House Republican's Entire 'Big Tech' Platform Is 'We Must Force Big Tech To Display Our Conspiracy Theories And Lies'

from the sad-state-of-affairs dept

The Republican Party that once claimed to be the party of keeping government out of business and that actions have consequences has moved far, far beyond that. These days, it's a parody of everything it once derided. Take a look at House Speaker Kevin McCarthy's newly announced Framework to Stop the Bias and Check Big Tech. Even from the naming you can see quite clearly ridiculous victim-playing. There remains no evidence of any "anti-conservative bias" in social media content moderation. It is true that some Republican supporters have faced moderation... for breaking the rules. Just as some non-Republicans have faced moderation for those same reasons. It's just that these Republicans -- with no other fundamental principles to go on -- have tried to turn basic content moderation for policy breaking into a whiny victimhood.

Remember when Republicans used to mock Democrats for always playing the victim and being "whiny snowflakes"? Apparently it was all projection.

Just days before the 2018 primary election, Google search results for “California Republicans” identified our ideology as “Nazism.” At the same time, conservatives like Devin Nunes and Donald Trump Jr. were shadow banned on Twitter. For pro-life groups like Live Action and others, the discrimination wasn’t subtle at all. Since then, the examples of conservative censorship and bias across internet platforms has proliferated. Each one of you are all too familiar with how Big Tech and its overwhelmingly liberal executives want to set the agenda and silence conservatives.

Of course, each of those has a story behind them and none of them are presented accurately. Note that McCarthy doesn't bother to explore why any of the above happened (if they happened -- Twitter doesn't engage in "shadow banning" so that's just misleading claptrap). No one at social media companies wants to "silence conservatives." Again, most of the evidence suggests the exact opposite. But the fact is that if you violate policies -- including by spreading dangerous disinformation about, say, health or elections -- you might get kicked off.

That should be a policy that actual "conservatives" support. It's about the rights of private property owners to choose not to do business with those who are disruptive -- and for those being disruptive to face the consequences of their own actions. That seems like the kinds of things that conservatives used to insist they support.

Over 90 percent of search happens on Google and 90 percent of users drop off after first-page results. The ability to stack the deck protects the willing participants of the scheme and punishes the non-compliant. The same gatekeeper effect lies with Amazon and Apple. If your company or product doesn’t meet the criteria of corporate wokeism, it’s increasingly likely Americans won’t find it on these platforms.

What are you even talking about? It's got nothing to do with "corporate wokeism" -- a hilariously stupid term in its own right. And we've seen over and over again that the platforms have actually bent over backwards to have a light touch on conservatives to avoid being accused of bias. The reality is that there is unequal treatment: the sites have given conservatives a lot more leeway, and only proceeded to moderate in the most extreme cases.

Just to make this clear, looking at the accounts that get the most link clicking on Facebook, they are almost always dominated by famous "conservative" individuals and organizations.

Again, the evidence does not suggest "anti-conservative bias." If it's true (and even this could be disputed) that conservatives violate the policies of social media services more often -- for example, by posting utterly debunked conspiracy theories about elections, healthcare, and more -- well, perhaps that's on them. Not the companies.

Then we get to the actual policy recommendations:

Accountability: Our framework would rein in Big Tech and end their abusive practices, including by changing the law so that Americans can challenge Big Tech directly for their infringement of public speech rights. This effort starts by taking away the liability shield Big Tech has hidden behind for far too long. Section 230 of the Communications Decency Act would be changed to limit liability protections for moderation of speech that is not protected by the First Amendment and would preclude Big Tech from discriminating against Americans based on their political affiliation. We would also require regular reauthorization of Section 230 so Congress may update regulations of the constantly-evolving internet landscape.

Sigh. This is such garbage. Moderation is not an infringement of your right to speech. You can still speak -- you just don't have a guaranteed right to use someone else's property to speak. And if you took away 230, you'd get significantly less speech because you'd massively ramp up the legal liability and frivolous lawsuits against social media websites. Remember when Republicans were against handing plaintiffs' lawyers the easy ability to file vexatious lawsuits? Apparently that's out the window.

Also, what the hell does: "limit liability protections for moderation of speech that is not protected by the First Amendment" mean? That would be a massive 1st Amendment violation in its own right, saying that websites must leave up all protected speech. Lies, porn, hate speech, conspiracy theories, harassment, abuse are all protected speech under the 1st Amendment in most cases (there are a few edge cases that wouldn't count). But under such an approach, these Republicans would be turning the entire internet into a cesspool of garbage.

Similarly: "preclude Big Tech from discriminating against Americans based on their political affiliation." First of all, no one is being banned for being a Republican today. The only cases I've ever seen of someone being banned for political affiliation were Nazis. So the Republican Party is now making it official party platform that websites must protect Nazi speech? Really?

Transparency: Our framework would empower Americans by ending Big Tech’s ability to hide behind vague terms of service that have not constrained their conduct in any meaningful way. We will do so by mandating that any Big Tech content moderation decisions or censorship must be listed, with specificity, on a publicly available website. In addition, by requiring Big Tech to implement and maintain a reasonable user-friendly appeals process, our plan will empower conservatives and others whose speech rights have been infringed to challenge Big Tech’s attacks.

Anyone who knows anything about content moderation knows what this really means: give us the rules so we can figure out how to argue with you that we didn't break them. This is the abusers/harassers free pass to be a total asshole to the staff of social media companies, insisting that when they're harassing someone it wasn't "really" harassment. Or when they post racist garbage "it was just a joke." This is to open the floodgates on being able to continue to annoy and harass social media to try to make sure all garbage content must remain up.

Strengthening Anti-Trust Review: Our framework also recognizes that the status quo and bureaucratic delays are not acceptable when it comes to bringing long-overdue antitrust scrutiny to Big Tech. We will provide an expedited court process with direct appeal to the Supreme Court and empower state attorneys general to help lead the charge against the tech giants to break them up. We will also reform the administrative state and remove impediments that delay taking action on Big Tech power.

