New Bill Introduced To Study Impact Of SESTA/FOSTA On Sex Workers

from the good-to-see dept

A few months back, we were pleasantly surprised to see Rep. Ro Khanna announce plans to introduce a bill that would study the impact of FOSTA on sex workers. Earlier this week, he came through, introducing the SAFE SEX Workers Study Act, which he's introducing with Rep. Barbara Lee in the House. On the Senate side, Senators Elizabeth Warren and Ron Wyden have introduced the companion bill. You can read the bill here. It would task Health & Human Services with studying the impact of FOSTA on sex workers, in coordination with the Centers for Disease Control and the National Institute of Health.

The bill is quite clear in laying out the concerns these elected officials have about the overall impact of FOSTA:

“There has been a host of anecdotal reporting from sex workers and community health organizations that following the enactment of SESTA/FOSTA, sex workers have faced greater threats of physical and sexual violence, as they are increasingly pushed off on-line platforms and onto the streets to seek clients. Despite these reports, no national study has been conducted to assess the impacts of SESTA/FOSTA on sex workers,” said Rep. Ro Khanna. “Sex workers have relied on such internet platforms to screen clients and negotiate boundaries for consensual, transactional sex services, including condom use and other harm reduction strategies. While SESTA/FOSTA was intended to curb online sex trafficking, by banning the “promotion of prostitution,” a host of internet platforms relied on by sex workers have shut down. My bill would mandate the first national study investigating how the shutdown of websites in connection with SESTA/FOSTA impact the health and safety of people who rely on consensual, transactional sex. I’m proud to partner with Rep. Lee, Senator Warren and the many advocates on this critical issue.”

“For far too long, SESTA/FOSTA has demonized and harmed sex workers,” said Rep. Lee. “Instead of preventing sex trafficking, SESTA/FOSTA made it harder for sex workers to access critical health and safety resources. We need the full picture – that’s why I’m proud to work with Rep. Khanna and Senators Warren and Wyden on this legislation to study the full effects of SESTA/FOSTA. It’s imperative we ensure that everyone has the full picture when making reproductive health decisions.”

“As lawmakers, we are responsible for examining unintended consequences of all legislation, and that includes any impact SESTA-FOSTA may have had on the ability of sex workers to protect themselves from physical or financial abuse,” said Senator Warren. “I’m glad to be working with Representatives Khanna and Lee, and Senator Wyden to do just that with the SAFE SEX Workers Study Act.”

“Last year I warned that forcing websites to take down any mention of sex work would remove agency from sex workers and put them at great risk of violence and abuse, all while making it harder to catch sex traffickers and aid victims of human trafficking. So far, initial reports from cities across the country show that violence against sex workers is rising dramatically and there’s little evidence that this law is helping victims. Representatives Khanna, Lee and Senator Warren are taking the common-sense position that HHS should study the impacts of SESTA-FOSTA on the most vulnerable members of society, so that Congress can make informed policy decisions, rather than chasing knee-jerk responses,” said Senator Wyden.

As some are noting, this study could be a first step to repealing FOSTA-SESTA (though the law is still being challenged in the courts as well).

The bill already has a bunch of co-sponsors -- though I'll note that there are no Republican cosponsors, so the bill at this point is not bipartisan. Also of note, one of the cosponsors (as far as I can tell, the only one where this is true), Rep. Bonnie Watson Coleman of New Jersey, was also a cosponsor of FOSTA. Still, Senator Warren did vote for SESTA in the Senate, so it's good to see her appear to recognize that may have been a mistake. It's still not clear if this bill will go anywhere, but just the fact that some in Congress are recognizing that FOSTA may have put more people in danger (even as it was pitched as a way of "protecting" victims) is at least a good start.

Filed Under: barbara lee, elizabeth warren, fosta, health, ro khanna, ron wyden, sesta, sex workers, study

Elizabeth Warren's Feud With Facebook Over 'False' Ads Just Highlights The Impossibility Of Content Moderation At Scale

from the damned-if-you-do dept

You may have heard over the past few days about a bit of a feud between Presidential candidates -- mainly Elizabeth Warren -- and Facebook about how the company handles political ads with false information. It began a week or so ago when the Trump campaign started running a bunch of Facebook ads around impeachment, some of which were blatantly false, based on totally debunked claims. Facebook, however, just recently clarified its policy, noting that while it will block ads that its partner fact-checkers have determined to be untrue, that does not apply directly to political candidate ads themselves:

We rely on third-party fact-checkers to help reduce the spread of false news and other types of viral misinformation, like memes or manipulated photos and videos. We don’t believe, however, that it’s an appropriate role for us to referee political debates and prevent a politician’s speech from reaching its audience and being subject to public debate and scrutiny. That’s why Facebook exempts politicians from our third-party fact-checking program. We have had this policy on the books for over a year now, posted publicly on our site under our eligibility guidelines. This means that we will not send organic content or ads from politicians to our third-party fact-checking partners for review.

In response to this, Warren decided to hit back by deliberately posting a "false" ad to call out Facebook's policy (in this case, her ad declared that "Mark Zuckerberg and Facebook just endorsed Donald Trump for re-election." The ad then calls out Facebook's policy and attacks the company for its stance. Here's how it read:

Breaking News: Mark Zuckerberg and Facebook just endorsed Donald Trump for re-election.

You're probably shocked, and you might be thinking, "how could this possibly be true?"

Well, it's not. (Sorry.) But what Zuckerberg *has* done is given Donald Trump free rein to lie on his platform -- and then to pay Facebook gobs of money to push out their lies to American voters.

If Trump tries to lie in a TV ad, most networks will refuse to air it. But Facebook just cashes Trump's checks.

Facebook already helped elect Donald Trump once. Now, they're deliberately allowing a candidate to intentionally lie to the American people. It's time to hold Mark Zuckerberg accountable—add your name if you agree.

Except... it turns out that the latter part of Warren's "fake news ad" -- the part which she presents as truthful -- is actually false as well. As Facebook itself noted in a tweet (yes, in a tweet, from Facebook) directed at Warren, Trump is airing TV commercials with the same debunked claims in them on TV stations, and it's one of the most viewed ads:

In other words, the central claim from Warren's campaign -- that other providers, such as TV stations, would not allow such blatant lies in ads -- is pretty clearly untrue. And while some are arguing that Facebook pointing this out "backfired spectacularly", it didn't. It is true that Warren is now claiming that Facebook's argument supports her point, but I don't see that at all.

If anything, it shows the damned if you do/damned if you don't nature of content moderation.

