Apple hit with antitrust complaint in China - Axios
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Apple hit with antitrust complaint in China

Ng Han Guan / AP

App developers in China have filed a complaint against Apple with Chinese regulators, claiming antitrust violations against the tech giant's alleged unexplained removal of apps from the App Store and a refusal to communicate regarding issues with developers in Chinese, per the WSJ.

  • Apple's response: The company told WSJ that most Chinese submissions to the App Store get approved within 48 hours, reiterating that all of its guidelines apply equally across the world.
  • Why it matters: The complaint comes at a fraught time for Apple in China, as it attempts to both maintain its foothold in its massive market and comply with the Chinese government's online scrutiny and censorship — highlighted by its recent removal of VPN apps from the App Store used to bypass the nation's Great Firewall.
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The walls are closing in on tech giants

Illustration: Rebecca Zisser / Axios

Tech behemoths Google, Facebook and Amazon are feeling the heat from the far-left and the far-right, and even the center is starting to fold.

Why it matters: Criticism over the companies' size, culture and overall influence in society is getting louder as they infiltrate every part of our lives. Though it's mostly rhetoric rather than action at the moment, that could change quickly in the current political environment.

Here's a breakdown of the three biggest fights they're facing.

Battle over content: Both sides are increasingly wary of the outsized role that Facebook and Google play as moderators of public discourse, as was seen following the violence in Charlottesville. In the White House, Steve Bannon has reportedly argued that Facebook and Google should be regulated like public utilities.

  • Right-wingers worry the progressive-leaning companies aren't going to give their views a fair shake. Recently they opposed Google's firing of an engineer whose internal memo questioned women's aptitude for engineering jobs. They've also criticized YouTube policies meant to combat offensive speech. They see a company with the ability — and, in their eyes, motive — to sideline their views.
  • A policy memo quietly circulated earlier this year by activist Phil Kerpen recommended rules to keep online platforms politically neutral, potentially subjecting platforms that violated that neutrality to government enforcement actions. In an email obtained by Axios, Kerpen said the general strategy would "get us on offense and scare the hell out of Google, Facebook, Twitter." (Kerpen told Axios that the "unpublished draft memo represents preliminary thoughts on complex issues.")
  • Sen. Ted Cruz told Axios that he's worried about "large tech companies putting their thumb on the scales and skewing political and public discourse." He asked during a June hearing whether "these global technology companies have a good record protecting free speech, and what can be done to protect the first amendment rights of American citizens."
  • On Monday, Fox News host Tucker Carlson said that since Google "has the power to censor the internet, Google should be regulated like the public utility it is to make sure it doesn't further distort the free flow of information."
  • The left's fixation on whether fake news impacted the election has ensnared Facebook and other platforms in investigations into Russia's influence during the campaign. Top Senate Intelligence Committee Democrat Sen. Mark Warner has spoken about fake news with Facebook staffers multiple times this year in both Silicon Valley and Washington, a source said.
  • There's also frustration that Facebook didn't remove the event page for the white supremacist rally in Charlottesville until right before it happened.

Battle over liability: Big tech firms are in a panic about a bi-partisan bill that would let sex trafficking victims sue web platforms that hosted content implicated in the crime.

  • For decades online platforms have been heavily shielded from liability for what users post. That's central to the business models of Google, Facebook, Airbnb and other internet companies and they fear this bill opens the door to new liability risks for other types of user-generated content.
  • There's been a flood of opposition to the bill from trade groups representing tech giants and outside groups that have received funding from the companies. Backers of the bill say the companies had the opportunity to step up. "We offered them a chance to provide constructive feedback and they chose not to, and instead decided to oppose a strongly bipartisan bill to help stop online sex trafficking," said Kevin Smith, a spokesman for bill sponsor Sen. Rob Portman.

Battle over size: Legal experts are crafting the antitrust case against tech giants.

  • The left-leaning team at the New America Foundation's Open Markets program has been pushing this issue hard for years, but has recently started to get traction. A law review note produced by a fellow for the program has brought new attention to Amazon's effect on competition. Amazon cares enough about the concerns to have met with members of the New America team in June.
  • "They deserve to be highly profitable and successful," Sen. Elizabeth Warren said of major tech companies in a speech last year. "But the opportunity to compete must remain open for new entrants and smaller competitors that want their chance to change the world again."
The other side: Big tech companies generally argue they compete aggressively with each other as well as upstarts, that they have no interest in injecting bias into how they moderate user content, and that their liability protections have enabled the the internet sector to thrive.