I mean, Republicans have spent the past four or five decades redefining anti-trust to make it effectively impossible to win a case on anti-trust grounds, so this is quite a turnaround -- but also one of those situations where you almost want to say "hey, you made this bed, now lay in it."

Anyway, a few days after McCarthy put out this ridiculous "framework," Republicans on the House Judiciary put out their own plan, which they claimed was "consistent" with McCarthy's framework -- and it is. It is consistently disconnected from reality.

It, of course, removes Section 230:

A cause of action to empower Americans. For far too long, Big Tech has been able to censor the views of conservatives with effectively no recourse available to those affected. This proposal would create a statutory basis for Americans to directly challenge Big Tech in court for its censorship and silencing of conservatives.

Overhauling Big Tech’s liability shield. Congress passed Section 230 of the Communications Decency Act to allow internet platforms to moderate unlawful or offensive content on their platforms. Big Tech has exploited this protection to make subjective content moderation decisions, often in a manner harmful to conservative voices. This proposal will ensure that any content moderation decisions are done in good faith, based on objectively reasonable criteria, and in accord with particularized rules.

As has become standard among politicians these days, this completely misstates and misunderstands how Section 230 (and the 1st Amendment) work. Both of the concepts above would be clear violations of the 1st Amendment, as we just saw with the Florida law that Florida Law that tried to create something similar.

The whole thing is one giant performative, grievance, pity party from the party that used to pretend to be against such things. It's just sad, but that is the state of the Republican party these days.

Filed Under: antitrust, bias, big tech, kevin mccarthy, republicans, section 230

Congressional Leadership Realizing That 'Big Tech' Antitrust Bills Aren't Ready For Prime Time

from the back-to-the-drawing-board dept

As you've now heard, there's a big push in Congress to revise how antitrust works. A group of mostly Democratic House members (with a few Republicans on board) introduced a questionable package of antitrust bills, with many, many problems. There were some good ideas (such as better funding of the FTC) and some more creative ideas (such as around interoperability), but done in such ham-fisted ways that they would cause a lot more harm than good. We've noted how the bills would create massive problems for content moderation, and raise related speech issues.

Last week's marathon markup hearing in the House Judiciary Committee did not ease these concerns -- if anything they made them much, much worse. After the hearing was finally over, a bi-partisan group of Judiciary Committee members put out a statement highlighting the half-baked nature of the proposals.

“The marathon markup – that started Wednesday morning, recessed as the sun came up on Thursday morning, and then reconvened for another four hours on Thursday – featured several bills that would radically change America’s leading tech companies and made crystal clear that the bill text as debated is not close to ready for Floor consideration.

“The package of legislation poses harm to American consumers and the U.S. economy and left Members on both sides of the aisle with basic questions that have yet to be answered. What companies are covered in the scope of the bills? If only four, why? Why are foreign firms not covered? Were the definitions of ‘covered platforms’ arbitrary or not? How would the bills impact useful products that consumers rely on? How do the bills protect the data of American consumers? How do the bills protect consumers from arbitrary tech company abuses, as well as safeguard the nation’s security and economic interests?

“The 16-month-long investigation conducted by the Antitrust, Commercial, and Administrative Law Subcommittee rightfully scrutinized digital markets in an effort to remove barriers to competition. Unfortunately, the resulting legislative proposals – which the full Committee did not hold a hearing on or have reasonable time to fully consider – fell short of adequately addressing identified problems in an effective way that serves Americans’ interests. We urge the sponsors of the bills to take the necessary time, commit to a comprehensive approach, and work with their bipartisan colleagues of this Committee to address the concerns articulated during markup to further develop these bills.”

Of course, given how nearly all of those concerns were brushed aside by Committee members who support the bills, my fear was that this process was on an unstoppable train track. People had asked Rep. Jerry Nadler to slow things down before the hearing and he had refused. However, it appears that more soberly minded members of the leadership are now realizing that maybe this rush job is a mistake.

Majority Leader Steny Hoyer is now pumping the brakes on moving these antitrust bills to a full floor vote.

“There was disagreement among the Democrats in the committee and not every Democrat voted for it, and some very senior members opposed it,” Hoyer said of the House Judiciary’s consideration of the legislation last week. “There’s a lot of discussion to be had before I get to scheduling bills for the floor.”

What this really means is that someone has taken the temperature of the other members and realized there aren't enough votes to pass these bills. That doesn't mean they won't be back (or that this process won't just jump over to the Senate for now). It's entirely possible that updated versions of the bills will be even worse. But, for now, at least, it appears that Congress is taking at least a temporary breather on rushing through these bills.

Filed Under: antitrust, big tech, congress, david cicilline, steny hoyer

Congressman Nadler Throws The World's Worst Slumber Party In Order To Destroy The Internet

from the not-the-last-sleepless-night-this-nonsense-will-cause dept

House Judiciary Chairman Congressman Nadler really does not like "big tech" companies, and four of them (Apple, Google, Facebook, and Amazon) in particular. His antipathy has led him to bypass any further subcommittee inquiry to identify which issues raised by these companies might be suitable for regulation, or to develop careful language that could remediate them without being an unconstitutional and counter-productive legislative attack on the entire Internet economy.

Instead he called a full committee hearing this past Wednesday to debate and markup a slate of six bills that are, in their current form, an unconstitutional and counter-productive legislative attack on the entire Internet economy. (Here's where we'd normally include an embed of the hearing, but for reasons that are not at all clear, after the session was live-streamed via YouTube, it is currently blocked from showing the recording -- perhaps the session that was a debate about how best to break Google, has literally broken Google by streaming a video too long for YouTube to deal with).

Although the hearing lasted over 24 hours(!), from midday Wednesday into midday Thursday (with just one three-hour recess and a few other breaks for floor votes), there was little illumination on whether anything these bills target is truly an infirmity at all, an infirmity that Congress hasn't itself created, or an infirmity particular to just these targeted companies. Or whether any of these proposed "remedies" won't hurt the very interests they are ostensibly supposed to help.

