App Developers Suing Facebook Suffer Redaction Failure, Expose Discussions About Pay-For-Play API Access

from the mostly-smoke,-minimal-fire dept

Earlier this week, UK politicians conveniently pounced on a US businessman to force him to turn over documents possibly containing info Parliament members had been unable to extract from Mark Zuckerberg about Facebook's data sharing. An obscure law was used to detain the visiting Six4Three executive, drag him to Parliament, and threaten him with imprisonment unless he handed over the documents MPs requested.

The executive happened to have on him some inside info produced by Facebook in response to discovery requests. Six4Three is currently suing Facebook over unfair business practices in a California court. The documents carried by the executive had been sealed by the court, which means the executive wasn't allowed to share them with anyone… in the United States. But he wasn't in the United States, as gleeful MPs pointed out while forcing him to produce information it wanted from another tech company unwilling to set foot in London.

It was all very strange, more than a little frightening, and completely bizarre. A lot of coincidences lined up very conveniently for UK legislators. The frightening part is it worked. This will only encourage Parliament to pull the same stunt the next time it thinks it can get information others have refused to hand over. Targeting third parties is an ugly way to do government business, especially when the UK government is attempting to obtain information from US companies. All bets are off once they're on UK soil, so traveling execs may want to leave sensitive info on their other laptop before landing at Heathrow.

But there's also a chance Six4Three wanted to put this information in the hands of UK legislators. Call it "plausible deniability" or "parallel construction" (why not both?!), but the ridiculousness of the entire incident lends it an air of theater that probably isn't entirely unearned.

Now there's more fuel for that conspiratorial bonfire. Court documents filed by Six4Three containing sensitive info about Facebook's API terms and the possible sale of user info made their way into the public domain. They were redacted to keep this sensitive information from being made public.

Well, let me rephrase that: they were "redacted" in such a way all sensitive info could easily be read by anyone who opened the PDF. Sure, the black bars are there, but selecting the "redacted" text and pasting it anywhere that can handle text allows this information to be read.

Cyrus Farivar of Ars Technica uploaded the redaction failure [PDF] -- an error first spotted by the Wall Street Journal. The first redaction, which precedes several fully-redacted pages, contain the following info -- stuff Facebook would probably liked to have stayed obscured. (The failed redaction is in bold.)

Facebook filed its removal petition on the eve of its deadline to serve its motions for summary judgment and mere days before the Superior Court’s ruling on Plaintiff’s discovery motions to obtain information from key Facebook executives, including Chief Executive Zuckerberg, regarding the decision to close Graph API that shut down Plaintiff’s business and many others. Plaintiff’s discovery to date provides evidence suggesting that the decision to shut down Graph API was made: (1) for anticompetitive reasons; (2) in concert with other large companies; (3) prior to October 2012 (even though Facebook waited to announce the decision until April 2014); (4) by Mr. Zuckerberg; and (5) with the active participation of at least six other individuals who reported directly to Mr. Zuckerberg. See Godkin Reply Decl. Exhibit 3, at 1-4. Plaintiff has yet to receive information regarding this decision that shut down its business. Rather, Facebook has produced documents only from low-level employees that Facebook unilaterally selected as custodians and who clearly had no involvement in the decision that shut down Plaintiff’s business.

Another fully-redacted paragraph points to a pay-to-play API offering, gleaned from emails obtained through discovery.