Let's take a second to remember that it was just a few months ago that Warren got really angry at Facebook for temporarily blocking one of her ads. And that time Warren responded by arguing that Facebook should not be able to "shut down a debate" over a political topic. And, yet, in this case, when they won't shut down Trump's posts, suddenly she's mad about that too?

As Julian Sanchez rightly points out, no matter which way Facebook goes, it's going to get yelled at.

And this is the point that lots of us have been trying to make regarding Facebook and content moderation. If you're screaming about all the wrong choices you think it makes to leave stuff up, recognize that you're also going to pretty pissed off when the company also decides to take stuff down that you think should be left up.

Now, there is a consistent way to interpret Warren's position -- which is that in either case, Facebook is "too big" because (as she suggested earlier this year) it can "shut down" the debate on this topic. Except, that's also pretty obviously bullshit, because much of this debate actually happened... on Twitter. And also across lots and lots of media sites.

There are good reasons to be worried about Facebook's market position. There are good reasons to be concerned about the amount of lies that get flung around by political campaigns. But this whole debate over lies in ads is not a Facebook problem. If you want to get at the fact that politicians will lie, well, then you're going to need to take that up with the 1st Amendment. Blaming Facebook for taking the reasonable stance that it doesn't want to be the one directly judging whether or not a politician is being truthful is silly. If it had to review every single political ad for truthfulness, I doubt Elizabeth Warren would be very happy about it either. Hell, part of the problem is that "truth" is not an exact standard either. Some things are misleading, but "technically" true. Some things could count as "little white lies." Some could be blatant falsehoods. But where anything falls is often a matter of opinion, and Warren should actually be happy that Facebook is refraining from making a judgment call on the truthiness of political ads.

Filed Under: advertising, campaign ads, content moderation, content moderation at scale, donald trump, elizabeth warren, truth
Companies: facebook

Elizabeth Warren Wants Congress To Be Smarter About Tech... While Grossly Overstating Google & Facebook's Market Power

from the let's-start-at-home dept

So, this is good! Elizabeth Warren has announced that she supports bringing back the Office of Technology Assessment.

My anti-corruption plan reinstates and modernizes the Congressional Office of Technology Assessment (OTA), strengthens congressional support agencies, and transitions congressional staffers to competitive salaries so that Congress can act based on the best expertise and information available.

[....]

Reinstate and modernize the Office of Technology Assessment. The OTA was originally led by a bipartisan group of lawmakers, with votes divided evenly between Democrats and Republicans. The new OTA should be led by a single, independent director to ensure that increased partisanship does not prevent members of Congress from receiving the information they need. The OTA should also have the authority to self-commission reports and be equipped to respond to short-term requests from Members, such as preparing for hearings, writing regulatory letters, and weighing in on agency rulemaking, rather than largely limiting its efforts to lengthy long-term reports. And the OTA should have in-house experts on interdisciplinary issue areas so that it can provide information and analysis on issues like climate change and technology consolidation that do not fit within a single issue area.

That all looks good. Indeed, we've been calling for Congress to reinstate and modernize the Office of Technology Assessment for many, many years, so it's good to see Warren apparently on board with this plan (though I'll note that she does not appear to be a co-sponsor of an existing bill to help modernize the OTA.

She frames it, somewhat accurately, as a way to get beyond Congress relying on lobbyists and those with dodgy information. And that would be a good thing. But it does seem a bit ironic that the same day she puts out this plan about no longer having tech policy driven by dodgy one-sided information, Alec Stapp gave a detailed explanation of how Warren, herself, was basing a key claim for why Google and Facebook should be broken up on very, very dodgy information.

A big part of Warren's argument was that Google and Facebook are so dominant on the internet today, that they basically control the flow of information. She claimed that 70% of all traffic went through those two companies.

More than 70% of all Internet traffic goes through sites owned or operated by Google or Facebook.

Stapp decided to dig into that number and found... that while the data is not clear, it's likely to actually be less than 20%. That's a pretty damn big difference. Like we've seen in other studies where "big" stats are extrapolated from a single report that doesn't cover what people pretend it covers and are limited by small sample sizes or not representative samples, the same thing seems to have happened here.

And, like those other studies, this one involves a game of telephone as well. The number appears to come from a study from a web analytics company, Parse.ly, from 2015, looking at traffic sent to just 400 news publishers. This is not a random sample. That study showed that Facebook sent 39% of the traffic to the publishers in the sample while Google sent 34%. That was picked up on by a freelance blogger who posted a story on his own website claiming "GOOG and FB now have direct influence over 70%+ of internet traffic" which is not at all what the Parse.ly study meant or implied. From there, bastion of fact checking, Newsweek, wrote a piece about who controls the internet and cites the freelancer's blog. And that brings us back around to Warren, who cites the Newsweek piece.

Voila. A fake statistic laundered through four sources.

Stapp then uses Sandvine's much more thorough research to suggest that perhaps Google and Facebook drive a bit less than 20% of internet traffic.

As for Google and Facebook? The report found that Google-operated sites receive 12.00 percent of total internet traffic while Facebook-controlled sites receive 7.79 percent. In other words, less than 20 percent of all Internet traffic goes through sites owned or operated by Google or Facebook. While this statistic may be less eye-popping than the one trumpeted by Warren and other antitrust activists, it does have the virtue of being true.

So, yes, it would be good if tech policy was based on more realistic information -- and bringing back the OTA would be great. Then, perhaps, Elizabeth Warren wouldn't also be relying on dodgy stats passed around through bad reporting.

Filed Under: congress, elizabeth warren, monopoly power, ota
Companies: facebook, google

Do People Want A Better Facebook, Or A Dead Facebook?

from the there's-a-difference dept

The question in the title is one that I actually think is worth discussing, because seeing the reactions to both Mark Zuckerberg's announced plans for greater privacy in Facebook's messaging tools, and to Elizabeth Warren's not very well thought out plan to break up Facebook, it seems quite clear that some people just want the company dead at any cost. Indeed, I've seen a lot of people pointing to this AP article, derisively, about how Facebook's plans for more privacy are all a misleading game because the the company might profit from it.

As if that's a bad thing.

For years, we kept getting told that the reason big companies like Facebook and Google didn't treat user privacy very carefully was because there was profit in scooping up all our data, and that there were no profits in privacy. This was seen as a problem. Yet, now that Facebook is exploring ways to provide more privacy and snoop less, some are still complaining that it might profit from it? Shouldn't we want to see business models that align with protecting user privacy? Shouldn't we want companies to realize that protecting user privacy both can and should be profitable as well? Won't that encourage companies to move away from data surveillance business models into ones that are more respectful to end users?