Over the course of the hearing he did, of course, get some bi-partisan pushback. Some of the most credible seemed to come from Reps. Lofgren and Issa, who tried to alert the bills' proponents to many of the bills' defects, and also Rep. Spartz, who kept noticing all the due process and doctrinal shortcuts built into the bills. And some of the language did get amended. But no evidence was considered and no experts were consulted. The committee was not interested in building any further record that might challenge (or even potentially support) the foregone conclusions that something must be done and these bills should be the something.

As a result, the fundamental problems with the bills remain because the fundamental problem remains: even after all that effort the Committee still lacks a meaningful understanding of how and why tech companies get big, including any reasons why we either value that bigness or otherwise force it to happen. The kindest read of the situation – as with most tech policy regulation, it seems – is that it's a bit like the story of the blind men and the elephant, where each man has a different perception of what an elephant must look like depending on whether they are holding its trunk, its ear, or its tail. Here the House Judiciary Committee is holding tightly to the tail and refusing to even contemplate that there might be any more elephant to consider. As a result it also can't recognize how some of the problems they are worried about are actually problems of their own making.

One conspicuous example that came up during this marathon bill markup session was the outrage expressed by some members of the committee that Amazon sometimes kicks off independent vendors using its marketplace services. But instead of asking why Amazon might do that, the committee chose to presume that it was due to nothing more than some nefarious anti-competitive instinct. And in making that presumption the committee ignored its own role in forcing Amazon's hand.

For instance, how does it make sense for Congress to think that Amazon should potentially be liable for counterfeit or defective goods vendors use their platforms to sell, and yet simultaneously criticize Amazon for denying vendors with potentially problematic products access to their platform? Answer: it doesn't make any sense at all. Congress needs to decide: if it wants Amazon to be more open to more small business users, it has to make it safe for them to be.

Yet instead of fortifying laws that offer platforms protection to make it safe for them to be open to more users, including smaller businesses and potential competitors, Congress is instead hard at work crafting bills to further put the screws to the bigger platforms if they give access to the wrong third party user who does something with their platforms that Congress also doesn't like. It is deliberately creating a no-win situation for platforms that forces them to make only bad choices that no one will like – and that Congress will only want to further punish them for.

Filed Under: antitrust, big tech, competition, jerry nadler, markup
Companies: amazon, apple, facebook, google

No, 'Big Tech' Should Not Give 'Big Telecom' Billions Of Dollars For No Reason

from the we've-already-been-over-this dept

A few weeks back we noted how FCC Commissioner Brendan Carr had taken to Newsweek to dust off a fifteen year old AT&T talking point. Namely that "big tech" companies get a "free ride" on telecom networks, and, as a result, should throw billions of dollars at "big telecom" for no real reason. You'll recall it was this kind of argument that launched the net neutrality debate, when former AT&T CEO Ed Whitacre proclaimed that Google wouldn't be allowed to "ride his pipes for free." Whitacre was effectively arguing that in addition to paying for bandwidth, tech giants should pay him a troll toll. You know, just because.

The claim that technology giants (or anybody, really) gets a "free ride" when it comes to US telecom is farcical. Companies like Amazon, Google, and Netflix all pay billions of dollars in total for undersea cable runs, massive cloud storage, transit routes, and content delivery networks. Hell, Google is even a residential ISP. That's on top of the money consumers, businesses, and Silicon Valley giants pay for their own bandwidth, which in the US is often some of the highest in the developed world thanks to regional monopolization and captured regulators (precisely like Carr).

Carr's right about one thing: we need to reform the USF broadband subsidy system, heavily reliant on income from dying landline phones. But he's not actually coming at the issue in good faith. He's using that need for reform to help shovel yet more unearned cash at AT&T, a company that already gleaned billions in utterly pointless tax breaks, subsidies, and regulatory favors under Carr and Donald Trump's watch.

I've covered the telecom beat for twenty years of an adult life, and know what a captured regulator looks like when I see one. But despite the fact AT&T's argument is coming out of Carr's mouth, the press somehow keeps taking Carr's point earnestly. CNET recently took him at face value last week. This week it was Bloomberg's turn to promote Carr's idea that Google, Netflix, and Amazon should throw money at companies like AT&T for no damn reason:

"The pandemic has spotlighted the need for fast internet connections for schooling, work and health care and has emerged as an area of agreement as President Joe Biden and lawmakers of both parties grope for ways to support more broadband. Carr, in an interview, said one way to do that is by getting companies such as Amazon, Google and Netflix Inc. to pay. He cited “businesses that are benefiting from the modern network and paying virtually nothing."

Bloomberg oddly doesn't even challenge this argument that Google and friends "pay virtually nothing" for bandwidth, despite the billions upon billions they pay for...bandwidth. You literally can't stumble five feet without seeing some report about a major Netflix, Google, or Amazon investment in cloud storage, transit, undersea cables, or content delivery networks. Like CNET, Bloomberg also implies that Carr is having an original thought that AT&T just happens to agree with, when the underlying argument is actually AT&T's:

"AT&T Inc., the largest U.S. phone company by revenue, perked up when Carr laid out his plan in Newsweek.

“Hard to imagine successful reform that does not include some version of this proposal,” Hank Hultquist, vice president of federal regulatory for AT&T, said in a tweet. The company has advocated for appropriations from Congress -- an idea opposed by others who fear the subsidy may fall prey to annual funding fights.

Amazing. AT&T planted a dated, dumb argument in a Newsweek article with the help of a captured regulator, then continues to get major outlets to amplify it as if they are just some objective third party. Worse, Bloomberg somehow manages to get interim FCC boss Jessica Rosenworcel to give her tacit approval to socking tech giants with arbitrary troll tolls:

"Carr in a Newsweek editorial suggested lawmakers and regulators could set fees for web companies such as Google, Facebook, Apple Inc. and even Microsoft Corp. for Xbox gaming.

The call from Carr, a Republican, has drawn interest. “It’s an intriguing idea. And we’re going to need ideas,” FCC Acting Chairwoman Jessica Rosenworcel, a Democrat, told Bloomberg TV on June 11.

