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Year in Review: With Key Hires On Antitrust and Looming Regulation, A Look Back at Big Tech in 2021

Big technology companies faced hurdles in 2021 — and it’s only the beginning of a Biden administration crackdown.

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Facebook CEO Mark Zuckerberg.

WASHINGTON, December 29, 2021 – While the world scraped through another year of the coronavirus pandemic, Big Tech was unable to escape unscathed, with the biggest names in the game facing potentially sector altering challenges.

With the rise of a number of key antitrust figures, including Amazon critic Lina Khan heading the Federal Trade Commission, Google critic Jonathan Kanter taking a position in the Justice Department’s antitrust division, and Tim Wu appointed to the National Economic Council, the focus on big tech is set for 2022.

That said, our second in a three-part series on a review of 2021 examines what happened to the big technology companies in 2021.

Section 230

At the outset of 2021, then-president Donald Trump was deplatformed by most major social media platforms in the wake of the January 6 riots at the U.S. Capitol Building. In response, Trump re-ignited the conversation surrounding Section 230 of the Communications Act of 1934, which shields tech platforms of being legally liable for the content their users post.

Even though it may seem that both conservatives and liberals in Congress can come together against Section 230, the reality is their perspectives could not be more at odds.

Republicans tend to believe social media companies are guilty of using Section 230 to stifle conservative speech – a claim that Twitter’s internal research has refuted, at least on their own platform.

Conversely, Democrats believe that these companies are hiding behind Section 230, shirking responsibility, and refusing to be held accountable for the real-life consequences of hateful and dangerous speech on their platforms.

The Big Tech companies have been accused of using Section 230 as a shield to deflect criticisms of how they choose to or choose not to moderate user content that is posted on their social media platforms.

Because of this ideological disconnect, despite all the rhetoric and chest thumping, the needle has not moved on Section 230 in Congress. There have been precious few alternatives put forward to replace Section 230 and protect the smaller companies that would be impacted by a full repeal.

Those who have lampooned Section 230 naysayers often point out that small companies will inevitably be the most impacted by a repeal of Section 230. While Facebook, Twitter, and Google will have the capital necessary to defend themselves in court and adjust their moderation policies, the reasoning goes, small companies will not, and it will simply be too risky for them to host user created content.

While Big Tech will be able to adapt to change made to Section 230, some argue, everyone else could find themselves pushed further to the margins to mitigate their own risk.

Facebook/Meta

Facebook, recently rebranded as Meta, has spent a lot of time in the doghouse this year.

In 2021, the company navigated whistleblowers, the Oversight Board, Section 230 debates, and more – it was even voted “worst company” in a user poll on Yahoo Finance.

Shortly after Trump’s expulsion from Facebook’s social media platforms, the Oversight Board upheld Facebook’s decision as part of its first round of judgements on January 28. In 2021, Oversight Board would pass down 21 binding judgements to Facebook.

The board was Facebook’s answer to mounting criticisms regarding their content moderation policies; Facebook’s critics argued that their policies appeared intentionally vague, and some called for more independent and transparent “oversight.”

Facebook also experienced a tumultuous conclusion to 2021. In October of 2021, Frances Haugen identified herself as the whistleblower behind what would become known as “The Facebook Files.” Haugen would later testify before Congress, claiming that Facebook was not only aware of how its platforms could negatively impact young people, but also that it was cognizant of the role they played in violence in developing nations.

Facebook rebranded itself as Meta on Oct. 21, after Haugen’s testimony.

Apple

Apple found itself at the center of several antitrust and competitive-based issues in 2021.

In Epic Games v. Apple, despite a favorable ruling that did not find Apple to be a monopoly or having had engaged in anti-trust behavior (in nine of ten counts), Apple was found to have to have engaged in anticompetitive practices through its anti-steering policies.

During the case, Epic received support from companies like Spotify and Hinge owner Match Group Inc., saying that they had dealt with similar anticompetitive behavior.

With a market cap of over $600 billion, Apple was also one of only six American firms (alongside Tesla, Microsoft, Amazon, Alphabet Inc., and Facebook) that would be recognized and targeted for additional antitrust bills.

One such bill is H.R. 3816, introduced by Antitrust Subcommittee Chairman David Cicilline, D-Rhode Island. This bill would go so far as to make it illegal for companies to give their own products preferential treatment on their marketplaces.

Among other things, this would likely outlaw the practice of pre-installed applications on phones and other smart devices – a practice that Apple is thoroughly engaged in, steering users to their own proprietary apps while potentially obfuscating alternatives.

Google

Google broke records in 2021, but not all to the company’s benefit. In July of 2021, the Competition Authority of France fined the company nearly $600 million – the largest in the authority’s history – over a failure to negotiate with digital publishers “in good faith” to fairly compensate them for their content, per European Union copyright directives.

Google was also simultaneously sued by 36 states and the District of Columbia over alleged Google Play Store abuses.

