Category Archives: Big Tech

Representative David Cicilline, the chairman of the subcommittee, shifted the conversation to the conspiracies about Covid-19 that flourish on Facebook and didnt mince words, insisting that the platform contains deadly content, that is, content that leads the public to dangerous actions, whether its trying unsafe cures or resisting prudent measures like wearing a mask. But Zuckerbergs insistence that Facebook has a relatively good track record of fighting and taking down lots of false content as well as putting up authoritative information fails to placate users and legislators when it concerns a plague that has left 150,000 dead and counting, as opposed to, say, leaks of personal data.

To be fair, the major platforms have always insisted that there were two exceptions to their hands-off approach to the hate and misinformation that appear on their platforms: public health and democracy. Until now, they could assume that those third rails wouldnt be breached in the United States in such harmful and undeniable ways. Facebook, for example, has been credibly accused of aiding genocide in Myanmar, but that was on the other side of the globe; and Amazon and YouTube, as well as Facebook, have helped promote campaigns against vaccination of children, endangering young lives, but at nowhere near the scale of misery from Covid-19. Simply put, there is no moving on from this presidency or pandemic to the next scandal.

In January, Zuckerbergs close confidant and VP of augmented and virtual reality at Facebook, Andrew Bosworth, wrote a forthright take about his companys role in getting Trump into office. So was Facebook responsible for Donald Trump getting elected? Bosworth asked. I think the answer is yes, but not for the reasons anyone thinks. He didnt get elected because of Russia or misinformation or Cambridge Analytica. He got elected because he ran the single best digital ad campaign Ive ever seen from any advertiser. Period.

Six months later, with a deadly virus spreading unabated in the United States and a president questioning whether to hold an election, I dont think Bosworth would again write those words, never mind in such an offhand way. If polls are to be believed, Trump is substantially more disliked, and in more profound ways, now than he was at the beginning of the year. But it is interesting to get a glimpse of Bosworths thought process. Citing the moral philosopher John Rawls, he asserts that the moral way to decide something is to remove yourself entirely from the specifics of any one person involved, and this reasoning prevents him from limiting the reach of publications who have earned their audience, as distasteful as their content may be to me and even to the moral philosophy I hold so dear.

He quickly added the familiar caveats: That doesnt mean there is no line. Things like incitement of violence, voter suppression, and more are things that same moral philosophy would safely allow me to rule out.

Accountability is coming for Big Tech. Not just because Congress had an impressive hearing, but because the confluence of crises now demand action, even by these companies own hands-off logic. There is no choice but to reclaim the unchecked power these platforms wield. This is about more than Facebook spreading fake cures and voter suppression; or YouTube sending its users down rabbit holes of conspiracy and hate; or Apple and Amazon becoming so central in how we get news and entertainment, and how we conduct commerce. This is about how a nation protects its people.

Perhaps in better times we could assume the best of these platforms and be swayed by their promises to fix whatever problem crops up, but when our nation is tested as it is now, we cant accept band-aid fixes and assurances they already have a way to do better next time.

Mike Tyson had a good way of explaining Silicon Valleys current inadequacy in the face of the crises theyre up against: Everyone has a plan until they get punched in the mouth.

Photographs: Graeme Jennings/Getty Images; LMPC/Getty Images

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For Big Tech, There's No Winning This Round - WIRED

TOPLINE

Congresss grilling of top Silicon Valley CEOs Wednesday on antitrust issues reflects the American publics broad distrust of big tech companies increasing powerbut polling released throughout 2020 shows that while Americans may be wary of big tech, theyre more conflicted when it comes to what action the government should take in response.

Facebook CEO Mark Zuckerberg testifies before the House Financial Services Committee on October 23, ... [+] 2019. (Photo by Aurora Samperio/NurPhoto via Getty Images)

72% of U.S. adults believe big tech companies have too much power and influence in politics, per a Pew Research survey conducted in June, while an Accountable Tech/GQR Research poll in July found 85% of respondents believe they have too much power in general.

A Morning Consult poll released in January found that 65% believe tech companies benefits to users arent worth the industrys becoming more powerful at the expense of smaller companiesbut a majority of those respondents still enjoy big tech products, using major social media and search tools and predominantly shopping online.

Americans who distrust big tech dont necessarily support government action: 69.8% of respondents to a July poll by the Center for Growth and Opportunity/YouGov said they somewhat or completely agree that tech companies are too big, but only 44.4% agree the government should break them up.

A Knight Foundation/Gallup poll conducted in December and released in March found 50% support government intervention to break up tech companies, while 49% oppose, and the Pew survey found only 47% support more government tech regulationdown from 51% in 2018.

88% of Knight/Gallup respondents said they do not trust social media platforms to make the right decisions about what users can post, but 55% still said the companies should be making those decisions anyway, rather than the government.

A July Morning Consult poll found only 46% of Americans trust Congress to best regulate big tech companies, as compared with 57% who trust the courts, 53% trusting federal agencies and 34% who trust the president.

A national survey by The Verge released in March found that 51% believe Google and YouTube should be broken up into two different companiesbut 66% dont have a problem with Facebook owning Instagram and WhatsApp.

