During recess, tech antitrust is on 'a knife edge'
Hello, and welcome to Protocol Policy! Today, I’m writing about why you shouldn’t take your eye off the tech-antitrust ball just because lawmakers are fleeing Washington. Plus, a deep dive into how social media has created a firehose of prescription ads that no one really oversees — and guess what the lawyer who was in charge of stopping insider trading at Apple was up to?
Should I stay or should AICOA?
Senators recently headed home for a two-week break without taking action on the tech antitrust bill. That doesn’t mean, though, the moment is any less crucial for the fate of the American Innovation and Choice Online Act. And even if supporters and detractors alike think they’ll win by just staying their courses, they know they have to make the best of the time that lawmakers will spend at July Fourth barbecues.
Those who support AICOA, and claim they have the votes to pass it, were eager to get a vote before the Independence Day recess. But that doomed hope wasn’t just a scheduling preference, like slipping out for lunch at 11:30 a.m. on a summer Friday.
- Rather, this recess (or the “state work period,” as it’s called by lawmakers who are sensitive about the notion they’re on the job only half the time) offers Big Tech more time to plead its case, strategize, advertise against the measure, grab attention with stunts, come up with procedural hurdles, etc.
- Tech and its friends might be able to mobilize real-life constituents — who are theoretically the people senators most care about — to give a piece of their mind to the lawmakers at cookouts and fireworks shows.
- It’s worth watching out for that dynamic: Yes, it gets really hard to do much in Congress after August because of the demands of campaigning, but senators who are facing tough races may start to waver if they’re hearing a lot about voter concerns right now.
Some of that in-person jawboning is surely going on, and is organized by both sides, said Adam Kovacevich, a former Google official who now runs a pro-tech group that’s been highly critical of AICOA.
- But, Kovacevich contends, what senators may hear about most are more basic economic concerns or else hotter-button political topics — particularly in the wake of a busy SCOTUS season.
- “When a senator is marching in a July Fourth parade, what are the top issues that voters and constituents come up to them and ask them to deal with?” he said. “It’s much more likely to be inflation, abortion, guns, not Amazon Basics.”
So, no, Big Tech hasn’t yet launched some sort of massive protest movement to get everyday users to accost senators.
- Companies are still trying to reach senators at the moment, though. Business organizations are sending letters. Think tanks and business-allied groups are writing blog posts. The Big Tech CEOs were even reaching out last week.
- These are more or less the things tech was doing before, but it’s important to realize they’re not exactly minimal. Rather, these efforts are backed by literal millions of dollars in ad spending and hot rhetoric about national security and inflation.
- Kovacevich also teased that tech allies are “looking at” new ads focused on the content moderation concerns that have threatened to alienate progressives.
Plus, all this keepin’ on, backed up by hefty ad spending, does make good strategic sense if tech really does think it’s already winning.
- “Going into July and then into the August recess, our focus is just maintaining where we’re at — still persuading senators that this isn’t the time to do this bill, that there’s issues with this bill,” said Robert Winterton, a spokesperson for the tech trade group NetChoice. “We feel like where we’re at is working.”
- On the other hand, even top-level pleas to Senate Majority Leader Chuck Schumer have only resulted in the CEOs being told personally that he supports the legislation and is working “to get the necessary votes to pass it,” according to the Washington Post.
Meanwhile, pro-AICOA forces are trying to harness their own grassroots and get attention they don’t have to pay quite so much for.
- Digital rights group Fight for the Future, for instance, put up video billboards outside Schumer’s D.C. and New York homes that play the John Oliver segment boosting the antitrust bill.
- An “independent developer” who just happens also to be named Adam Kovacevich even wrote in Newsweek about his support for the bills.
What this means was actually summed up by a Brit I recently spoke with — Richard Stables, CEO of the Kelkoo Group, a European shopping comparison site that’s pushed tech competition matters on both sides of the Atlantic. After attending “seven or eight” meetings with Capitol staff and lawmakers last week, he told me he was “cautiously optimistic” that AICOA has the votes, though some supporters aren’t ready to admit it. But, he added: “I think it’s on a bit of a knife edge.”— Ben Brody (email | twitter)
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Grayscale sued the Securities and Exchange Commission over the agency’s decision not to allow the company’s proposed Bitcoin ETF. The SEC denied Grayscale’s attempt to hold bitcoin in an ETF rather than through futures contracts, as the agency said the fund didn’t meet legal standards designed to protect investors.
Schumer has turned to CEOs in a bank-shot attempt to finalize the Competes Act. The Senate majority leader asked around a dozen Democratic senators to push corporate chief executives to pressure Republican senators on the bill, per Axios. GOP senators had reportedly been unmoved by calls from leadership to reconcile the House and Senate bills before the holiday weekend.
