Outgoing competition watchdog Rod Sims has laid out a post-pandemic economic reform plan for Australia centred on new merger rules, further crackdowns on Big Tech and a complete rework of privacy laws. Mr Sims also flagged further regulatory crackdowns targeted at large digital platforms, with a new discussion paper on the topic to be released…
Artificial intelligence has often been adopted in ways that reinforce exploitation and domination. But that doesn’t mean we should greet all new AI tools with refusal.
For advocates of cryptocurrency, the promise of an economic future that is managed by a blockchain (a decentralized database that is shared among the nodes of a computer network, as opposed to being held in a single location, such as a central bank) is compelling. For anyone paying attention, the rapid expansion of cryptocurrency has been stunning. In 2019, the global cryptocurrency market was approximately $793 million. It’s now expected to reach nearly $5.2 billion by 2026, according to a report by the market research organization Facts and Factors. In just one year — between July 2020 and June 2021 — the global adoption of cryptocurrency surged by more than 880 percent.
But the increasing popularity of cryptocurrency has environmentalists on edge, as the digital “mining” of it creates a massive carbon footprint due to the staggering amount of energy it requires. Based on data from the Bitcoin Energy Consumption Index from Digiconomist, an online tool created by data scientist Alex de Vries, the carbon footprint of Bitcoin, the world’s largest cryptocurrency, is equivalent to that of New Zealand, with both emitting nearly 37 megatons of carbon dioxide into the atmosphere every year, according to a February 2021 CNBC article.
To understand why this is a problem, it’s important to explain what goes into creating a cryptocurrency like Bitcoin. Unlike fiat money, which is regulated through central banks, transactions in Bitcoin are tracked through a public ledger consisting of a network of computers around the world: the blockchain. “Mining” — a process in which computational puzzles are solved in order to verify transactions between users, which are then added to the blockchain — allows this validation process to take place, which is an energy-intensive process.
It’s been a bit of a wild ride for Bitcoin. The market price of a single Bitcoin plunged below $30,000 in June 2021 for the first time since January 2021 — falling by more than half from its April peak of around $65,000. Nevertheless, some analysts and billionaire investors are still feeling bullish about the crypto coin, as several leading businesses continue to adopt the currency.
Goldman Sachs started trading Bitcoin futures (agreeing to transact the coin at a predetermined future date and price). Tesla invested $1.5 billion in Bitcoin. PayPal announced in March 2021 that it would allow its U.S. customers to use cryptocurrency to pay its millions of online merchants. In September, El Salvador became the first country to make Bitcoin legal tender. This, coupled with the fact that big name brands like AT&T, Home Depot, Microsoft, Starbucks and Whole Foods now accept Bitcoin payments, could pave the way for mainstream use. But if the bulls are right and the price of a single Bitcoin eventually hits $500,000, it would pump more carbon dioxide into the atmosphere than what is released by countries like Brazil or Mexico.
Another sector shaken up by digital assets is the art world, as digital artworks have been making headlines for the huge amounts they’ve been selling for on the market through the use of non-fungible tokens, more commonly known as NFTs, a type of guarantee backed by the Ethereum blockchain. In simpler terms, the works are created, or “minted,” through a process called proof-of-work (PoW), which establishes its unique identity, as explained in an article on Hyperallergic.
The carbon footprint of a single Ethereum transaction as of December 2021 was 102.38 kilograms of CO2, which is “Equivalent to the carbon footprint of 226,910 Visa transactions or 17,063 hours of watching YouTube,” according to Digiconomist. Meanwhile, the electrical energy footprint of a single Ethereum transaction is about the same amount as the power that an average U.S. household uses in 7.28 days, the website further states.
In March 2021, Austrian architect Chris Precht announced that he was “[abandoning] plans to sell digital artworks backed by NFTs due to the environmental impact of mining the digital tokens,” according to Dezeen magazine. He said that he had created three digital artworks and wanted to sell them using blockchain technology. “I wanted to create 300 tokens because I had three art pieces and I wanted to make each one in an edition of 100.… I would have used the amount of electricity I usually use in two decades,” Precht explained.
“[W]e’re largely powering 21st-century technology with 19th-century energy sources,” Andrew Hatton, head of information technology at Greenpeace United Kingdom, toldCNBC. He attributes this energy usage to the “huge amount of data-crunching needed to create and maintain this cyber-currency,” a process that demands a lot of electricity. The problem, according to Hatton, is that “only about a fifth of the electricity used in the world’s data centers comes from renewable sources.”
Another crucial aspect to cryptocurrency is that there is only a limited supply available. So, over time, as more Bitcoin is mined, the complex math problems needed for transactions get harder to solve, demanding more energy in turn. The system is designed this way so that each digital token that gets issued contains its own unique cryptographic reference to the blockchain, ensuring its security. The issue of energy usage over time is further exacerbated by incentives attached to mining. In terms of Bitcoin, each time a miner solves the complex hashing algorithm required to produce Bitcoin (the “PoW”), they receive a small amount of the cryptocurrency itself.
The inherent problem with this, as Charles Hoskinson, co-founder of Ethereum, toldCNBC, is that “the more successful bitcoin gets, the higher the price goes; the higher the price goes, the more competition for bitcoin; and thus the more energy is expended to mine [it].” As the price continues to rise, so will the incentive to mine the cryptocurrency, creating a feedback loop that spells trouble for the climate.
“Such numbers should be taken with a good deal of salt. Bitcoin’s energy use depends crucially on its price, which swings wildly. The authors [of a paper published in April in the journal Nature Communications] assume that the long-term trend will be upward, because the rate at which new bitcoins are created is designed to halve every four years. Reality will doubtless prove more complicated,” notes the Economist. “But the general picture — that bitcoin is a dirty business — fits with other research. One oft-cited model, which uses publicly available blockchain data, reckons its global energy consumption is already equal to that of Kazakhstan, and that its carbon footprint matches Hong Kong’s.”
Another problem besides the gargantuan energy usage is where that energy comes from. There is no definitive statistic related to the proportion of renewable versus fossil fuel-powered electricity used for Bitcoin mining. Earth.org cites two conflicting measures of Bitcoin’s energy usage: CoinShares, a cryptocurrency asset management and analysis firm, reported in 2019 that 74.1 percent of Bitcoin’s electricity comes from renewables, while the University of Cambridge puts that number at 39 percent, according to a report it issued in 2020.
A better indicator of Bitcoin’s electricity source is not how it is powered but where its power comes from. A March 2021 article by Quartzestimates that since April 2020, “around 65 percent of bitcoin mining capacity, or hashrate, was based in China due to its cheap electricity.” This figure should give a better understanding of the primary source of fuel currently powering Bitcoin.
In May 2021, at least half of China’s significant share of Bitcoin mining was located in the coal-rich province of Xinjiang, according to the Cambridge Bitcoin Electricity Consumption Index, cited by Quartz. In 2020, 63 percent of China’s Bitcoin mining came from coal-fired plants, Fortune reported in July 2021, citing figures from Rystad Energy. “The energy research firm estimates that if China were to eliminate bitcoin mining, it would cut CO2 emissions by 57 million [metric tons] — the equivalent to what the entire country of Portugal emits in a year,” the Fortune report noted.
Despite these figures, a more renewable, energy-conscious future may lie ahead for cryptocurrency. In September 2021, Chinese President Xi Jinping told the UN General Assembly that his country would “strive to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060.” That could lead to provinces such as Xinjiang being forced to move more toward renewables. The call from Beijing has also prompted nearby territories such as Inner Mongolia (which made up 8.7 percent of China’s Bitcoin mining in 2020) to ban all crypto mining in mid-2021. If the change doesn’t come from within China after these crackdowns, Bitcoin mining may grow somewhere else as miners look “to explore clean energy like surplus natural gas, shifting their focus from China to countries like Iceland, Norway, and Canada,” according to Quartz.
It’s important that any valid criticism of Bitcoin considers the broader perspective around energy usage. As Michel Rauchs, research affiliate at the Cambridge Centre for Alternative Finance, explained to CNBC, “Although we agree the amounts [of energy needed by Bitcoin] are ludicrous right now, that is still half as much as inactive home appliances in the U.S. consumed.” A similar line of logic could be applied to a variety of everyday tasks such as sending emails or using the internet in general, both of which use up a fair share of energy too.
“What we have here is people trying to decide what is or is not a good use of energy,” Meltem Demirors, chief strategy officer of CoinShares, toldCNBC. For Demirors, Bitcoin’s energy transparency places it in a better position than other, more opaque energy-consuming industries such as the banking industry.
To this effect, a May 2021 report produced by Galaxy Digital, a financial services and investment management firm based in New York, puts the energy consumption of Bitcoin at less than half that produced by the banking and gold industries. Putting this finding into perspective, the report’s authors note that, “Bitcoin is a fundamentally novel technology that is not a precise substitute for any one legacy system.” What this means is that, unlike traditional currency or gold, Bitcoin is “not solely a settlement layer, not solely a store of value, and not solely a medium of exchange.” This makes Bitcoin’s relative energy consumption productive in comparison to comparative sectors, given its robust potential uses.
Galaxy Digital’s report further addresses the source of energy used by miners to generate Bitcoin. “Critics often assume that the energy expended by miners is either stolen from more productive use cases, or results in increased energy consumption,” according to the report. “But because of inefficiencies in the energy market, bitcoin miners are incentivized to utilize non-rival energy that may otherwise be wasted or underutilized, as this electricity tends to be the cheapest.” A recent case in point can be found in El Salvador, where the president has announced the use of geothermal energy to power its Bitcoin mining.
The promise of such an endeavor offers hope for a more sustainable cryptocurrency future. Whether this will make much difference to the climate crisis in light of government and industrial inaction remains to be seen. Even if cryptocurrency finds a way to coexist with a fossil-free future, critics point out that the majority of the wealth created by Bitcoin goes to a disproportionately small number of investors. According to a recent study conducted by researchers at MIT Sloan School of Management and the London School of Economics, reports the Wall Street Journal, “the top 10,000 bitcoin accounts hold 5 million bitcoins, an equivalent of approximately $232 billion.” Speaking about Bitcoin, Antoinette Schoar, a finance professor at MIT Sloan School of Management and co-author of the study, said, “Despite having been around for 14 years and the hype it has ratcheted up, it’s still the case that it’s a very concentrated ecosystem.”
This article was produced by Earth | Food | Life, a project of the Independent Media Institute.
Silicon Valley has become infamous for its role in the surveillance ecosystem, especially during the COVID-19 pandemic. Bosses are increasingly using an array of tech industry tools to keep constant tabs on their employees working from home, despite statistics showing that those who work remotely are more productive than their counterparts toiling away in office buildings.
But one woman who worked for the tech industry’s biggest company is fighting back. Ashley Gjovik, a former Apple project manager who was fired in September after speaking out about workplace safety concerns, has asked labor regulators to rule that the company employs illegal surveillance tactics. In October, Gjovik filed a complaint with the National Labor Relations Board (NLRB) accusing Apple of a number of unfair labor practices, including keeping tabs on employees in a manner that prevents them from exercising their right to discuss working conditions.
Gjovik also alleged that the company violated the National Labor Relations Act (NLRA) by retaliating against her for voicing concerns about workplace safety stemming from the fact that Apple’s office building in Sunnyvale, California, is situated on top of an Environmental Protection Agency (EPA)-designated Superfund site, an area contaminated by hazardous industrial waste that is supposed to have been cleaned up and contained if humans are in the vicinity. If Gjovik prevails, the NLRB could issue a ruling curtailing employers’ abilities to surveil workers and chill their speech.
Gjovik has filed numerous other complaints with several environmental and workplace safety regulators, and the Securities and Exchange Commission (SEC), and has been meticulous in documenting her experience, as demonstrated by her personal website.
This week, the Department of Labor ruled that Gjovik’s complaints had merit, and that the agency’s Occupational Safety and Health Administration (OSHA) would be investigating her whistleblower retaliation complaints. Whistleblowing law expert Stephen Kohn told the Financial Times that it was unusual for OSHA to investigate such allegations because companies often “silence and intimidate” employees and because those filing charges must establish that their case is likely to succeed.
“Most of us know that there’s some level of pollution in our day-to-day lives, but there’s still a lot of trust in the government and companies to do the right thing when it comes to poisoning people,” she told Truthout.
In her NLRB complaint alleging illegal surveillance by Apple, Gjovik cited the company’s handbook, which reserves the right to search employees’ work equipment and their personal devices “to protect Apple confidential and sensitive information.” The company defines its proprietary information to include “compensation, training, recruiting, and other human resource information.”
Under federal labor law, all employees have the right to discuss their working conditions “for the purpose of collective bargaining or other mutual aid or protection.” The NLRB has ruled that management cannot spy on employees exercising their rights.
The Apple handbook includes a footnote stating that the company is not attempting to restrict its employees’ “rights to speak freely about wages, hours, or working conditions as legally permitted.” But Apple policy also generally forbids employees from making any public disclosures without prior approval, including statements to the press, and it orders employees to refrain from discussing “compensation, training, recruiting, and other human resource information” after leaving the company, which it attempts to enforce through non-disclosure agreements. The handbook also bars employees from sharing information about their coworkers’ “compensation, health information, or performance and disciplinary matters” without any footnotes about “rights to speak freely about wages, hours, or working conditions,” according to Gjovik’s complaint.
Charges that Gjovik filed with the NLRB also cite a memo circulated by Apple CEO Tim Cook after details of a meeting featuring discussion of pay equity was leaked to the press. Cook responded to the disclosure by vowing “to identify those who leaked” and by saying “people who leak confidential information do not belong here,” contradicting any stated policy granting employees the right to discuss their working conditions.
Gjovik also told Truthout that when she informed someone on Apple’s employee resources team that she had the legal right to speak publicly about working conditions, he replied, “Most people don’t figure that out.”
In response to questions about Gjovik and Apple workplace activists, Apple has typically declined to make specific comments. For example, the company told Slate: “We are and have always been deeply committed to creating and maintaining a positive and inclusive workplace. We take all concerns seriously and we thoroughly investigate whenever a concern is raised and, out of respect for the privacy of any individuals involved, we do not discuss specific employee matters.”