In January of 2021, Google squared off with the Australian Government. The case was not dissimilar to the one that would play out in July, whereby France fined the company for $600 million. When faced with legislation that would require Google to compensate content creators for content shared on their engine, Google’s parent company, Alphabet, threatened to shut down the search engine for the island nation.

In September of 2021, Australia struck at Google again, labeling it a monopoly and announcing that it would be taking steps to hamper Google’s ability to sell ads.

Amazon

Google was not the only company breaking records. In 2021, Amazon passed Walmart as the world’s largest retailer outside of China.

In 2021, Amazon acquired Metro-Goldwyn-Mayer for nearly $8.5 billion — nearly its largest acquisition to date, second only to Amazon’s purchase of Whole Foods Market for $13.7 billion in 2017 — and one of the largest mergers in 2021.

The acquisition was one of the most significant moves made in 2021 as the “Streaming Wars” have only heated up. Despite this, Amazon has largely managed to skirt the antitrust conversations that have swirled around the other companies on this list.

But with Khan as the head of the FTC, Amazon is also looking at possible regulatory issues. In fact, earlier this year, it requested that Khan recuse herself or be recused from all matters related to the company due to past statements she has made.

Much of the criticism Amazon has faced has surrounded knock off products hawked by third-party retailers that maintain a presence on Amazon.
For its part, Amazon mostly denies responsibility for the third-parties it platforms, though H.R. 5502, co-sponsored by Rep. Jan Schakowsky, D- Illinois, could change that.

“What we’re saying now is very simply that online marketplaces will have to verify that the identity of their higher volume sellers, so they have to take some responsibility,” said Schakowsky during a hearing on the bill in November.

Though the bill was passed in the House Committee on Energy and Commerce, it still has a long way to go before being passed into law, as it must still pass the House and Senate.

Big Tech

Tech Policy Conference Panelists Tackle Challenges of Federal Privacy, Antitrust Laws

Academics were concerned about an anti-preference bill, while one state AG said he’s ‘pragmatic’ about a federal privacy law.

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Screenshot of Colorado Attorney General Phil Weiser at the TPI Aspen Forum on Monday

ASPEN, Colorado, August 15, 2022 – Academics expressed concern Monday about antitrust legislation before Congress that would prevent companies from preferencing their own products on their platforms, arguing the legislation targets only certain companies and hasn’t shown it would benefit consumers.

The American Innovation and Choice Online Act, S.2992, which is currently before the Senate and aims to ban discrimination against third-party products on the host platform, defines targeted companies by their value – which effectively narrows the number of affected companies and makes it a problematic piece of legislation, according to some academics.

“I think it’s very difficult to single out specific companies…for specific rules,” Judy Chevalier, a professor of finance and economics at Yale University, said at the TPI Aspen Forum on Monday.

“It’s hard to imagine what is the principle whereby private label band aids are a bad idea at Amazon but they’re a good idea at Walmart,” she added. “The self-preferencing rule can be applied to Amazon in a way that I think can be interpreted to limit their ability to introduce and promote their private label products.

“It’s not very convincing that this behavior has thus far harmed consumers,” she continued. “So I think singling out particular companies in this broad brush way strikes me as problematic.”

Dennis Carlton, a professor of economics at the University of Chicago business school, said the legislation makes him “nervous” because of the impact on innovation of targeting certain industries over others.

“High tech industries are rapidly changing, and whenever we have regulation or try and have regulation of rapidly changing industries, it is just too hard for the regulators to keep track of what’s going on and they wind up causing delays in innovation,” Carlton said.

“Innovation is one of the strongest ways we improve our products and our standard of living. It makes me very nervous when you target specifically an industry or…make exceptions to other industries without…economic criteria or any attempt to show that this would produce a benefit not a harm. So it makes me nervous these proposals.”

Similar sentiments were expressed on a Broadband Breakfast panel in March, in which an association representing large technology companies blasted the legislation introduced by Senator Amy Klobuchar, D-Minn., as unfairly targeting certain online platforms and excluding large retailers.

“The bill very carefully picks winners and losers,” said Arthur Sidney, vice president of public policy at Computer and Communications Industry Association, which includes members like Amazon, Google, and Facebook.

State AGs weigh in on privacy legislation

On a separate panel at the Forum on Monday, the state attorneys general of Colorado and Nebraska discussed the state of privacy legislation – both in their own state and at the federal level.

Introduced in June, the American Data Privacy and Protection Act (H.R. 8152) cleared the House Energy and Commerce Committee last month for House floor votes. The proposed bill would provide Americans protections against discriminatory use of their data, require covered entities to minimize the data they collect, and prevent customers from needing to pay for privacy.

Despite his state having passed comprehensive privacy laws that are considered leading and a model by some, Colorado AG Phil Weiser said he’s “pragmatic” about a federal law.

“If a federal law is as good and strong as what we worked on in Colorado, I am comfortable with that law preempting Colorado, provided state AGs have the authority to enforce federal law,” he said. “It’s important to me to have that model because, you could imagine a world where the feds are not engaged in active enforcement, then the states can pick up that slack.”

