May 15, 2019

Axios Login

By Ina Fried
Ina Fried

Another opportunity for my D.C. readersYou're invited to an Infrastructure Week edition of News Shapers, tomorrow at 8am. 

  • Join Axios' Mike Allen for a series of conversations focused on news of the day and how it relates to infrastructure in America. We'll hear from Minority Leader Kevin McCarthy, Majority Whip James Clyburn and Massachusetts Gov. Charlie Baker and Boston Mayor Marty Walsh will join Mike onstage for a joint interview.  RSVP here

Everyone else, please accept the consolation prize: today's Login.

1 big thing: For Big Tech, markets define monopolies

Photo: Lynne Cameron/PA Images/Getty Images

An antitrust lawsuit against Apple and growing calls to break up Facebook highlight renewed interest in using antitrust law to address a host of problems with the largest technology companies.

Yes, but: The fate of those cases will hinge in large part on the legal intricacy of how regulators and courts define each tech company's market, Axios' Scott Rosenberg reports.

Driving the news: The U.S. Supreme Court ruled Monday that a class action suit by users charging Apple's App Store with monopolistic behavior could move forward.

The big picture: Here's why "market definitions" are so central to antitrust fights: Say you run the only restaurant in town — do you have a monopoly?

  • If the market is defined as "restaurants" or "dining out," then you do.
  • If the market is defined as "meals" or "food," well, people can buy groceries and cook, right?
  • One way, you're a monopolist — the other, you aren't.

In the App Store suit, users charge that Apple, by forcing developers to sell iPhone apps only through Apple's storefront and taking a cut of those sales, drives up prices.

  • Apple has argued that, among other things, users can access software and services via the web browsers on their phones, and that the majority of apps accessed from the App Store are free downloads that don't earn it a penny.

If you define the market as "iPhone apps," Apple looks a whole lot like a monopolist — it maintains complete control over the space.

  • You can't put a non-App Store app on an iPhone without "jail-breaking" it, tampering with the operating system in a way that violates Apple's terms and voids the warranty.

If you define the market as, say, "smartphone apps," you get a different outcome.

  • That's because users are free to buy Android phones and access a very different universe of apps. Users have choice — presto, no monopoly.

The same principles apply in the debate over breaking up Facebook or Google.

  • If you place Facebook in the "social networking" category, as co-founder Chris Hughes does in his call to break up the company, Facebook is easy to cast as a monopoly. But if it's seen as "messaging," then it has competition via Apple, Snapchat and cellphone providers.
  • Similarly, it's easy to argue that Google has a monopoly in the search market, and many countries do. But if you define the market instead as "online information," the case is a lot murkier.

Our thought bubble: In tech, market definitions are unusually fluid because hardware evolves quickly and software is infinitely malleable.

  • Lawsuits and antitrust cases move slowly, and by the time they reach a decision, the markets often have already mutated.
  • But the tech giants' power has grown so vast that many critics see antitrust remedies as the only way to rebalance the industry's game.

Go deeper

2. Big Tech snapping up AI startups
Expand chart
Data: CB Insights; Chart: Harry Stevens/Axios

Amid a clamoring for artificial intelligence talent and ideas, the biggest tech companies have snapped up more than 50 AI companies since 2010, Axios' Kaveh Waddell reports.

The big picture: The clamor reflects a scarcity of AI expertise, as we've reported in the past. But it also allows Big Tech companies to reinforce their advantage over the upstarts, each time making it harder for a new entrant to strike gold.

What’s happening: Several of the top AI researchers and most lucrative products at leading tech firms came from acquisitions, according to data compiled by CB Insights.

  • In 2010, Apple purchased Siri, the digital assistant that's become a cornerstone in its phones, tablets, computers and speakers.
  • In 2013, Amazon acquired British tech company Evi, which went on to contribute to its market-leading Alexa assistant.
  • In 2014, Google bought up DeepMind, the pioneering research outfit behind the computers that beat humans at Go. And a 2013 acquisition brought Geoffrey Hinton, the father of deep learning, to Google.

