The antitrust bill passed the Senate. (Not that one.)
Hello, and welcome to Protocol Policy! Today I’m hiding from temperatures headed to the upper 90s to tell you about the “proof of concept” for the tech-antitrust coalition. Plus, the White House’s new push against online abuse, and what went down in Elon Musk’s Twitter town hall.
Venue vidi vici
In a moment of bipartisan frustration with tech, a bill inspired by Google’s practices and supported by an unlikely coalition of lawmakers like Sens. Amy Klobuchar and Ted Cruz sailed through the Senate earlier this week. Except, no, it wasn’t that one.
Still, the bill from Sen. Mike Lee, known as the State Antitrust Enforcement Venue Act, would strike a blow for government competition prosecutors who feel kicked around by Big Tech, and it does so in just three small words.
- Right now, when a bunch of civil cases in different federal courts all involve “one or more common questions of fact,” judges like to consolidate them into one, sometimes faraway, court for the lengthy pretrial phase.
- Judges don’t want to have to rule again and again — or, potentially, in divergent ways — on what documents have to be produced or who should get deposed.
In antitrust cases, though, the federal government gets to stay put in the court it wants. If this bill passes the House too and gets signed into law, it’ll add the words “or a State” to the statute, ensuring state attorneys general get their home-court advantage too.
- Why does this matter? States tend to feel like they have a leg up in their own federal districts: They know the judges, they know the courtroom rules, they know the local legal precedents and they know nearby private lawyers who might be good to hire for help.
- Lawyers like to sleep in their own beds too, but more importantly, they don’t want tech companies — or whomever they’re alleging violated the antitrust laws — to get advantages in their home courts.
- Federal judges, it should be noted, have suggested the measure could threaten the efficiency of their dockets.
The issue is particularly relevant in antitrust litigation because the potential for high damage awards makes it very attractive for private plaintiffs to pile on to the government’s allegations. That means lots of lawsuits and a desire for consolidation.
- That’s basically what happened when the Texas-led antitrust lawsuit against Google’s practices in ad tech got sent to New York for the pretrial phase.
- That process, in turn, helped prompt the writing of the bill by Lee, although a provision that would have applied retroactively and allowed Texas to bring the case back got stripped out.
What does this all mean for tech antitrust — especially that other, more contentious bill from Klobuchar on self-preferencing by the likes of Google?
- Rep. Ken Buck, the Republican who is sponsoring the House version of the venue bill and has been a crucial GOP ally of tech antitrust measures, called the success of the Senate measure the “proof of concept for a bipartisan reform coalition.”
- Lee, who is emphatically not supporting the self-preferencing bill despite his frustrations with tech, said he hoped to continue working with bipartisan colleagues “to make further reforms to stop abusive monopolists.”
- And it certainly says something about senators’ annoyance with tech, or interest in their own states’ antitrust enforcement, that none of them objected to passage of the bill.
Still, new hurdles keep popping up for the big bill. That’s even as supporters say they have the kinds of private assurances that make them confident antitrust summer is about to begin (alongside what I can assure you is a very humid lead-up here to the actual summer).
- Senators are running out of time to vote on Big Tech self-preferencing before the August recess, which would be the easiest window for it to pass, although it’s not the last one.
- The gun debate could take up the time before the July 4 recess too, which is when Klobuchar and others had suggested they hoped to finish with the measure.
- And some Democrats want a change to a key provision over concerns about its effect on content moderation, even though the section helped secure crossover Republican support.
Ultimately, the Senate always has room to surprise: usually with gridlock, occasionally through bipartisanship. At least on the venue bill, the shock came from the latter, and Big Tech may be feeling the heat.
The White House launched a task force that will provide recommendations for curbing online abuse. Over the course of 180 days, the group will come up with advice for the federal government and states as well as tech companies. The White House said recommendations would focus on strengthening accountability for offenders, researching the scope of the problem and increasing support for those who have been targeted.
Sens. Bernie Sanders and Elizabeth Warren, plus another three Democrats, introduced a bill that aims to limit data brokerage activity in the health space. The group cited likely restrictions on abortion access as a driving force behind their efforts.
Warren and Sanders also joined a letter from Sen. Ed Markey pushing the Commerce Department to develop a strategy for common mobile device chargers, like the one the EU just put in place. They say it would “restore sanity and certainty to the process of purchasing new electronics.”
