For the last few months we’ve been writing a lot about AICOA, the American Innovation and Choice Online Act, being pushed for by Senator Amy Klobuchar. It’s an antitrust bill, but not an antitrust bill designed to fix the whole host of problems we have today with industrial consolidation and anticompetitive practices. No, it’s just a bill to target a few specific practices of a narrow slice of the tech industry. And, it only has bipartisan support (barely) for one reason, and one reason only: because Republicans believe that the vaguely worded law will be a tool they can use to batter companies for content moderation decisions they disagree with. This isn’t some conspiracy theory. This is literally what the Republicans themselves are saying. Out loud. Over and over again.
For the last few months, cringe-inducingly called “hot antitrust summer” by supporters of this bill, we were told the bill needed to get a vote this summer. Chuck Schumer apparently promised a vote this summer. And, even John Oliver was coaxed into an unfortunately confused piece about the law encouraging his fans to urge Schumer to bring the law to a vote.
But, as Schumer himself has been explaining to party insiders, the bill doesn’t have the votes to pass. It appears that there are enough Senators who are reasonably concerned about the vague language of the bill being open to abuse that they won’t vote for it. And fixing that language would lose votes on the Republican side.
All summer long, Klobuchar has been insisting, without proof, that they did have the votes to pass it, and urging Schumer to bring it to the floor. However, she’s finally admitted that’s not going to happen, and that there will be no vote before the recess. She still appears hopeful that it will happen in the fall, but that may be an even harder lift with the midterms rapidly approaching.
There are plenty of good reasons to be concerned about the power of some of the largest tech companies. But this is not the bill to fix it. Just the fact that Republicans are openly and eagerly explaining how they’ll abuse this law should have made that clear to everyone who has good faith reasons for supporting this bill. It’s been frustrating how quickly some folks have decided they can bend on their overall principles just because they believe this bill has a chance of passing. There are some good things in this bill, but the bill has serious problems and not just the potential for abuse — rather it has a bunch of supporters gleefully telling you how they’re going to abuse it.
If the law won’t pass without the ability to abuse it, the law shouldn’t pass. Go back and write a better bill.
As you may have heard, a few days ago, the FTC announced that it was seeking to block Meta’s acquisition of Within Unlimited, a maker of a popular VR fitness app. I believe this is the first case in which the Lina Khan-run FTC has stepped in to block an acquisition by one of the big internet companies. In many ways, this seems like a test from all sides.
Since Khan took over the FTC, it seems pretty clear that Google, Amazon, Apple, and Meta/Facebook have been extremely cautious about new acquisitions. While they have continued to acquire companies, the pace (and scope) of such acquisitions appears to have dropped off noticeably. Just by way of example, from 2010 to 2014 (looking back a decade ago, along with two years in either direction), Google averaged over 23 acquisitions a year, with the “slowest” year being 2012’s 12 acquisitions and the biggest being 2014’s 34 acquisitions. In 2021, however, Google acquired just five companies, and has acquired another five this year already.
So the companies are more cautious, and when they’re making these acquisitions, they tend to be not directly connected to their core business, but to ancillary businesses. This is almost certainly done on purpose, as the issue around antitrust law, is whether or not the companies are leveraging a market they’re considered dominant in to gain an unfair advantage in another market.
That’s why even the framing of the FTC’s announcement here seems… odd. When you think of Meta… well… you probably don’t think of Meta. If you do think of the company at all, you probably think of Facebook (or possibly Instagram), but you’re thinking about social media. Yet, here’s how the FTC frames its argument:
The Federal Trade Commission is seeking to block virtual reality giant Meta and its controlling shareholder and CEO Mark Zuckerberg from acquiring Within Unlimited and its popular virtual reality dedicated fitness app, Supernatural. Meta, formerly known as Facebook, is already a key player at each level of the virtual reality sector. The company’s virtual reality empire includes the top-selling device, a leading app store, seven of the most successful developers, and one of the best-selling apps of all time. The agency alleges that Meta and Zuckerberg are planning to expand Meta’s virtual reality empire with this attempt to illegally acquire a dedicated fitness app that proves the value of virtual reality to users.
Virtual reality giant? Virtual reality empire? Yes, we can say that Meta, via Oculus, has a large part of the VR market (stats say about 80% these days), but it’s… a small market. Current estimates say it’s a few billion dollars.
To put it another way: if Oculus were separate from Meta and still had the same marketshare, would the FTC be stepping in to stop this deal? I think most people doubt that very much. This move very much feels like it’s being driven by general animus towards Facebook’s success on the social media side, not some legitimate concern about Meta’s future prospects in VR.
Now, a lot of people are comparing this to when Facebook bought Instagram in 2012. But, that was a very different kind of deal. First, Instagram was a direct competitor to Facebook. Within Unlimited is just one app maker in the space, not really a competitor. Also, at the time, the social media market was an order of magnitude bigger, and way more established with a much larger user base than the VR market today.