Between the lines: The more these large companies buy up AI talent and software, the larger they expand the buffer between them and everyone else.

  • Frantic company recruiting and acquisitions are just getting started, says Deepashri Varadharajan, lead analyst at CB Insights. "And Big Tech companies that are trillion-dollar conglomerates have an advantage here."

Yes, but: These companies haven't swallowed up the whole AI field. There are still plenty of startups with smart people and innovative products.

Read more

3. San Francisco limits city use of face recognition

Photo: Justin Sullivan/Getty Images

San Francisco supervisors yesterday passed a first-of-its-kind bill that would impose strict limits on use of face recognition by city agencies.

What it does: The bill bans the use of face recognition tech by the city government unless departments that want to deploy the technology first submit proposals and post public notices.

What it doesn't do: The bill doesn't address private-sector use of facial recognition, including for security and marketing. Also, federal law enforcement agencies, like TSA, aren't subject to the city rules.

What they're saying: The move was applauded by civil rights group Color of Change, which noted that face recognition is known to be less accurate in detecting people of color, who are disproportionately targets of the technology as well.

  • “Today’s vote is an important step toward protecting Black people and marginalized communities from the dangerous combination of racially biased technology and unchecked policing," Color of Change senior campaign director Brandi Collins-Dexter said in a statement.

Meanwhile, Microsoft has been encouraging Congress to take up the issue and set boundaries on use of face-recognition technology, including by government agencies.

Go deeper: The facial recognition face-off

4. Trying out the new OnePlus 7 Pro

For my job, I get to test lots of new phones and I often find some features that I wish were in every phone. This week, I've been playing around with the latest flagship from OnePlus (it launched Tuesday).

Details: Here are 3 features I particularly liked on the $669 OnePlus 7 Pro...

  1. Gestures from the home screen let you quickly launch the camera or open the flashlight without needing to first unlock the phone and enter the homescreen. You just draw a "v" for the flashlight or an "o" for the camera. Such quick access is a nice touch.
  2. By including a pop-up selfie camera, OnePlus avoids the whole question of where to put the notch. There is no notch or significant bezel, letting the full 6.5-inch screen shine.
  3. Along with the pop-up camera, OnePlus cleverly added a feature that quickly detects a fall in progress and retracts the selfie camera surprisingly fast — like, before your phone hits the ground.

Go deeper: OnePlus 7 Pro Review (The Verge)

5. Take Note

On Tap

Errata

  • An item in yesterday's Login on Tempo Automation misstated the size of the San Francisco manufacturer's new facility. It's 42,000 square feet, not 422,000 square feet. In my defense, I have a glitchy MacBook Pro keyboard that, in addition to a "c" key that doesn't always work, has a "2" that likes to repeat itself.

ICYMI

  • Security researchers have detailed a new flaw in Intel chips that, if exploited, could allow attackers to get data from the processors. The flaw, along the lines of Spectre and Meltdown, exploits a feature known as speculative execution and fixing the issue results in a hit to performance. (TechCrunch)
  • In a guidance memo, the National Labor Relations Board said Uber drivers are properly categorized as independent contractors. (Axios)
  • Apple announced a new way to use Apple Pay in conjunction with special NFC stickers so that customers don't need an app for things like scooter rentals or parking meters. (9to5Mac)
  • Cybersecurity firm CrowdStrike, which lost $140 million on $250 million in revenue, filed to go public. (CNBC)
  • Facebook is tightening its live-streaming rules, making the announcement shortly before a world leaders' meeting on tackling online violence in response to the New Zealand mosque attacks. (Axios)
  • The AI revolution has created a new job category with what some some call "sharecroppers," or thousands of low-wage workers in the U.S. and across the globe who painstakingly inventory millions of pieces of data and images, and give power to AI programs. (Axios)
6. After you Login

Some 19,000 Warriors fans at Game 1 of the Western Conference Finals walked out with not only a win, but also a free Google Home Mini. OK, there might have been two or three Trail Blazers' fans, who also presumably got a smart speaker.

Ina Fried