I know Rosenworcel is just being polite, but we just had a fifteen year fight (dubbed net neutrality) over applying arbitrary fees on websites and services, then throwing that money at telecom giants for no reason. Yes, the USF and broadband subsidy process needs reform. But that starts with fixing a broken FCC subsidy process that throws billions of dollars annually at politically powerful telecom companies that game the system. You'll notice this idea never quite crosses Carr's lips, in large part because such slush funds have historically been of immense benefit to AT&T and friends, his only real constituents.

Carr and AT&T's argument is popping up now because AT&T, Comcast, Verizon and friends want to pre-empt the Biden broadband plan (which promises to heavily fund local competitors and community broadband efforts) with their own alternative: have "big tech" throw billions at AT&T. AT&T strategy and policy folks want to exploit the justified political and public anger at big tech to seed an idea they've been pushing for literally twenty years now. That "big tech" is a bunch of mean freeloaders who should be funding telecom giants' perpetually unfinished network builds.

In reality you fix/fund US broadband infrastructure like you fund most of the rest of our neglected infrastructure: by actually taxing corporations and billionaires. You then fix the very broken (intentionally) broadband mapping and subsidy process, using that money to fund competitors that meaningfully challenge entrenched local monopolies. Said entrenched local monopolies don't want that sort of real reform, so instead we get this theater. Theater the unskeptical press then regurgitates because it apparently doesn't know how this game is played.

Filed Under: big tech, brendan carr, competition, fcc, jessica rosenworcel, subsidies, universal service fund

Recent Antitrust Push Is Weirdly Narrow, Pretends Telecom And Banking Don't Exist

from the do-not-pass-go,-do-not-collect-$200 dept

As you've probably noticed, there's a big new "antitrust" push afoot in DC. As you may have also noticed, many of these proposals don't actually do a whole lot to reform US antitrust or monopoly problems in any broad way. Scholars for decades have warned that US antitrust enforcement has become feckless, and that we need to rethink how we approach antitrust in a world in which companies often seem to have more and more power over our lives.

The U.S. is dominated by anticompetitive giants in banking, telecom, insurance, health care, air travel, and countless other sectors. And generally, we've historically encouraged them by underfunding our regulators, steadily weakening antitrust enforcement, rubber stamping merger after terrible merger, and replacing competent Judges with bobble head dolls. All under the pretense that doing anything else would be disastrous, while clinging tightly to a consumer welfare standard that sometimes seemed incapable of addressing modern market, labor, and consumer harms.

That's a lot to fix, but with this vast interconnected dysfunction being so profitable, and with so many cross-industry corporations (with bottomless budgets and immense lobbying control over Congress) opposed to real reform and oversight, that doesn't seem likely to actually happen. So instead we've been getting something else. A very selective new wave of "antitrust reform" that focuses exclusively "big tech," while leaving sectors like banking or "big telecom" free to run amok. Despite evidence that those latter sectors actually do things that harm consumers (the supposed standard for antitrust).

The movement to rein in big tech and shore up antitrust enforcement certainly has valid components, based on justified anger at years of dodgy business practices. But this anger has been proven to be exploitable by folks like News Corporation and AT&T. Both companies are looking to saddle their Silicon Valley competitors in online advertising with rules that don't apply to their own businesses, while simultaneously demolishing constraints and oversight of their own sectors (see: net neutrality, the dismantling of FCC authority, or the steady erosion of media consolidation rules protecting small businesses).

Enter Rep. David Cicilline, in charge of the House Judiciary Committee's antitrust panel. He says Democrats have introduced a suite of different antitrust bills in the belief it will keep "big tech" on its heels, making it harder to defeat one centralized bill. He claims that by narrowly targeting specific issues of antitrust it will be easier to get the 10 Republican votes needed to pass the bills with a 60 vote majority in the Senate. But so far there's no indication the obstructionist GOP, whose interest in "antitrust reform" has generally been of the performative populism variety, has any interest in helping out (last I saw the proposals had about 3 GOP votes in the House, just enough to market the effort as "bipartisan").

Meanwhile, many of the bills are oddly selective in what they deem to be a "dominant platform." The Platform Competition and Opportunity Act (pdf), for example, greatly restricts what constitutes a monopolistic offender, making sure to carve out exceptions for telecom giants, Mastercard, VISA, and Walmart. The bill bans companies from owning or operating a business that "presents a clear conflict of interest," but only if the company in question has 50 million monthly active U.S. users and a market cap of over $600 billion:

"...is owned or controlled by a person with net annual sales, or a market capitalization greater than $600,000,000,000, adjusted for inflation on the basis of the Consumer Price Index, at the time of the Commission’s or the Department of Justice’s designation under sec13 tion 4(a) or any of the two years preceding that time, or at any time in the 2 years preceding the filing of a complaint for an alleged violation of this Act."

Again, this very specific restriction omits a lot of companies that are engaging in the same kind of anticompetitive behavior, including many that see overlap in markets dominated by technology giants (telecom). It's also just kind of an arbitrary restriction given that what others value you at isn't necessarily what determines whether or not you're engaging in anticompetitive behavior. The actual, anticompetitive behavior does.

But just looking at the $600 billion valuation threshold gives a sense of just how this line-drawing happened. Under this definition (including the number of US users), it looks like the law only applies to Apple, Microsoft, Amazon, Google (Alphabet) and Facebook. That's it. It seems notable that companies which are also kinda powerful and dominant, but happen to fall just somewhat beneath the threshold, include Visa, Mastercard, JP Morgan Chase, Bank of America, Walmart, Disney... and Comcast, AT&T, and Verizon. How very, very interesting.

It's hard to argue that different rules should apply to Amazon as compared to Walmart. Or that Comcast, AT&T and Verizon should be spared from such antitrust scrutiny, when their control over some markets is clearly a much larger stranglehold than the five impacted companies. It's almost like these bills are designed to be a performative attack on just one sector while pretending otherwise.