CEOs of worlds most powerful tech companies on Wednesday defended themselves against lawmaker accusations that their companies have too much power and stifle smaller businesses, claiming that their practices are instead part of a thriving competitive economy and that their size is essential to their value. Just like the world needs small companies, it also needs large ones, Amazon CEO Jeff Bezos argued in his opening statement to the House antitrust subcommittee, while Facebook CEO Mark Zuckerberg said Facebooks large size is an asset to its work to keep people safe on our platform, and to make sure were investing to fix our issues and get ahead of new risks.

Zuckerberg and Bezos, along with Alphabet CEO Sundar Pichai and Apple CEO Tim Cook, appeared before the House antitrust subcommittee Wednesday, amid widespread scrutiny into the tech giants alleged anticompetitive practices. The companies are also facing antitrust investigations from the Department of Justice, Federal Trade Commission, state attorneys general and the European Union. The antitrust struggles come amid broader distrust of big tech companies and their role in the coronavirus pandemic, racial justice protests and impending November election, as companies have struggled to respond to growing misinformation and address hate speech and extremist groups on their platforms.

Though Americans are increasingly suspicious of big tech companies, polls show that the coronavirus pandemic may be improving their standing in the eyes of Americans. A Harris poll released in April found that 38% of respondents view of the tech industry had become more positive over the course of the pandemic, while an April report by the National Research Group found a full 88% of Americans say the pandemic has given them a greater appreciation for technologys positive impact.

Mark Zuckerberg Is Even Less Popular Than Donald Trump, Poll Finds (Forbes)

The Verge Tech Survey 2020 (The Verge)

Techlash? America's Growing Concern With Major Technology Companies (Knight Foundation)

Most People Dont Like Giving Big Tech More Power, but They Rely on Its Services (Morning Consult)

Most Americans say social media companies have too much power, influence in politics (Pew Research Center)

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As Tech Giants Face Congress, Heres What Americans Actually Think Of Big Tech - Forbes

Every Friday, Law Decoded delivers analysis on the weeks critical stories in the realms of policy, regulation and law.

The concept of monopoly will reign in todays Law Decoded. As a fundamental principle, blockchain technology is about distributing both inputs and outputs of information securely. In its still very young lifecycle, the technology has proven to have boundless applications on the basis of this fairly simple principle.

A secondary principle is decentralization, and in this way, blockchain technology seems inherently opposed to monopolies. The big challenge of Bitcoins white paper was finding a way to move value across parties without getting lost in either that proverbial valley between two Byzantine generals OR the trap of a third party. Thats not to say that every firm working in blockchain is morally so grounded as to turn down the opportunity to monopolize its market. But the tech is promising for addressing a huge range of concentrated power especially in a digitizing world.

This week saw antitrust conflict between paeons of big tech and government. While those encounters were hostile, they will likely not result in any major damage to anyones bottom line. It also saw some new consequences for misuse of monopolized monetary power, which is a system that is also unlikely to change soon. The great thing about a monopoly, once you have it, is that its really hard for someone else to take it from you. But these are clusters of power that seem pretty obvious as places youd look to decentralize.

Kollen Post, Policy Editor, @the_postman_

CEOs for the four horsemen of U.S. tech Apple, Amazon, Google and Facebook appeared virtually before Congress on Wednesday to face accusations of functionally acting as monopolies.

The Thursday release of Q2 earnings reports showing rising revenues for each of the firms except Google did nothing to gain these firms sympathy. This was despite efforts during the hearings by the CEOs to depict their companies and their individual biographies as the American dream come true.

The past half-decade has ravaged the public image of tech in the United States. Increasingly dystopian revelations of data-gathering practices and brutal campaigns to squash competition have led to a widespread backlash against Silicon Valley. The role of social media in the 2016 election and subsequent waves of disinformation (including COVID-19) has also ended whatever honeymoon period firms like Facebook and Twitter had enjoyed.

Meanwhile, China, whose digital payments providers are widely praised as ahead of those in use in the U.S., looks set to crack down on those providers based on similar antitrust principles. For China, however, that might be at least in part to clear the way for a broad launch of a digital yuan.

Many of these tech giants are entrenched enough that they may be getting too big to fail. It is undeniable that they provide services that have changed our way of life. As Mark Zuckerberg pointed out during Facebooks investor call last night, had the COVID-19 pandemic happened two decades ago, this shift to working remotely wouldnt have been possible, and many more people would be dying. However, recent events should be getting a lot of people thinking about whether these giant firms are the best we can do and whether we might be better served looking at decentralized alternatives.

Also in the U.S., the Federal Reserves printer continues to go brrr, beating out the countrys total money printing over the first two centuries of its existence in the space of a month. The dollar is, for the first time during this pandemic, looking to be on the ropes.

Quantitative easing the formal term for the Feds use of inflation as a source of funds at the expense of all dollars already out there is a recurring villain in Bitcoin narratives. The idea is that it has to result in a monetary collapse eventually.

The extraordinary expenditures in the U.S. over recent months have seen the dollar stubbornly resisting this narrative, but according to recent analysis, thats changing. Early in the pandemic, global financial institutions and governments scrambled to stock up on dollars, buoying demand and value despite outlays. But this week, as Congress considers another huge stimulus bill, the dollar dipped to its lowest level since May 2018.

