Jun 5, 2020

Axios Login

By Ina Fried
Ina Fried

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1 big thing: As techlash heats up, here's who's stoking the fire

Illustration: Aïda Amer/Axios

As controversies around online speech seethe against a backdrop of racial tension, presidential provocation and a pandemic, a handful of companies, lawmakers and advocacy groups have continued to promote a backlash against Big Tech, Axios' Margaret Harding McGill reports.

The big picture: Companies like Facebook and Google got a reputational boost at the start of the coronavirus lockdown, but that respite proved brief, as criticism has revved back up over antitrust, content moderation and privacy concerns.

Be smart: Decrying tech giants' power is an increasingly winning message among Americans on both the populist right and progressive left. It can also present competitive and political benefits for those voicing it.

Here are the firms, faces and groups to watch as the techlash heats back up.

Industry: Companies that compete with or rely on major tech companies are increasingly outspoken in their criticisms — and in some cases, have taken those concerns to lawmakers and antitrust enforcers.

  • Oracle, locked in a long-running copyright battle with Google, has lobbied against the company on privacy issues and supported changes to online platforms' legal immunity for user-posted content. Oracle exec Ken Glueck argues there isn't a broad techlash, but a narrower bristling against companies whose business model relies on consumer data collection.
  • Yelp has been outspoken in its calls for antitrust action against Google, accusing the company of unfairly favoring its own products in search results. It hosted an event last year entitled the "Vanguard of the Techlash."
  • News Corp is at the forefront of criticism from the news industry that tech giants unfairly scoop up ad revenue from publishers.

Republican lawmakers: Much of the tech criticism on the right centers on claims of anti-conservative bias and Silicon Valley firms' dealings in China.

  • Freshman Sen. Josh Hawley (R-Mo.) quickly made a name for himself as one of tech's biggest foils on the right. He has called for antitrust investigations, reforms to children's online privacy law, and introduced a bill that would create a government audit process to ensure platforms moderate content in a politically neutral manner.
  • Sen. Marsha Blackburn (R-Tenn.) has been outspoken against tech on privacy issues — suggesting there should be uniform federal policy that holds tech and telecom firms to the same privacy standards — and urged the FTC to take action against Facebook and Google last year over potential privacy, data security, and antitrust violations.
  • Sen. Lindsay Graham (R-S.C.), as chairman of the Judiciary Committee, introduced bipartisan legislation that would require online platforms to "earn" the legal immunity they currently have for user-posted content under Section 230 of the Communications Decency Act.

Democratic lawmakers: The techlash discourse on the left has touched on privacy, misinformation and ways tech companies may exacerbate social inequities. But antitrust enforcement has been perhaps the most key theme.

  • Sen. Richard Blumenthal (D-Conn.), a former state attorney general who was involved in the Microsoft antitrust case, supported a change in the Section 230 law related to sex trafficking, co-sponsored Graham's bill and joined Hawley on a letter to the Justice Department urging a broad review of Google's practices in its antitrust investigation.
  • Sen. Elizabeth Warren (D-Mass.) made breaking up Amazon, Facebook, and Google a major part of her campaign for president, and has called Facebook a "disinformation-for-profit machine" in criticizing its political ads policy.
  • Rep. David Cicilline (D-R.I.), the chairman of the House Judiciary antitrust subcommittee, is leading a bipartisan probe into the market power of Amazon, Apple, Facebook and Google.

Advocacy groups: Organizations pushing for antitrust action or legislative changes have stayed on message during the pandemic. Two newer groups have quickly developed profiles as techlash agitators.

  • The American Economic Liberties Project launched this year with funding from eBay founder Pierre Omidyar's the Omidyar Network, and is led by Sarah Miller, who also co-chairs the Freedom From Facebook and Google coalition. The project published a paper outlining antitrust and regulatory remedies for curbing the power of Facebook and Google.
  • The Internet Accountability Project, a conservative advocacy group that has received funding from Oracle, has focused its efforts on anti-conservative bias, privacy violations, anticompetitive practices and other issues.
2. Regulators query Google rival for antitrust fix

Illustration: Lazaro Gamio/Axios

Speaking of techlash-related inquiries, federal and state antitrust enforcers have been gathering thoughts from privacy-focused search engine DuckDuckGo about possible remedies to address alleged competitive harms stemming from Google's dominance in search, Margaret reports.