Apple has not responded to Truthout’s request for comment on Gjovik’s claim that a member of its employee resources team told her that the majority of Apple employees aren’t aware of their rights in the workplace.
Gjovik’s conflict with Apple management started in March, when an administrative assistant emailed her team about the company’s Environmental Health and Safety division wanting to conduct a “vapor intrusion survey” in the Sunnyvale office. The phrase set off “alarm bells” for Gjovik, who had spent the last six months battling her apartment’s property managers after becoming ill and learning that the residence was built on top of another EPA Superfund site.
“My body was just going crazy. It was such a nightmare. I was buying books on terminal illness,” Gjovik said.
When she applied what she learned from her struggle at home, things started going south. Gjovik responded to the administrative assistant’s email by asking her management team if Apple had conducted comprehensive air quality tests, citing an Atlantic article from 2013 which documented how their Sunnyvale building was next to three separate triple fund sites. Apple started leasing the property in 2015, hadn’t conducted any tests since moving in, and did not inform employees of the hazardous waste underneath them, Gjovik alleged, noting that she herself discovered the lack of testing in public records after learning how to do research through her apartment ordeal. She said that management claimed that they didn’t have to inform employees of the situation because there was no evidence of air quality issues. Gjovik replied that they lacked the evidence because they didn’t perform proper tests.
Meanwhile, evidence of retaliation against Gjovik by management started to mount. HR opened a sexual harassment investigation into one of Gjovik’s superiors that she did not want initiated out of fear that hostility from above would worsen. She started getting bombarded with an unrealistic number of work assignments. One boss cited Gjovik’s “mental health issues” in urging her to drop her concerns about the Superfund site. Additionally, she says, superiors told her not to raise questions about workplace safety — always over the phone or in person. Gjovik attempted to document those statements by replying in emails with notes about the conversations, asking if she missed anything.
By the middle of summer, things began to escalate. On July 23, Gjovik made The New York Times quote of the day for questioning why Apple management wanted its employees to return to office work as the Delta variant of COVID-19 started to spread throughout the country. Around the same time, she took to the company’s messaging platform, Slack, to ask her coworkers if they have had negative experiences dealing with HR, receiving numerous responses in the affirmative. In early August, after informing employee resources, Gjovik asked colleagues working in the office to document cracks in the floor — a sign that vapor intrusion may be occurring. They took photographs and sent them to Gjovik, and she planned to go into the office the next day to gather evidence herself. On the day of her planned trip to the office, however, she was informed that she was being put on paid administrative leave. On September 9, after Gjovik received a request from Apple management to cooperate with an investigation about “a sensitive Intellectual Property matter,” she agreed to cooperate but never found out what it is they were trying to discover. Gjovik asked that the inquiry be conducted in writing over email. Subsequently, she was fired.
The night before Gjovik was fired, she received a direct message on Twitter from a random helpful follower urging her to take steps to protect her privacy, in a general warning that invoked his own experience with private sector surveillance. Hours later, she asked her Twitter followers if it would be “over-paranoid” to worry about the security of her messages on Apple’s iCloud. Soon after, she began taking her personal information off of servers controlled by Apple and, as she told the tech publication Protocol, Gjovik began to unplug smart devices in her home. She told Truthout that she has no proof of the company using non-public information against her, but noted that internet trolls defending Apple have used information that she has not shared about her health and compensation to insult her, calling the matter a “nightmare sandwich.” Gjovik has also documented how supervisors at Apple were warning her to be wary of private-sector surveillance when she told them how she was locking horns with her property management company.
Still, there is an end to the nightmare in sight and a silver lining. Gjovik is hoping that complaints she has filed with workplace regulators will prevent Apple and other massive companies from bullying and mistreating employees, especially workers who aren’t as well-compensated as she was. Already, it appears that the complaints she filed after being put on administrative leave have the potential to bear fruit. In addition to the Department of Labor advancing her case, the Equal Employment Opportunity Commission told Gjovik in September that she has the right to sue Apple in state court for creating a hostile work environment. Experts familiar with the NLRA, including former NLRB officials, have said that Gjovik has a strong case against Apple — especially her complaint about CEO Cook threatening the employees who leaked details about the meeting concerning pay equity.
“What he’s saying here goes too far,” NLRB Chair Wilma Liebman told Bloomberg about the Cook memo. “It’s restrictive of people’s ability to talk about employment policies.” Mark Gaston Pearce, another former NLRB chair who, like Liebman, led the Board during the Obama administration, tweeted that Gjovik’s case could be “a vehicle” to reverse pro-management rulings by the Board under the Trump administration. NLRB General Counsel Jennifer Abruzzo, who has the power to direct Board agents to advance cases that could set precedent, has asked regional offices to pursue cases designed to expand the definition of “concerted activity,” which was narrowed under Trump, including those involving handbook policies like the ones flagged by Gjovik. Abruzzo also noted on November 4 the Board has ruled that concerted activity includes “protesting unsafe working conditions and asserting statutory rights, like filing a claim with [OSHA].”
As far as her complaint to the SEC is concerned, Gjovik said she wants to stop the company from misrepresenting how it treats its employees. The complaint centers around a shareholder, Nia Impact Capital, who alleged that Apple is exposing itself to employment litigation risk by enforcing a culture of secrecy beyond that which is necessary to protect its trade secrets. The company responded by claiming that “Apple does not limit employees’ and contractors’ ability to speak freely about harassment, discrimination, and other unlawful acts in the workplace.” Gjovik’s SEC complaint alleges that these are “false & misleading statements of material importance” by Apple, citing an agency commissioner who warned in September 2020 against companies engaged in “woke-washing where companies attempt to portray themselves in a light they believe will be advantageous for them on issues like diversity.”
Not that any of this has brought Gjovik much pleasure. She told Gizmodo that working for Apple was a “dream” job, and although she held a high-pressure position, she was paid well and proud of her work. But since she was put in a situation where she feared for her health and safety, and got significant push back from the company for raising concerns about it, she wants to take the opportunity to stand up for herself and others.
“I was a very senior employee who gave them my blood, sweat and tears. If they’re doing it to me, what the fuck are they doing to retail?” she asked rhetorically. “I’m going to file as much shit as I can.”
Correction: An earlier version of this story said that in early August, Gjovik went into the Sunnyvale office herself to take photos of cracks in the floor.
The federal government will embark on the “most significant reforms” to Australia’s payment system in 25 years with new regulations to target big tech firms and the cryptocurrency sector. Treasurer Josh Frydenberg announced the reform plan on Wednesday afternoon, most of which won’t be delivered until the end of next year, well after the next…
Financial industry watchdogs are asking federal officials to attempt to stop the cryptocurrency pilot program launched by Facebook, noting that the U.S. government has the power to criminally prosecute executives for operating the venture.
The Open Markets Institute sent a letter on November 23 to numerous regulatory agencies and the U.S. Department of Justice (DOJ), saying the omnipresent tech conglomerate may be “in the illegal business of receiving deposits without a bank charter.”
“There are several legal and regulatory implications for Facebook’s pilot that warrant particular attention by the agencies,” the Open Markets Institute letter stated.
Other financial industry analysts share the Open Markets Institute’s opinion. Americans for Financial Reform and Demand Progress issued a joint statement in response to the pilot, urging “relevant regulators and lawmakers with jurisdiction over banking, consumer protection, and antitrust to intervene to put this project on hold.”
Facebook has not responded to a request from Truthout for comments on the claim that it might be illegally taking bank deposits.
Financial institutions in the United States that seek to operate as a bank by lending money and accepting deposits — the latter of which Facebook’s pilot appears to be doing — must first have a bank charter approved by the Office of the Comptroller of the Currency (OCC). The OCC is one of the country’s federal bank regulators and an agency within the Department of Treasury. Bank charters outline how firms will operate as a bank, and include plans to comply with safety and soundness regulations.
The Open Markets Institute letter also noted that regulators recently said so-called stablecoins, the type of cryptocurrency at the heart of the Facebook pilot, should be regulated like banks.
Cryptocurrencies consist of publicly available records that demonstrate an entity’s ownership of tokens by using public databases to cryptographically link the tokens to the digital wallet of their owner and past transactions. The exchange-value of many cryptocurrencies fluctuate wildly: In the past month alone, Bitcoin has lost some 20 percent of its value, but is still worth 35 percent more than it was six months ago. Stablecoins, on the other hand, are marketed as being pegged to the value of another asset, like the U.S. dollar.
The constant value of stablecoins has given them deposit-like qualities in the eyes of legal observers and some U.S. officials. Federal regulators made their determination that stablecoin ventures should be regulated like banks in a report on the tokens published on November 1 by the President’s Working Group on Financial Markets, a multi-agency executive branch panel that seeks to uphold market orderliness.
Treasury Secretary Janet Yellen convened the working group to investigate stablecoins because of concerns about the practices of Tether, a company behind one of the most widely used stablecoins, and because of Facebook’s interest in cryptocurrency, which long predates its recently launched pilot program, given that the website has billions of monthly users.
Facebook unveiled its cryptocurrency pilot program, Novi, on October 19, basing the initiative on remittances from the U.S. to Guatemala facilitated by a stablecoin called the Pax Dollar. The announcement came nine days before the company revealed that it was rebranding itself as “Meta” in a move designed to prepare consumers for the future release of virtual reality products for work and entertainment.
The Meta rebrand was rolled out after Facebook received intense scrutiny from federal policymakers. In September, a whistleblower had told The Wall Street Journal that the company was aware of the negative impact of one of its products, Instagram, on the mental health of teenage girls, while doing nothing to address the problem and simultaneously considering the launch of an Instagram for kids — the latest in a long history of scandals, which critics say demonstrate that Facebook has little regard for the well-being of its users. Instagram for kids has been put on hold in the wake of the revelations.
Problems with Tether were highlighted earlier this year by two regulatoryenforcement actions, which revealed that the U.S. Dollar Tether frequently lacked the cash reserves that it needed to maintain its one-to-one peg, raising the fears that the global $3 trillion cryptocurrency market could crash if too many people attempted to redeem their U.S. Dollar Tethers for U.S. dollars at the same time. Stablecoins like the U.S. Dollar Tether are mostly used to speculate on the value of cryptocurrencies like Bitcoin and Ethereum.
The U.S. Dollar Tether redemption problem is reminiscent of a classic bank run, bolstering the argument that stablecoins resemble traditional banking deposits. Bank runs occur when a critical mass of depositors simultaneously attempt to withdraw their money, in a phenomenon that typically leads to the collapse of the bank itself, and losses by customers and other businesses that have partnerships with the bank.
Though the President’s Working Group report said Congress should pass legislation in order to regulate stablecoins like banks, much to the delight of the cryptocurrency industry, it also noted that existing authorities could be used by officials to regulate the market. The working group concluded, as the Open Markets Institute remarked, that “the Department of Justice, may consider whether or how section 21(a)(2) of the Glass-Steagall Act may apply to certain stablecoin arrangements.”
The Glass-Steagall Act was passed in 1933 during the Great Depression, and is best known for having erected a firewall between investment banking and retail banking. Though it was largely repealed by banking deregulation legislation passed during the final months of the Clinton administration, parts of Glass-Steagall remain on the books, including section 21(a)(2), which says that any entity “in the business of receiving deposits subject to check or to repayment…upon request of the depositor” must be licensed by the federal government or state governments. Stablecoins are subject to repayment upon request of those who purchase them.
Punishments for violating the law include a maximum of five years’ imprisonment. Facebook’s pilot, which is called Novi, is only licensed on the federal level as a “Money Services Business” with the arm of the Treasury Department tasked with detecting money laundering and other financial crimes. It is licensed as a money transmitter in 38 states, the District of Columbia and Puerto Rico.
Five Democratic senators blasted Facebook’s decision to move ahead with its Novi pilot under the money transmission framework, though they stopped short of accusing Facebook of violating criminal law. They noted that in 2019, Facebook CEO Mark Zuckerberg promised Congress that the company would wait for regulatory approval before moving forward with plans to launch its own cryptocurrency payment system.
“To be clear, your ability to secure state-issued money transmitter licenses is not equivalent to obtaining the blessing of ‘all U.S. regulators,’ as you said in your testimony two years ago,” the lawmakers said in an October 19 letter to the company, written in response to the launch of Novi. They urged the firm to “immediately discontinue your Novi pilot.”
Arthur Wilmarth, a law professor at George Washington University who has helped pioneer the theory that the Justice Department could prosecute stablecoin issuers, said that the agency “should probably send a letter of warning to Novi: either cease and desist or you can anticipate that we will bring a criminal indictment.”
“Anyone who knowingly partakes is liable,” he told Truthout, adding that the DOJ could send a message to the cryptocurrency industry by going after Facebook executives or those involved with “one of the other stablecoin issuers like Tether.”
Still, Wilmarth and other supporters of this theory aren’t confident that federal prosecutors will exercise their power.
“Is DOJ prepared to do anything? At least the President’s Working Group mentioned the possibility,” Wilmarth said. He noted that the legal theory isn’t as “ironclad” as it used to be because it allows companies to take deposits if they are licensed under state law. In recent years, two states, Wyoming and Nebraska, have allowed special bank charterswithout deposit insurance requirements as a means of attracting cryptocurrency ventures. (Novi doesn’t have any Wyoming license, and the company is only licensed in Nebraska as a money transmitter.)
Renita Marcellin, a senior policy analyst for Americans for Financial Reform, which has also pointed to the Justice Department’s powers when urging the Biden administration to take a tougher stance on cryptocurrencies, said that she doesn’t “expect DOJ to say much here.”
“For market participants and industry people, I am assuming that they feel so empowered to do this because DOJ has been really lacking in this space,” Marcellin said. “Unfortunately, that’s not Mark Zuckerberg’s problem, that’s DOJ’s problem. They need to be very clear about what this law means.”
Assuming Novi does comply with federal law, there are many other criticisms of the project, including worries about its environmental impact, fears that the company could prod Guatemala toward passing laws favoring the cryptocurrency industry, concerns about the viability of Novi itself and the probability of Facebook using the venture to engage in predatory behavior.