That's not to say that all the proposals in all the bills lack merit or benefit. I think at least one part of the Merger Filing Fee Modernization Act does something important: namely shoring up lagging FTC funding in an era where the agency is being asked to do more and more with a fraction of the staff and resources of their international counterparts. Recall a major reason the telecom lobby neutered net neutrality and FCC oversight is that they knew enforcement responsibilities would fall to an FTC without the resources, staff, or authority to do the job properly.

But given the tight restrictions of most of the proposals, I'm still left wondering just how much input into these bills media/telecom policy and lobbying folks had as authors built in compromises for the sake of "bipartisanship." Telecom giants like AT&T and Comcast have spent the last three or four years successfully convincing many DC policymakers that Silicon Valley giants are the only dominant giants worth worrying about. Rupert Murdoch has been playing similar reindeer games. Pretending "big tech" monopolies are the only monopolies that need immediate fixing benefits both, and exploiting legitimate public anger at big tech isn't particularly hard right now on either side of the aisle.

US Antitrust most definitely needs reform, but it's unlikely we'll obtain it through legislation so compromised for the sake of "bipartisanship" that it views the issue through a pinhole. Or via bills heavily shaped by telecom and media monopolies that want to be excluded from meaningful oversight. The appointment of Lina Khan does suggest a government awakening to the narrowness of the consumer welfare standard in the Amazon era. But like so many issues (climate comes quickly to mind) passing meaningful legislation will first require cleaning up Congressional corruption, and that still seems well over the horizon.

Filed Under: antitrust, banking, big tech, telco, valuation

Think Tech Companies Are Too Monopolistic? Then Stop Giving Them Patent Monopolies

from the no-one-to-blame-but-yourself dept

There is a lot of sturm and drang in the halls of government these days about corporate mergers – or, at least, tech company mergers (oddly, this ire doesn't seem to necessarily extend to all mergers). But despite all the gnashing and wailing there's not a lot of understanding of why they happen. Which is strange, because if you think there's a problem, it would help to understand WHY there is a problem, because that understanding will give clues on how to fix it.

So let's think about why a company "merges" with another. I put "merges" in quotes, because usually it boils down to one company buying another – how much of a "merger" it is depends on how similarly positioned the respective companies are and the details of the deal, but regulators today seem most upset about the A part of M&A (acquisition) so let's focus on that aspect. Why would a company want to acquire another?

One big reason relates to patent law. Let's say you're a company with a product, and you want to make that product do something more, or better, or have some new feature that it doesn't already have. You could develop it on your own but (a) that will take time you may not have (ex: the market opening may close before you can get it out the door), (b) money you may not have (ex: you may not have the liquidity needed), or other resources you may not have (ex: you may not have the expertise needed or be able to easily hire it), and (c) even if you had what was needed you may still not be able to develop it on your own because it turns out that someone has already developed the best method, gotten a patent on it, and now they can block anyone else from implementing it with at least the threat of litigation if not also actual litigation.

So the shortest distance between two points for many companies, especially larger tech companies, is often to simply buy the other company that has the missing piece of the technology puzzle they want. This acquisition then does a few things. For one, it gives the purchasing company access to that technology, which means it could potentially produce a better product. Of course, it also gives the company exclusive access to the technology and lets them block anyone else from using it, including their competitors.

In other words, through patent law (and also copyright law, but we'll set that aside for now) we intentionally give companies the power to act like monopolies, even when it's not actually in our interest. So of course we're upset that companies use that power, but the problem is that it's a power we gave them. Splitting them up is not the cure for the problem we created; the only solution is to stop giving them so much monopoly power in the first place.

There are at least two things we should do differently. First, we need to stop giving out so many patents full stop (and we need to stop condemning the people calling for fewer to be issued). Too often these patents are not for actually significant innovations (or innovations at all), and all too often they are on subject matter that should be unpatentable. Every few decades or so the US Supreme Court wakes from its slumber to remind the world that, at least under US law, software is not patentable subject matter. But these decisions haven't stopped people from pursuing, and getting, these sorts of patents. So it's very strange that people wonder why there are so many tech companies with software-driven products that have so much market clout, when it's a power our own USPTO has been purposefully giving them.

But even where patents are issued appropriately, there are still things we can do to mitigate their anti-competitive effects. One of the problems with patents today is how they give patent holders the ability to shut out other users of the technology. That's why patents can have this harmful effect on the marketplace, and it's also what has put modern patent law out-of-step with the authority granted Congress by the Constitution to pass a patent law at all. Congress gets to legislate in this area for the purpose of "promot[ing] the progress" of science and the useful arts, but the reality of today's patent law is that instead of promoting progress it ends up creating huge obstacles to it.

This injunctive power that comes with a patent is also unnecessary to achieve anything that patent law was intended to vindicate. Even accepting as true the idea that innovators need some sort of reward for being the first to innovate something the world would benefit from – beyond, of course, the inherent market advantage that comes from being first – all that means is that if there's some profit to be had from the innovation that the patentholder should get to realize at least some of it. But you don't need the power to shut out all other uses to glean that profit; all you need to do is license it.

Of course, backed with the power to enjoin other uses, license fees today are less about reasonable market rates that provide benefit to everyone: the innovator, the implementer, and the public, which now gets to have more innovation in the marketplace at prices the market can bear. Instead, patent revenue today is more about extortive windfalls. The policy change we need is to switch up that balance. And one way to do that is by replacing the current (and often disproportionate) ability of patentholders to enjoin any uses of their technology with some sort of compulsory license system. A compulsory license system means that patent holders cannot say no to competitors and other innovators who want to use or build on their technologies, either directly, by refusing permission, or indirectly, through excessive license fees. Instead the reward for their patent is the reasonable income returned by the license they must offer.

There are several upsides to changing patent law this way. For one, even if it somehow diminishes the perceived luster of having a patent that would not be a bad thing: as explained before, the landgrab that has been trying to turn every technological improvement, no matter how small, into a powerfully enforceable monopoly has been at the root of much of the anticompetitive behavior regulators now lament, and discouraging it would, on its own, help mitigate those problems. (Constraining the Patent Office so that it also grants fewer patents, especially specious and/or software ones would help as well.)

