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Facebook failures may be real, but the case for increased censorship is weak

Once the so-called Facebook whistleblower revealed her identity and story, it was only a matter of time before the public imagination of one of the largest social networking sites would go off the rails.

What Frances Haugen released to the Wall Street Journal in her initial leaks, which it dubbed the “Facebook Files ,” detailed how Facebook had made decisions on which accounts to censor, survey data on Instagram use among teens, and the status of the civic integrity team tasked with countering misinformation around political topics.

Many of the revelations are fascinating, and some damning, but they point to a company bombarded with external and internal demands to censor accounts and pages that spread “misinformation” and “hateful” content. Who determines what that content is, and what classifies as such, is another point.

In the days since, Haugen has become a hero to critics of the social media giant on both the Right and the Left, animating these arguments before a Senate subcommittee on consumer protection on Tuesday.

It created the perfect theater for Washington lawmakers and media outlets, elevating conjecture, hyperbole, and feverish contempt for an online platform used by billions of users.

Congressional Republicans and Democrats are united in confronting Facebook, though they are animated by different reasons. Generally, Democrats say the platform does not censor enough content and want it to do more, evoking the “interference” in President Donald Trump’s 2016 victory. Republicans, on the other hand, believe the censorship is pointed in the wrong direction, often targeting conservative content creators, and would like to see more even-handedness.

“Facebook has caused and aggravated a lot of pain and profited off the spreading of disinformation, misinformation, and sowing hate,” said committee chairman Sen. Richard Blumenthal, who days before received ridicule for asking Instagram to ban the “finsta” program. (Finstas are fake Instagram accounts created by teenagers to avoid the prying eyes of parents.)

Facebook’s mistakes, especially when it comes to content moderation, are vast. I have joined countless others in pointing out the troubling examples of censorship that are all too often politically motivated. Considering it is a Silicon Valley firm staffed with tens of thousands of employees who likely lean left, it is not surprising.

But the incentive to censor content exists because of the huffing and puffing in Congress, whistleblowers like Haugen, and media pressure to conform to a narrow version of online free speech that has no parallel elsewhere.

Whether it is through the lens of antitrust, to break apart Facebook’s various divisions such as Instagram and WhatsApp, or by reforming Section 230 to make firms liable for all speech on their platforms, it is clear that heavy-handed social media regulation will have the greatest impact on users and generally make Facebook unbearable.

As much as some might like to castigate the unicorn start-up with tens of thousands of employees and a hefty stock price, it derives its power and influence as a platform for billions of individuals looking for connections.

A number of the posts on Facebook may be atrocious or wrong, and they deserved to be called out by those who see them. But in free societies, we prefer to debate bad ideas rather than relegate them to the darkened reaches of society, where they will only fester and grow unabated.

Expecting or forcing Facebook to ramp up censorship will make the platform a de facto arm of our federal agencies rather than a free platform for connecting with friends and family.

While there are many positive reforms that could be invoked in the wake of the Facebook moment, a national privacy and data law, for example, we know it will be the users of these platforms who will ultimately suffer from misguided regulation.

If we believe in free speech and an open internet, it is our responsibility to advocate sane, smart, and effective rules on innovative technologies, not laws or edicts that only seek to punish and restrict what people can say online. We as users and citizens deserve better.

Originally published here

The fight over Facebook’s content censor button will make all users lose

By Yaël Ossowski

Once the so-called Facebook whistleblower revealed her identity and story, it was clear the narrative about the future of one of the largest social networking sites would soon go off the rails.

What Haugen revealed in her initial leaks to the Wall Street Journal, which they dubbed the “Facebook Files,” were documents and research on how Facebook had made decisions on which accounts to censor, survey data on Instagram use among teens, and the status of the civic integrity team tasked with countering misinformation around political topics.

Many of the revelations are indeed fascinating —and some damning — but they generally point to a company constantly embattled with external and internal demands to censor and shut down accounts and pages that spread “misinformation” and “hateful” content. Who determines what that content is, and what classifies as such, is another point.

Among her allegations in her first public interview on 60 Minutes, she posited that the disbanding of the civic integrity team, of which she was a part, was directly responsible for the January 6th riot at the Capitol building. 

In the days since, Haugen has become a hero to critics of the social media giant on both the right and the left, animating these arguments before a Senate subcommittee on consumer protection on Tuesday. 

