Google and Facebook’s antitrust problem is getting much more serious

In July, when the Federal Trade Commission settled with Facebook over privacy issues, I wondered whether our strange era of regulation would amount to anything more than a round of fines and promises to do better from the tech platforms. Congress has made little progress toward passing the sort of privacy legislation that could expand the FTC’s authority, and the Trump Administration’s antitrust inquiries have been tainted by the perception that they are intended to punish the president’s political enemies rather than level the competitive playing field.

But in the weeks since, new regulatory threats to the tech platforms have appeared at a steady clip. On Friday, the attorney general of New York announced that seven other states and the District of Columbia would join her in a new antitrust investigation of Facebook. Here’s Taylor Telford and Tony Romm in the Washington Post:

James will work with the attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia on an inquiry focused on “Facebook’s dominance in the industry and the potential anti-competitive conduct stemming from that dominance,” according to a news release.

“Even the largest social media platform in the world must follow the law and respect consumers. I am proud to be leading a bipartisan coalition of attorneys general in investigating whether Facebook has stifled competition and put users at risk,” James said in a news release. “We will use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”

Then today, an even bigger hammer dropped. A whopping 50 attorneys general — 48 states plus Puerto Rico and DC — announced they would join Texas Attorney General Ken Paxton in an antitrust investigation of Google. (California and Alabama are sitting this one out.) Here’s Lauren Feiner at CNBC:

“When there is no longer a free market or competition, this increases prices, even when something is marketed as free, and harms consumers,” said Florida Attorney General Ashley Moody, a Republican. “Is something really free if we are increasingly giving over our privacy information? Is something really free if online ad prices go up based on one company’s control?”

The big tech platforms now face two Congressional, six state and local, and eight federal investigations. That’s according to a handy new tracker from the New York Times, which I encourage you to bookmark. (I did!) In a companion piece, Jack Nicas, Karen Weise and Mike Isaac break down the nature of the investigations into Google, Apple, Facebook, and Amazon. While the details vary, anti-competitive behavior is at the heart of many of the inquiries.

How much does all this matter? We don’t know today. But the arrival en masse of the country’s attorneys general is a very serious development. As Romm pointed out in a piece over the weekend, they have a track record of spurring real change across a variety of industries:

When state attorneys general have banded together on a broad, bipartisan basis, they’ve managed to muscle major changes to other industries. They forced billions of dollars in payments from Big Tobacco to pay health claims and finance antismoking campaigns in the 1990s. Two decades later, they helped reform unfair mortgage lending practices. More recently, states have led lawsuits against pharmaceutical companies they contend are responsible for the opioid crisis.

There are important limits to what state AGs can do here, experts told Feiner in a separate piece.

“If people are expecting antitrust law to break up the platforms or fundamentally change the way they do business … my bet is they’re going to be very disappointed,” said Doug Melamed, a professor at Stanford Law School.

If states sign on to a federal case against a tech company, “I think that it would show that there is a lot of momentum behind the challenge to the tech companies,” Carrier said. “But at the end of the day, it’s still up to a court to apply antitrust law. So if the court thinks it’s not an antitrust case, it doesn’t matter if the states have signed on.”

But their power is real — and for the platforms and their legal teams, today represents a significant escalation of the threats against them. Ashley Gold and Christopher Stern lay out some reasons why in The Information:

The states’ involvement ups the ante for Google parent Alphabet and Facebook in multiple ways. The companies, already under investigation for possible antitrust violations by federal regulators, now have to engage with authorities in numerous jurisdictions at once. One risk is that the states decide at some point that federal regulators aren’t moving fast enough, or being tough enough, and opt to file their own lawsuits in federal court, where antitrust cases are typically fought.

It also is possible that the attorneys general eventually could go after Facebook and Google at the state level, where the companies would be forced to fight up to dozens of individual state cases rather than resolving their legal issues in a single federal settlement. That outcome is less likely, however, experts said.

The final outcome of all this is impossible to predict. But if this summer it seemed like the biggest tech platforms might be able to escape US regulators unscathed, today’s developments would seem to make that much less likely.

Meet Zoe

As the audience for The Interface has grown, so have our ambitions for it. Today I’m delighted to tell you that Zoe Schiffer has joined The Verge to work with me on this project. Zoe worked in the technology industry before starting her journalism career, and recently completed a master’s degree at Stanford. She has previously written for Vox, KQED, NPR, and the San Francisco Chronicle. I can’t imagine a better background for the kind of work we do around here.

Take it away, Zoe!

Hey there! I’m really excited to be here. I came to The Interface by way of Stanford, where I studied the intersection of technology and democracy. Before that, I was a full-time writer at Uber.

At The Verge, I’ll be watching the dance between big tech’s ability to self-regulate and the government’s willingness to step in. At the moment, both congress and the courts seem unusually interested in issues of privacy, labor, and competition — but we have to wait and see whether this interest will result in real action. I’ll be monitoring these cases as they move forward and keeping a critical eye on their likely impact(s).

If you have tips, sci fi recommendations, or just want to say hi, email me at zoe@theverge.com or find me on Twitter at @zoeschiffer.

The Ratio

Today in news that could affect public perception of tech platforms.

Trending up: The BBC is working with Google, Twitter, and Facebook to develop an “early warning system for misinformation.” They’re also working together on projects involving voter education and media literacy.

Trending down: There’s a lot of “trending down” in today’s Google news, but 50-as-in-five-zero attorneys general teaming up for an antitrust investigation probably takes the cake.

Trending down: Posts on private Instagram accounts and Facebook pages can be found and shared via easily discovered URLs.

