Good morning, beta testers! This Tuesday, an app caused chaos at the Iowa Caucus, Germany has a plan to strengthen anti-competition regulation, and the Justice Department's antitrust chief steps away from investigating Google.
The Big Story
An app glitch might have delayed the Iowa Caucus result.
- The Iowa Democratic Party paid over $60,000 to use an app built by a company called Shadow, which was supposed to let precinct chairs report vote counts electronically. But on Monday night, the app — built in the last two months and reportedly not tested at scale — didn't let some of those chairs log in. (The party denies that the app went down).
- Instead, precinct chairs phoned in results. But a recent rule change meant those calls lasted around 20 minutes per precinct — for over 1,600 precincts. Making matters worse: the reporting line used the same number as the app help line, leaving the party overwhelmed.
- Shadow started out as Groundbase, which was founded by former Hilary Clinton staffers Gerard Niemira and Krista Davis. In January, Groundbase was acquired by the nonprofit Acronym, which is run by former Obama campaign producer Tara McGowan. Michael Moritz, a partner at Sequoia Capital, has donated $1 million to Acronym, which describes itself as "building power and digital infrastructure for the progressive movement."
- J. Alex Halderman, a computer science professor at the University of Michigan, told the New York Times: "This is an urgent reminder of why online voting is not ready for prime time."
Germany has a plan to strengthen anti-competition regulation.
A draft "digital law" would make it easier for German authorities to intervene when they think a tech company's dominating a market. "There is no other jurisdiction that has proposed such a far-reaching tool for taming the digital giants," Rupprecht Podszun, head of the Institute for Competition Law at Heinrich Heine University Düsseldorf, told the Financial Times.
- The new law would allow Germany's Federal Cartel Office to regulate firms of "paramount significance" across markets, not just in a single market, and strengthen its powers to collect information.
- The regulator could then stop firms from giving their own services preferential treatment — something that U.S. tech giants have been criticized for (see, for example: Google showing its Shopping results above other price comparison sites, which the EU fined it for in 2017). The bill would also force platforms to let users transfer their data to other services.
- Podszun told the Financial Times that the bill had a "huge" signalling effect. "You could see France and Italy following suit, and the net gradually tightening." And Iris Plöger, a member of the executive board of BDI, Germany's leading business lobby, told the newspaper that the law "would make it difficult to create internationally competitive digital companies."
- The bill is not yet law and could still be changed as the government consults with trade bodies. An oral hearing is scheduled for Feb. 18.
And more Antitrust
The Justice Department's antitrust chief steps away from investigating Google.
Makan Delrahim will no longer be responsible for examining potential anti-competitive practices by the search giant, reportedly due to a conflict of interests, according to The New York Times.
- "As the technology review progressed, Assistant Attorney General Makan Delrahim revisited potential conflicts with previous work with the Department of Justice's ethics office," a Justice Department spokesman told the Times. "He and the ethics office have decided that he should now recuse himself from a matter within the tech review in an abundance of caution."
- The decision comes months after Senator Elizabeth Warren called for him to step down, saying: "any reasonable person would surely question your impartiality in antitrust matters involving Google." She has claimed that, as a private lawyer, Delrahim was paid $100,000 to lobby for Google's (successful) acquisition of the ad-tech firm DoubleClick.
- This isn't the first time Delrahim has courted controversy: last year, a lawsuit revealed text messages that suggested he may have helped Sprint and T-Mobile get their merger approved.
- Meanwhile, the Justice Department's antitrust investigation into Google continues to ramp up. Reuters reports that the department will meet with state attorneys general on Tuesday to share information. The Wall Street Journal previously reported that such a meeting could lead to the federal and state investigations, which are currently operating independently, joining forces.
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