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Amazon, Apple, Facebook and Google Respond and Deflect Manifold Criticism by House Judiciary Panel

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Screenshot of Rep. David Cicilline from the webcast

July 30, 2020 — Wednesday’s House Judiciary Antitrust subcommittee hearing marked the first time four tech CEOs appeared before Congress, and the first time Amazon’s head, Jeff Bezos, spoke to U.S. legislators, albeit remotely.

Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai also dialed in through video conference, while most of the committee members were present in Congress, for the sixth hearing in the subcommittee’s year-long investigation into the tech companies’ business practices.

Representatives grilled the tech CEOs on their allegedly anticompetitive businesses practices.

The CEOs largely contended that size and conglomeration benefits end-users, by making technology easier to deploy.

Screenshot of Amazon CEO Jeff Bezos participating in the hearing remotely

But the majority of members on the subcommittee said that these corporations stifle choice and oppress the next generation of entrepreneurs. They claimed that big tech companies hold dangerous power and stifle competition. They criticized the heads of each of the four companies, calling them “gatekeepers of the digital economy.”

Accusations against the ‘big four’ add up

Each of the four CEOs were accused of stealing ideas, buying up their competitors and utilizing consumer data to expand at a near exponential rate.

“Each platform uses data to protect its power,” said Rep. James Sensenbrenner, R-Wis., asserting that “tech companies abuse their control over current technology to extend their control.”

Yet the CEOs mustered their way through the nearly six-hour long questioning session, mostly managing to not admit to the ways in which their business practices might stifle competition.

The CEOs avoided giving direct answers to the Representatives’ questions, often saying that they were unaware of the situations being referenced or claiming that their words were being taken out of context.

The companies’ heads continued to refute the idea that they lead monopolies, arguing that they have competition both outside of the tech sector and globally.

Screenshot of Facebook CEO Mark Zuckerberg participating in the hearing remotely

“When Google bought YouTube, they were able to compete against cable operators,” Zuckerberg said. “When Amazon acquired Whole Foods, they were able to compete against Kroger.”

Below are snapshots of the interactions involving each of the four big tech companies.

Amazon and third-party sellers

Amazon, which dominates 70 percent of the online market space, was accused of stifling third-party sellers by Rep. Lucy McBath, D-Ga.

According to McBath, third-party sellers often use the words “bullying, fear and panic” to describe their relationships with Amazon.

McBath cited one third-party seller who said, “we’re stuck and we don’t have a choice,” claiming that selling on Amazon, while unfortunate, was their only viable option.

Screenshot of Rep. Lucy McBath from the webcast

In response, members of Congress demanded Amazon be more transparent with their use of third-party data.

Rep. Joe Neguse, D-Colo., accused Amazon Web Services of purposely stifling competitors, citing instances in which the company identified startups with promising technology and copied their designs.

Rep. Jamie Raskin, D-Md., criticized Amazon for undercutting the prices of their smart home products in order to sell more than the competitors listed on their site.

The company was further criticized for promoting the sale of its own products during the pandemic, after vowing it would only sell essential products.

Facebook and its Instagram acquisition

Facebook, the largest global social networking service, which accrued $18 billion in revenue last year alone, was grilled over its 2012 Instagram acquisition.

Rep. Pramila Jayapal, D-Wash., read a testament from Instagram’s founder, saying he felt pressured to sell the company to Zuckerberg.

Zuckeberg argued back that, at the time of the acquisition, it was “not obvious that Instagram would have reached the scale” it has achieved today.

Rep. Jerrold Nadler, D-N.Y., cited evidence that Facebook saw Instagram as a threat and bought it to avoid competition.

In retrospect, members of Congress called the 2012 merger approval a failure on the part of the Federal Trade Commission.

Rep. Val Demings, D-Fla., criticized the platform for restricting the access of its competitors to Facebook, citing a case in which Facebook restricted Pinterest’s use of the site in 2012.

Screenshot of Rep. Val Demings from the webcast

Members referenced when Facebook stole Snapchat’s “stories” feature, rendering the competitor nearly obsolete, after Snapchat refused to be bought out by the company.

Yet Zuckerberg reacted with surprise when Congressmembers referred to Facebook as a monopoly, saying, “Monopoly? We face a lot of competitors in everything we do.”

