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Shark at-tech in the Senate

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Money talks in politics, and Big Tech is a big talker

Big Tech has spent over $70 million in Washington over the past year to stop legislation that targets the business practices of the behemoths of the industry – Meta (Facebook), Amazon, Alphabet (Google), Apple, and Microsoft. 

But so far, they have failed to stop the pincer movement on Big Tech now underway in both the House and Senate – And these moves in Congress have the backing of the President.

Last week, the Senate Judiciary Committee approved legislation that would prohibit these major companies from favouring their own products on their platforms and disadvantaging competing services. 

Last July, the House Judiciary Committee approved a more aggressive package of six bills that would block mergers that eliminate competitors or reinforce monopoly power, prevent social media platforms from favouring their own products at the expense of distorting the market, and encourage the antitrust authorities to stop Big Tech – by breaking them up if necessary – from using their monopoly power to destroy competition with their platforms.

What makes these concerns so politically potent is that they have strong bipartisan support from both Democrats, who are concerned about structural issues of concentration of market power and abuse of consumers, and Republicans, who are more focused on content, bias and free speech issues that are suffused throughout digital content.

All these vectors converging on Big Tech became supercharged when Frances Haugen, a former Facebook executive, gave expert, credible testimony on Capitol Hill outlining, in forensic detail, deep concerns about Facebook’s conduct, policies, culture and resistance to accountability for how it does business.

The drama that will play out for the balance of this year in Congress is whether this legislation will be taken up on the House and Senate floors and sent to President Biden to be signed into law.

The Administration has already declared its hand on these issues. 

The new head of the Federal Trade Commission, Lina Khan, and the new head of antitrust at the Justice Department, Jonathan Kanter, have announced new guidelines to review proposed mergers among the Big Five, with a special emphasis on pricing and damage to competitors when the dominant players make significant acquisitions.

This is a multifront battle

The Federal Trade Commission and several states are in the courts seeking to overturn Fakebook’s acquisitions of Instagram and WhatsApp. 

The Justice Department has sued Google, alleging the company has a monopoly on search.  36 states have sued Google and its mobile app store for abuse of market power.

Big Tech’s concerted political power may be able to run out the clock in Congress this year. 

The adage is true:  it is much easier to stop something than to start something in Congress.  History suggests Big Tech may well be able to trip up the legislative process – but that it will fail to prevent the government from enforcing the antitrust laws.

Congress’ legislative activity, scrutiny and oversight serve an especially useful purpose: to shine a bright light on the most powerful industry in the world today. 

The hearings and legislation build a record.  Tobacco is severely regulated because of the explosive hearings on what their executives knew – and tried to cover up – on how smoking causes cancer and other diseases. 

The testimony of witnesses like Ms Haugen on how Facebook operates changes political and popular sentiment on these issues.  

That shining of a bright light on the industry gives the regulators a stronger hand to bring down the antitrust laws on Big Tech practices that harm competition and consumers.

The two biggest antitrust actions in the past 40 years were against AT&T and competition in the telecoms industry, and Microsoft and its dominant position in personal computer operating systems.

Their trials in the courts were monumental, with both companies profoundly altered by antitrust settlements. AT&T was broken up, and Microsoft had to change its business practices on its software.

Why is what is happening to Big Tech today in Congress so important? 

Veteran Republican Senator Orrin Hatch of Utah put it this way in 1999:

”Almost two years ago in the Judiciary Committee, I began examining the state of competition in the computer industry and specifically Microsoft’s business practices. That was before the Justice Department brought its lawsuit against the company. Some criticized me for doing it, and it was lonely. But I think people now recognize how important those hearings were.”

Veteran Republican Senator Orrin Hatch of Utah put it this way in 1999:

If the dominant Big Tech companies are forced to abide by new rules on what they can and cannot do, rules that limit their market power and provide more protections for consumers, it will be because of what Congress is doing right now to advance legislation to make them more accountable to the rule of law.

Big Tech, by flexing its well-financed lobbying clout, might win the battle in Congress, and prevent enactment of the House and Senate bills now pending.

But they cannot stop the war on their market power.  Their reckoning with the antitrust laws is right in front of them.

Bruce Wolpe is a Ticker News US political contributor. He’s a Senior Fellow at the US Studies Centre and has worked with Democrats in Congress during President Barack Obama's first term, and on the staff of Prime Minister Julia Gillard. He has also served as the former PM's chief of staff.

Business

Instagram introduces new process to crack down on underage users

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The majority of social media platforms have an age limit of 13 years old, but how is this really being regulated?

Instagram is exploring new ways for teenagers to verify their age and comply with platform rules.

The gram is turning to video selfies to crack down on minors editing their date of birth to make them appear over 18.

The Meta-owned app is testing video selfies with facial analysis software as a new age-verification method.

For a U.S. teen who wants to join insta, they will need to upload ID, ask three adult users to vouch for them or take a video selfie.

Meta says it hopes the new methods will ensure teens have an “age-appropriate experience” on the content sharing app.

Video selfies have become a popular way for digital platforms – such as online banking apps – to verify users’ age or identity.

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Crypto

Gucci goes big in metaverse with new Vault Art Space

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Forward thinkers who love fashion, this exhibit is for you

Luxury brand Gucci has opened a Vault Art Space as it continues to explore the art world and the metaverse

Gucci inaugurated the gallery in a partnership with NFT marketplace SuperRare

The debut exhibit is titled “The Next 100 Years of Gucci”

Spring Cry by Alanna Vanacore

Keep your eye out for a special selection of NFT artworks, each a collectible fragment of Gucci’s heritage.

The artworks are showcased and auctioned off directly on Vault’s website in three drops between now and the end of July.

All sales will be in Ethereum.

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Tech

Samsung penalised for misleading Galaxy phone users

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Samsung Electronics Australia will pay $14 million after admitting that it misled customers about its phone’s waterproof capabilities

The false or misleading claims were made about the water resistance of several phones, including the S7, S7 Edge, and Note 8 Samsung Galaxy phones.

It’s understood there were more than 3.1 million of these Galaxy phones sold in Australia.

The company says if the phones were submerged in pool or sea water there was chance of the charging port being corroded and stop working if the phone was charged while still wet.

“The phones would display a warning message to discourage consumers from attempting to charge the phones while water was in the charging port,” the company said.

“The phones also had inbuilt systems to minimise the prospect of corrosion if the phones were attempted to be charged while water remained in the charging port.”

SAMSUNG

Australia’s consumer watchdog says they reviewed hundreds of complaints from customers who experienced issues with their Galaxy phones.

“The case only relates to a prospect of corrosion of the charging port (if charged while pool or
sea water remained in the charging port), and only following submersion in pool or sea
water. It does not relate to water resistance generally,” the company explained.

Affected customers are urged to contact Samsung.

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