Will Tech’s Monopolies Survive 2020?
Will Tech’s Monopolies Survive 2020?

How the triple turmoil of a pandemic, protests, and a presidential election threatens Silicon Valley’s status quo.

Photo: Wang Ying/Xinhua via Getty

Welcome back to Pattern Matching, OneZero’s weekly newsletter that puts the week’s most compelling tech stories in context.

There was a brief moment, at the peak of the Covid-19 pandemic’s first wave in the United States, when it looked like Big Tech might be back in the public’s good graces. With stay-at-home orders across the country, screens were no longer an addictive distraction from real life, but the locus of real life itself. Zoom was powering business meetings; Houseparty, happy hours. Facebook was once again a dominant force in news; Apple and Google were partnering on a privacy-conscious contact tracing app. Politicians in the United States and Europe who had been laying the groundwork for new regulations suddenly had more urgent things to worry about.

That moment has passed. The lifting of lockdowns has been greeted not with sighs of relief at a return to the status quo, but with rallying cries to change it. There are protests in the streets. A presidential election looms. While criminal justice reform tops the domestic agenda, the appetite for tech reform appears to have returned as well.

The Pattern

Big Tech is back in the hot seat.

💬 The European Commission this week opened two antitrust probes against Apple, focusing on how its App Store rules and Apple Pay system, respectively, hamstring competitors. The App Store investigation was sparked by a 2019 complaint from Spotify about Apple’s practice of taking 30 percent of all subscription revenues from users who sign up for third-party apps on iOS. That puts Spotify at a disadvantage in competing with Apple’s own Apple Music service, from which Apple keeps 100 percent of revenues. (In 2018, Spotify stopped allowing users to pay via iOS.) The Apple Pay investigation, meanwhile, will examine how Apple limits the use of its devices’ “tap and go” payment functionality to Apple Pay alone, once again giving its own service a big edge over competitors.

💬 Spotify is hardly the only company affected. I wrote in depth in February about the brewing antitrust case against Apple, and the developers lining up to testify against it. In a twist of timing, one of those developers, Basecamp, launched a new paid email app, called Hey, on the same day the EU investigation was announced. Apple rejected it, on the grounds that it doesn’t allow the in-app subscription options that would give Apple its 30-percent cut. Protocol’s David Pierce recounted how that decision went down, while The Verge’s Dieter Bohn blasted Apple for inconsistencies in how it enforces its rules. Even Apple blogger Jon Gruber, who often defends the company, agreed that the company’s rent-seeking has gone too far. (Meanwhile, if you’re interested in Hey, read developer Kaya Thomas’ OneZero review of the buzzy, pricey new email platform.)

💬 Even mighty Facebook can’t get its apps onto Apple devices when they compete directly with Apple’s own offerings. The New York Times reported Thursday that Apple has rejected Facebook Gaming, the social network’s new casual gaming app, at least five times in the past four months, citing policies against apps that function primarily as game stores. Google, for its part, quickly approved Facebook Gaming on the Google Play store in April. Illustrating the user-unfriendly effects of Apple’s restrictions, the Times article explains that Facebook’s approach to getting its app approved has involved continually making the interface less intuitive, on the theory that this would make it less store-like.

💬 That Apple governs its App Store with impunity, and often to its own advantage, is not new. Neither is it new that Apple’s own apps sometimes compete with, copy, and crowd out those made for its platforms by independent developers. What is different now are the scope of Apple’s first-party app ambitions, the number of developers willing to risk the giant’s ire by speaking out, and the willingness of people in power to listen. In OneZero this week, Owen Williams argues that the EU case could be “a defining moment for the technology industry, as companies like Google and Facebook may find themselves scrutinized in a similar way.” And speaking of Google…

💬 Google made a similar power play this week by integrating its Meet videoconferencing software into the Gmail app. It’s a transparent attempt to leverage Google’s dominance in one market — email, in this case — against a rival (Zoom) that was outcompeting it in another market.

💬 The regulatory fervor is not confined to Europe. Back in the United States, the right broadened its assault on Section 230 this week, as Sen. Josh Hawley introduced a bill that would make it easier to sue tech companies for inconsistencies in how they moderate content. The move comes two weeks after Donald Trump signed an executive order challenging the legal protections that online platforms enjoy under Section 230 of the Communications Decency Act. Gizmodo’s Dell Cameron argues that the bill, like Trump’s order, is mostly toothless: It still allows companies to set their own rules of moderation, as long as they stick to them and apply them equally to all parties “in good faith.”

