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.
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.
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.
Paul Romer was once Silicon Valley’s favorite economist. The theory that helped him win a Nobel prize — that ideas are the turbocharged fuel of the modern economy — resonated deeply in the global capital of wealth-generating ideas. In the 1990s, Wired magazine called him “an economist for the technological age.” The Wall Street Journal said the tech industry treated him “like a rock star.”
Today, Mr. Romer, 65, remains a believer in science and technology as engines of progress. But he has also become a fierce critic of the tech industry’s largest companies, saying that they stifle the flow of new ideas. He has championed new state taxes on the digital ads sold by companies like Facebook and Google, an idea that Maryland adopted this year.
And he is hard on economists, including himself, for long supplying the intellectual cover for hands-off policies and court rulings that have led to what he calls the “collapse of competition” in tech and other industries.
“Economists taught, ‘It’s the market. There’s nothing we can do,’” Mr. Romer said. “That’s really just so wrong.”
free-market theory. Monopoly or oligopoly seems to be the order of the day.
The relentless rise of the digital giants, they say, requires new thinking and new rules. Some were members of the tech-friendly Obama administration. In congressional testimony and research reports, they are contributing ideas and credibility to policymakers who want to rein in the big tech companies.
Their policy recommendations vary. They include stronger enforcement, giving people more control over their data and new legislation. Many economists support the bill introduced this year by Senator Amy Klobuchar, Democrat of Minnesota, that would tighten curbs on mergers. The bill would effectively “overrule a number of faulty, pro-defendant Supreme Court cases,” Carl Shapiro, an economist at the University of California, Berkeley, and a member of the Council of Economic Advisers in the Obama administration, wrote in a recent presentation to the American Bar Association.
Some economists, notably Jason Furman, a Harvard professor, chair of the Council of Economic Advisers in the Obama administration and adviser to the British government on digital markets, recommend a new regulatory authority to enforce a code of conduct on big tech companies that would include fair access to their platforms for rivals, open technical standards and data mobility.
his Nobel lecture in 2018 prompted him to think about the “progress gap” in America. Progress, he explained, is not just a matter of economic growth, but should also be seen in measures of individual and social well-being.
Mr. Romer pushed the idea that new cities of the developing world should be a blend of government design for basics like roads and sanitation, and mostly let markets take care of the rest. During a short stint as chief economist of the World Bank, he had hoped to persuade the bank to back a new city, without success.
In the big-tech debate, Mr. Romer notes the influence of progressives like Lina Khan, an antitrust scholar at Columbia Law School and a Democratic nominee to the Federal Trade Commission, who see market power itself as a danger and look at its impact on workers, suppliers and communities.
That social welfare perspective is a wider lens that appeals to Mr. Romer and others.
“I’m totally on board with Paul on this,” said Rebecca Henderson, an economist and professor at the Harvard Business School. “We have a much broader problem than one that falls within the confines of current antitrust law.”
Mr. Romer’s specific contribution is a proposal for a progressive tax on digital ads that would apply mainly to the largest internet companies supported by advertising. Its premise is that social networks like Facebook and Google’s YouTube rely on keeping people on their sites as long as possible by targeting them with attention-grabbing ads and content — a business model that inherently amplifies disinformation, hate speech and polarizing political messages.
So that digital ad revenue, Mr. Romer insists, is fair game for taxation. He would like to see the tax nudge the companies away from targeted ads toward a subscription model. But at the least, he said, it would give governments needed tax revenue.
In February, Maryland became the first state to pass legislation that embodies Mr. Romer’s digital ad tax concept. Other states including Connecticut and Indiana are considering similar proposals. Industry groups have filed a court challenge to the Maryland law asserting it is an illegal overreach by the state.
Mr. Romer says the tax is an economic tool with a political goal.
“I really do think the much bigger issue we’re facing is the preservation of democracy,” he said. “This goes way beyond efficiency.”
The proposition was tantalizing: Handsome returns awaited investors who would be willing to provide an infusion of cryptocurrency to Elon Musk, the billionaire chief executive of Tesla and founder of SpaceX, for a moneymaking venture.
It seemed too good to be true, because it was.
Investors lost $2 million in six months to fraudsters who impersonated Mr. Musk, the Federal Trade Commission said in a report released on Monday that was meant to draw attention to a spike in cryptocurrency scams.
The commission found that nearly 7,000 people lost a reported $80 million over all from October through March as part of various scams targeting investors in Bitcoin and other cryptocurrencies like Dogecoin, a nebulous marketplace that Mr. Musk has bullishly promoted on Twitter. The median amount that they lost was $1,900, according to the commission.
