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Antitrust

Section 230 Has Coddled Big Tech For Too Long, Says Co-Author of Book on Amazon

Co-author of “The Amazon Jungle” says Section 230 has allowed Big Tech to get away with far too much.

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"The Amazon Jungle" co-author Jason Boyce

May 11, 2021 – The internet liability provision Section 230 has allegedly given Amazon the ability to allow unvetted products on its platform, which has boosted its business at the expense of customers, an Amazon critic is claiming.

Jason Boyce is the co-author of the book The Amazon Jungle: The Truth About Amazon, The Seller’s Survival Guide for Thriving on the World’s Most Perilous E-Commerce Marketplace,”  that dives into the size of Amazon and its alleged privacy issues.

“Amazon is protected by Section 230” and not in a good way, Boyce said in an interview with Broadband Breakfast.

“These White entitled hoodie wearing billionaires aren’t going to do the right thing for the U.S. citizens,” said Jason Boyce, co-author with Rick Cesari of the book. It attempts to explain just how big the company really is and the privacy issues it poses.

In an interview with Broadband Breakfast, Boyce discussed how and why it needs to be held accountable for its alleged dominance in ecommerce and other markets is vying to own.

Boyce singled out CEOs of other big tech companies, calling Mark Zuckerberg “poison,” and the “bearded wonder,” referring to Jack Dorsey at Twitter. Not even Jeff Bezos’ blazer exempts him from his responsibility, he said.

“These white entitled hoodie wearing billionaires aren’t going to do the right thing for the U.S. citizens,” he said.  Boyce said that these “libertarian” idols are no longer trustworthy in part due to their lack of respect for intellectual property and privacy invasion with no means of remuneration to the consumer.

Amazon was contacted multiple times for comment on this interview before publication, and while it said a response would be given, the company did not follow-up.

Amazon’s role in the Section 230 debate

Section 230 from the Communications Decency Act of 1996 says that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

In other words, online intermediaries are protected against a range of laws that might otherwise be used to hold them legally responsible for what others say and do—which can extend to the sale of products from third parties in Amazon’s case.

If a third party from a factory in China decides to sell a retractable dog leash on Amazon, Amazon is not responsible for the safety of that Chinese-based retractable leash. If the leash snaps and takes an eye out, the consumer who bought it cannot sue Amazon since it is protected by Section 230. Unfortunately, this has already happened.

Heather Oberdorf, a Pennsylvania woman, bought an $18.48 retractable leash from a Chinese company selling on Amazon. One day while walking her dog, the leash suddenly snapped and sprang back, hitting her left eye and resulted in partial blindness.

MarketWatch reported on this story and said that “Amazon contended that Oberdorf could not hold it liable for posting [the retractable leash] because a section of the 1996 Communications Decency Act (CDA) shields companies from liability for publishing what third parties say on their sites.”

The Chinese factory that produced the leash will also be free from legal responsibility as “no U.S. citizen is going to have any success suing a factory in China,” as there is no incentive to offer the sale of safe products to consumers on Amazon, said Boyce.

Waiving rights to sue

When signing up for an Amazon account, all rights to sue the company, even if a third party’s product use results in serious harm, is waived upon account creation. Amazon should be required to force its third party sellers to publish safety information about their products so consumers can be informed.

Amazon is a once-in-a-generation company that was won ecommerce, offering half a billion items online, while the biggest Walmart store can only stock 500,000 items, said Boyce. He raised alarm over Amazon’s dominance in the book industry and its Amazon Web Services, calling them monopolies that at the present time, prevent the “next Amazon” from being born.

Boyce cited the historical case of Microsoft, where it was sued by the U.S. government for “tying,” since it prevented other browsers from existing, among other things. The government was successful in breaking up Microsoft in one of the largest anti-trust cases, which allowed Google to be born under the “do no evil” mantra.