“Facebook’s pilot is likely another attempt by the firm to further grow its dominance in digital advertising, and monetize its users’ private data,” said Alexis Goldstein, financial policy director at the Open Markets Institute.
In its letter to regulators, the organization enumerated its concerns with the operation’s safety and soundness. Paxos, the company that issues the Pax Dollar, claims that its stablecoin is backed up by banked cash and “cash equivalents,” which are short-term, highly liquid investments. But the federal government typically only insures up to $250,000 in customer deposits per bank, and it’s unclear how Paxos cash deposits are distributed. And while the firm is overseen by New York state regulators as a limited purpose trust company, a special classification of financial firm established by New York in 2015 to impose some oversight on cryptocurrency ventures, Facebook has not publicly outlined its contingency plans in the event of a run on the Pax Dollar, or if the token loses its peg. Moreover, it’s not clear what would happen if Coinbase, the cryptocurrency exchange that has been hired by Facebook to provide custody services for Pax Dollars, is hacked.
“They mentioned that Coinbase has an insurance program, but they don’t really say what type of losses the insurance covers,” Marcellin said. “How are you taking deposits when you don’t have any backstops for people’s money?”
As for the environmental impact, the Pax Dollar is based on an energy-intensive security feature to validate transactions: algorithmic problem-solving called “proof of work” crypto mining. The Open Markets Institute said this “creates a number of extensive climate harms, which include annual energy consumption akin to that of entire nations, 30,700 tons of electronic waste (computer hardware is notoriously difficult to recycle) annually, [and] higher electricity bills for residents of states with crypto mining.”
There’s also the issue of Facebook claiming that Novi offers poor people access to financial services “with no fees” because the Pax Dollar operates on the Ethereum network which requires users to pay validation transaction fees, which tend to spike when there’s an uptick in transactional activity. For now, Facebook isn’t passing these costs onto Novi users. But the company could put the burden on its customers after capturing market share — a common “predatory pricing” practice employed by numerous tech firms such as Uber, Lyft and Amazon, as the Open Markets Institute remarked. The lack of Novi transaction fees also obscures the fact that users in Guatemala would still need to exchange their Pax Dollars with the Quetzal, Guatemala’s national currency.
“They’re free-riding off the banking system. If people want to transfer it to physical cash, they have to use a bank, so then they have to be subject to transfer fees,” Marcellin said. “This completely undermines the whole idea that this is [offering] services to underbanked. If you don’t have a bank account, you can’t use it.”
There is a potential workaround for this conversion problem, albeit one with troubling implications, if the experience of another Central American country is any indication. The government of El Salvador, Guatemala’s neighbor to the southeast, made Bitcoin legal tender in September much to the chagrin of Salvadorans who protested the move, lamenting the wild swings in the price of Bitcoin, among other aspects of the law. Results of a poll published in August showed that 65 percent of Salvadorans were in opposition to the law that made Bitcoin legal tender.
“The only alternative to leveraging the existing banking system is if Facebook is planning to work with the government of Guatemala to change the laws of that sovereign nation to mandate the acceptance of Pax Dollars as legal tender,” the Open Markets Institute warned.
Finally, there’s the nontrivial matter of how Facebook has treated its users. In addition to the recent Instagram scandal, the company has conducted psychological tests on unwitting users; allowed the data of 87 million users to be exploited in 2016 by Cambridge Analytica, the hardline right-wing political consulting firm that used the information to push fearmongering ads to benefit Donald Trump and the Brexit campaign; enabled incitement to genocide in Myanmar; and allowed disinformation and fake accounts to manipulate political processes in countries around the world.
Considering “Facebook’s track record of violating user privacy, and Facebook’s ongoing need to find new profit centers,” the Open Markets Institute warned, “there is absolutely no reason to believe its promises today that it will not find a way to monetize its digital assets pilot project.”
“If anything, an effort to monetize the data of users who take part in this project seems not merely plausible, but likely,” the organization said. That is, unless the federal government defies expectations and exercises its power to stop the godlike tech giant.
Streaming sites like Spotify paying artists a pittance for their music is a big story at present. But one artist is fighting back. She has launched a single on an ethical streaming site. And her approach potentially shows a new way of working for musicians around the world.
Meet MIRI
East London-based artist MIRI has been honing her craft for many years. She gained an illustrious live résumé performing at diverse events such as the Million Women Rise march in London and The 100 Club as part of the official Bob Marley birthday celebration. In 2019, she released her Soundbites EP. As The Canary said at the time:
Soundbites is a project that will surely prove to be timeless. MIRI has crafted something that cannot be boxed in, much like herself. Socially profound, lyrically resonant, and musically ingenious, the EP stands as a testament to the sum of this unapologetically heartfelt artist’s parts. But it’s MIRI’s vocals which truly shine, showing the glittering calibre of this unique performer. Soundbites stands as a glorious, emotive moment in her blossoming career.
Since then, she has continued performing live and steadily releasing a stream of new music. The October 2020 track Just Breathe was a timely ballad, resonating with the feelings people may have been having during the coronavirus (Covid-19) pandemic:
MIRI is an ambassador for female music organisation the F-List and creatives group Women in CTRL. She also does a lot of work for LGBTQI+ groups. But as an independent artist she has, like many others, faced challenges when it comes to earning a living from her music. This is partly down to streaming sites.
The streaming scandal
As The Canary previously reported, streaming now makes up 80% of the music we listen to in the UK. But there’s controversy about how streaming sites pay artists for their music. A report by the government on the economics of streaming warned that “pitiful returns” from the current system are affecting the “entire creative ecosystem”, and also raised “deep concerns” about the position of the major music companies in the market. In response, the Competition and Markets Authority (CMA) has launched its own inquiry into the industry.
More recently, a Labour MP launched a bill in parliament. As The Canary previously reported, MP Kevin Brennan’s Copyright (Rights and Remuneration of Musicians) Bill sought to introduce a right to “equitable remuneration” for streaming income, where performers have a right to receive a share without reference to their label contracts. It would also give musicians more of a say over how their music is used. The bill is still currently being debated in parliament.
Shocking figures from Spotify
The problem is acute. MIRI shared data from campaign group the Trichordist into how much streaming sites actually pay artists, and the figures were shocking. On a site like Spotify, people would have to stream an artist’s track over 3,000 times just for them to earn an hour’s work at minimum wage:
MIRI told The Canary she’s not dismissive of why some artists still use major streaming sites:
With Spotify I understand why artists will stay on there. It’s not an easy decision to make because bigger platforms like that help an artist with audience reach. In the past I’ve found that some event promoters and music industry professionals will ask for my Spotify link and stats. It’s not a fair predicament to put an artist in: ‘do I keep my music on there to help me keep building my fan base or do I throw that all away by taking my music down’. It’s a gamble especially when music is your livelihood.
But the shocking figures Spotify and other sites pay artists cannot be understated. Moreover, the sites are hardly ethical. MIRI told The Canary:
When I read that Spotify CEO Daniel Ek recently invested $113m in the military that was enough for me. He could have invested that money into artists. I find his investment very concerning. I’ve started taking some of my music down from Spotify. It’s important to point out that it’s not just Spotify who aren’t paying artists fairly, it’s the bulk of the bigger streaming sites.
So, for her latest single, she’s tried a different approach.
Trends
MIRI’s latest release is Trends. She toldLoud Women that:
I co wrote ‘Trends’ a while back. I was listening to a lot of Vampire Weekend at the time. I’ve performed it in lots of different spaces including the artist Natty’s Vibes & Pressure night in what use to be Passing Clouds.
The influences of World Music-inspired Vampire Weekend and Reggae artist Natty on MIRI are clear. Because Trends is a gorgeous, hybrid indie/pop track with pleasing nods to Reggae and Dancehall in it. On the face of it, the strumming guitar line and dominant drums, juxtaposed with a delicate electric organ, feel very indie. But the dominant rhythmic arrangement of the guitar, organ and kick drum actually incorporate a Reggae/Dancehall beat. It’s a clever fusion of genres – and makes for an uplifting, crowd-pleasing affair. Plus, as always with MIRI, the lyrics carry political and social messages. She also toldLoud Women:
Trends is about observing political corruption yet recognising our power and strength in imagination and creativity. The way that we can stand up, come together and use our voices to speak our truth.
But The Canary is not going to give readers the YouTube link for the track. Because MIRI has been intentionally pushing Trends on another streaming site.
Welcome to ethical streaming
Sonstream describes itself as a “pay per play” music streaming site. As God Is In The TVwrote:
The service offer singles and album streams. Albums cost 10p to stream in their entirety (so the unit price is dependent on the number of tracks on the Album) where as singles come in three different tariffs, the most being 3.3p per stream, the cheapest being 1.5p per stream. By proxy of the model; unsigned music artists receive 2.5p for every [pay] of their tracks.
So, MIRI released Trends on 19 November on Sonstream – before she released it elsewhere. You can sign up and then stream the track here. She told The Canary:
I wanted to release ‘Trends’ exclusively on Sonstream first to make some noise about streaming and to earn money. On the first week ‘Trends’ received over 500 streams on Sonstream. On the following week I released it on all the major platforms and it received 80 streams on Spotify. Within two weeks I’d earned just over £20 on Sonstream and that’s for 1 song being streamed and on a small independent site. On two of the bigger platforms I would have earned 0 and £1.08 on Spotify.
Spotify: enough is enough?
MIRI is pleased with how Sonstream operates. She told The Canary:
When I first uploaded my music onto Sonstream over the pandemic I didn’t have any expectations. When I saw within a short time that I was actually getting paid and paid fairly it made me realise what a terrible deal artists are getting on all the major streaming sites. Maybe we wouldn’t have needed to get emergency funding or have had to stress and panic about money so much if we weren’t getting such a bad deal here.
A Musicians Union poll found that 82% of respondents earned less than £200 from streaming sites in all of 2019. So, something needs to change. And MIRI is at the forefront of trying to bring this about.
Not a hobby. A job.
She concluded that:
I will keep… shouting about ethical streaming platforms like Sonstream and Resonate. I hope that we can fix streaming sooner rather than later. Artists deserve to get paid. Music is not a hobby for me, it’s my job.
It seems unclear whether change in the way streaming sites operate will come from parliament or not. So artists will have to continue to fight and raise awareness of the dire situation in which the rigged system leaves them. But ultimately, change can be effected by us, the audience. If we all stopped our streaming subscriptions and switched to ethical sites like Sonstream, it wouldn’t be long before Spotify and the rest had no choice but to stop exploiting musicians. We all need to play our part.
The government will change the law to make sure musicians get more money from streaming only if an “industry-led” solution cannot be found, a minister has said. At the same time, the movement to ensure musicians receive fairer pay is picking up cross-bench support.
The “problem”
Business minister George Freeman told MPs the Government’s first instinct was to “avoid legislation”, as he acknowledged there was a “problem” of musicians not receiving a substantial cut of streaming revenues. His comments came as MPs debated the Copyright (Rights and Remuneration of Musicians) Bill, sponsored by Labour MP for Cardiff West Kevin Brennan.
Kevin Brennan with Rebecca Ferguson in Parliament Square (Jonathan Stewart/PA)
The Private Member’s Bill, which did not receive backing from the government, sought to introduce a right to “equitable remuneration” for streaming income, where performers have a right to receive a share without reference to their label contracts. It would also give musicians more of a say over how their music is used, with MPs hearing that dame Vera Lynn could have reclaimed ownership rights to her music, receiving royalties after We’ll Meet Again and other favourites experienced a revival in recent years.
Freeman told MPs:
If we can avoid legislation but solve the problem in some other way, that’s our first instinct. But indeed, I want to make very clear if we conclude that legislative changes are the only way to achieve what the House is looking for, then that is very much open to us.
We want to work very closely with the industry, and let me just take this opportunity to make clear to the industry, who will be watching this closely, that we do think there is a problem, we want to make sure we get it right and we want to work with them to get the right measures in place.
George Freeman (Victoria Jones/PA)
Labour MP Brennan told MPs that “wonderful British artist” Vera Lynn would have been able to reclaim rights to her music if his proposals were made law.
He later said:
If, after a period of 20 years, they are dissatisfied with the efforts being made by record labels or publishers – and this would apply to Dame Vera Lynn, I am glad to say, were she still with us – if they are dissatisfied with the efforts being made by record labels or publishers, musicians could give notice of their intention to reclaim their rights to exploit their music or transfer that right to another label or publisher who might do a better job than the existing one.
He was responding to Conservative MP Natalie Elphicke (Dover), who described Dame Vera as “one of our most loved entertainers and icons across the country”, adding:
Yet she found herself with a revival of some of her most famous and beloved songs, and not receiving royalties from a contract that was conceived and signed before the internet had even been considered and built.
Dame Vera Lynn (Zak Hussein/PA)
Brennan insisted his Bill’s efforts to remunerate musicians for streaming was “not about anarchy in the UK”, adding:
This Bill is about equity in the UK music industry.
Conservative former cabinet minister Esther McVey gave her backing to the Bill, and said the taxpayer should have not picked up the bill for big labels who did not pay their artists “correctly” during the pandemic. McVey said:
Covid shone a spotlight into this area. In the past, artists could go out and earn extra money through performing at live events. Not now, they couldn’t, and they would rely far more heavily on what was coming through from streaming.
Why should the taxpayer pick up the bill for these international giants who aren’t paying their contributors, creators, writers, correctly?
As a seventh grader, Emma Lembke was one of the last in her friend group in Birmingham, Alabama, to get on social media. When she did, she says she soon found herself addicted, spending five hours a day on the apps, mostly Instagram.
“At an important developmental period in my life as a young female, as a young kid, in middle school, [I got] wound up in this world of likes, comments, very deeply quantifiable measures of my value, addictive algorithms, and the endless scroll,” she says.
When Lembke reached what she calls a “breaking point” in ninth grade, she began looking into the effects of social media. She found research articles, statistics, and a now widely shared TEDx Talk that all suggested to her that the anxiety, body image issues, and isolation she thought she was alone in feeling were in fact linked to social media use.