The spate of fraud cases — a nearly 1,000 percent increase compared with the same period the previous year, the report said — came as the price of Bitcoin and Dogecoin soared toward record highs.
bought $1.5 billion worth of Bitcoin, which Tesla said was part of an initiative to invest in alternative assets like digital currencies and gold bullion.
accept Bitcoin as payment for cars in the United States, sent the price of Bitcoin skyward by more than 10 percent. But then Mr. Musk reversed course this month, saying that the company will no longer accept the cryptocurrency because of concerns over its effects on the environment.
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Mr. Musk has similarly sent mixed messages regarding Dogecoin, which was created as a cryptocurrency parody in 2013 and has recently been booming.
Last week, he polled his 55.1 million followers on Twitter on whether Tesla should accept Dogecoin; 78 percent of respondents said yes. He also revealed last week that SpaceX would launch a satellite to the moon next year in exchange for a payment in Dogecoin. In a May 8 appearance on “Saturday Night Live,” Mr. Musk said that cryptocurrency was both “the future of currency” and “a hustle.”
Joseph A. Grundfest, a professor of law and business at Stanford and a former member of the Securities and Exchange Commission, said in an interview on Monday night that the surge in scams involving cryptocurrency was not at all surprising amid the surging prices.
He said that investors should be more circumspect when faced with propositions like those concocted by the impersonators of Mr. Musk.
“Don’t send cryptocurrency to Elon Musk,” Mr. Grundfest said. “He already has more than he needs.”
The Federal Trade Commission cautioned on Monday in the report that fraudsters had used online dating platforms to lure people into cryptocurrency scams. About 20 percent of the money that people reported losing through romance schemes since October was sent in cryptocurrency, the report said.
The commission also noted that people ages 20 to 49 were more than five times as likely as older people to report losing money on cryptocurrency investment scams.
Cryptocurrency experts cautioned that it was especially difficult for victims of fraud schemes to get their money back and that cryptocurrency had become a preferred payment method for those orchestrating ransomware attacks.
“As a practical matter, there is no recourse,” Mr. Grundfest said. “Why crypto? It’s very simple. It’s very hard to trace.”
Even people with Ms. Scott’s resources can’t prevent swindlers from using their names. Scammers have copied the webpage of the federal Small Business Administration and impersonated the Federal Trade Commission, one of the agencies trying to combat exactly these sorts of cons.
Ms. Scott gives to institutions — universities, food banks, other frontline charities — not individuals. She has no accounts on social media like Facebook and Instagram, only her Medium page and a verified Twitter account with just three tweets. Her organization would never request fees upfront from grant recipients, a person with knowledge of her giving said. The person declined to comment directly on online deception taking place in Ms. Scott’s name or what actions she might take to help prevent it.
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Ms. Churchill did more research and realized it was highly unlikely that Ms. Scott had been in touch with her directly, but still she could not cut herself off from the scammers right away. She had invested everything she could pull together in unlocking those promised funds.
“My son needs it for a better life. And I have already lost so much,” she said at the time.
Ms. Churchill shared dozens of screenshots and web pages, unveiling a complex network invented to prey on the hopes of the needy. She said the scammers had known that she had no money, that she was borrowing from her grandmother and her sister to cover the mushrooming fees.
After a few weeks, Ms. Churchill went to the local police. They told her that she had been conned and that there was no way to get her money back.
“This experience has ruined my life, to be honest,” she said.
She had already been struggling. Raising five children largely on her own, she relies on government support. Her mother is nearby in Sydney, but she is on dialysis and not able to help much. After Lachlan, her third born, received a diagnosis of autism, doctors said he needed specialized schooling and interventions she could not afford. Her GoFundMe page raised less than $500.
At the time the message from the “MacKenzie Scott Foundation” appeared in her inbox Ms. Churchill seemed to be in the kind of emotional distress that makes people more vulnerable to scammers, said Stacey Wood, professor of psychology at Scripps College.
Lina Khan, a Democratic nominee to the Federal Trade Commission, outlined strong concerns over competition in the tech industry during her confirmation hearing on Wednesday.
Ms. Khan, a law professor and a former staffer at the F.T.C. who President Biden nominated to the agency in March, warned of the cascading power of tech companies that has allowed them to easily expand their reach across markets.