Neguse pushed back, citing evidence that Facebook accounted for 95 percent of all social media use in the U.S., as early as 2012.

Google’s efforts to privilege its own products

Google, the search engine which captures 90 percent of online searches, was ridiculed by Congressmembers for being a walled garden, stealing content and privileging its own sites.

Members of Congress referenced two incidents of Google stealing from competitors: restaurant reviews from Yelp and music lyrics from Genius.

When Yelp spoke out against the incident, Google responded by threatening to delist Yelp from its website entirely.

“Isn’t that anti-competitive?,” questioned Rep. David Cicilline, D-R.I.

Pichai responded, maintaining that Google does not steal content.

Demings questioned Pichai on his 2016 decision to combine data sets that Google promised Congress it would keep separate, insinuating that Pichai no longer cared about the legal binding after gaining “exponential” power.

When questioned by members about Google’s ad revenue, Pichai revealed, in a near whisper, that it accounts for around $100 billion of the company’s overall returns.

Apple’s gatekeeper role as guardian of the App Store

Apple, which profits from over 100 million iPhone users in the U.S. alone, was accused by Representatives of picking and choosing what apps are marketed to users.

What Cook referred to as a “seamless integration of software and hardware,” others saw as Apple having the power to exclude apps that compete with the company.

Screenshot of Apple CEO Tim Cook participating in the hearing remotely

Apple is sole decision maker in the rules governing the app store.

One member noted that Apple made screen time apps obsolete by automatically installing iPhones with a similar function in iOS 13.

In response, Cook maintained that, “the app store is accessible” and that “Apple does not have a dominant share in any sector in which they do business.”

See additional story on the hearing.

Social Media

Twitter Takeover by Elon Musk Forces Conflict Over Free Speech on Social Networks

Transparency laws in Calif. and N.Y. are the ‘liberal’ counterpart to the ‘conservative’ speech laws in Texas and Florida.

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WASHINGTON, November 23, 2022 — As the Supreme Court prepares to hear two cases that may decide the future of content moderation, panelists on a Broadband Breakfast Live Online panel disagreed over the steps that platforms can and should take to ensure fairness and protect free speech.

Mike Masnick, founder and editor of Techdirt, argued that both sides of the aisle were attempting to control speech in one way or another, pointing to laws in California and New York as the liberal counterpoints to the laws in Texas and Florida that are headed to the Supreme Court.

“They’re not as blatant, but they are nudging companies to moderate in a certain way,” he said. “And I think those are equally unconstitutional.”

Censorship posed a greater threat to the ideal of free speech than would a law forcing platforms to carry certain content, said Bret Swanson, a nonresident senior fellow at the American Enterprise Institute.

“Free speech and pluralism, as an ethos for the country and really for the West, are in fact more important than the First Amendment,” he said.

At the same time, content moderation legislation is stalled by a sharp partisan divide, said Mark MacCarthy, a nonresident senior fellow in governance studies at the Brookings Institution’s Center for Technology Innovation.

“Liberals and progressives want action to remove lies and hate speech and misinformation from social media and the conservatives want equal time for conservative voices, so there’s a logjam gridlock that can’t move,” he said. “I think it might be broken if, as I predict, the Supreme Court says that the only way you can regulate social media companies is through transparency.”

Twitter’s past and current practices raise questions about bias and free speech

While talking about Elon Musk’s controversial changes to Twitter’s content moderation practices, panelists also discussed the impact of Musk’s rhetoric surrounding the topic more broadly.

“Declaring yourself as a free speech site without understanding what free speech actually means is something that doesn’t last very long,” Masnick said.

When a social media company like Twitter or Parler declares itself to be a “free speech site” is really just sending a signal to some of the worst people and trolls online to begin harassment, abuse and bigotry, he said.

That is not a sustainable business model, Masnick argued.

But Swanson took the opposite approach. He called Musk’s acquisition of Twitter “a real seminal moment in the history and the future of free speech,” and called it an antidote to “the most severe collapse of free speech maybe in American history.”

MacCarthy said he didn’t believe the oft-repeated assertion that Twitter was biased against conservatives before most Musk took over. “The only study I’ve seen of political pluralism on Twitter — and it was done by Twitter itself back when they had the staff to do that kind of thing — suggested that Twitter’s amplification and recommendation engines actually favored conservative tweets over liberal ones.”