So, really, the bigger issue here seems to be that the FTC under Lina Khan is testing out Khan’s belief in changing how antitrust works, away from one that has a fundamental reason for preventing abuse, towards one that is more punitive and focused on punishing big companies for being big. And that has consequences.
Rebecca Haw Allensworth, a professor of antitrust law at Vanderbilt University, said the F.T.C.’s arguments would face tough scrutiny because Meta and Within did not compete with each other and because the virtual-reality market was fledgling.
“The way that merger analysis has stood for at least 40 years is about what kind of head-to-head competition does this merger take out of the picture,” she said.
You can argue that the old standard was no good — and I can see compelling arguments there. But this case still seems like a spectacularly weak one with which to make this point.
We’re talking about a new and nascent market, one which seems pretty dynamic, with lots of different companies exploring and testing the waters. There doesn’t even seem to be an argument that Meta is leveraging its other businesses unfairly here. It’s just… weird to focus on this particular acquisition.
Indeed, it’s so weird that Khan’s own staff advised against going after this merger, and Khan overruled them. That generally doesn’t bode well for showing that you have a strong case.
Federal Trade Commission Chair Lina Khan led her fellow Democrats in the agency’s majority vote to sue Meta Platforms Inc. this week, despite the staff recommending against bringing a case to challenge the company’s acquisition of Within Unlimited Inc., according to three people with knowledge of the decision.
But, to me, the biggest concern here is that this attempt — purportedly to help enable more competition, could actually result in less competition. Box CEO Aaron Levie explained the concern succinctly in a tweet.
I’ve seen a lot of people confused about this point, so it’s worth unpacking a bit. The startup/investor ecosystem is based on investors making huge bets knowing that most won’t pan out. There’s a common refrain that one deal in ten being successful is what’s needed to be a successful VC, though many VCs I’ve spoken to dispute that, and say it’s more of a spectrum. You expect to have a very few massively successful investments, and then a whole bunch of middling success stories, and a few failures.
It’s 15 years old now, but famed venture capitalist Fred Wilson had a post on this way back when, noting that a VC has to shoot for getting 5 to 10x returns on every deal and hope that you’ll get 30% to hit that number, but you also need another 30% or so to “under perform” — and get closer to 2x returns. And those often (not always…) are the ones that are selling out to large companies.
The VC math gets a bit complex, but VC success stories are made on the big unicorn exits. They need those. And when they’re investing, they’re not doing so with the expectation of selling to one of the big guys. I’ve met some VCs who won’t invest in entrepreneurs who say their exit strategy is to sell out to a big company — because that means the entrepreneur isn’t thinking big enough for growth capital. If they’re aiming low, then they’re creating a ceiling for themselves.
That said, having the fallback position of selling out if a company can’t be a unicorn is still super important. A VC may need a few unicorns to be successful, but having a “soft landing” by selling to a larger tech company if that fails is still helpful to keeping a VC in business.
If the FTC is saying that big companies can never buy up startups again, that wipes out much of that middle part of the spectrum for VCs, massively increasing the risk of investing in startups. Now, suddenly, you either need to make sure that more of the companies you invest in are unicorns (if that were possible to do, everyone would be doing it…), or you have to focus on even higher potential returns on each investment, so that when you do get a unicorn, it covers the missing middle of the spectrum.
And, either way, that’s going to massively disincentivize VC investment in lots of startups. The ones that are taking off and appear to be on their way to unicorn land will get more VCs piling in to try to cash in, but then you’ll just have a smaller number of super-funded players, and not a truly competitive market.
So the end result is fewer startups get funded, and there’s less competition in the marketplace, rather than more.
These things work as an ecosystem, and it would be nice if the people making the decisions at the FTC actually understood that.
We do have a real problem in this country where many industries lack true competition. But nascent, dynamic industries don’t really seem to be the areas of concern right now, and the potential consequences of messing with that could be large. Why not focus on large, consolidated industries that aren’t growing and aren’t dynamic?
Advocates for the problematic American Innovation and Choice Online Act (AICOA) (which includes groups and organizations I often agree with and work with) keep insisting that they have the votes to pass the bill and demanding that Senator Chuck Schumer bring it to the floor for a vote. Schumer, who correctly has no interest in wasting floor time on a controversial bill that won’t pass, has now admitted that the votes just aren’t there to pass it.
Schumer called the bill a “high priority,” but said the Senate doesn’t have the 60 votes needed to approve it, according to people who attended a fundraiser for Schumer at Bistro Bis, a restaurant near Capitol Hill.
Schumer made the comments in response to a question about the measure, the American Choice and Innovation Online Act, which would prevent internet platforms from giving advantages to their own products and services.