That's why I highlighted the positive concepts in Zuckerberg's post. Because I think it's good to encourage companies to go in the right direction.

But many people, clearly, do not agree. And, as far as I can tell, the thinking is that they don't care about a better Facebook or a Facebook that protects privacy. All they want is a damaged or (even better) a dead Facebook. And, frankly, that kind of thinking makes no sense to me. Look, I'm all for something better coming along and killing off Facebook that way. I'm all for creative destruction -- especially the kind that destroys big stodgy businesses by giving their customers a much, much better experience. But, focusing just on killing off Facebook for no reason other than "company bad" doesn't make much sense. Like it or not, billions of people use Facebook.

And most people can agree that Facebook has a history of fairly egregious behavior at times, but slamming the company for finally doing something positive, doesn't seem particularly productive. It doesn't encourage other companies to do the right thing either. Sure, it makes sense if your goal is just a "dead Facebook," but arguing for a "dead Facebook" for no other reason than you just don't like Facebook is irrational. I want to see more competition in the marketplace, and I'd love to see Facebook not be as dominant. But I'd also greatly prefer a Facebook that is a good actor, rather than a bad one.

Filed Under: antitrust, big tech, consumers, elizabeth warren, mark zuckerberg, privacy
Companies: facebook

Everyone's Overreacting To The Wrong Thing About Facebook (Briefly) Blocking Elizabeth Warren's Ads

from the again-and-again dept

I've made it clear that I don't think much of Elizabeth Warren's big plan to "break up big tech," which seemed not particularly well thought out and unlikely to accomplish its actual goals. Even so, I certainly cringed upon hearing the news that Facebook had blocked an ad that Warren's team had taken to promote the plan. I mean, come on. Here is Warren, talking about how Facebook is too powerful and can potentially influence policy by choosing what it allows and what it doesn't allow... and Facebook up and hands Warren the most beautiful gift she could ever hope for: blocking her own ad for her policy to break up Facebook. Basically everyone immediately spun the story as Facebook trying to censor this call to break up itself.

It sure looked bad.

Of course, the reality, again, is a lot more nuanced. And, while everyone will ignore this (and I'm sure some people will make bogus accusations in the comments), the reality is that this isn't proof of Facebook's nefarious attempts to censor people it doesn't like or messages it doesn't like. It's proof of the impossibility of content moderation at scale. As Facebook explained, the original ad violated a Facebook policy that had nothing to do with the message it was sending: you're apparently not allowed to use Facebook's logo in an ad:

“We removed the ads because they violated our policies against use of our corporate logo," the spokesperson said. "In the interest of allowing robust debate, we are restoring the ads.”

This is, indeed, true. If you look at Facebook's ad policies it shows the following:

You are, in fact, not allowed to use a Facebook logo in an ad. Warren's ad violated that. Of course, in this context, it looks really, really bad. As Buzzfeed's Ryan Mac noted, this policy -- "which was ostensibly put in place for good reason, is interpreted without nuance."

Yup. Except, here's the thing, as we discussed on our podcast last year, it is literally impossible to invoke nuance when discussing moderation of content at scale. To handle the kind of scale that Facebook and other giant platforms deal with, you need to have thousands (and maybe tens of thousands) of content moderators, and they need to be trained in a manner that they will apply the same rules pretty consistently (which is already an impossible standard). In such a world, there is literally no room for nuance. A system that allows nuance is one that allows arbitrary decision making... leading to just more complaints of inconsistent content moderation.

And, frankly, for all of Warren's attempt to frame this as evidence that Facebook has "too much power" and is "dominated by a single censor," what actually played out suggests why that's inaccurate. These ads weren't getting much attention. Indeed, they had almost no money behind them. According to Buzzfeed, these ads weren't designed to reach a wide audience:

Facebook’s ad archive shows that the four ads had less than $100 in backing each, with three garnering fewer than 1,000 impressions and one garnering between 1,000 and 5,000 impressions.

And then what happened? The ads got taken down, and rather being "censored," the story went crazy viral through other sources, almost as if the Warren campaign maybe found some silly rule to violate just to make this kind of thing happen.... And, of course, the Streisand Effect then guaranteed that for basically a tiny ad spend, a ton more people now became aware of these ads.

I fully expect that the details and nuance here will be ignored by most -- and we'll keep hearing for months (or, possibly, years) about how this somehow "proves" Facebook either "censors critics" or is too dominant and can stifle a message. And, yet, all of the details show something very, very different. Content moderation at scale is impossible to do well, and when Facebook does (for totally different reasons) try to stifle a message (after receiving tons of pressure from people like Elizabeth Warren to better police political ads...), it suddenly became headline news across the political and tech news realms.

Again, there are all sorts of reasons to be concerned about Facebook's market position. And I'd love to see more competition in the market. But, can we at least not jump on the easy narrative when it's wrong, even if it "feels" good?

Filed Under: advertisements, antitrust, censorship, content moderation, elizabeth warren, logos, message, policies, power
Companies: facebook

How To Actually Break Up Big Tech

from the protocols,-not-platforms dept

Last week, I wrote about Elizabeth Warren's big plan to break up big tech and why I thought her plan (a) would not work and (b) was based on a fairly shocking number of factual errors. Not everyone agreed (indeed, many people have disagreed). Many of those who disagreed, though, seemed to only do so because they hate the big internet companies, and thus they seemed happy about any attack on them, no matter how pointless. Others attacked me personally, insisting that my detailed explanation of why I found Warren's plan laughably naive was really just because I "love big tech." Finally, some demanded to know what my plan would be. And while I think it's somewhat silly to imply that you cannot critique a bad plan if you can't come up with another plan (sometimes, doing nothing is the best plan), I've been meaning to write some more about this anyway, and here's a good opportunity.

Contrary to the strawman beliefs some insist I have, I am quite worried about the market power of many large companies these days, and how that might be stifling competition. As I've argued for over twenty years on this site, the single biggest driver of innovation is competition. And I want to see more competition to get more innovation. My issue is that doing so through regulatory means is fraught with significant risks -- ones that could very much do the opposite. Highly regulated industries are not known for being competitive and innovative for the most part. They tend to enable only big entities -- who can deal with the regulations -- to exist and crowd out startups. On top of that, thanks to regulatory capture and the crony nature of our political system these days, you also end up with just a few big companies who now focus on what we've referred to in the past as political innovation rather than technological or entrepreneurial innovation. It's a recipe for stagnation, not innovation and competition.

