With help from Leah Nylen, Simon Van Dorpe and Susannah Luthi
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— Not on board: The ranking member on the Senate Judiciary antitrust panel is conspicuously missing from the growing list of cosponsors for the latest Senate antitrust bill. Here’s why.
— Don’t you dare: FTC Chair Lina Khan joined forces with Rohit Chopra to denounce what they called a misapplication of Section 230 and warn tech companies against trying anything similar.
— Welcome to the party: There’s been global interest in taking on the U.S.’ big tech companies. One competition agency hasn’t been as involved, but that could change soon.
IT’S FRIDAY, OCT. 15. WELCOME TO MORNING TECH. I’m your host, Benjamin Din. Don’t you love lawmakers who are willing to engage on Twitter? I do.
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WHO’S MISSING FROM THE SENATE ANTITRUST BILL? — Mike Lee of Utah, the top Republican on the Senate Judiciary antitrust panel, is nowhere to be found on the list of senators sponsoring the bipartisan antitrust bill slated to be introduced next week. The effort, led by Senate Judiciary antitrust Chair Amy Klobuchar (D-Minn.) and Senate Judiciary ranking member Chuck Grassley (R-Iowa), is the latest move in Congress’ efforts to rein in the tech giants.
— Difference of opinion: Lee didn’t respond to a request for comment, but he has previously said that he opposes the House Judiciary package because he views it as government regulation dressed up as antitrust reform. Another concern of his: Those bills are too targeted. In contrast, antitrust bills that Lee has supported — including one with Klobuchar that would allow state attorneys general to decide where their antitrust cases are heard — have been broad enough to affect all industries.
“America is facing a panoply of competition concerns not just in Big Tech, but across our entire economy,” he said this summer while introducing a separate antitrust bill with Grassley. “We need a holistic approach that deals with all of these concerns, and that benefits all consumers, in every industry — without massively increasing regulation and imposing a command-and-control grip over the economy.
— The Grassley option: The Iowa Republican did sign on to sponsor the antitrust bill with Klobuchar, which would prevent the tech giants from favoring their own products, but it took months of negotiation to secure his support. Unlike Lee, Grassley has expressed an interest in some proposals related to competition in the pharmaceutical industry and has introduced agriculture-specific antitrust legislation in the past.
Grassley managed to smooth out some Republican objections to the tech antitrust bill by removing a provision that would’ve allowed private citizens to file lawsuits — something they feared would cause the tech giants to be hit by a deluge of litigation. Another change would require the government to prove harm to the market upfront, rather than just allege misconduct and have the company defend itself.
— Additional cosponsors: Sens. Josh Hawley (R-Mo.), Mazie Hirono (D-Hawaii) and Mark Warner (D-Va.) have also signed on as backers, joining powerful Senate Judiciary leaders like Chair Dick Durbin (D-Ill.) and former Chair Lindsey Graham (R-S.C.).
THAT’S NOT HOW SECTION 230 WORKS — The FTC, the Consumer Financial Protection Bureau and the North Carolina DOJ are weighing in on a court case that they say uses Section 230 of the Communications Decency Act — the law shielding the tech industry from liability for what users post — to skirt around other laws.
“We are concerned that if tech companies circumvent consumer and banking laws, using Section 230 and other tactics, it will give a free pass to some, undermining fair competition,” Khan and Chopra, the CFPB director, said in a statement that served as a warning shot to companies considering this strategy. This marks the FTC’s second time in as many days telling the tech industry to be on its best behavior.
— Section 230 latest: The amicus brief comes as lawmakers are looking at ways to change the shield law, a remedy Facebook whistleblower Frances Haugen suggested when she testified about the social network before Congress. The latest legislative effort, introduced today by prominent Democrats like House Energy and Commerce Chair Frank Pallone (D-N.J.), targets companies that use algorithms to promote harmful content, as John reported for Pros — precisely what Haugen said was one of Facebook’s biggest problems.
— This case’s background: Consumers filed a lawsuit over inaccurate information on publicdata.com, a website that gathers public information to compile and sell background check reports and is operated by a company called Source for Public Data. Although such platforms are typically considered consumer reporting agencies, a trial court dismissed the suit after the company argued it was an “interactive computer service” and not the original source of the information, so it should be shielded from Fair Credit Reporting Act violations under Section 230. (Eric Goldman, a law professor at Santa Clara University and a Section 230 expert, commented on the case in a May blog post.)
The case is important, especially “as tech companies expand into a range of markets,” Khan and Chopra wrote. The two agencies, they said, would “be closely scrutinizing tech companies’ efforts to use Section 230 to sidestep applicable laws and will seek to ensure that this legal shield is not being used or abused to gain an undue competitive advantage over law-abiding businesses.”
