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Apple CEO Tim Cook made an impassioned plea Tuesday against looming U.S. and European regulations that could fundamentally change the App Store's model.

Why it matters: Apple is feeling the heat as it may be forced to change longstanding policies it argues are best for user privacy and security.

Driving the news: Cook made the comments during a speech at the International Association of Privacy Professionals' Privacy Summit in Washington, as governments consider laws that would force Apple to open up its walled-off App Store.

In Europe, lawmakers will soon pass the Digital Markets Act, which would force Apple to allow users to download apps outside of the App Store and let developers use their own payment systems.

Similar legislation is winding its way through Congress, but passing it will be a heavier lift.

What they're saying: "We are deeply concerned about regulations that would undermine privacy and security in service of some other aim," Cook said. 

"Here in Washington and elsewhere, policymakers are taking steps in the name of competition that would force Apple to let apps on the iPhone that circumvent the App Store through a process called 'side loading'... That means data hungry companies would be able to avoid our privacy rules and once again track our users against their will."

Between the lines: Cook and Apple have repeatedly made the argument that the fees they charge app developers and the policies that keep the App Store under Apple's control are key to keeping people's data safe on iPhones.

Cook took indirect aim at companies that rely on targeted advertising in his speech. He said loss of privacy is not inevitable with technology and that it can be designed to keep it.

"Imagine a stranger following you as you take your child to school, holding a camera outside the driver's side window, recording everything you do," he said. "Imagine you open your computer and the stranger is suddenly watching your every keystroke. You wouldn't call that a service. You would call it an emergency."

Tim Cook defends a closed App Store against looming regulations

Apple is feeling the heat as it may be forced to change longstanding policies.

Tim Cook attends the 2022 Vanity Fair Oscar Party hosted by Radhika Jones at Wallis Annenberg Center for the Performing Arts on March 27, 2022 in Beverly Hills, Calif. Photo: Lionel Hahn/Getty Images

Apple

Big Tech

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Elon Musk suggested in a series of tweets Saturday night changes to the premium Twitter Blue service — including a cheaper subscription price, banning ads and offering the option to pay in cryptocurrency.

Our thought bubble: Musk, Twitter's largest shareholder, is continuing to make very specific policy and product recommendations in public even though he now serves on the social media network's board and could presumably propose and promote them internally.

Driving the news: The Tesla chief executive tweeted that all Twitter Blue subscribers "should get an authentication checkmark" that's different from the verification one for official accounts and public and media figures.

"Price should probably be ~$2/month, but paid 12 months up front & account doesn't get checkmark for 60 days (watch for credit card chargebacks) & suspended with no refund if used for scam/spam," Musk said.

"And no ads. The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive," he added.

Meanwhile, the world's richest man agreed with a Twitter user who suggested a cheaper subscription price for poorer countries, saying the cost "should be proportionate to affordability & in local currency."

"Maybe even an option to pay in Doge?" Musk said, in reference to the cryptocurrency Dogecoin.

He also opened a Twitter poll on whether the company's San Francisco headquarters should be converted into a homeless shelter because he said "no-one shows up (to work there)." It had garnered over half a million votes by late Saturday.

What to watch: Twitter was due to host Musk for a staff "question-and-answer session" following his appointment to the microblogging site's board last week following his purchase of a 9.2% stake in the company, per the Washington Post.

A spokesperson for Twitter declined to comment on Musk's tweets.

Go deeper: Elon Musk could dictate the future of Twitter

Editor's note: This article has been updated to reflect that Twitter declined to comment.

Elon Musk suggests Twitter Blue overhaul

"Maybe even an option to pay in Doge?" Musk said.

Tesla CEO Elon Musk is pictured as he attends the start of the production at Tesla's "Gigafactory" on March 22, 2022 in Gruenheide, southeast of Berlin. 

Elon Musk at Tesla's "Gigafactory"  in Gruenheide, Berlin, last month. Photo: Patrick Pleul - Pool/AFP via Getty Images

Elon Musk

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

EU executive vice president Margrethe Vestager defended the Digital Markets Act on Thursday, saying it's up to tech companies to figure out how to live with it.

Why it matters: Critics of the legislation have said it could break encryption for messaging, it makes products less useful for users, and it provides little clarity on how companies can avoid massive fines. 