At the Senate Commerce committee hearing, Ms. Khan, 32, said she was “seeing whole range of potential risks. One that comes up across board is that the ability to dominate one market gives companies, in some instances, the ability to expand into adjacent markets.”
She also focused on the online advertising market and how the consumer data mining that fuels it poses potential harms for consumers. The business model, she said, incentivizes more and more data collection.
In a 2017 Yale Law Journal article titled “Amazon’s Antitrust Paradox,” she questioned the bias of antitrust experts toward consumer prices as the key metric for antitrust violation. Even though Amazon offers consumers lower prices in many cases, she argued the company could harm competition by squeezing out small-business rivals who rely on its marketplace.
President Biden’s nomination of Ms. Khan to one of three Democratic seats at the F.T.C. has been taken as a sign of how the White House plans to be tough on tech. Tim Wu, a progressive critic of Facebook and other big tech companies, was also recently named to a role in the White House.
Ms. Khan said in Wednesday’s hearing that approvals of tech mergers during the Obama administration were a “missed opportunity” to slow the growth of the companies.
Tech mergers approved during that time underestimated the particular economics of tech companies, she said. Regulators that approved the deals may have also assumed the dynamics of the tech market would allow for new entrants to go up against the bigger companies, she added.
her past work investigating the tech giants for the House antitrust subcommittee. The House released a report in October that found the digital platforms were monopolies.
Ms. Khan said she would follow ethics rules that prohibit her involvement in investigations into companies where she has financial and personal ties. She said she did not have those ties to any tech giants.
The European Union unveiled strict regulations on Wednesday to govern the use of artificial intelligence, a first-of-its-kind policy that outlines how companies and governments can use a technology seen as one of the most significant, but ethically fraught, scientific breakthroughs in recent memory.
The draft rules would set limits around the use of artificial intelligence in a range of activities, from self-driving cars to hiring decisions, bank lending, school enrollment selections and the scoring of exams. It would also cover the use of artificial intelligence by law enforcement and court systems — areas considered “high risk” because they could threaten people’s safety or fundamental rights.
Some uses would be banned altogether, including live facial recognition in public spaces, though there would be several exemptions for national security and other purposes.
The 108-page policy is an attempt to regulate an emerging technology before it becomes mainstream. The rules have far-reaching implications for major technology companies including Amazon, Google, Facebook and Microsoft that have poured resources into developing artificial intelligence, but also scores of other companies that use the software to develop medicine, underwrite insurance policies, and judge credit worthiness. Governments have used versions of the technology in criminal justice and allocating public services like income support.
“deepfakes” would have to make clear to users that what they are seeing is computer generated.
For the past decade, the European Union has been the world’s most aggressive watchdog of the technology industry, with its policies often used as blueprints by other nations. The bloc has already enacted the world’s most far-reaching data-privacy regulations, and is debating additional antitrust and content-moderation laws.
governments around the world, each with their own political and policy motivations, to crimp the industry’s power.
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In the United States, President Biden has filled his administration with industry critics. Britain is creating a tech regulator to police the industry. India is tightening oversight of social media. China has taken aim at domestic tech giants like Alibaba and Tencent.
The outcomes in the coming years could reshape how the global internet works and how new technologies are used, with people having access to different content, digital services or online freedoms based on where they are located.
Artificial intelligence — where machines are trained to perform jobs and make decisions on their own by studying huge volumes of data — is seen by technologists, business leaders and government officials as one of the world’s most transformative technologies, promising major gains in productivity.
But as the systems become more sophisticated it can be harder to understand why the software is making a decision, a problem that could get worse as computers become more powerful. Researchers have raised ethical questions about its use, suggesting that it could perpetuate existing biases in society, invade privacy, or result in more jobs being automated.
Release of the draft law by the European Commission, the bloc’s executive body, drew a mixed reaction. Many industry groups expressed relief the regulations were not more stringent, while civil society groups said they should have gone further.
“There has been a lot of discussion over the last few years about what it would mean to regulate A.I., and the fallback option to date has been to do nothing and wait and see what happens,” said Carly Kind, director of the Ada Lovelace Institute in London, which studies the ethical use of artificial intelligence. “This is the first time any country or regional bloc has tried.”
ethical uses of the software said she was fired for criticizing the company’s lack of diversity and the biases built into modern artificial intelligence software. Debates have raged inside Google and other companies about selling the cutting-edge software to governments for military use.
In the United States, the risks of artificial intelligence are also being considered by government authorities.