On October 30, 2012, Facebook Vice President of Engineering, Michael Vernal, sent a note to certain employees stating that after discussing with Mr. Zuckerberg, Facebook has decided to “limit the ability for competitive networks to use our platform without a formal deal in place” and that Facebook is going to “require that all platform partners agree to data reciprocity.” Mr. Vernal then describes a whitelisting system Facebook will implement, and did in fact implement, to determine data access based on this “reciprocity principle.” See Godkin Reply Decl., Exhibit 5 at FB-00423235-FB-00423236. The reciprocity principle is subsequently defined and discussed among Facebook employees on numerous occasions as shutting down access “in one-go to all apps that don’t spend…at least $250k a year to maintain access to the data.” See Godkin Reply Decl., Exhibit 6 at FB-00061251. Facebook then embarks on a campaign to reach out to large companies and extract significant payments from them with the threat that they will otherwise turn off the company’s data access. However, if a company were to agree to provide significant payments to Facebook, then Facebook would offer it an enormous advantage relative to its competitors. Facebook employees routinely discuss this fact in their email exchanges: “Removing access to all_friends lists seems more like an indirect way to drive NEKO adoption.” See Godkin Reply Decl., Exhibit 7 at FB00061439. In other words, Facebook’s decision to close access to data in its operating system (“removing access to all_friends_lists”), which shut down Plaintiff’s business, was designed to generate increased revenues on Facebook’s advertising platform (“drive NEKO adoption”) by offering an unfair competitive advantage to companies from which Facebook could extract large payments.

Now, the only thing holding this back from being a Six4Three effort to expose Facebook without running afoul of the court is the filing date. This redaction failure was filed nearly 10 months ago -- long before UK politicians talked a Six4Three exec out of potentially-damaging documents.

That being said, the London incident still smells super-fishy. And the information seen here doesn't indicate much more than Facebook considered selling access to Facebook user info. It appears Facebook never followed through with the plan. The lack of pay-for-play doesn't excuse its larger sins, but it does kind of put a dent in Six4Three's claims Facebook unfairly locked it out of API access when it kicked its shady bikini-photo-searching app to the curb.

More intrigue is sure to develop as Facebook attempts to have Six4Three held in contempt of court following its seemingly involuntary production of sealed documents during its exec's recent London trip.

Filed Under: antitrust, api, pay for play, redaction, uk
Companies: facebook, six4three

Donald Trump Suddenly Pretends To Care About Comcast Antitrust Violations

from the dysfunction-junction dept

For years, smaller cable companies have complained that giants like Comcast do everything in their power to make life miserable (and expensive) for them. These smaller providers have complained that Comcast often mandates they buy and include NBC channels and regional sports networks in their lineups, driving up costs. Many of these companies have considered getting out of the TV business entirely as their margins get tighter and they find themselves increasingly out-maneuvered by ever-growing, vertically-integrated media, telecom, and broadcast giants like Comcast and AT&T.

This week, the American Cable Association, a coalition of around 700 mid-sized and small cable providers, simply issued yet another request to the DOJ to, you know, actually maybe do something about Comcast's growing monopoly power:

"To help secure the benefits of a competitive pay-TV and broadband market for millions of consumers, the American Cable Association has asked antitrust law enforcers at the Department of Justice (DOJ) to open an investigation into the business practices of the vertically integrated media giant Comcast-NBCU, focusing on harms stemming from the dominant communications firm’s control of cable systems, TV stations, and regional sports networks (RSNs) concentrated in some of the largest local markets in the country."

Their complaint notes that with the conditions now expired on Comcast's 2011 merger with NBC, the company has greater leeway than ever to use its size, wealth, growing broadband monopoly and political power to bully smaller cable operators and consumers alike.

Normally these cries would simply be ignored in M&A manic America. Much like the TV market, smaller cable companies can't compete with the immense political power Comcast's wealth and size buys on Capitol Hill, so their concerns are pretty consistently ignored. As a result, whether we're in the throes of Obama or Trump administrations, blindly letting the biggest media and telecom companies merge, then standing around with a dumb look on our collective faces as these titans do what they always do (raise rates and use their newfound power to hamper competitors) is kind of our thing.

Like many small businesses, the ACA pretty consistently issues these cries for help without anybody much giving a damn. But that dynamic changed when President Trump this week curiously decided to wade in and comment on the ACA's filing:

So for one thing, it's unlikely that Donald actually cares about Comcast's monopoly power. After all, if he did, his FCC wouldn't have just effectively neutered itself and net neutrality (and most meaningful oversight of predatory monopolies) at direct Comcast request. Don probably just saw something on NBC news that made him mad, and decided to punish Comcast for it in a passive aggressive way. And punish it did: Comcast's stock dropped steeply on Monday of this week, and a dozen furrow-browed stories exploring Comcast's antitrust power were published that would have otherwise never have been written.