Masnick agreed, pointing to other academic studies: “They seemed to bend over backwards to often allow conservatives to break the rules more than others,” he said.

Randolph May, president of The Free State Foundation, said that he was familiar with the studies but disagreed with their findings.

Citing the revelations from the laptop of Hunter Biden, a story that the New York Post broke in October 2020 about the Joe Biden’s son, May said: “To me, that that was a consequential censorship action. Then six months later before a congressional committee, [Twitter CEO] Jack Dorsey said, ‘Oops, we made we made a big mistake when we took down the New York Post stories.’”

Multiple possibilities for the future of content moderation

Despite his criticism of current practices, May said he did not believe platforms should eliminate content moderation practices altogether. He drew a distinction between topics subject to legitimate public debate and those posts that encourage terrorism or facilitate sex trafficking. Those kinds of posts should be subject to moderation practices, he said.

May made three suggestions for better content moderation practices: First, platforms should establish a presumption that they will not censor or downgrade material without clear evidence that their terms of service have been violated.

Second, platforms should work to enable tools that facilitate personalization of the user experience.

Finally, the current state of Section 230 immunity should be replaced with a “reasonableness standard,” he said.

Other panelists disagreed with the subjectivity of such a reasonableness standard. MacCarthy highlighted the Texas social media law, which bans discrimination based on viewpoint. “Viewpoint is undefined: What does that mean?” he asked.

“Does it mean you can’t get rid of Nazi speech, you can’t get rid of hate speech, you can’t get rid of racist speech? What does it mean? No one knows. And so here’s a requirement of government that no one can interpret. If I were the Supreme Court, I’d declare that void for vagueness in a moment.”

MacCarthy predicted that the Supreme Court would reject the content-based provisions in the Texas and Florida laws while upholding the transparency standard, opening the door, he argued, for bipartisan transparency legislation.

But to Masnick, even merely a transparency requirement would be an unsatisfactory result: “How would conservatives feel if the government said, ‘Fox News needs to be transparent about how they make their editorial decision making?’”

“I think everyone would recognize immediately that that is a huge First Amendment concern,” he said.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, November 23, 2022, 12 Noon ET – Elon and Ye and Donald, Oh My!

With Elon Musk finally taking the reins at Twitter after a tumultuous acquisition process, what additional new changes will come to the world’s de facto public square? The world’s richest man has already reinstated certain banned accounts, including that of former president Donald Trump. Trump has made his own foray into the world of conservative social media, as has politically polarizing rapper Ye, formerly Kanye West, currently in the process of purchasing right-wing alternative platform Parler. Ye is no stranger to testing the limits of controversial speech. With Twitter in the hands of Musk, Parler in the process of selling and Trump’s Truth Social sort-of-kind-of forging ahead in spite of false starts, is a new era of conservative social media upon us?

Panelists

  • Mark MacCarthy, Nonresident Senior Fellow in Governance Studies, Center for Technology Innovation, Brookings Institution
  • Mike Masnick, Founder and Editor, Techdirt
  • Randolph May, President, The Free State Foundation
  • Bret Swanson, Nonresident Senior Fellow, American Enterprise Institute
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Mark MacCarthy is a Nonresident Senior Fellow in Governance Studies at the Center for Technology Innovation at Brookings. He is also adjunct professor at Georgetown University in the Graduate School’s Communication, Culture, & Technology Program and in the Philosophy Department. He teaches courses in the governance of emerging technology, AI ethics, privacy, competition policy for tech, content moderation for social media, and the ethics of speech. He is also a Nonresident Senior Fellow in the Institute for Technology Law and Policy at Georgetown Law.

Mike Masnick is the founder and editor of the popular Techdirt blog as well as the founder of the Silicon Valley think tank, the Copia Institute. In both roles, he explores the intersection of technology, innovation, policy, law, civil liberties, and economics. His writings have been cited by Congress and the EU Parliament. According to a Harvard Berkman Center study, his coverage of the SOPA copyright bill made Techdirt the most linked-to media source throughout the course of that debate.

Randolph May is founder and president of The Free State Foundation, an independent, non-profit free market-oriented think tank founded in 2006. He has practiced communications, administrative, and regulatory law as a partner at major national law firms. From 1978 to 1981, May served as Assistant General Counsel and Associate General Counsel at the Federal Communication Commission. He is a past Chair of the American Bar Association’s Section of  Administrative Law and Regulatory Practice.