During the pandemic, Lembke, who is now 19 and a freshman at Washington University, started an organization called Log Off, which provides resources for reducing screen time, advice for better digital well-being, a curriculum for schools on navigating social media, and a place to submit personal stories so teens can break what Lembke says is a stigma around admitting that use of social media is making them miserable. The group has since grown to a team of 60 digital youth advocates from 16 different countries.
“I was unaware of the heavy editing and toxicity of the body standards present on the apps, but what I was aware of was how I was not meeting that preset standard,” starts one anonymous story published on the organization’s website. “I wish someone would have told me to never get on the apps as a young, highly insecure 7th grader. It has taken years of self discipline and reflection to get to a place where I can look in the mirror and smile.”
Log Off is part of a growing Generation Z movement pushing back against companies like Facebook, Instagram, Snapchat, and TikTok, and the way they control teens’ social lives. Those born between 1995 and 2010 are often portrayed as “digital natives” who are gleefully glued to their phones. But they, like all age groups, are struggling with the mental health effects of spending hours in worlds that encourage heavy social comparison and value the quantifiable, the optimizable, and the performative over the authentic. Forty-two percent of Gen Z-ers now say they’re “addicted” to social media and couldn’t quit if they tried, and more than half believe life was better before social media, according to polling by the Harvard Kennedy School Institute of Politics.
“Teens face a choice: Either risk your social circle or risk your mental health,” Lembke says.
The Social Media Generation
Unlike older adults, Gen Z never really had a meaningful choice about whether to use social media. To not be on Instagram or Snapchat or TikTok is, at most American schools today, to be in a distinct and socially left-out minority. Even before the pandemic, 95% of teens in the U.S. had their own smartphone or access to one, according to Pew Research Center, and 75% had at least one active social media profile, according to the American Academy of Child and Adolescent Psychiatry.
At the same time, research is increasingly showing that smartphone and social media use is connected with heightened anxiety, depression, self-harming behaviors, and sleep deprivation in teens.
In 2017, when psychologist Jean Twenge published an article in The Atlantic linking increased smartphone use with a 56% rise in suicide rates in Americans ages 10–24 between 2007 and 2017, her findings were widely dismissed.
“The arrival of the smartphone has radically changed every aspect of teenagers’ lives, from the nature of their social interactions to their mental health,” she wrote.
But our understanding of social media has changed dramatically since 2017, with recent revelations by Facebook whistleblower Frances Haugen that the company’s own research found that teen girls’ eating disorders and body image issues got worse on Instagram. This came as there was already a growing awareness of the negative effects of heavy social media use because of the forced isolation of the pandemic. The release of The Social Dilemma on Netflix in September 2020, which features former employees of Facebook, Google, and Twitter revealing the addictive, emotionally manipulative design of these apps, furthered this cause.
In the past year, a nonprofit headed by The Social Dilemma protagonist Tristan Harris called the Center for Humane Technology—perhaps the organization that has done the most to raise awareness of and put pressure on Big Tech—has begun heavily supporting the work of young activists.
This includes LookUp, a nonprofit that funds young people to raise awareness about digital wellness and develop more ethical and inclusive tech. The organization was founded in 2019 by Susan Reynolds, a former English teacher at a private boys school in Concord, Massachusetts, who began researching the impacts of tech after noticing the addictiveness of AOL Instant Messenger in the late 1990s for her and her students. By the 2010s, she was meeting with college students to share research on associations between smartphone use and weakened cognitive capacity and sleep disruption.
“What was clear to me was that [teens] needed data, but they didn’t need me telling them what to do,” Reynolds says.
In the past year, LookUp has expanded, with chapters in the United Kingdom, India, and Africa. In October, the organization hosted a youth summit that drew 1,200 registrants and featured more than 175 youth speakers, as well as a panel hosted by Deval Patrick, the former governor of Massachusetts, and remarks by Massachusetts Sen. Edward Markey, who is cosponsoring the KIDS Act. If passed, this legislation would ban social media’s addictive features, such as autoplay, push alerts, and follower counts, for users under 16.
Ritom Gupta, 22, director of community engagement for LookUp India, believes raising awareness is especially important for his peers. “People in this country are still getting addicted to tech. It’s still in its infancy, not like the U.S., where everyone’s aware.”
The group makes recommendations to its audience, such as not using one’s phone first thing in the morning, turning off notifications, and practicing meditation to use social media more mindfully.
“The irony on social media is that while you’re trying to capture the moment, you’re missing out on that moment to show people who are not there in that moment,” says LookUp India Chair Rijul Arora, 25.
One app LookUp has funded, called Mynd, allows users to rate their moods while on social media, selecting choices like “happy,” “angry,” or “anxious,” and then view trends as well as set goals for healthier social media use. Creator Madi McCullough, 23, a recent college graduate and freelance social media coordinator, was inspired by health apps that “use persuasive technology for good,” such as encouraging people to run more, rather than promoting addictive use.
Less and Better Tech
While the initial focus of LookUp was on funding tech projects like Mynd, Reynolds says that one of the widest-reaching initiatives centers around going tech-free. NoSo November, created by 20-year-old University of Colorado, Boulder, student Maddie Freeman, is an initiative for high schools and individuals to log off or delete all social media apps for the month of November and spend their free time doing activities like yoga, cooking, and calling friends. The idea is to make going off social media a group experience rather than a socially isolating one. (Freeman recently shot a promo for the challenge with The Social Dilemma director Jeff Orlowski).
Like other Gen Z-ers, Freeman appreciates that social media allows her to connect so easily with people in different time zones and doesn’t think it is the sole cause of mental health issues, but she believes it contributes heavily. In high school, 12 of her peers, including several friends, and all of whom were heavy social media users, committed suicide.
During the first NoSo November challenge last year, participants noticed a change right away, she says: “Within days of being in that challenge, everyone was like, ‘I do not miss these apps at all. I don’t want to re-download them.’ It was a weight lifted off of all of our shoulders.”
While in the near-term, young activists have focused on raising awareness of social media’s impact and strategies to cut down on their use of it, they don’t talk about it as a matter of personal responsibility and self-control the way older adults often do. Instead, they frame it as a systemic issue that requires regulation, such as the KIDS Act and an online safety bill out of the United Kingdom that could influence how the rest of the world handles tech.
At the same time, teens and young adults don’t believe social media is going away. The focus, they say, must be on designing more authentic and less toxic ways of connecting, and teaching media literacy — and they are ready to help lead the way.
“Being in Gen Z, social media was baked into the DNA of my childhood, and I think that’s going to be the same with every generation that comes after,” Lembke says. “As a society, we can force social media companies to prioritize their users and youth mental health, and to exist in healthier ways. I hope legislators will open up and listen to us, because there’s much to be said from our side.”
During an ongoing global semiconductor shortage that has stifled smartphone and car companies alike, thecommunications and electronicssector spent15.1%more on federal lobbying during the third quarter than the same period last year, bringing its 2021 total to$362.1 million. It was the largest lobbying spending increase experienced by any sector this quarter.
Semiconductors, or semiconductor microchips, are an essential component of electronic devices. Over the course of this year, industry demand for the chips has outstripped their supply, causing some chipmakers to deepen their U.S. investments.
In March, PresidentJoe Bidencalled on Congressto invest $50 billion in semiconductor manufacturing and research. He received$133 millionfrom the communications and electronics industry during the 2020 campaign cycle, making it thefourth highest spendingsector to contribute to his campaign.
Tech companySamsungannounced Tuesday it will build a semiconductor factory in Taylor, a city just outside of Austin, Texas. One of the world’s largest makers of electronic devices, the company also spent$2.9 millionthis year on federal lobbying. During the third quarter alone, the company spent$1.1 million— more than it has any other third quarter in its history.
Theelectronics manufacturing and equipmentindustryspent the mostin the communications and electronics sector. Its industry groups have lobbied$135.1 millionso far this year. The industry experienced its largest third quarter lobbying spend yet, spending $46.1 million — a nearly $10 million increase from the same period last year.
Other electronics giants moving to chip in includeIntel, who in March announced it would build a pair of new factories in Arizona. Intel has spent$4.9 millionon federal lobbying this year despite spending only$1 millionthis past quarter.
Earlier this month,Texas Instrumentsannounced plans for new semiconductor plants in Sherman, Tex. The tech company has spent just over$1 millionon lobbying efforts so far this year, tying with theSemiconductor Industry Association, a lobbying group that represents the United States semiconductor industry.
Amazon.comis the largest client lobbying in the communications and electronics industry, spending a total of$15.3 millionduring the first three quarters of 2021. The Seattle-based company, whichproduces its own lineof semiconductor chips, spent over$5 millionon federal lobbying during the third quarter alone.
The communications and electronics sector has contributed$20.6 millionto members of Congress this year. Of that, nearly 73% went to Democrats and 27% went to Republicans. So far, the sector has given the most to Senate Majority LeaderChuck Schumer(D-NY), a total of$1.8 million. Sen. Schumer sponsored theUnited States Innovation and Competition Act, a bill that passed the Senate in June, which would invest$52 billionfor domestic semiconductor manufacturing to help reduce U.S. reliance on foreign semiconductor producers.
Within the communications and electronics sector, clients from thetelecomandinternetindustries spent record-high amounts on federal lobbying.Telecom services and equipmentbested its previous third quarters numbers with $26.1 million, for a total of$81.5 millionthis year. The internet industry followed suit and added $23.2 million to its now$67.6 million2021 federal lobbying total.
Dangerous disinformation and “arbitrary incursions on liberties” are the technology red lines that Australia won’t allow to be crossed, according to Foreign Affairs minister Marise Payne. On Friday she warned against the unchecked influence of Big Tech, which she said should have been addressed “yesterday”. Speaking at the Australian Strategic Policy Institute’s Sydney Dialogue on…
Former Prime Minister Paul Keating has backed Chinese government moves to curb market powers and social influence of large technology companies, saying recent regulatory interventions will make China a “more civil society than the United States”. During highly anticipated address to the National Press Club, Mr Keating slammed the Australian government’s animosity towards China, which…
Rep. Alexandria Ocasio-Cortez was among the progressives calling for government action to break up Facebook after the company and its family of apps — including Instagram, Messenger, and WhatsApp — experienced a massive outage on Monday, rendering inaccessible services that billions of people worldwide use to communicate.
“It’s almost as if Facebook’s monopolistic mission to either own, copy, or destroy any competing platform has incredibly destructive effects on free society and democracy,” the Ocasio-Cortez wrote on Twitter. “Remember: WhatsApp wasn’t created by Facebook. It was an independent success. FB got scared and bought it.”
“If Facebook’s monopolistic behavior was checked back when it should’ve been (perhaps around the time it started acquiring competitors like Instagram),” the New York Democrat added, “the continents of people who depend on WhatsApp and IG for either communication or commerce would be fine right now. Break them up.”
Sen. Elizabeth Warren (D-Mass.) echoed that message, declaring, “We should break up Big Tech.”
Facebook — in a Twitter post — apologized for “any inconvenience” that may have been caused by the outage, which lasted roughly six hours and cost CEO Mark Zuckerberg $6 billion in net worth. In a blog post Monday evening as its services started to come back online, Facebook blamed the outage on “configuration changes.”
The blackout, believed to be the largest in the company’s history, came just hours after “60 Minutes” aired its interview with Frances Haugen, a former Facebook employee who accused the tech behemoth of putting “profit over safety” by refusing to combat rampant misinformation and incitement to violence on its platform.
“Facebook is killing people,” Rep. David Cicilline (D-R.I.), chair of the House Antitrust Subcommittee, said following Haugen’s interview. “Whether it is teen suicides, January 6, or Covid misinformation, Facebook has shown that its unchecked power to dictate and profit from what people see online is a threat to our safety and our country.”
“As I have said before,” Cicilline continued, “Facebook must be broken up and brought to justice.”
At the same time as the company scrambled Monday to address an outage that critics seized upon as further evidence of its monopolistic reach, Facebook filed a motion to dismiss the Federal Trade Commission’s antitrust lawsuit, which accuses the tech giant of engaging in an illegal “buy-or-bury scheme to maintain its dominance.”
“It unlawfully acquired innovative competitors with popular mobile features that succeeded where Facebook’s own offerings fell flat or fell apart,” alleges the FTC’s complaint, which specifically mentions Facebook’s purchase of Instagram in 2012 and WhatsApp in 2014.
“To further moat its monopoly, Facebook lured app developers to the platform, surveilled them for signs of success, and then buried them when they became competitive threats,” the FTC says. “Lacking serious competition, Facebook has been able to hone a surveillance-based advertising model and impose ever-increasing burdens on its users.”
In its response to the lawsuit on Monday, Facebook contended that the agency’s complaint “pleads no facts plausibly establishing that Facebook has, and at all relevant times had, monopoly power.”
Facebook was down today, but their law-firms were not.
Apparently, Facebook’s lawyers spent the day working to dismiss the FTC’s antitrust lawsuit — again.
As the New York Timesreported Monday, the impact of the hours-long Facebook blackout “was far-reaching and severe.”
“Facebook has built itself into a linchpin platform with messaging, livestreaming, virtual reality, and many other digital services,” the Times noted. “In some countries, like Myanmar and India, Facebook is synonymous with the internet. More than 3.5 billion people around the world use Facebook, Instagram, Messenger, and WhatsApp to communicate with friends and family, distribute political messaging, and expand their businesses through advertising and outreach.”
“Facebook is also used to sign in to many other apps and services,” the Times added, “leading to unexpected domino effects such as people not being able to log into shopping websites or sign into their smart TVs, thermostats, and other internet-connected devices.”
Vincent Bevins, a journalist currently based in Brazil, emphasized during the outage that “WhatsApp and Messenger are essentially public infrastructure for huge parts of this planet (it varies by country), and that should come with some responsibilities to citizens.”
“I am fine because I have credit on my phone to send text messages/call people,” Bevins wrote on Twitter. “But I can tell you right now that a lot of people, here in Brazil and all over the place, do not — they were relying on those ‘free’ apps to communicate with friends and family today.”