It created the perfect Two Minutes Hate session in Washington and on major media, allowing unchecked conjecture, hyperbole, and feverish contempt for a platform that allows ordinary people to post online and small businesses to run ads on their products.

Unusual for DC, Republicans and Democrats are united on confronting Facebook, though they are animated by different reasons. Generally, Democrats say the platform does not censor enough content and want it to do more, evoking the “interference” that led to Donald Trump’s victory in 2016. Republicans, on the other hand, believe the censorship is pointed in the wrong direction, often targeting conservative content creators, and would like to see more even-handedness.

The picture painted by all lawmakers, however, is of a company adding to general societal discord.

“Facebook has caused and aggravated a lot of pain and profited off the spreading of disinformation, misinformation, and sowing hate,” said committee chair Sen. Richard Blumenthal, who days before received ridicule for asking Instagram to ban the “Finsta” program (Finstas are fake Instagram accounts created by teens to avoid the prying eyes of parents).

The comments of Blumenthal and others were indeed hyperbolic, considering the vast majority of Facebook product users post images, videos, and text to their friends and family and can in no way be considered objectionable, but it helps lead to their ultimate aim.

But considering the premise of these hearings and investigations on Capitol Hill is to frame and inform future legislation, it is clear that regulation will soon be directly targeted at social media content and users, not the company itself, will be the ones to suffer.

As much as one would like to castigate the Silicon Valley firm with tens of thousands of employees and a stock ticker, it derives its power and influence as a platform for billions of individuals with something to say. A select number of the posts on Facebook may be atrocious or wrong, and they deserved to be called out, but they still are the posts of individuals and groups. Users have the option to flag posts for inappropriate content.

What makes many of the allegations leveled at Facebook interesting — albeit insincere (content designed to elicit an angry response, body image issues, unverified stories, etc.) — is that many of these can also be lobbed at traditional institutions: clickbait partisan journalism, Hollywood and the modeling industry, and tabloids that operate as rumor mills. In the age of social media, however, these are dying breeds.

The fact that many media outlets are openly advocating against social networks, technologies that directly compete with them, also makes this quite conflicted as we have seen in Australia.

When regulations do come to pass, and we can only assume they will, the only significant action will be to restrict what can and cannot be posted on the platform. Whether it is the mandatory hiring of a certain number of moderators, a veto process for third parties, or mandatory ID verification, which advertisers are already subject to, it will mean limiting and censoring the platform. This will harm users and consumers.

While there are many positive reforms that could be invoked in the wake of the Facebook moment — a national privacy and data law, for example — likely it will be the users of these platforms who will ultimately suffer.

The new Internet age has led most of the world to untold levels of growth and prosperity. Being able to connect with friends and family wherever they may be is a public good that we have only begun to understand and appreciate.

If we allow regulators to deploy content censorship buttons and restrict our ability to post and interact online, who is to say that only the “bad guys” will be caught up in the net?

If we believe in free speech and an open Internet, it is our responsibility to push for sane, smart, and effective rules, not those that only seek to punish and restrict what people can say online.

Yaël Ossowski is the deputy director of the Consumer Choice Center.

The Consumer Choice Center stands opposed to antitrust actions on innovative tech firms

Today, the Consumer Choice Center sent a letter to the members of the House Judiciary Committee to explain our opposition to a series of bills soon to be introduced on the House floors related to antitrust actions.

The full letter is below, and available in PDF form to share.

Dear Member of the House Judiciary Committee,

As a consumer group, we write to you to raise your attention about a series of bills that will soon be introduced on the floor of the House and make their way to the House Judiciary Committee.

These bills, soon to be introduced by Democrats and co-sponsored by some Republicans, relate to antitrust actions to be taken against tech firms based in the United States.

These include the Merger Filing Fee Modernization Act, End Platform Monopolies Act, Platform Anti-Monopoly Act, Platform Competition and Opportunity Act, and Augmenting Compatibility and Competition by Enabling Service Switching Act.

In our view, these bills are not about concern for the consumer, the consumer welfare standard as traditionally understood in antitrust law, or even because companies like Amazon, Facebook, Twitter, and Microsoft are “too big.” 

Rather, these actions are a zealous takedown of American innovators that will harm consumers and punish innovation. This is a dangerous precedent.