Oddly, many outlets took the potential for a DOJ inquiry into Comcast's monopoly power seriously. But there's zero real indication that's the case. As the assault on net neutrality should have made pretty clear, letting giant telecom operators like Comcast largely dictate most tech policy has been the Trump administration policy thus far, and that's not likely to change. The DOJ isn't going to suddenly investigate Comcast just because Don ran his mouth on Twitter, and it's certainly not going to suddenly pursue remedies for an eight-year old merger.

Don was likely just being Don: jumping into the fray of a subject he doesn't know much about because he saw some shit on TV that made him sad. And while it's true that Don's DOJ did sue AT&T to thwart (unsuccessfully) its Time Warner merger, it's likely that had less to do with actually helping consumers, and more to do with hurting CNN or helping Trump ally Rupert Murdoch, who spent most of 2017 trying to scuttle the deal for competitive reasons. So yeah, it's possible that the DOJ could ruffle some feathers at Comcast as punishment for critical NBC coverage of the President, but it's just not likely with Comcast already having gotten most of what it wanted (most notably in the form of a self-immolating FCC in the hands of Ajit Pai).

Meanwhile, the ACA has made a pretty consistent habit of complaining about Ajit Pai's failure to keep an eye out for the little guy, despite being breathless supporters of Pai's appointment. Perhaps at some point the ACA can connect the dots between supporting politicians that don't care about monopoly power, and policy that pretty clearly doesn't care about monopoly power.

Filed Under: antitrust, cable, donald trump
Companies: at&t, comcast

House To Investigate Whether DOJ's AT&T Antitrust Lawsuit Was Political

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

When the Trump DOJ sued to stop AT&T's $89 billion merger with Time Warner last year, more than a few eyebrows were raised. After all, the DOJ's antitrust suit, allegedly a bid to protect consumers, came as other arms of the Trump administration were busy utterly dismantling a wide variety of popular consumer protections (like net neutrality) at the direct request of industry. It raised the question: why suddenly care about consumer protection and antitrust power when you've shown absolutely no general concern for those concepts previously?

As a result, there's always been a lingering question as to whether Trump's obvious disdain for Time Warner owned CNN was driving a petty bid for vengeance. Others wondered if the DOJ's lawsuit was a personal favor to Trump ally Rupert Murdoch, who had tried unsuccessfully to buy CNN from AT&T at least twice, and had spent much of 2017 lobbying Trump to scuttle the deal as a competitive favor to his Fox empire.

With a shakeup in the House, those questions could soon again be making headlines. Incoming House intelligence committee chairman Adam Schiff told Axios last weekend that one of the numerous things the new House leadership will investigate is whether the DOJ's antitrust lawsuit against AT&T was political:

"Schiff said Congress also needs to examine whether Trump attempted to block AT&T’s merger with Time Warner as payback to CNN.

"We don't know, for example, whether the effort to hold up the merger of the parent of CNN was a concern over antitrust or whether this was an effort merely to punish CNN," Schiff said.

To be clear, AT&T's monopoly power is clearly a problem and, regardless of the motivation, it's a good thing the DOJ tried to stop it.

AT&T's domination of both fixed broadband, wireless broadband, and its monopoly over the backhaul connections feeding everything from cellular towers to ATMs was already causing headaches. The company's expanded ownership of "must have" media properties only made things worse by causing new anti-competitive problems for competitors like Dish. Combine these with the death of net neutrality, AT&T's past behaviors, and the FCC's fresh inability to hold AT&T accountable for any of it -- and the over-arching market issues should be pretty clear.

Ultimately the DOJ lost its case for several reasons. Antitrust laws weakened after decades of lobbying left the DOJ arguing obvious outcomes (like AT&T raising rates on competitors and consumers) within narrow confines of economic theory. And because the DOJ didn't want to highlight the fact the Trump admin was harming these same consumers with its other hand (net neutrality), it simply avoided mentioning the idea at all. That's an obvious issue since AT&T's domination of both the media and its broadband monopoly will work synergistically to harm competitors and consumers alike.