Born in China and adopted to American Fork, Utah, Reporter Derek Shumway graduated from Brigham Young University with a bachelor's degree in political science and a minor in international strategy and diplomacy. At college, he started an LED lightbulb company. word

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Antitrust

FTC Mum on Microsoft-Activision Deal, Proposes Review of Merger Guidelines

The deal would elevate Microsoft in an even more favorable position in the games-as-a-service market.

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FTC Chairwoman Lina Khan on CNBC last week

WASHINGTON, January 24, 2022 – As Federal Trade Commission Chairwoman Lina Khan does media rounds this past week, she has refused to comment on last week’s news that Microsoft has agreed to buy video game making giant Activision-Blizzard for nearly $70 billion.

As per policy, the FTC and the Department of Justice, which on Tuesday jointly held a press conference on merger reform on the same day of the announced consolidation, said they could not comment on the deal, which would increase the Xbox maker’s gaming market share and allow it to better compete with Japanese behemoth Sony.

During the press conference, Khan, installed as chairwoman in June as an already outspoken critic of certain big tech practices, announced that the organizations would be launching a review of merger guidelines. Khan stressed that the current guidelines do not adequately protect consumers and promote competition in the era of the digital economy.

“While the current merger boom has delivered massive fees for investment banks, evidence suggests that many Americans historically have washed out with diminished opportunity, higher prices, lower wages, and lagging innovation,” she said. “These facts invite us to assess how our merger policy tools can better equip us to discharge our statutory obligations and halt this trend.”

She reiterated those goals on a CNBC interview on Wednesday. The purchase of the highly influential Call of Duty franchise maker will have to go through her office. It also presents another stress test for the office, as it is already engaged in an existing lawsuit against Facebook practices. Both Facebook and Amazon have asked for Khan to be recused from investigations in their companies because of her past positions on them.

The deal would significantly expand Microsoft’s Game Pass platform, which offers free games to play for a monthly subscription. Microsoft announced on the day of the proposed deal that Game Pass surpassed 25 million subscriptions.

“Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog,” said Microsoft Gaming CEO Phil Spencer said in a statement.

Despite its numerous successful intellectual properties, Activision Blizzard has been marred with scandal in recent years. In 2021, the company was sued by California Department of Fair Employment and Housing for promoting a “frat boy” culture, whereby female employees were not only allegedly discriminated against, but also subjected to sexual assault and misconduct.

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Antitrust

American Innovation and Choice Online Act Advances to Senate Floor With Bipartisan Alliance

Klobuchar was able to rally Democrats and Republicans to support her bill, but its future depends upon a shaky alliance.

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Sen. Amy Klobuchar

WASHINGTON, January 21, 2022 – Senators on the Senate Judiciary Committee have formed a tenuous, bipartisan alliance to curb allegedly anticompetitive behavior by large tech companies.

During a Thursday markup, the Senate Judiciary Committee voted 16-6 to send the American Innovation and Choice Online Act, S. 2992, to the Senate floor. The bill would prohibit certain companies with online platforms from engaging in behavior that discriminates against their competitors.

There is a laundry list of violations and unlawful behaviors enumerated in the bill, including unfairly preferencing products, limiting another business’ ability to operate on a platform, or discriminating against competing products and services.

This bill would only apply to companies with online platforms that meet one of the following criteria:

  • Has at least 50,000,000 United States-based monthly active users on the online platform or 100,000 United States-based monthly active business users on the online platform
  • Is owned or controlled by a person with United States net annual sales or a market capitalization greater than $550,000,000,000, adjusted for inflation on the basis of the Consumer Price Index and is a critical trading partner for the sale or provision of any product or service offered on or directly related to the online platform

Sen. Amy Klobuchar, D-Minn., the sponsor of the bill, referred to the bipartisan effort as “the Ocean’s 11 of co-sponsors,” featuring a diverse line-up of legislators, from Sen. Josh Hawley, R-Miss., and Sen. John Kennedy, R-La., to Sen. Dick Durban, D-Ill., and Sen. Richard Blumenthal, D-Conn.

