Connect with us

Tech

Shark at-tech in the Senate

Published

on

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

TikTok’s parent company loses $7bn

Published

on

TikTok’s Parent company sees losses grow as it tries to outplay Facebook, Instagram and YouTube

TikTok’s parent company, ByteDance, has experienced a loss of more than $7 billion dollars in operating costs, tripling last year’s records.

The company attributes the huge loss to its massive investment in global growth. It detailed the results in a financial report which was provided to internal stakeholders.

In the first quarter of 2022, the company recorded a profit in its operating costs, with the company’s revenue expanding by more than 80% to $61.7 billion in 2021.

But expenses that are focused on expanding its products worldwide continue to swell at a rapid rate.

While TikTok is one of ByteDance’s most successful and well-known products, the company owns a wide range of digital platforms including: Douyin, Toutiao, Vigo Video, Helo, Lark and BytePlus. In total, it attracts hundreds of millions of users in China alone and 1 billion TikTok users worldwide.

The internal report was emailed to all ByteDance’s 130,000 employees. In a note of assurance, company execs “remain confident in the strength of our business and organisation.”

The ability for ByteDance to continue to invest in the company’s growth is clearly a strong advantage the company has over its competitors in the market.

A new report found Australians spent more time on TikTok in the last 12 months than on Facebook, a leader for many years in the space.

With other platforms such as Facebook, Instagram and YouTube scrambling to compete with TikTok, it seems ByteDance must have a long-term expansion strategy in mind.

The company is evidently trying to arrive at a place where such massive losses relating to operating will be a distant memory.

Continue Reading

Business

Australian government will temporarily change telco laws amid Optus data breach

Published

on

Australians impacted by the Optus data breach are set to be given greater protection as authorities scramble to protect the personal information that was leaked online

Today, the Australian federal government has announced it will temporarily change the country’s telecommunication laws, paving the way for Optus to share sensitive data.

The move will see the divers licenses, alongside Medicare and passport numbers of impacted customers provided to financial institutions.

Allowing enhanced monitoring for those who were compromised in the cyberattack.

Optus will be working hand-in-hand with banks to monitor fraudulent activity, hopefully avoiding any breaches.

The government says all of the personal information must be immediately destroyed once it is no longer deemed necessary.

When announcing the changes, Communications Minister Michelle Rowland said financial institutions have been proactive throughout this process – but elements of the Optus response have previously been criticised.

The breach affected nearly 10 million customers and former customers, sending the country into a panic.

Australian Treasurer Jim Chalmers says this latest move is designed to help keep impacted residents safe from cyber crime.

This unprecedented move now sits with the Governor General who is required to give final approval.

Australians are told the regulations will remain in place for a period of 12 months.

Continue Reading

Business

Another twist in the Musk and Twitter deal

Published

on

The trial between Twitter and Elon Musk is still set to go ahead

The trial between Twitter and Elon Musk is set to go ahead, in a strange series of events. This comes despite Musk’s recent change of heart over the deal to buy the social media platform

Delaware Court judge Kathaleen McCormick says neither party has applied for a “stay” in the action. Now, proceedings are still due to begin on October 17.

This comes a day Musk performed a U-turn, deciding to go ahead with the multi-billion dollar deal to buy the social media giant.

Musk’s lawyer says his client has “reconsidered his position” and is now “committed to completing the transaction.”

The transaction values Twitter at $54.20 per share, bringing the total sale price to around 44 billion.

The trial was scheduled to run over five days with Twitter arguing the Tesla CEO should be required to complete the transaction.

Musk launched a counterclaim, alleging the company suffered a substantial reduction in its value, rendering the deal invalid.

Continue Reading

Trending Now

Copyright © 2022 The Ticker Company PTY LTD