John Tye, the founder of Whistleblower Aid, a legal nonprofit that represents people seeking to expose potential lawbreaking, was contacted this spring through a mutual connection by a woman who claimed to have worked at Facebook.
The woman told Mr. Tye and his team something intriguing: She had access to tens of thousands of pages of internal documents from the world’s largest social network. In a series of calls, she asked for legal protection and a path to releasing the confidential information. Mr. Tye, who said he understood the gravity of what the woman brought “within a few minutes,” agreed to represent her and call her by the alias “Sean.”
She “is a very courageous person and is taking a personal risk to hold a trillion-dollar company accountable,” he said.
On Sunday, Frances Haugen revealed herself to be “Sean,” the whistle-blower against Facebook. A product manager who worked for nearly two years on the civic misinformation team at the social network before leaving in May, Ms. Haugen has used the documents she amassed to expose how much Facebook knew about the harms that it was causing and provided the evidence to lawmakers, regulators and the news media.
knew Instagram was worsening body image issues among teenagers and that it had a two-tier justice system — have spurred criticism from lawmakers, regulators and the public.
Ms. Haugen has also filed a whistle-blower complaint with the Securities and Exchange Commission, accusing Facebook of misleading investors with public statements that did not match its internal actions. And she has talked with lawmakers such as Senator Richard Blumenthal, a Democrat of Connecticut, and Senator Marsha Blackburn, a Republican of Tennessee, and shared subsets of the documents with them.
The spotlight on Ms. Haugen is set to grow brighter. On Tuesday, she is scheduled to testify in Congress about Facebook’s impact on young users.
misinformation and hate speech.
In 2018, Christopher Wylie, a disgruntled former employee of the consulting firm Cambridge Analytica, set the stage for those leaks. Mr. Wylie spoke with The New York Times, The Observer of London and The Guardian to reveal that Cambridge Analytica had improperly harvested Facebook data to build voter profiles without users’ consent.
In the aftermath, more of Facebook’s own employees started speaking up. Later that same year, Facebook workers provided executive memos and planning documents to news outlets including The Times and BuzzFeed News. In mid-2020, employees who disagreed with Facebook’s decision to leave up a controversial post from President Donald J. Trump staged a virtual walkout and sent more internal information to news outlets.
“I think over the last year, there’ve been more leaks than I think all of us would have wanted,” Mark Zuckerberg, Facebook’s chief executive, said in a meeting with employees in June 2020.
Facebook tried to preemptively push back against Ms. Haugen. On Friday, Nick Clegg, Facebook’s vice president for policy and global affairs, sent employees a 1,500-word memo laying out what the whistle-blower was likely to say on “60 Minutes” and calling the accusations “misleading.” On Sunday, Mr. Clegg appeared on CNN to defend the company, saying the platform reflected “the good, the bad and ugly of humanity” and that it was trying to “mitigate the bad, reduce it and amplify the good.”
personal website. On the website, Ms. Haugen was described as “an advocate for public oversight of social media.”
A native of Iowa City, Iowa, Ms. Haugen studied electrical and computer engineering at Olin College and got an M.B.A. from Harvard, the website said. She then worked on algorithms at Google, Pinterest and Yelp. In June 2019, she joined Facebook. There, she handled democracy and misinformation issues, as well as working on counterespionage, according to the website.
filed an antitrust suit against Facebook. In a video posted by Whistleblower Aid on Sunday, Ms. Haugen said she did not believe breaking up Facebook would solve the problems inherent at the company.
“The path forward is about transparency and governance,” she said in the video. “It’s not about breaking up Facebook.”
Ms. Haugen has also spoken to lawmakers in France and Britain, as well as a member of European Parliament. This month, she is scheduled to appear before a British parliamentary committee. That will be followed by stops at Web Summit, a technology conference in Lisbon, and in Brussels to meet with European policymakers in November, Mr. Tye said.
On Sunday, a GoFundMe page that Whistleblower Aid created for Ms. Haugen also went live. Noting that Facebook had “limitless resources and an army of lawyers,” the group set a goal of raising $10,000. Within 30 minutes, 18 donors had given $1,195. Shortly afterward, the fund-raising goal was increased to $50,000.