Were not witnessing a collapse in the monetary system, but certainly, a strain that, if it continues, will call into question whether the Fed really knows what its doing. At the same time, the head of the countrys major banking regulator is calling for blockchain-based challengers to the Feds central role in payments.

As China and the U.S. dominate headlines focusing on potential central bank digital currencies, and different European Union banks are launching their own trials, the remaining two of the five major currencies in the world have taken major steps indicating the same interest.

The Bank of Japan announced that it had appointed its top economist to a team doing research on the digital yen. The Bank of England, meanwhile, tapped Accenture to update technology for the U.K.s payments system not explicitly referring to a CBDC, but Accenture is deeply involved in the development of CBDCs around the world, including the digital dollar.

The dollar, the euro, the yen, the pound sterling and, as of 2016, the yuan form the basis for the International Monetary Funds Special Drawing Rights and form the backbone of global reserves. None of the five are transacting as CBDCs yet, but its clear that they are all worried about being left out. CBDC technology is not yet standard, but at the very least, research into it has become necessary to those currencies looking to maintain their prestige.

The American Enterprise Institutes visiting crypto expert, Jim Harper, talks digital dollars and new payments systems.

Coin Center, a leader in lobbying and research on decentralized networks, has updated its educational resources.

Kelman Law runs down the basics of paying taxes on both earnings in cryptocurrencies and capital gains on trading in the United States.

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Law Decoded: Big Tech, Central Banks and the Hunt for Monopolies, July 24-31 - Cointelegraph

Theres a contradiction in the Trump, and by extension Republican, deregulatory agenda that could inadvertently threaten the recovery of an already wavering economy.

That aberration is the continued reflexive embrace of antitrust regulation, an original sin of the administrative state with vast, potentially destructive societal costs.

With antitrust intervention, politicians and bureaucrats do not merely push companies around; they also directly or indirectly dictate business models and can even inappropriately influence the trajectory of entire economic sectors in non-market directions.

A picture taken on August 28, 2019 shows the US multinational technology and Internet-related ... [+] services company Google logo (top L), US online store application Amazon (top C), US online social media and social networking service, Facebook (top R) and US multinational technology company Apple logo application (down C) displayed on a tablet in Lille. (Photo by DENIS CHARLET / AFP) (Photo credit should read DENIS CHARLET/AFP via Getty Images)

The big tech news this week is a hearing in the House Judiciary Committees Subcommittee on Antitrust, Commercial, and Administrative Law.

Called "Online Platforms and Market Power: Examining the Dominance of Amazon AMZN , Apple AAPL , Facebook, and Google, GOOGL " the hearing will feature the CEOs of each, appearing remotely: Jeff Bezos, Tim Cook, Sundar Pichai, and Mark Zuckerberg, respectively. This hearing is the committees sixth in a series.

Its bad news when both parties favor economic regulatory intervention and thats the state were in now with antitrust. While international regulators and state attorneys general have their sights on these companies, all are targets of federal antitrust investigation by the Justice Department and the Federal Trade Commission in the Trump administration. (Attorney General Bob Barr, separately testifying in Judiciary this week, is taking a lead role.)

In a joint statement, House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) and Antitrust Subcommittee Chairman David Cicilline (D-R.I.) said:

Since last June, the Subcommittee has been investigating the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement. Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. "

The subcommittee will ultimately issue a report based on more than a year of information gathering, but will likely downplay letters for the record and inconvenient testimony from antitrust skeptics. How do we know that? A headline on Drudge referred to an APPLEFACEBOOKAMAZONGOOGLE Reckoning. Other articles refer to the CEOs facing a "grilling."

The very notion of monopoly power in intangible code, in ones and zeros, seems perverse, though. And here we observe not one monopoly but four companies (other giants could have also been invited to testify) vigorously competing against one another in various ways. That would seem to exemplify competition rather than the stifling of it with which big tech stands accused.

The chief internal contradiction of antitrust is that it decries bigness and excess power but then urges that the biggest and most powerful entity of all the government wielding the life or death power over all the CEOs domains impose a subjective remedy.

And government enjoys that power not just in the present case, but enjoyed it in all those that came before, and will in all those interventions to come after. That is a truly awesome power.

So we go through this theater with the dominant firms of the day every so often (AT&T, IBM IBM , Microsof MSFT t). Google is accused of favoring its own content in search results, Apple of downlisting rival apps, Facebook (and non-invitee Twitter, too) of suppressing conservative speech. Other gripes will be aired.

If the companies are so bad and the claimed consumer harm the only condition that could justify intervention is real, the more honest approach of the grandstanders would simply be to directly forbid consumers from using any of these companies services. Consumers would surely thank Congress for its protection, right?

An antitrust subcommittee doing antitrust stuff is one thing; whats more striking is the degree to which Trump himself has energized and legitimized tech attacks, especially regarding issues like content moderation that will ride along at what is ostensibly an antitrust-centric hearing. (One GOP member wants the aforementioned Barr to investigate Facebooks Zuckerberg for allegedly lying about to Congress about anti-conservative bias in prior hearings.)

On the one hand, and consistent with the Trump administrations well-known and broad deregulatory agenda to energize business, the administration took early steps to cut merger review times overall, and to speed up bank merger approvals via internal streamlining at the Federal Reserve and at the Comptroller of the Currency.