In a column on Monday, Motherboard’s Edward Ongweso Jr. observed that “for the past decade, Facebook has not simply had a deleterious effect on the general public, but established itself as the major if not sole conduit for internet activity across the world with a series of ruthless acquisitions that are now under scrutiny for breaking antitrust law.”
“A lack of transparency and accountability aren’t why Facebook has been able to exploit content moderators or independent contractors, nor why it has been able to facilitate a genocide or spark a mental health crisis, or any of the long list of sins and abuses we can amend to the company’s constantly growing record,” Ongweso argued. “The reason it has been able to do all this (and get away with it) is power. Shining a light on power doesn’t necessarily undermine power, but bringing a hammer down on it will.”
Construction work on several major tech company expansion projects, including those by Amazon, Microsoft, Google and Facebook, slowed to a crawl today as the region largest carpenters’ union halted work over a wage dispute.
At 6 a.m. Thursday, 2,000 Northwest Carpenter Union members walked off the job and began picketing at four major job sites, including Microsoft expansions in Redmond and Sammamish; Google and Amazon projects in Bellevue Plaza, and Facebook’s Building X in Redmond.
Evelyn Shapiro, the union’s executive secretary-treasurer, said the affected sites were not randomly chosen. In the push for better wages and benefits, the union looked at companies “that are making billions,” she said.
Specifically, the union is striking against the contractor consortium, the Associated General Contractors, and not the tech companies themselves.
Over the past year, we have seen a tidal wave of support to address and rein in monopolies like we haven’t seen in decades. As companies like Amazon and Facebook have demonstrated the dangers of having too much power concentrated in one company — and as corporate consolidation has upended entire sectors of our economy, from farms to pharmacies — regulators and elected officials have taken unheard-of new steps to stop the spread of unchecked corporate power.
These past few weeks, the Biden administration and Congress have signaled strong support for greater antitrust action: the appointment of Google critic Jonathan Kanter to lead the Department of Justice’s antitrust division, the advancement of leading anti-monopoly scholar Lina Khan’s nomination to the Federal Trade Commission, a slate of House bills targeting Big Tech’s corporate power, and a strong executive order on competition from the Biden administration.
But as antitrust reforms have grown in popularity, they have found an unlikely set of backers: far right politicians like Senators Ted Cruz, Tom Cotton and Josh Hawley who, just months ago, openly supported a white nationalist insurrection and have voted time and again to cut taxes for corporations.
Some might be tempted to welcome their support — a sign, perhaps, of newfound bipartisanship under the Biden administration. It is a temptation we must resist at all costs.
Supporters like these won’t make it easier to win meaningful antitrust reforms that help us build a functional, multiracial democracy. By framing the antitrust fight as solely an economic populist one, they will doom the project altogether and could pave the way for a dangerous alliance between big business and government that will ease the path to power for white nationalists.
To understand why, we need to understand the history of anti-monopoly policy making.
The Incompatibility of Monopolies and Democracies
In the late 19th and early 20th century, a handful of megacorporations like Standard Oil and U.S. Steel rose to dominance, growing powerful enough to dictate terms to lawmakers. Their rise was accompanied by the erosion of worker and consumer protections, ruthless tactics to wipe out competitors and, unsurprisingly, massive economic and racial inequality.
Starting in the early 1900s, lawmakers increasingly began to push back and through a series of new laws and court decisions, broke up monopolies and placed some limits on their power. In Europe, by contrast, powerful monopolies were put into power and then co-governed with genocidal dictators in Germany, Spain and Italy. Fascist state power was propped up by corporate monopolies.
While the antitrust reforms of the early 20th century and a militant labor movement helped stave off corporate consolidation and unchecked power, in the 1970s, a bipartisan pro-business effort came together to eliminate guardrails that had prevented businesses from gaining too much power. It’s no surprise that decades later, monopoly powers are on the march again — and neoliberalism is bringing to power leaders with fascist tendencies like Donald Trump. Tim Wu, who is Biden’s special adviser on competition policy, noted these contrasts in the opening of his book, The Curse of Bigness: Antitrust in the New Gilded Age: “Extreme economic concentration yields gross inequality and material suffering, feeding an appetite for nationalistic and extremist leadership.”
It would be naive to think that somehow, in the wake of Trump’s defeat, that democracy is safe and we can repair the harms done to our multiracial society. What is clear is that there is a rising strain among certain Republicans who are Trump’s strongest supporters and have taken up the populist mantle of antitrust — as though they hadn’t been corporate America’s allies in Congress for years.
We should not be fooled. When Senator Hawley and Senator Cruz call for breaking up corporate power, they are co-opting antitrust language to both punish “woke corporations” taking anti-racist stances, and to build up their base — especially people and communities facing unemployment, wage stagnation and disinvestment. They are not true believers in multiracial democracy — antitrust is merely a tool for them to play out a personal agenda against perceived tech bias against conservatives.
I’ve seen this strategy in action myself. Growing up in India in the early 1990s, I was witness to the rise of the Bharatiya Janata Party (BJP), the Hindu nationalist party that rules the country today. The party fused an economic program of national self-sufficiency and economic populism with Hindu nationalism and ruthless attacks on Muslims. As a child, my friends and I canvassed for the BJP, having been recruited by a neighbor with a few rupees and some candy. The election propaganda we distributed lured regular people in with the promises of a more prosperous future — what they left out was that their reforms were designed only for upper-caste Hindus in clear rejection of a secular democracy.
I didn’t understand that the result could only be the violent social, economic and political exclusion we see in India now.
This is the future that awaits us if we buy Hawley and Cruz’s snake-oil promises and normalize their economic policy platforms. Our dream of building a multiracial democracy will be destroyed as fascists and monopolists consolidate power.
There is a better way to do antitrust. Rather than submitting to the swan song of bipartisanship, we need to ground antitrust work within an explicitly anti-racist framework and show how monopolies disproportionately harm real people in Black and Brown communities. In their groundbreaking paper on race and monopoly, the group Liberation in a Generation noted the need to make antitrust work more accessible and intersectional: “These technical conversations cover up the human pain and the racism responsible for that pain, often purposely … this is one way that racism is removed from economic discussions and debates.”
At the Action Center on Race & the Economy (ACRE) where I work, we’ve targeted, with our Black and Brown partners, Amazon for blatantly profiteering off of communities of color. From sales of smart surveillance technologies — like Rekognition and Ring, that ramp up racial profiling of Black and Brown people, to data-sharing partnerships with 2,000 law enforcement agencies — Amazon entrenches its monopoly power through its surveillance empire. Monopoly power is what lets Amazon continue to get away with this racist business model, by insulating the company from both popular opinion and regulators.
In India, too, people are showing how unabated corporate power worsens systemic racism. Last year, for example, Indian farmers and their unions rose up to protest new farm bills from the BJP-led government that would have left them at the mercy of big agriculture corporations. Their uprising ripped the veneer of economic populism off of Hindu nationalism by showing how it impoverishes working people in the country.
What gives me hope in the face of Hawley’s rhetoric, and the dangers it presents, is activists and organizers in the United States, India and worldwide who are coming together and standing up to fight corporate monopolies and anti-democratic state power in a multiracial struggle.
Democratic lawmakers and regulators who are currently evaluating solutions to limit monopoly power, whether in Big Tech or other industries, need to be vocal that this work is happening to build up a multiracial democracy. They need to take their cues from these activists, especially those of color, and center anti-racism in their analysis and policies, rather than chasing the mirage of bipartisanship. This is the time to be having briefings and hearings on Capitol Hill that bring in the voices and solutions from activists, workers, farmers and small business owners, especially those of color. Without that, anti-monopoly will just be another tool that clears the path for white nationalists to win state power.
NSW Customer Service minister Victor Dominello has urged multinational tech companies seeking access to the state’s extraordinary $2.1 billion Digital Restart Fund to “partner up” and help build local tech and digital capability.
Although NSW had not mandated local participation rates in government procurement, Mr Dominello said there was a clear expectation that big tech multinationals find ways to build partnerships with local SMEs and startups that resulted in capability uplift.
The NSW government unveiled a $1.6 billion Digital Restart Fund last year as both an economic stimulus measure to rebuild after the lockdowns and disruptions of 2020, and also a lever of industrial policy to build and strengthen local companies.
An additional $500 million was added to the fund last month, an unprecedented pool of money being directed at tech uplift.
“That’s a lot of grunt we have in the engine now that we didn’t have before,” Mr Dominello told InnovationAus during a wide-ranging interview on the Commercial Disco podcast – to be published via this site and Podbean on Friday.
Victor Dominello: Wants the tech giants to do more in building local capability
But Mr Dominello poured cold water on widespread push among local tech suppliers for governments to mandate a level of local participation in public sector tech procurement contracts as the best means of building sovereign capability in key tech supply chains.
He also dismissed the notion of imposing a ‘Retained Economic Benefit’ criteria to tech procurement decisions, confirming to InnovationAus that the advice from the federal Trade department that such a yardstick would breach Free Trade Agreements that the Commonwealth had signed with partners, including the United States.
By including a Retained Economic Benefit measure in procurement decisions – with criteria such as where the supplier is ultimately domiciled, where its intellectual property resides, where it pays taxes, and where it employs researchers – would potentially be tipped toward Australian companies.
Mr Dominello said that the rhetoric behind the creation of a ‘Made in Australia’ office was “fine”, but in practical terms it would not work. The Australian Information Industry Association last month called for the federal government to create a Made in Australia office as a way to encourage sourcing from local tech companies.
The NSW government formally adopted adopted local procurement targets recommended by its ICT/Digital Soveriegn Procurement Taskforce: a minimum 25 per cent of contract of contracts valued at $3 million or more must be directed to locals SMEs (via subcontracting arrangements) 30 per cent of NSW government total spend on ICT must be with SMEs.
These are not mandated targets, but remained the best way to build SME participation, Mr Dominello said. And there was a clear expectation that the multinational tech giants get on board.
The reality is that the state government – and other governments around Australia – needed to work with these highly innovative tech companies from the US and elsewhere, Mr Dominello said.
“But when they come here and they want to play in our patch, my message to them is that they need to partner-up,” he told InnovationAus. “You can come here and just be an island [without local partners], but that’s of no value to us.”
“That means you must buddy-up with SMEs in NSW in order to access part of that $2.1 billion [digital restart fund]. That’s the most important lever that we have.”
Mr Dominello said in the context of geopolitical strategic tensions and COVID tech supply chains issues, that big tech multinationals should see building local capability as being in their own self-interest – even invoking the key strength of the so-called Five Eyes intelligence sharing network if the US, Australia, New Zealand, Canada and the UK.
“You do not want Australia to be a passenger. As part of the Five Eyes, you want Australia to be a strong participant,” he said.
“It is absolutely great that the tech giants from the US in particular are doing so well and innovating and forging ahead. But truly, you need to make sure that you’re partnering up with us to make sure that we can build our capacity as well.’
“Because a strong Australia becomes a part of a strong network – and if we’re just a passenger, that puts a lot of weight on [them],” Mr Dominello said.
“They understand that, and that’s probably the biggest lever we’ve got; to make sure the big tech’s are helping us cultivate our local environment as well.”
Over the past couple weeks Joe Biden has been honing a progressive economic message that borrows both from the Progressive Era in the early years of the 20th century and the New Deal years of the 1930s and 1940s. In his embrace of antitrust politics this summer, he is going further than either Bill Clinton or Barack Obama did to take on entrenched economic powerhouses and to craft a progressive-economic governing philosophy. Six months into his presidency, despite compromises on his infrastructure bill that have alienated the left of his party, Biden is still thinking big and strategizing ways to alter the balance of power within the American economy.
Front and center in this is an effort to go after large monopolies, in particular in the hi-tech sectors, and to use the power of the government to essentially jump-start competition in key sectors of the economy that, to borrow from the lexicon of mid-century economists, could be considered “commanding heights” and that are currently controlled by a tiny number of companies.
On July 9, the president spoke about the need to break up the great monopolies of our time, and to regulate how they use their dominance to put the squeeze on competitors and to foist hidden fees and other costs onto consumers. He framed his administration’s response not as an attack on capitalism, but much as FDR framed the New Deal, as a way to save capitalism from itself. At a time when the U.S. and its geopolitical allies are in an increasingly unpredictable Cold War-styled conflict with China, these nations see a need to promote their political systems as capable of spreading wealth simply by tweaking the ground rules of capitalism — and protecting the system from its tendency to cannibalize all that stands in the way of maximizing short-term profits. “The heart of American capitalism is a simple idea: open and fair competition,” he opined. But in recent years, he averred, big companies have taken shortcuts. “Rather than competing for consumers they are consuming their competitors. Rather than competing for workers, they’re finding ways to gain the upper hand on labor.” He continued, “let me be very clear: Capitalism without competition isn’t capitalism; it’s exploitation.”
In his speech, Biden talked about how Teddy Roosevelt took on the oil and railway magnates and beat them. He referenced how Franklin Roosevelt “ramped up antitrust enforcement eightfold in just two years.” Biden then talked about how, for the past 40 years, presidential administrations have pulled back from enforcing antitrust laws and have let monopolies concentrate power again.
Shortly after he finished talking, Biden signed an executive order containing more than 70 provisions aimed at stimulating competition and helping consumers, in an array of industries that are currently beholden to a few corporate behemoths — from Big Pharma through to social media and internet services. These provisions include making it easier for Americans to buy cheaper pharmaceutical drugs from suppliers in Canada, making it harder for tech giants to collect data on their users’ internet habits, and stimulating competition amongst broadband internet providers.
Following that decision, a wide range of political figures — from populist Democrats such as Senators Bernie Sanders (I-Vermont) and Elizabeth Warren (D-Massachusetts), to far right politicians such as Rep. Matt Gaetz (R-Florida) — call for an overhaul of the country’s antitrust laws to give government the necessary legal tools for taking on the combines of our age. A consensus is growing — one that started taking root during the Trump era — that corporations such as Amazon and Facebook, and business titans such as Bezos and Zuckerberg, exercise the same sort of stranglehold over the economy today as did the railway and oil and steel companies of the late 19th and early 20th centuries. And, emerging out of that realization, a consensus is also taking root that it is past time to update the U.S.’s antitrust laws so as to make it easier to break up companies that now rival mid-size countries in terms of the economic clout they wield on the global stage. Biden’s executive order should, in this context, be viewed as the starting gambit in a much larger, and longer, struggle. It should also be viewed in the context of rising geopolitical tensions with China — which have the potential to spill over into war at some point in the next few years — and as a defense of the notion that capitalist democracies can continue to deliver needed reforms and material well-being to the majority of their citizens.
