Aug 6, 2020

Axios Login

By Ina Fried
Ina Fried

Remember how excited everyone was back in March to read about stopping the pandemic using "The Hammer and the Dance"? Right now, I'm sorry to say, it feels more like: First, we missed the nail. And then we tripped.

But that won't keep us from your daily dose of tech news — today, at 1,537 words, a 6-minute read.

1 big thing: Congress' next moves to rein in tech giants

Illustration: Eniola Odetunde/Axios

After grilling the CEOs of Amazon, Facebook, Google and Apple last week, members of Congress are grappling with whether to accuse any of the firms of illegal anticompetitive behavior, to propose updating federal antitrust laws, or both, Axios' Ashley Gold reports.

The big picture: Congress is just one arm of government making the case against these companies. Google is expected to be the first of the firms to face possible antitrust litigation from the Justice Department before summer's end, but all four face a full-court press of investigations by DOJ, the Federal Trade Commission and state attorneys general.

What's next: Following on from last week's hearing, the House Judiciary antitrust subcommittee is preparing a report of its probe's findings, drawn from some 1.3 million documents and hours of calls and interviews. Subcommittee Chair David Cicilline told "Axios Re:Cap" he hopes to issue the report and recommendations by late August or September.

The report may detail behaviors that investigators conclude harmed competition, as outlined in the hearing:

  • Facebook undertook its 2012 acquisition of Instagram in part because executives viewed it as a competitive threat, per internal communications uncovered in the probe.
  • Lawmakers also highlighted Amazon's use of third-party sales data to develop its own products.

The lawmakers face two options:

They can argue that tech giants have violated antitrust law and lay out a legal case for breaking them up.

  • That’s tough, as the case that the companies have monopolies remains fuzzy and none of them has driven up prices for consumers — two bars that successful antitrust cases are expected to pass.

They can make recommendations to update antitrust laws for the digital economy.

  • That will require coming up with metrics of harm other than pricing effects, since so many digital products are free.
  • It will also call for definitions of markets that address the kind of power Amazon holds over third-party sellers or Apple holds over App Store developers.

Antitrust panel members suggest they'll ultimately produce some combination of the two.

  • "Some of the things we uncovered, like Facebook clearly admitting to buying a competitor for market share, I believe is breaking the law under current antitrust regulation," Rep. Pramila Jayapal (D-Wash.) told Axios. Other areas, such as Google's dominance in the ad tech space, may need newer laws to address, she said.
  • Rep. Ken Buck (R-Colo.) told Axios, "We've got to sit down and talk about what changes in the law would solve some of the issues we have identified. I feel strongly that there is a need for regulation in the digital arena."

What we're hearing: Groups that advocate tough measures against tech companies want to see detailed legislative recommendations.

  • The Economic Liberties Project, for instance, wants new antitrust laws to set "bright-line" caps on how much market share any one tech firm can hold, executive director Sarah Miller told Axios.
  • The group also wants to see Congress require regulators to claw apart Amazon’s e-commerce platform from its storage and shipping business, per a letter to the House Judiciary committee Thursday.
  • Several other groups joined the letter, including the Open Markets Institute, Demand Progress and The Institute for Local Self-Reliance.

But, but, but: The fate of any proposals to emerge from the House investigation almost certainly lies with voters in November. New antitrust legislation — a long shot at any time — is unlikely to progress unless Democrats win both the White House and the Senate.

2. Facebook, Twitter act against Trump COVID falsehoods

Photo: NurPhoto/Getty Images

Facebook removed a video post from President Trump's campaign Wednesday in which he claimed in an interview with Fox News that children are "almost immune" to COVID-19. Twitter took down the same video post later on Wednesday evening, Axios' Sara Fischer and Ashley report.

Why it matters: It’s the first time that Facebook has removed content by Trump for violating policies on coronavirus-related misinformation.

Details:

  • Trump's tweet that included the video was resharing a post from @TeamTrump, the official account for the president's re-election campaign.
  • A Twitter spokesperson told Axios the original tweet from the campaign was "in violation of the Twitter Rules on COVID-19 misinformation. The account owner will be required to remove the Tweet before they can Tweet again."
  • That policy temporarily locked out the @TeamTrump account from tweeting and briefly stirred confusion in the press and on social media Wednesday night that Twitter had frozen Trump's own @realDonaldTrump account.