Secondly, it also means that more people can use the technology, or even build on it. And that's good for society in general. The point of patents is to stimulate that innovation, and this change would do so by clearing the way to it. Furthermore, it would also have the effect of diminishing the monopolistic effects we don't like. Not only would patents now provide less monopoly power, but they would also lessen the incentive companies currently have to acquire other companies in order to horde more of it.

Which would also lead to less market consolidation. For instance, smaller companies with a sought after-innovation, instead of being bought out by one company that could now exclusively benefit from it, could stay going concerns and continue to put products in the market. If the innovations were legitimately patentable they could also use those licensing profits to subsidize their own further innovation and product development, and to the extent that fewer innovations may be patentable, the good news is that this reduction in patentability would mean that there would be more technologies available for them to help themselves to in order to compete, even against the companies we currently worry are too big.

Of course, there is a catch: compulsory license systems are great in theory but often cumbersome in practice, and, as we see in the copyright space, they can introduce new, unwelcome, and debilitating costs and regulatory impediments. (We'd also want to keep an eye on where non-practicing entities owning patents should be in this ecosystem, if anywhere.) So this isn't a case of "just add water" where tacking any old compulsory license system onto patent law will automatically make everything sunshine and roses. It will take some extremely careful thinking in how to implement.

In the meantime, however, we are seeing some other industry adaptations, like patent pools, emerge to help mitigate the extortive power of patents. And, in general, the idea of minimizing the exclusionary control of a patent, including through compulsory licenses, is a good one we would be better served to be thinking seriously about, rather than the zealous appetite to break up companies that has currently seized all of our attention. Especially when these proposed break-ups are so arbitrary, unprincipled, and ultimately costly in ways regulators do not seem to be contemplating.

In any case it just doesn't make any sense for the government to on one hand tell companies to go be monopolies and then immediately complain they are being monopolies. The solution to the problem of companies acting monopolistic is to not deliberately give them so much power to be.

Filed Under: big tech, consolidation, monopolies, patents

Chief Publishing Lobbyist Maria Pallante Claims Copyright Is 'Under Assault' At Annual Meeting

from the unfortunately-not dept

The Association of American Publishers, like most industry lobbying groups, has a reputation for jealously guarding industry profit-making, no matter the larger implications of their doing so. In the past, the AAP has advocated for secret copyright treaties designed specifically to protect the publishing industry, getting Google to make its Google Library project far less useful, and has sued the Internet Archive's digital library program in the middle of the COVID-19 pandemic. Again, the AAP is a lobbying group and we should expect them in some respects to behave like one, but it's important to tease out what they're lobbying for and against and whether its interests are shared with the interests of the general public. Spoiler alert: they absolutely are not.

So, when the AAP held its recent annual meeting and devoted a portion of this 90-minute affair to the importance of copyright, that would typically be met with something of a yawn and a hand-wave. And when it got several mediocre persons to also speak at that meeting in part to rail against the omni-present threat of "big tech", well, most of us probably just kept yawning.

As part of their remarks, Brian Napack, AAP chair and CEO of John Wiley, and Maria Pallante, CEO of AAP, made clear that protecting copyright remains the top priority for the association.

Minnesota Senator Amy Klobuchar voiced her concerns over the power of Big Tech in accepting the AAP’s 2021 Award for Distinguished Public Service. Keynote speaker Don Lemon (CNN host and author of This Is the Fire), urged publishers to publish more authors of color, while closing keynoter Brad Stone focused his remarks on Amazon, the subject of two of his books, The Everything Store and the recently released Amazon Unbound.

If Senator Klobuchar wants to join the likes of Donald Trump in complaining vaguely about "big tech", well, I guess I'll just have to somehow manage to keep my eyes dry. The inclusion of divisive cable news commentators is certainly a choice to be made, I suppose, as is the inclusion of a biographer for Amazon and Jeff Bezos who isn't always super kind to the company or its leader. That Stone's books can be bought on Amazon is at least a partial rebuttal of all the "big tech" complaining, but I digress.

Instead, what is most notable from this annual meeting is the CEO of the AAP, Maria Pallante, proclaiming to the audience that the association would do everything possible to beat back the "assault" in progress on America's copyright laws.

To make sure that publishing remains a good business to be in, AAP’s job, Pallante said, “is to ensure that you can compete fairly in the modern marketplace.” Regrettably, she continued, “there are actors who seek to weaken your legal protections in order to advance their business interests, whether that interest is in bloating the fair use doctrine to illogical boundaries or, more blatantly, appropriating and monetizing your works without permission.”

In Pallante’s view, the exclusive rights delineated in the Copyright Act are under assault, as is an effective enforcement framework, and she said the DMCA, which governs how infringing content on websites can be taken down, “is badly in need of updating.” She also lamented the lack of a competitive marketplace in which authors’ works can be discovered and publishers can compete “without unfair control or manipulation from dominant tech giants.”

Think about the claims in that statement. "There are actors that seek to weaken your legal protections in order to advance their business interests" is a hell of a take from the CEO of a lobbying group that literally does that exact thing to the public. More copyright laws that strip away the public's rights, stricter enforcement with less legal protections for the accused among the public, diminishing the role of fair use: literally all of these things Pallante is advocating for are well-described as an actor seeking to weaken your legal protections to advance its business interests. Pallante is literally the villain she's complaining about.

As for copyright being "under assault", well, I can only assume it's under assault in the same fashion that I'm constantly told that Christmas is under assault, by which I mean it only expands, becomes more arduous and annoying, is omni-present, and is tied strictly to commercial interests.

Pallante goes on to suggest that the AAP's lawsuit against the Internet Archive's library platform had better be victorious... or else basically all copyright protections go away.

In a final point about copyright, Pallante said that the lawsuit the association filed a year ago against the Internet Archive for copying 1.3 million scans of books is still in discovery, but said the IA’s activities “are well outside the boundaries of both the law and copyright commerce, and ultimately pose an existential threat to the copyright framework on which authors and publishers rely.”