Many of the tech companies in the crosshairs offer free or inexpensive services to consumers in a competitive marketplace that boasts hundreds of social apps for messaging, photo sharing, social networking, and online marketplaces that offer quick delivery, stellar service, and unbeatable prices.

As consumers of these services, we understand that there are often decisions made by these companies that raise concerns. For political conservatives, the issue hinges on whether there is bias in the moderation of accounts, comments, and products. For liberals, it is about whether these companies are too powerful or too big to be reined in by government, and questions about how they pay their taxes or whether various tech companies played a part in getting Donald Trump elected in 2016.

These are all valid concerns, and we have been active in calling them out where necessary.

However, using the power of the federal government to break up innovative American companies subject to domestic law, especially in the face of mounting competition from countries that are not liberal democracies, such as China, is wrong and will lead to even more unintended consequences.

The American people benefit from a competitive and free market for all goods, services, and networks we use online. Weaponizing our federal agencies to break up companies, especially when there is no demonstrated case of consumer harm, will chill innovation and stall our competitive edge as a country.

If there are breaches of data or if consumer privacy is compromised, the Federal Trade Commission should absolutely issue fines and other penalties. We agree with this. If there are egregious violations of law, they should be dealt with immediately and appropriately.

Let us be clear: The internet is the ultimate playground for consumer choice. Government attempts to intervene and regulate based on political considerations will only restrict consumer choice and deprive us of what we’ve thus far enjoyed.

The overwhelming majority of users are happy with online marketplaces and with their profiles on social platforms. They’re able to connect with friends and family around the world, and share images and posts that spark conversations. Millions of small businesses, artists, and even news websites are dependent on these platforms to make their living. This is an especially important point.

Using the force of government to break apart businesses because of particular stances or actions they’ve taken, all legal under current law, is highly vindictive and will restrict the ability for ordinary people like myself or millions of other consumers to enjoy the platforms for which we voluntarily signed up. 

We should hold these platforms accountable when they make mistakes, but not invite the federal government to determine which sites or platforms we can click on. The government’s role is not to pick winners and losers. It’s to ensure our rights to life, liberty, and pursuit of happiness, as the Declaration of Independence states. 

As such, when these bills come before you as legislators, we urge you, as a consumer advocacy group speaking for millions of people just like you around the country, to reject them. 

Sincerely Yours,

Yaël Ossowski

Deputy Director, Consumer Choice Center

yael@consumerchoicecenter.org

Boom and Bust | Australia vs. Facebook

Tony looks at who won the Australia vs. Facebook saga and why it matters. He is joined by David Clement and Dr. Sinclair Davidson.

Watch the video here.

Facebook, Australia and the pitfalls of online regulation

“Facebook has re-friended Australia.” Those were the words of Australian Treasurer Josh Frydenberg to a gaggle of reporters in Canberra this week, in an ever-so-slightly smug declaration of victory in the regulatory battle between his government and the embattled social media giant.

His statement came after Facebook, having kicked up an almighty storm – and generated a great deal of bad press for itself in the process – eventually gave in and backed down from its sudden ban of all news content for Australian users. It followed Google’s example and entered into negotiations with Rupert Murdoch’s News Corp, among others, begrudgingly agreeing to pay to host their content on its platform, as mandated by the new Australian law.

This situation is profoundly troubling. The core of the dispute is the new law spelling out how tech giants like Facebook and Google, which host external news links on their platforms, must negotiate with the providers of that content.

Anybody can see that the idea of government-mandated negotiation doesn’t make much logical sense. If two consenting parties have a mutually-beneficial agreement where one facilitates the sharing of the other’s content, where is the role of the government to step in and demand that money changes hands?

It’s not clear what problem the Australian Government believes is being solved here. It has intervened in the market arbitrarily, making one side very happy and the other very miserable. But to what end? Worryingly, this appears to be just the latest front in a troubling new trend of governments arbitrarily meddling in an industry where innovation and productivity are booming. Sadly, governments are often inclined to do this.

California, for instance, recently won the right in court to implement its harsh net neutrality rules, the first state to come close to replicating the ill-fated far-reaching Obama-era law. Meanwhile, the European Union has declared its intention to keep tabs on big tech with a raft of new policy ideas, including annual check-ins with the European Commission about what steps companies are taking to “tackle illegal and harmful content”.