Senators embrace specific and direct targeting of Big Tech

Klobuchar spoke directly about the need to target large companies, “We have to look at this differently that just startup in a garage – that is not what they are anymore. They may have started small, but they are [now] dominant platforms,” she said. “For the first time, the monopoly power is going to be challenged in what I consider to be a smart way.”

At the outset of the meeting, there were more than 100 amendments proposed by members of the committee, but by its conclusion, more than 80 of them had been withdrawn.

One of the amendments that worked its way into the bill was a markup that exempted subscription-based services from complying with the legislation, allowing services like Amazon Prime and Netflix to promote their own content above others’.

“The bill strikes the right balance between preventing the conduct that hurts competition, while also ensuring that platforms can continue to provide privacy and data security features to their users, compete against rivals in the United States and abroad, and maintain services that benefit consumers,” Klobuchar said.

A fragile alliance between read-meat Republicans and progressive Democrats

Though there were big names on both sides of the aisle supporting the bill, the alliance seemed fraught. Despite being supportive of the bill, Kennedy made it clear that his support was conditional. “I am a co-sponsor of this bill, but this bill is going to change – it is going to change dramatically,” he said. “I hope to be in the room when those changes are made, otherwise I will be off this bill faster than you can say ‘Big Tech.’”

Some of Kennedy’s criticisms harkened back to Section 230 issues raised by former President Donald Trump – calling some of the targeted companies “killing fields for the truth,” and stating that “their censorship is a threat to the first amendment.”

Despite his criticisms, Kennedy echoed other senators, both Republican and Democrat, who emphasized that they did not want the perfect to become the enemy of the good. “All we have done [for five years] is strut around, issue press releases, hold hearings, and do nothing. So, this is a start.”

Klobuchar also received push-back from members of her own party, with Sen. Dianne Feinstein, D-Calif., stating that she was critical of the bill because it is designed to specifically target large tech companies, many of which are based out of California (though she ultimately voted to advance the bill to the Senate floor).

Hawley rebuffed Feinstein in his comments, stating that he supports the bill for the same reason Feinstein refuses to. “[Feinstein] pointed out – I think rightly – that this bill is very specific and does target specific behavior – anti-competitive behavior – in a specific set of markets. I think that that’s a virtue and not a vice.”

The measure must be passed by the full Senate, as well as the House, before it goes to the president for his signature.

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Antitrust

CES 2022: Patreon Policy Director Says Antitrust Regulators Need More Resources

To find the best way to regulate technology, antitrust regulators need more tools to maintain fairness in the digital economy.

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Larent Crenshaw (left), head of Patreon's global policy team

LAS VEGAS, January 7, 2021 – The head of Patreon’s global policy team said federal regulators need more resources to stay informed about technology trends.

Laurent Crenshaw told CES 2022 participants Friday that Congress should provide tools for agencies like the Federal Trade Commission to enforce consumer protection standards.

“I’m not going to say that big tech needs to be broken up, but there should be appropriate resources for federal regulators to understand the digital marketplace,” he said. “We’re are still living in a world that is dominated by big actors, and we’re debating about whether to even give federal regulators the power to understand how the marketplace is moving toward digital.”

Crenshaw of Patreon said that more resources were necessary at the FTC in order to understand the digital marketplace. Patreon is a membership platform that provides a subscription service for creators to offer their followers.

Such resources would empower the agency to place appropriate safeguards for smaller technology innovators. “So in 10 [or] 20 years, it’s not just the replacements of the current Google, Apple, or Facebook, but something entirely new,” he said.

Panelists echoed Crenshaw’s point that consumer welfare should guide competition policy. Tyler Grimm, chief counsel for policy and strategy in the House Judiciary Committee, said that antitrust should bend to the consumer welfare standard. “Antitrust should leave in its wake a better economy,” he said.

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