Apple is widely expected to ask a judge to keep the order from going into effect. Either company could also appeal to the U.S. Court of Appeals for the Ninth Circuit. In that court, a three-judge panel could review the decision, a process that could take a year or more. After a ruling there, Apple or Epic could appeal to the Supreme Court.
The ruling allows both sides to claim a partial victory. Apple now has a court ruling that says it does not run a monopoly in an important digital marketplace, which undercuts its opponents’ efforts to claim that it violates antitrust laws. But Epic’s lawsuit could also force Apple to crack open its airtight iPhone software to create an avenue for developers to avoid its commission.
Apple’s shares fell nearly 3 percent on the Nasdaq exchange after the ruling was announced.
“Today the court has affirmed what we’ve known all along: The App Store is not in violation of antitrust law,” Apple said in a statement. “As the court recognized, ‘Success is not illegal.’ Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world.”
The ruling did uphold many of the principles of Apple’s App Store business, including that it can prohibit third-party iPhone app marketplaces and can continue to charge a 30 percent commission on many transactions. Epic had challenged those practices.
“It puts an economic question mark around the App Store, but at the same time, it affirms the principles” of the business, said Adam Kovacevich, a former Google lobbyist who now runs a tech-policy group that is in part sponsored by Apple.
Tim Sweeney, Epic’s chief executive, said on Twitter that he was not satisfied with the ruling because it did not go far enough in allowing companies to complete in-app transactions with their own payment systems, versus having to direct customers to outside websites. He said Fortnite would not return to the App Store until such rules were in place.
“Today’s ruling isn’t a win for developers or for consumers,” he said. “We will fight on.”
Mr. Rubin, the antitrust lawyer, said that Apple would feel relieved to dodge being labeled a monopoly, but that the judge’s verdict would most likely do little to strengthen its standing in other investigations because antitrust lawsuits can vary. He said Apple might also have to consider lowering its commission now that it will be easier for developers to send customers elsewhere to make purchases.
WASHINGTON — For months, Apple and Google have been fighting a bill in the South Korean legislature that they say could imperil their lucrative app store businesses. The companies have appealed directly to South Korean lawmakers, government officials and the public to try to block the legislation, which is expected to face a crucial vote this week.
The companies have also turned to an unlikely ally, one that is also trying to quash their power: the United States government. A group funded by the companies has urged trade officials in Washington to push back on the legislation, arguing that targeting American firms could violate a joint trade agreement.
The South Korean legislation would be the first law in the world to require companies that operate app stores to let users in Korea pay for in-app purchases using a variety of payment systems. It would also prohibit blocking developers from listing their products on other app stores.
How the White House responds to this proposal poses an early test for the Biden administration: Will it defend tech companies facing antitrust scrutiny abroad while it applies that same scrutiny to the companies at home?
executive order to spur competition in the industry, and his top two antitrust appointees have long been vocal critics of the companies.
The approach the White House chooses may have widespread implications for the industry, and for the shape of the internet around the world. A growing number of countries are pursuing stricter regulations on Google, Apple, Facebook and Amazon, fragmenting the rules of the global internet.
American officials have echoed some of the industry’s complaints about the proposal, saying in a March report it appeared to target American companies. But trade officials have yet to take a formal position on it, said Adam Hodge, a spokesman for the United States Trade Representative. He said officials were still considering how to balance the claim that the legislation discriminates against American companies with the belief among tech critics in South Korea and America that the legislation would level the playing field.
“We are engaging a range of stakeholders to gather facts as legislation is considered in Korea, recognizing the need to distinguish between discrimination against American companies and promoting competition,” Mr. Hodge said in a statement.
Apple said that it regularly dealt with the United States government on a range of topics. During those interactions it discussed the South Korean app store legislation with American officials, including at the U. S. Embassy in Seoul, the company said in a statement.
The company said the legislation would “put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases” and endanger parental controls.
A Google spokeswoman, Julie Tarallo McAlister, said in a statement that Google was open to “exploring alternative approaches” but believed the legislation would harm consumers and software developers.
The proposal was approved by a committee in the Korean National Assembly last month, over the opposition of some in the Korean government. It could get a vote in the body’s judiciary committee as soon as this week. It would then require a vote from the full assembly and the signature of President Moon Jae-in to become law.
The proposal would have a major impact on Apple’s App Store and the Google Play Store.