This week, the Federal Trade Commission warned against the sale of artificial intelligence systems that use racially biased algorithms, or ones that could “deny people employment, housing, credit, insurance, or other benefits.”
Elsewhere, in Massachusetts, and in cities like Oakland, Calif.; Portland, Ore.; and San Francisco, governments have taken steps to restrict police use of facial recognition.
Andrew here. Yesterday’s guilty verdict against George Floyd’s murderer, a former Minneapolis police officer, was a symbol of something profound: a demonstrable shift in the way this country, increasingly supported by business, has strived for civil rights.
As we ponder the meaning of this decision, it is worth recalling a moment in 1965, in the middle of that era’s civil rights movement.
A Wall Street bond firm, C.F. Securities, told Alabama that it would “no longer buy or sell bonds issued by the state or any of its political subdivisions.” Gov. George C. Wallace, who objected to desegregation, had said the state shouldn’t pay for the National Guard to protect Martin Luther King Jr. and protesters in the Selma-to-Montgomery march.
The investment firm’s executive vice president, Donald E. Barnes, wrote to the governor that his failure “to protect the citizens of Alabama in their exercise of constitutional rights” amounted to “discouragements to Alabama’s economic future.” He insisted that the move was based on economic risk, but the letter made clear it was about more than that.
paid time off on Juneteenth; the N.B.A. emblazoned the words “Black Lives Matter” on courts; Netflix steered its cash into local banks that serve Black communities; Wall Street banks announced programs worth billions to support Black communities; and just last week, in perhaps the greatest demonstration of the new responsibility business is feeling, 700 companies and executives signed a letter opposing laws that make it harder for people to vote.
“The murder of George Floyd last Memorial Day felt like a turning point for our country. The solidarity and stand against racism since then have been unlike anything I’ve experienced,” Brian Cornell, the C.E.O. of Target, wrote in a note to employees of the Minneapolis-based retailer yesterday. “Like outraged people everywhere, I had an overwhelming hope that today’s verdict would provide real accountability. Anything short of that would have shaken my faith that our country had truly turned a corner.”
You know what? Justice is good for business.
HERE’S WHAT’S HAPPENING
The European Super League has collapsed. Plans to create a closed competition of top soccer clubs fell apart yesterday when six English teams withdrew, bowing to outrage from fans and threats by lawmakers. Shortly after, an official at the Super League said the project had been suspended, ending an effort to upend soccer’s multibillion-dollar economics.
outweigh a small risk of blood clots, but wants a warning added. U.S. regulators will decide whether to end a pause on the vaccine in the coming days.
Goldman Sachs releases worker diversity data. The Wall Street bank disclosed for the first time how many of its senior U.S. executives are Black: 49 out of more than 1,500. Banks agreed last year to publish more information about their work forces; Morgan Stanley has an even smaller share of Black executives than Goldman.
Apple’s new products raise competition concerns. The tech giant unveiled new iPads and iMacs, and a revamped podcast app. But its new AirTags, which attach to items to help find them, was criticized by the C.E.O. of Tile, which makes a similar product. Apple also said it would roll out new iOS privacy features — criticized by Facebook and other app makers — next week.
Understanding the ‘antimonopolist’ Lina Khan
Lina Khan’s nomination to the Federal Trade Commission is one of the clearest signs of progressive influence in the Biden administration. A Columbia University scholar who worked on a major congressional report about Big Tech and antitrust last year, Ms. Khan is a star in the constellation of competition law experts known as “antimonopolists.” Her confirmation hearing with the Senate Commerce Committee is today.
power of internet giants, which could win her some conservative support. Having a “strong” perspective probably isn’t an obstacle to confirmation, Mr. Hoffman said.
“Antimonopoly is more than antitrust,” Ms. Khan wrote in 2018. It shifts away from a “consumer” take on mergers managed by antitrust agencies to a broader approach using “policy levers” across the government and keeps workers, voters, the environment and more in mind.
Big Tech will be a likely focus at the hearing. But this would be a “disservice” to Ms. Khan, according to Mr. Hoffman. “At the F.T.C., a lot of the agenda is reactive,” he said. Companies file merger paperwork and regulators respond, whatever the industry. Ms. Khan has a broad perspective on competition law, Mr. Hoffman said, and today would be “a fair time” to ask what “objective standards” she’d apply.
“You have to have some morals.”
— Ari Emanuel, the outspoken C.E.O. of the entertainment conglomerate Endeavor, speaking in a New Yorker profile about returning an investment from Saudi Arabia after the killing of Jamal Khashoggi. Separately, Endeavor disclosed yesterday that it hopes to be valued at more than $10 billion in an I.P.O.