If you can read that and not burst out laughing, you have a stronger constitution than I do.

Now, if Pallante's name sounds at all familiar to you, it's because she previously ran America's Copyright Office. Now, I will say this much: I will happily take Pallante's doomsday for copyright claims more seriously than I have in this post if she can tell me what happened to the $11 million that the Copyright Office, under her leadership, managed to spend on a computer system that never materialized, was supposed to cost a tenth of that spend, and was the subject of several lies in the Copyright Office's reports to Congress.

Otherwise, I'll just note that copyright law in this country is so laughably bloated that it deserves an assault, but isn't actually on the receiving end of one.

Filed Under: big tech, copyright, fair use, maria pallante, publishing, user rights
Companies: aap, association of american publishers

CNET Amplifies FCC's Carr's Attempt To Force 'Big Tech' To Pay 'Big Telecom' For No Reason

from the troll-tolls dept

So last week we noted how FCC Commissioner Brendan Carr had taken to Newsweek to dust off a fifteen year old AT&T talking point. Namely that "big tech" companies get a "free ride" on telecom networks, and, as a result, should throw billions of dollars at "big telecom" for no real reason. You'll recall it was this kind of argument that launched the net neutrality debate, when former AT&T CEO Ed Whitacre proclaimed that Google wouldn't be allowed to "ride his pipes for free." Whitacre was effectively arguing that in addition to paying for bandwidth, tech giants should pay him a troll toll, just because.

As we noted last week, this claim that technology giants (or anybody, really) gets a "free ride" when it comes to US telecom networks is laughable. Companies like Amazon, Google, and Netflix all pay billions of dollars in total for undersea cable runs, massive cloud storage, transit routes, and content delivery networks. Hell, Google is even a residential ISP. That's on top of the money consumers, businesses, and Silicon Valley giants pay for their own bandwidth, which in the US is often some of the highest in the developed world thanks to regional monopolization and captured regulators (precisely like Carr).

In reality, the argument that "big tech" gets a "free ride" has long been a flimsy proxy for telecom providers who believe it's their God-given right to get a cut of massive Silicon Valley ad revenues, even if that makes no coherent sense. It has popped up again and again for fifteen straight years, usually out of the mouths of those prodded into making it by telecom policy and lobbying organizations.

So when it popped up again last week I was fairly sure it would be ignored. Until CNET grabbed Carr's column believing it was in good faith, and amplified it to even more people:

"In a follow-up interview with CNET on Friday, Carr said companies like Facebook, Amazon, Apple and Netflix have been enjoying a free ride on the internet infrastructure, while millions of Americans have been paying what amounts to an additional tax on their telephone bills for broadband service.

"It's time for Big Tech to pay its fair share," Carr said.

CNET barely challenges Carr's assertion that these companies get a "free ride," even though you can't go five feet without running into an announcement where a company like Google is spending big bucks on telecom infrastructure. While Carr is right that the existing FCC USF and subsidization model does need fixing as contributions drop, Carr's not actually coming at this argument in good faith. If he were, he'd be able to mention in passing the billions we throw at telecom giants for fiber networks they routinely half deploy, or the countless examples of outright subsidy fraud that have plagued the telecom sector for years.

Instead the onus for funding America's unfinished broadband deployments is for whatever reason thrown at the feet of Silicon Valley, something Carr rambles on at length about, as if telecom sector monopolization/corruption and FCC incompetence is somehow Silicon Valley's fault:

"When it comes to deciding which companies should contribute to the fund and how much they should be required to pay, Carr suggests that legislators look at companies that benefit the most financially from the use of internet infrastructure.

..."For instance, Google's ad revenues -- I think those are fair game for looking at a charge to support the network," he said. "The same with Facebook or Apple's App Store, maybe even iPhone cloud services and certainly the [video] streamers."

But again, this presumes that these companies don't already pay massive amounts of money for bandwidth and telecom infrastructure. Or that telecom giants have somehow received an unfair shake, despite gleaning untold billions in tax cuts, subsidies, merger approvals, and regulatory favors in exchange for network investment and job promises that routinely never show up. CNET does at least point out this is all not new, though it's framed in the "he said, she said" view from nowhere journalistic approach that usually leaves readers wondering which side is telling the truth:

"This is an argument that large internet service providers have been pushing for years," former FCC Chairman Tom Wheeler said in an interview. In 2006, AT&T's former CEO Edward Whitacre was among the first to suggest publicly that companies such as Google shouldn't be given a "free ride" on his network. The comments ignited more than a decade of debate over net neutrality regulations.

CNET then proceeds to quote the telecom lobby, trotting out Rick Boucher, one time fair use champion turned AT&T lobbying and policy prop:

"Groups representing the telecommunications industry largely support Carr's proposal. The Internet Innovation Alliance, which represents AT&T along with telecom equipment makers like Alcatel Lucent, Ciena and Corning, says it makes sense. "Requiring Big Tech to help close the digital divide is an obvious and attractive solution to the Universal Service Fund (USF) crisis," former Rep. Rick Boucher, an honorary chair of the organization, said in a statement. "It makes sense for the Amazons, Googles, Apples and Facebooks of the world -- that depend upon and benefit from Americans being online -- to back efforts to achieve universal broadband. It's in their interest, as their user bases would be bolstered."

But it doesn't make sense in the broader context of the fact that US taxpayers have thrown countless billions already at telecom giants for fiber networks that mysteriously only wind up half deployed. That's not Amazon, Netflix, or Google's responsibility to fix, however much justified animosity you may have at these companies for dodgy behavior on numerous other fronts.

The story ends with Carr getting the last word about how he's just looking out for the little guy. But there's been no indication, at any point in Carr's long history of questionable claims, that this is actually true. What's more likely is that companies like AT&T, worried about the Biden broadband plan driving competition into their markets, want to capitalize on the animosity toward "big tech" by once again trotting out a lame argument that the real solution lies not in holding legislators, regulators, or telecom giants accountable for years of fraud and wasted money, but in taxing Silicon Valley. And Carr, never one to see a telecom argument he doesn't breathlessly support, was more than happy to amplify it.