Some critics suggest the DMA story could mirror that of Europe's General Data Protection Regulation — a privacy law, implemented in 2018, that many users dealt with only in the form of pop-up windows. 

What they're saying: Speaking to Axios' Ashley Gold and Dan Primack during a Twitter Spaces event, Vestager said it's up to tech companies to bake DMA requirements into their platforms in a way that's user-friendly and attractive.

"I think it's about time we are asked for real consent," Vestager said. "I think there's a lot of room for improvements... for a consumer to know what it is I'm consenting to or not."

She said EU technical experts say it is possible to keep platforms secure while requiring interoperability, and she expects companies to evolve their abilities over time. 

"If you look at what is possible with interoperability and security now, it's probably different than what would be possible in two, four, six years' time, so it's a staggered approach."

One fun thing: Vestager was a bit delayed logging onto the Twitter Spaces interview — her iPhone's microphone had been disabled for Twitter by her privacy settings .

Go deeper: You can listen to the entire interview with Vestager here.

Vestager defends the Digital Markets Act from critics

Critics of the legislation have said it could break encryption and make products less useful.

Illustration of the EU flag with downward facing cursor arrows in place of stars.

European Union (EU)

Data privacy

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Percentage who say they trust technology businesses to do what is right, select countries

Data: 2022 Edelman Trust Barometer; Chart: Jacque Schrag/Axios

Trust in tech companies has continued to decline in the U.S. and Canada, while rising in most of the rest of the world. That's according to fresh data from Edelman's annual 2022 Trust Barometer, shared first with Axios.

Why it matters: The decline in trust comes as pressure is mounting for regulators and legislators to more tightly regulate the industry and its perceived excesses.

Globally, the tech industry remains the most trusted sector of business, earning the trust of 74 percent of those served, ahead of healthcare and education. By contrast, social media is the lowest ranked sector, trusted by only 44 percent of respondents. 

However, only 54 percent of Americans trust tech companies to do the right thing, down three percentage points from last year and a whopping 19 points since 2019. 

In the U.S., the decline in trust was seen across a number of the most talked-about sectors, including 5G, artificial intelligence, "internet of things" and virtual reality.

Those with higher incomes tended to trust tech more than those in lower income brackets. However, the gap narrowed last year, with trust improving among lower-income Americans and falling among the wealthy.

Nearly two-thirds of Democrats said they trust tech companies, while only 49 percent of Republicans and 50 percent of independents said the same.

What they're saying: "The trajectory of trust in tech makes complete sense if you consider it within the context of world events," said Dan Susong, chair, U.S. Tech Sector at Edelman. "I'd suggest that tech can — and will — regain trust if it commits to better education — about what it is, what it does."

Americans' trust in tech companies hits new low

Only 54 percent of people in the U.S. trust tech companies to do the right thing.

Europe's new digital rules are giving tech leaders nightmares

Big Tech worries that compliance might mess with what made their products popular.

Illustration of the EU flag with downward facing cursor arrows in place of stars

Twitter co-founder Jack Dorsey expressed his regrets Saturday for the current state of the internet and said he's "partially to blame."

What he's saying: "The days of usenet, irc [Internet Relay Chat], the web ... even email (w PGP) ... were amazing," Dorsey tweeted, referring to earlier online communications systems.

"Centralizing discovery and identity into corporations really damaged the internet," added the CEO of the Block digital-payments company, formerly known as Square.

"I realize I'm partially to blame, and regret it." 

Why it matters: Dorsey, who stepped down as Twitter's CEO last year, has previously thrown his support behind an open and decentralized standard for social media.

Twitter co-founder Jack Dorsey regrets his role in centralizing internet

"Centralizing discovery and identity into corporations really damaged the internet," Dorsey said.

Jack Dorsey creator of Twitter sspeaks on stage at the Bitcoin 2021 Convention, a crypto-currency conference  at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida. 

Twitter co-founder Jack Dorsey on stage at the Bitcoin 2021 Convention, at the Mana Convention Center in Miami. Photo: Joe Raedle/Getty Images

Jack Dorsey

Media Trends

Axios Media Trends

Facebook parent Meta found itself back in the spotlight this week, largely through controversies of its own making.