My second big concern with the plans people have been floating is that they ignore the reality of why some of the tech companies have gotten so big and so successful. For the most part, they're in highly networked industries, where it's not just "winner takes all" but in many ways size and dominance of the network is fundamental to their operation. Network effects can lead to dominant positions, for the fairly obvious reason that the bigger they are, the better they are for everyone involved. For all of Warren's talk of breaking up companies, note that she was only talking about chipping off a few of their peripheral acquisitions: not taking an axe to their core business.

And that's because she recognizes that as much as people scream to "break up big tech," there's no reasonable way to do that without making the overall offerings a lot less useful for the public. How do you break up Facebook's social network? Do you say half the world can't use it and have to use the BookFace spinoff instead? You could, of course, cleave off Instagram and Whatsapp, but that doesn't really change Facebook's overall global dominance. The reason Facebook is so powerful is that it connects the entire globe. There is no place to make a reasonable cut to split that up. Google is powerful because of its search engine. How do you break that up? Do you say for searches on topic X you use Google, but for searches on topic Y you have to use Elgoog? You could cut off Doubleclick from Google, but then you still have a massive search engine and a massive internet ads company. And while I guess you could cut off Amazon's web services piece from it store, that doesn't change the main "competition" complaint most people have about Amazon, which is the size of its footprint in e-commerce. But again, it got there not through predatory practices, but because it's so convenient and easy for most people that they actually get tremendous benefit from it.

But, that presents a dilemma. And while lots of people seem to think there are easy answers to this (just like they think there are easy answers to "content moderation") there are not. This is a really complex issue, and like nearly all super complex issues, the easy solutions tend to look appealing, while actually making everything a hell of a lot worse.

So I will make a suggestion for how I'd like to "break up" big tech, while admitting that since this is a complex topic with no easy answer, I could be wrong. But so could everyone else. And I've been digging through the details on this stuff for many years now, and I do think my plan makes the most sense. Later this year, I have a big academic paper on this topic coming out with a lot more details, so in the meantime expect a bunch more posts on this topic leading up to that.

The idea goes back to one I raised back in 2015 in the context of content moderation: that we need to move to a world of protocols, not platforms. This is the world of the earlier internet, dominated by open protocols with a variety of competitive apps built on top. Instead of Twitter, there was IRC. Instead of Reddit, there was Usenet. And you had a choice of clients and servers and could move around if you didn't like the policies of one or the other.

In the world of protocols, you still get the global connectivity benefit, but without the lockdown control and silos (and, potentially, the questionable privacy practices). In a world of protocols, there may be a global network, but you get competition at every other level. You can have competitive servers, competitive apps and user interfaces, competitive filters, competitive business models, and competitive forms of data management. If you don't like how one app provider handles privacy, you move to another -- but because you're using the same protocol, you don't lose everything you're doing with it, you're just entering through a new door that you like better. If you don't like the way one provider handles content moderation, you change it or move to another.

And, yes, I noted competition at the business model level as well -- because that's important. We could see lots of interesting attempts at creating different services with different business models that go beyond the limited options (pay with your data, freemium, advertising, etc.) today. One option might be in the form of cryptocurrency or token tied to the protocol. While I can already hear half of you rolling your eyes, this is a model that is at least worth exploring. A cryptocurreny or token tied to a protocol takes away much of the incentive for the really terrible business models everyone complains about. You don't need to spy on everyone if just getting more usage in general increases the value of the currency. And encouraging business models that don't require collecting data on everyone is something we should celebrate, not mock. But, cryptocurrency isn't the only such solution either. I've been playing around with a few attempts at new protocol-based systems these days that purposely eschew the cryptocurrency/token model, and are exploring other models instead. The point is that there are other ways of making this work, and more options is better.

However, if we were in a world where the major services and functions we used online were protocols instead of platforms, it would move the power and control out to the ends of the network, rather than centralizing it on the servers of a few giant companies. We'd still get the benefits of the network effects of the systems, but without the centralized control. We'd still be able to get innovation at various levels, but without relying on a single entity to determine what's best. We'd still get the convenience of powerful services, but without the opaque decision making of a single entity. It's an approach that could actually work.

That still leaves the question of how do we get there from here. And there are a lot of challenges in that. But I don't think declaring large platforms as "platform utilities" gets us any closer to that vision -- and if anything seems to drive us away from it. I'll be writing some more posts on how we get towards a world of protocols instead of platforms, and the many hurdles in the way, in the coming weeks and months. However, there are two key approaches to making it happen: either bottom up or top down. And both could work -- but both could be difficult.

The bottom up approach is people designing new protocols from scratch and building a new userbase. That presents a huge number of challenges in terms of building up the userbase, but it's not impossible. New startups pop on the scene all the time, and some of them even succeed. And I already know of at least 6 or 7 attempts at building these kinds of protocols from scratch. And while they're all fairly small, some are building up at least some traction and are interesting to follow and experiment with. The benefit to this approach is you have no legacy to deal with, making things easier to design and the entire setup more nimble. The cons, obviously, are the lack of a userbase and the basic "empty room" problem: how do you get someone to use a social application when there's nothing to do there and no one to connect with?

The "top down" approach would be to convince an existing internet giant to move towards such a world. It's unlikely that any company today would agree to flip the switch entirely and open up their platform into an open protocol. But I would argue that it's not as far out and unrealistic an idea as many assume. In the last six months, I've had in-depth conversations with four large internet companies about this approach, and they were surprisingly more open to at least considering what it would mean than I initially expected. And while I may go into more detail in later posts, I'll give three quick reasons why the big tech firms may actually decide it makes sense to give up their silos in the long run:

1. It gets them away from proposals like Warren's to "break up" their business, which they know would create a giant mess. By opening up their core code for anyone to use and pushing the power out to the ends of the network, the companies are effectively "breaking themselves up.
2. It takes them off the hook for all of the platform liability that is getting dumped on them these days. There are all sorts of competing and impossible demands on these platforms concerning how they moderate content, with tons of people being upset no matter what decision is made, and various people and (especially) politicians now looking to dump massive liability on the platforms themselves. If they turn their system into a protocol, they actually get rid of much of that headache. There will still be questions about content moderation, but it becomes a very different problem -- one to where there can be many different approaches, with competition at the filter level. We didn't used to blame email providers for spam, but thanks to the open protocols of email, it allowed all sorts of innovative spam filtering services to spring up. Given how much of a headache content moderation and platform liability has become of late -- and the fact it's likely to become an even bigger headache over time -- at some point, companies are going to realize an open protocols approach is a solution to that problem.
3. The possibility of new business models. This is important. Lots of people insist that no giant platform would willingly give up so much control, because it's entirely antithetical to business models built off of collecting all the data. And that's true. But, that's why I'm eager to see how new business models shake out in this space, because it might lessen the "we collect all your data" business model reliance and open up new opportunities that could even be more lucrative (especially if they create opportunities where people start abandoning services that don't respect their privacy).