The Google store accounted for 75 percent of global app downloads in the second quarter of 2021, according to App Annie, an analytics company. Apple’s marketplace accounted for 65 percent of consumer spending on in-app purchases or subscriptions.
One way software developers make money is by selling products directly in their apps, like Fortnite’s in-game currency or a subscription to The New York Times. Apple has insisted for years that developers sell those in-app products through the company’s own payment system, which takes up to a 30 percent cut of many sales. Last year, Google indicated it would follow suit by applying a 30 percent cut to more purchases than it had in the past. Developers say that the fees are far too steep.
After South Korean lawmakers proposed the app store bill last year, the Information Technology Industry Council, a Washington-based group that counts Apple and Google as members, urged the United States Trade Representative to include concerns about the legislation in an annual report highlighting “barriers” to foreign trade. The group said in October that the rules could violate a 2007 accord that says neither country can discriminate against firms with headquarters in the other.
Apple said that it was not unusual for an industry group to provide feedback to the trade representative. The company said the government had explicitly asked for comment on potentially discriminatory laws. In a statement, Naomi Wilson, the trade group’s vice president of policy for Asia, said that it encouraged “legislators to work with industry to re-examine the obligations for app markets set forth in the proposed measure to ensure they are not trade-restrictive and do not disproportionately affect” American companies.
When the trade representative’s report was published in March — just weeks after Mr. Biden’s nominee to the position was sworn in — it included a paragraph that echoed some of the tech group’s concerns. The report concluded that the South Korean law’s “requirement to permit users to use outside payment services appears to specifically target U.S. providers and threatens a standard U.S. business model.”
The American report did not say the law would violate the free trade agreement with South Korea. But in July, the managing director of a group called the Asia Internet Coalition, which lists Apple and Google as two of its members, pointed to the report when he told Korea’s trade minister that the law “could provoke trade tensions between the United States and South Korea.”
“The Biden administration has already signaled its concerns,” the director said in a written comment in July.
American diplomats in Seoul also raised questions about whether the legislation could cause trade tensions.
“Google said something like that, and a similar opinion was expressed by the U.S. Embassy in Korea,” said Jo Seoung Lae, a lawmaker who backs the legislation. He added that the embassy had been in touch with his staff throughout June and July. Park Sungjoong, another lawmaker, also said that the embassy had expressed trade concerns about the law.
Mr. Jo said that a Google representative had visited his office to express opposition to the proposal, and that Apple had also “provided their feedback” opposing the legislation.
Mr. Jo said that he had requested that the United States provide its official position, but he said he had not received one yet.
American trade officials sometimes defend companies even when they are criticized by others in the administration. While former President Donald J. Trump attacked a liability shield for social media platforms, known as Section 230, his trade representative wrote a similar provision into agreements with Canada, Mexico and Japan.
But Wendy Cutler, a former official who negotiated the trade agreement between South Korea and the United States, said that it would be difficult for America to argue that the Korean rules violate trade agreements when the same antitrust issues are being debated stateside.
“You don’t want to be calling out a country for potentially violating an obligation when at the same time your own government is questioning the practice,” said Ms. Cutler,now the vice president at the Asia Society Policy Institute. “It weakens the case substantially.”
South Korean and American app developers have run their own campaign for the new rules, arguing it would not trigger trade tensions.
In June, Mark Buse, the top lobbying executive at the dating app company Match Group and a former board member of a pro-regulation group called the Coalition for App Fairness, wrote to Mr. Jo, the Korean lawmaker, supporting the proposal. He said that the Biden administration knew about concerns around the tech giants, making trade tensions less likely.
Later that month, Mr. Buse attended a virtual conference about the app store legislation hosted by K-Internet, a trade group that represents major Korean internet companies like Naver, Google’s main search competitor in South Korea, and Kakao.
Mr. Buse, who traveled to Seoul this month to press the case for the legislation on behalf of the Coalition for App Fairness, made it clear that his employer considered it a high-stakes debate. He listed the many other countries where officials were concerned about Apple’s and Google’s practices.
“And all of this,” he said, “is following the leadership that the Korean assembly is showing.”
WASHINGTON — When the nation’s antitrust laws were created more than a century ago, they were aimed at taking on industries such as Big Oil.
