Oct 22, 2020

Axios Login

Join Axios tomorrow at 3:30pm ET for a virtual event on the upcoming election featuring former national security adviser H.R. McMaster, Voto Latino CEO and president María Teresa Kumar, and Rep. Karen Bass (D-Calif.).

Today's Login is 1,488 words, a 6-minute read.

1 big thing: Lawyers crystal-ball the Google antitrust suit

Illustration: Eniola Odetunde/Axios

The Justice Department's antitrust suit against Google is a strong, straightforward monopoly case, competition lawyers and experts tell Axios' Ashley Gold. But that doesn't mean it'll be an easy journey for the government.

The big picture: Winning any antitrust case is a heavy lift. It's even more of a challenge to pull off victory in a future-looking case that seeks to make room for potential new competition to flourish.

Where it stands: The DOJ filed its suit Tuesday, arguing that Google uses unfair tactics to lock its search engine in as the default in browsers and mobile devices. Judge Amit Mehta will preside over the case in the District Court for D.C. Lawyers who spoke with Axios expect the path from here to proceed as follows:

  • Google will ask Mehta to dismiss the complaint, a request the government will oppose. (Google will then file a reply.)
  • Both parties will launch into the discovery process, during which the government can request documents from Google, depose executives and otherwise build up a body of evidence to support its case.
  • "They will be scouring Google's files for any indication that [being the default search engine] is leading to their high share," said Joel Mitnick, a partner for antitrust and global litigation groups at Cadwalader.

Between the lines: That causal relationship is crucial for the government to establish.

  • Google's answer to these concerns is that people stick with its search engine simply because it's the best.
  • To proceed with its case, the DOJ has to demonstrate that Google is being pushed on a public that might otherwise prefer other options.

To do that, the DOJ will likely call in some academics.

  • "Frequently, these cases become a battle of economics experts," said Jeffrey Jacobovitz, a partner at Arnall Golden Gregory.

The other side: Google, which calls the DOJ's case "deeply flawed," maintains it's easy for users to switch to another search provider and that there's no evidence its dominance in the search market is hurting consumers.

Of note: Parties in antitrust cases often ask for extensions to reply to complaints, and Google is likely to slow-walk the process, lawyers say.

The intrigue: Several experts — and indeed the DOJ itself, in the suit filed Tuesday — drew parallels between the issues raised with Google and the antitrust concerns propelling the agency's 1998 case against Microsoft. That case focused in part on Microsft's deals with PC makers to include Internet Explorer as the default browser on computers running Windows.

  • One antitrust lawyer familiar with the Google case called it "smarter, better and narrower with a better chance of success" than U.S. v. Microsoft. (Despite winning an initial judgment against Microsoft, the U.S. ultimately lost that case on appeal.)

Yes, but: It's possible that any remedies ultimately reached in the case, whether obtained from a judge or in a settlement, prove "toothless," said Philip Giordano, an antitrust partner at Hughes Hubbard who formerly worked as an antitrust prosecutor at the DOJ.

What's next: The narrowness of the case is working to the DOJ's benefit for now — but it's likely to expand. The Justice Department, along with Texas, is still actively looking into Google's advertising technology, the antitrust lawyer familiar with the case said.

  • State attorneys general are also expected to go after other parts of Google's business and file suits that will eventually be combined with the DOJ's in the coming weeks.
2. Quibye-bye

Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Quibi, the well-funded but struggling mobile video streaming service, is shutting down, the company announced Wednesday, Axios' Sara Fischer reports.

Why it matters: Quibi, which only launched its app six months ago, had struggled to hit its subscriber growth targets amid the global pandemic.

Details: Quibi said in a statement that it intended to wind down its business operations and initiate a process to sell its assets over the next few months. Any remaining funds will be returned to its investors.

  • The company noted that its board made the decision to shutter after exploring several strategic and financial options. Reports had suggested the company met with a wide range of potential buyers without finding sufficient interest.

By the numbers: The company raised a whopping $1.75 billion to get the app off the ground from Alibaba, as well as Hollywood giants like Walt Disney Co., NBCUniversal and AT&T's WarnerMedia.

  • Third-party analytics companies reported over the summer that the app only attracted a few million downloads. Other analytics companies reported that Quibi struggled to convert most of its free trial subscribers to paid subscribers.

Between the lines: Quibi was created to provide short-form videos (usually 7–10 minutes) to young users via mobile. Its big trick was letting viewers rotate their phones for a different perspective, as content was shot both vertically and horizontally.