There still are plenty of reasons why the big platforms are unlikely to do this in the near future (and I'm pretty sure a clueless Wall St. would punish any company that tried), but as various trends continue to move along, it may become more and more appealing.

Notice that all of that could very well happen without a massive policy intervention from the government. However, there are certainly policy ideas that could help move this along a lot faster. Of course, moving these policy proposals forward would require a more detailed understanding of how technology and technology innovation really works, because the key isn't enforcing breakups or trying to codify "fairness" guidelines with new rules -- it's taking away some of the existing legal and regulatory tools that make it easy and appealing to build vertically-integrated walled gardens, which aren't always obvious to people who aren't immersed in the tech policy space since they are presented as having other purposes:

1. Get rid of most patents (if we're talking real antitrust, we'd start by getting rid of these government-granted monopolies). Perhaps you could start with "software" ones, though defining what is a "software" patent is hard enough. Patents hinder competition and would create huge problematic thickets in a world of protocols where we want widespread competition at every other level. Without patent thickets and patent trolls, we'd see a lot more competition, especially in taking different approaches to providing interfaces and filters for the same kinds of content.
2. Dump the ridiculous CAFC ruling on API copyrights and make it clear that there is not copyright on interfaces, meaning that you could actually have much more interoperability and people building new systems to connect to third party products.
3. Get rid of Section 1201 of the DMCA and its anti-circumvention rules. Again, this blocks competition and interoperability. Indeed, Section 1201 is a huge barrier to this kind of future, in that it would allow companies to effectively block out competitive third party services through "technological protection measures." Without 1201, it would make it much easier for almost anyone to create a new competitive interface for an existing protocol-based service.
4. Make sure that full encryption is supported as a fundamental right of end users. This becomes important, as a protocol-based system should also lead to a booming new market for databanks that will store your encrypted data, giving you total control over it and who it is shared with (and for what purposes). But if there are mandated backdoors or some other crap, you completely destroy such a market. Encryption makes this possible.
5. Get the SEC to stop thinking of cryptocurrency as just a financial tool and to recognize it's something entirely different. Sure, you need them to deal with the out-and-out scams, but as it stands right now, the SEC is talking about crazy ideas like how any crypto system should need to go through "clinical trials" like drugs. Ideas like that would simply snuff out any possibility of the above ever happening. People don't realize how much of this future may be held back by a myopic SEC who is viewing all of this through a single lens.

There's more, but those steps would open up a lot of opportunity for a protocols-based system to take hold. And when it really happens, no one's going to worry about "breaking up" big tech anymore, because it won't even be necessary.

Filed Under: big tech, competition, copyright, elizabeth warren, encryption, end users, filters, innovation, interoperability, patents, platforms, protocols
Companies: facebook, google

It Sure Sounds Like Elizabeth Warren Wants To Bring The EU Copyright Directive Stateside

from the maybe-think-on-that-a-bit-more dept

Last week we wrote a critical analysis of Elizabeth Warren's big plan to break up "big tech." As we noted, there was a lot in the plan that was nonsensical, unsupported by the facts or just plain confused. We'll be talking more about some of these ideas a lot over the next few years I imagine (stay tuned), but there was one line in Warren's plan that deserved a separate post: it appears that a part of Warren's big attack on big tech... is to give a massive handout to Hollywood. Here's the line:

We must help America’s content creators — from local newspapers and national magazines to comedians and musicians — keep more of the value their content generates, rather than seeing it scooped up by companies like Google and Facebook.

That may sound rather basic and lacking any details, but what's notable about it is that the language reflects -- almost exactly -- the language used in the EU in support of the absolute worst parts of the EU Copyright Directive (specifically, Article 11 and Article 13). For example, this Q & A page by the Legislative Affairs Committee of the EU Parliament uses quite similar language:

The draft directive intends to oblige giant internet platforms and news aggregators (like YouTube or GoogleNews) to pay content creators (artists/musicians/actors and news houses and their journalists) what they truly owe them;

Why, that sounds quite familiar. Indeed, Warren's announcement even uses "keep more of the value their content generates," which appears to be a reference to the completely made up notion of a "value gap" between what internet platforms make and what they should be paying artists.

It's no secret, of course, that those pushing strongest for Articles 11 and 13 plan to bring them to the US as soon as possible. Indeed, that's why we pointed out that it is quite important for Americans to pay attention to what's happening there -- as it's likely to follow across the Atlantic before too long. The fact that a leading Presidential candidate is already mimicking the language of such controversial European legislation is quite amazing, and suggests a Warren campaign that is very out of touch with what people actually want from their internet.

It's also kind of odd for someone who paints themselves as a "progressive politician" who will stand up "against big business" to be hinting at policies that are obviously designed solely as a wealth transfer mechanism to the giant Hollywood studios, major record labels, and large newspaper publishers. It's difficult to square that position with helping the little guy.

Similarly, one of our big concerns with Articles 11 and 13 is that, by their very nature, they will increase the monopoly issue. They are rules that only make sense if you have a few giant companies on each side negotiating with one another -- rather than a large number of competitors, and a wide variety of independent creators. So, it's doubly bizarre that Warren would include this suggestion in her big post about how terrible monopolies are and how she needs to break up big tech. Copyright-directive style proposals won't do that. They'll simply reinforce the dominant position of the big companies by making it nearly impossible for startups to even enter the market.

Filed Under: antitrust, article 11, article 13, artists, break up big tech, content creators, copyright, elizabeth warren, journalists, value gap
Companies: facebook, google

Elizabeth Warren Wants To Break Up Amazon, Google And Facebook; But Does Her Plan Make Any Sense?

from the tell-us-how-you-really-feel dept

This isn't necessarily a big surprise, given that she's suggested this many times over the past few years, but 2020 Presidential candidate Elizabeth Warren has just laid out her plan for breaking up Amazon, Google and Facebook. It's certainly worth reading to understand where she's coming from, and some of the arguments are worth thinking about -- but much of it does feel like just grandstanding populism in front of the general "anti-big tech" stance, without enough substance behind it.

Twenty-five years ago, Facebook, Google, and Amazon didn’t exist. Now they are among the most valuable and well-known companies in the world. It’s a great story — but also one that highlights why the government must break up monopolies and promote competitive markets.