Regardless, the Trump DOJ suddenly and exclusively caring about AT&T's monopoly power was always curious. And while many will be sure to suggest that any investigation of the motivation is itself political, it's a question that would be nice to have answered all the same -- since using "instruments of state power" like the DOJ to settle petty grievances with media outlets you don't like is kind of a fucking problem.

Filed Under: adam schiff, antitrust, congress, doj, mergers, politics
Companies: at&t, time warner

Qualcomm's Patent Nuclear War Turning Into Nuclear Winter

from the none-of-this-is-good dept

We haven't written much about Qualcomm and Apple's all out nuclear war over patents, but a few recent developments suggest it's worth digging in and discussing. In some ways it sweeps in other companies (mainly Intel) and also involves the FTC and the ITC. I won't go through the entire history here because I'd still be writing this post into next year. Qualcomm is a pretty massive company and while it does produce some actual stuff, it has long acted quite similar to a patent troll. It has also vigorously opposed basically all patent reform efforts, while at the same time quietly funding a bunch of "think tanks" that go after anyone advocating for patent reform (I expect some fun comments to show up below).

The reason Qualcomm acts this way is that it has long abused the patent system to jack up prices to ridiculous rates. And it's finally facing something of a reckoning on that. In early 2017, the FTC went after Qualcomm for abusing its patents -- notably: "using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products." Specifically, the FTC alleged that Qualcomm, despite promises to the contrary to get its patents into important standards, was not following the FRAND (Fair, Reasonable and Non-Discriminatory) licensing of its patents, as required to have its inventions be a part of the standard. Just days later, Apple sued Qualcomm, also regarding Qualcomm's patent shakedown, claiming that Qualcomm had been massively overcharging Apple for the use of its patents, rather than licensing them on a FRAND basis.

A few months later, Qualcomm sued Apple, claiming that it had been sharing Qualcomm's proprietary code with Intel. Apple had been using chips from both Qualcomm and Intel, but was in the process of dropping Qualcomm entirely. Qualcomm also launched multiple parallel proceedings at the ITC. As we've discussed for over a decade now, patent holders ridiculously get two shots at anyone they accuse of patent infringement (so long as the accused manufacturers its goods outside the US). The International Trade Commission (for reasons that make no sense) feels that it can judge on its own if patents have been infringed, and if so, it can block the further importation of the "infringing" good. That's the only remedy at the ITC, but it can have quite an impact, obviously, in blocking a product out of the US market. Incredibly, the ITC need not follow the same rules as a regular court and it can do its own analysis while a case is in federal court (which might rule entirely differently).

So that's the history. Basically, Apple and Qualcomm are in an all out patent nuclear war, with the FTC and ITC involved around the edges. In the last few weeks, however, pretty much everything has been looking pretty bad for Qualcomm. While an administrative law judge at the ITC did find some infringement, he (somewhat surprisingly) announced that he would not recommend an import ban (again, this is the only remedy the ITC can offer). The full ITC needs to review this recommendation and make a final call. Tons of patent maximalists are screaming their heads off about how the ITC must start blocking iPhones, but as Judge Thomas Pender recognized, banning an entire product because it may have infringed on a single patent is ridiculous. In the language of the judge "the statutory public interest factors weigh against issuing a limited exclusion order as to products found to infringe patents asserted in this investigation." In other words, "grow up Qualcomm, this isn't such a big deal that you get to completely ban the product."

And, now, the latest is that the FTC's case against Qualcomm went in the FTC's direction, with Judge Lucy Koh granting the FTC's motion for partial summary judgment and saying that Qualcomm was violating its FRAND promises. This isn't everything to do with the case, but does involve questions around whether or not Qualcomm can limit its licensing to just device makers, or if it also has to license its patents to other chipmakers, like Intel. And Koh points out that basically everyone recognizes that the FRAND agreement it made applies to everyone -- not just a limited subset of companies. Koh repeatedly highlights Qualcomm's own previous statements that support this.

