September 21, 2022
Photo: Al Drago/Bloomberg via Getty Images
Hello, and welcome to Protocol Policy! Today I have a warning for my fellow havers of too many interests and starters of too many projects about what it might look like if we took over a government agency. Plus: Don’t try to bribe the FTC with ESG, everyone is getting deposed in Twitter vs. Musk and your Gmail is about to get a lot spammier.
The era of Republicans being cautiously curious about FTC Chair Lina Khan — based on the notion that she would mostly be disrupting just Big Tech — is definitely over. Khan, who is trying to revive the agency’s traditional hostility to big business overall, got a pretty hostile reaction herself from GOP members at a Senate antitrust subcommittee hearing this week. Some of the criticisms were unfair: She was all but called a Marxist, and Sen. Mike Lee implied she was in the game merely to get into “glossy magazines.” But some of the rhetorical punches also revealed that Khan’s very ambition to do a ton may hurt her need just to keep up.
Lee, for instance, brought up a statement by the FTC’s two Republican commissioners that merger enforcement is actually way down, despite Khan’s tough talk.
Khan didn’t really have a direct retort to this.
But Khan’s also aware that the FTC may always be outgunned by industry and that if her tenure is going to be ambitious, it will require her to make choices and sacrifices.
Ultimately that could mean the FTC has to make hard choices about other matters, too.
That full list simply may not be doable. It’s not that Khan should ignore her mandate, or that the worst-faith criticisms are somehow fair. She’s been open that running the FTC her way has brought its challenges, though, and if we’re going to rely on a single hollowed-out agency to fix our problems with tech, lawmakers might at least want to consider helping out.— Ben Brody (email | twitter)
The FTC is investigating Amazon’s planned $1.7 billion iRobot acquisition. Critics have expressed concerns over Amazon using data gathered from Roombas to map users’ homes. Amazon said “we’ve been very good stewards” of user data, when the deal was announced in August.
Companies try to convince the FTC to approve illegal deals by offering concessions — not on competitive concerns, but on ESG, Khan also said during her testimony. While some opponents have portrayed her as using antitrust law to impose unrelated progressive ideals, Khan said the FTC rejects offers like this every time.The ruling letting Texas’ social media law go into effect could actually increase competitive scrutiny on companies like Meta or, weirdly, Twitter. Asked during the same hearing about a hypothetical court decision labeling such companies common carriers, Justice Department antitrust chief Jonathan Kanter winkingly said that also likely made them monopolies. The ruling, which could force edge providers to host almost all content, claimed with no real basis that Twitter is a monopoly and other big social platforms are common carriers.
Software is changing payments and banks should care: At Modern Treasury, we built a platform to complement banks’ existing products to help them prepare for a future led by software. We’re here to help them future-proof their business so that they can participate in and lead in the next phase of financial services.
A New York court is requiring Tether to submit financial documents of its stablecoin transactions. Tether has been accused of attempting to inflate bitcoin prices by issuing its asset-backed stablecoin.
State securities agencies are leading the way in helping people recoup crypto losses. In particular, state securities commissioners from Alabama, Kentucky, New Jersey, Texas and Vermont have targeted frozen accounts at Celsius and Voyager. States also led the way in filing cease and desist orders against those companies, beating federal regulators to the punch, according to The Washington Post.
All New York City subways will have cameras installed, Gov. Kathy Hochul said. The installation will cost an estimated $5.5 million, and it’s intended to help address riders’ fear of crime. The messaging from Hochul was particularly strange: “You think Big Brother is watching you on the subway? …You’re absolutely right. That is our intent: to get the message out that we’re going to be having surveillance of activity on the subway trains, and that’s going to give people great ease of mind.”
Jack Dorsey was deposed in the Musk-Twitter acquisition lawsuit, and Musk himself is up next week. The trial is set to begin on Oct. 17.
The SEC argued in a lawsuit that it has legal purview over Ethereum transactions. The filing from Monday alleges that, since the Ethereum blockchain is clustered more densely in the U.S. than any other country, the transactions in question took place in the U.S.
UNGA 2022 and the climate tech forecast: On Sept. 29, Protocol Climate editor Brian Kahn will hold a panel discussion with climate policy leaders, experts and tech executives to recap the biggest developments at UNGA 2022 and preview the trends and events that will shape the future of climate tech and the planet. RSVP here.
The Texas social media law only gives Big Tech platforms bad options, Protocol’s Issie Lapowsky explains. The safest option could be to stay the course, but other possibilities include trying to cut service to Texas or change their moderation policies only for Texas users.
The Biden Administration has taken special care to shield vulnerable communities from crypto scams. Some of these efforts were made with an eye to the past: The Treasury Department, for instance, cited the 1874 collapse of the Freedman’s Savings Bank in its recent crypto report.
The FCC added a China Unicom subsidiary to a list of firms that pose a national security threat. The designation claims that the subsidiary, Pacific Networks, is subject to influence and control by the Chinese government. The FCC already revoked its telecom service authority in March 2022.
Indonesia passed a bill that would fine companies for data breaches. The fines will be determined by an oversight body authorized by the president, and they can go as high as 2% of annual revenue.
Software is changing payments and banks should care: Activities that once took place in person or over the phone—getting a loan, making a payment, investing in a security—now occur entirely within software. Covid has only accelerated this trend. To remain a part of clients' financial lives, banks need to play well with software.
TikTok is shutting down political fundraising. The company will also prohibit politician accounts from using other monetization features such as tipping and gifting.
Political campaigns can now register to circumvent the Gmail spam filter, just in time for the midterm season. Under a new pilot program, the campaigns can apply to be exempted from typical spam detection systems. Republicans have been pressuring Google over its spam filter, claiming it disproportionately filters GOP campaigns.
A JPMorgan executive said there’s been a steep decline in crypto payment demand. Speaking in a TV interview on Tuesday, global head of payments Takis Georgakopoulos noted there had been a lot of demand for cryptocurrency payments up until around six months ago. The decline is good news for SWIFT, since crypto payment transfers were seen as a threat.
YouTube’s dislike button is probably less powerful than you think. A study from Mozilla found that the dislike button only prevented 12% of unwanted recommendations. Instead, it seems YouTube is relying more on users’ observed preferences rather than their stated preferences — but that then raises questions about users having control over their own recommendation feed.
1.19 euros: That’s how much in-app purchases previously priced at 0.99 euros will cost for Apple customers, beginning Oct. 5, 2022. As if Europe hasn’t had a rough enough economic journey as it stands, Apple is hiking prices across the eurozone App Store — likely to make up for the dollar becoming more valuable relative to the euro.
What’s a SPAC king without a SPAC? Well, I guess he’s now just Chamath Palihapitiya. Palihapitiya had to wind down two of his largest SPACs because they weren’t able to find suitable targets in time. The SPACs have accumulated $1.2 billion and $460 million, but those funds will now be returned to investors. Altogether, the SPAC market has cooled considerably, with liquidations hitting a new high in Q3 2022.
Thanks for reading — see you Friday!