I find this a very odd way to open this proposal. I don't see how the first sentence supports the second. Indeed, the first sentence would seem to contradict the second. Twenty-five years ago those companies didn't exist, and if you asked people what tech companies would take over the world, you'd get very different answers. Technology is an incredibly dynamic and rapidly changing world, in which big incumbents are regularly and frequently disrupted and disappear. One of my favorite articles to point people to was a 2007 article warning of the power of a giant monopolistic social network that would never be taken down by competition. That social network? MySpace. The article briefly mentions Facebook, but only to note that it "will always be on MySpace's periphery."

Let me make my position clear on all this too: I am always supportive of greater competition, and have always been a huge supporter of disrupting incumbents, because I believe that's how we get to better innovations. But I also believe that this is rarely done by government intervention, and usually comes from new technologies and new innovations in the marketplace. For years now I've been talking about why the real way to "break up" big tech platforms is to push for a world of protocols, rather than platforms, which would push the power out to the ends of the network, rather than keeping them centralized under a single silo with a giant owner.

But I fear that nearly all of these plans to "break up" big tech actually make that harder. It doesn't open up new opportunities for a protocol-based approach, and simply assumes that the world will always be managed by giant platform companies -- just slightly smaller, and highly regulated, ones. And that might actually lead us to a much worse future, one that is still controlled by more centralized systems, rather than more decentralized, distributed protocols where the users have power.

The internet is a constant challenge with lots of new upstarts hoping to disrupt the big guys. And sometimes it works, and sometimes it doesn't. We should be wary of companies with too much power abusing that position to block competition. And I'm certainly open to looking at specific situations where it's alleged that these companies are blocking competitors, but a general position that says breaking up the internet giants seems more opportunistic and headline-grabbing than realistic.

In the 1990s, Microsoft — the tech giant of its time — was trying to parlay its dominance in computer operating systems into dominance in the new area of web browsing. The federal government sued Microsoft for violating anti-monopoly laws and eventually reached a settlement. The government’s antitrust case against Microsoft helped clear a path for Internet companies like Google and Facebook to emerge.

Two things on this. First, Microsoft was clearly engaged in anti-competitive practices that were designed to restrict competition and harm consumers. There was clear evidence of the company proactively seeking to undermine competitors. There is (to date!) little such evidence of the same thing with the big internet companies. It is entirely possible that such evidence will eventually be found, and if that's the case, then it's reasonable to punish the companies for such practices. But, to date, all of the examples people cite as "evidence" of anti-competitive practices by the big internet companies really looks like reasonable steps to improve consumer welfare with their products (i.e., the opposite of what Microsoft was doing in the 90s.)

Second, I know some may disagree, but I find it difficult to believe that the government's antitrust case against Microsoft truly "helped clear a path" for Google and Facebook. After all, that antitrust case fizzled with the DOJ, despite "winning" the case, eventually getting basically no real concessions from Microsoft at all. The argument that some will make was that merely being involved in the antitrust case helped clear the path by (a) distracting Microsoft and forcing it to spend a bunch of resources on fighting the DOJ and (b) by making the company more hesitant to continue its historical practices, but I'm not sure there's much evidence to support either of those claims. Microsoft fell behind Google and Facebook because the company was structurally oblivious to the power of the internet, and when it finally realized the internet was important, really couldn't make the necessary shifts to be a truly internet native company. Yes, it took over the browser market, temporarily, but was easily beaten back when better browsers came on the market.

The story demonstrates why promoting competition is so important: it allows new, groundbreaking companies to grow and thrive — which pushes everyone in the marketplace to offer better products and services. Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?

Again, this seems to contradict the larger message here. If Microsoft were a stronger company, then, uh, wouldn't that mean Google had less dominance?

Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy. They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.

It may be true that they have too much power. But the way to deal with that is by encouraging more innovation. A heavily regulated market... tends not to do that.

As for Warren's actual plan, it has two steps:

First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.

Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”

These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.

So, first thing on that: passing legislation is the job of Congress, not the President. And Warren is already in Congress. So if this is part of her Presidential platform, it seems like, maybe she should start by introducing such legislation now, while she's actually in the legislative body.

Second, while "fair, reasonable, and nondiscriminatory dealing with users" sounds nice -- and is used in other things such as FRAND patent licensing -- it's not entirely clear what it truly means in these situations. Everyone likes the words "fair," "reasonable" and "nondiscriminatory," but in the context of users on a platform, does it mean that internet platforms can no longer ban trolls for harassment? Because right now there are a lot of trollish people who are insisting that being banned from Facebook, Twitter or YouTube is unfair, unreasonable and discriminatory. Indeed, this seems like a huge gift to the trolls and grifters who pretend to be "conservative" and then whine when platforms cut them off. Certainly, at the very least this would lead to a huge burst of such lawsuits, as Warren's plan allows basically anyone to sue over this:

To enforce these new requirements, federal regulators, State Attorneys General, or injured private parties would have the right to sue a platform utility to enjoin any conduct that violates these requirements, to disgorge any ill-gotten gains, and to be paid for losses and damages. A company found to violate these requirements would also have to pay a fine of 5 percent of annual revenue.

This is a recipe for insane amounts of litigation -- often vexatious litigation, just seeking to ding a company for being "unfair" in its choices.

Incredibly, this includes "search results." Warren specifically calls out Google search as a "platform utility," and says that under her plan:

Google couldn’t smother competitors by demoting their products on Google Search.

And that sounds good if Google was legitimately "smothering competitors" by "demoting their products on Google search" but there's no evidence that it does. The very nature of search is that Google is expressing its opinion by ranking the search results in the order it thinks best serves you. If it believes that your particular site is not relevant, it's going to demote it. But, under Warren's plan, if you're not showing up at the top of Google results, you can sue for massive damages. In other words, SEO-by-litigation and anyone who isn't happy with where they show up is going to sue.

Indeed, in her plan, she links to the big NY Times article about the site Foundem that has been at the center of various antitrust challenges against Google over the past decade. And, as we wrote all the way back in 2010, Foundem's argument makes no sense. The company made a shopping search engine, and insists that it was anticompetitive that Google's search engine kept dropping Foundem's site in Google's search results further and further. But the reason for that was that when people were searching on Google for products, they wanted links to actual products and not to another search engine. Foundem's search results dropped not because Google suddenly feared competition from Foundem, but because pointing users to another search engine was a bad experience for users. Back in 2009 there was a great analysis that explained why Google downranked Foundem and it had nothing to do with competition, but because Foundem was a crappy link directory (with affiliate codes attached) that was basically just a spam site hoping to live off of Google traffic.