But often, President Trump has threatened antitrust action against tech and telecom firms, a stance conflicting with that deregulatory agenda and an especially dangerous tinkering with the marketplace and peoples portfolios and 401(k)s in todays crisis-rocked world.

We could see it coming, though. As a candidate, Trump proclaimed, AT&T T is buying Time Warner, a deal that we will not approve in my administration because it is too much concentration of power in the hands of too few. We will look at breaking that deal up and other deals like it. The Justice Departments attempt to block the merger ultimately failed.

Similarly, Trump tweeted in 2018 thatComcast CMCSA may be violating antitrust laws. However, after mulling it over (such delays of business transactions themselves impose heavy regulatory costs, something Trump recognized with respect to infrastructure approvals during his July 2020 White House South Lawn deregulation celebration), the Justice Departmentultimately did not investigatethe Comcast-NBCUniversal alliance.

With respect to the big tech players in the hotseat now, the president said in 2018 that Google, Facebook, and Amazon may be in a very antitrust situation, and said he was in charge and looking at it. Even then, politicians and pundits across the political spectrum were calling for thebreakupof these companies. Forcible breakup calls for an even bigger entity to wield the axe, as noted; but one will not likely find that contradiction expressed in grillings.

Some Republicans wanted Twitter at the Judiciary hearing also. Trump fought bitterly earlier this year with that company and has on numerous occasions threatened to regulate social media. In May, he followed though by issuing an executive order targeting their alleged censorship.

The online speech debate and the antitrust debate are highly intertwined, and in addition to cutting big tech down to size, both the right and left want to change underlying rules that protect platforms from liability for user postings. This battle too will doubtlessly emerge at the hearing and continue thereafter.

While the Judiciary committee was conducting the months of investigations culminating in this weeks Super Bowl hearing, the administration was doing similarly. Back in early 2019, the Federal Trade Commission announced a technology task force to assess tech sector antitrust violations and to go beyond current practice in scrutinizing transactions. In the wake of that, and in contrast to the administrations recognition of agency misuse of regulatory guidance documents elsewhere, the FTC is now in the process of drafting guidance on how the antitrust laws apply to the technology sector and defending its own role in policing it.

In other antitrust developments, this year, the FTC requested data from top tech companies on their business acquisitions over the last 10 years. The commission is also pondering an injunction against Facebooks procedures for interoperability across platforms, and is in the early stages of investigating Amazon, having started interviews in 2019 with businesses that sell on the site.

Still other signals point to a potentially expanding Trump administration antitrust agenda by the Department of Justice and FTC beyond big Internet tech firms. The FTC, for example, has been challenging an aquisition transaction in DNA sequencing.

While the DoJ and FTC did issue a Joint Antitrust Statement with respect to collaborative activities among firms during the pandemic, expedited advisory opinions still constitute playing Mother-May-I.

America may have some real troubles right now, but so-called monopoly power among competing firms in media and online sales and services are not threats to the country calling for coercive intervention from this unfortunate alliance of Democrats and Republicans.

The reality is that the infrastructure needed in tomorrows world of smart cities, autonomous vehicles, robotics and artificial intelligence, and space travel and more will require firms of far larger scale than any that we today call big tech and fret over.

These giants of the future will likewise be competitive non-monopolies, unless government grants them monopoly power or license.

Having just celebrated years of regulatory cuts at the White House, now would be a good time for President Trump back off his counterproductive flirtations with one of the worst forms of economic intervention, antitrust regulation. Congress? Thats not so simple.

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Antitrust Showdown In Congress: Big Tech, Meet Big Government - Forbes

The heads of Facebook, Apple, Google and Amazon appeared before angry lawmakers Wednesday as Congress prepares to weigh new anti-monopoly regulations, including possibly breaking them up. Facebooks Mark Zuckerberg turned to a familiar argument, saying that breaking up the big tech companies would hurt U.S. competitiveness against China in developing new technologies and Americas ability to curb Chinese influence globally.

So are U.S. tech giants an asset to the U.S. in its competition with China or a hindrance?

Google CEO Sundar Pichai answered several questions about his companys loyalty to the United States by recounting its expanding work with the Defense Department. Ever more, he attempted to cast Google as an engine of U.S. innovation.

Our engineers are helping America remain a global leader in emerging technologies like artificial intelligence, self driving cars and quantum computing, he said.

Zuckerberg contrasted between what he described as Facebooks American values and ideas with those of China. China is building its own version of the internet focused on very different ideas, and they are exporting their vision to other countries, he said in his prepared testimony.

He is not alone in this view. Daniel Castro, director of the Center for Data Innovation at the libertarian-leaning Internet Technology and Innovation Foundation, told Defense One, Breaking up U.S. tech firms would undercut American innovation. At a time when Chinese companies are growing more dominant in the global digital economy, U.S. policymakers should not hamstring successful tech companies.

Eric Schmidt, Googles former CEO who now chairs the Defense Innovation Board, has made similar statements, telling the Telegraph in May, Chinese companies are growing faster, they have higher valuations, and they have more users than their non-Chinese counterparts...Its very important to understand that there is a global competition around technology innovation, and China is a significant player and likely to remain so.