SPEAKING OF HAUGEN — Fourteen Democratic attorneys general sent a letter to Facebook CEO Mark Zuckerberg, led by Connecticut Attorney General William Tong, questioning the company’s purported “whitelist” of high-profile figures who are automatically exempt from Facebook’s content moderation policies, in an effort to crack down on posts that spread hesitancy around the Covid-19 vaccines.
The AGs asked whether the whitelist protects any of the “Disinformation Dozen,” the 12 people designated by the Center for Countering Digital Hate as responsible for nearly two-thirds of all anti-Covid vaccine content on social media. Most of the dozen, including anti-vaccine advocate Robert F. Kennedy, Jr., remain active on Facebook, although Rizza Islam, whose posts targeted Black Americans, has had his account removed.
SOUTH AFRICAN COMPETITION AUTHORITY REVS UP ON TECH — As the world rushes to crack down on the tech giants, one key regional authority so far has not been very active: South Africa’s Competition Commission. But action from the agency is expected to ramp up in the coming weeks.
— What’s coming: In February, the authority launched a market inquiry into “online intermediation platforms.” Public hearings in the market inquiry start on Nov. 2, with both Huawei and Google on the agenda.
Speaking at the virtual International Competition Network conference on Thursday, the commission’s chief economist, James Hodge, stressed the “need to move away from classic theories” in the digital economy. Google’s search engine, for instance, has so far mostly been studied through the lens of Google “self-preferencing” its own services at the expense of rivals. But the commission sees “a broader effect even where Google is not operative,” Hodge said.
Google’s first page is so monetized that organic search results — those not bumped up in the rankings by payments to Google — are only visible at the bottom of the page, he said. “This raises fundamental questions about the structure of search and the balance between paid and organic search results.”
— The China angle: Back in August, Beijing raised the pressure on Pretoria to act. “Monopolistic actions in the platform economy … [are] a matter of grave concern for South Africa’s Competition Commission. No country can turn a blind eye to the negative externality of the emerging digital economy,” China’s ambassador to South Africa wrote in an op-ed for the newspaper BusinessDay.
South Africa has mainly been dominated by U.S. tech platforms, and stronger scrutiny against them could create opportunities for Chinese rivals to move in. The Chinese government has pledged to ramp up efforts to develop digital services on the continent. Beijing’s plan to partner with African governments focuses on strengthening digital infrastructure and connectivity, particularly in remote areas.
Jon Leibowitz, a former FTC chair, is joining Maryland Attorney General Brian Frosh’s office as a part-time senior counsel. … Evan Sharp is stepping down as Pinterest’s chief design and creative officer and will transition into an advisory role. He is joining the creative collective LoveFrom founded by former Apple chief design officer Jony Ive. … Glen Fukushima has been nominated to be a member of the Securities Investor Protection Corp. He is a senior fellow at the Center for American Progress and a former VP of AT&T Japan.
David Bain is joining INCITS, a division of the Information Technology Industry Council, as EVP. He was previously executive director of the Tech Integrity Council and VP of standards for the Telecommunications Industry Association. … The Wireless Internet Service Providers Association announced new additions to its board of directors: Sam Curtis, Keefe John and Jeff Kohler.
Veritone, the creator of aiWARE, is now the first multi-cloud AI platform provider that has been approved for use across the DOJ. … Eight 911 service providers will pay fines to the FCC for not filing service reliability certifications on time in 2020, the agency announced. … DoorDash is donating $250,000 in gift cards and 100 DashPass subscriptions to the International Rescue Committee to support food access for Afghan refugees in the U.S. … The Free State Foundation celebrates its 15th anniversary.
A difficult run: Microsoft is shutting down LinkedIn in China, “marking the end of the last major American social-media network operating openly in the country,” WSJ reports.
Chip in: “Verizon Asks Employees to Help Kill Corporate Tax Increase,” via The Intercept.
Versatile: Could AirPods be used as health devices? Apple is looking into it, WSJ reports.
ICYMI: “U.S., Europeans reach deal on withdrawing digital taxes, French official says,” POLITICO’s Bernie Becker reports for Pros.
Tips, comments, suggestions? Send them along via email to our team: Bob King ([email protected]), Heidi Vogt ([email protected]), John Hendel ([email protected]), Alexandra S. Levine ([email protected]), Leah Nylen ([email protected]), Emily Birnbaum ([email protected]), and Benjamin Din ([email protected]). Got an event for our calendar? Send details to [email protected]. And don’t forget: Add @MorningTech and @PoliticoPro on Twitter.
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