Furthermore, Koh points out that allowing Qualcomm to discriminate against chipmakers would hand the company a total monopoly, and that clearly goes against the concept behind the FRAND agreement to put the technology into the standard:

If a SEP holder could discriminate against modem chip suppliers, a SEP holder could embed its technology into a cellular standard and then prevent other modem chip suppliers from selling modem chips to cellular handset producers. See Lemley, Intellectual Property Rights, 90 Calif. L. Rev. at 1902 (stating that a company with a SEP “will effectively control the standard; its patent gives it the right to enjoin anyone else from using the standard”). Such discrimination would enable the SEP holder to achieve a monopoly in the modem chip market and limit competing implementations of those components, which directly contradicts the TIA IPR policy’s stated purpose to “enable competing implementations that benefit manufacturers and ultimately consumers.” TIA IPR at 6. See Borg v. Transamerica Ins. Co., 47 Cal. App. 4th 448, 456 (1996) (holding that a court may not interpret a contract in a way that contradicts the contract’s plain meaning). Qualcomm never attempts to explain how discrimination against modem chip suppliers is consistent with the stated purposes of the IPR policies.

I know there's a lot of jargon in there, but it's basically saying that the whole point of the standardization process, as everyone agreed, was to create standardization across multiple competitors (while still allowing a reasonable license for patent holders). But if Qualcomm can reinterpret this agreement to say that FRAND only applies to downstream users, then that completely overturns the entire intention of the standards making process and just gives Qualcomm a total monopoly on the chips (going well beyond its patents). Qualcomm will undoubtedly appeal, but it's not a good start for the company.

Oh, and speaking of not a good start, the post-Apple world for Qualcomm isn't looking great either. Its latest earnings projections going forward were below what Wall St. was expecting and some are noticing a $5-billion-ish Apple-shaped hole in the books.

While I've been equally critical of Apple in the past when it's abused the patent system, in this situation it seems pretty clear that Qualcomm completely overplayed its hand with its patents in ways that were abusive, and that drove up costs in an unfair manner, against its own agreements. And so far, the various courts and administrative bodies are not buying into Qualcomm's desperate attempts to keep up its monopolizing.

It all goes back to the point we've been making for decades: if you have a good product, compete in the marketplace. Don't abuse the patent system to try to block competitors or to artificially inflate the price. That just telegraphs that you're bad at innovating and you know that competitors can do a better job than you. Qualcomm is now learning how that plays out in the long run.

Filed Under: antitrust, ftc, itc, monopoly, patents, phones, sep, standards, standards essential patents
Companies: apple, intel, qualcomm

Leading Open Access Supporters Ask EU To Investigate Elsevier's Alleged 'Anti-Competitive Practices'

from the are-you-listening,-Commissioner-Vestager? dept

Back in the summer, we wrote about the paleontologist Jon Tennant, who had submitted a formal complaint to the European Commission regarding the relationship between the publishing giant Elsevier and the EU's Open Science Monitor. Now Tennant has joined with another leading supporter of open access, Björn Brembs, in an even more direct attack on the company and its practices, reported here by the site Research Europe:

Two academics have demanded the European Commission investigate the academic publisher Elsevier for what they say is a breach of EU competition rules that is harming research.

Palaeontologist Jon Tennant and neuroscientist Björn Brembs, who are both advocates for making research results openly available, say the academic publishing market "is clearly not functioning well" in an official complaint about Elsevier's parent company RELX Group.

The pair claim RELX and Elsevier are in breach of EU rules both due to general problems with the academic publishing market and "abuse of a dominant position within this market".

The 22-page complaint spells out what the problem is. It makes the following important point about the unusual economics of the academic publishing market:

For research to progress, access to all available relevant sources is required, which means that there is no ability to transfer or substitute products, and there is little to no inter-brand competition from the viewpoint of consumers. If a research team requires access to knowledge contained within a journal, they must have access to that specific journal, and cannot substitute it for a similar one published by a competitor. Indeed, the entire corpus of research knowledge is built on this vital and fundamental process of building on previously published works, which drives up demand for all relevant published content. As such, publishers do not realistically compete with each other, as all their products are fundamentally unique (i.e., each publisher has a 100% market share for each journal or article), and unequivocally in high demand due to the way scholarly research works. The result of this is that consumers (i.e., research institutions and libraries) have little power to make cost-benefit evaluations to decide whether or not to purchase, and have no choice but to pay whatever price the publishers asks with little transparency over costs, which we believe is a primary factor that has contributed to more than a 300% rise in journal prices above inflation since 1986. Thus, we believe that a functional and competitive market is not currently able to form due to the practices of dominant players, like Elsevier, in this sector.