But technology giants like Amazon, Facebook, Google and Apple, which dominate e-commerce, social networks, online advertising and search, have risen in ways unforeseen by the laws. In recent decades, the courts have also interpreted the rules more narrowly.
On Monday, a pair of rulings dismissing federal and state antitrust lawsuits against Facebook renewed questions about whether the laws were suited to taking on tech power. A federal judge threw out the federal suit because, he said, the Federal Trade Commission had not supported its claims that Facebook holds a dominant market share, and he said the states had waited too long to make their case.
The decisions underlined how cautious and conservative courts could slow an increasingly aggressive push by lawmakers, regulators and the White House to restrain the tech companies, fueling calls for Congress to revamp the rules and provide regulators with more legal tools to take on the tech firms.
David Cicilline, a Democrat of Rhode Island, said the country needed a “massive overhaul of our antitrust laws and significant updates to our competition system” to police the biggest technology companies.
Moments later, Representative Ken Buck, a Colorado Republican, agreed. He called for lawmakers to adapt antitrust laws to fit the business models of Silicon Valley companies.
This week’s rulings have now put the pressure on lawmakers to push through a recently proposed package of legislation that would rewrite key aspects of monopoly laws to make some of the tech giants’ business practices illegal.
“This is going to strengthen the case for legislation,” said Herbert Hovenkamp, an antitrust expert at the University of Pennsylvania Law School. “It seems to be proof that the antitrust laws are not up to the challenge.”
introduced this month and passed the House Judiciary Committee last week. The bills would make it harder for the major tech companies to buy nascent competitors and to give preference to their own services on their platforms, and ban them from using their dominance in one business to gain the upper hand in another.
including Lina Khan, a scholar whom President Biden named this month to run the F.T.C. — have argued that a broader definition of consumer welfare, beyond prices, should be applied. Consumer harm, they have said, can also be evident in reduced product quality, like Facebook users suffering a loss of privacy when their personal data is harvested and used for targeted ads.
In one of his rulings on Monday, Judge James E. Boasberg of U.S. District Court for the District of Columbia said Facebook’s business model had made it especially difficult for the government to meet the standard for going forward with the case.
The government, Judge Boasberg said, had not presented enough evidence that Facebook held monopoly power. Among the difficulties he highlighted was that Facebook did not charge its users for access to its site, meaning its market share could not be assessed through revenue. The government had not found a good alternative measure to make its case, he said.
He also ruled against another part of the F.T.C.’s lawsuit, concerning how Facebook polices the use of data generated by its product, while citing the kind of conservative antitrust doctrine that critics say is out of step with the technology industry’s business practices.
The F.T.C., which brought the federal antitrust suit against Facebook in December, can file a new complaint that addresses the judge’s concerns within 30 days. State attorneys general can appeal Judge Boasberg’s second ruling dismissing a similar case.
fined Facebook $5 billion in 2019 for privacy violations, there were few significant changes to how the company’s products operate. And Facebook continues to grow: More than 3.45 billion people use one or more of its apps — including WhatsApp, Instagram or Messenger — every month.
The decisions were particularly deflating after actions to rein in tech power in Washington had gathered steam. Ms. Khan’s appointment to the F.T.C. this month followed that of Tim Wu, another lawyer who has been critical of the industry, to the National Economic Council. Bruce Reed, the president’s deputy chief of staff, has called for new privacy regulation.
Mr. Biden has yet to name anyone to permanently lead the Justice Department’s antitrust division, which last year filed a lawsuit arguing Google had illegally protected its monopoly over online search.
The White House is also expected to issue an executive order this week targeting corporate consolidation in tech and other areas of the economy. A spokesman for the White House did not respond to requests for comment about the executive order or Judge Boasberg’s rulings.
Activists and lawmakers said this week that Congress should not wait to give regulators more tools, money and legal red lines to use against the tech giants. Mr. Cicilline, along with Representative Jerrold Nadler of New York, the chairman of the House Judiciary Committee, said in a statement that the judge’s decisions on Facebook show “the dire need to modernize our antitrust laws to address anticompetitive mergers and abusive conduct in the digital economy.”
Senator Amy Klobuchar, a Democrat of Minnesota who chairs the Senate Judiciary Committee’s subcommittee on antitrust, echoed their call.