As we’ve been discussing, the only way that this bill has Republican support is because the bill is written in a manner that will open it up to abuse by Republican politicians and officials to go after these companies over content moderation choices they disagree about, claiming that they’re preferencing for anti-competitive reasons. Republicans have made it abundantly clear that they ONLY support the bill for this very reason and will pull their support if the bill is clarified to say that it’s about actual competition issues, and not content moderation.
That should alarm Democrats pushing the bill AND our friends in the activist community who are so committed to this mistargeted bill.
But they’re so infatuated with getting a “win” on antitrust, that they no longer seem to care about the damage this bill could do.
I mean, as if to put an exclamation point on the dangers of this bill, the same article quoting Schumer that he doesn’t have the votes also quotes an extreme rightwing ideologue from the American Principles Project talking about how important it is to pass the bill. While the article frames the American Principles Project as “a right-leaning group that advocates for antitrust reform” that is underselling APP by quite a bit.
This is not a “right-leaning group that advocates for antitrust reform.” It’s an extremist group pushing nonsense Trumpist culture wars. And its one of the most active in pushing for AICOA. Which many Democrats are supporting. At some point, someone needs to ask why?
Thankfully, Schumer’s comments about not having the votes suggests that at least some Democrats are realizing that maybe they don’t want to pass a bill that the GOP is eagerly, and quite publicly, planning to exploit.
How many times have you shared a link today? How many times have you used a search engine to look for information? We use links and snippets to gain and share information so often that we don’t even think about it. It’s an essential component of the internet, so intrinsic that an internet without links simply doesn’t work. For this reason, it’s alarming that certain members of Congress are pushing “link tax” proposals, like the Journalism Competition Preservation Act (JCPA), that will monetize links in a way that changes how this essential internet infrastructure works.
The JCPA would permit news sites to band together and “negotiate” with platforms like Google and Facebook — presumably to withhold their content via link and snippets (also known as the short previews of the articles) until the platforms have paid up. Presumably, the intent of this proposal is to shift the balance of power away from big tech platforms and back to news publishers. This goal is laudable because, with the rise of Big Tech, the loss of sources for local news and information is certainly concerning. However, the JCPA is irredeemably flawed legislation that will destroy public access to information and create loopholes to alter how copyright works in our country – all while failing to achieve its stated goal of “saving” the news industry and only making problems worse for small publishers and libraries, whose goals of access to information are sometimes in conflict with large media conglomerates.
Libraries have been one of the primary victims of the ever-expansion of copyright, since copyright law limits the ability of patrons to interact with intellectual property as they wish. The increasing scope of copyright, combined with the ease with which something falls under copyright protection, has resulted in a decrease in the availability of free information. Expansive copyright nearly always equals closed intellectual property systems, which in turn limits libraries’ ability to provide equitable access to information for all. In this case, a link tax would specifically harm libraries because links cannot be copyrighted. A link and snippet tax would be the equivalent of adding a tax to every book you check out from a library.
Research shows that access to accurate, high-quality local news is important to community health, and libraries have long-standing systems in place that increase the public’s access to information. Costly and restrictive “link taxes” like the JCPA will break these systems and penalize the public institutions that should be focused on providing high quality information resources to their communities. As trained information professionals, librarians are uniquely suited to provide access to and evaluation of the news for their communities – this proposal would take that discretion out of the hands of libraries and public institutions and place it in the hands of corporations and media conglomerates.
The relationship between libraries and publishers, including news organizations, has a long historical precedent, and libraries and publishers should work together to create a more equitable and profitable news landscape. Even so, we recognize that publishers are well within their rights to place content behind subscriptions and passwords – a route that at least 69% of media outlets have taken with great success. However, paywalls and licenses should not be not the only route for publishers moving forward, and libraries can help pave that future. A recent collaboration between Library Futures, New York’s Albany Public Library, and Hearken proved that it is indeed possible to support communities through citizen participation in the news process. In coordination with news partners and libraries, we demonstrated an increase in subscriptions and reporting power as well as built invaluable connections. With the majority of consumers accessing news through their smartphones or social media, the link to content is inviolable—as well as critical—for the publishers to reach consumers, for consumers to access the information, and for libraries to provide access to consumers.
Small and medium publishers raised concerns about how a link tax would disproportionately hurt smaller news publishers and local news outlets who can’t afford to lose any more traffic. There are also many news sites, like ProPublica, Global Voices, The Conversation, El Diario and Al Jazeera, that purposely use Creative Commons licensing to make their articles more available to the public. These news outlets want to be readily accessible to the public and to other news outlets. As organizations and institutions committed to open access to information, libraries are invested in the future of nonprofit, openly licensed and public news sources. A link tax would jeopardize these sources, which provide crucial reporting and opinion for patrons.
American policymakers should not export bad ideas from foreign countries at the expense of publishers’ and libraries’ ability to provide high-quality news and information to American readers.They should instead carefully consider how legislation like the JCPA could open up a new loophole that allows news publishers to stop links to their materials which will only restrict access to information. For libraries and other public institutions dedicated to knowledge and education, this issue is of grave concern to our patrons, to the public, and to the continued free flow of information.