The executive order also came as the Biden team was pushing countries around the world to sign onto the idea of a global minimum corporate tax, to prevent big companies from simply relocating to tax havens, which allow them to avoid paying higher tax bills in their home countries.
This idea has long been championed by progressives — along with globally coordinated financial transaction taxes aimed at raising tax revenues off of the extraordinarily high volume of trades in stocks, bonds, and other financial instruments in this era of automated, artificially intelligent trading systems. Now, however, it is moving off of the utopian wishlists of radical economists and into the mainstream, and the Biden administration seems willing to employ the U.S.’s diplomatic clout to forge a new, and surprisingly progressive, Washington consensus around global tax rules.
The shift away from Clintonian, and, to a lesser extent, Obama orthodoxies on the economy is profound; and it is long overdue. Clinton came to measure his economic success largely by the performance of the stock market, and Obama by levels of economic growth following the devastating financial crisis unleashed in 2007-08. Both of those measures do tell us something about the broader state of the economy, but by themselves they are woefully inadequate. They do not speak to issues of inequality — or, more particularly, unequal access to basic resources such as affordable and fast internet connections, or life-saving medicines. In choosing their economic priorities, both Clinton and Obama shied away from tackling tendencies toward monopoly in the sparkling new hi-tech growth sectors of the economy.
Biden, by contrast, is dancing to a different tune. His team seems unintimidated by the prospect of taking the fight to big business. To the contrary: They seem to have concluded that the public is with them in this fight and that they stand to benefit politically from promoting antitrust, anti-monopoly policies.
Sen. Elizabeth Warren (D-Massachusetts) has sent a letter to the Commodity Futures Trading Commission (CFTC) urging the agency to investigate Google for potentially engaging in anti-competitive practices by manipulating and exerting wide control over the online advertising market.
In April, as part of another Texas antitrust case brought against the company, it was revealed that Google was running a covert operation to monitor online ad bids by other companies and using the information to bolster its own ad-buying program. “Project Bernanke,” which was not disclosed to bidders, evidently generated hundreds of millions of dollars a year for Google.
The Justice Department is probing Google over that project and other potentially anti-competitive online practices around advertising. But Warren says in her letter that she believes the CFTC, which regulates commodities and the derivatives market in the U.S., should conduct a broader scrutiny of the company.
“Today, the advertising market is functionally unregulated. It is a market worth hundreds of billions of dollars per year, and it is the main revenue driver for some of the country’s largest companies,” she writes. “The market for digital advertising has become perhaps the most actively traded commodity exchange in the world.”
Though the market is largely unregulated, Warren writes, “The market is subject to private regulation, however, by the dominant player in the market — Google. Google exercises that regulatory power to benefit itself and to exploit other market participants, both large and small.”
The senator then cites the 15 states and territories that are part of the lawsuit filed by Texas Attorney General Ken Paxton following the original discovery of “Bernanke” to bolster her argument that Google exercises undue power over the online advertising market.
“Imagine if the financial markets are controlled by one monopoly company, say Goldman Sachs, and that company then owns the [New York Stock Exchange], which is the largest financial exchange, that then trades on that exchange to advantage itself, eliminate competition, and charge a monopoly tax on billions of daily transactions,” the states and territories wrote. “That is the world of online display advertising today.”
If these allegations are true, then they represent “deeply troublesome market manipulation” by Google, Warren says in her letter. The behavior is made especially concerning, Warren says, by the fact that the company doesn’t appear to be trying to hide their potentially anti-competitive practices.
“Given the power of a company like Google to unilaterally manipulate the online advertising market, it is critical that the CFTC ensures these new digital commodities are traded fairly and without harmful manipulation,” Warren concluded.
Online marketing is indeed largely unregulated, holding up a veil of secrecy to advertisers and their clients. This can cause undue harm, advocates have said for several years, to politics and the larger mission to fight disinformation online in general.
Warren’s letter is a continuation of a push from Washington, D.C. and other state and local governments to try to rein in tech companies. D.C. Attorney General Karl Racine filed an antitrust lawsuit in May against Amazon for artificially inflating prices and the Federal Trade Commission recently lost an antitrust case against Facebook.
Warren herself is also involved in several efforts to break up big tech companies. She has mounted an effort to break up huge companies like Facebook, Google and Amazon. Advocates argue, as Truthout’s Mike Ludwig reported last month, that the companies hold too much political and market power while largely going unregulated.
Australians are the tenth most “data surveilled” citizens in the world, according to analysis of data requests by government authorities to Big Tech companies over the last eight years, a period where Australia has introduced several pieces of controversial national security legislation.
Australian authorities have made around two data requests for every 1000 people since 2013 and access requests are also trending up, according to VPN provider Surfshark, which overnight released analysis of 66 countries’ request for user data from Apple, Google, Facebook, and Microsoft.
Adjusted for population, Australia ranks 10th, with Malta, Singapore, Germany, the UK and US in the top five.
The 66 countries analysed have made more than 3 million data access requests to Big Tech in the eight-year period, with the companies more often than not providing partial or full disclosure to authorities.
Australian government authorities have made nearly 50,000 requests for user data to Big Tech companies since 2013. Source: company reporting/Surfshark analysis.
But the four companies vary in compliance with requests. Facebook disclosed information for 76 per cent of authorities’ requests while Apple only handed it over 55 per cent of the time. Microsoft has trended down and now discloses information for 61 per cent of requests after being as high as 79 per cent in 2013.
Amazon was not included in the analysis, which is based on the companies’ self-published data, because the ecommerce and data giant does not consistently report the information.
Facebook’s own transparency data shows Australian authorities have steadily made more requests for user data since 2013, including a jump last year that saw more than 3,000 requests, including nearly 150 “emergency disclosure requests”.
Facebook gave Australian authorities data for 80 per cent of their requests last year, and says the “vast majority” of requests related to criminal cases.
The rise in requests has come as digital platforms rise in popularity and countries introduce or amend laws to allow increased access to communications for national security and law enforcement reasons.
In late 2018 the Australian Parliament passed controversial “encryption busting” laws allowing authorities to compel encrypted communications from providers. While used sparingly so far, the new powers have potentially wiped billions from the economy.
Along with more recent legislation for content takedown and data sharing with international authorities, civil and digital rights groups have warned the mission creep of data access powers is pushing Australia further towards a surveillance state.
Surfshark chief executive Vytautas Kaziukonis said the latest analysis showed digital surveillance is growing around the world.
“During the past years, the world has witnessed widespread adoption of physical and online surveillance tools,” he said.
“An increasing number of governments are deploying a range of surveillance technologies under the promise of maintaining order and public safety. However, it is evident that the seek to track and monitor citizens can be far more overreaching and infringe people’s privacy.”
Companies such as Beyond Meat and Impossible Foods have started to become household names, producing meat substitutes that taste as close to meat as their scientists have been able to engineer. In the midst of a climate crisis that threatens our very existence, plenty of scientists have been recommending that we all look for ways to cut down on our meat intake because cows produce large amounts of methane that has a significant negative environmental impact. Eating animal products also brings up animal rights questions. One of the main selling points of these Silicon Valley companies is essentially that we can save the planet and eat ethically without sacrificing taste. Yet, there is a key question few people seem to be asking about these new products: Are these meat substitutes good for our health?
It’s been widely said the tech companies are the railroads or oil companies of the 21st century. These companies wield enormous power. They have done much good, but they have the potential to do much harm.
It’s why the Online Safety Bill is an important piece of legislation currently before the Senate. It’s a very welcome initiative. It brings to bear a simple, single framework for online safety.
Setting out the basic online safety expectations and arming the eSafety Commissioner with power to effectively ensure people are protected should be broadly welcomed.
The fact is people are being bullied and abused often under the cover of anonymity. There’s nowhere else in our society where you can, under the cover of darkness, pretend to be someone else and attack people.
So it’s important we look to increase penalties for the use of a carriage service to menace, harass or cause offence, from three to five years.
Over the past few months, the Morrison Government has introduced world-leading media bargaining code legislation. Australia has led the world in trying to ensure publishers and public interest journalists are paid for their work.
Just as large tech companies cannot threaten a country, nor can they have more power than any other non-state actor in the world today where they can bully and defeat a country.
As a government we’ve been prepared to intervene to ensure consumers are protected. I am not in favour of regulation for regulation’s sake but there is much content on social media which already contravenes our laws.
As I said in the Senate chamber, social media really has become the wild west.What we need to do is balance civil liberties against the desire to protect people and these are judgements that should be exercised by a minister and they should be disallowable.
Australia’s eSafety Commissioner was the first dedicated online safety regulator to be established in the world and acts as a safety net for when online services fail to keep Australians safe online.
The Commissioner, Julie Inman Grant, is doing a great job but the framework of having the minister set the regulation is an important one.
Ultimately, we want to have a system where Australia is not a backwater. We want to see technology used but we also want to make sure people are protected.
We don’t want to see people bullied and harassed online, we don’t want to see people attacked under the cover of anonymity.
We have laws in New South Wales against anti-incitement and defamation, so social media should not provide a back door to breaking the law.
What I want to see is a scheme that is ultimately going to protect people from cyberbullying and image abuse in a way which balances out the privacy concerns which are understandable and legitimately held.
Australia had a big win with the media bargaining code. We now need to build on that.
This government has a great record of being prepared to intervene where there’s consumer detriment or broader community detriment in relation to tech companies.
We should use this opportunity to lead the world again.
At a time in which distractions seem to multiply by the second thanks to the omnipresence of screens and social media, and COVID-19 pandemic has isolated us further, we’re all having a hard time truly listening to one another and connecting. Silicon Valley veteran Ximena Vengoechea wants to change that with her new book “Listen Like You Mean It.” On this week’s installment of “Scheer Intelligence,” host Robert Scheer speaks to the User Experience designer about her work at Twitter, LinkedIn, and Pinterest, and the role tech companies have had on our ability to listen to one another.
“I think some of how we lost [our ability to listen] has been the sort of moment that we’re in, which is this culturally, politically divided moment, this technologically accelerated moment,” says Vengoechea…
The UK’s competition regulator has launched a fresh investigation into Facebook over concerns that the tech giant might be abusing a dominant position in digital advertising.
Monopoly
The Competition and Markets Authority (CMA) will look into how the social network gathers and uses certain data and whether it may provide an unfair advantage over rivals in the online classified ads and online dating space. As well as Facebook’s advertising services, Facebook Login – a feature that allows people to sign into other websites and apps – will also form part of the probe.
The regulator said it will assess whether data from both offerings enable the firm to benefit Facebook Marketplace, a part of the platform where users can place classified ads, and Facebook Dating.
The announcement comes as the European Commission (EC) launched its own investigation into the company’s use of data.
Chief executive of the CMA Andrea Coscelli said:
We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors. Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.
We will be working closely with the European Commission as we each investigate these issues, as well as continuing our coordination with other agencies to tackle these global issues.
For the first time, tech workers at three major tech companies in the United States have taken public direct action to show solidarity with the Palestinian struggle against apartheid. Workers at Google, Apple, and Amazon have released open letters calling on management to publicly acknowledge the illegal occupation and human rights abuses by the Israeli government, support their Palestinian workers and the rights of their workers to speak freely about Palestine in the workplace, and (in some cases), review business contracts with the Israeli government. These actions, at companies with little presence or history of organized labor (save the notable exception of the very nascent Alphabet Workers Union), came after eleven days of bombings and arrests by the IDF in Gaza and the West Bank, as well as street violence against Palestinians by extremist Israeli civilians.
On May 18th, Google workers from an organization called Jewish Diaspora in Tech circulated a petition calling on the management of Google’s parent company, Alphabet, to review all contracts with and donations to “Institutions that support Israeli violations of Palestinian rights, such as the Israeli Defense Forces,” as well as to listen to Palestinian workers’ demands, donate funds to Palestinian relief organizations, and recognize, “The harm done to Palestinians by Israeli military and gang violence.” On May 20th, workers in the Apple Muslim Association (a group of Muslim workers at Apple) circulated a similar letter internally at the company, demanding Apple’s management publicly recognize the illegal occupation of Palestinian territory by Israel, as well as affirm the importance of language around the occupation (demanding that management not use the terms “conflict,” “clash,” or “both sides”). On May 25th, workers at Amazon released a similar letter. Collectively, the petitions have gathered several thousand signatures.
This particular moment is leading to an increase in activism from within the tech industry in part because of increased awareness of the occupation and support for Palestinians globally. “This time for me has been different than all the previous intifadas,” a Palestinian Amazon software engineer (who wished to remain anonymous) told Left Voice. “Where there wasn’t as much social media coverage to help show the other side of the story. Before, one side was always more dominant in the media and was kind of controlling the narrative.” A Palestinian hardware engineer at Amazon (who also wished to remain anonymous) agreed, saying “we hope that our message will also be carried into other tech companies like Facebook and Twitter, because those two companies control the content that is shared on their websites, especially when it comes to the Palestinian narrative.”
The Amazon software engineer, who grew up in the West Bank, said that sharing that narrative more widely in these workplaces is a high priority for these tech workers, who feel a lot of pressure to not discuss the Palestinian struggle in the workplace. “One thing we are asking for, working at Amazon, is to normalize talking about the Palestinian cause and Palestinian human rights and the sufferings that Palestinians go through back home,” he said. “It’s polarized. You might not get shut down, but it’s preferred not to talk about it, let alone going the extra mile and trying to organize a Palestinian event at Amazon where you talk about your culture and have people wearing Keffiyehs.” And being able to talk about the experiences of Palestinians under occupation is the first step, he believes, to organizing to end it. He believes there has to be an understanding of what’s happening on the ground — that we cannot ignore the history behind the occupation if we want justice to be done. “Peace should be established on justice,” he said. “And once this is established for everyone, and everyone understands the real issues, then we can talk and we can do things that would guarantee a better future for everyone.”