“After decades of binding Supreme Court decisions that have weakened our antitrust policies, we cannot rely on our courts to keep our markets competitive, open and fair,” she said in a statement. “We urgently need to rejuvenate our antitrust laws to meet the challenges of the modern digital economy.”
But the six bills to update monopoly laws have a long way to go. They still need to pass the full House, where they will likely face criticism from moderate Democrats and libertarian Republicans. In the Senate, Republican support is necessary for them to overcome the legislative filibuster.
The bills may also not go as far in altering antitrust laws as some hope. The House Judiciary Committee amended one last week to reinforce the standard around consumer welfare.
Even so, Monday’s rulings have given the proposals a boost. Bill Baer, who led the Justice Department antitrust division during the Obama administration, said it “gives tremendous impetus to those in Congress who believe that the courts are too conservative in addressing monopoly power.”
Facebook and the tech platforms might like the judge’s decisions, he said, “but they might not like what happens in the Congress.”
President Biden named Lina Khan, a prominent critic of Big Tech, as the chair of the Federal Trade Commission, according to two people with knowledge of the decision, a move that signals that the agency is likely to crack down further on the industry’s giants.
A public announcement of the decision is expected Tuesday, one of the people said.
Earlier in the day, the Senate voted 69 to 28 to confirm Ms. Khan, 32, to a seat at the agency. The commission investigates antitrust violations, deceptive trade practices and data privacy lapses in Silicon Valley.
Ms. Khan did not immediately respond to a request for comment.
In her new role, Ms. Khan will help regulate the kind of behavior highlighted for years by critics of Amazon, Facebook, Google and Apple. She told a Senate committee in April that she was worried about the way tech companies could use their power to dominate new markets. She first attracted notice as a critic of Amazon. The agency is investigating the retail giant and filed an antitrust lawsuit against Facebook last year.
Her appointment was a victory for progressive activists who want Mr. Biden to take a hard line against big companies. He also gave a White House job to Tim Wu, a law professor who has criticized the power of the tech giants.
But Mr. Biden has yet to fill another key positions tasked with regulating the industry: someone to lead the Department of Justice’s antitrust division.
This is a developing story. Check back for updates.
LONDON — Russia is increasingly pressuring Google, Twitter and Facebook to fall in line with Kremlin internet crackdown orders or risk restrictions inside the country, as more governments around the world challenge the companies’ principles on online freedom.
Russia’s internet regulator, Roskomnadzor, recently ramped up its demands for the Silicon Valley companies to remove online content that it deems illegal or restore pro-Kremlin material that had been blocked. The warnings have come at least weekly since services from Facebook, Twitter and Google were used as tools for anti-Kremlin protests in January. If the companies do not comply, the regulator has said, they face fines or access to their products may be throttled.
The latest clashes flared up this week, when Roskomnadzor told Google on Monday to block thousands of unspecified pieces of illegal content or it would slow access to the company’s services. On Tuesday, a Russian court fined Google 6 million rubles, or about $81,000, for not taking down another piece of content.
store all data on Russian users within the country by July 1 or face fines. In March, the authorities had made it harder for people to see and send posts on Twitter after the company did not take down content that the government considered illegal. Twitter has since removed roughly 6,000 posts to comply with the orders, according to Roskomnadzor. The regulator has threatened similar penalties against Facebook.
the police visited Twitter’s offices in New Delhi in a show of force. No employees were present, but India’s governing party has become increasingly upset with the perception that Twitter has sided with its critics during the coronavirus pandemic.
In Myanmar, Poland, Turkey and elsewhere, leaders are also tightening internet controls. In Belarus, President Aleksandr G. Lukashenko this week signed a law banning livestreams from unauthorized protests.
“All of these policies will have the effect of creating a fractured internet, where people have different access to different content,” said Jillian York, an internet censorship expert with the Electronic Frontier Foundation in Berlin.
The struggle over online speech in Russia has important ramifications because the internet companies have been seen as shields from government censors. The latest actions are a major shift in the country, where the internet, unlike television, had largely remained open despite President Vladimir V. Putin’s tight grip on society.
“sovereign internet,” a legal and technical system to block access to certain websites and fence off parts of the Russian internet from the rest of the world.
an interview this week with Kommersant, a leading Russian newspaper, Andrey Lipov, the head of Roskomnadzor, said slowing down access to internet services was a way to force the companies to comply with Russian laws and takedown orders. Mr. Lipov said blocking their services altogether was not the goal.