But not everyone agrees. David Segal, co-founder of the left-leaning group Demand Progress, took a categorically different view, telling Defense One, Far from stifling innovation, antitrust enforcement is necessary in order to enable it. He pointed to what he described as kill zones or areas of technology development that are too close to the products that the giants produce to attract venture capital.

Legal scholar Ganesh Sitaraman argues that conflating big tech with American innovation is part of the problem. Big tech, he says, is too intricately intertwined with China to be purely American.

The claim that big American tech companies are somehow an alternative to Chinese dominanceor, in the more extreme form, that they are competing with China on behalf of the United Statesis largely backwards he argues, in a January article for the Knight First Amendment Institute. Big techs integration with China thus supports the rise and export of digital authoritarianism; deepens economic dependence that can be used as leverage against the United States in future geopolitical moments; forces companies to self-censor and contort their preferences to serve Chinese censors and officials.

Lawmakers of both parties love to hate on big tech and its poster-child representatives, like those summoned to Wednesdays hearing. Conservatives routinely claim that Google is censoring their speech, a line they returned to repeatedly on Wednesday. Liberals argue that Facebook doesnt do a good enough job of calling out misinformation, especially if it might anger conservatives. Some observers worry that all of those resentments get in the way of a functional discussion about whether or not the companies are too big.

Im not confident that in the current environment you would see constructive solutions put forward that are not based on political retaliation, rather than a principled approach, said Mieke Eoyang, vice president for national security at think tank Third Way.

There is ample reason for lawmakers to be suspicious of how the big tech interacts with the Chinese government. A May report from London-based research firm Top10VPN shows that Amazon provides web services to Chinese companies on a Commerce Department sanctioned Entity list. Google has an AI research effort in China.

Facebook, which is effectively banned in the country, is arguably the least reliant on the Chinese market. Hong Kong-based TikTok is a major competitor to Facebook-owned Instagram. But that doesnt tell the whole story. Facebook is such a large gamer marketplace, it still makes money off of China from companies like Tencent that need Facebook's users to play their games.

From the Pentagons perspective, American tech giants do offer a unique technological resource, one that does produce innovation and that arguably would not exist if they were broken up. Consider the Pentagons JEDI cloud program. Smaller cloud providers complained that the programs requirements were tilted toward Amazon, the only company that many believed could meet them. Part of the reason that the JEDI contract came down to a race between Microsoft and Amazon (after Google pulled out) is because those are the companies with the largest cloud offerings, able to provide the highest level of security. It was only after visiting them that former Defense Secretary James Mattis realized that what Americans private big tech firms were doing with cloud computing was decades ahead of what the government was doing with smaller, patchwork capabilities. He also realized that cloud computing at enterprise scale was essential to real innovation in AI.

The size of that cloud capability and the amount of data available plays a big role in a companys ability to develop next-generation AI products. Googles compute power, and access to a massive dataset of online video footage via YouTube, was vital to the development of deep learning technologies. Facebooks compute power and its access to billions of biometric facial records pictures of faces allowed it to createunique facial recognition technology to rival the human brain.

These companies developed the worlds largest compute capabilities in order to become the worlds largest companies. Busting them up could eliminate something that doesnt exist anywhere else and actually is a driver for innovation, one that arguably requires more regulation and oversight but also that cant be replicated at a smaller scale.

The unique resource of big tech firms is what Congress is consideringin the context of these companies overall effects on the market, individuals, and tangled U.S. relations with China. How to do that? The answer is carefully and case by case. While Republicans and Democrats love to vilify big tech, these companies are very different from one another, even if they do have anti-competitive practices.

I think these companies are all differently situated based on their business models. So when it comes to discussions around breaking them up, the implications are all different, said Eoyang, as are the unintended consequences of doing so.

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Busting Up Big Tech is Popular, But Here's what the US May Lose - Defense One

Big tech is back in the spotlight.

The chief executives of Amazon, Apple, Facebook and Google testified before Congress on July 29 to defend their market dominance from accusations theyre stifling rivals. Lawmakers and regulators are increasingly talking about antitrust action and possibly breaking the companies up into smaller pieces.

I study the effects of digital technologies on lives and livelihoods across 90 countries. I believe advocates of breaking up big technology companies, as well as opponents, are both falling prey to some serious myths and misconceptions.

Arguments for and against antitrust action often use earlier cases as reference points.

The massive 19th-century monopoly Standard Oil, for example, has been referred to as the Google of its day. There are also people who are recalling the 1990s antitrust case against Microsoft.

Those cases may seem similar to todays situation, but this era is different in one crucial way: the global technology marketplace.

Currently, there are two big tech clusters. One is in the U.S., dominated by Google, Amazon, Facebook and Apple. The other is in China, dominated by Baidu, Alibaba, Tencent, Huawei and TikTok-maker ByteDance.

This global market is subject to very different political and policy pressures than regulators faced when dealing with Standard Oil and Microsoft. For example, the Chinese government has blocked most of the U.S. companies from entering its market. And the U.S. government has done likewise, blacklisting some Chinese outfits over perceived national security threats while discouraging others.

Since the COVID-19 outbreak, the Chinese government has doubled down on championing its own technology companies.

U.S. companies size and data accumulation capabilities give the country economic and political influence around the globe. If the U.S. technology giants are broken up, the result would be a vastly uneven global playing field, pitting fragmented U.S. companies against consolidated state-protected Chinese firms.

