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Sundar Pichai's semi-apology

Image: C-SPAN / Protocol

It's pronounced Pih-chai

Sundar Pichai

Good morning! This Thursday, two lawsuits want to change Facebook completely, Sundar Pichai (sort of) apologizes for what happened to Timnit Gebru, and DoorDash and C3.ai had massive first days on the stock market.

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The Big Story

The antitrust fight hits Facebook

The government is coming for Facebook. Hard.

Two simultaneous lawsuits — one from the FTC, and one from a group of state attorneys general led by New York AG Letitia James — both allege that Facebook is a monopoly in social, and that it should be required to divest Instagram and WhatsApp.

  • The money quote, from the states' suit: "For almost a decade, Facebook has had monopoly power in the personal social networking market in the United States. As set forth in detail below, Facebook illegally maintains that monopoly power by deploying a buy-or-bury strategy that thwarts competition and harms both users and advertisers."
  • The phrase "personal social networking" is important. That's the market in which Facebook is accused of being a monopoly. Facebook would like its competition to be "the internet" or "every ad business on Earth," but the suits are defining the market as "personal social networking." That's also why TikTok isn't mentioned: It's not "used primarily to communicate with friends, family, and other personal connections," so it doesn't count.

Facebook's response: If these weren't legal acquisitions, where was the FTC years ago? "In addition to being revisionist history, this is simply not how the antitrust laws are supposed to work," Facebook general counsel Jennifer Newstead wrote.

The breadth and force of these suits surprised a lot of people, not least because the antitrust suit against Google turned out to be fairly narrow and specific. This is neither of those things: It is a full rebuke of the way Facebook does business. Specifically, the way Mark Zuckerberg does business.

  • Both suits quote Zuckerberg's emails extensively, in which he says things like "we can likely always just buy any competitive startups" and "[o]ne thing about startups ... is you can often acquire them." Pithy thoughts! Until they get used against you.
  • The underlying allegation is that Facebook would never have continued to adapt and win without buying or crushing competitors. Here, too, a damning 2011 Zuckerberg quote: "If Instagram continues to kick ass on mobile or if Google buys them, then over the next few years they could easily add pieces of their service that copy what we're doing now, and if they have a growing number of people's photos then that's a real issue for us."
  • I suspect there's a whole generation of CEOs learning from Zuckerberg's blunt and aggressive tone here. Google's Fight Club-ish rulebook for never talking about antitrust is starting to look awfully smart.

The divestments are the sexy story, but it's possible that the more consequential move could be the FTC's complaints about the way Facebook has wielded its APIs. If antitrust action forces Facebook to make its social graph available and portable, it could instantly change the whole landscape of social networking. Imagine if Facebook built the social layer the internet never had … only to be forced to give it back to the internet?

Oh, and here's a question: Who do you think is the mystery, redacted company that Facebook has made "multiple overtures to acquire?" My best guess is Pinterest, but I'd love to know what you think.

Google

Sundar Pichai's semi-apology

Anna Kramer writes: What are the limits of worker activism? Can protests and NLRB complaints create long-lasting change at tech companies? That's the question employees everywhere are asking as the anger over Timnit Gebru's exit from Google refuses to go away.

Sundar Pichai apologized yesterday for the unhappiness caused by Gebru's departure, but Gebru saw it more as a defensive PR stunt than an apology.

  • Pichai promised an internal review of the events surrounding her exit and said he takes responsibility for how unhappy it made people. You could interpret that a number of ways, but Gebru and the thousands of Google workers and AI ethics leaders in her corner really didn't think much of it. "Don't paint me as an 'angry Black woman' for whom you need 'de-escalation strategies,'" she tweeted.
  • This isn't the first time a tech CEO has apologized for a controversy in hopes the furor will go away. Eventually the media circus dies down and journalists like me move on to other stories, and not much changes in the long run.

Because of all the news about NLRB complaints from last week that allege Google and Amazon violated labor laws, I also took a look at the NLRB database to get a sense of how much change such complaints create.