Most of the complaint is a detailed analysis of why academic publishing has become so dysfunctional, and is well-worth reading by anyone interested in understanding the background to open access and its struggles.

As to what the complaint might realistically achieve, Tennant told Techdirt that there are three main possibilities. The European Commission can simply ignore it. It can respond and say that it doesn't think there is a case to answer, in which case Tennant says he will push the Commission to explain why. Finally, in the most optimistic outcome, the EU could initiate a formal investigation of Elsevier and the wider academic publishing market. Although that might seem too much to hope for, it's worth noting that the EU Competition Authority is ultimately under the Competition Commissioner, Margrethe Vestager. She has been very energetic in her pursuit of Internet giants like Google. It could certainly be a hugely significant moment for open access if she started to take an interest in Elsevier in the same way.

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Filed Under: academic journals, anti-competitive, antitrust, competition, eu, european commission, open access
Companies: elsevier

EU 'Protecting Consumers' By Forcing Them To Pay More For Android?

from the how's-that-work? dept

This was widely predicted this summer in the wake of the EU's massive $5 billion antitrust fine on Google concerning its practices with Android. As we noted at the time, the EU's antitrust focus seems to be much more directed at harming US companies rather than protecting EU consumers. Indeed, it is leading to situations where the antitrust efforts seem to be harming EU consumers, rather than helping them.

The latest is that Google is no longer offering its app suite for free in Europe.

Google’s licensing terms are changing in Europe later this month on account of a European Commission ruling that barred the company from requiring phone manufacturers to bundle Chrome and search with the rest of its suite of apps. In public statements, Google has been cagey about exactly how the new licensing fees will be structured, but documents reveal the deal with EU manufacturers will be rated by country and pixel density.

EU countries are divided into three tiers, with the highest fees coming in the UK, Sweden, Germany, Norway, and the Netherlands. In those countries, a device with a pixel density higher than 500 ppi would have to pay a $40 fee to license Google’s suite of apps, according to pricing documents. 400 to 500ppi devices would pay a $20 fee, while devices under 400 ppi would pay only $10. In some countries, for lower-end phones, the fee can be as little as $2.50 per device.

What is not at all clear is how this helps... anyone (well, other than the EU Commission who wants its $5 billion). At best, I guess you can argue that this "opens up" some sort of market for third party apps -- though those are already available to users to download and install pretty easily.

While I recognize that -- as many Europeans are quick to tell me -- EU regulations are much less focused on consumer welfare as a metric (and much more focused on beating up on big companies), I'm curious as to how this makes for good public policy. It provides a more expensive and less useful consumer experience while doing little to encourage any actual competition. Why is that a good thing?

Filed Under: android, antitrust, competition, consumer benefit, eu
Companies: google

DOJ Continues To Point Out A Mega-Merged AT&T Will Jack Up Prices On Everybody

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

AT&T recently defeated the DOJ's challenge to their $86 billion merger with Time Warner thanks to a comically narrow reading of the markets by U.S. District Court Judge Richard Leon. At no point in his 172-page ruling (which approved the deal without a single condition) did Leon show the faintest understanding that AT&T intends to use vertical integration synergistically with the death of net neutrality to dominate smaller competitors.

In fact, net neutrality was never even mentioned by the DOJ at the multi-week trial. Likely in part because the DOJ didn't want to highlight how the Trump FCC was screwing everybody over with one hand, while the Trump DOJ was allegedly suing AT&T to "protect consumers" with the other (some argue that Trump's disdain for CNN and adoration of Rupert Murdoch were the more likely motivators). But if you ignore the fact that AT&T plans to use its monopoly over many broadband markets (from residential to cellular tower backhaul) combined with the death of net neutrality to make life difficult for consumers and competitors alike, you're not paying any attention to history or to AT&T's repeated nods in that general direction.