Why it matters: The Justice Department and states are reportedly preparing to bring antitrust cases against Google this year. The remedies they're feeling out now could feature in the concessions they may seek from Google, either in court or through a settlement.

Details: DuckDuckGo founder Gabriel Weinberg told Axios that antitrust investigators have been asking about a push from the company to force Google to create a preference menu for Android users to easily switch to a different search provider.

  • Google created such a menu after the EU's $5 billion fine against the company over competition concerns involving the Android mobile operating system.

The other side: A Google spokesperson said, "Our focus is firmly on providing services that help consumers, support thousands of businesses, and enable increased choice and competition."

Flashback: The Federal Trade Commission previously investigated Google's search practices but closed its probe in 2013 without taking enforcement action.

  • Weinberg said the market has shifted since then, and he believes search is worth another look.
3. ZoomInfo soars on IPO day

Illustration: Aïda Amer/Axios

Thursday saw the biggest tech IPO of the year from a company with Zoom in its name — not the video conferencing firm, but ZoomInfo, which uses machine learning to help businesses with sales and marketing.

Why it matters: The stock offering showed that investor interest remains high in companies with a proven track record of being able to grow and generate cash, even in tough times.

Driving the news:

  • ZoomInfo stock surged more than 61% Thursday, closing at $34 per share.
  • The Vancouver, Washington-based company raised $935 million in its IPO. The company priced 44.5 million shares at $21, above its original $16-$18 price range.
  • ZoomInfo reported $400,000 of net income on $102 million in revenue for Q1 and CEO Henry Schuck told Axios the company is only getting stronger. April saw its best first-month sales in a quarter ever.
  • The company has 202,000 paying users at 15,000 companies tapping its database of market intelligence and data analytics spanning 14 million firms, per Investors Business Daily.

Between the lines: ZoomInfo had to navigate unusual conditions, conducting its roadshow virtually and amid nationwide protests. "It's not the backdrop I think anybody had hoped for," Schuck said. "The things happening in our country are a lot more important than a tech company IPOing."

  • But, he noted that his company has helped a number of small businesses pivot amid a drastically changed economy.
4. Facebook to block ads from state media in the U.S.

Illustration: Rebecca Zisser/Axios

Facebook said Thursday it will begin blocking state-controlled media outlets from buying advertising in the U.S. this summer, Axios' Sara Fischer reports, and will starting labeling content from such outlets.

Why it matters: The company hasn't yet seen many examples of foreign governments using ads to manipulate U.S. users, but it's acting out of an abundance of caution ahead of the election, said Nathaniel Gleicher, Facebook's head of security policy.

Details: Beginning Thursday, state-backed media that U.S. users will see labels on include outlets like Russia's Sputnik, China's People's Daily, Iran's Tasnim News Agency and others.

  • The list is dynamic. Facebook is working with experts around the world to continuously evaluate the list of outlets classified as state-backed.
  • The labels will exist on the state-backed outlet's Facebook page and in the platform's ad library. The labels will also appear on organic posts, but only in the U.S. for now. Outlets that feel wrongly labeled can appeal the process.

Facebook is labeling these outlets to give users transparency into potential bias a state-backed entity may have when providing information to U.S. users.

  • Gleicher says Facebook is labeling these outlets, not removing them altogether, because in many countries, state-backed media is the only provider of local news.

Be smart: Facebook is again following the path of Twitter, which barred all state-backed outlets from buying ads anywhere last August after finding that more than 900 accounts originating from inside China were part of a coordinated effort to undermine protests in Hong Kong.

5. Take Note

Trading Places

  • Google made a series of executive moves, as reported by Search Engine Land. Among the changes, Prabhakar Raghavan was promoted to lead Google's Search and Assistant businesses, with current search head Ben Gomes moving over to the company's education business.
  • Twitter named Nikkia Reveillac its head of research.


6. After you Login

This probably beats the robin's nest you've seen in your yard.

Ina Fried