with Tonya Riley
The E.U.’s top competition chief Margrethe Vestager said increased online shopping has brought more consumer choice and better prices — fostering more competition.
“We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior,” Vestager said. Amazon told my colleagues in a statement it would cooperate fully with the E.U. “and continue working hard to support businesses of all sizes and help them grow.” (Amazon chief executive founder and owner Jeff Bezos owns The Washington Post.)
The moves in the European Union signal that despite more activity in Washington aimed at reining in big tech, it's still mainly noise and the real center of activity is still across the Atlantic.
The E.U. announced its probe just a day after Rep. David N. Cicilline (D-R.I.), the chair of the House Judiciary subcommittee focused on antitrust, blasted U.S. enforcers on Tuesdat for not doing enough to rein in the technology industry as executives from Apple, Amazon, Facebook and Google testified on the Hill. He said the lack of regulatory scrutiny of competition in the tech industry in the United States has created “defacto immunity” for the tech platforms..
“This trend is not the inevitable consequence of technological progress,” Cicilline said at a hearing on Tuesday. “It is the result of policy choices we are making as a country.”
Cicilline’s criticism of the top U.S. antitrust enforcers — the Federal Trade Commission and Department of Justice — come on the heels of a flurry of antitrust activity in Washington. His committee has launched a broad, bipartisan probe into competition in the technology industry. Meanwhile, Amazon is under closer watch after the FTC and DOJ divvied up oversight of the e-commerce giant, Facebook, Google and Apple.
Meanwhile, action in Europe has escalated. In a similar but separate case yesterday, Germany’s competition agency, the Bundeskartellamt, said it reached a settlement with Amazon that will result in the company making changes to its dealings with sellers. The agreement will wind down the authority’s eight-month probe into the company, and require Amazon to give sellers at least 30 days notice before suspending their accounts.
Vestager has also already levied more than $9 billion in fines against Google for antitrust violations. She’s also forced other companies like Apple to pay back billions in taxes. The E.U. competition authority is also reportedly probing Apple following a complaint from Spotify that the company’s Apple Music service has an unfair advantage over other competing music streaming apps.
But yesterday’s announcement is a reminder that the E.U. and Washington have similar concerns. Amazon and Facebook bore the brunt of the scrutiny this week in Washington.
The heightened look at Amazon was highlighted by one particular attendee. As Cicilline pressed Amazon executive Nate Sutton, observers noted that Lina Khan, a legal scholar who has been called Amazon’s “antitrust antagonist,” was sitting behind him.
Cicilline suggested Amazon’s current business model could give the company an unfair advantage and pressed Sutton on how it uses the data it collects from third-party sellers.
“You are selling your own products on a platform you control and they’re competing with products from other sellers,” Cicilline said.
Sutton argued that Amazon was engaging in the same tactics that many physical retailers do in selling its own products. He also denied the company uses data it collects to benefit its own sales.
“The difference is Amazon is a trillion-dollar company that runs an online platform with real-time data on millions of purchases and billions in commerce and can manipulate algorithms on its platform and favor its own product. That is not the same as a local retailer,” Cicilline pushed back.
Matthew Stoller, an Open Markets Institute fellow who has advocated for breaking up the tech giants, said:
Yesterday Amazon's Nate Sutton told the House Antitrust Committee that Amazon doesn't use such data to launch its own products. I guess we'll find out if he was telling the truth. https://t.co/5cIsGbWKuD
— Matt Stoller (@matthewstoller) July 17, 2019
Amazon faced a lot of heat during Tuesday’s hearing, while a committee Republicandefended the positive benefit the company had in her community -- underscoring how U.S. lawmakers may be much more wary of cracking down than European regulators. Rep. Kelly Armstrong (R-N.D.) said he comes from a rural area where there is little access to big box retailers.
“So when we're talking about competition and all of this, I also think we've got to remember at no point in time, from my house in Dickinson, North Dakota, have I had more access to more diverse and cheap consumer products,” he said. “Things that often would require a plane ticket or a nine-hour car ride to buy can now be brought to our house. So I think, when we're talking about consumers, we need to remember that side of it too."
Correction: A previous version of this article used an incorrect gender pronoun to refer to Armstrong.
BITS, NIBBLES AND BYTES
BITS: Regulators and industry leaders worry that Telsa’s race to launch untested and unregulated self-driving technology could result in “crashes, lawsuits and confusion,” my colleague Faiz Siddiqui reports.
Tesla’s critics say its plans to forgo complex sensor technology standard in the industry and allow users to use autonomous driving in complex city landscapes could result in significant danger. “And because autonomous vehicles are largely self-regulated — guided by industry standards but with no clearly enforceable rules — no one can stop the automaker from moving ahead,” Faiz writes.
Tesla has pointed to its track record of safety with its Autopilot program, but watchdogs at Consumer Reports and the National Safety Council say that the company’s semiautonomous driving system has also resulted in major accidents and reckless behavior from drivers.
