Axios Login

A smartphone with different colored buttons floating above its surface.
September 17, 2019

Thanks, as always, for reading.

Situational awareness: The early reviews of the new iPhones are in (here's NYT, WSJ, the Verge), and they all make us wonder why new iPhone releases still deserve the breathless treatment.

Today's Login is 1,027 words, a 4-minute read.

1 big thing: Tech regulators clash over Facebook probe

Data: Axios research; Table: Andrew Witherspoon/Axios
Data: Axios research; Table: Andrew Witherspoon/Axios

As investigations into tech giants' possible anti-competitive behavior multiply, authorities are beginning to tussle over turf — adding a new potential for discord to the regulatory chess game, Axios' Sara Fischer writes.

Why it matters: These probes are legally complex and historically difficult to pull off. There's bipartisan support right now for checking Big Tech's power, but the companies have enormous resources and remain popular, and fighting among regulators can only hamper their work.

Driving the news: Federal Trade Commission chairman Joe Simons has written a letter to the Justice Department's antitrust division complaining about the DOJ's behavior in handling disagreements over which agency has the authority to probe Facebook, the Wall Street Journal reports.

  • Sen. Mike Lee (R-Utah) intends to bring up the letter and address the issue at a Senate Judiciary antitrust subcommittee hearing Tuesday, his office confirmed to Axios.

Be smart: Both agencies, under much pressure, have clashed over who has jurisdiction to investigate which companies.

  • Earlier this year the two agencies agreed that they would divide up investigations into the companies, with the DOJ taking on Alphabet (the parent company of Google) and Apple, and the FTC looking into Facebook and Amazon.
  • Tensions apparently rose in July when the DOJ announced another sweeping investigation into Big Tech platforms for their dominance, a move which reportedly had the FTC concerned that the DOJ would be stepping on its turf to investigate Facebook.

The big picture: A growing list of media investigations are presenting evidence of tech platforms abusing their dominance to promote their own products and services.

  • On Monday, the Journal reported that Amazon has changed its search function to more prominently feature products that are more profitable for the company. Amazon denies the report, saying it features products customers want, "regardless of whether they are our own brands or products offered by our selling partners."
  • Last week, a New York Times investigation revealed that Apple-owned apps often top rivals in its own App Store.
  • Friday, the House Judiciary Committee sent Facebook, Google, Apple and Amazon lengthy document requests, including executives' private communications, for its own investigation into the companies' practices.

The bottom line: Multiple probes can help regulators cover the vast territory they have set out to explore. But any time and resources they spend fighting each other will only benefit the companies they are seeking to hold accountable.

2. Apple invests another $250 million in iPhone supplier Corning

A worker at the Corning plant that makes glass for Apple's iPhones
A worker at the Corning plant that makes glass for Apple iPhones. Photo: Apple

Apple said Tuesday it is awarding key supplier Corning with $250 million from the company's $5 billion Advanced Manufacturing Fund, designed to invest in U.S.-based companies that make parts for the company.

Why it matters: The move aims to help Corning with the massive R&D expense of coming up with ever stronger glass to go on the outside of the iPhone, Apple Watch and other products. The latest deal comes on top of $200 million Apple put into Corning in 2017.

Apple isn't saying exactly how the deal is structured, but it is part of a much broader relationship in which Apple and Corning work together on glass and billions of dollars change hands.

The bottom line: People talk about making iPhones in the U.S., but that's unlikely to happen. There are real iPhone manufacturing jobs in the U.S., but they are at suppliers like Corning.

3. Exclusive: Bill Gates regrets meeting with Epstein

Bill Gates, who donated $2 million to the MIT Media Lab at the request of pedophile Jeffrey Epstein, told Axios yesterday: "I wish I hadn't met with him."

"It was a dead end," Gates said in his first comments since his name surfaced among billionaires associated with Epstein, Axios' Mike Allen reports.

  • The donation was made in 2014, after Epstein pleaded guilty in 2008 to two felony charges of soliciting a minor for prostitution.
  • MIT Media Lab director Joi Ito resigned Sept. 7 after the extent of his involvement with Epstein was revealed.

Why it matters: A Gates official told Ito, in an email obtained by Axios' Felix Salmon, that Gates wanted the $2 million unrestricted gift to be anonymous.

  • Axios reported that as far as MIT was concerned, the Gates grant was Epstein money. Epstein met with Ito to determine where it would be spent.

Asked if he feels used by Epstein, Gates told Mike: "I'd say I didn't have a ... business or personal relationship I wouldn't go that far."

Gates, at the end of a phone interview about a new Gates Foundation report, "Examining Inequality," said: "I won't say I knew him that well, because he was introduced to me as somebody who could bring more people into philanthropy."

  • "There were meetings along those lines," he continued. "That didn't materialize, and so then I stopped meeting with him."

Go deeper: See the email from Gates' office.

4. Internet Association pushes Congress on privacy

The web's trade organization, the Internet Association, became the latest industry group to urge Congress to pass a national privacy law.

Why it matters: Industry organizations, individual companies and consumer groups all say they want privacy legislation. They probable vary in what they would like to see in such legislation, but there could well be room for something that all could get behind.

What they're saying: "Passing comprehensive, federal privacy legislation in the 116th Congress is a top priority for the internet industry," said IA president & CEO Michael Beckerman. "Internet companies stand ready with the broader business community to support unified, national privacy legislation."

Between the lines: California's state privacy law goes into effect Jan. 1, and much of the industry hoped to see less strict national rules pre-empt the state's measure first.

5. Take Note

On Tap

  • Oracle OpenWorld continues in San Francisco.
  • President Trump holds a fundraiser in Silicon Valley.

Trading Places

  • Free software pioneer Richard Stallman resigned from his positions at MIT and the Free Software Foundation after controversial statements about the Jeffrey Epstein case. (Vice/Motherboard)
  • HTC has named Yves Maitre as its new CEO.


6. After you Login

What's better than Cookie Monster? Cookie Monster and a puppy.