Why it matters: Meta’s stock has already struggled to rebound from the  "Facebook Files" fiasco and Apple’s app changes (down 33% year-to-date), but it had begun to rally in March. Now, a series of setbacks could further hinder its comeback.

The Verge reported Thursday that, for months, misinformation has been flowing more freely into at least half of all Facebook users' News Feeds because of a glitch in the system that is supposed to downrank potentially problematic content. 

Facebook parent Meta, along with Apple, handed over customer information to hackers who successfully spoofed what appeared to be an emergency request from law enforcement, as Bloomberg reported Thursday.

On Wednesday, the Washington Post reported that Meta had hired a GOP consulting firm to help gin up anti-TikTok sentiment. 

Yes, but: Facebook downplayed the impact of the News Feed ranking issues, which also allowed more unwanted content onto News Feeds including nudity and violence, telling the Verge that the bug “has not had any meaningful, long-term impact on our metrics.” 

The problem did not apply to posts that qualified for deletion, only to so-called "borderline" items that pushed close to Facebook's rules' edge.

Be smart: Facebook is under enormous pressure to improve the safety of its current products before it begins encrypting its messaging products and expanding into the metaverse. 

It’s also facing growing antitrust pressure. As such, even small snafus can easily bubble up to PR crises that further erode trust with regulators and legislators.

Investors tend to be more willing to overlook these sorts of problems until they  affect the bottom line, but will be less forgiving if advertisers balk.

Facebook's latest faceplants

A fresh wave of self-inflicted troubles for the social networking giant came to light this week.

An illustration of a Facebook thumb pointed down with a bandage on it

Facebook

Small businesses say Amazon's dominance is one of their most significant challenges in a new survey Wednesday from an anti-monopoly group shared exclusively with Axios.

Why it matters: Tech giants and their critics are both looking for support from small businesses in their lobbying battles over antitrust bills, due to the outsized sway small firms can hold with lawmakers.

Details: The Institute for Local Self-Reliance surveyed 908 small businesses online in January to solicit their views on the challenges they face and the policies they believe would help.

Retailers made up a majority of the respondents, with others including manufacturers, farms, banks and restaurants.

By the numbers: The businesses said their top issue is large competitors receiving better access, pricing and terms, with 65% saying it was a significant challenge.

62% of respondents identified Amazon's market dominance as an "extremely significant" or "very significant" challenge, with 50% calling it "extremely significant."

58% said large competitors selling at a loss is a significant challenge.

Between the lines: ILSR also surveyed a smaller subset of 94 businesses that have sold on the Amazon marketplace.

74% of that subset’s respondents don’t think Amazon’s algorithms are neutral, and suspect them of favoring Amazon’s products over third-party sellers.

55% said they would not feel comfortable speaking out about concerns about Amazon's treatment of sellers.

What they're saying:  "They're understandably afraid to speak out," Stacy Mitchell, co-director of ILSR, told Axios. 

"Part of the reason we did this survey is to make sure that small business voices were heard in some fashion on Capitol Hill as lawmakers are considering legislation that would potentially break up or regulate the Big Tech companies."

The other side: ILSR circulated its survey to members of more than a dozen small business organizations as well as online forums and networks for entrepreneurs. In a statement, an Amazon spokesperson said the survey lacks credibility.

"The truth is that sellers have more options than ever, and a recent study found the average small or medium-sized business uses five different methods of selling products to customers—they have choices and continue choosing to sell on Amazon and elsewhere," the spokesperson said.

"Our focus is on continuing to work hard on behalf of our sellers to make Amazon the best place to sell products and grow a business.”

Exclusive: Small businesses fear Amazon shadow, survey finds

The businesses said their top issue is large competitors receiving better access, pricing and terms.

Illustration of an Amazon package in a city

Small businesses

The Justice Department endorsed House and Senate bills Monday that would keep the biggest digital platforms like Meta, Google, Apple and Amazon from giving preferential treatment to their own products.

Why it matters: Support from the Biden Administration's DOJ gives the bipartisan bills a boost, and shows that the department thinks they can be enforced and help boost tech competition in the U.S.

The big picture: "The fact that the DOJ’s regulatory goals are consistent with the Hill show the seriousness of the DOJ’s antitrust concerns in the technology sector," Jeffrey Jacobovitz, senior counsel at law firm Arnall Golden Gregory LLP and former Federal Trade Commission attorney, told Axios.