Before the introduction of the legislation, some experts were concerned that having a number of different state privacy laws would harm smaller companies operating across multiple states. One lawyer noted that the longer companies have to wait for a uniform federal law, the greater the burden of compliance on them.

In fact, two Democratic California reps – Anna Eshoo and Nanette Barragan – were concerned that such a federal law would override their own state’s law. Eshoo proposed a provision, which was not included during a markup of the bill, that would have allowed states to add privacy provisions on top of the federal baseline.

“If you do have multiple standards,” Weiser said, “we have to solve for the problem, which is a problem right now of what I call interoperability or harmonization: How do we make sure that different state laws enable compliance across them as opposed to putting businesses in, to me, the unacceptable position of saying, ‘I can either comply with Colorado’s law or California’s law, but not both.’?”

Having had a privacy proposal in its legislature that did not pass, Doug Peterson, AG for Nebraska, said the state is taking a wait-and-see approach, including observing how states, including Colorado, fare with their own laws.

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Americans Should Look to Filtration Software to Block Harmful Content from View, Event Hears

One professor said it is the only way to solve the harmful content problem without encroaching on free speech rights.

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Photo of Adam Neufeld of Anti-Defamation League, Steve Delbianco of NetChoice, Barak Richman of Duke University, Shannon McGregor of University of North Carolina (left to right)

WASHINGTON, July 21, 2022 – Researchers at an Internet Governance Forum event Thursday recommended the use of third-party software that filters out harmful content on the internet, in an effort to combat what they say are social media algorithms that feed them content they don’t want to see.

Users of social media sites often don’t know what algorithms are filtering the information they consume, said Steve DelBianco, CEO of NetChoice, a trade association that represents the technology industry. Most algorithms function to maximize user engagement by manipulating their emotions, which is particularly worrisome, he said.

But third-party software, such as Sightengine and Amazon’s Rekognition – which moderate what users see by bypassing images and videos that the user selects as objectionable – could act in place of other solutions to tackle disinformation and hate speech, said Barak Richman, professor of law and business at Duke University.

Richman argued that this “middleware technology” is the only way to solve this universal problem without encroaching on free speech rights. He suggested Americans in these technologies – that would be supported by popular platforms including Facebook, Google, and TikTok – to create the buffer between harmful algorithms and the user.

Such technologies already exist in limited applications that offer less personalization and accuracy in filtering, said Richman. But the market demand needs to increase to support innovation and expansion in this area.

Americans across party lines believe that there is a problem with disinformation and hate speech, but disagree on the solution, added fellow panelist Shannon McGregor, senior researcher at the Center for Information, Technology, and Public Life at the University of North Carolina.

The conversation comes as debate continues regarding Section 230, a provision in the Communications Decency Act that protects technology platforms from being liable for content their users post. Some say Section 230 only protects “neutral platforms,” while others claim it allows powerful companies to ignore user harm. Experts in the space disagree on the responsibility of tech companies to moderate content on their platforms.

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Big Tech

Surveillance Capitalism a Symptom of Web-Dependent Companies, Not Ownership

Former Google executive Richard Whitt critiqued Ben Tarnoff’s argument in ‘Internet for the People’ during Gigabit Libraries discussion.

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Photo of Ben Tarnoff, co-founder of magazine Logic and the author of “Internet for the People”

July 15, 2022 – A former Google executive  pushed back against a claim that the privatization of broadband infrastructure has created the world’s current data and privacy concerns, instead suggesting that it’s the companies that rely on the web that have helped fuel the problem.

Richard Whitt, president of technology non-profit GLIA Foundation and former employee of Google, argued that while the World Wide Web is rife with problems, the internet infrastructure underlying the web remains fundamentally sound.

Whitt was responding to claims made by Ben Tarnoff, a journalist and founder of Logic Magazine, at the Libraries in Response event on July 8. Tarnoff argued – as he does in his recent book, “Internet for the People” – that the privatization of broadband infrastructure in the 1990s has allowed the use and commodification of personal data for profit to flourish (known as surveillance capitalism).

The discussion took place during the Gigabit Libraries Network’s series “Libraries in Response.” The session was titled “If the Internet is Broken, How Can Libraries Help Fix it?”

Privatization, Tarnoff claims, has raised such issues as polarization of ideologies and the “annihilation of our privacy.” As a result, he said, the American people are losing trust in tech companies that “rule the internet.”

Whitt responded that the internet is working well based on the protocols, standardized rules for routing and addressing packets of data to travel across networks, derived at the onset of the internet.

The World Wide Web, a system built on the internet to allow communication using easy-to-understand graphical user interfaces, allowed for browsers and other applications to emerge, which have since perpetuated surveillance capitalism into the governing approach of the web that it is today, said Whitt, suggesting it’s not ownership of the hard infrastructure that’s the problem.

The advertising market that encourages surveillance extraction, analysis and manipulation is, and will continue to be, profitable, Whitt continued.

The discussion follows a Pew Research Center study that found that only half of Americans believe tech companies have a positive effect in 2019 compared to a seventy-one percent in 2015.

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