Hello, and welcome to Protocol Policy! Today I’m looking at how the FTC’s attempts to beef up its powers on privacy may reinforce its tool kit on competition. Plus, Musk can cram in Mudge’s allegations if he does it quickly, and Meta’s in trouble with Irish privacy authorities — again.
Follow the rules
The FTC is diving deeper into Amazon’s proposed acquisitions of One Medical and iRobot. Given chair Lina Khan’s plans to fundamentally remake the agency and push back on the power of major companies, the reviews signal pending clashes that go beyond the mere question of whether the transactions violate antitrust law. And the commission’s Democrats could be giving hints about those issues as soon as a rulemaking session on Thursday.
The FTC’s reported moves on the acquisitions have long been expected, but still raise question marks for the future of the deals.
- The FTC is investigating Amazon’s proposed deal for the boutique primary health care provider, and the agency has started to look into the e-commerce giant’s proposed purchase of the Roomba maker, per POLITICO.
- The latter is likely to look at how the data that iRobot’s products vacuum up as they zoom around homes could give Amazon an unfair leg up over rival retailers, the report said.
Traditionally, of course, acquisitions in industries that seem poised to stay competitive after the deals close are not the ones that garner serious scrutiny by antitrust regulators. Ditto those that only raise questions about data protection.
- Under that view, the FTC would probably just be digging into these two deals, which arguably both fit into categories of things that aren’t big problems, to be extra sure nothing worrisome is going on.
- But in context, the FTC probably wants to slow down Amazon while assemblimg a case against the company for something else, maybe like its treatment of third-party merchants or dark patterns in Prime sign-ups.
But as we know, there’s nothing traditional about this FTC, and Khan, who became the closest thing competition law has to a celebrity with her criticism of Amazon’s practices, has long considered the fusion of privacy and antitrust.
- The revamped complaint against Meta she oversaw, for instance, treated poor privacy protection as a type of degraded product quality arising out of the social network’s alleged monopoly.
- She had taken up that idea in her academic work prior to joining the commission, and she also approvingly studied the history of the government simply prohibiting powerful companies from entering certain additional industries.
- The potential privacy rulemaking the FTC recently kicked off also asks about whether some companies are just too big to participate in certain data practices or to be allowed to share information across business lines.
Usually privacy enforcement at the FTC is, somewhat unlike merger enforcement, backward-looking in the extreme.
- Khan’s work, though, and the very possibility of rulemaking are partially designed to make the FTC more powerful in challenging, and more proactive about banning, icky data uses.
- In other words, Amazon may have hoped to close these deals eventually because the main concerns about them actually lie in a policy area where the FTC is always behind the ball.
- Khan, however, is trying to turn that dynamic around, and even if she has an uncertain path to success, the agency’s new thinking about data could spell expensive, time-consuming, profit-crimping trouble for Amazon — even if the deals go through.
That’s why Amazon should probably be listening closely when Khan speaks about the rulemaking on Thursday. The FTC’s eyeing of the proposed acquisitions is, after all, more or less routine. That means the scrutiny might well come to nothing — maybe because there really doesn’t turn out to be much to object to under competition law. But Amazon knows that, when facing down one of its foremost antagonists, the battles may not go as simply as we all envision.
— Ben Brody (email | twitter)In Washington
The Commerce Department wants to put $28 billion of its new semiconductor funding toward U.S. manufacture of “leading edge logic and memory chips.” The department’s new spending plan also allocates $10 billion toward current chips and says guidance for how to apply for the money will be available by February. Sec. Gina Raimondo said she hoped the funds could start flowing by spring.
Lawmakers are back from recess, and once again the spotlight is on the tech-focused anti-self-preferencing bill. Sen. Amy Klobuchar has insisted the measure is alive, suffering mostly from scheduling vagaries and the pressure brought down by Big Tech’s millions in ad spending against it. Still, the bill has been in limbo for months — and now lawmakers don’t want to anger well-heeled foes close to the upcoming election.
A MESSAGE FROM CIRCLE
USD Coin (USDC) is the institutional grade stablecoin. Monthly attestations show exactly what reserves back USDC, and businesses all over the world are using USDC to build the next generation of financial services and global payment applications.