AI is the solution to all our online content woes, right? Not so fast: An FTC report concluded “that governments, platforms, and others must exercise great caution in either mandating the use of, or over-relying on, these tools even for the important purpose of reducing harms.” The best thing AI could really do, the FTC said, is stop spreading scams, illegal sales, incitement, disinfo and other dreck across tech platforms in the first place. Ouch.Advocates for children want the Education Department to condemn the use of social media by schools to communicate with students.
In the states
Securities regulators in Alabama, Texas, New Jersey, Washington and Kentucky opened probes into the troubled crypto lender Celsius. Last week, the company — which as of mid-May managed $11.8 billion in assets — paused all withdrawals, swaps and transfers.
The head of the crypto trade group Association for Digital Assets Markets launched a campaign for a House seat in New York. Michelle Bond is running as a Republican to replace retiring GOP Rep. Lee Zeldin.
A MESSAGE FROM INTERNET FOR GROWTH
The idea that politicians could restrict cost-effective online advertising and marketing is daunting. These laws could potentially cripple the way small companies like ours do business in this ever-evolving digital age.
Roku’s competitors have accused it of abusing market power. For free, ad-supported streaming channels, Roku decided it would shift to an in-house tech stack and reduce revenue-share payoffs by 5%. Some programmers fear that platform operators such as Roku are acting as gatekeepers, particularly when it comes to accessing user data.
It’s no secret that most tech companies hate when employees unionize — but why? Protocol spoke with tech executives to understand some of the top reasons, including impact on company culture and the potential for increased labor costs. Employees discussed the grim aftermath of enduring a failed unionization effort.
The EU’s reversal of the $1 billion antitrust fine levied against Qualcomm shows just how hard it is to make antitrust action stick. In particular, the EU has had a hard time enacting regulations when it comes to hardware providers.
The U.S. has seen increased rates of exports for used vehicles, which may run counter to the Biden administration’s push to reduce emissions by promoting EV adoption. The U.S. exported more than $8 billion worth of used cars in 2021, up from a little over $6 billion in 2020.The crypto industry’s making an aggressive bid to hire D.C. bigwigs.
Around the world
Not everyone is on board with the European Commission's Code of Practice to tackle disinformation. Apple and Telegram were notably absent from the list of 34 signatories, though they could still join. The code is intended to set frameworks for demonetizing misinformation, increasing political ad transparency and providing fact-checking tools to users.
Sony, Samsung and Toshiba lost their attempt to overturn an EU fine of around $121 million. In 2015, the European Commission ruled that the companies had colluded in their procurement tenders within the optical disk drive market.
Russia hit Alphabet with a small fine of around $260,000 for failing to store data from Russian users domestically. Relations between the two continue to deteriorate amid the war in Ukraine, and Alphabet moved several of its employees out of the country in February.
French regulators accepted Meta’s data-sharing agreement. Meta made a five-year commitment to grant access to select advertising information for domestic ad tech companies. Authorities there had been looking into the matter after the French firm Criteo filed a complaint.The U.K. wants to be done with cookie popups (yay!), mostly by moving to an opt-out model for tracking rather than the GDPR’s opt-in approach. (Wait, what?)
In the media, culture and metaverse
At Twitter’s town hall meeting yesterday, Musk told employees there’s utility in allowing pseudonyms on the platform. When asked how his political views would impact the direction of Twitter, Musk labeled himself a moderate and pointed to instances of voting for Democrats and Republicans.
YouTube took down one of the Jan. 6 committee’s videos because it included Trump’s election lies, saying that the clip had insufficient context.
33 hospitals: Of Newsweek’s top 100 hospitals in the U.S., 33 had installed Meta’s Pixel ad tracker on their websites to share potentially sensitive patient information with the social media giant, according to an investigation from The Markup. The data-sharing practice raises concerns about potential HIPAA violations.
A MESSAGE FROM INTERNET FOR GROWTH
Internet advertising has enabled us to grow our business to what it is today, but proposed regulations limiting advertisers’ ability to reach target audiences would hurt media publishers like us.
Over 60% of global CEOs said they expect a recession in their primary region before the end of 2023, according to the C-Suite Outlook survey conducted in May. That was, of course, before the Fed hiked rates by 75 basis points earlier this week, while signaling its intention to continue raising them throughout the year.
Thanks for reading — see you Wednesday!