cannot afford to lose. Presidential immunity from prosecution vanishes once Mr Trump leaves office, a consideration that may weigh heavily given the ongoing investigations by the New York district attorney into reported“protracted criminal conduct at the Trump Organization”. Mr Trump denies any wrongdoing.For months it has been obvious that Mr Trump would claim victory and fraud should he lose the election. He has refused to say he would accept a peaceful transfer of power. The polls, he claimed, could not be trusted. Without a shred of shame, Mr Trump appears willing to challenge the validity of the vote in any state he loses, seeking to undermine the electoral process and ultimately invalidate it.This is a dangerous moment. There’s no evidence of widespread illegal votes in any state. Yet a fully fledged constitutional crisis over the process of counting ballots is on the cards because Mr Trump is demanding recounts and court cases while conditioning his base to view the election in existential terms. Last year, in an influential and prescient analysis, Ohio University’s Edward B Foley wargamed how a quarrel over mail-in ballots in Pennsylvania could lead to a disputed result in the 2020 presidential election.The most frightening scenario, said Prof Foley, was “where the dispute remains unresolved on January 20, 2021, the date for the inauguration of the new presidential term, and the military is uncertain as to who is entitled to receive the nuclear codes as commander-in-chief”. This ends with the US attorney general, William Barr, announcing that it is legally sound for Mr Trump to be recognised as re-elected for a second term while Democrats call for nationwide protests to dislodge the squatters in the White House. It would be better to avoid such a predicament rather than plan to get into it.Republicans must not be seduced by Mr Trump into manipulating the electoral system, through political and legal battles, to defy the popular will for partisan advantage. The Grand Old Party has profited from voter suppression and gerrymandering to keep an emerging Democratic majority at bay. But these darker impulses have given rise to Mr Trump and an unhealthy reliance on a shrinking coalition of overwhelmingly white Christian voters paranoid about losing power.Joe Biden looks to have done enough to win the White House. He will have his work cut out when he gets there, needing to rebuild the US government’s credibility after Trumpism hollowed out its institutions. That means offering hope to a country that faces a pandemic and an economic recession. He will have to reassert America’s role as the global problem-solver. Under Mr Trump the “indispensable nation” disappeared when it was needed the most. By any reasonable standard Mr Biden should not have to continue to run against Mr Trump. He must be allowed to get on with running America. More

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      in Elections

      Trump lawyers petitioning supreme court have close ties to Brett Kavanaugh

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      Trump campaign lawyers who have asked the supreme court to intervene in Pennsylvania’s vote count have close ties to Brett Kavanaugh, the justice who is expected to have a decisive vote in any upcoming election-related rulings.
      Justin Clark, a senior lawyer for Donald Trump’s campaign, helped shepherd Kavanaugh’s controversial 2018 confirmation through the Senate in his previous role as White House congressional liaison.
      Another lawyer, William Consovoy, the litigator who filed the supreme court challenge on behalf of the Trump campaign, helped to bankroll a high-profile Federalist Society dinner in Kavanaugh’s honour in 2019.
      It is far from clear whether the Trump campaign’s bid before the US supreme court – which is challenging Pennsylvania’s inclusion of mail-in ballots received after 3 November – will lead to any changes in the state’s ultimate vote count. But the relationships between the campaign lawyers and Kavanaugh are an example of how conservative lawyers and jurists who have been appointed to the highest court have especially close political ties.
      Activist Chris Kang, who serves as chief counsel for Demand Justice, a progressive group that has said it is trying to restore federal courts’ “legitimacy”, said the relationships between Consovoy, Clark and Kavanaugh, were “alarming”.
      “It is very troubling. This kind of thing is more commonplace these days, but I don’t think it makes it any less concerning,” Kang said. “It’s a very insular world of supreme court justices and the lawyers who argue in front of them. It does breed a backscratching culture that is very problematic.”
      The Federalist Society lies at the heart of the conservative bar, and has played what critics call an outsized role in advising the White House on the nomination of judges and justices.
      The lawyers who are part of the Federalist Society, some of whom become judges, share a strict conservative view of the law which, in turn, has helped to propel Republican political causes, like restricting voting rights and opposition to environmental regulations.
      One staunch critic of the group, the Rhode Island Democratic senator Sheldon Whitehouse, has said that nearly 90% of Trump’s appellate judges, as well as most of the supreme court’s conservative justices, are members of the Federalist Society, which is funded entirely by anonymous conservative donors and corporations. More