Driving the news: The Senate Judiciary Committee approved its bill, the American Competition and Innovation Act, in January. A companion bill awaits full House approval. 

News of the DOJ letter was first reported by the Wall Street Journal.

Yes, but: The bills still have to pass the full Senate and House, and face a packed congressional agenda along with bitter partisanship. 

“It’s always helpful to know where the DOJ stands on competition legislation, but it’s not obvious that this letter will change the legislative dynamics in Congress around the bill," Daniel Francis, former deputy director of the FTC competition bureau and a lecturer at Harvard Law School, told Axios.

What they're saying: "The Department views the rise of dominant platforms as presenting a threat to open markets and competition, with risks for consumers, business, innovation, resiliency, global competitiveness, and our democracy," the letter, signed by acting assistant attorney general Peter Hyun, reads.

"If enacted, we believe that this legislation has the potential to have a positive effect on dynamism in markets going forward," Hyun writes, and that the DOJ "looks forward to working with Congress to ensure that the final legislation enacted meets these goals."

The other side: Tech companies and their defenders have called the bills discriminatory and argued that they would hurt privacy and security, along with taking away services consumers enjoy.

"With the midterms looming, we know that voters aren't pining for Democrats to break Amazon Prime or Google's search results," Adam Kovacevich, CEO of pro-tech group Chamber of Progress, told Axios. 

Meanwhile: Last week, Europe pushed ahead with a proposal, the Digital Markets Act, that would ban many of the Big Tech behaviors outlined in the U.S. bills. 

Tech lobbied hard against the Digital Markets Act, but was ultimately unsuccessful.

DOJ backs bills that could kneecap Big Tech

Support from the Biden administration's DOJ gives the bipartisan bills a boost.

Assistant Attorney General for Antitrust at the Justice Department Jonathan Kanter testifies before Congress

Assistant attorney general Jonathan Kanter testifies before the Senate Judiciary Committee on Oct. 6, 2021. in Washington, D.C. Photo: Win McNamee/Getty Images

Department of Justice (DOJ)

Huawei may have seen its sales take a dip amid U.S. sanctions, but it's not just Chinese companies that stand to suffer if the U.S. and China further split their tech universes.

Driving the news: A new report from Loup Partners details U.S. tech giants' exposure to China.

Why it matters: China is a major source of manufacturing capacity and also a juicy, if tough-to-crack, market for companies looking to expand globally.

Apple is one of the companies most exposed to China, getting 18 percent of revenue and an estimated 85 percent of its manufacturing from the country.

Tesla gets about a quarter of its revenue and does about the same percentage of its manufacturing in China.

Amazon only gets a tiny fraction of its revenue, probably less than 1 percent, from China, but the Loup report estimates that 37 percent of sellers and 75 percent of products sold on Amazon are from China.

By contrast, Microsoft gets about 2 percent of revenue from China, while Google, Facebook and Netflix don't get meaningful revenue from the country, though Facebook and Google do manufacture some hardware there.

Apple leads U.S. tech giants in China ties

It's not just Huawei that could suffer from the "great decoupling."

Animated illustration of two computer chips, one with American coloring and one with Chinese coloring. Their circuits are spreading out in different directions. 

China

Axios AM

Meta will reinstate former President Trump's Facebook and Instagram accounts "in coming weeks" following a two-year suspension, according to Nick Clegg, the company's president, global affairs.

Why it matters: The decision sets a new precedent for how the company treats world leaders, and it could change the trajectory of the 2024 U.S. presidential election.

"We've always believed that Americans should be able to hear from the people who want to lead the country," Clegg told Axios. "We don't want to stand in the way of that."

Flashback: Facebook, along with Twitter and many other social media platforms, barred Trump soon after the Jan. 6 attack on the U.S. Capitol for breaking their rules and over fears of further incitements to violence. 

The big picture: The reinstatement of Trump's accounts will allow him to run ads via his Facebook and Instagram pages, which have 34 million and 23 million followers, respectively.

Trump relied heavily on Facebook ads in previous election cycles for fundraising and list-building. 

Under Elon Musk, Twitter has also reinstated Trump's account, but he has not posted yet, continuing to rely on his account at Truth Social instead.