Google declined to discuss the situation in Russia and said it received government requests from the around the world, which it discloses in its transparency reports.
Facebook also would not discuss Russia, but said it restricted content that violated local laws or its terms of service. “We always strive to preserve voice for the greatest number of people,” a spokeswoman said.
Twitter said in a statement that it took down content flagged by the Russian authorities that violated its policies or local laws.
protests in support of the opposition leader Alexei A. Navalny after his arrest in January. The demonstrations were the biggest shows of dissent against Mr. Putin in years.
“This mobilization was happening online,” Ms. Zlobina said.
The Russian government has portrayed the tech industry as part of a foreign campaign to meddle in domestic affairs. The authorities have accused the companies of blocking pro-Kremlin online accounts while boosting the opposition, and said the platforms were also havens for child pornography and drug sales.
Twitter became the first major test of Russia’s censorship technology in March when access to its service was slowed down, according to researchers at the University of Michigan.
To resolve the conflict, a Twitter executive met at least twice with Russian officials, according to the company and Roskomnadzor. The government, which had threatened to ban Twitter entirely, said the company had eventually complied with 91 percent of its takedown requests.
Other internet companies have also been affected. Last month, TikTok, the popular social media platform owned by the Chinese company ByteDance, was fined 2.6 million rubles, or about $35,000, for not removing posts seen as encouraging minors to participate in illegal demonstrations. TikTok did not respond to a request for comment.
The fines are small, but larger penalties loom. The Russian government can increase fines to as much as 10 percent of a company’s revenue for repeat offenses, and, perhaps more important, authorities can disrupt their services.
Perhaps the biggest target has been Google. YouTube has been a key outlet for government critics such as Mr. Navalny to share information and organize. Unlike Facebook and Twitter, Google has employees in Russia. (The company would not say how many.)
In addition to this week’s warning, Russia has demanded that Google lift restrictions that limit the availability of some content from state media outlets like Sputnik and Russia Today outside Russia.
Russia’s antitrust regulator is also investigating Google over YouTube’s policies for blocking videos.
Google is trying to use the courts to fight some actions by the Russian government. Last month, it sued Roskomnadzor to fight an order to remove 12 YouTube videos related to opposition protests. In another case, the company appealed a ruling ordering YouTube to reinstate videos from Tsargrad, a nationalist online TV channel, which Google had taken down over what it said were violations of American sanctions.
Joanna Szymanska, a senior program officer for Article 19, an internet freedom group, said Google’s recent lawsuit to fight the YouTube takedown orders would influence what other countries did in the future, even if the company was likely to lose in court. Ms. Szymanska, who is based in Poland, called on the tech companies to be more transparent about what content they were being asked to delete, and what orders they were complying with.
“The Russian example will be used elsewhere if it works well,” she said.
Adam Satariano reported from London and Oleg Matsnev from Moscow. Anton Troianovski contributed reporting from Moscow.
This article is part of the On Tech newsletter. You can sign up here to receive it weekdays.
Hoo boy, this is a moment. A government authority in the United States has sued Amazon over claims that the company is breaking the law by unfairly crushing competition.
The lawsuit, filed on Tuesday by the attorney general for the District of Columbia, joins the recent government antitrust cases against Google and Facebook. These lawsuits will take forever, and legal experts have said that the companies likely have the upper hand in court.
The D.C. attorney general, Karl Racine, however, is making a legal argument against Amazon that is both old-school and novel, and it might become a blueprint for crimping Big Tech power.
It’s a longstanding claim by some of the independent merchants who sell on Amazon’s digital mall that the company punishes them if they list their products for less on their own websites or other shopping sites like Walmart.com. Those sellers are effectively saying that Amazon dictates what happens on shopping sites all over the internet, and in doing so makes products more expensive for all of us.
told me that he believed that those price claims were the strongest potential antitrust case against Amazon on legal grounds. (He has since been picked to advise the White House on corporate competition issues.)
I don’t know if any of these lawsuits against Big Tech will succeed at chipping away at the companies’ tremendous influence. And I can’t definitively say whether we’re better or worse off by having a handful of powerful technology companies that make products used and often loved by billions of people.
the price of power is scrutiny.