There is no easy answer to the question of how we should go about regulating the online market. The UK Government is at something of a crossroads in this area. It is currently consulting on the parameters of its new Digital Markets Unit (DMU) with the existing Competition and Markets Authority (CMA).

When considering the role of the DMU, the British Government would do well to learn from the mistakes of others from around the world and seek to prioritise the interests of consumers, rather than coming down rigidly on one side of the fence and cowing to the demands of one enormous lobbying operation or another, as the Australian Government appears to have done.

The DMU, in the words of its architects and proponents, will be “a pro-competition regime”, which will mean that “consumers will be given more choice and control over how their data is used and small businesses will be able to better promote their products online”. Those stated aims – making life easier for users and paving the way for the Steve Jobs of tomorrow – seem wholly positive.

But the Government briefing also says that the DMU will implement “a new statutory code of conduct” in order to “help rebalance the relationship between publishers and online platforms”. It is too early to say whether our Government is planning to go down the same road as Australia’s, but that rhetoric sounds ominous, to say the least.

There is certainly a vacancy for the DMU to fill, but the underdog it should be propping up is not Rupert Murdoch. There is a difficult balance to be struck between maintaining an environment where the existing tech giants are able to continue innovating and elevating our standard of living, while also fostering a truly competitive environment by removing obstacles for their smaller – but growing – competitors, along with new start-ups. That is the fine line the Government must tread.

Originally published here.

Dowden’s latest task? Regulating the internet. Here’s what Australia can teach us about that challenge.

Culture secretary Oliver Dowden finds himself burdened with an almighty task: regulating the internet. His new ‘Digital Markets Unit’, set to form part of the existing Competitions and Markets Authority, will be the quango in charge of regulating the social media giants. Dowden, like the rest of us, is now trying to discern what can be learned by rummaging through the rubble left behind by the regulatory punch-up between Facebook and the Australian government over a new law forcing online platforms to pay news companies in order to host links to their content.

Google acquiesced immediately, agreeing to government-mandated negotiations with news producers. But Facebook looked ready to put up a fight, following through on its threat to axe all news content from its Australian services. It wasn’t long, though, before Mark Zuckerberg backed down, unblocked the Facebook pages of Australian newspapers and, through gritted teeth, agreed to set up a direct debit to Rupert Murdoch.

The drama down under has been met with a mixed response around the world, but it is broadly consistent with the trend of governments shifting towards more and more harmful and intrusive interference in the technology sector, directly undermining consumers’ interests and lining Murdoch’s pockets. The EU, for one, is keen to get stuck in, disregarding the status quo and unveiling its ambitious plan to keep tabs on the tech giants.

In the US, the situation is rather different. Some conspiracy theorists – the type who continue to believe that Donald Trump is the rightful president of the United States – like to allege that the infamous Section 230, the item of US legislation which effectively regulates social media there, was crafted in cahoots with big tech lobbyists as a favour to bigwigs at Facebook, Google, Twitter, and so on. In reality, Section 230 was passed as part of the Communications Decency Act in 1996, long before any of those companies existed.

Wildly overhyped by many as a grand DC-Silicon Valley conspiracy to shut down the right’s online presence, Section 230 is actually very short and very simple. It is, in fact, just 26 words long: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Not only is this a good starting point from which to go about regulating the internet – it is the only workable starting point. If the opposite were true – if platforms were treated as publishers and held liable for the content posted by their users – competition would suffer immensely. Incumbent giants like Facebook would have no problem employing a small army of content moderators to insulate themselves, solidifying their position at the top of the food chain. Meanwhile, smaller companies – the Zuckerbergs of tomorrow – would be unable to keep up, resulting in a grinding halt to innovation and competition.

Another unintended consequence – a clear theme when it comes to undue government meddling in complex matters – would be that vibrant online spaces would quickly become unusable as companies scramble to moderate platforms to within an inch of their lives in order to inoculate themselves against legal peril.

Even with the protections currently in place, it is plain how awful platforms are at moderating content. There are thousands of examples of well-intentioned moderation gone wrong. In January, the Entrepreneurs Network’s Sam Dumitriu found himself plonked in Twitter jail for a tweet containing the words “vaccine” and “microchip” in an attempt to call out a NIMBY’s faulty logic. Abandoning the fundamental Section 230 provision would only make this problem much, much worse by forcing platforms to moderate much more aggressively than they already do.