  • A scroll through the records found 18 open labor complaints against Amazon and its affiliates and eight against Google and Alphabet, as well as more than 100 closed cases against Amazon and 20 closed cases against Google.
  • The NLRB can provide some justice for one person or a group of workers from time to time, but it doesn't seem like many people remember these cases after they're closed.

So what's the answer for workers like Gebru? It's still a pretty open-ended question, because very little has changed historically. Maybe her saga will be one of the few with a different conclusion.

People Are Talking

The space-internet has many competitors, said OneWeb's Sunil Bharti Mittal, but the core issues require working together:

  • "A very important issue that the world is going to grapple with is going to be space debris … we need to ensure that players like SpaceX, Amazon, OneWeb and whoever else comes in are responsible space players."

Tim Cook offered a pretty expansive view of Apple's job as App Store curator:

  • "The way that we've always viewed our responsibility is that, as a platform owner, that we have the responsibility of how the product is used and not just to throw something out there and see how it's used and see what the implications of it are."

A MESSAGE FROM SYNCHRONY

SYNCHRONY

Contactless payments are no longer a nice to have.

At Synchrony, we understand the challenges of running a business. Our financial and technology solutions, like touchless payment tools, help you offer your customers more tailored experiences, so they keep coming back.

Learn more about our solutions.

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Number of the Day

182

That's how many dollars you'd have needed to pay for a share of DoorDash when it first hit the stock market on its huge first day of trading yesterday. That was up 78% from the company's initial price, which had already been increased twice since DoorDash first announced plans to sell shares … at about $75 a pop. And then it closed even higher, at $189.51! C3.ai also had a big first day on the markets. The year of big tech IPOs just keeps getting bigger. (And, yes, Bill Gurley is mad about the whole thing.)

In Other News

  • Google's political ad ban lifts today, allowing Georgia's Senate candidates to advertise ahead of Jan. 5's runoffs. YouTube, meanwhile, said it would start removing videos alleging that fraud affected the election result.
  • Apple ignored labor law violations at its suppliers' factories because it wanted its production deadlines met, The Information reported. Since 2014, Chinese law has required temporary workers to make up a maximum of 10% of a factory's staff, but some Apple suppliers were using temporary workers for over 50%.
  • Twitch outlined its new hateful conduct policy. It now places less focus on intent and more on consequences, and broadened its protected characteristics and banned content.
  • France fined Google $121 million and Amazon $43 million for cookie law violations. Regulators said they didn't seek consent before saving cookies on users' machines. Separately, advocacy groups filed new privacy complaints against Google in six EU countries, and Apple and Google said they'd ban apps that provide data to the controversial data broker X-Mode.
  • Tsinghua Unigroup is set to default on $2.5 billion worth of bonds. It's a big blow for the Chinese state-backed chipmaker, which has played an important role in China's self-sufficiency plans. In other chip news, GlobalWafers bought Siltronic for $4.5 billion, creating the biggest silicon wafer manufacturer by revenue.
  • Facebook will spend $150 million on houses for low-income Bay Area residents. That comes from its previously-announced $1 billion investment.
  • Mozilla is leaving Mountain View. It's giving up the lease on its office in January, though it still has a smaller office in San Francisco.

One More Thing

Just call it Applezon

Apple's new Fitness+ service is launching next week, and along with it Apple seems to have expanded its definition of "accessory." Can I interest you in a $78 yoga mat, which has no technology but is presumably a very good yoga mat? How about a $250 bike helmet? Personally I love the idea of Apple selling products for everything you might do with your smartphone, and I'd like it to extend the idea. I want sweatpants for when I'm doomscrolling, popcorn for when I'm watching "Ted Lasso" and a toothbrush for while I'm checking email in the morning. Oh wait. That one's already on sale.

A MESSAGE FROM SYNCHRONY

SYNCHRONY

Contactless payments are no longer a nice to have.

At Synchrony, we understand the challenges of running a business. Our financial and technology solutions, like touchless payment tools, help you offer your customers more tailored experiences, so they keep coming back.

Learn more about our solutions.

Today's Source Code was written by David Pierce, with help from Anna Kramer and Shakeel Hashim. Thoughts, questions, tips? Send them to david@protocol.com, or our tips line, tips@protocol.com. Enjoy your day; see you tomorrow.

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