During the first trial, you'll recall the DOJ and its hired economists repeatedly pointed out how AT&T's vertical integration and ownership of "must have" content (like HBO) would provide the Dallas-based giant every incentive to raise TV rates. AT&T lawyers laughed those findings off, then immediately proceeded to...raise rates and hammer users with bogus new fees as it attempted to deal with the massive debt incurred from the merger. Those rate hikes were a major reason the DOJ decided it should try and appeal Leon's initial ruling.

As the DOJ works on its appeal of Leon's ruling, the government continues to point out in filings (pdf) that all of its economic models show that AT&T's ownership of Time Warner and DirecTV will provide the company with endless opportunities to raise rates on competitors and consumers:

"The bargaining model is an accepted and reliable predictor of competitive effects in the pay-television industry, and Professor Shapiro used reasonable inputs to quantify the magnitude of cost increases that AT&T would impose on rivals through negotiations—and the consequent higher prices for consumers—separate and apart from the non-quantifiable harms of the merger, such as reduced choice and stymied innovation...Given the district court’s illogical conclusion that the merger will lead to no change in bargaining leverage, and its erroneous finding of no consumer harm, a remand is necessary."

One of the major problems here is that lobbying has weakened antitrust enforcement so severely, government lawyers are now trapped within very narrow confines of economic theory to prove a point that should be common sense (especially if you've watched AT&T do business for more than five seconds): AT&T has a long history of behaving anti-competitively, and being even larger is going to make that even easier. There's roughly a million examples out there showing how AT&T exploits and abuses its captive customers with an ocean of bad behaviors.

That this will get worse as AT&T grows larger and more powerful shouldn't be a hard argument to make, even for lawyers trapped in the narrow hallways of accepted economic theory. And again, this is all before you even get to the fact that AT&T lobbyists just convinced the FCC to neuter itself on demand for no adult policy reason beyond it was what AT&T executives wanted.

Filed Under: antitrust, doj, mergers, prices
Companies: at&t, time warner

State Attorneys General Really Want To Go After Big Internet Companies; But Claim It's About Privacy, Not Bias

from the we'll-see... dept

We've written a few times about how Attorney General Jeff Sessions' plan to meet with State Attorneys General about going after big internet companies for perceived political bias was a clear First Amendment problem. He still held the meeting earlier this week, and it appears that at least some of the attendees agreed that targeting how the platforms present content was likely a non-starter, even if Sessions apparently kept trying to raise it as an issue. From a Washington Post report that quotes a few people who were in attendance:

Attorney General Jeff Sessions opened the meeting by raising questions of possible ideological bias among the tech companies and sought to bring the conversation back to that topic at least twice more, according to D.C. Attorney General Karl A. Racine.

Of course, the fact that the others in attendance mostly pushed past the question of political bias isn't exactly good news for the internet platforms, as the AGs apparently focused on other ways they could and should target the companies:

“We were unanimous. Our focus is going to be on antitrust and privacy. That’s where our laws are,” Jim Hood, Mississippi’s attorney general, said in an interview.

Of course, it seems like almost journalistic malpractice to quote Jim Hood talking about going after social media platforms without mentioning the fact that he was the centerpiece of a the conspiracy by the top movie studios to attack Google with nonsensical complaints about illegal things he found while doing searches on Google. If you don't recall, the Sony hack revealed a plot by the legacy movie studios to have their lawyers effectively run an investigation for Jim Hood -- and even the NY Times revealed that his eventual subpoena to Google was written by the MPAA's lawyers. A judge reviewing Google's legal fight with Hood noted that it seemed pretty clear that Hood's actions were done in "bad faith." So... consider me at least marginally skeptical that Hood is an objective voice on what is and is not appropriate for a state Attorney General to investigate regarding the big internet platforms.

Obviously, if there are real antitrust violations, then that's a valid issue to explore. But, so many of the attacks themselves seem to be a hell of a lot more "politically biased" than any of the claims about how the internet companies themselves are politically biased.