Across the pond: European regulators have taken action on their concerns about the companies' growing clout. Google faces a massive fine over allegedly anticompetitive behavior (and two other investigations) and Facebook has been docked for allegedly misleading regulators when it bought WhatsApp.

The political establishment is starting to buy in to these concerns, too: Democrats are urging tougher antitrust enforcement as part of their "Better Deal" platform. Republican leadership staffers told Google, Facebook and Amazon that aggressive pro-net neutrality advocacy would put their policy objectives at risk; sources say they invoked privacy as one issue where the companies could be vulnerable.

As history shows, it takes time for talk to turn to action: AT&T's antitrust disputes with its skeptics festered over a decade, and Microsoft's opponents agitated for years before the government took them seriously. And fringe arguments have a way of becoming mainstream: Critics of Ma Bell and Microsoft looked like outliers before picking up steam.
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Travis Kalanick hits back at Benchmark in Uber lawsuit reply

Sam Jayne / Axios

Former Uber CEO on Thursday filed his reply to a fraud lawsuit brought against him last week by venture capital firm Benchmark, which was designed to get him removed from the embattled company's board of directors. Here are the highlights, per a filing in Delaware Chancery Court:

Urgency: Benchmark has asked for a preliminary injunction that would effectively kick Kalanick off the company's board and out of its CEO search process. Kalanick argues that the dispute should be settled by an arbiter but, if it must be dealt with in court, then there is no need for a preliminary injunction because the current board is managing the business just fine: "There is no uncertainty regarding the validity of actions approved by a majority of the board. Nor is there any other independent, impending source of potential harm to the company or its stockholders."

Under duress: Kalanick alleges that Benchmark took advantage of him while he was in mourning for his mother, who was killed in a tragic boating accident that also seriously injured his father. "It executed its plan at the most shameful of times: immediately after Kalanick experienced a horrible personal tragedy."

Deal dispute: Benchmark has argued that Kalanick agreed upon resignation to give up three unfilled board seats that he controlled, but later refused to codify such changes. Kalanick contends that he had agreed that the seats would remain, with him receiving one and the entire board approving the two other directors. Either way, however, Kalanick seems to believe the agreement he signed the night of his resignation is invalid as it was not co-signed by any other party to the company's voting agreement, nor did he receive any consideration for giving up sole appointment power over those seats.

Prove it: Kalanick says that Benchmark's fraud claims rely heavily upon "information and belief," rather than explicitly detailing fraudulent statements.

Below is the full reply:

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Alt-social network raises $1 million amid Silicon Valley crackdown

Twitter

Gab, a so-called "free-speech social network" that's been rejected on app stores, has raised $1 million in crowdsourced funds amid a Silicon Valley crackdown on white nationalist content and accounts. The platform announced its fundraising milestone with a tweet that slammed "Silicon Valley elitist trash." The site claims to be politically neutral, but was started by a pro-Trump Silicon Valley executive, according to Venture Beat. Its avatar is a green frog that resembles the frog "Pepe" that is a symbol of the alt-right movement.

Why it matters: The alt-right movement in the U.S. has been leveraging social media to organize. Large fundraising efforts for the platform shows that the movement's momentum hasn't slowed down, despite efforts to stamp it out.

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5 presumed Barcelona terrorists shot dead to stop second attack

Police officers stand next to the van involved on an attack in Barcelona, Spain, Thursday, Aug. 17, 2017 (Manu Fernandez / AP)

Spanish police said Friday (local time) that five people presumed to be terrorists involved with the Barcelona attack have been shot dead in Cambrils, south of the Catalan capital, in an effort to prevent a second attempted attack, per the BBC.

Go deeper: Read more about the Barcelona attack here.

This post has been updated to reflect that the fifth suspect who was shot, and initially reported injured, has died.