Democratic Sen. Maria Cantwell is opposing another high-profile bipartisan privacy measure, according to reports. Cantwell is the only one of the four main congressional negotiators on data protection to withhold her support from a bill that recently got a House markup. She’s also apparently saying no to a not-yet-introduced measure from Sens. Richard Blumenthal and Marsha Blackburn, who lead a subcommittee on consumer protection.
The White House wants the FTC to crack down on data-sharing post-Roe. Amid concerns that tech services could provide evidence that people sought or obtained abortions, President Biden is expected to send a letter to the agency asking it to look into deceptive practices by data brokers, including the sale of sensitive health information. Chair Lina Khan has already told Protocol the FTC would take action if “existing laws and our existing tools cover some of those practices.”
Steve Jobs will receive a posthumous Presidential Medal of Freedom — the nation’s highest civilian honor — for changing “the way the world communicates, as well as transforming the computer, music, film and wireless industries.”
The U.S. Copyright Office said journalistic publishers don’t — and shouldn’t — have extra rights over the material that Google, Facebook and other internet platforms aggregate.
In the states
New York has denied an extension to a key permit for a controversial crypto mining operation in the state's Finger Lakes region. Gov. Kathy Hochul is still weighing whether to enact the legislature’s moratorium on new permits for gas-powered crypto mining, but state environmental regulators said the Greenidge plant does not comply with existing climate laws.
Wegmans will pay $400,000 to New York State over a data breach affecting more than 830,000 Empire State residents (and millions nationwide), according to the state attorney general. That’s about 48 cents per affected resident in the state.
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In the courts
The Apple official who was responsible for enforcing Apple’s ban on insider trading pled guilty to insider trading.
The judge in the FTC’s case against Meta struck a motion by the company “for violating the Court's Local Rule on excessive footnotes, which also appear in this case as an effort to circumvent page limits.”
Telehealth services have spent millions of dollars promoting prescription drugs on TikTok, Instagram and Facebook. The companies’ ad policies, though, have done little to curtail the firehose of promotions — some of them peddling misleading or unscientific claims — that makes the TV spots of yore look like a trickle.
A major escalation in Russian cyberattacks could still be in the works. Cybersecurity experts warned we could still be in a “‘calm before the storm' situation” as Russia faces mounting political and economic pressure.
Around the world
European Union officials have come to an agreement on crypto regulations that would require stablecoins to hold extensive reserves and mandate environmental impact assessments.
South Korean app developers can finally use Apple’s third-party payments system. However, Apple will still charge those companies 26% commission, down from the usual 30% fee from Apple’s in-app purchase system. When you add in any fees from third-party payment providers, this alternative option may not be all that attractive to developers.
Google spent months letting a sanctioned Russian ad tech company access user data, according to a ProPublica report. Google told the news outlet that, back in March, it had shut down direct ad-buying abilities for RuTarget, which is owned by the also-sanctioned Sberbank financial institution. But apparently the data-sharing slipped through.
Amazon has agreed to implement a two-click cancelation process for Prime, the European Commission announced. The company’s formerly labyrinthine procedure — complete with warnings, diversions and difficult-to-understand options — was a prominent example of dark patterns that could keep users paying for subscriptions they want to get out of. The changes will apply to Amazon’s “EU websites and for all devices (desktop, mobile and tablet).”
A TSMC board member warned of delays to its Arizona factory over the Competes Act. Ming-Hsin Kung, who is also a deputy minister of Taiwan’s National Development Council, said the timing of the $12 billion Arizona factory completion would be based on the timing of Congress approving subsidies.
Amazon is limiting LGBTQ+-related search results in the United Arab Emirates, where same-sex sexual acts are criminalized. Amazon has blocked related book and flag search results under pressure from the government.A coalition of European consumer groups filed GDPR complaints alleging Google’s use of dark patterns in its signup process extracts more data than users would otherwise give.
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How to build an equitable and inclusive future: There is so much more we need to do to make sure our future is more equitable and inclusive and maximizes America’s potential. It is not enough just to ensure everyone is connected. We also need to extend the full scope of digital opportunity to the people, the communities, and the institutions.
The beatings will continue until …
Mark Zuckerberg loves to make terrible outcomes sound like the result of aggregate consumer choices and neutral systems, but apparently he can also bring that spirit to his own workforce! “Realistically, there are probably a bunch of people at the company who shouldn't be here,” Zuckerberg told a town hall, according to Reuters. Citing the economy, Zuck discussed slower hiring and more ambitious goals, then added: “I think some of you might decide that this place isn't for you, and that self-selection is OK with me.”
Thanks for reading — see you Wednesday!