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1 big thing: States are reining in Big Tech

Illustration: Sarah Grillo/Axios

While Washington talks about investigating, regulating and maybe even breaking up Big Tech, it is states that are taking action now, as Kim Hart and I report.

Driving the news:

  • California has passed privacy legislation that will go into effect at the beginning of next year, while Congress continues to debate whether and how to regulate. "There already is a de facto national privacy law in the United States. It is the California law," Microsoft president Brad Smith told me in a recent Churchill Club interview.
  • The Justice Department struck a deal with Sprint and T-Mobile to allow their merger to go through and the FCC appears poised to approve it, but a coalition of states has filed suit to block the deal.
  • 48 states and 2 territories are conducting their own antitrust investigation of Google even as various agencies in D.C. proceed with their own inquiries.
  • California just passed laws dealing with the use of "deepfakes" in both elections and pornography, taking the lead on an emerging area of tech where federal law has yet to speak.
  • And, as Axios' Margaret Harding McGill reports, New York Attorney General Letitia James, a Democrat, who is leading a state-level antitrust investigation of Facebook, is headed to Washington to discuss that inquiry with top Justice Department officials.

Why it matters: Local governments are more nimble and have higher levels of public trust than Congress, so they have more latitude to get laws passed quickly.

  • That's a problem for tech companies that are trying to shore up public trust while also fighting back an array of regulatory assaults.
  • "From a reputation perspective, you'd hate to have local officials who are generally more trusted gunning for you," says Washington lobbyist Bruce Mehlman.

The big picture: State attorneys general have been particularly active under the Trump administration, acting unilaterally to go their own way in some cases, and uniting to fight Washington in others.

  • Aggressive state AGs with an interest in tech often move into higher profile political roles — such as former Missouri AG Josh Hawley, who's now a Republican senator and a vocal critic of Big Tech.
  • There's also former California AG Kamala Harris, a presidential candidate who, as a senator, has been tough on data privacy and election security.

At the state level, populist movements on the right and the left may converge on some tech-related issues, such as perceived partisan bias and and business market dominance.

  • Cities and states are also showing an appetite for intervening in the gig economy, which is expected to have ripple effects far beyond firms like Uber, Lyft and Doordash.

The bottom line: "There's so much change that people don't feel protected from, and the concurrent loss of trust in the establishment," Mehlman says. "So you have a rise of permission-less players who no longer think Washington should be the locus of global leadership."

Go deeper:

2. Streamers go to war over marketing

Illustration: Rebecca Zisser/Axios

The competition among streaming companies is getting intensifying, with rivals blocking competitors from marketing on their TV channels or distributing content on their apps, as Sara Fischer reports.

Why it matters: TV networks, hardware companies and telecom giants control access to some of the biggest audiences for new products, but they want to use that reach to benefit their own streaming offerings and stymie the competition.

Driving the news: Disney is banning Netflix from advertising across its TV networks, sources tell the Wall Street Journal.

  • Although the move looks like a symbolic nastygram to a rival, Disney could be foregoing significant money.
  • Streamers collectively spend billions of dollars marketing their services across all sorts of media, including digital, television, podcasts and billboards. Netflix alone spent nearly $2 billion on advertising last year.

Netflix has been involved in several of these disputes, since the streaming giant is considered the incumbent to beat.

  • In May, Netflix CEO Reed Hastings confirmed that Netflix would not be part of Apple's plans to sell subscriptions to other streaming services through Apple TV.

Amazon and Disney are also at odds. On Thursday, the Journal reported that Amazon's Fire TV has not yet struck a deal to carry Disney's streaming service Disney+ because Amazon "is pushing for the right to sell a substantial percentage of the ad space on Disney apps."

  • Yes, but: Tensions between streaming device-makers and programmers are longstanding. Amazon stopped selling the Apple TV set-top box and Google Chromecast dongle in 2017 for a little while amid disputes with both giants. Amazon also pulled YouTube from its touchscreen device for some time that year.

The big picture: The streaming wars have also caused competitors to rethink their board structures. Last month, Disney CEO Bob Iger resigned from Apple's board, presumably because Disney plans to launch a rival video service.

  • In April, Facebook said Hastings would resign from its board. Reports suggested that his departure was in part because Facebook was beginning to build its own video business that could in some ways rival Netflix's.
3. The 2 faces of the freelance economy

Illustration: Sarah Grillo/Axios

As the more and more turn to freelance jobs, there is a growing chasm between the haves and have-nots, Kaveh Waddell reports in Axios Future.

Some freelancers can pull in more than $100 an hour for management consulting, programming or graphic design. Others struggle to make much more than $10 an hour, beholden to "gig work" platforms like Uber or TaskRabbit.

Why it matters: Being one's own boss, with the flexibility it brings, can be lucrative for people who can differentiate themselves from competitors. For the rest, it can be quicksand.

The big picture: Freelance work makes up nearly 5% of U.S. GDP, according to a new study commissioned by Upwork, a site for high-earning freelancers to find jobs. And more people than ever — 28.5 million people, or half the freelance workforce — say it's a long-term plan.

  • Freelancers who are "significantly better than average" at their jobs tend to do well, says Stephane Kasriel, Upwork's CEO. "Stronger pros can really dictate their terms."
  • Gig work apps capitalized on this dream to attract millions to their platforms: Work whenever you want to make some spending money on the side, they promised.

But for those without a rare or standout skill, reality hasn't quite panned out that way.

  • "People turn to this work, but it's not as lucrative as they think it's going to be," says Alexandrea Ravenelle, a UNC professor who interviewed dozens of workers for her recent book, "Hustle and Gig."
  • "I'm finding a considerable number of workers end up turning to gig work, they think, for the short term — and they're still doing it 4 years later," Ravenelle says. There's no time to network or send out resumes when you're spending every working moment hunting for the next job.

The bottom line: "Given that being in the traditional workforce typically comes with benefits and protections, I think most workers would be better off being there rather than having to constantly hustle for the next gig," says Ravenelle.

4. Roethlisberger's Apple Watch woes

Photo: Shelley Lipton/Icon Sportswire via Getty Images

Injured Pittsburgh Steelers quarterback Ben Roethlisberger has been fined $5,000 for wearing his Apple Watch on the sidelines during a recent game, per ESPN.

Devices that are capable of transmitting voice or data, with the exception of those approved by the league (like coaches' headsets or the Surface tablets), are not allowed.

The winner: Apple, which got a whole lot more than $5,000 worth of free marketing.

5. Take Note

On Tap

Trading Places

ICYMI

  • PayPal pulled out of Facebook's Libra cryptocurrency project. (Axios)
  • Verizon sold off Mapquest, which was purchased by AOL for $1.1 billion back 2000, back when AOL and MapQuest were both pretty big deals. (Search Engine Land)
  • How Tim Cook has built a relationship with Trump, while largely avoiding a backlash. (WSJ)
  • Honda is buying Drivemode, which develops smartphone apps for drivers. (Twitter)
6. After you Login

Check out the theme song to "Succession" remade in Mario Paint.