Yes, but: Trump will be subject to new policies that Meta has created following feedback from its independent Oversight Board that could restrict his accounts — including his ability to run ads — should he violate the company's policies in the future.

"We just do not want — if he is to return to our services — for him to do what he did on January 6, which is to use our services to delegitimize the 2024 election, much as he sought to discredit the 2020 election," Clegg said. 

His accounts will not be reinstated immediately, Clegg said, because Meta's engineers will need time to build out some of the new functionality necessary to restrict certain posts or ad capabilities in the future, if needed. 

How it works: Trump will be subject to new policies around restricting accounts by public figures during civil unrest. Under those policies, Meta can decide to restrict the account of a public figure that violates its community standards for a time ranging from one month to two years.

Trump will also be subject to a crisis policy protocol, introduced by Meta in August, that will consider both on and off-platform risks of imminent harm to evaluating whether the actions or speech of any public figures requires sanctioning.

"If he now posts further violating content, that content will be removed, of course, and he could be suspended for between one month and two years, depending on the severity of the violation," Clegg said.

Be smart: For actions or speech that don't explicitly violate Meta's community standards, Clegg said the company will retain discretion to take action, and may enforce different types of guardrails, including limiting the distribution of posts without removing them or temporarily restricting access to its advertising tools.

"Oblique references to QAnon content, for instance ... is the kind of material that — even if it's done obliquely, and doesn't violate our community standards — we would seek to restrict the distribution of the content and/or restrict his ability to advertise," he said. 

These steps would allow content to remain visible on Trump's account but not get distributed in users' feeds, even for those that follow the former president.

For example, Meta may opt to remove the "re-share" button from such posts, and may stop them from being recommended or run as ads. 

Of note: If Trump posts content that violates the company's standards, but falls within Meta's characterization of "newsworthy content" — meaning the public interest in understanding what Trump said outweighs any potential harm — the company may opt to restrict the distribution of the content but leave it up. 

What they're saying: After Axios reported the news of Facebook's decision, Trump, in a post at Truth Social, said, "FACEBOOK, which has lost Billions of Dollars in value since 'deplatforming' your favorite President, me, has just announced that they are reinstating my account. Such a thing should never again happen to a sitting President..."

Between the lines: Clegg said Meta did not speak with Trump or any of his associates leading up to the decision being made and has no insight as to whether he plans to use his accounts once reinstated.

"We saw that his team had written to us publicly — I think they were asking for a meeting with Mark and myself and Joel [Kaplan]. That meeting did not take place," Clegg said, referring to Meta chief executive Mark Zuckerberg and Meta vice president for U.S. public policy Joel Kaplan. 

Trump was not briefed on the decision to lift his suspension before it was made public, Clegg said. He noted that the company will "always make ourselves available to explain and emphasize the policies that we've laid out."

"I think it would help if Donald Trump's team was as well informed as possible about where these lines are drawn and how these guardrails will operate," Clegg said.

"This whole process was really about our decision on our terms," he noted.  

Catch up quick: Meta initially banned Trump from posting on his Facebook and Instagram accounts for at least two weeks following the Capitol attack, until President Biden's inauguration.

Several months later — in response to guidance from Facebook's independent Oversight Board to revisit its decision — the company said Trump's ban would last two years, beginning with his initial suspension on Jan. 7, 2021.

Meta has been the subject of criticism from both the right and left over how it handles content moderation, especially over its handling of noteworthy figures during times of crisis or unrest.

Conservatives have alleged that the company's ban of Trump and others' accounts constitutes censorship, while progressives have argued that Meta hasn't done enough to stop the spread of dangerous misinformation in real time. 

To help shield Zuckerberg from some of that pressure and criticism, the company promoted Clegg last year to a new role that gives him complete oversight of policy decisions, like the one to reinstate Trump's account. 

Clegg said the decision to bring Trump back was "not remotely" made for business reasons. "In general terms, it's not great for business to be, you know, dragged into and embroiled in controversy," he said.

The bottom line: "I am the the ultimate decision maker on these kinds of issues in the company," Clegg said.

Editor's note: This story is breaking news and will be updated.

Exclusive: Facebook to reinstate Trump

The decision will end a two-year ban and allow Trump to post and raise money using the platforms.

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