Ariel Koren, an organizer with Jewish Diaspora in Tech, told me that her group had formed in the summer of 2020 following an enormous amount of pressure internally in the Jewish employee resource group (an employee organization set up by management) at Google to not express anti-zionist views. Koren had posted links from the Movement for Black Lives in the group’s listserv that included statements of solidarity with the Palestinian struggle, and she was all but censured for it. “This would be less concerning,” she said, “If it weren’t for the fact that the institutionalization of zionist, pro-occupation views has had actual economic and funding implications.”
Those economic implications include a $1.2 billion contract for cloud computing services that Google and Amazon secured with the Israeli government last month. The United States sends $3.8 billion of taxpayer money in aid to the Israeli government each year. The Israeli government then turns around and sends billions of dollars of that money back to American companies who, in turn, provide the Israeli government with weapons, cloud computing services, and software that the Israeli military uses to improve their security and surveillance technology. The Israeli military tests that technology out on Palestinians, sells it back to the United States, and trains ICE and U.S. police forces on how to use it.
Workers at these tech companies are increasingly speaking out about the connections between their everyday work in the tech industry and the use of the tools they build, especially by capitalist states, to repress the working class and oppressed around the world. Gabriel Schubiner, another organizer with Jewish Diaspora in Tech, said “I’ve seen how Israel, and the media speaking on Israel’s behalf, use both technology and academia as a form of political tech-washing that seeks to validate Israel as a progressive, Western-style capitalist democracy, in opposition to how Palestine and the Arab world are portrayed. I’ve also seen that there are deep engagements between the technology sector and the military industrial complex, and that technology sector is very much being weaponized.” A Muslim Amazon worker in a finance role (who wished to remain anonymous) said that similar conversations have been ongoing at her workplace, too. “Engineers have kind of had side conversations in different groups, like kind of asking each other, ‘What do you do if you’re asked to work on something like this?’ Or, you know, kind of asking each other, ‘Do you tell your managers that I won’t work on anything that’s relating to Israel or to “X”, whatever situation or cause or government?’” Schubiner put it more bluntly: “I don’t want my labor to be involved in militarizing the world and causing death and destruction,” they told me, “Like, it’s a very basic principle.”
The workers in Jewish Diaspora in Tech put together their letter to show solidarity and welcome both Jewish and non-Jewish coworkers into conversations about the occupation, while forcefully rejecting zionist talking points that equate anti-zionism with antisemitism. “It’s really empowering to see that we’re finally able to talk openly about the consequences of the false conflation of anti-zionism and antisemitism in the workplace.” Koren said. She emphasized that it is important for Jewish workers in the tech industry to use their voices to amplify the Palestinian struggle. “Many Jews are speaking out now because they are tired of being spoken for by a vocal and pretty extremist minority that doesn’t represent them. We understand that as Jews, we have have a certain amount of privilege in this conversation, that our Palestinian colleagues in many cases are not afforded.” Those actions of solidarity have been noticed, as the Amazon finance worker stated, “A lot of the efforts that started here were a group of either Muslims or Arabs, or more specifically Palestinians. And we felt that it was very important that there was a broader voice behind this, because we feel like oftentimes it’s just ourselves pushing for something. And that’s why we thought that it was so great to see that the letter that came out from Google employees was from a Jewish diaspora group.”
Garnering further support beyond the few thousand workers already involved in this organizing effort may be an uphill battle. Not only are zionist voices within these companies already loud, but the workforce in the tech industry in the U.S. is notorious for practices that stop workers from organizing among themselves. “There was a pretty common refrain from people, I think broadly at Google, but specifically within the Jewish ERG,” Schubiner said, “Where people who took issue with our letter felt, like, ‘Why are you trying to bring politics into our workplace? Why are you trying to make this political? Can we just, like, show up here and work?’ When you work at a tech company like Google, it’s easy to feel like, yeah, this is just my job. This is where I work. I go here and I tap on a computer every day and I’m in my little zone and it’s easy to forget that Google is one of the dominant centers of power in the world right now.” The growing understanding of the strategic placement of tech workers in both the global economy (central to communications, social media, banking, education, medicine, and more) and in the power of police states the world over is a major part of growing organizing efforts all over the tech sector. “I think there’s a broad perception,” Schubiner said, “That our work is separate from politics, but it never has been. All of the work that you’re doing deeply affects the world and I feel like more and more tech workers are learning to appreciate their work through an ethical and moral lens.”
The Amazon finance worker agreed: “If we feel that something that the company is doing is wrong, we should not be complicit in that. And we should speak out and organize to the best of our abilities.” She continued, “I think that we’ve seen a very powerful tool in many instances in history was to say: I’m not going to do this, until you make a change. Even in Palestine,” referring to the recent day-long general strike by Palestinians in Israel, Gaza, and the West Bank, from which tech workers may gather inspiration for future actions. She continued, “At the end of the day, we really are the ones that are making the money for the company. And we can decide that we won’t do what we’re supposed to do every single day. And that’s the most, I think, powerful pressure that workers collectively can have.”
During a so-called “America First” rally in Georgia on Thursday, Rep. Matt Gaetz (R-Florida) advocated for violent actions against tech companies that have banned certain right-wing users.
Gaetz railed against so-called “cancel culture” during the rally, asserting that conservative voices are being silenced online. In reality, a number of companies (such as Facebook and Twitter, among others) have removed users from their sites over a number of issues that go against their stated terms of service, including harassment and the threat of violence. (Many have suggested that usage of the term “cancel culture” is really a complaint over having to face consequences for harmful actions.)
“The internet’s hall monitors out in Silicon Valley, they think they can suppress us, discourage us,” Gaetz said during the rally. “Maybe if you’re just a little less patriotic. Maybe if you just conform to their way of thinking a little more, then you’ll be allowed to participate in the digital world.”
The Florida Republican went on to imply violence was a remedy to the issue.
“Well you know what? Silicon Valley can’t cancel this movement, or this rally, or this congressman. We have a Second Amendment in this country, and I think we have an obligation to use it,” Gaetz said.
Florida Man @mattgaetz, talking about Silicon Valley canceling conservatives says "We have a 2nd amendment in this country and I THINK WE HAVE AN OBLIGATION TO USE IT!" pic.twitter.com/FFEWnyEF0o
Gaetz’s comments came just one day after a gunman in San Jose, California — a city deeply entrenched in Silicon Valley — killed nine individuals in a mass shooting event.
Perhaps responding to stunned reactions to his comments on social media, Gaetz tweeted on Friday that he believed “the Second Amendment is about the ability to maintain, within the citizenry, an armed rebellion against the government if that becomes necessary.”
He added, “I hope it never does.”
But both Gaetz’s comments at the rally and on Twitter go against the Second Amendment’s real intention, according to historians, who say the amendment’s original intent was about preventing the need for a standing army while also securing the country against the threat of invasion. Gaetz’s words on Thursday wrongly implied the amendment should also be used against private companies to contest their policies.
Gaetz, who is an outspoken acolyte for former President Donald Trump, suggested he may run for president himself in 2024 if Trump declines to.
“I support Donald Trump for president. I’ve directly encouraged him to run and he gives me every indication he will,” Gaetz said this past week. “If Trump doesn’t run, I’m sure I could defeat whatever remains of Joe Biden by 2024.”
But Gaetz’s political future is in doubt, as he’s mired in a number of controversies. Most notably, he is the subject of a federal investigation that is looking into alleged sex-trafficking crimes. Gaetz denies the allegations are true, but a former associate of his, Joel Greenberg, recently pleaded guilty to six federal charges, admitting he himself had paid for sex with a teenager below the age of consent, and has suggested in the past that Gaetz paid for sex with underage teens as well.Several financial transactions of Gaetz’s also heavily imply the inappropriate and potentially illegal actions happened, and Greenberg is now said to be cooperating with federal authorities in the inquiry against Gaetz.
Responding to Gaetz’s latest comments on the Second Amendment as well as the current investigation targeting the Florida Republican, Rep. Ted Lieu (D-California) sent a tweet on Thursday night, addressed to House Minority Leader Kevin McCarthy (R-California), telling him Gaetz’s actions warranted removal from committee assignments.
“Dear @GOPLeader: You need to remove Rep Matt Gaetz from the House Judiciary Committee,” Lieu wrote. “It’s a conflict of interest for Gaetz to have oversight over the [Department of Justice] that is investigating him for sex crimes. Also, Gaetz is urging people to shoot Silicon Valley employees.”
CNN national security analyst Carrie Cordero also took note of Gaetz’s comments advocating violence against Silicon Valley-based companies, and tweeted that they were worth taking seriously.
Attorney General Karl Racine of Washington, D.C., has filed a lawsuit against Amazon claiming that it breaks antitrust laws by artificially inflating prices and discouraging competition.
The lawsuit claims that Amazon abuses its wide control over the online retail market by forcing third-party sellers to offer products at lower prices on Amazon than they do elsewhere — even on their own websites — and then charging the sellers as much as 40 percent of the product’s price in fees. This causes prices to be inflated across the board, according to the lawsuit.
“Amazon has used its dominant position in the online retail market to win at all costs. 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,” said Racine in a statement.
Amazon controls between 50 to 70 percent of the online retail market, Racine says, so sellers will often turn to the website to sell their products. But the company is creating an “anticompetitive” environment by indirectly controlling prices set by third-party sellers, according to the lawsuit.
“We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice,” Racine continued.
Sen. Elizabeth Warren (D-Massachusetts) praised the lawsuit, tweeting, “Many small businesses feel like they have to sell their products on Amazon for their survival – but Amazon abuses its size and power to bleed them dry. I’m glad the District of Columbia is fighting back.”
Many small businesses feel like they have to sell their products on Amazon for their survival – but @amazon abuses its size and power to bleed them dry. I’m glad the District of Columbia is fighting back. https://t.co/1JuSpkplY2
As Wired reported, Amazon stops listing third-party sellers on competitive sections of their webpages if sellers offer lower prices on other e-commerce sites like Walmart, leading to dramatic declines in sales for those sellers.
“Because of its size and strength, and because sellers can’t keep their prices low on their own channels, Amazon is literally inflating the entire online economy,” former Amazon seller Jason Boyce told Wired.
Amazon had previously had a “price parity” provision that stopped sellers from offering lower prices elsewhere. The practice came under enough scrutiny in the U.S. that the company dropped it in 2019. But Racine and sellers said that the practice never went away — the company just replaced it with a similar policy with the same name.
The lawsuit, filed on Tuesday, is one of several antitrust lawsuits from states and the federal government filed against large tech companies over the past year. Though the suit was filed in D.C., it echoes complaints about the company from the rest of the country.
Antitrust claims can be hard to prove, but The New York Timesreported that Tim Wu, scholar and influential big tech critic, pointed to claims over the company’s pricing mechanisms as the best way to go after Amazon on an antitrust front. The Biden administration also appears to be prepared to take on big tech monopolies with Wu as an National Economic Council adviser and Lina Khan, progressive antitrust champion, on the Federal Trade Commission.
“This suit is another indication that the tide is shifting — both policymakers and the public want Amazon’s outsized power to be curtailed,” Stacy Mitchell, Institute for Local Self Reliance co-director, a technology nonprofit and advocacy group, told Recode.
Facebook and other social media companies face intense criticism from both the right and left these days, but the biggest threat to giants like Facebook, Amazon and Google may be increasingly diverse coalitions led by progressives that are renewing a push to break up big tech monopolies.
Sen. Elizabeth Warren (D-Massachusetts) and Rep. Mondaire Jones, a Democrat on the House Judiciary’s anti-trust subcommittee, are expected to announced a new push to break up Facebook and Google this week alongside Freedom From Facebook and Google, a growing coalition of advocacy groups that argues the companies are two of the world’s “most dangerous monopolies.”
Warren campaigned for president on breaking up big tech, and advocates see the senator as key to pushing the Biden administration to enforce anti-trust regulations and Congress to write new rules. Democratic members of the anti-trust subcommittee released a groundbreaking report last year with a number of ideas for breaking up big tech companies and updating anti-trust regulations for digital commerce after years of allowing tech corporations to grow into alleged monopolies.
“We’re seeing an unprecedented level of momentum within the federal government — and at the state level, as well — to address the power that these platforms have and the harms that they are causing to democracy and to civil rights,” said Morgan Harper, director of advocacy and policy at the American Economic Liberties Project, in an interview. “You have to address the business model to also address the harms these platforms are causing.”
Meanwhile, Florida Gov. Ron DeSantis, a Republican, signed a bill on Monday supposedly targeting “censorship” of political candidates by social media platforms, but the new law was quickly panned by critics and legal experts as a show of loyalty to former President Trump that has little chance of holding up in court. Trump was permanently banned from Twitter and his Facebook account was suspended for lying about the election he lost and stoking violence after a mob of his supporters stormed the U.S. Capitol on January 6.
While conservatives accuse Facebook of “censoring” them as the company attempts to clamp down on misinformation, progressives say the company is not doing enough to prevent overtly racist messages and violent conspiracy theories from proliferating on its platform. However, for progressives, this issue is just the tip of the iceberg when it comes to the mammoth social media company, which also owns the Instagram and WhatsApp platforms.
On Tuesday, a separate coalition of progressive watchdog and media justice groups released a litany of 70 public complaints against Facebook. The complaints range from mass surveillance and alleged privacy violations that feed the company’s targeted advertising schemes to the silencing of Palestinian activists critical of the Israeli occupation. Like Google and Amazon, critics say Facebook has raced to secure monopoly power over its respective markets by developing “predatory” business practices that harvest user data for profit and leave minorities open to discrimination online.
The list represents a broad range of grievances from various ideological interests, but they agree broadly that Facebook’s own efforts to appease critics have not gone far enough, because profit remains the company’s top priority. For example, the groups say Facebook has intentionally amplified racist, sexist, antisemitic and ageist messages and disinformation because they boost engagement — a far cry from the right’s complaints about censorship. The business model of “surveillance capitalism,” they argue, is simply incompatible with human rights and democracy.