“If the regulators don’t do something about it, then the next place there’s going to be a challenge will be in the courts when somebody gets hurt,” one former transportation official told Faiz. “Those mistakes are going to make a skeptical public even more skeptical and are going to delay the implementation of a technology that could save up to 40,000 lives a year.”
Tesla competitors Waymo and Uber have a much more cautious timeline for testing driverless vehicles, limiting their tests to states that have approved the technology and shutting down experiments after accidents. Tesla is one of the few major car companies with autonomous vehicles to decline to voluntarily report its safety findings to the National Highway Traffic Safety Administration.
NIBBLES: Google’s political ads database continues to have inaccuracies nearly a year after launch, the Wall Street Journal’s Emily Glazer and Patience Haggin report. The company has failed to catalogue recent ads for both presidential and congressional candidates for both parties, raising concerns that the company could also be missing attempts by foreign actors to influence the 2020 election.
While the Journal was unable to identify the exact extent of the discrepancies, reporters found multiple instances of political advertising that was mislabeled or not labeled at all. In the spring, Google listed ads from Trump, Sen. Kamala D. Harris (D-Calif.), and Beto O’Rourke (D-Tex.) but didn’t include their content.
“Google says it has systems to detect political ads from buyers who don't classify them properly by adding the federal election or tax ID, and declined to provide more details,” the Journal reports.
Both Google and Facebook introduced political advertising libraries after pressure from Congress last year. Investigations revealed that both companies had run election-related ads by foreign actors before and after the 2016 election.
BYTES: Sen. Chuck Schumer (D-N.Y.) is calling for the Federal Bureau of Investigation and Federal Trade Commission to investigate a popular Russia-based app to determine whether Russian intelligence could be exploiting the data the app is collecting. FaceApp first launched in 2017, but it started trending again this week with a new artificial intelligence filter that allows users to make their faces look older in pictures
“FaceApp’s location in Russia raises questions regarding how and when the company provides access to the data of U.S. citizens to third parties, including potentially foreign governments,” the Senate minority leader wrote in his request to the agencies.
Experts point out that FaceApp, which grants the company permission to store user photos and transmit them outside the country, could put users at risk of having their photos stored and shared with third parties, including the Russian government.
“It puts the data in a vulnerable state that becomes something that can train facial recognition and other kinds of systems that may not be intended the way people are using it,” Kate O’Neill, a tech consultant, told my colleague Hannah Denham.
Wary of Russian interference ahead of the 2020 election, the DNC has warned staffers to avoid the app, CNN's Donie O'Sullivan reports. “It's not clear at this point what the privacy risks are, but what is clear is that the benefits of avoiding the app outweigh the risks,” said Bob Lord, the DNC's chief security officer.
FaceApp denies suggestions that it's shilling information to Russian spies. The company told my colleague Geoffrey A. Fowler that it does not transfer data to Russia and that most images are removed from its servers in 48 hours.
RANT AND RAVE
FaceApp had Twitter wondering whether Cambridge Analytica taught Americans anything. CNN reporter Seth Fiegerman:
FaceApp’s virality is a damning reminder that we as consumers have learned nothing from the last two years of privacy scandals. If an app looks fun, we don’t ask questions. Remember: Cambridge Analytica started with a personality quiz. https://t.co/AamgAjwZdH
— Seth Fiegerman (@sfiegerman) July 17, 2019
The Daily Beast's Lachlan Markay named his own price for the data:
Nice try FaceApp, but I'm not gonna give some anonymous AI developer permanent access to my likeness for anything less than *carries the 1, multiplies by follower count* 63 retweets.
— Lachlan Markay (@lachlan) July 17, 2019
Crooked Media podcast host Louis Virtel pointed out there was a better app for aging quickly:
You should try this other app that ages you 50 years in a second called Twitter.
— Louis Virtel (@louisvirtel) July 17, 2019
PUBLIC CLOUD
The Trump campaign plans to roll out a mobile app “aimed at engaging its most loyal supporters” in the coming weeks, my colleagues Toluse Olorunnipa and Ashley Parker report. The app will allow users to register to vote, track the campaign, and earn potential rewards for volunteering with the campaign.
“For instance, supporters waiting in line to attend a rally who get a dozen friends to download the app might earn VIP seats once inside,” Toluse and Ashley write. “The app is part of an effort by campaign manager Brad Parscale to juice enthusiasm among Trump supporters and capitalize on the energy at Trump’s rallies.” Parscale was the architect of Trump’s widely praised digital strategy in 2016.
Trump is just the latest 2020 candidate to embrace apps as an organizing tool. Bernie Sanders’ presidential campaign launched its “Bern” app to assist canvassers with data collection in April. And Democrats have followed suit, partnering with political technology start-ups to rally volunteers and donors.
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PRIVATE CLOUD
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CHECK-INS
Today:
- The Open Technology Institute holds a panel on the future of free expression online in America at 12 p.m.
- Chamber of Digital Commerce is hosting its third Congressional Blockchain Education Day.
