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Coronavirus Pandemic Renders Small Businesses More Reliant on Digital E-Commerce Platforms Than Ever Before

Jericho Casper

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Screenshot of U.S. Rep. Yvette Clarke, D-New York

September 22, 2020 — The coronavirus pandemic has taken a dire toll on small businesses across the United States.

In an attempt to subsist, many small businesses have been forced to close their physical doors, and try their hand in the digital marketplace, utilizing opportunities offered by e-commerce platforms.

“Many have had to accelerate to digital platforms to stay valid,” said Rep. Kevin Hern, R-Oklahoma, speaking at a panel of lawmakers and small business owners discussing how to improve the digital economy. E-commerce platforms have been “paramount for the success of small business,” said Hern.

While it is technically true that e-commerce platforms have given small businesses the opportunity to compete and sell goods globally, these platforms, which boost the reputation of third-party sellers online, cannot be viewed completely as allies to small businesses. The panel was convened by The Hill.

While digital platforms attempt to pose as a “friend” to small business, many of their actions align more with “foe.”

In reality, small business panelists said they are forced to use platforms like Amazon. The e-commerce behemoth which receives half of all online sales.

Because of Amazon’s dominant position, they said, small business owners have no choice but to turn to it to reach new customer bases in a critical time of need.

Amazon’s control over e-commerce distribution the market strips small business owners of their say in matters and renders third-party sellers reliant on Amazon’s terms of service.

Amazon has used its dominant position in the industry to further its own growth and hamper the ability of small e-commerce businesses to compete, by undercutting the prices they offer.

Some instances of Amazon’s control over e-commerce distribution came to light during the House Judiciary Antitrust Subcommittee’s hearing of executives for big tech companies in July.

Amazon has used data collected on the third-party sellers that utilize their site against them, critics charge. Amazon uses this data for what has proven successful for third-party sellers to cherry-pick new products.

Amazon then cuts the prices they offer a product for, lower than the third-party competitors which operate on their site, these critics charge.

Lendio’s 2018 American Dream Survey of more than 2,000 small business owners found that many view Amazon as a threat to their business, with two out of three small business owners reporting that they view large corporations as having a negative impact on growth opportunities.

At the same time, Amazon aids small businesses’ ability to reach new markets.

Rep. Yvette Clarke, D-New York, called for facilitating a “healthy ecosystem for small businesses at each level of government,” urging that local, state, and federal government do everything in their power to help small businesses.

Assistant Editor Jericho Casper graduated from the University of Virginia studying media policy. She grew up in Newport News in an area heavily impacted by the digital divide. She has a passion for universal access and a vendetta against anyone who stands in the way of her getting better broadband.

Big Tech

Government’s Reactive Nature Hobbling Tech Regulation, Expert Says

Congress may need another big tech breach to move earnestly on regulation, says consultant.

Samuel Triginelli

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Screenshot of Steve Haro at FiscalNote event

April 12, 2021 – The reactive nature of Congress to data crises means another breach of citizens’ privacy may be needed to spurn the next big legislative move, said a former congressional chief of staff.

“We still have questions to answer how to deal with technology dominance. We are not there yet because, unfortunately, Congress, for the most part, tends to act in response to crisis,” said Steve Haro, who is currently a government affairs consultant and was a former assistant secretary of commerce.

During a discussion sponsored by FiscalNote and CQ Rollcall, experts joined in a conversation on the current state of public policy for the tech industry and how influential Congress and the Biden-Harris admission will be on dealing with big tech.

Among the discussed issues was how the government will deal with intermediary liability provision Section 230.

Lawmakers have wondered whether the provision — which protects platforms from legal liability for posts by their users — offers too much protection to social networks when it comes to content moderation and disinformation. This central premise has spurned calls for a reform of Section 230; a number of Democrats have proposed their own bill to keep much of the protections except for paid posts.

“I do not believe 230 needs change, but that doesn’t mean I don’t have concerns,” Haro said. “I believe there is collective agreement this is still a necessary law, and it has worked. It has allowed the internet to build do what has become, good or bad.”

Haro pointed to the congressional hearings into Facebook’s handling of the Cambridge Analytica scandal three years ago, which saw the scraping of millions of user accounts without their consent. The result did not see substantial progress on regulations. “We might need another crisis to spur Congress into action,” Haro said.

Michael Drobac, principal at the law firm Dentons, said “we are not there, and I would say the thing that has been most present and clear is that in most of these hearings” the members of Congress are still trying to understand the technology to make a meaningful impact.