These ‘Roaring Twenties’ have railroad battles, too
Canadian National Railway yesterday offered to buy Kansas City Southern for $33.7 billion, topping a $29 billion bid last month by its rival Canadian Pacific. They’re jockeying over the chance to create the first railroad connecting major ports from Canada to Mexico. The bidding war reflects bullishness about an industry poised for growth if a post-pandemic boom ushers in this generation’s “Roaring Twenties.”
antitrust concerns made the counterbid “illusory and inferior.” Kansas City Southern said it would evaluate the new bid in accordance with its agreement with its original suitor.
mixed reception from freight shippers, who suffered in the last round of consolidation. And we haven’t yet heard from Senator Amy Klobuchar, who heads the antitrust subcommittee and represents key industrial interests in Minnesota.
Giving Coinbase a run for its (digital) money
The public listing of Coinbase, the largest crypto exchange in the U.S., generated a wave of excitement that competitors aim to ride. Among them is Binance.US, the third-ranked domestic crypto exchange, which yesterday named Brian Brooks — formerly Coinbase’s chief counsel and most recently acting U.S. comptroller of the currency — as C.E.O., beginning in May. “There’s a lot of buzz about my former employer, which is well-deserved,” Mr. Brooks told DealBook about Coinbase. “But it’s in everybody’s best interest if there’s more competition.”
Mr. Brooks’ first task is building trust with regulators. He says “managing reputation” is his biggest concern. Binance has shifted its operations throughout Asia since it was founded in 2017, and some say it played fast and loose with rules. The C.F.T.C. was reportedly investigating the company for allowing U.S.-based customers to trade crypto derivatives, which is banned (the agency declined to comment). Mr. Brooks insists he did “a lot” of due diligence on his new employer and dismisses “loose talk” about the exchange flouting regulations.
Binance’s group C.E.O., CZ Zhao, says he embraces regulation. Hiring Mr. Brooks is one way the company is trying to make the point. Binance also hired Max Baucus, the former Montana senator and ambassador to China, last month, along with other former regulators.
Binance.US sees potential to lead in undeveloped areas of the American crypto landscape, like derivatives and lending. Mr. Brooks said the company can learn from competitors like Coinbase and Kraken — and challenge them. That is, if he can convince regulators to bless its efforts to bring crypto into the financial mainstream, a preoccupation of players across the industry.
JPMorgan wants to end banker burnout, for real this time
Yesterday, JPMorgan Chase’s co-heads of investment banking, Jim Casey and Viswas Raghavan, announced policies aimed at improving working conditions amid record deal volume and banker burnout. The company has attempted similar things before. DealBook spoke with Mr. Casey about the latest plan — and whether this one will stick.
JPMorgan has recently hired 65 analysts and 22 associates, and plans to add another 100 junior bankers and support staff, Mr. Casey said. It’s targeting bankers at rival firms, as well as lawyers and accountants interested in a career switch.
similar efforts to protect junior bankers’ hours in 2016, but “it wasn’t stringently enforced,” Mr. Casey said. Why not? “Laziness.” This time, junior bankers’ hours and feedback will figure in senior manager performance evaluation and compensation.
“It’s not a money problem,” Mr. Casey said, so there won’t be one-time checks or free Pelotons after a rush.Junior bankers will get their share of the record $3 billion in fees JPMorgan earned in the first quarter.
Some things won’t change. Because banking is a client-service job, managers sometimes have limited control over workloads and hours. “You might do 100 deals a year, but that client only does one deal every three years,” Mr. Casey said.
How the bank will measure success: “Ask me what our turnover ratio has gone to and I will tell you,” Mr. Casey said. The goal, he said, is “lower.”
THE SPEED READ
Politics and policy
Senator Bernie Sanders is co-sponsoring a bill that would impose a financial transaction tax on Wall Street to drastically expand tuition-free access to community colleges and trade schools. (CNBC)
Twelve megadonors accounted for nearly $1 of every $13 raised by federal candidates and political groups since 2009, a new study found. (NYT)
Best of the rest
The Sacklers, the family that founded the maker of OxyContin, are worth about $11 billion, according to documents released by a Congressional committee. (WSJ)
“Behind the Mysterious Demise of a $1.7 Billion Mutual Fund.” (WSJ)
Amazon is opening a hair salon in London. It isn’t called Prime Cuts. (WaPo)
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