There are two main views of antitrust action among legal experts.

One focuses on consumer welfare, which has been the prevailing approach federal lawyers have taken since the 1960s. The other suggests that regulators should look at the underlying structure of the market and potential for powerful players to exploit their positions.

Those two sides seem to agree that price plays a key role. People who argue against breaking up the tech giants point out that Facebook and Google provide services that are free to the consumer, and that Amazons marketplace power drives its products costs down. On the other side, though, are those who say that having low or no prices is evidence that these companies are artificially lowering consumer costs to draw users into company-controlled systems that are hard to leave.

Both sides are missing the fact that the monetary price is less relevant as a measure of what users pay in the technology industry than it is in other types of business. Users pay for digital products with their data, rather than just money.

Regulators shouldnt focus only on the monetary costs to the users. Rather, they should ask whether users are being asked for more data than is strictly necessary, whether information is being collected in intrusive or abusive ways and whether customers are getting good value in exchange for their data.

There arent just two ways for this debate to end, with either a breakup of one or more technology giants or simply leaving things as they are for the market to develop further.

In my view, the best outcome is right in the middle. The errant company is sued to make necessary changes but isnt broken up. The very fact that the government filed a lawsuit leads to progress with other companies. That is exactly what happened in past cases against the Bell System, IBM and Microsoft.

In the 1956 federal consent decree against the Bell System telephone company, for example, which settled a seven-year legal saga, the company wasnt split up. Instead, Bell was required to license all its patents royalty-free to other businesses. This meant that some of the most profound technological innovations in history including the transistor, the solar cell and the laser became widely available, yielding computers, solar power and other technologies that are crucial to the modern world. When the Bell System was eventually broken up in 1982, it did not do nearly as much to spread innovation and competition as the agreement that kept the Bells together a quarter-century earlier.

The antitrust action against IBM lasted 13 years and didnt break up the company. However, as part of its tactics to avoid appearing to be a monopoly, IBM agreed to separate pricing for its hardware and software products, previously sold as an indivisible bundle. This created an opportunity for entrepreneurs Bill Gates and Paul Allen to create a new software-only company called Microsoft. The surge of software innovations that have followed can clearly trace their origins to the IBM settlement.

Two decades later, Microsoft was itself the target of an antitrust action. In the resulting settlement, Microsoft agreed to ensure its products were compatible with competitors software. That made room in the emerging internet marketplace for web browsers, the predecessors of Apples Safari, Mozillas Firefox and Google Chrome.

Even Margrethe Vestager, the European Unions top antitrust official and frequent tech-giant nemesis, has said that antitrust prosecutions are part of how technology grows. But that doesnt mean they all have to achieve their most extreme ends and be broken up.

The current pandemic has highlighted the value of the technological innovations of the big tech companies.

Americans are relying more than ever on the internet and online shopping and delivery, while mobility data has been critical in gauging social distancing behaviors and guiding policy. Digital tools for tracking coronavirus cases, deaths and social distancing behaviors in the smallest counties have circulated widely, and social media and smartphone videos were crucial to the recent protests and calls for social justice.

Altogether, this has led to a softening of public opinion toward big tech and calls for an end to talk of breaking them up.

But the pandemic has also revealed numerous digital fault lines: differences in access by country, race and region; the ability of tech companies to exploit labor; and potential for new kinds of misuse of data.

Far from giving the technology industry a free pass, the pandemic is an opportunity to take a more balanced view. Yes, lets celebrate the Silicon Valleys value, but lets not turn a blind eye to the problems they create or worsen.

During the hearings, youll likely hear politicians accentuate the bad stuff, while the tech CEOs will paint an overly rosy image of themselves. Antitrust is complicated enough without misconceptions clouding their judgments as well.

This is an updated and expanded version of an article originally published on July 17, 2019.

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Lawmakers keen to break up 'big tech' like Amazon and Google need to realize the world has changed a lot since Microsoft and Standard Oil - The...

In his opening statements, the chairman of Wednesdays historic tech hearing argued that regulating techs most dominant players is vital in the midst of the ongoing pandemic that has driven even more of American life online.

Prior to the COVID-19 pandemic, these corporations already stood out as titans in our economy, House Judiciary Antitrust Subcommittee Chair David Cicilline said. In the wake of COVID-19, however, they are likely to emerge stronger and more powerful than ever before.

The argument that tech stands to benefit from the COVID-19 crisis is a smart one and a timely attack thats difficult to dispute. While many major companies in other industries are struggling, grappling with layoffs or filing for bankruptcy, many of techs largest companies stand to emerge from the economic storm largely unscathed if not better off.

In his own opening remarks, ranking member Jim Sensenbrenner also argued that because Americans are relying more on online companies than ever before, techs power must be examined in light of the pandemic.

That responsibility comes with increased scrutiny of your dominance in the market, Sensenbrenner said.

Its not the first warning about tech companies amassing more power in the throes of the coronavirus crisis. A handful of members of Congress have called attention to mergers planned during the pandemic, citing concerns about adequate scrutiny for deals that could make techs already huge companies even larger and more dominant.

