The Media Today

The looming antitrust battle facing big tech

June 4, 2019

In recent weeks, the Justice Department and the Federal Trade Commission—which lead antitrust enforcement in the US—have been discussing what to do about big tech. As the The Washington Post puts it, regulators have been “quietly divvying up” oversight of the sector’s key players; according to The Wall Street Journal, the Justice Department is set to assume responsibility for Google and Apple, while the FTC will take on Facebook and Amazon. These assignments look like preparatory moves, though the full extent of the administration’s intentions remains unclear. However, investigations into anti-competitive behavior would hardly be a surprise. Tech giants are in the midst of a reputational hammering.

Yesterday, Congress struck a further painful blow to big tech as the House Judiciary Committee’s antitrust subcommittee announced that it would launch its own probe. David Cicilline, the subcommittee’s Democratic chair, stressed the focus would be broad, rather than trained on a single company or practice. “The internet is broken,” Cicilline said. Nonetheless, Google, Apple, Facebook, and Amazon are all likely to be in the crosshairs. According to the Post’s Tony Romm and Elizabeth Dwoskin, lawmakers are set to investigate “escalating crises” including the erosion of user privacy online and the role of tech companies in sucking digital advertising revenue away from news outlets, particularly at the local level. Add in the critical rhetoric of Democratic presidential candidates such as Elizabeth Warren, and big tech’s business practices face a deepening, multi-front siege.

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In an era of trenchant political division, skepticism of tech monopolies would appear to be a rare point of bipartisan agreement. Over the weekend, Warren and Josh Hawley, the Republican senator from Missouri, approvingly tweeted the same Journal article about the Justice Department’s potential Google probe; yesterday, Jerry Nadler, the Democratic chair of House Judiciary, and Doug Collins, its ranking Republican member, expressed similar concerns about monopolistic practices. These aren’t people who tend to agree on much: last month, Collins accused Nadler of abusing his power around a scheduled hearing with Attorney General William Barr and encouraged Barr not to attend. Nadler and his fellow Democrats subsequently voted to hold Barr in contempt.

We should be cautious before reaching conclusions of comity. The list of grievances against big tech is lengthy, and Democrats and Republicans have emphasized different parts of it. Democrats often blame Facebook, in particular, for allowing foreign manipulations aimed at putting Donald Trump in the White House; many Republicans, including Trump, have railed against the platform and its counterparts based on perceived bias against conservatives. And, while actors within the administration and Congress may genuinely share antitrust concerns, the probes and potential probes reported yesterday contain a competitive dynamic. According to CNN’s Brian Fung, the House subcommittee framed its investigation, at least in part, as a rebuke to federal antitrust authorities’ perceived inaction. “I don’t have a lot of confidence that these agencies will get the job done,” Cicilline said.

Nor should we expect these investigations to lead to concrete action. Congressional committees do not have enforcement power; government agencies do, but previous efforts to break companies up have been “rare, time-consuming and not always successful,” as The New York Times notes. Major tech companies have increased their lobbying spending in Washington. And, legally speaking, the antitrust case here is hardly simple. Companies like Facebook and Google undoubtedly dominate several markets. As the Journal’s Jacob M. Schlesinger writes, however, their products are often free. This makes harm to consumers—which has become a principle antitrust standard in the courts—hard to quantify.

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Broadly speaking, however, regulators and lawmakers’ apparent mutual interest in curbing tech monopolies is a significant development. Months of rhetoric are starting to take a more concrete form.

Below, more on big tech and antitrust:

  • A checkered record: Where is Trump in all this? According to the Times, the president supports the steps his agencies are taking but has had no hand in them. “Trump’s lack of involvement,” the Times notes, “could be good news for the potential investigations”: his previous opposition to the AT&T–Time Warner merger was cited in court by AT&T as evidence of a political agenda. In March, The New Yorker’s Jane Mayer reported that Trump did order officials to block the merger in apparent retaliation against coverage on CNN, which Time Warner owns. The officials, it seems, did not act on the demand, and the merger eventually went through following a legal challenge. Yesterday, Trump explicitly called for a boycott of AT&T in order to force “big changes” at CNN.
  • Across the pond: Authorities in other countries already took action against big tech companies on antitrust grounds. In recent years, the European Union has fined Google more than $9 billion over three separate complaints that the search giant abused its dominant market share for financial gain. The Verge has a round-up.
  • A separate probe: The FTC has already investigated Facebook over the company’s handling of user data. In late April, Facebook announced that it expected to be fined up to $5 billion. As part of settlement negotiations, Facebook reportedly agreed to create new positions at the company to strengthen its privacy practices.
  • Meanwhile, at Apple: Yesterday, Apple hosted its Worldwide Developers Conference. The event underscored the company’s intensifying bid to present itself as trustworthy on user privacy, and saw the announcement of a range of new features. Nieman Lab’s Joshua Benton rounded up the day’s top takeaways for news publishers.