“The reality is that section 230 is as important today as it was when it was passed,” Haro said.

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Big Tech

Regulatory Commission Needed To Monitor Big Tech Collection Of Consumer Data, Professor Says

Derek Shumway

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Screenshot of Robin Gaster from Henry George School of Social Science

April 8, 2021 — There needs to be a digital regulatory commission created to ensure big tech cannot run wild with consumer data, said Robin Gaster, a George Washington University public policy scholar.

Gaster, who’s also president of Incumetrics, a data and program evaluation consultancy, published a book that was released this month about Amazon’s rise from an online bookstore to everything else.

Gaster sat down with Broadband Breakfast on Wednesday and talked about the e-commerce giant’s reach into industries like healthcare and its rapid collection of more consumer data. The solution, he proposes, is creating a “new digital deal,” which would see a sort-of digital Federal Communications Commission — an entity which has the resources and the person power to match Amazon’s growing force.

Amazon’s reach into health care needs to be met with proper oversight and ethics to ensure it really will protect consumer privacy, he said.

The e-commerce behemoth acquired PillPack, a prescription delivery company, developed the Amazon Halo, a competitor device to Fitbit, and launched Amazon Care, a telehealth app service. Add Amazon’s own Alexa AI platform into the mix and it has a stream of access to valuable data.

“I would absolutely imagine that five years from now, if you sprain your knee, you probably will not go on the Internet and look for things and trying to figure it out. You will say, ‘Alexa,’ I sprained my knee. What should I do?” said Gaster.

Amazon’s breakneck growth into healthcare is concerning because no one knows exactly what could or intends to do with all the data it possesses, Gaster said. With so much aggregated data across its products and services, Amazon needs to be held accountable for its actions so that if something goes wrong, there are ways to fix it that are open and trustworthy.

Gaster said governments and companies alike are playing “privacy theater” – they talk about protecting privacy, but it’s a mere performance put on to make it seem like they care about it, he said.

Alexa takes in all sorts of data from voice-commands and people’s Amazon accounts. It may as well be a virtual doctor someday, but people don’t know how or if they can control their data recorded by Alexa, Gaster said.

The notion that people can control their data is ridiculous, said Gaster. “We are walking across the digital plane naked. We have no clothes!” he said, adding no one can wade through the legalese in the terms and conditions and privacy statements.

Gaster’s book is entitled Behemoth – Amazon Rising: Power and Seduction in the Age of Amazon.

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Courts

Supreme Court Declares Trump First Amendment Case Moot, But Legal Issues For Social Media Coming

Benjamin Kahn

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Photo of Justice Clarence Thomas in April 2017 by Preston Keres in the public domain

April 5, 2021—Despite accepting a petition that avoids the Supreme Court deliberating on whether a president can block social media users, Justice Clarence Thomas on Monday issued a volley that may foreshadow future legal issues surrounding social media in the United States.

On Monday, the Supreme Court sent back to a lower court and ruled as moot a lawsuit over whether former President Donald Trump could block followers on Twitter, after accepting a petition by the federal government to end the case because Trump wasn’t president anymore.

The case dates back to March 2018, when the Knight First Amendment Institute and others brought a case against former president Trump in the Southern District of New York for blocking users based on their political views, arguing the practice is a violation of the first amendment.

The lower court judge agreed, and the decision was upheld by the United States Court of Appeals.

In accepting the petition by the government, Justice Thomas stated that adjudicating legal issues surrounding digital platforms is uniquely difficult. “Applying old doctrines to new digital platforms is rarely straightforward,” he wrote. The case in question hinged on the constitutionality of then-President Trump banning people from interacting with his Twitter account, which the plaintiff argued was a protected public forum.

Thomas stated that while today’s conclusion was able to be vacated, that likely would not be the case in the future. He went on to say that digital platforms exercise “concentrated control of so much speech in the hands of a few private parties.”

He continued: “We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms.”

Even though Facebook and Google were not the platforms in question in this case, Thomas pointed to them as “dominant digital platforms” and stated that they have “enormous control over speech.” He stated that Google, Facebook, and Twitter have the capabilities to suppress information and speech at will, and referenced the “cataclysmic consequences” for authors that Amazon disagrees with.

Thomas also rejected the notion that other options exist.

“A person always could choose to avoid the toll bridge or train and instead swim the Charles River or hike the Oregon Trail. But in assessing whether a company exercises substantial market power, what matters is whether the alternatives are comparable.”

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