Jennie Rose Halperin is the Executive Director of Library Futures, and Juliya Ziskina is a policy fellow with Library Futures.
For a while now, as Democrats have insisted that the two main antitrust bills that have been able to scrape together bipartisan support won’t have any impact on content moderation, we keep pointing out that the only reason they have Republican support is because Republicans want it to impact content moderation. After all, Ted Cruz was practically gleeful when he talked about using this bill to “unleash the trial lawyers” to sue over moderation.
Earlier this week, we cheered on a proposal from four Democratic Senators, led by Brian Schatz, to add a tiny amendment to the AICOA bill to say that it can’t be used to create liability for content moderation. If, as Senator Amy Klobuchar and others supporting this bill (including my friends at EFF and Fight for the Future) are correct that this bill already cannot be abused to enable litigation over content moderation, this amendment shouldn’t be a problem. All it would be doing is clarifying that the bill doesn’t do exactly what those supporters say it shouldn’t be read to do.
Except… the Republicans can’t help themselves but to give up the game. The Federalist, not generally the most trustworthy of news sources — but generally a reliable mouthpiece for Trumpist Republicans — ran an article about the Schatz proposal, saying flat out that Republicans would pull their support for AICOA if the minor amendment Schatz suggested is included.
First, lets remind everyone how simple the proposed amendment is:
Protection for Content Moderation Practices.—Nothing in section 3(a)(3) may be construed to impose liability on a covered platform operator for moderating content on the platform or otherwise inhibit the authority of a covered platform operator to moderate content on the platform, including such authority under the First Amendment to the Constitution of the United States, section 230(c) of the Communications Act of 1934 (47 U.S.C. 230(c)), or any other provision of law.
That’s it. If you don’t think this bill can or should be used to sue over content moderation, then this shouldn’t be a problem. But if you do think websites should be sued for their editorial discretion, well… then it’s a problem. And according to the Federalist, it’s a real problem. It notes that this Amendment would kill the only “conservative or populist ideas along for the ride” on the bill.
In other words, it’s flat out admitting that, as we’ve been saying all along, the only reason Republicans support the bill is that they see it as a Trojan Horse to sue over content moderation decisions.
And thus, the Federalist notes that nearly all Republicans supporting the bill would walk if this tiny Amendment is included:
Sen. Chuck Grassley, the lead Senate sponsor of the bill, has reportedly already promised Republicans will walk if the changes are made, and he’s right: Populists and conservatives like Sens. Josh Hawley, Sen. Ted Cruz, and Rep. Matt Gaetz would flee.
As if to confirm that Republicans will bail if the law is explicit that it doesn’t do what supporters of the bill insist it doesn’t do, Rep. Ken Buck (who is the lead Republican sponsor of the companion bill in the House) tweeted out the Federalist article, implying that he, too, would bail if the bill is clarified to say it has no impact on content moderation:
So, there you have it. Supporters of the bill can deny all they want that the bill can be used to sue over content moderation decisions, but the Republicans are flat out telling them that the only reason they support the bill is because they believe it can be used to sue over content moderation decisions.
Honestly, that should make supporters of the bill think hard about what it is they’re actually supporting here.
As the big push is on to approve two internet-focused antitrust bills, the American Innovation and Choice Online Act (AICOA) and the Open App Markets Act, we’ve been calling out that while the overall intentions of both may be good, there are real concerns with the language of both and how it could impact content moderation debates. Indeed, it seems pretty clear that the only reason these bills have strong support from Republicans is because they know the bills can be abused to attack editorial discretion.
There have been some other claims made about problems with these bills, though some of them seem overblown to me (for example, the claims that the Open App Markets bill would magically undermine security on mobile phones). However, Bruce Schneier now points out another potential issue with both bills that seems like a legitimate concern. They both could be backdoors to pressuring companies into blocking encryption apps. He starts by highlighting how it might work with AICOA:
Let’s start with S. 2992. Sec. 3(c)(7)(A)(iii) would allow a company to deny access to apps installed by users, where those app makers “have been identified [by the Federal Government] as national security, intelligence, or law enforcement risks.” That language is far too broad. It would allow Apple to deny access to an encryption service provider that provides encrypted cloud backups to the cloud (which Apple does not currently offer). All Apple would need to do is point to any number of FBI materials decrying the security risks with “warrant proof encryption.”
Sec. 3(c)(7)(A)(vi) states that there shall be no liability for a platform “solely” because it offers “end-to-end encryption.” This language is too narrow. The word “solely” suggests that offering end-to-end encryption could be a factor in determining liability, provided that it is not the only reason. This is very similar to one of the problems with the encryption carve-out in the EARN IT Act. The section also doesn’t mention any other important privacy-protective features and policies, which also shouldn’t be the basis for creating liability for a covered platform under Sec. 3(a).
