Dec 16, 2019

Axios Login

By Ina Fried
Ina Fried

'Tis the season ... to try to look busy while really thinking about what you are going to do over the holidays. Well, part of looking busy is reading through your email, starting with Login.

Good news, it's only 1,236 words, a 4-minute read.

1 big thing: The FTC's preemptive strike on Facebook

Illustration: Sarah Grillo/Axios

News that the Federal Trade Commission is weighing immediate action to block Facebook's effort to integrate its messaging products casts a pall over the company's plans, whether or not regulators actually follow through, Axios' Scott Rosenberg, Margaret Harding McGill and Sara Fischer report.

The big picture: CEO Mark Zuckerberg announced in January that Facebook would integrate the technical foundations of its messaging services — Facebook Messenger, WhatsApp, and Instagram.

  • Facebook described the plan as motivated by engineering and business concerns, but critics noted that it would set roadblocks for any future effort to break Facebook up by unwinding its acquisitions of WhatsApp and Instagram.

Driving the news: The Wall Street Journal reported late last week that the FTC was considering seeking a preliminary injunction to bar Facebook from proceeding with its integration plan.

  • The FTC has not commented publicly.
  • It's much more difficult for regulators to unwind a completed acquisition than to block one that's still in progress, but this year the FTC has specifically noted it can be done.
  • "The Commission is committed to ensuring competitive markets for the benefit of consumers, and there will be times when it has to act after a merger has been consummated," FTC chairman Joseph Simons said in announcing a move this fall to undo an acquisition by prosthetic knee-seller Otto Bock.

Where it stands: The FTC would have to ask for an injunction against Facebook in federal court, and demonstrate to a judge that harm to consumers is likely if Facebook proceeds with its integration plans.

  • "Harm to consumers" is tough to prove in a market where the products are free.
  • The FTC is likely to argue that Facebook has an effective monopoly in messaging. But defining markets in tech can be treacherous, and Facebook can point to plenty of competitors, domestic and globally, from Apple to WeChat.

Facebook's position: Its back-end integration of messaging services has been underway a long time and is not a reaction to potential antitrust action, and the project has more to do with enabling messaging across platforms than fully combining its services.

What we don't know: Whether this is a warning shot fired in Facebook's direction or a real precursor to action.

  • There's a big difference between leaking a potential action and actually filing a motion in court.

The intrigue: Facebook's relationship with the FTC is already contentious.

  • Earlier this year, the company reached a $5 billion settlement with the commission — the largest in FTC history — over its alleged violations of a previous consent decree.
  • The FTC is also maneuvering in relation to parallel antitrust investigations of Facebook undertaken by the Justice Department and a coalition of state attorneys general.

Go deeper:

2. "Product integration" is tech's antitrust sore spot

As the FTC bears down on Facebook's product integration plans, remember that similar questions have driven every major previous tech-industry antitrust battle, Scott writes.

  • The Justice Department's epic case against IBM, which lasted from 1969 to 1982, centered on the mainframe company's integration of software and hardware.
  • The 1998 U.S. case against Microsoft focused on the software giant's integration of its web browser and the Windows operating system.

Between the lines: In tech's antitrust battles, the outcome is often less important than how broadly the process distracts the targeted company or deters it from moving aggressively in new directions.

  • In the IBM case, the company won the long legal siege. But before the 1969 case was even filed, IBM, which had previously sold hardware and software as a single package, unbundled the two to defang the government's case — thereby setting the stage for the rise of an independent software industry, which hadn't previously existed, and the founding of a company named Microsoft.
  • Tied up in court at a crucial moment in the evolution of the internet, Microsoft never went as far as it originally envisioned at integrating the browser with its other products. Google, founded the same year the government filed suit against Microsoft, wound up dominating the browser-based office software market, with services like Google Docs and Gmail.

The bottom line: Federal efforts against Facebook may be less important for their concrete legal results than for limiting the company's ability to dominate the next phase of tech industry growth — whatever it proves to be.

3. Instagram to bullying posters: Take a breath

Image: Instagram

Instagram is trying a new technique when it comes to cracking down on cyberbullying: asking posters with potentially negative comments to take a moment and think about what they are about to say.

Why it matters: There's a great deal of negative commenting on social media, but much of it doesn't violate platforms' specific rules. Companies are getting more creative about trying to alter the tone as they see users souring on the sniping.

Details: Users who post a comment that is similar to past comments reported as harassment will see a warning and get asked whether they want to edit their comment, learn more, or share anyway.

  • The feature is rolling out now in select countries and will be expanded globally, Instagram said.

What they're saying:

  • Instagram: "In addition to limiting the reach of bullying, this warning helps educate people on what we don't allow on Instagram, and when an account may be at risk of breaking our rules."
  • Rose Erhardt (@rozzzzlyn): "Since presenting as an LGBTQ person, I've seen that some people post harmful or hurtful captions targeting the community, as well as other marginalized groups. (This) seems like a great opportunity to give people that little nudge to reconsider their words before posting so that Instagram can be a safe space for everyone."
4. Instacart workers organize for higher wages

Illustration: Sarah Grillo/Axios Visuals

Thousands of Instacart contract "shoppers" — who fetch groceries for one of the largest on-demand companies in the gig economy — have gone on strike for higher wages, as Axios' Orion Rummler reports.

The big picture: Instacart shoppers said their wages were slashed in late 2018 when the company introduced an algorithmic pay system to estimate workers' earnings per job, the Washington Post reports.

  • Workers are making more since the company reversed a separate policy in February that used tips to supplement wages after it weathered heavy backlash, the Post reports.

Details: On Nov. 3, thousands of Instacart shoppers joined a three-day strike, according to rough estimates from organizers via Facebook. Some customers deleted the app and called for a boycott, per the Post. A few days later, Instacart announced plans to cut $3 quality bonuses offered for shoppers who received five-star ratings.

Background: Instacart settled a $4.6 million class action lawsuit in 2017 involving allegations of improper tip pooling and failing to reimburse workers for business expenses, which Instacart denied, per Vox.

Go deeper:

5. Hot Wheels aims to help kids learn coding

Image: Hot Wheels

Hot Wheels is adding a coding component to its existing smartphone-connected car system, known as Hot Wheels id.

Why it matters: The effort, like others from Kano and Littlebits, aims to get kids interested in coding by tapping into their enthusiasms, whether for Harry Potter, Star Wars or race cars.

Hot Wheels' effort works with Apple's existing Swift Playgrounds programming environment.

How it works: Hot Wheels id Swift Playgrounds places kids into a story in which they learn programming basics as they try to rescue a car that has been stolen by the evil genius Draven.

6. Take Note

On Tap

  • It's an especially light week for scheduled events, leaving plenty of time for both last-minute shopping and pre-holiday news dumps.
  • The biggest thing on the calendar is the second week of trial in the antitrust case a number of states have brought over T-Mobile's planned Sprint acquisition.

Trading Places

  • Erich Anderson, Microsoft's chief IP counsel, is leaving the company after 20 years. In a LinkedIn post, he says he is moving to another city to become general counsel at an unnamed company.

ICYMI

7. After you Login

Check out this periodic table that embeds actual samples of 83 of the 118 elements, including bubbles of the gaseous ones.

Ina Fried