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September 13, 2022
So much for the summer news drought. Lots to get to...
📣 Situational awareness: Whistleblower Peiter Zatko, who served as Twitter's head of security until he was fired in January, will testify before Congress today beginning at 10am ET. Meanwhile, Twitter's shareholders will vote on the platform's sale to Elon Musk.
Today’s newsletter is 1,245 words, a 5-minute read.
1 big thing: Amazon charges ahead with acquisitions in dare to FTC
Illustration: Lindsey Bailey/Axios
Amazon is going on another acquisition shopping spree in the shadow cast by Federal Trade Commission chair Lina Khan's high-profile critique of the company's size and power, Axios' Ashley Gold reports.
Driving the news: Amazon announced its intention to acquire concierge health care service OneMedical in July and Roomba producer iRobot in August. Last week it said it would acquire Belgian warehouse robotics maker Cloostermans.
- In what is known as a "second request," the FTC has asked for more information from Amazon and OneMedical, stalling the deal's closing until issues are resolved.
- The agency is also expected to closely examine Amazon's attempt to buy iRobot, per a Politico report, and anti-monopoly groups pushed for an investigation into the deal in a letter to the FTC last week.
Why it matters: Challenging Amazon's acquisitions will be a major test for the resource-strapped FTC and for Khan's effort to transform tech regulation.
Flashback: Khan rose to prominence for arguing that Amazon's position as both a seller of its own goods and platform for sellers was anti-competitive.
- In June 2021, the company unsuccessfully requested she recuse herself from Amazon-related matters.
- Khan previously told Axios she would rather litigate over alleged anticompetitive mergers than negotiate with companies.
- Earlier this year, the FTC allowed Amazon's purchase of MGM to close, but it has continued to scrutinize the deal as part of a wider antitrust probe of Amazon.
What they're saying: "When you get a second request, it's a huge event. Suddenly your transaction goes from closing in five weeks to closing in a year," Bruce Hoffman, former head of the bureau of competition at the FTC, told Axios. "Suddenly you go from spending a little bit of money to spending $10 million [to close your deal]."
- Khan and Justice Department antitrust chief Jonathan Kanter have both been vocal with concerns about large platforms acquiring smaller ones.
- In a shift from previous administrations, Big Tech should assume its deals will face second requests from the FTC, Alden Abbott, former general counsel at the FTC, now a fellow at George Mason University, told Axios.
- "The current view is, 'We don't trust any acquisitions by the big platforms, because they may use them to entrench their dominant position to get additional information about consumers, which they might misuse,'" Abbott said.
Details: Groups and lawmakers opposed to Amazon's iRobot and OneMedical deals say they pose consumer privacy and competition concerns. iRobot, OneMedical and Amazon have all said consumer privacy would be protected in any transactions.
The other side: The rapid fire announcements of the OneMedical and iRobot deals were a case of coincidental timing, a source close to Amazon told Axios.
What's next: Amazon and OneMedical will have to supply the FTC with all of its requested information before the deal is able to close. Amazon may also send iRobot an official second request following the current review.
- Then the agency can choose to challenge these acquisitions, as it did with Meta's plan to acquire VR fitness company Within.
2. The contradictory tech jobs picture
Illustration: Allie Carl/Axios
Even as layoffs and hiring freezes have become more common across tech companies large and small, salaries have continued to climb amid an overall shortage of skilled workers, according to a new report from job placement site Hired.
What they're saying: "The hiring climate this year has been full of contradictions and challenges," Hired CEO Josh Brenner said in a statement. "We've seen climbing salaries, aggressive hiring, and layoffs — all at once."
By the numbers: Salary offers for candidates in the San Francisco Bay Area continue to be the nation's highest at an average of $174,063, followed by Seattle ($168,069) and New York ($161,128).
- However, salaries in mid-size markets are catching up with the larger tech markets. The highest pay growth rates were in Philadelphia (up 12%), Dallas/Fort Worth (up 11%) and Denver (up 11%).
- And in 15 out of 17 markets, the salaries for remote workers are actually outpacing those for workers being hired locally.
3. Scoop: Meta rolls "integrity" teams together
Illustration: Shoshana Gordon/Axios
Meta is merging its business integrity unit, the team that moderates ad content, with its central integrity team, which moderates users' posts, according to an internal memo obtained by Axios' Sara Fischer.
Why it matters: The merger of the two departments will drive efficiencies at a time when Meta is looking to cut costs, two sources told Axios.
- It will also combine Meta's customer support efforts so that everyday users and businesses receive the same treatment.
Details: The new integrity team of roughly 3,000 employees will be housed as one unit under Guy Rosen, Meta's chief information security officer.
- A Meta spokesperson confirmed the integration and said the company is unifying the two teams "to leverage their shared learnings to more effectively and efficiently deliver on our commitment to protecting and supporting people and businesses across Meta's platforms."
- Meta has said it plans to reduce hiring and cut costs as revenue growth begins to slow. So far, there haven’t been major layoffs announced for full-time employees.
Between the lines: The two teams were built separately years ago at a time when there wasn't much overlap between users and advertisers.
- Now that so many everyday users have become creators, or operate small businesses across Meta's platforms, there is less of a divide amongst the two groups.
Be smart: Bringing together the two teams will mean that eventually, Meta will use the same tools, practices and systems to moderate all of the content on its platform, whether ads or organic posts from everyday users.
4. Heat wave knocks Twitter data center offline
Twitter lost a key data center that went offline due to the extreme heat wave in California last week, Axios' Shawna Chen reports, citing CNN.
Details: The outage led to a full shutdown of Twitter's physical equipment at the Sacramento location, according to an internal memo obtained by CNN.
- As a result, Twitter was in a "non-redundant state" as of Friday, according to the memo.
What they're saying: "There have been no disruptions impacting the ability for people to access and use Twitter at this time," a Twitter spokesperson said in a statement.
Our thought bubble, via Axios' Andrew Freedman: Climate change poses risks for the physical underpinnings of the internet, including the data centers that require large amounts of energy for cooling.
5. Take note
On Tap
- The software-as-a-service industry is gathering in San Francisco for SaaStr Annual 2022, which runs today through Thursday.
- TriNet's PeopleForce conference takes place today through Thursday in Brooklyn. (I'll be interviewing chef José Andrés on stage on Thursday.)
Trading Places
- Bonnie Ross is leaving Microsoft after 18 years, most recently as studio chief for 343 Industries, which manages the Halo franchise.
- Peloton's co-founders are both vacating their roles. Former CEO John Foley resigned as executive chairman Monday, and chief legal officer Hisao Kushi will exit Oct. 3, per CNBC.
ICYMI
- A video said to show Meta's upcoming Quest Pro VR headset is making the rounds after a prototype was allegedly found in a hotel room. (The Verge)
6. After you Login
Photo: Courtesy of "Chicago"
Actress Angelica Ross became the first openly transgender woman to star on Broadway on Monday when she assumed the lead role of Roxy Hart in the long-running musical "Chicago."
- "It meant so much," the "Pose" star told me after Monday's show. "Especially when I looked out into the audience when the lights came up and I saw so much family — so many trans folks, so many non-binary folks."
- Fun fact: Ross also has tech ties as the founder of TransTech Enterprises, which provides career training to help trans people find work in the industry.
Thanks to Scott Rosenberg and Peter Allen Clark for editing and Bryan McBournie for copy editing this newsletter.
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