It gets worse:
In Sec. 2(a)(2), the definition of business user excludes any person who “is a clear national security risk.” This term is undefined, and as such far too broad. It can easily be interpreted to cover any company that offers an end-to-end encrypted alternative, or a service offered in a country whose privacy laws forbid disclosing data in response to US court-ordered surveillance. Again, the FBI’s repeated statements about end-to-end encryption could serve as support.
Finally, under Sec. 3(b)(2)(B), platforms have an affirmative defense for conduct that would otherwise violate the Act if they do so in order to “protect safety, user privacy, the security of nonpublic data, or the security of the covered platform.” This language is too vague, and could be used to deny users the ability to use competing services that offer better security/privacy than the incumbent platform—particularly where the platform offers subpar security in the name of “public safety.” For example, today Apple only offers unencrypted iCloud backups, which it can then turn over governments who claim this is necessary for “public safety.” Apple can raise this defense to justify its blocking third-party services from offering competing, end-to-end encrypted backups of iMessage and other sensitive data stored on an iPhone.
And the Open App Markets bill has similar issues:
S. 2710 has similar problems. Sec 7. (6)(B) contains language specifying that the bill does not “require a covered company to interoperate or share data with persons or business users that…have been identified by the Federal Government as national security, intelligence, or law enforcement risks.” This would mean that Apple could ignore the prohibition against private APIs, and deny access to otherwise private APIs, for developers of encryption products that have been publicly identified by the FBI. That is, end-to-end encryption products.
Some might push back on this by pointing out that Apple has strongly supported encryption over the years, but these bills open up some potential problems, and, at the very least, might allow companies like Apple to block third party encryption apps — even as the stated purpose of the bill is the opposite.
As Schneier notes, he likes both bills in general, but this sloppy drafting is a problem.
The same is true of the language that could impact content moderation. In both cases, it seems that this is messy drafting (though in the content moderation case, it seems that Republicans have jumped on it and have now made it the main reason they support these bills, beyond general anger towards “big tech” for populist reasons).
Once again, the underlying thinking behind both bills seems mostly sound, but these problems again suggest that these bills are, at best, half-baked, and could do with some careful revisions. Unfortunately, the only revisions we’ve seen so far are those that carved out a few powerful industries.
The Democrats supporting the bill more or less know this. The bill’s author in the Senate, Amy Klobuchar, had a chance to fix these issues, but instead chose to pander even more to Republicans by carving out the finance and telco sectors from the bill’s impact, while leaving in the problematic language that will be abused for content moderation purposes.
As they note, since (the non-disingenuous…) supporters of the bill keep insisting that it’s not meant to impact content moderation at all, there shouldn’t be any problem with amending the bill to make that absolutely clear.
Our understanding is that you do not intend for the bill to limit content moderation in this way, and we want to work with you to fix this issue. We certainly acknowledge that reasonable minds may disagree about the meaning of this provision, and that is precisely why adding the suggested clarification below to the bill makes sense. We believe that adding the following text to the of
Rule of Construction (Section 5) will resolve the issue by simply spelling out what we understand is our shared intent:
Protection for Content Moderation Practices.—Nothing in section 3(a)(3) may be construed to impose liability on a covered platform operator for moderating content on the platform or otherwise inhibit the authority of a covered platform operator to moderate content on the platform, including such authority under the First Amendment to the Constitution of the United States, section 230(c) of the Communications Act of 1934 (47 U.S.C. 230(c)), or any other provision of law.
That language would be a big improvement. And while it won’t fully stop frivolous lawsuits, it would help get most of them dismissed earlier.
So, now the question remains: will Klobuchar accept this fairly straightforward suggestion? Because if she doesn’t, she seems to be acknowledging the open secret: that many of the Republicans are supporting this bill because they want it to be abused in a manner around content moderation.
Either way, kudos to these four Senators for standing up and asking Klobuchar to do the right thing.
Here on Techdirt, we’ve written about a bunch of John Oliver’sLast Week Tonight shows that are quite frequently directly in agreement with what we write about on Techdirt. We’re often impressed at the level of detail and nuance he’s able to approach complex issues with, while (of course) keeping things quite funny. I know that he has a large, very smart team, that often digs in deep with experts in order to get a complete picture. That’s why his reports on SLAPP suits, voting machines, grandstanding state AGs, police accountability, encryption and much much more have been featured here as worth watching on important topics we’ve covered for decades.
However, I’m quite disappointed in his most recent show about antitrust reform and tech monopolies. I do think it’s worth watching, but it’s missing some important context that I would have normally expected from him and his team.
I think that the video does do a good job addressing some of the actual problems of giant tech companies and their power. Though, I do wonder about using a quote from Jonathan Taplin as support for anything, considering he’s an extremist copyright maximalist, whose screeds against Google and the internet are so full of wrongness that they’ve inspired a whole genre of NY Times corrections.