Our thought bubble: Quibi will become a case study in how tons of money and seasoned leadership can’t make a bad idea work.

  • The company has blamed its troubles in part on the pandemic, but TikTok, which also serves up short-form video on users' phones, has gained massive traction in recent months, even while facing major political headwinds.

Jeffrey Katzenberg is an investor in Axios.

3. Exclusive: Survey reveals pandemic's toll on gig workers

Illustration: Sarah Grillo/Axios

More than two-thirds of gig workers have seen their incomes drop during the coronavirus pandemic, with almost a third cutting back on food as they struggle to cover expenses, according to new data from an industry survey shared exclusively with Axios' Kyle Daly.

The big picture: The pandemic has put ride-share drivers, personal shoppers and others at heightened risk of contracting the coronavirus without netting them benefits or additional pay.

By the numbers: The survey found that where one in five gig economy workers made less than $1,000 a month in March, by summer that number had risen to three in five.

  • Nearly three in five said they couldn't cover household expenses for more than a month without additional financial help if they lost their main source of income.
  • Black gig workers have been particularly hard hit, reporting lower earnings and greater concern about COVID-19 than their white counterparts.

Details: The survey polled 695 gig workers across five U.S. cities in July and August.

  • It was led by Flourish Ventures, a financial technology venture capital firm backed by eBay founder Pierre Omidyar, and Steady, a platform that connects people to part-time work at both gig-economy firms and traditional employers such as retailers.

What they're saying: The government and financial services providers should work to get gig workers and others hard hit by the pandemic on firmer financial footing, Flourish managing partner Emmalyn Shaw told Axios — and tech firms can make a big difference too, she said.

The bottom line: "There are all these ways technology can address people's needs," Shaw said. "The question is, how creative can you be?"

4. Why we confide in robots

Illustration: Eniola Odetunde/Axios

New forms of "empathetic computing" are helping human users feel more comfortable in opening up to a program, Axios' Bryan Walsh reports.

Why it matters: Our mental health has taken a major hit during the COVID-19 pandemic, while social distancing means it's harder to meet in person with therapists. That has opened a space for emotionally attuned machines to help us.

By the numbers: A survey of thousands of employees and executives released earlier this month by Oracle and the HR research and advisory firm Workplace Intelligence found 68% of people reported they would prefer to talk to a robot over their manager about stress and anxiety at work.

  • 80% said they were open to having a robot as a counselor or therapist.
  • "Workers said that robots can support their mental health better than humans because they can provide a judgment-free zone," says Dan Schawbel, managing partner of Workplace Intelligence.

Of note: In April, the FDA suspended many of its rules for digital therapeutic devices for psychiatric disorders because of the pandemic, which led to an increase in doctors prescribing new forms of digital therapy.

Bryan has more here.

5. Take Note

On Tap

  • The Senate Judiciary Committee is slated to vote to authorize subpoenas for Twitter CEO Jack Dorsey and Facebook CEO Mark Zuckerberg today.
  • Intel reports earnings after the markets close.

Trading Places

  • Airbnb said Tuesday that longtime Apple design chief Jony Ive will be serving as a consultant to the company as part of a multi-year arrangement with Ive's design firm.
  • Former Disney CEO Bob Iger is joining the board of Perfect Day, a startup working on an animal-free dairy protein.
  • New Zealand-based digital animation firm Weta Digital named Joe Marks as CTO. Most recently Marks was executive director of Carnegie Mellon's Center for Machine Learning & Health and before that headed research labs at Mitsubishi and Disney.

ICYMI

  • New research suggests that more than 2,000 U.S. law enforcement agencies, including 49 of the 50 largest ones, are using technology that lets them access locked, encrypted smartphones. (NYT)
  • Security software maker McAfee is returning to the public markets a decade after being bought by Intel and following a $740 million IPO. (Bloomberg)
  • Facebook is rolling out its dating service in Europe after regulator concerns early this year forced a delay. (Reuters)
  • Iran is behind threatening emails sent to Florida and Alaska voters, U.S. officials said, announcing that the country and Russia have both obtained voter registration data that they may use to sow chaos. (Axios)
  • Former Facebook employees say the company deliberately tweaked its News Feed algorithm to protect conservative sites and throttle liberal ones. (Mother Jones)
  • A Facebook update meant to direct people searching for QAnon-related topics to fact-checks instead sent unsuspecting users to QAnon material. (Business Insider)
6. After you Login

I don't know why this moose family was crossing the road, but it was fun to watch.