What Trump said: "Children are almost — and I would almost say definitely — but almost immune from this disease .... They have stronger immune systems than we do, somehow, for this, and they don't have a problem."

Reality check: A growing body of evidence suggests children can easily contract and spread the virus.

  • They do appear significantly less likely to become ill from the virus, though it's also been linked to a serious inflammatory syndrome.
  • "This video includes false claims that a group of people is immune from COVID-19 which is a violation of our policies around harmful COVID misinformation," a Facebook spokesperson told Axios.

Be smart: In the last couple of weeks, Facebook CEO Mark Zuckerberg has shown a greater willingness to break with Trump.

  • In an earnings call last week, Zuckerberg criticized the federal government's response to the coronavirus pandemic, saying it could have been handled better, and adding there is "no end in sight" to working from home for employees.

The other side: "Another day, another display of Silicon Valley's flagrant bias against this President, where the rules are only enforced in one direction. Social media companies are not the arbiters of truth," said Courtney Parella, deputy national press secretary for the Trump campaign.

Meanwhile, a letter to Facebook from Rep. Jackie Speier (D-Calif.) and members of the Democratic Women Caucus, including House Speaker Nancy Pelosi, called on the company to "do more to protect the ability of women to engage in democratic discourse and to foster a safe and empowering space for women."

  • The letter asks Facebook to quickly remove posts that threaten candidates or glorify violence against women, eliminate hate speech targeting women, shut down offending accounts and remove manipulated images and videos.
  • It comes after Facebook recently decided not to take down a video of Pelosi doctored to slur her speech, though fact checkers labeled it as "partly false." The platform came under fire for not removing a doctored video of Pelosi in 2019 as well.
3. TikTok faces TikTok faces more national ban threats
Data: AppTopia; Chart: Naema Ahmed/Axios

TikTok, already threatened with a U.S. ban by Trump, is also facing the prospect that its stunning 2020 growth could be ended by multiple bans around the world., Axios' Fadel Allassan and Sara report.

State of play: TikTok is already banned in India, where it was downloaded more than 118 million times in 2020. A U.S. ban would cut into a significant amount of the user growth it has seen this year.

  • More than 50 million U.S. users downloaded the app in 2020, per AppTopia.
  • TikTok is estimated to have more than 100 million American users.

The big picture: As Axios has previously noted TikTok has found greater success outside of its homeland than any other Chinese-owned app. But an increasing number of countries are beginning to eye bans of the app.

  • Australian intelligence agencies are investigating TikTok over security concerns. Prime Minister Scott Morrison said last month that the government was taking a close look at TikTok.
  • Japan is also mulling a ban of TikTok and other Chinese-owned apps. As TechCrunch notes, Japan was one of TikTok's first overseas success stories.
  • Pakistan has put TikTok on notice for featuring what the government calls inappropriate content. Pakistan issued a "final warning" to TikTok in late July.
  • Indonesia, one of TikTok's more popular markets, temporarily banned the app in 2018 for "inappropriate content." The ban was quickly overturned once the company agreed to censor "negative content," per Reuters.
4. California’s latest legal run at Uber and Lyft

California's Labor Commission has filed lawsuits against Uber and Lyft, accusing them of "committing wage theft by misclassifying employees as independent contractors," Axios' Kia Kokalitcheva reports. The suit will replace individual claims that drivers have filed.

Why it matters: This is the latest move by California officials seeking to force the companies to reclassify their drivers from independent contractors to employees following a new law that went into effect in January.

  • Meanwhile, a court hearing is scheduled for Thursday regarding the state attorney general's request for an injunction to force the companies to comply. Attorneys for San Francisco, Los Angeles and San Diego are also participating in that suit.
  • San Francisco's district attorney has separately sued delivery company DoorDash on similar grounds.
  • The three companies and others are also backing a state measure on November's ballot that would keep drivers as contractors, while offering them some new benefits.

What they're saying:

"The vast majority of California drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under state law. When 3 million Californians are without a job, our leaders should be focused on creating work, not trying to shut down an entire industry."
— Uber spokesperson
5. Take note

On Tap

Uber will announce its second quarter earnings after the markets close.

Trading Places

Stripe hired Mike Clayville, previously at Amazon Web Services, as its chief revenue officer.

ICYMI

6. After you Login

My colleague Jonathan Swan's interview with Trump for "Axios on HBO" has inspired a raft of memes and jokes — but this mashup with Monty Python's dead parrot sketch may be the final word.

Ina Fried