But, the problem with Oliver’s segment is that while it spends most of the episode laying out legitimate concerns about tech power concentration, it then simply accepts that the two popular bills making their way through Congress will actually help and won’t cause problems. Oliver embraces and supports the American Innovation and Choice Online Act (AICOA) and the Open App Markets bill. However, as we’ve explained, while both bills have some good parts, the only reason Republicans are supporting them is that they know that the bills will be massively abused to litigate content moderation decisions.
Oliver doesn’t mention this or explore the issues. He only mentions Republican support in noting that both Bernie Sanders and Josh Hawley support the bills, suggesting that the only reason the bills have bipartisan support is because they’re “too narrow.” But that ignores that the actual reason they have Republican support is because Republicans see this as a tool to punish and intimidate “big tech” into leaving their lies and propaganda online. Ted Cruz has repeatedly noted he supports these bills because they will “unleash the trial lawyers” on these companies.
And, just after Oliver’s segment aired, Hawley again bragged about using them to attack “woke” corporations:
And, at the very least, I’d expect Oliver and his team, with their willingness to explore nuances, to at least maybe explore why support for these bills are coming from copyright maximalist extremists and populist propagandist politicians.
But… he doesn’t.
Instead, he implies falsely that the only criticism of these bills is coming from big tech “shills.” And while it is true that some of the pushback on these bills is coming from disingenuous sources, using disingenuous arguments, some of the concerns are legit. And to wipe them away and assume that just because he’s accurately laid out the problem, that these bills are automatically a solution is the type of facile, but wrong, exploration of complex solutions I’m used to it from much of the rest of the media, but had come to expect better of from Oliver.
I mean, just as one example, four years ago, Oliver himself did a wonderful piece about how state Attorneys General abuse their positions for political means, often doing the will of certain industries, to attack other industries. And, I should note clearly here that these bills enable state AGs to go after the tech companies. So, if Oliver and his team are well aware of that, why are they downplaying the possibility that these bills might be abused and dangerous, political ways?
As we’ve discussed at length over the last few months, there are fairly easy ways that these bills could be amended to limit the possibility of abuse. But the Democrats sponsoring the bills have refused to do so, because they know they’d lose that critical “bipartisan support.” But, really, that should be the story here. The only reason these bills have bipartisan support is because Republicans know they’ll be abused, and WANT them to be abused. The only amendments we’ve seen have simply been to carve out certain industries after lobbyists complained.
Again, that seems like the kind of story I’d expect to see from Oliver, rather than full throated support for these bills.
We’ve pointed this out a few times over the past year. The main antitrust bills that are floating around both the House and the Senate only have Republican support because they have a trojan horse hidden in them that will make it much more difficult for the biggest websites to do any moderation on Republican culture war propaganda campaigns. The two major bills, the American Innovation and Choice Online Act (AICOA) and the Open App Markets bill, both have clauses against anti-competitive “preferencing.”
However, as we keep pointing out, this would allow Parler to argue that Amazon, Google, and Apple treated it differently than, say, Twitter, when those three companies chose not to do business with Parler. Parler even made some of these arguments in its lawsuit against Amazon, and while that lawsuit flopped, if these laws passed, it would reopen the issue and allow companies to sue.
A number of Democrat supporters of these bills, and various civil society organizations, including many that we’ve worked with and usually support, keep trying to brush aside this issue, and keep insisting that it won’t really matter. Some are even willing to align with outright bigots who are only supporting these bills for this very reason, because they think getting something passed on antitrust is the bigger issue.
However, the Washington Post has a great op-ed from two academics who understand this issue better than just about anyone else: Jane Bambauer from University of Arizona and Anupam Chander from Georgetown. I highly encourage everyone supporting these bills to read their analysis of how these bills could create a real mess for disinformation online.
They also point to the Parler example, but they also, thankfully, take on the main argument I’ve heard back from friends supporting these bills: that courts would throw out such lawsuits. This, to me, has always been an odd take, since they know how damaging even frivolous lawsuits can be, and how much of a chilling effect even the threat of extensive litigation can cause. And as Bambauer and Chander make clear, here the chilling effects can be significant.
But the bills would hand the makers of services and apps that give free rein to hate speech and disinformation a powerful weapon to use in court: If Apple or Google kicked them out of app stores, or downgraded them in search results, these companies could argue that the decisions weren’t about content moderation at all, but rather market domination.
At the least, such claims would have to be litigated — a costly proposition, with no guarantee of victory. Alternatively, Apple, Google and other companies might become less vigilant about screening out hate speech and disinformation. You can be wary of Big Tech’s market power and still think the implication of these bills for the speech that is spread online is extremely bad.