Bret Swanson is president of the technology research firm Entropy Economics LLC, a nonresident senior fellow at the American Enterprise Institute, a visiting fellow at the Krach Institute for Tech Diplomacy at Purdue University and chairman of the Indiana Public Retirement System (INPRS). He writes the Infonomena newsletter at infonomena.substack.com.

Drew Clark (moderator) is CEO of Breakfast Media LLC, the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Under the American Recovery and Reinvestment Act of 2009, he served as head of the State Broadband Initiative in Illinois. Now, in light of the 2021 Infrastructure Investment and Jobs Act, attorney Clark helps fiber-based and wireless clients secure funding, identify markets, broker infrastructure and operate in the public right of way.

Social media controversy has centered around Elon Musk’s Twitter, Ye’s new role in Parler, and former U.S. President Donald Trump

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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Social Media

Trump’s Twitter Account Reinstated as Truth Social Gets Merger Extension

The merger, delayed by a federal probe, has left Truth Social without expected funding.

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Elon Musk next to a phone displaying the Twitter account of Donald Trump, who has said he will continue to post only on Truth Social.
Photo courtesy of Steve Jurvetson. Graphic by Em McPhie.

WASHINGTON, November 22, 2022 — Digital World Acquisition Corp. shareholders voted Tuesday to extend the Dec. 8 deadline for its merger with Truth Social, giving the platform a chance at survival as it faces financial and legal challenges.

The right-wing alternative social media platform championed by former President Donald Trump is currently under federal investigation for potential securities violations, which has delayed the merger and forced Truth Social to operate without $1.3 billion in expected funding.

The DWAC vote was delayed six times in order to raise the necessary support, with the company noting in a securities filing that it would be “forced to liquidate” if the vote was unsuccessful. Private investors have already withdrawn millions in funding.

Trump indicated on Truth Social in September that he was prepared to find alternative funding. “SEC trying to hurt company doing financing (SPAC),” he wrote. “Who knows? In any event, I don’t need financing, ‘I’m really rich!’ Private company anyone???”

Trump’s potential return to Twitter poses another risk for Truth Social

Meanwhile, under the new leadership of Elon Musk, Twitter reinstated Trump’s account, which was banned after then-Twitter executives alleged he stoked the January 6 riot at the Capitol. The reinstatement was made official after Musk asked in a public Twitter poll — which received around 15 million votes — whether he should allow the controversial former president back on the platform.

Trump’s potential return to Twitter could undermine Truth Social’s primary attraction, which could be another blow to the fledgling platform.

On Truth Social, the former president encouraged his followers to vote in the poll while indicating that he would not return to Twitter. But with 87 million followers on Twitter and fewer than 5 million on Truth Social, Trump may be tempted to make use of his newly reinstated account despite statements to the contrary, particularly in light of the official announcement of his 2024 presidential campaign.

The campaign could also allow him to bypass his agreement to first post all social media messages to Truth Social and wait six hours before sharing to other platforms. The agreement makes a specific exception for political messaging and fundraising, according to an SEC filing.

Musk’s decision to bring back Trump was one of many controversial decisions he’s made in his short tenure at the social media company — including a number of high-profile firings and the reinstatement of multiple formerly-banned accounts — which has led several major advertisers to pause spending.

Musk tweeted in October that he would convene a “content moderation council with widely diverse viewpoints” before making any “major content decisions or account reinstatements.” No such council has been publicly announced, and the Tweet appeared to have been deleted as of Tuesday.

Ye returns to Twitter while details of Parler acquisition remain uncertain

Trump’s reinstatement seems to have motivated at least one controversial figure to return to Twitter: Ye, formerly Kanye West, whose account was restricted in October after tweeting that he would go “death con 3 on JEWISH PEOPLE.” The restrictions were lifted prior to Musk’s acquisition of Twitter, but the rapper remained silent on the platform until Nov. 20.

“Testing Testing Seeing if my Twitter is unblocked,” he posted.

Right-wing social media platform Parler announced in October that Ye had agreed to purchase the company. Completion of the acquisition is expected by the end of December, but further details, including financial terms, have yet to be announced.