How to fight back against bogus online information: The comedian Sarah Silverman and three of my colleagues are hosting a virtual event Wednesday about disinformation and how to combat it. Sign up here for the online event at 7 p.m. Eastern. It’s open only to New York Times subscribers.
fine social media companies for permanently barring political candidates’ accounts. The measure is most likely unconstitutional and unenforceable, Democrats, libertarian groups and tech companies told my colleague David McCabe, but it’s a response to Facebook’s and Twitter’s suspension of former President Donald Trump.
Posting is life. My colleague Taylor Lorenz explains how social media invitations to a teenager’s birthday party spread on TikTok and drew thousands of people and a police crackdown. The event got big partly because it was an opportunity for attendees to post compelling material online. SIGH.
POTUS loves Apple News? I don’t like it when computers and smartphones come with the device makers’ apps already installed, but it’s effective — even with the president of the United States. The Washington Post reported that during the 2020 campaign Joe Biden shared with aides human interest stories from Apple News, which came on his iPhone and he apparently hadn’t deleted.
Hugs to this
The Linda Lindas are glorious. Here is the talented punk band of four girls between the ages of 10 and 16 — Bela, Eloise, Mila and Lucia — playing “Racist, Sexist Boy” at a Los Angeles public library. The Guardian interviewed them about their sudden internet fame.
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The District of Columbia sued Amazon on Tuesday, accusing it of artificially raising prices for products in its ubiquitous online marketplace and around the web by abusing its monopoly power, a sign that regulators in the United States are increasingly turning their attention to the company’s dominance across the economy.
In the lawsuit, the D.C. government said that Amazon had effectively prohibited merchants that use its platform from charging lower prices for the same products elsewhere online. That, in turn, raised prices for those products not just on Amazon’s website but in other marketplaces as well, it said.
“Amazon has used its dominant position in the online retail market to win at all costs,” said Karl Racine, the attorney general for the District of Columbia. “It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor.”
Jodi Seth, a spokeswoman for Amazon, said in a statement that Mr. Racine “has it exactly backwards — sellers set their own prices for the products they offer in our store.” She added that Amazon reserved the right “not to highlight offers to customers that are not priced competitively.”
others raise their prices elsewhere or choose to list solely on Amazon, the largest e-commerce site in the country, to avoid losing their listings. The complaint said “Walmart routinely fields requests from merchants to raise prices on Walmart’s online retail sales platform because the merchants worry that a lower price on Walmart will jeopardize their status on Amazon.”
Absent the policing, sellers “would be able to sell their products on their own or other online retail sales platforms for less than they sell them on Amazon’s platform,” it said.
“Most favored nation” contracts are common across industries, including the cable industry with media business partners. Mr. Racine’s office will have to prove how the price agreements harmed other sellers and were anticompetitive.
Tim Cook took the stand for the first time as Apple’s chief executive. The billionaire creator of one of the world’s most popular video games walked a federal judge through a tour of the so-called metaverse. And lawyers in masks debated whether an anthropomorphic banana without pants was appropriate to show in federal court.
For the past three weeks, Apple has defended itself in a federal courtroom in Oakland, Calif., against claims that it abused its power over the iPhone App Store, in one of the biggest antitrust trials in Silicon Valley’s history. Epic Games, the maker of the popular game Fortnite, sued Apple last year seeking to allow apps to avoid the 30 percent commission that the iPhone maker takes on many app sales.
On Monday, the trial — which covered esoteric definitions of markets as well as oddball video game characters — concluded with Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California pressing the companies on what should change in Apple’s business, if anything. The decision over the case, as well as the future of the $100 billion market for iPhone apps, now rests in her hands. Judge Gonzalez Rogers has said she hopes to issue a verdict by mid-August.
Yet even in an era of antitrust scrutiny of the world’s biggest tech companies, the trial showed how difficult it was to take on a $2.1 trillion corporate titan like Apple.
more than $1 billion in sales — from the App Store. Epic also spent millions of dollars on lawyers, economists and expert witnesses. Yet it still began the trial at a disadvantage because antitrust laws tend to favor defendants, according to legal experts who tracked the case.
While Judge Gonzalez Rogers signaled openness to Epic’s arguments during the trial, a ruling in favor of the video game maker might not lead to momentous changes in the market for mobile apps. Any verdict is also likely to be tied up in appeals for years, at which point rapid change in the technology industry could leave its effects obsolete.