Suppose Truth Social — President Donald Trump’s Twitter rival — becomes a hotbed of election disinformation, vaccine misinformation and racist speech, and Apple decides that it is violating its App Store guidelines, which require app-makers to filter objectionable content. Would Truth Social or an ideological ally sue, arguing that Apple was preferencing its own News app, or its business partner Twitter’s app? Some judges, and possibly a Supreme Court majority, would be sympathetic to such claims. After all, this would represent a difference in treatment between similar apps (though Apple could of course argue that all apps that permit disinformation are treated alike). Sen. Ted Cruz (R-Tex.) is among those who have noticed that these bills could lead to results similar to those of the recently eviscerated Texas content-moderation law. The bill targeting app stores would “make some positive improvement on the problem of censorship,” he said during markup for the bill.
Also, the bills’ authors could make it clear that these laws can’t be used to stop lawsuits related to content moderation choices, but they have deliberately chosen not to (because they know they’d lose the Republican support if they do).
The Klobuchar-Grassley bill does allow companies to defend against lawsuits by demonstrating that their actions were taken to protect safety, user privacy or the security of the platform, but this defense would likely prove inadequate. Apple or Google would carry the burden of proving that its actions were “reasonably necessary” to protect those specific interests. And even showing that the removed app or speech was sexist, racist, antisemitic or Islamophobic would not be enough. The other bill’s safeguards against abuse are even weaker.
The article also notes that while some supporters of the bill insist that Section 230 would protect these bills from being abused to stop moderation choices, that also seems unlikely for two reasons. Under the Malwarebytes case, companies can get around the 230 issue by claiming that the moderation decision was anticompetitive, rather than for legitimate content moderation needs, and then 230 gets taken off the table. Also, that depends on no more changes being made to either Section 230 itself, or how the courts interpret 230 — both of which seems like dubious propositions (unfortunately).
But, really, the 5th Circuit’s decision in the case highlights the fact that it’s not at all likely that courts would toss out these cases. And, importantly, given the size of the penalties under at least one of the laws, it would be risky for companies to not act accordingly.
Note that if the Internet platform loses, the Klobuchar-Grassley bill would subject it to a penalty of up to 15 percent of its U.S. revenue (not just profits), a risk that few companies would be willing to take.
Perhaps some companies are willing to risk 15% of their revenue on judges understanding bad faith litigation, but that’s a huge bet.
And, again, the article notes that the bills’ authors could fix this, and make it clear that these scenarios don’t apply to the bill, but it appears Democratic Senators have deliberately chosen not to, because they know they’d lose GOP support for the bill.
The Klobuchar-Grassley bill authors recognize that it could affect moderating activity by platforms. The bill, therefore, explicitly excludes from its definition of unlawful activity any reasonable actions the platforms take to protect the copyrights and trademarks of others. Unfortunately, actions motivated by corporate responsibility and designed to protect against hate speech, harassment or misinformation don’t receive similar protection.
What’s most frustrating to me in all of this is how supporters of these bills refuse to actually engage on this point beyond insisting that the courts will dump these lawsuits. That’s far from certain. And even if it were true, these are the same groups that often point out the chilling effects of even frivolous, vexatious litigation.
If those groups, and the politicians pushing these bills, really believe in the underlying concepts in the bill there’s a solution: amend the bills to make it clear they can’t be used in these kinds of content moderation situations. If they’re unwilling to do that, it just feels like they’re carrying water for disinformation peddlers and trollish bigots who are eagerly looking forward to using these laws to litigate.
Look: there are very real issues with the state of the internet today, including the amount of power a few companies have. But that doesn’t mean any solution is a good solution. Unfortunately, Senator Amy Klobuchar, whenever given the option, seems to put forth the worst possible plan. It’s mind boggling.
For a while now, Klobuchar, along with Senator Chuck Grassley, have been pushing their American Innovation and Choice Online Act (AICOA). It’s got a fair bit of support, including from companies and organizations I often agree with on the issues. But, this bill has serious problems. Many of us raised concerns about those problems, and even made suggestions on how to fix the problems. There are ways to create a bill that would target the actual bad practices of internet companies. But this isn’t it.
For a few months, Klobuchar has apparently been working on a new and improved version of the bill, which was revealed last night. Somewhat incredibly, it fixes none of the problems people raised. The major change: making sure it doesn’t apply to telcosand financial companies.
I only wish I were joking. Of course, this is the same Klobuchar who, on a different antitrust bill, made sure to carve out her state’s largest employer, Target. So, we get it. Klobuchar cares more about making the lobbyists and specific industries happy than tackling the real problems of her bill. It’s pathetic.