Twitter draws legislative attention, with changes to the social media landscape on the horizon

One of Musk’s first major changes to Twitter attempted to replace the existing verification system with a process through which anyone could pay $8 per month for a verified account. The initial rollout of paid verification sparked a swarm of accounts impersonating brands and public figures such as Sen. Ed Markey, D-Mass., who responded with a letter demanding answers about how the new verification process would prevent future impersonation.

Markey also co-signed a Nov. 17 letter written by Sen. Richard Blumenthal, D-Conn., asking the Federal Trade Commission to investigate Twitter for consumer protection violations in light of “serious, willful disregard for the safety and security of its users.”

Musk responded to the letter by posting a meme that mocked the senators’ priorities, but he later appeared to be rethinking the new verification process.

“Holding off relaunch of Blue Verified until there is high confidence of stopping impersonation,” Musk tweeted on Monday.

Other changes to the platform may be out of Musk’s hands, as state and federal legislators consider an increasing number of proposals for the regulation of digital platforms.

The Computer and Communications Industry Association released on Monday a summary of the trends in state legislation regarding content moderation. More than 250 such bills have been introduced during the past two years.

“As a result of the midterm elections, a larger number of states will have one party controlling both chambers of the legislature in addition to the governor’s seat,” CCIA State Policy Director Khara Boender said in a press release. “This, coupled with an increased interest in content moderation issues — on both sides of the aisle — leads us to believe this will be an increasingly hot topic.”

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Social Media

Twitter Loses Senior Officers, Gains White House and Federal Trade Commission Scrutiny

The current kerfufle isn’t the first time Twitter has had a run-in with the Federal Trade Commission.

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Screenshot of Katie Harbath, a fellow at the Bipartisan Policy Center

WASHINGTON, November 10, 2022 – Elon Musk’s Twitter is facing headwinds as the Federal Trade Commission and the broader administration of President Joe Biden signal scrutiny of the company, as the company’s former senior officers resign amid chaotic policy changes.

“We are tracking recent developments at Twitter with deep concern,” an FTC spokesperson said Thursday. “No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”

And in a post-Election Day press conference on Wednesday, Biden generally signaled a tough stance against Musk.

Asked if Musk was “a threat to U.S. national security” and whether the federal government should “investigate his joint acquisition of Twitter with foreign governments, which include the Saudis,” Biden replied, choosing his words carefully:

“I think that Elon Musk’s cooperation and/or technical relationships with other countries is worthy of being looked at,” Biden said. “Whether or not he is doing anything inappropriate, I’m not suggesting that.  I’m suggesting that it [is] worth being looked at.  And — and — but that’s all I’ll say.”

Following up on her question, Jenny Leonard of Bloomberg asked “how,” and Biden replied, “There’s a lot of ways.”

Resignation by top Twitter officials

Thursday morning, Twitter’s now-former chief information security officer, Lea Kissner, stepped down in a Tweet. Basedon an internal company message, several outlets reported the same day that the platform’s chief compliance officer and chief privacy officer also quit.

According to The Verge, a Twitter attorney wrote the following on a company forum: “Elon has shown that his only priority with Twitter users is how to monetize them. I do not believe he cares about the human rights activists. the dissidents, our users in un-monetizable regions, and all the other users who have made Twitter the global town square you have all spent so long building, and we all love.”

Twitter’s woes don’t stop there. After Musk instituted a subscription-based verification badge, many fake accounts soon gained verification – including imposters claiming to be former President Donald Trump, former New York Mayor Rudy Giuliani, and basketball star LeBron James.

Nor is this Twitter’s only recent run-in with the FTC. In May, the watchdog ordered the platform to pay a $150 million penalty for alleged deceptive use of user data for advertising purposes.

 “I expect…a big increase in the number of whistleblower complaints and other things that people might be filing (against Twitter),” said Katie Harbath, a fellow at the Bipartisan Policy Center, on a web panel Thursday afternoon.

“[The FTC doesn’t] proactively put out statements regularly, so this is a pretty big deal today,” said moderator Rebecca Kern, a tech-policy reporter for Politico.

In September, Twitter’s former head of security, Peiter Zatko, testified before the U.S. Senate, alleging that the platform doesn’t adequately protect customer data and is vulnerable to meddling by foreign actors.

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