And while there was some talk about the privacy practices of the various platforms (which, while they may be concerning, it's not clear how any of them violate any laws...), some of the talk also involved an astounding incomprehension of the encryption discussion. And, for that, we'll go back to Jim Hood again:

For other states, the issue was the tech industry’s relationship with law enforcement. That included talk about Apple and “how we in law enforcement depend on cellphones.” Hood said that Apple has “waved at us and didn’t use all their fingers” in its handling of encryption.

That is not at all an accurate portrayal of what happened. Apple was making sure that everyone's information was safe by using strong encryption. The FBI sought to undermine that safety by demanding that Apple make a massive, and very dangerous, change to its software.

Indeed, it's quite incredible for Hood to bring this up in the context of the AGs discussing "privacy" concerns about how the big tech companies handle data. If you want them to protect data, you want them to use strong encryption. Yet, here, Hood is whining that Apple dared to actually protect people's privacy.

So... if tech companies actually protect people's privacy with strong encryption, they get yelled at and threatened with legal action by Attorneys General. And if they don't protect people's privacy... they get yelled at and threatened with legal action by Attorneys General. Just what exactly are they supposed to do?

Again, it is entirely possible that these companies have violated various laws. Perhaps they're in violation of antitrust laws, though the evidence there is lacking so far. But, from everything that's been said coming out of this meeting, it does not inspire much confidence that there are reasonable and objective reasons for taking legal actions against these platforms. Instead -- and this is all too typical for state AGs -- there appears to be a lot of grandstanding and bluster without much substance.

Filed Under: antitrust, encryption, first amendment, free speech, internet, jeff sessions, jim hood, privacy, social media
Companies: apple, facebook, google

Louisiana's Attorney General Wants To Break Up Google Over 'Bias'

from the fairness-doctrine-gone-mad dept

The latest in this ridiculous political fight over the claimed, but not proven, "political bias" found in search results and social media is that Louisiana's Attorney General says we should break up the big internet companies because of it. He's not even hiding his unconstitutional anti-First Amendment reasons for doing so:

Landry says the internet giants are suppressing conservative agendas, stifling competition, and infringing on antitrust laws.

“This can’t be fixed legislatively,” Landry told The Advocate Tuesday. “We need to go to court with an antitrust suit.”

Again, it's not at all proven that the internet giants are "suppressing conservative agendas." If they were, that would be quite remarkable, given that apparent "conservatives" control the White House, both houses of Congress, the judiciary and the vast majority of state houses. It would certainly then suggest that these internet companies aren't very good at suppressing such an agenda if they really were attempting to do so (and, spoiler alert: they're not).

But, of course, the larger point still stands: this is clearly a government official, looking to use not just executive power, but law enforcement powers, to intimidate companies regarding speech on their platforms. That is 100% unconstitutional. I already detailed a variety of cases that make this point, but it appears that law enforcement officials are going to ignore that, so long as they can politically grandstand on this issue.

But, just to flip this around: would Louisiana Attorney General Jeff Landry agree that Fox News or Breitbart should be hit with legal action for "suppressing liberal agendas?" Of course not.

Some will say that this is just politicians being politicians, and they'd have a point. But what's absolutely astounding is that some on the other end of the political spectrum are jumping on this just because they so hate Google. Matt Stoller, from the Open Market Institute, has spent the past few years misrepresenting all sorts of arguments concerning the internet companies, and pushing for them to be broken up. He sits very far away from Landry politically, but apparently as long as a politician wants to break up the internet companies (even in violation of the First Amendment) that seems to be cool with him:

After people pointed out to him that Landry was just playing partisan politics, Stoller responded by suggesting that maybe it's for the wrong reasons, but at least someone is trying to break up these companies (despite there being no evidence to support such a move):

Lots of people have key issues that they think are important. For some that may be breaking up the big internet companies. But a general rule of thumb: if you have to spit on the First Amendment to get your wish, you're doing it wrong.

Filed Under: antitrust, bias, jeff landry, monopoly, political bias
Companies: google