💬 And yet that even that mushy qualifier could open the door to enough lawsuits that some companies may simply decide a more hands-off approach is safest. Which is, of course, what Trump and Hawley want: for social platforms to keep their paws off of racist or false content from right-wing sources, including the president himself. This week conveniently brought us an illustration of the kind of dustup that could turn into a lawsuit, when NBC News reported that Google had banned the financial site ZeroHedge and conservative political site The Federalist from its ad network for spreading racist conspiracy theories about the anti-police brutality protests. As an uproar spread — both sites have large, vocal followings — Google disputed NBC News’ story. Google said The Federalist was never demonetized, but that it had reached an agreement with the publisher that involved removing racist comments from The Federalist’s comment section.

💬 These are the types of interventions that liberals and civil rights activists, along with some of tech companies’ own employees, have been calling for. (Some civil rights groups are now calling on companies to boycott Facebook’s ad platform.) They’re also the type that get the right riled up and build momentum for bills like Hawley’s, as Ben Shapiro and Ted Cruz were quick to rail against Google’s moves this week. As I wrote in a previous newsletter, we appear to have at last reached the point where the big platforms have to pick a side. Twitter was the first to do so, when it started flagging some of Trump’s tweets as misleading, and the company kept up its enforcement against him this week by putting a warning label on a video he tweeted. The video fabricated fake CNN footage of a “terrified” Black toddler running away from a “racist baby,” then implied that the network was spreading divisive fake news (a classic example of Trumpian projection).

💬 Facebook has opted for the laissez-faire approach to Trump’s posts, but even it felt compelled to take action this week when the liberal blog Media Matters for America reported that the president was running Facebook ads with Nazi iconography. (Trump’s campaign then claimed the inverted red triangle was an antifa symbol — which is a lie, according to historians who study the group.) Facebook removed the 88 offending ads.

💬 Antitrust enforcement and Section 230 reform are separate issues. But the growing momentum behind both is indicative of a larger trend: Big Tech has lost the benefit of the doubt. That happened long ago in Europe, but it is finally happening in the United States as well, from both major parties. And any notion that the pandemic or a Republican presidency would ease the regulatory pressure on Silicon Valley has now been put to rest. Americans of all ideologies are fed up with business as usual, their polarization arguably stoked by the tech platforms themselves, and their economic stability undermined by the rise of the gig economy. In other words, we’re living in a mess that is partly of the tech industry’s making. And now that mess is coming back to haunt it.

Undercurrents

Under-the-radar trends, stories, and random anecdotes worth your time

🗨️ Two Black leaders at Pinterest left the company over racial discrimination, saying they were subjected to offensive comments, unfair pay, and retaliation. CEO Ben Silbermann subsequently issued a public apology and admitted “parts of our culture are broken,” Bloomberg’s Sarah Frier reported. But the ex-employees, Ifeoma Ozoma and Aerica Shimizu Banks, who made up two-thirds of the platform’s public policy and social impact team, said on Twitter that they heard the apology only through the media. Their allegations are part of a wider reckoning over tech companies’ treatment of Black employees, and they dent the reputation of a platform that had previously earned praise for some progressive policies — which, it turns out, Ozoma and Banks had been criticized by their managers for championing. Read Ozoma’s full thread here.

🗨️ Lesser-known face recognition companies are eagerly courting law enforcement, looking to fill the vacuum after IBM, Microsoft, and Amazon stepped back. Clearview AI, NEC, nd Ayonix are among those poised to capitalize by ignoring the anger over surveillance technology’s discriminatory effects on Black communities, the Wall Street Journal reported. My OneZero colleague Dave Gershgorn has written about an even longer list of companies, including many that you might not expect, that have been trying to cash in on a face recognition gold rush. In Bloomberg Opinion, Cathy O’Neil makes the case that face recognition by law enforcement will continue until or unless Congress repeals post-9/11 legislation, such as the Real ID Act, that prioritized antiterrorism efforts over civil liberties.

🗨️ Instagram’s algorithm systematically incentivizes its users to show skin in their photos, according to a report from the nonprofit AlgorithmWatch.

🗨️ The great scourge of bots on social media may be overstated, bot expert Darius Kazemi argued, in a New York Times article by Siobhan Roberts.

Headlines of the Week

Facebook Groups Are Destroying America

— Nina Jankowicz and Cindy Otis, Wired

Devin Nunes’ Attorney Says He’s at ‘Dead End’ in Quest to Reveal Identity of Twitter Cow

— Kate Irby, Fresno Bee

Thanks for reading. Reach me with tips and feedback by responding to this post on the web, via Twitter direct message at @WillOremus, or by email at oremus@medium.com.
['Will Oremus']
['Technology', 'Apple', 'Facebook', 'Pattern Matching']