The antitrust window is shrinking as DC turns to Ukraine
Hello, and welcome to Protocol Policy! Antitrust has fallen on the list of D.C. priorities in the last two weeks. We ask: Can Congress still get anything done before midterms? And we wrap up the fairly predictable tech talking points from last night’s State of the Union. Finally, major U.S. tech companies are all racing to cut ties with Russia.
Applebee's and antitrust
If you haven’t seen it yet, it’s worth checking out this viral CNN footage. The broadcast pans over Kyiv as air sirens blare in the background. Then, without warning, the Kyiv footage is relegated to the bottom corner of the screen to make way for an Applebee’s commercial, complete with a Zac Brown Band soundtrack and twerking cowboys.
The video struck a chord, I think, because it underscores how absurdly little control we seem to have over where we direct our attention. Even the most pressing issues can get pushed aside, should an algorithm or network executive award our screen to the next-highest bidder. Netflix and Spotify have used this to their advantage: They just waited out their respective controversies and, sure enough, the news cycle had to move on. Enjoy the next four Dave Chappelle specials.
The question I want to explore today is whether the moment has also passed for Big Tech antitrust: Is there enough wind in those sails to get anything done by midterms?
- For a while, antitrust enforcement sat at the top of every D.C. agenda. Sen. Amy Klobuchar spearheaded two significant, bipartisan antitrust bills. And Lina Khan landed at the FTC ready to fend off critics and launch one of its most consequential antitrust campaigns in decades.
- Antitrust no longer occupies that top slot. The war in Ukraine has instead become everyone’s highest priority, for obvious reasons. D.C. has a lot to figure out in the coming days, from the ramifications of further sanctions to the diplomatic fallout in Europe.
- There’s also Biden’s Supreme Court nominee, Judge Ketanji Brown Jackson. Republicans may very well attempt to block her confirmation, and that would mean further political deadlock. It would also become another wedge splitting support for Klobuchar’s bills, which already held a tenuous bipartisan balance.
The war in Ukraine has changed political calculus surrounding antitrust. Big Tech and its lobbyists have pressured Republicans to steer clear of antitrust on the grounds that the U.S. needs big, powerful tech companies to uphold national security. That angle of attack may gain more traction as the U.S. faces off against Russia.
And timing is everything. We’re only eight months away from the midterms. Conventional D.C. wisdom (the irony of that phrase isn’t lost on me) says that nothing gets done during the eight weeks leading up to an election. Once you add the Labor Day recess into the mix, Congress realistically has until August to get antitrust measures passed. The lobbying arm opposing antitrust knows this, and it also knows midterms will likely swing Congress to the right. The odds are in tech’s favor, and the markets seem to agree — not that they ever took the threat all that seriously.— Hirsh Chitkara (email | twitter)
The State of the Union had a heavy focus on Ukraine, but President Biden also mentioned key tech priorities. Biden urged the House and Senate to reconcile their respective chip bills. He also expressed support for the PRO Act, which would help facilitate gig worker unionization. And Biden set the tone for antitrust enforcement, noting in the speech that “capitalism without competition is exploitation.”
Russia won’t be able to turn to China for chips if U.S. officials have their way. Leaders in Washington are reportedly hoping to pressure SMIC, Lenovo and other Chinese tech companies to stop supplying critical components to Russia. Prior to the Ukraine conflict, Russia sourced around 70% of its chips from China. Experts expected the country would further rely on China in the wake of current sanctions, but the U.S. wants to cut off that backup plan.The U.S. Chamber of Commerce wants to block the appointment of Gigi Sohn to the Federal Communications Commission. In a statement, the Chamber said Sohn was among the “leading advocates for policies that amount to regulatory overreach in the broadband market.” The powerful lobbying group also objected to Sohn’s stated support of municipal-owned broadband networks. Sohn’s uphill battle to confirmation just became even steeper — Democrats on the commerce panel still hope to move her nomination to the floor on Thursday.
The Ukraine war heightens the possibility of cyberattacks. The attacks could come from gray-market cybercriminals in Russia who sometimes pursue government objectives as a means of maintaining the good graces of domestic law enforcement. Cybersecurity experts advise everyone to up their security protocols in the meantime.
China will require tech companies to tell users when algorithms are used to serve them content. The regulation drew inspiration from the EU AI Act, but goes even further. It could set a precedent for similar legislation around the world.
China is attempting to control the narrative on Russia and Ukraine within its own borders. Protocol’s Shen Lu writes: “The sheer volume of vulgar and pro-war jokes on Chinese social media, against the backdrop of China’s murky position on the war, has created a dangerous situation for Chinese citizens stuck in Ukraine at this time.”
Elon Musk felt snubbed during the State of the Union. After Biden praised Ford and GM — but not Tesla — in his remarks and on Twitter, Musk hit back at the president, noting that Tesla “has created over 50,000 U.S. jobs building electric vehicles & is investing more than double GM + Ford combined.”
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A top Ukrainian official called for crypto exchanges to block all wallets in Russia and Belarus. Ukraine Vice Prime Minister Mykhailo Fedorov said it was critical “to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.” Coinbase, one of the world’s leading exchanges, said such a ban “would punish ordinary Russian citizens who are enduring historic currency destabilization.”
DuckDuckGo “paused” its partnership with Yandex, the Russian search engine, citing the war in Ukraine. Representatives for DuckDuckGo, which brands itself as a privacy-focused search engine, said in a Tuesday House hearing on tech that the index was used to provide non-news link indexing in Russia and Turkey.
Uber also attempted to cut ties with Yandex. The company said on Monday that it was “actively looking for opportunities to accelerate the sale of our remaining holdings” in their joint venture.
Apple paused all product sales in Russia on Tuesday. Ukraine Vice Prime Minister Mykhailo Fedorov appealed to Tim Cook on Twitter last week, asking for such measures to be considered. Fedorov said it might “motivate youth and active population of Russia to proactively stop the disgraceful military aggression.”
Visa and Mastercard also blocked a number of undisclosed Russian financial institutions on Tuesday. Visa said in a statement it was “prepared to comply with additional sanctions that may be implemented.”
In the media, culture and metaverse
Meta will soon let some users know when their posts have been removed by an algorithm. The alert system was tested last year in response to a recommendation from the Oversight Board. The Oversight Board raised concerns after a case in which a breast cancer awareness post was automatically removed. At the time, the board wrote: “The incorrect removal of this post indicates the lack of proper human oversight which raises human rights concerns.”
Meta is also restricting Russian state-backed media on its platforms. The company said on Tuesday that it would ramp up efforts to crack down on Russian propaganda. Meta president of Global Affairs Nick Clegg also said the company would prompt users in Ukraine to switch to encrypted chats in an effort to promote user safety. Russia already retaliated against Meta, partially restricting Facebook access within the country.
1%: That’s the estimate Goldman Sachs gave for the chance that nuclear weapons will be used in this conflict, according to The Wall Street Journal. The firm told its clients that this scenario would result in a “total loss” of the S&P 500.
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American youth doubled screen time on smartphones since the start of the pandemic, Sen. Ed Markey said on Monday at an industry forum. Markey and Sen. Bill Cassidy introduced a bill that would expand online protections for children ages 13 to 16.
Thanks for reading — see you Friday!