“Now, instead of being a tool for social movements fighting for justice and liberation, Facebook has become a machine used to advance tyranny, corruption, and greed,” said Evan Greer, an organizer with the digital justice group Fight for the Future, in a statement. “By using algorithms that are optimized to generate ad revenue, they amplify some of the worst content on the internet, while at the same time actively silencing and suppressing the voices of marginalized people, activists, artists and creators.”
The coalition, which also includes groups, such as Accountable Tech and Data for Black Lives, is calling on Congress to breakup Facebook into smaller companies and write regulation that “forces Big Tech companies to find a new business model that does not rely on intrusive surveillance of users,” according to Robert Weissman, president of Public Citizen.
“Facebook’s ongoing operations, let alone expansionist designs, are incompatible with the functioning of a democratic society,” Weissman said in a statement on Tuesday as activists delivered the complaints to Facebook. “The company has too much political power, too much surveillance capacity, too little regard for its users, too little respect for communities of color and oppressed groups around the world, and far, far too little self-restraint.”
Facebook gets a lot of attention for its outsize role in the social media universe and a seemingly endless stream of political controversy, but activists and anti-trust lawyers are also moving to break up Google and Amazon, which are also alleged monopolies that control vast swaths of the internet. If Congress writes anti-trust legislation with Facebook in mind, the rules would likely also apply to other tech giants that squeeze out competition and use data surveillance to generate massive profits.
The fight has already made its way into the courts. On Tuesday, the Washington, D.C. attorney general’s office filed an anti-trust lawsuit against Amazon alleging the e-commerce giant unlawfully maintains monopoly power by preventing independent sellers from offering their products at lower prices on other platforms, according to The Verge. Google faces multiple anti-trust lawsuits over its alleged dominance of the search engine business, including a lawsuit filed by the Department of Justice in October.
The big tech industry is clearly aware of the growing movement to hold it accountable. In March, Public Citizen reported that Facebook and Amazon are now the biggest individual corporate lobbying spenders in the United States, surpassing traditional lobbying powerhouses such as tobacco firms and fossil fuel producers. (The analysis looks at individual companies and excludes trade groups that aggregate lobbying spending for the pharmaceutical and insurance industries, for example.)
During the 2020 election cycle, big tech companies spent a collective $124 million on lobbying and campaign contributions, more than ever before. Amazon’s spending increased by 30 percent while Facebook’s spending spiked by 56 percent, according to the report.
Former President Donald Trump will continue to stay off Facebook after the company’s oversight board ruled Wednesday that his ban was justified for creating “an environment where a serious risk of violence was possible.” Trump was banned shortly after the January 6 insurrection at the U.S. Capitol, which he helped foment by promoting baseless claims of election fraud. The oversight board also said Facebook should reassess its ban and make a final decision in six months. Shoshana Zuboff, professor emerita at Harvard Business School and author of the book The Age of Surveillance Capitalism, says that Facebook’s recent moves follow years of inaction by CEO Mark Zuckerberg. “He showed that he was willing to do just about anything to appease Trump … to keep regulation at bay,” Zuboff says.
TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.
AMYGOODMAN: Here on Democracy Now!, democracynow.org, The Quarantine Report, I’m Amy Goodman, with Nermeen Shaikh. You can watch, listen and read transcripts using our iOS and Android apps. Download them for free from the Apple App Store or Google Play Store today.
Former President Trump’s Facebook account will remain suspended — at least for now. On Wednesday, an oversight board set up by Facebook upheld the January 7th ban, saying Trump’s rhetoric created a, quote, “serious risk of violence.” But the board said Facebook should review whether the ban should be indefinite.
For more, we go to Shoshana Zuboff, professor emerita at Harvard Business School, author of the book The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power.
Professor Zuboff, welcome back to Democracy Now! Your reaction to the Facebook-appointed board’s decision?
SHOSHANAZUBOFF: Well, you know, it looks like this so-called oversight board, which of course, everyone should understand, was set up by Mr. Zuckerberg with a $130 million endowment and really is a device to help keep him free of public law, help keep him free of regulation. So, we know that Mr. Zuckerberg didn’t do a very good job taming political speech. He allowed political speech to go free of fact-checking. And the worst example of this, of course, was Mr. Trump, who became a clear and present danger to our democracy. So, rather than grappling with that, this decision was given to this so-called oversight board, and now it looks like they’ve kicked it back to Facebook.
The real issue here, though, Amy, is that in kicking it back to Facebook, they’ve actually kicked it back to the Biden administration. And here’s why I’m going to say that. First of all, why did Mark Zuckerberg indulge and appease Donald Trump for so many years, and especially in that last year of election season as things became more bizarre, inflammatory and dangerous? Well, there were — the key reason was political appeasement. Just as the oversight board, so-called, is set up to keep him free of regulation, he showed that he was willing to do just about anything to appease Trump, appease the Trump administration, appease the conservative allies, to keep regulation at bay. And in appeasing Trump, all that Zuckerberg really had to do was not intervene in his economic machine, surveillance capitalism, which is programmed, engineered to maximize engagement and data extraction by circulating and amplifying what turns out to be the most inflammatory, the most bizarre, the most dangerous, the most threatening, the craziest content. So, by keeping Trump going, he satisfied his political goals, and he also satisfied his economic goals.
Now, as we saw yesterday, very, very quickly, Trump is back on his microphone — not on Facebook, not on Twitter, but he’s got plenty of other outlets. And what was the first thing he started to do? Threaten Zuckerberg with regulation. Threaten Zuckerberg with Republican retaliation. Right? So, now we are back in the political arena. And this means that the Biden administration, that team, is going to have to take a stand, because the thing that’s going to keep Mr. Trump off Facebook and save American democracy is going to be a situation where Mr. Zuckerberg fears the Democrats as much as he fears the Republicans. And so far that has not been the case. So, we are now back into a political power match. And that’s going to really change the dynamics of these next few months.
NERMEENSHAIKH: Professor Zuboff, could you respond to those who have criticized the decision by Facebook to indefinitely suspend Trump’s account? It’s not just conservatives in this country, but also several European leaders who have said that tech companies have no place in making decisions like this; this decision and decisions like it should be in the hands of governments.
SHOSHANAZUBOFF: Well, that is absolutely true. You know, Mr. Zuckerberg and his so-called oversight board are running around the rim of a donut chasing each other’s tails, looking for solutions, when the solution space is in the hole. And the problem is that surveillance capitalism, companies like Facebook that depend upon the secret extraction of behavioral data, which gets turned into targeting and targeted ads, you know, this is a very pernicious, extractive, dangerous, anti-democratic economics that has taken hold in the last 20 years, the last two decades.
And it’s done so because democracy has failed to act. And it’s not only true in America, but the liberal democracies around the world have failed to develop a distinct vision of how do you design and deploy and apply the digital world, digital technology, in a way that advances democracy and allows democracy to flourish. So, we’re not China, but instead we’ve allowed these private companies to create a different kind of surveillance state in our surveillance society in America and in the West that operates under private capital.
So, we are long overdue for the same kind of period of tremendous creativity and invention that we saw in the 20th century. You know, the first part of the 20th century, the employers, the owners of the great industrial enterprises, they had all the power. They had all the decision rights. Everything that happened, happened based on their private property rights. That’s the same situation we’re in today. And in the 20th century, you know, we created these huge behemoths, the monopolies, the cartels, the trusts, and it looked like ordinary citizens, and even democracy itself, had no chance. And we were looking forward to a century of extreme inequality and serfdom. But, ultimately, beginning in the third and especially the fourth decades of the 20th century —
AMYGOODMAN: We have 10 seconds.
SHOSHANAZUBOFF: — democracy fought back. And we created the rights, laws and institutions we needed to tame industrial capitalism, tether it to democracy. We can do the same thing today. This third decade is now. Our opportunity for citizens and lawmakers to come together, we need to bring the digital into democracy’s house. And —
AMYGOODMAN: Professor Zuboff, we’re going to do Part 2 of this discussion, post it online at democracynow.org. Her book, The Age of Surveillance Capitalism. I’m Amy Goodman, with Nermeen Shaikh.
The federal government has allocated more than $4 million to the oversight of the big tech media bargaining code, despite no companies being designated under it yet.
Communications Minister Paul Fletcher announced on Wednesday morning that next week’s federal budget will include $4.2 million for the Australian Communications and Media Authority (ACMA) to undertake its role to oversee the news media bargaining code.
The bargaining code, passed by Parliament in late February, requires designated companies to enter into “final offer” arbitration to determine commercial revenue-sharing deals with Australian media companies.
The govt has handed ACMA $4M to oversee the news media bargaining code
While the code has been passed into law, it doesn’t fully come into effect until the Treasurer moves to designate either Facebook or Google, which is yet to happen.
Both tech giants moved to ink a series of commercial deals with the big Australian media companies in the lead-up to the legislation passing, while Facebook also briefly blocked all news content for Australian users.
It’s unclear when or if the federal government will move to designate any company under the bargaining code.
The new funding for ACMA will allow it to administer an eligibility scheme under the code, register news businesses and maintain a register of arbitrators, Mr Fletcher said.
“Digital platforms have fundamentally changed the way that media content is produced, distributed and consumed, which is why the Morrison government introduced this world-leading code, to support a diverse and sustainable Australia news media sector,” Mr Fletcher said in a statement.
“We welcome the reports that Google and Facebook have reached commercial agreements with some news businesses for the use of their content, and encourage the parties to continue to negotiate deals in good faith. This is powerful evidence the code is already doing its job.”
The code also automatically allows smaller media companies to negotiate collectively with the tech giants over commercial deals, but this is also not in effect as no companies have been designated.
Last week the competition regulator authorised Country Press Australia members to bargain collectively with the tech companies to secure revenue sharing deals, the first authorisation of its kind in Australia.
Smaller publishing firms are required to apply to the Australian Competition and Consumer Commission (ACCC) before they bargain collectively without the code being in force.
There are concerns that these smaller companies have not been able to secure revenue sharing deals with Facebook and Google and that they won’t be assisted by the code.
ACCC chair Rod Sims has backed the government’s claims that the presence of the code is helping media companies secure deals with Facebook and Google.
“We welcome the fact that both Facebook and Google appear to be successfully reaching voluntary deals with Australian news businesses, including a number of smaller publishers, following the passage of the bargaining code,” Mr Sims said last week.
“The onus now remains on Facebook and Google to continue to negotiate in good faith with news businesses of all sizes.”
Facebook is tracking Australian teenagers online and selling their profiles to alcohol, gambling and smoking advertisers, according to new research that warns Australia needs new regulation to protect kids online.
Advertisers can target Australian Facebook users based on their interest in certain things, which the tech giant knows by monitoring their activity on its platforms and by tracking them elsewhere online.
The practice is routinely found to be out of step with community expectations, but currently there are not explicit laws regulating it or how it applies to minors in Australia.
Facebook is offering advertisers children audiences that have shown an interest in smoking, drinking, gambling and weight loss.
Democracy and rights advocate Reset Australia set up test advertising campaigns to examine Facebook’s reach of young audiences and how it compares to what is on offer with adult audiences.
The group says they found little difference, with Facebook giving them the option to target users as young as 13 based on their ‘interest’ in things like smoking, gambling, alcohol or extreme weight loss.
Advertisers can direct targeted advertisements to thousands of children based on these interests for only a few dollars. For example, the group said they had the option to target one thousand underage users interested in alcohol for as little as $3.03.
What advertisers can send children is also inappropriate, according to Reset Australia, which had several deliberately ‘dubious’ ads approved by Facebook for campaigns targeted at children but did not send them for ethical reasons.
Reset Australia executive director Chris Cooper said the public is increasingly aware their data is collected online but lacks an understanding of how it is monetised and the long term risks the model creates.
“We’re sort of sleepwalking into these problems because we’ve accepted the status quo, business as usual approach of big tech companies,” he tells InnovationAus.
In 2017 leaked Facebook documents revealed the company was identifying and exploiting vulnerable young people by allowing advertisers to target 14-year-olds based on when they feel “worthless” and “insecure”. When revealed by The Australian, Facebook apologised and said it would investigate the practice.
Facebook was contacted about the Reset Australia report but did not provide a response.
Mr Cooper argues tech platforms’ failure to protect children is a consequence of the company’s fundamental business model which relies on packaging up audiences for targeted advertising. In that regard, Facebook has little incentive to clean up the practice and the consequences are potentially profound.
“I think it’s really difficult for them to shift their business model,” said Mr Cooper.
“The model as it sits is insanely profitable. And so the incentive to undermine that or shift that is not there. And that’s why, in our view, you need regulation.
“Because that’s the stick that helps to enable that kind of shift and I think without that incentive it’s very unlikely that these companies will move.”
While other countries have moved to regulate the collection of children’s data and its use to profile them for advertising, in Australia Facebook enjoys a “policy gap”, according to Reset Australia.
Last year the UK’s Information Commissioner introduced a statutory code of practice for online service providers requiring them to take into account the best interests of the child and minimise data collection on children by default.
Ireland is also moving to introduce similar data protections for children while a UN Committee on the Rights of the Child has recommended member nations should prohibit by law the targeting of children for commercial purposes based on digital records.
Australia’s latest online safety legislation focuses on content removal and cyber bullying rather than targeted advertising. Any new protections for Children would likely come in the upcoming reforms to Australia’s Privacy Act, currently being considered by the Attorney General’s Department
Reset Australia is working with other civil society and privacy groups to contribute to the review, including arguing for specific set of privacy protections for young people.
The reforms will be needed to drag Facebook “kicking and screaming across ethical lines”, according to Mr Cooper, who says big tech is broadening its data ambitions.
“Data itself is used to shape your life experience [like] the content we’re served by the algorithms and Ultimately what version of truth and morality we get on the platform.
“And so, there’s already a number of indications there around what we see is driving polarisation in society, and a kind of breakdown of the public square and a shared set of common facts that were always operated around.”
On Thursday Facebook reported revenue of $US26.2 billion for the quarter, far beyond analysts expectations, sending share up six per cent in late trading.
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