Jun 16, 2021

Axios Login

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Today's newsletter is 1,306 words, a 5-minute read.

1 big thing: New FTC chair already rocking boats

Photo: Saul Loeb-Pool/Getty Images

By naming tech critic Lina Khan to chair the Federal Trade Commission Tuesday, the White House made clear that the Biden administration is dead serious about antitrust enforcement to rein in Google, Facebook, Apple and Amazon, Axios' Ashley Gold and Margaret Harding McGill report.

The intrigue: The White House took both the industry and many D.C. insiders by surprise when it named Khan as FTC chair just hours after the Senate confirmed her appointment as one of five commissioners at the agency.

Why it matters: Specific moves to clip the wings of tech giants over issues like monopolistic behavior and privacy practices are more likely to come from leadership at the FTC and the Justice Department than from Congress.

  • The FTC is widely seen as the likeliest leading edge of any major regulatory moves.
  • Putting a firebrand like Khan in the FTC's driver seat will rally tech's opponents and provoke some late-night counter-strategy sessions in Silicon Valley offices.

Khan, 32, is a Columbia Law professor known for her argument that Amazon's retail business should be separated from its selling platform, and for advocating broad updates of antitrust law to deal with digital-age problems.

What they're saying:

  • "The difference between being a mere commissioner and being chair is the difference between going to the moon and going to Mars," said former FTC chairman William Kovacic. "Mars is a much bigger deal."
  • Khan has "immense legal prowess" and is "an out-of-the-box thinker ... who can take on the biggest companies the world has ever known," Senate Judiciary antitrust subcommittee Chair Amy Klobuchar (D-Minn.) told Axios. She noted that Khan will be overseeing the FTC's open case on Facebook's acquisitions of WhatsApp and Instagram.

The other side: "In a time of increased global competition, antitrust populism will cause lasting self-inflicted damage that benefits foreign, less meritorious rivals," said Aurelien Portuese, director of antitrust and innovation policy at tech-funded think tank the Information and Technology Innovation Foundation.

Rebecca Slaughter, who had been acting FTC chairwoman, will remain at the agency as a Democratic commissioner.

  • Biden has one more Democratic commissioner to name to the agency, as soon as current Democratic commissioner Rohit Chopra receives Senate confirmation to lead the Consumer Financial Protection Bureau.
  • Slaughter was only informed that the White House would be naming Khan as chair on Tuesday, a source familiar with the matter told Axios.

Between the lines: Presidents can elevate FTC commissioners to be chair at any time. But when presidents have nominated new FTC commissioners to serve as chair, they've usually made their intentions clear in advance.

  • It's an unusual move for the White House, Kovacic said: "If you walk back through the modern or earlier history of the FTC, I can't remember an instance where the White House has named an individual to be a commissioner, then once that person was confirmed by the Senate, designated that person to be the chair."
  • "The confirmation proceeding [would have probably been] more contentious, if Khan was identified as the prospective chair," he added.
2. Amazon's relentless worker churn

Image: Erica Pandey/Axios

During the pandemic, Amazon's tech-infused network of warehouses and planes and trucks worked pretty much flawlessly. But its system of managing workers broke down, a nine-month New York Times investigation found, Axios' Erica Pandey writes.

Why it matters: The convenience of Amazon comes with a cost — the company churns through human workers as rapidly as it churns through customer orders.

By the numbers:

  • Amazon made the equivalent of three years worth of profits in 2020 and hired around 350,000 new warehouse and delivery workers — including servers, actors, and teachers who had lost their jobs — to keep up with pandemic demand.
  • But turnover was very high, at around 150% a year. To put that in context, it means replacing the entire hourly workforce in the equivalent of every eight months, the Times notes.

What's happening: Amazon evaluates workers like machines, with automated systems that track productivity, benefits, overtime assignments, firings and more.

  • But those systems often broke down when Amazon workers — just like everyone else — dealt with sickness, child care issues or other extenuating circumstances.
  • Amazon's HR systems haven't kept up with its explosive growth, former company executives told the Times, and workers are burnt out and suffering as a result.

Founder Jeff Bezos acknowledged work to be done in his most recent shareholder letter. "We need a better vision for how we create value for employees — a vision for their success," he wrote.

Go deeper: The full Times story is worthy of your time.

3. AI could help defend against cyberattacks

Illustration: Annelise Capossela/Axios

A new report suggests machine learning could help in the fight against cyberattacks, but cautions that AI is far from a panacea.

Why it matters: Attacks, including ransomware, have been on the rise across a variety of industries and institutions.

Several factors have led to the increase in attacks, including the digitization of more of the economy, the growing role of cyber attacks as part of international politics and a lack of security experts, according to the report from the Center for Security and Emerging Technology.

"Machine learning can help defenders more accurately detect and triage potential attacks," CSET said in its report.

  • "However, in many cases these technologies are elaborations on long-standing methods — not fundamentally new approaches — that bring new attack surfaces of their own."

Between the lines: Cybersecurity has been and remains an arms race. It's hard to significantly change the game, when each side can and does utilize the latest advances in technology to aid their effort.

Yes, but: The report suggests that, at a minimum, the use of machine learning could make the best defenses more widely available.

Go deeper:

4. Connected devices are new Senate antitrust focus

Senators scrutinized the connected device industry of home assistants, music players and other smart home products Tuesday, Ashley reports.

Driving the news: Lawmakers from both parties see the smart speaker market as another area where tech giants like Google and Amazon may take unfair advantage of competitors and users.

Why it matters: Tuesday's Senate Judiciary antitrust subcommittee hearing makes it more likely that Senate antitrust bills will also take aim at the connected device market.

What they're saying: Klobuchar told Axios: "There are 94 million people in the U.S. on at least one connected speaker. Let's get ahead of this, as opposed to just being behind it."

Representatives from both Google and Amazon said interoperability was a goal of their products at the hearing. But they declined to fully commit to the concept on the record, Klobuchar said.

Eddie Lazarus, chief counsel of home sound system company Sonos, testified about Sonos' complaints about both Google and Amazon.

  • Lazarus told Axios: "My sense there is broad support for doing something significant ... the connected home space is a subset of the overall enterprise of modernizing antitrust for the digital age."
5. Take note

On Tap

  • Viva Technology, a big European tech conference, is holding a hybrid digital and in-person event in Paris today through Friday. Notable speakers include Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, Zoom CEO Eric Yuan, Google cloud chief Thomas Kurian and Magic Leap CEO Peggy Johnson.

Trading Places

  • Otter.ai announced today that Siri founder Adam Cheyer and Cortana founder Larry Heck will serve as strategic advisers. It has also hired Richard Ward, formerly of frog and Metalab, to be its chief design officer.
  • Instabase said it has hired Yee Jiun Song, formerly an engineering VP at Facebook, to be its first senior VP of engineering.


6. After you Login

Photo: ina Fried/Axios

I saw this car driving on I-5 yesterday. Guess if I ever get a personalized license plate I will have to think of a different one.