The main “focus” of the bill is that it’s supposed to bar certain large companies from preferencing their own products. So, for example, Yelp has spent over a decade whining that Google showed people the results of its own Local search, crowding Yelp results out of search. The bill is designed to say that companies can’t do that any more. Of course, there are legitimate concerns that this will mean certain companies sending people to very useful products that people actually like will violate this bill. The quintessential example of this: when doing a search on a location, Google can point you to Google Maps. But, under this bill, that would be problematic.
discriminate in the application or enforcement of the terms of service of the covered platform among similarly situated business users in a manner that would materially harm competition;
So, Amazon telling Parler that it violates AWS’ terms of service and booting it off the service? That would not be allowed under this bill. Remember, Parler sued Amazon, and a key part of their initial claims was that because Amazon treated Twitter differently than Parler (which wasn’t true at the time, as Twitter had only just signed a deal to use AWS but wasn’t on it yet), that it was anticompetitive for Amazon to remove Parler. The judge in that case was not impressed, but if AICOA becomes law, suddenly we’re going to see a ton of claims like this in response to moderation choices.
Tons of companies already love to claim that moderation decisions are about harm to competition. Hell, for many years, the main company going after Google for antitrust was a really, really spammy tool called Foundem, that was upset that Google had realized that users hated getting sent to Foundem, and downranked the site. Foundem (apparently funded by Microsoft) spent years insisting this was “anticompetitive” rather than “making search work better by not sending users to spammy sites they don’t want.” But, again, under AICOA, arguments like that are going to have to be considered by judges.
Downranking spammy sites and services, or removing sites that ignores terms of service like Parler, now become competition law minefields.
It’s difficult to see how that’s good for anyone, other than the operators of sketchy sites.
As we’ve noted, everyone in the Senate actually knows this. Because the main reason that Klobuchar keeps this nonsense in the bill and doesn’t fix the language, is because she knows that this is the only way to keep Republicans on the bill. Republicans see this content moderation trojan horse in the bill, and are thrilled with it. Because they think it’s going to allow lawsuits to protect Parler, Truth Social, and their other also ran websites.
Remember, Ted Cruz was so excited about this bill because it would, in his words, “unleash the trial lawyers” to sue Google, Facebook and others for content moderation decisions.
Republicans are supporting this bill because they know it will be used to hit internet companies with all sorts of lawsuits over their moderation decisions.
Of course, it appears that some Republicans worried (or, rather, some telco lobbyists told Republicans) that the law might ALSO result in broadband providers facing the same sorts of nonsense lawsuits. Indeed, part of the original bill could have been read as a kind of net neutrality bill in disguise, because larger ISPs would be barred from similarly “favoring” services over others in a way deemed anticompetitive. And you can bet that some telcos that rely on things like zero rating were worried.
So, that brings us to the major change in this new version of Klobuchar’s bill: she carved out the telcos to make sure the bill doesn’t apply to them. Even though telcos are way more of a competition problem than any online service. Here’s some new language in the bill excluding telcos. It explicitly says that the definition of an “online platform”:
does not include a service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service.
Got it? So, no preferencing. Unless you’re the only broadband player in town. Then, go hog-wild, according to Senator Klobuchar.
Nice work there. That won’t make people cynical at all about the political process.
Of course, once again, this is almost certainly appeasement to Republicans, who, for clear political reasons, want to continue to pretend that telcos are no big deal, and that it’s only the big internet providers who are evil.
It makes no sense at all that Democrats like Amy Klobuchar are playing right into their hands, and giving them everything that they want. But, of course, Klobuchuar has decided for political reasons that she wants to be seen as the senator who took on big tech for her next presidential campaign. And, if that means handing Republicans all the tools they need to file a ton of vexatious lawsuits to try to force companies to enable more hate speech and propaganda, so be it.
It’s pure cynical opportunism.
Oh, and also, it looks like financial firms got a little carve out as well. The original bill said the term online platforms would apply to websites that “facilitates the offering, advertising, sale, purchase, payment, or shipping of products or services…” The new version of the bill covers those that “enables the offering, advertising, sale, purchase, or shipping of products or services…”
So, the same list minus payments.
That’s two giant industries — telcos and banks — that were able to secure their carveouts. But, no effort to fix any of the actual problems of the bill.
With the original bill, NERA Economic Consulting had written up an analysis of companies that would be considered covered platforms in the bill, noting that it directly would hit just six: Google, Apple, Facebook, Amazon, Microsoft, and likely TikTok. However, it also noted that there were 13 other companies that were below the size thresholds in the bill, but close enough that they would likely “take measure to avoid significant risk incumbent upon exceeding the thresholds.” Notably, many of those included broadband companies and financial companies. By my count, the new carve outs in the bill likely cut that list of 13 by at least 7.
It’s possible that some of the others might be excluded as well, though I’m not as sure. Still, it seems pretty clear that these new carveouts were directly because of lobbying by these firms that didn’t want to be included, despite the fact that all are arguably much more problematic, and have much less readily available competition than the companies targeted by the bill.
It’s enough to make one think that senators like Klobuchar don’t really care about doing the right thing at all. They just want to be seen as doing something.