Now imagine if every such spam company could now sue Google for not ranking high enough? Is that really the world we want?

The second part of Warren's plan is to break up already consummated tech merger deals:

Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.

Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers, including:

Amazon: Whole Foods; Zappos
Facebook: WhatsApp; Instagram
Google: Waze; Nest; DoubleClick

Unwinding these mergers will promote healthy competition in the market — which will put pressure on big tech companies to be more responsive to user concerns, including about privacy.

First of all, I should note that just recently lots of people were totally up in arms over Donald Trump supposedly trying to interfere with the DOJ's analysis of the AT&T / Time Warner merger. And I'm curious if those people feel the same way about a potential President Warren announcing ahead of time -- without any actual investigation by a supposedly independent DOJ -- that it's okay to declare that they should be broken up? It certainly seems like the same form of bogus interference, even if for different reasons. The DOJ is supposed to be an independent agency for a reason. We shouldn't cheer when Donald Trump ignores that and we shouldn't cheer when any other President or Presidential candidate does it either.

Second, while I might find myself much more supportive of a more aggressive DOJ that blocks future acquisitions by these companies, I'm not sure I see how the specifically listed divestiture plans would... do much of anything (with the one possible exception of Google/Doubleclick, which I'll get to). While I'm sure that Amazon, Facebook and Google would grumble about breaking off all of the others, for the most part, all of the listed divestitures involve companies that were mostly left alone and run as separate subsidiaries, which don't necessarily have much to do with any of those companies' core business. Sure, there might be some revenue or growth hits in spinning those off, but it doesn't really change their fundamental ways of doing business. Amazon loses Zappos? Meh. It'll still sell lots of shoes and maybe ramp up its efforts there in a way that ends up making Zappos tough to sustain by itself. Google loses Waze? Well, it already has Google Maps which probably has more users anyway.

Facebook might be a little different, since Instagram and Whatsapp clearly seem to be a key part of Facebook's future strategy, but at least for now they're pretty separate.

The Google Doubleclick one could be a bigger deal, since that is a core part of Google's business. Warren's "plan" talks about Google buying up DoubleClick as if that were done for anticompetitive reasons, and pretending that the DOJ "waved through" the deal while ignoring the monopoly issues, leaving out the fact that it happened way back in 2007 when the marketplace was very, very different, and Google's current position was far from certain. And while Doubleclick, as part of Google, may end up handling a lot of the ad serving market, there are tons of alternatives. The online ad market is crammed with tons and tons of companies. It's not difficult to find confusing maps laying out the state of the market -- and many companies are looking to take down Google Doubleclick, which is often seen as the provider of last resort (it works, but the quality is shit and the payouts are worse).

In other words, this entire plan gets headlines (duh) because so many people are (perhaps reasonably!) angry at the power of big tech companies. But, very little in the actual plan makes much sense. The "platform utility" idea will lead to massive, wasteful, stupid lawsuits. The unwinding of old mergers will involve interfering with an independent agency, and seem unlikely to do much to change the main "concerns" that Warren raises in the first place.

And, again, none of this is to say we shouldn't be concerned about big internet companies with too much power. It's a perfectly reasonable concern, but just because you want to "do something" and "this is something," doesn't mean that it's the something we should do. The way to attack the positions of these big internet companies is to enable more competition -- and you do that by encouraging alternatives in the marketplace. This is why I'm actually hopeful that some of these companies will actually start to explore an idea of moving to protocols, rather than owning the whole platform themselves, or that we'll see new protocols springing up.

Meanwhile, if Warren were truly concerned about "monopolies" and a lack of competition, why isn't her plan looking at the lack of competition in the broadband and mobile markets -- cases where we have legitimate competition problems due to bad regulatory policies going back decades?

Filed Under: antitrust, big tech, breaking up, doj, elizabeth warren, fairness, internet, platform utilities
Companies: amazon, facebook, google

GOP Senate Streisands Elizabeth Warren And Coretta King In Attempt To Silence Her

from the oops dept

We've covered all kinds of stories about the Streisand Effect here at Techdirt, for the obvious reason that our overlord originally coined the term. From individuals to professional sports leagues to celebrities, there is something of a pantheon in these pages of those that attempt to silence speech or coverage they don't like which instead results in much wider coverage of that speech or coverage. But I can't seem to find an instance where we've had the opportunity to ding an entire wing of a congressional body for failing to understand how all of this works before.

And so it is with great pride that I am able to bring you the story of how the Senate silenced Elizabeth Warren as she read a letter authored by Martin Luther King Jr.'s widow during the debate over confirming fellow Senator Jeff Sessions as Trump's Attorney General.

The rebuke of Warren came after the Massachusetts Democrat read a letter written 30 years ago by Coretta Scott King, the widow of Martin Luther King Jr., opposing the nomination of Jeff Sessions for a federal judgeship. Warren cited the letter during a debate on the nomination of Sessions -- now an Alabama senator -- as Donald Trump's attorney general. Reading from King's letter to members of the Senate Judiciary Committee in 1986, Warren said: "Mr. Sessions has used the awesome power of his office to chill the free exercise of the vote by black citizens in the district he now seeks to serve as a federal judge."

Republicans cried foul -- charging that Warren violated Senate rules against impugning another senator. A vote along party lines upheld that decision, turning what could have been an ordinary late-night partisan floor speech for political devotees into a national story.

We'll get to that last bit in just a moment, but let's not fail to point out how silly the application of this rule is and what it means for the prospect of sitting Senators filling cabinet positions. If Senate rules prohibit another Senator form impugning a cabinet appointee during the debate over that appointee's cabinet nomination, what would be the point of the debate? And keep in mind that Warren was not going on some self-authored tirade. She was reading a letter from the widow of the single most recognized civil rights leader, which was sent to Congress in the past -- though Senator Strom Thurmond refused to put it into the Congressional record. That letter still had a hand in defeating a previous nomination of Sessions to judgeship. In February, which is Black History Month. This is banal as it gets.

Separately, Senators complained about Warren quoting former Senator Ted Kennedy on his opposition to Sessions back in 1986. So, apparently the rule is that even if you're quoting former Senators and people closely associated with the civil rights movement, you can't say anything that might upset a sitting Senator, even if it was discussed previously in the Senate and now as part of the debate over his own nomination to be Attorney General.