In April, Sen. Elizabeth Warren (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY) proposed the Pandemic Anti-Monopoly Act, which would freeze mergers during the crisis, calling out big tech specifically. The LEAST we should do is halt big mergers during COVID to slow the consolidation of sectors, Ocasio-Cortez said.

Cicilline also previously called for a freeze on mega-mergers and pushed for such a ban to be included in the economic stimulus package passed by Congress.

As hard as it is to believe, it is possible that our economy will emerge from this crisis even more concentrated and consolidated than before, Cicilline said. As American families shift more of their work, shopping and communication online, these giants stand to profit.

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Lawmakers argue that big tech stands to benefit from the pandemic and must be regulated - TechCrunch

Amazons Jeff Bezos, Apples Tim Cook, Googles Sundar Pichai and Facebooks Mark Zuckerberg, CEOs of four of the worlds most powerful companies, are testifying before Congress Wednesday.

Specifically, they are going before the Houses Subcommittee on Antitrust, Commercial, and Administrative Law, and the issue here boils down to power. How did these companies get it? Did they do so legally, or did they break rules? Finally, do they have too much power?

Erik Gordon, professor at the University of Michigans Ross School of Business, spoke with host Sabri Ben-Achour. The following is an edited transcript of their conversation.

Sabri Ben-Achour: So can you explain why this hearing is happening? And, specifically, why this question of how these companies became so powerful and whether they did so legally is an issue right now?

Erik Gordon: The hearing is happening because members of Congress think that these companies are really powerful, and that theyre abusing their power, and that Congress should look into it and maybe pass some new laws. The question you brought up is the key question. Under current antitrust law, its perfectly OK to be big and to be powerful, and, in fact, to be a monopoly, as long as you got big and powerful by lawful means, as long as you didnt do anything illegal. The government cant break you up, under current law, just for being big.

Ben-Achour: So whats an example of how, say, Google or Facebook or whichever might have accumulated power illegally?

Gordon: Suppose you have a dominant online search engine, and you use that search engine dominance to make you even more powerful in an other area. So, for example, suppose you say, You can only use my search engine, if you use my browser. Now you get big and powerful in the browser business, because you already had power in the search engine business. That would be an example of getting bigger and more powerful illegally.

Ben-Achour: Do you think anything significant will come out of these hearings? Or are they sort of theatrical?

Gordon: I have a sense that in an election year, were going to see some theater. Its an opportunity for politicians to control the questions. They get to put together some nice sound bites for their campaign. This isnt the first round of hearings we had, and in the other hearings, where there were some beat-ups of Zuckerberg and other tech people, oh, a few bills were introduced in Congress. They didnt go anywhere. Nothing much happened.

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Are the Big Tech companies breaking antitrust rules? Their CEOs testify before Congress. - Marketplace

The hearing on big tech antitrust matters on Wednesday was an embarrassment, and not a single governmental official there had the ability, will, or both, to bring any of the CEOs on hand to task.

The very best you can say about Wednesday's hearing is that it was bipartisan. But you can only say that because Democrats and Republicans alike displayed equal ignorance, and favored their own political careers instead of doing the job they said they were there for.

Whether you think Apple, Google, Facebook, and Amazon are shiny-clean saints, slightly murky figures, or outright criminal, it doesn't matter. If there's anything to get away with, they got away with it and that was it, that latest round was over with nobody but the tech CEOs scoring any points.

America originally took the basics of its legal system and its hearing procedures from the UK, where one of the authors of this editorial is from. In the UK, there is a weekly Prime Minister's Questions session, the PMQs, and it is lauded as among the greatest examples of democracy in action but only by the people involved. To the people, it is an embarrassment. Highly paid and in theory highly educated people act in it the same way schoolboys do in the yard.

And for the Americans on the staff, this was more of the same ignorance and posturing on the irrelevant that we've seen for the last 20 years. It was elected officials wrapping themselves in the flag, trying to score points for re-election campaigns. Instead of listening to answers, they'd cut off the answers, and keep reading what were pre-prepared statements in the form of the worst Jeopardy game show-like presentation possible.

Not one single person facing off against Tim Cook and the rest, did a good job and got a good answer. There was Rep. Mary Gay Scanlon who had specific questions about Amazon's alleged destruction of rival Diapers.com, but she was only able to make Jeff Bezos squirm until her time was up. And, that diapers.com example was from more than a decade ago.

But, at least Scanlon came armed with specifics and research. This hearing purportedly followed an investigation begun back in 2019 but most appeared to have been briefed for the first time on their way into the room.

More platform confusion on display belies bigger knowledge problems

As an AppleInsider reader, the difference between Twitter and Facebook is so obvious to you that it seems impossible anyone could get them mixed up. If you're not a user, though, it's all one big social media monolith and it's not your job to find out which is which.

But, knowing what the differences are in a hearing ostensibly about big tech power, it literally was the job of the committee to know the difference. You might hope that they would already know the difference between Twitter and Facebook, and that they would know what an app is. The fact that they didn't isn't shocking at this point, and the fact that they were incapable of finding out during this entire investigation is shameful.

At first, this seemed like it might be similar to the decision then-senator Steve King made when he tried to grill Google's Sundar Pichai about an iPhone issue. It might or might not have been technological ignorance, but it was certainly political maneuvering and it was playing to the crowd instead of trying to find the truth.