Filed Under: big tech, brendan carr, fcc, free ride

What If The Media And Politicians Tried To Hold A Techlash... And No One Joined Them

from the oh,-look-at-that dept

There's been plenty of talk lately about the "Techlash" which has become a popular term among the media and politicians. However, what if the general public feels quite differently? Vox, which is not exactly known for carrying water for the tech industry, has released a new poll that shows that the public is overwhelmingly optimistic about technology, and thinks that technology has been a force for good in the world. This applies across the board for Democrats, Republicans, and independents.

Seventy-one percent of likely voters agreed with the tech-optimist statement: “Technology is generally a force for good. Large tech companies have provided innovations like vaccines, electric vehicles, bringing down the cost of batteries that store green energy, vegetarian meat options, and other ways that have improved our quality of life.” Only 19 percent agreed with the tech-pessimist statement: “Technology is generally a force for bad. Large tech companies are bad for workers, inequality, and democracy. The technological innovations they produce are not worth the cost.”

When put into chart form, the results are really, really striking:

Obviously, "technology" covers a lot more than the big internet companies -- and the messaging that Vox tested highlights mostly non-internet innovations. But, still. The fact that the "control" group -- ones who didn't even receive the specific messaging -- felt even stronger about the good technology does in the world than those who were first primed with statements about other kinds of technology is really something.

There are plenty of examples, certainly, of tech gone awry, but it really seems that the general public recognizes all of the good that innovation and technology have done for the world, and feel optimistic about it. Of course, none of that will stop "the narrative" of the techlash, because it's just too useful for many pushing it.

Filed Under: big tech, polls, surveys, tech optimism, techlash

The Washington Post Thought It Might Be Nice To Provide Free Book Marketing To Insurrectionist Josh Hawley

from the zero-accountability dept

Let's be clear about something. The U.S. doesn't really do "accountability" particularly well. It's a major reason why we often repeat the same mistakes over and over again without learning much from history or experience. That's been made particularly clear by a U.S. press that continues to not only platform the insurrectionists who spread election fraud lies leading to the violent events of January 6, but treats these lies as valid and meaningful opinions. That, understandably, has led to concerns that it's going to happen again. But worse.

Case in point is the Washington Post, which this week decided, for whatever reason, to give Senator Josh Hawley oodles of free publicity for his latest book. Washington Post Live hosted Hawley as part of a chat, providing him ample free marketing for his book complaining about the "tyranny of big tech" (tyrannically sold by Amazon, and heavily marketed by Hawley on Twitter). Not only that, the Post couldn't be bothered to craft an accurate bio for Hawley, instead using the one provided by his publicist that paints Hawley in an aggressively inauthentic light:

Not too surprisingly, the Post marketing doesn't really bother to inform readers that Hawley's anti-monopolist credentials are largely nonexistent. Like most of the GOP, it's literally impossible to find an instance where Hawley, for example, so much as criticized a telecom monopoly. And, like most of the press, it's rare you'll find outlets like the Washington Post pointing out that a primary platform of the GOP for forty fucking years has been to encourage monopolization, whether we're talking about telecom, airlines, banking, or countless other marginally competitive and largely broken U.S. business sectors.

The GOP isn't engaged in histrionics over "big tech" because it genuinely cares about monopolization or unchecked corporate power. Decades of policy history make it abundantly clear that's not remotely true.

The GOP is angry at big tech because a handful of social media companies belatedly started policing disinformation and race-baiting, cornerstones of party power and recruitment in the face of an aging, sagging, and shifting electorate. There are plenty of very valid criticisms of "big tech," but the U.S. press seems incapable of acknowledging that many of the GOP's concerns on this front aren't entirely in good faith.

NYU journalism professor Jay Rosen has long lamented the U.S. media's obsession with the "view from nowhere," and how this undermines accountability while letting bad actors off the hook. Rosen wasn't particularly impressed with the Post offering free book marketing to a guy who just got done spending months filling the American public's heads with dangerous fluff and nonsense, and shows absolutely nothing that could be mistaken as contrition in the wake of January 6:

Even if you just want to ignore that Hawley's anti-corporate power and anti-monopolist credentials are nonexistent, it shouldn't be that hard to see how treating Hawley's (read: Trump's) lies as valid can easily help undermine accountability for recent attacks on democracy. And while the Post did challenge Hawley somewhat on his role in the insurrection, the very act of free marketing and platforming Hawley then gives him ample opportunity to muddy the waters and distort his actual role in triggering the events of January 6, which he happily proceeded to do:

Rosen wasn't the only media scholar to take issue with the Post's decision to give Hawley's book free marketing in the wake of his attacks on democracy:

Comedians routinely critical of the U.S. press also took issue with the Post's decision to provide free book marketing to Hawley:

Of course the folks most in need of hearing and understanding this message, didn't hear it at all. In reality, Hawley has been facing nonexistent to very light accountability for lying repeatedly about the 2020 election results, which put the very fabric of democracy at risk. But for the "cancel culture" set the very act of questioning the Post's failures of accountability and journalistic standards is itself somehow viewed as "censorship":

Again, light accountability for lying about the results of an election is not "censorship." And criticizing someone for spreading lies that put elected officials' lives at risk shouldn't be seen as "conservative." One major reason America keeps stumbling through the same issues over and over without learning anything from the experience is because for the ad-based, impression-obsessed U.S. press. It's more profitable to heavily market Hawley and enjoy the resulting controversy than it is to do the right thing and not platform his dangerous lies at all. The age-old internet concept "don't feed the trolls" isn't adhered to because adhering to it harms profits.

That doesn't mean the Post shouldn't cover him when he does something of note (like being the only Senator to vote against a hate crime bill protecting Asian Americans), but they don't need to be helping him sell a book five months after his lies contributed to numerous human deaths, normalizing his behavior and setting an ugly precedent for something even worse just over the horizon.

Filed Under: big tech, censorship, insurrection, josh hawley, journalism, news coverage, platforming, promotion
Companies: washington post