Of course, by invoking this rarely used Senate rule, one which has previously been ignored, Senator Warren and King's letter is splashing headlines all over the place. On top of that, Warren and others rushed to social media circles to make sure the letter was heard by everyone who would listen. Which, given the way all of this is trending on social media, was a great many people.

Warren went straight from the Senate floor to a call-in appearance on Rachel Maddow's MSNBC show, a favorite of progressives. "I've been red-carded on Sen. Sessions. I'm out of the game of the Senate floor," she told Maddow.

She also read King's letter outside the Senate floor in a Facebook live video.

That Facebook live video now has over 7.5 million views. That seems like approximately 7.5 million more people than would have watched Warren's hour-long speech on C-SPAN.

We can leave politics aside completely and still shake our heads at how badly this attempt to silence Warren and the reading of the letter has gone for those that attempted the silencing. This is pure Streisand Effect at work, and it's being supercharged by those that raised the objection to the letter's reading, who don't seem to understand how easily this situation and their own words will be used against them.

Senate Majority Leader Mitch McConnell defended evoking Rule 19, a rarely evoked chamber regulation that prohibits senators from impugning each other.

"She was warned. She was given an explanation. Nevertheless, she persisted," the Kentucky Republican said on the Senate floor, delivering an instantly classic line -- the kind liberals imagine being replayed ad nauseum in TV ads in a future presidential campaign.

Again, this isn't about political teams. If you're in favor of Sessions, if you're a Republican, if you're a Trump voter, you should still be able to understand how bungled this whole thing was. Had there been no attempt to silence Warren, coverage of the letter being read likely would have registered as a curiosity at most. Instead, this thing is everywhere. Including below.

Filed Under: coretta scott king, elizabeth warren, jeff sessions, mitch mcconnell, rule xix, senate, streisand effect, ted kennedy

Elizabeth Warren Introduces Bill To Make Tax Season Return-Free

from the intuit-ive-thinking dept

Yay, it's tax season again! As our American readers will know, this is the wonderful time of year when we scramble to get all of our taxes and deductions paperwork in order, take them to some storefront that looks like a military recruitment center, push all of those papers in front of someone that looks like they just graduated from college, and scream, "You figure it out!" For our foreign readers, I should explain that we do this because our tax code is more complicated than the plot of Game of Thrones, our tax authorities are every bit as ruthless as that same series, and we've collectively allowed our citizens' payment of due obligations to become a for-profit industry. But seriously, though, come to America. It's great. I swear.

Several times in the past, some members of our government have attempted to lessen the burden we bear to pay our taxes. It never seems to work because the industry that makes money off of this tax system -- the tax preparation people and software makers -- lobbies to keep filing free taxes a pain in the ass, directly scaring the public into thinking the government will over-charge them, and then indirectly and unethically having sockpuppets do the same. It's in this way that you have a free-to-file federal tax program that roughly two-thirds of the public would be perfectly qualified to use, instead only being used by 3% of the population. 'Merica!

Well, Elizabeth Warren and seven co-sponsors would like to change that by simply eliminating the need for returns entirely for a significant number of people.

On Wednesday, the Democratic senator introduced a bill with seven cosponsors, including Democratic presidential candidate Bernie Sanders, seeking to make significant reforms to the Internal Revenue Service (IRS). Under the bill, Americans with simple tax obligations would have the option not to complete a tax return at all, but to instead receive a pre-prepared return from the IRS with their liability or refund already calculated for them. The IRS already gets most employer and bank information on taxpayers’ obligations — such as W2s and interest earned — so all it would have to do is calculate what they would owe for them.

For others with more complex situations — those who want to itemize their deductions or with many dependents who have to provide more information — the bill would direct the IRS to develop a free, online preparation and filing service that would allow everyone to file directly with the government, rather than relying on third party filing services like TurboTax or H&R Block. And taxpayers would be able to download the tax information the IRS already has.

In other words, have the IRS, which will be evaluating these people's returns anyway, simply do all the math for most of the simple tax returns. We're not talking about returns that would legitimately make use of deductions; we're talking about very simple tax returns, which is what most people have filled out by tax preparers or tax software anyway. Now, this is usually where someone will make the obvious point: the government doesn't deserve to be entrusted with this math. And, hey, I take that point seriously. The government has certainly shown its capacity to lie and deceive. But so has the tax-prep industry. Intuit has been guilty of all kinds of underhanded attempts to keep people from being able to file for free. They are proven deceivers, too.

In addition to that, this bill is directly setting its sights on the cozy relationship the IRS has with the tax-prep industry, so anti-governmenters should really think about getting on board with this.

The bill would also prohibit the IRS from entering into agreements that would restrict its ability to provide such free, online services directly to taxpayers. The IRS has signed a number of binding agreements with the tax preparation industry over the years that blocks it from offering free services directly to taxpayers itself, saying that it will “not enter the tax preparation software and e-filing services marketplace” and “not compete” with private service providers. The IRS’ declarations that it won’t enter the tax preparation space fly in the face of what it’s been mandated to do. In 1998, Congress passed a bill requiring the Treasury Department to develop a “return-free” tax system by 2008 for those with simple obligations, computing what those people owe with information the IRS already has. Yet Warren’s office argues that the IRS has instead turned control of the process over to private tax preparation companies.

When a government institution rebukes its public duties in favor of corporate wishes, there's a word for that. And it's that corporate control that will be pushing back on Warren's bill. The tax-prep industry, after all, has spent nearly $30 million in lobbying Congress since the late nineties. We're all about to get a very real lesson on the effect of corporate lobbying on a Congress that is ostensibly designed to serve the public need. I suspect the results will be as instructive as they are ugly.

Part of the solution to this is, of course, a simplified tax code. But it's somewhat strange to see some in favor massive tax reform, including simplifying the tax code, come out against simplifying filing tax returns or eliminating returns entirely.

Yet some anti-tax groups that say they want a simpler tax code have fought against these efforts. Grover Norquist, founder of Americans for Tax Reform, has testified and advocated against a return-free system. Republican presidential candidate Ted Cruz has consistently called to abolish the IRS, rather than get on board with plans to direct the agency to make things easier for taxpayers.

Some of that sentiment is likely coming from a worry that a simplified filing system would lead many people to be less angered by the overall tax system, and thus less interested in more radical reform. And some is likely born of a deep-seeded mistrust of government in general and the IRS in particular. Which, again, I completely understand. But it would be wise for the listeners of those mouthpieces to truly understand what this legislation would accomplish, because it's largely built around eliminating returns for filers with returns so simple that charging to file them is downright silly.

Filed Under: elizabeth warren, irs, regulatory capture, tax returns, taxes
Companies: intuit