The representatives in this hearing did not know what they were asking either, and that is a clear abdication of responsibility. You and I can't pin Mark Zuckerberg up against the wall and get him to answer for years of Facebook's issues. This august body could, and have the power to do so and they just didn't.

Five minutes in government meetings is meaningless, no matter how many laps you take

After significant wrangling by both the committee and the tech CEOs, each committee member was granted what turned out to be three five-minute slots in round-robin and parliamentary fashion in which to ask questions. Obviously, that's inadequate. But, apparently if you give a politicians five minutes, they will take the five minutes. We counted about four minutes and ten seconds on the average per five-minute allocation, for the representatives themselves and their political agenda.

Even the ones who actually did ask questions instead of proselytizing, they tended to interrupt the answers in a handful of seconds. Sometimes that was right and necessary these four big tech people are not dumb and they know five minutes can be eaten up very quickly with some padding.

But most of the time, the interruptions were not to get back on topic or to delve or to pull a CEO up for talking nonsense and there was a fair amount of that nonsense, but discussions of all the CEOs portraying their companies as scrappy underdogs under constant threat is a topic for another day. Most of the time, a representative would interrupt an answer in order to ask their next pre-prepared question with no regard to the answer just given. Answers don't matter to them, being seen to ask your questions does.

Repeatedly, too, we had the outright offensive demand that the CEOs answer complex issues with just a yes or no. If you're allowed a complex answer, you can hide in the details but there's a chance you'll reveal the truth. With a yes or no, there isn't.

The only people who ever demand a yes or no, are ones who have no interest in the answer, or in the truth. They solely and exclusively care about how they look to their voters back home.

There used to be an office in the US designed to help with this, but it is long gone

In 1972, The United States Congress established the bipartisan Office of Technology Assessment (OTA). It was specifically established to educate and brief the House and Senate on complex scientific and technical issues of the day, and was instrumental in the early digital distribution of governmental documents to not just the feds, but to the public as well. It was governed by 12 members of Congress six Republicans and six Democrats and had a staff of 143 people, mostly scientists, with a smattering of support people.

It cost the federal government about $22 million per year in the early '90s. That's millions, not billions. It was dissolved as unnecessary and "wasteful" in 1995, with arguments saying that governmental officials were more than capable enough to understand and govern fairly on the issues and technologies of the day.

They weren't capable of doing that without the OTA then, and as the years have passed, this has only gotten worse, and the skeleton crew of mostly non-scientists doing this kind of work at the Government Accountability Office is underfunded and understaffed for the increasingly complex matters at hand. What isn't clear, is if this inability to govern on these matters without education is willful, or just incompetent.

Of course, it isn't clear how much the concept manned by a skeleton crew helps with the problem if that inability to deal with complex scientific or technological matters is willful. The European Parliamentary Technology Assessment (EPTA) performs roughly the same tasks, with roughly the same manning, and it doesn't seem to help decisions there either.

Not the first time, and it won't be the last

At first glance, this seems like more of the same that we've come to expect from the US government when it comes to technology. But, this time they went too far. Wednesday's hearing was the least productive federal hearing we've had the misfortune to have to sit through in two full decades. And yes, this includes the supreme court case discussing live video streaming service Aereo that likened the service to a parking lot and a dry cleaner's shop, somehow.

You know that each of the four CEOs had a debriefing with their executive board after the hearing. You can bet that each one of them had a stiff drink and counted their lucky stars that it went the way it did.

As CEOs, they should be relieved. As Americans, they should be scared. The House of Judiciary correctly and properly identified a huge issue, and it spoke correctly of the importance of this hearing. But then, it destroyed its authority by presenting a circus of schoolyard children. And, that comparison probably isn't fair to the children.

Maybe the next hearing, or the one after that will be better. We're not expecting it, though.

See the original post here:

When it comes to big tech, US government official incompetence is embarrassing and horrifying - AppleInsider

Technology companies now make up around 20% of the state's overall economic impact.

SEATTLE As Congress investigates whether big tech companies are too big, Seattle continues to see fast growth as these companies expand.

Currently, tech companies make up 20.2% of Washington state's overall economy, according to a recent study by CompTIA.

In Seattle, the overall footprint among companies like Amazon, Apple, Google, and Facebook is expanding. Amazon's global headquarters is now more than 40 owned and leased buildings in Seattle.

When it comes to jobs, the impact is growing too.

Amazon currently employs around 50,000 people in the region. Apple, which is moving into two 12-story buildings on Dexter Avenue in Seattle, is planning to move in around 2,000 employees.

Google is putting the finishing touches on its new five-building campus along Mercer Street and is expected to provide around 4,500 jobs.

Facebook, which is also now growingwith five buildings in Seattle, has around 5,000 employees in the city.

But many feel that big tech growth can also do more harm than good.

"These four companies represent a private government that can overtake many countries in a way," said Hanson Hosein, co-director of the Communication Leadership master's program at the University of Washington. Hosein has been closely studying tech growth in Seattle for more than a decade.

"We're talking billions of people and trillions of dollars," he said. "That power is disproportionate, and the concern is very anti-democratic because they're not that accountable to us."

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Big tech companies continue to expand in Seattle - KING5.com