Governing

A controversial paper presented this summer at the International Society of Political Psychologists argued that “human brains aren’t built for self-rule,” and that democracy is likely to continue its rapid decline around the world. A chilling story from Rick Shenkman in Politico — and I welcome any thoughts you may have on this subject.

The irony is that more democracy—ushered in by social media and the Internet, where information flows more freely than ever before—is what has unmoored our politics, and is leading us towards authoritarianism. Rosenberg argues that the elites have traditionally prevented society from becoming a totally unfettered democracy; their “oligarchic ‘democratic’ authority” or “democratic control” has until now kept the authoritarian impulses of the populace in check.

Compared with the harsh demands made by democracy, which requires a tolerance for compromise and diversity, right-wing populism is like cotton candy. Whereas democracy requires us to accept the fact that we have to share our country with people who think and look differently than we do, right-wing populism offers a quick sugar high. Forget political correctness. You can feel exactly the way you really want about people who belong to other tribes.

President Trump’s reelection campaign will launch an app this fall “ to encourage supporters to donate, volunteer and reel in like-minded voters — all while providing the president more unfiltered access to his followers.” (Anita Kumar / Politico)

Immigration and Customs Enforcement is seeking from Apple and Google the “names, phone numbers and other identifying data of at least 10,000 users of a single gun scope app” as part of an investigation into gun sales. (Thomas Brewster / Forbes)

Speaking of guns, 15 Democratic senators have called on Facebook to do a better job eliminating guns from its Marketplace service. The letter follows a recent Wall Street Journal report on the subject. (Parmy Olson / Wall Street Journal)

A profile of Rowdy Republican, a Facebook page that whips up partisan outrage to grow its audience so that it can directs its 780,000 followers to buy a deceptive book about diabetes. (Judd Legum / Popular Information)

Some 900 Amazon employees are threatening to walk out September 20th over the company’s insufficient response to climate change, the first time in company history that corporate employees have participated in a walkoit. (Louise Matsakis / Wired)

After social media posts falsely linked him to a mass shooting, Democratic presidential candidate Beto O’Rourke called on tech platforms to remove disinformation more effectively. (Makena Kelly / The Verge)

How Microsoft is avoiding antitrust scrutiny this time around. It’s all about the business model. (Steve Lohr / New York Times)

Industry

How Apple stacked the App Store with its own products. Crackerjack investigation from Jack Nicas and Keith Collins at the New York Times into how the App Store promoted Apple’s own apps over its competitors across some 700 search terms. It’s precisely this sort of self-dealing that has led to successful antitrust prosecutions of Google in Europe. Apple changed its algorithms after being presented with the Times’ findings:

The Times’s analysis of App Store data — which included rankings of more than 1,800 specific apps across 13 keywords since 2013 — illustrated the influence as well as the opacity of the algorithms that underpin tech companies’ platforms.

Those algorithms can help decide which apps are installed, which articles are read and which products are bought. But Apple and other tech giants like Facebook and Google will not explain in detail how such algorithms work — even when they blame the algorithm for problems.

An internal document shows how Apple is changing Siri’s responses to questions about feminism and #MeToo. (Alex Hern / The Guardian)

A dozen current and former Google employees told Recode that many employees are still justifiably afraid to report workplace issues because they fear retaliation. “They say the company continues to conceal rather than confront issues ranging from sexual harassment to security concerns, especially when the problems involve high-ranking managers or high-stakes projects.” (Shirin Ghaffary / Recode)

Google banned ads for “unproven or experimental medical techniques,” including most ads for stem cell therapy and gene therapy, after seeing a rise in ads from bad actors. (William Wan and Laurie McGinley / Washington Post)

Google Maps isn’t always displaying the location of abortion clinics. (Carter Sherman and David Uberti / Vice)

YouTube promised to eliminate comments on content featuring minors, but a simple search turns up more than 100 videos that escaped detection. (Joan E. Solsman / CNET)

Popular YouTube creators are creating successful secondary channels for their podcasts, and clips from the shows have become valuable new sources of audience and revenue. (Julia Alexander / The Verge)

Period tracking apps appear to be sharing sensitive data with Facebook using its software developer kit, which is typically used for ad-targeting purposes. (Megha Rajagopalan / BuzzFeed)

You can now share the song you’re listening to on Spotify as a Snapchat story. (Chris Welch / The Verge)

How Chinese companies are building commerce into chat apps. (Connie Chan / Andreessen Horowitz)

And finally …

The Sketchy Economics Behind the Jeremy Renner App

Many of us have been captivated by the rise and fall of the official Jeremy Renner app, which was shut down last week because EscapeX, the company managing its development, had dramatically under-invested in community management. (Trolls had emerged to issue death threats against some users, as you might expect on an app whose sole purpose was to discuss the life and work of a 48-year-old actor-slash-singer.)

But there was something grifty about the whole thing, as Sarah N. Emerson explains in OneZero:

There is something undeniably icky, even predatory, about Renner asking his fans to pay money to boost their comments and increase the likelihood that he will see them. That was the premise of the app’s virtual currency or “star system,” which let users pay up to $99.99 (equivalent to 14,800 stars) for these credits. EscapeX says the currency was a reward “for being on the app” or creating original content (such as photoshopped images of Renner). People could gift stars to other users and spend them on offers such as lunch with Renner. But what it really boiled down to was a lottery system: the illusion that throwing more money at the app would considerably improve your chances of winning Renner’s attention.

What’s even worse is that users also documented years of abuse and harassment on the app, though Shapira said that it “did not happen frequently.”

It happened frequently enough to kill the app, though. RIP.

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Send us tips, comments, questions, and your state attorneys general power rankings: casey@theverge.com and zoe@theverge.com.

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