Other notable stories:

  • Last month, the Times drew criticism for a story that raised conflict-of-interest questions around Joe Biden’s role, in 2016, in ousting Ukraine’s top prosecutor. Yesterday, Iuliia Mendel, a freelance journalist who co-wrote that story, was appointed spokesperson for Volodymyr Zelensky, the TV comedian recently elected as Ukraine’s president. Mendel applied for the post two days after the Biden story ran, and reported a further article for the Times—about Zelensky’s first moves as president—on May 20, without informing editors of her new job prospects. A Times spokesperson told CNN that this was a “serious conflict of interest,” but that it believes Mendel’s reporting for the paper was “fair and accurate.”
  • Today marks the 30th anniversary of the Tiananmen Square massacre in China. Today, many of the country’s citizens still do not know that it happened. “Over the past 30 years, the Beijing regime activated the state machinery to erase or distort any memory of 3 and 4 June,” Rowena Xiaoqing He writes for The Guardian. “The post-Tiananmen leadership went on to construct an official account that portrayed the movement as a western conspiracy to weaken and divide China, hence justifying its military crackdown as necessary for stability and prosperity, and paving the way for China’s rise.”
  • Yesterday, during a lunch at the National Press Club, Andrew Wheeler, the energy lobbyist turned EPA administrator, scolded the media for overly negative coverage of the environment, Yahoo News’s Alexander Nazaryan reports. Wheeler listed “five things that the press gets wrong about this administration and the EPA,” such as claiming that “the environment is getting worse.” He added that coverage of November’s dire National Climate Assessment—which directly contradicted Trump’s agenda—had been alarmist.
  • Last week, Benjamin Netanyahu, Israel’s prime minister, failed to form a coalition government. He will face fresh elections in September. Much is at stake for Netanyahu: three major corruption cases, two of which relate to his dealings with media companies, hang over him. For CJR, Ruth Margalit goes deep on Netanyahu’s relationship with the press. “Netanyahu has, perhaps to his ruin, built himself into the media’s omnipresent foil,” she writes. “Among analysts of Israeli politics, the most common word used to describe Netanyahu’s view of the press is ‘obsession.’”
  • For the Times, Max Fisher and Amanda Taub report that YouTube’s automated recommendation system is steering pedophiles to home movies featuring partially clothed children, some of which rack up hundreds of thousands of views. “YouTube has not put in place the one change that researchers say would prevent this from happening again: turning off its recommendation system on videos of children,” Fisher and Taub write. “The company said that because recommendations are the biggest traffic driver, removing them would hurt ‘creators’ who rely on those clicks.”
  • Court documents filed in Connecticut—where families of the Sandy Hook school shooting are suing Alex Jones over his claims that the massacre was a hoax—shine new light on the opaque inner workings of Infowars, the conspiracy empire Jones runs. CNN’s Oliver Darcy took a look: “Depositions emphasized how lucrative it has been for Jones to sell products in his online store, and offered a glimpse into how being banned by social media companies like Facebook and Twitter has affected the business.”
  • For CJR, Ashley Cusick recaps the newspaper war in New Orleans, where John and Dathel Georges, the locally based owners of The Advocate, recently purchased the New Orleans Times-Picayune from Advance, a national chain. (The entire staff of the Times-Picayune is being laid off; some expect to be rehired at a new, merged newspaper set to debut later this month.) “The idea that a local owner could knock off one of the biggest media companies in America was pretty audacious,” Peter Kovacs, a former Times-Picayune staffer who is now editor of The Advocate, told Cusick.
  • In Romania, the General Data Protection Regulation—an EU-wide directive designed to protect internet users—has been weaponized against investigative journalists, Bernhard Warner reports for The Atlantic. Romanian authorities accused the Rise Project, a small digital non-profit, of breaching GDPR when it posted documents corroborating fraud allegations against the then-president of the country’s ruling party.
  • And in Australia, federal police searched the home and electronic devices of Annika Smethurst, a journalist and editor at Rupert Murdoch’s News Corp., in a seven-hour raid linked to a story about secret government surveillance plans. Australia’s Daily Telegraph has more.

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Jon Allsop is a freelance journalist whose work has appeared in the New York Review of Books, Foreign Policy, and The Nation, among other outlets. He writes CJR’s newsletter The Media Today. Find him on Twitter @Jon_Allsop.