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McConnell supports Flake hours after Trump calls him "toxic"

Senate Majority Leader Mitch McConnell said Thursday that Sen. Jeff Flake (R-AZ) has his "full support" ahead of his reelection bid next year, according to an official McConnell Twitter account:

  • Timing: Earlier today, Trump tweeted, "Great to see that Dr. Kelli Ward is running against Flake Jeff Flake, who is WEAK on borders, crime and a non-factor in Senate. He's toxic!"
  • Context: Flake opposed Trump during his presidential campaign and in his recent book, "The Conscience of a Conservative," Flake sharply criticized Trump and condemned his party for enabling Trump's rise to the presidency.
  • Why it matters: McConnell, who was reportedly livid with the way the president handled the violence in Charlottesville, has been engaged in an ongoing feud with Trump following the president's series of tweets criticizing the Majority Leader's performance. McConnell's latest statement in support of Flake only adds fuel to the fire.
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White House calls it quits on Infrastructure Council

Pablo Martinez Monsivais / AP

The White House called it quits Thursday on a council that was expected to advise President Trump on how to best improve U.S. infrastructure, acknowledging that participation in the council could subject members to intense criticism given the controversy surrounding Trump's handling of the Charlottesville, Virginia attacks, per the WSJ.

  • Why it matters: It's Infrastructure Week. And it suggests the Charlottesville fallout is having larger implications.
  • The announcement: "The President's Advisory Council on Infrastructure, which was still being formed, will not move forward," a White House official said Thursday.
  • Timing: The move comes just one day after Trump abruptly shut down his two key groups of outside business advisers.
  • Bad optics: Canceling an infrastructure council the same week that the White House is supposed to be pushing its infrastructure agenda is only intensifying what has already been a tough week for the administration.

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How magazines are reacting to the Trump-Charlottesville fallout

Many magazines are reacting with covers alluding to Trump's role in the racial tension currently reverberating through America after the white nationalist rally in Charlottesville, Virginia.

Go deeper: Axios' Mike Allen on two nations, divisible, under Trump. And here are some of the most anti-Trump magazine covers from the year, as well as 5 ways to make a winning Trump magazine cover.

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Sen. Corker calls for "radical changes" at the White House

Erik Schelzig / AP

Sen. Bob Corker, who has been restrained in his criticism of President Trump, let loose while speaking to local media in Tennessee. Per the Chattanooga Times Free Press:

  • "We're at a point where there needs to be radical changes at the White House — it has to happen."
  • "The president has not yet been able to demonstrate the stability, nor some of the competence, that he needs to demonstrate in order for him to be successful."
  • "We should hope that he aspires, that he does some self reflection, and that he does what is necessary to demonstrate stability, to demonstrate competence and demonstrate he understands the character of our nation..."
  • "Helping to inspire divisions because it generates support from your base is not a formula for causing our nation to advance..."
Why it's different: Republican members of Congress have criticized Trump plenty of times before — but rarely in such sweeping, biting terms.
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AT&T reportedly in advanced talks with DOJ for Time Warner deal

Alan Diaz / AP

Justice Department officials are in discussions with AT&T about potential merger conditions, the WSJ reports, a positive sign for its $85 million bid for Time Warner.

Conditions: Despite Trump's early criticism of the tie-up, antitrust experts have anticipated the DoJ would approve the deal — with conditions — since the companies do not directly compete. Still, content providers have raised concerns with the DoJ that the deal will allow AT&T to favor its own programming over others and would consolidate media power. As Bloomberg reported last month, a possible condition would be pledging not to give its own programming an unfair advantage over rivals.

Data: The WSJ also reports that DoJ officials have asked about making AT&T's large amounts of customer data available to competitors at a reasonable price. This data is a major asset as telecom providers try to get a bigger piece of the online advertising market.

Top job still vacant: DoJ's review of the merger has continued despite the fact that the top antitrust enforcer post remains unfilled. Trump's pick for the job, Makan Delrahim, is still waiting on Senate confirmation. His confirmation is not necessary for staff to come to a conclusion on the deal, antitrust experts say.

AT&T has said it expects the deal to close by the end of the year.

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Trump again pushes debunked claim on WWI-era general

President Trump tweeted a fictional claim about WWI-era General John Pershing Thursday afternoon, telling his followers to "study it." This is one of several times Trump has cited the debunked claim about Pershing.

The fictional story he's referring to: Pershing, around the time of the Philippine-American War, killed 49 Muslims with bullets dipped in pigs' blood, and spared the 50th person so that he would take the last bullet to his people and tell them what happened.

Why? Trump has referenced this story repeatedly at rallies both during his campaign and his presidency as a way to give credence to his claim that the U.S. should "go much further" than waterboarding suspected terrorists.

Timing: The tweet came hours after a terrorist attack in Barcelona left at least 13 people dead and more than 50 injured.