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In the states
The Los Angeles Unified School District was hit by a ransomware attack over the weekend. LAUSD, the second-largest school district in the U.S., is working with the FBI, Department of Education and Department of Homeland Security to address the issue. The school year still began Tuesday, as scheduled.
In the courts
A Delaware judge ruled Elon Musk can add information from Twitter whistleblower Peiter “Mudge” Zatko to his lawsuit, but he can’t push back the trial date. During a lengthy hearing Tuesday, it also emerged that Musk expressed doubts about the purchase during the early days of Russia’s war in Ukraine, saying World War III could break out.
Uber’s former chief security officer is on trial this week over a data breach. Joe Sullivan faces allegations that he mishandled a 2016 breach, as he paid the hackers $100,000 but failed to tell drivers their data had been compromised. This is likely the first time a corporate executive has faced criminal charges over a data breach, according to The New York Times.
Elizabeth Holmes is asking for a retrial. She said a key witness, former Theranos lab director Adam Rosendorff, showed up to her home after the original trial and expressed regrets over his testimony. Holmes, who faces up to 20 years at an upcoming sentencing hearing, said that Rosendorff told her “the government tried to make everyone look bad.”On Protocol
The U.S. Department of Energy has a little-known climate funding division that punches above its weight. The Advanced Research Projects Agency–Energy has provided over $3 billion in funding to some 1,300 projects since its inception. Some observers say ARPA-E has a success rate better than most VCs.
The FTC’s crackdown on Kochava places heightened scrutiny on data brokers. Kochava sold data on places such as Amazon Web Services marketplace that could be used to identify individuals who visited abortion clinics.
Around the world
Ireland’s Data Protection Commission fined Meta $400 million for GDPR violations. Details on the fine are forthcoming, but the commission generally found that Meta didn’t do enough to protect children as required under the GDPR. The ruling includes fines for settings Meta claims it updated years ago, when it stopped making accounts for children public by default. Meta plans to appeal the decision.
Brazil fined Apple for selling iPhones without charging cables. The Justice Ministry said Apple was selling an incomplete product, labled the tactic a “deliberate discriminatory practice against consumers” and levied a fine worth around $2.4 million.
Russia reportedly has a “shopping list” of high-end chips it wants in the wake of sanctions. The desired chips — from the likes of Micron, Broadcom and Intel — are critical high-end weapons components. One think tank analyst told POLITICO Russia may be in need of new supplies since it used so many missiles in Ukraine and faces Western sanctions that have limited re-stocking efforts.In the media, culture and metaverse
The SPAC behind Trump’s Truth Social is in a bad financial way, according to The Washington Post, and appears poised to fail in a bid to get shareholders to approve an extension of its merger with the app, which is facing intense government scrutiny. Truth Social itself doesn’t seem to be doing so hot, and would lose its main partner if the failed vote means the SPAC has to liquidate.
Signal picked Meredith Whittaker, the AI expert who left Google after saying she faced retaliation for her role in company walkouts, to serve as its new president. Whittaker, who also founded the AI Now Institute, had been working at the FTC.
The edit button that Twitter is finally testing will only allow users to change a tweet five times in the 30 minutes after it’s posted. While the ability to edit tweets has long been a major hope for many users, it also presents opportunities for bad actors to spread misinformation or scams by changing a benign tweet that’s gone viral — a problem the limited time window appears aimed at minimizing.A MESSAGE FROM CIRCLE
USD Coin (USDC) is the institutional grade stablecoin. Monthly attestations show exactly what reserves back USDC, and businesses all over the world are using USDC to build the next generation of financial services and global payment applications.
Learn why institutions trust USDC at Circle’s Transparency & Stability Hub
In data
10%: That’s the approximate size of the deficit California faces for electricity capacity compared to standard demand. Wildfires and extreme heat are straining a system that’s already on the verge of facing blackouts. Grid operators have called on residents to limit consumption, including guidelines to avoid charging EVs between 4 and 10 p.m.
A quiet quitter by any other name?
It’s not just you: “Quiet quitting” has entered our modern vernacular in what feels like the least organic way possible. Not since “cheugy” have I seen the media try so hard to make something happen (this is my Regina George moment). Anyhow, Gallup is now telling us quiet quitters make up half the U.S. workforce. David Graeber told us as much four years ago, back when quiet quitting went by another name.
Thanks for reading — see you Friday!