“To mount a credible antitrust campaign, you need to have a significant war chest,” said David Kesselman, an antitrust lawyer in Los Angeles who has followed the case. “And the problem for many smaller companies and smaller businesses is that they don’t have the wherewithal to mount that type of a fight.”
The case focused on how Apple wields control over the iPhone App Store to charge its commission on app sales. Companies big and small have argued that the fee shows Apple is abusing its dominance, while Apple has responded that its cut of sales helps fund efforts to keep iPhones safe. Regulators and lawmakers have homed in on the issue, making it the center of antitrust complaints against the company.
Tim Sweeney, Epic’s chief executive and a longtime antagonist to big tech companies, has said he is “fighting for open platforms and policy changes equally benefiting all developers.”
30 percent number has been there since the inception. And if there was real competition, that number would move. And it hasn’t,” she said of Apple’s commission on app sales. She also said that it was anticompetitive for Apple to ban companies from telling customers that they could buy items outside of iPhone apps.
At other times on Monday, she appeared reluctant to force Apple to change its business. “Courts do not run businesses,” she said.
Judge Gonzalez Rogers also suggested that Epic’s requested outcome in the case would require a significant change in Apple’s business and questioned whether there was legal precedent for that. “Give me some example that survived appellate review where the court has engaged in such a way to limit or fundamentally change the economic model of a monopolistic company?” she asked Epic’s lawyers.
ripe for a legislative fix. Apple also faces two other federal lawsuits over its app fees — one from consumers and one from developers — which are both seeking class-action status. Judge Gonzalez Rogers is also set to hear those cases.
Similarly, a victory for Apple could deflate those challenges. Regulators might be wary to pursue a case against Apple that has already been rejected by a federal judge.
Judge Gonzalez Rogers may also deliver a ruling that makes neither company happy. While Epic wants to be able to host its own app store on iPhones, and Apple wants to continue to operate as it has for years, she might order smaller changes.
Former President Barack Obama nominated Judge Gonzalez Rogers, 56, to the federal court in 2011. Given her base in Oakland, her cases have often related to the technology industry, and she has overseen at least two past cases involving Apple. In both cases, Apple won.
She concluded Monday’s trial by thanking the lawyers and court staff, who mostly used masks and face shields during the proceedings. Months ago in the throes of the coronavirus pandemic, it was unclear if the trial could be held in person, but Judge Gonzalez Rogers decided that it was an important enough case and ordered special rules to minimize the health risks, including limits on the number of people in court.
Epic opted to include its chief executive over an extra lawyer, and Mr. Sweeney spent the trial inside the courtroom, watching from his lawyers’ table. Mr. Sweeney, who is typically prolific on Twitter, didn’t comment publicly over the last three weeks. On Monday, he broke his silence by thanking the Popeyes fried-chicken restaurant next to the courthouse.
While most of the provider aid has been distributed, the Biden administration is expected to begin doling out the remaining funds, estimated at $25 billion of the original $178 billion, said Kristen O’Brien, a vice president for McDermott+Consulting in Washington, D.C. Hospitals are asking for more time to spend the money.
How the aid was spent has not been fully documented. While the larger hospital networks aggressively sought the funds from the start, smaller organizations, children’s hospitals and those in rural areas or serving large numbers of low-income patients had more difficulty securing the aid because of the way the funding formula was structured.
In a later round of funding decisions, officials with the Department of Health and Human Services reviewed applications more closely, and in some cases, reduced or denied requests, Ms. O’Brien said.
Grants given after the initial rush were more targeted, to those hospitals in Covid hot spots or rural areas. A few large chains, including HCA Healthcare and the Mayo Clinic, returned at least some of the money, in the wake of disclosures that wealthier hospitals had received far more aid while reporting healthy profits.
Overall, the aid program did prevent hospital closings, said Ken Marlow, a lawyer with K&L Gates in Nashville, who advises hospitals. “We haven’t seen a real avalanche of these distressed hospitals coming on the market.”
But some may no longer be able to resist takeovers or mergers. “Those providers are potentially more distressed as a result of the stress of the pandemic and will have to be thinking hard about the future, their survival,” said Torrey McClary, a lawyer with Ropes & Gray who also counsels hospitals.