Centralisation of policy in this area fails consistently whether it comes from governments or the private sector because it is necessarily arbitrary and prone to human error. When Facebook tried to block Australian news outlets, it also accidentally barred the UK-based output of Sky News and the Telegraph, both of which have Australian namesakes. State-sanctioned centralisation of policy, though, is all the more dangerous, especially now that governments seem content to tear up the rulebook and run riot over the norms of the industry almost at random, resulting in interventions which are both ineffectual and harmful.

The Australian intervention in the market is so arbitrary that it could easily have been the other way around: forcing News Corp to pay Facebook for the privilege of having its content shared freely by people all over the world. Perhaps the policy would even make more sense that way round. If someone was offering news outlets a promotional package with a reach comparable to Facebook’s usership, the value of that package on the ad market would be enormous.

Making people pay to have their links shared makes no sense at all. Never in the history of the internet has anybody had to pay to share a link. In fact, the way the internet works is precisely the opposite: individuals and companies regularly fork out large sums of money in order to put their links on more people’s screens.

If you’d said to a newspaper editor twenty years ago that they would soon have free access to virtual networks where worldwide promotion of their content would be powered by organic sharing, they would have leapt for joy. A regulator coming along and decreeing that the provider of that free service now owes money to the newspaper editor is patently ludicrous.

That is not to say, however, that there is no role for a regulator to play. But whether or not the Digital Markets Unit will manage to avoid the minefield of over-regulation remains to be seen. As things stand, there is a very real danger that we might slip down that road. Matt Hancock enthusiastically endorsed the Australian government’s approach, and Oliver Dowden has reportedly been chatting with his counterparts down under about this topic.

The humdrum of discourse over this policy area was already growing, but the Australia-Facebook debacle has ignited it. The stars have aligned such that 2021 is the long-awaited point when the world’s governments finally attempt to reckon with the tech behemoths. From the US to Brussels, from Australia to the Baltics, the amount of attention being paid to this issue is booming.

As UK government policy begins to take shape, expect to see fronts forming between different factions within the Conservative Party on this issue. When it comes to material consequences in Britain, it is not yet clear what all this will mean. The Digital Markets Unit could yet be a hero or a villain.

Originally published here.

The impending war with big tech

The last few weeks have seen a substantial ramping up of rhetoric from Westminster towards big tech. Facebook’s dramatic show of power against – and subsequent capitulation to – the Australian government over its new law obliging it to pay news outlets to host their content made for gripping viewing, and it has since become clear that senior ministers across the British government were tuning in to the action.

Matt Hancock came bursting out of the blocks to declare himself a ‘great admirer’ of countries which have proposed laws forcing tech giants to pay for journalism. Rishi Sunak has been bigging-up this year’s G7 summit, which will be held in Cornwall. From the way he is talking, it sounds like he is preparing to lead an army of finance ministers from around the world into battle with Silicon Valley.

Meanwhile, Oliver Dowden, the cabinet minister with responsibility for media and technology, indicated that he has been chatting to his Australian counterparts to learn more about the thinking behind their policymaking process. He followed that up with a series of stark and very public warnings to the businesses themselves,promising to “keep a close eye” on Facebook and Twitter, voicing his “grave concern” over the way big tech companies are operating and threatening sanctions if they step out of line.

This one-way war of words comes against the backdrop of a menacing new regulatory body slowly looming into view. The Digital Markets Unit, a quango which is set to form part of the existing Competition and Markets Authority (CMA), will be the chief weapon in the government’s armoury. As things stand, we know very little about what it is intended to achieve.

Big tech in its current form is a young industry, still struggling with teething problems as it learns how to handle owning all the information in the world. There are plenty of areas where Facebook, Google, Amazon and countless others are arguably falling short in their practices, from users’ privacy to threats to journalists, which Dowden and others have picked up on.

But the natural instinct of state actors to step in has the potential to be cataclysmically damaging. The government is running out of patience with the free market and seems poised to intervene. Countless times, haphazard central policy has quashed innovation and sent private money tumbling out of the country. Against the backdrop of the forthcoming corporation tax rise, there is a fine balance to strike between effective regulation and excessive state interference.

The nature of government interventions is that they block innovation, and therefore progress. Superfluous regulation is like a dazed donkey milling about in the middle of the road, bringing the traffic to a halt. Of course, the donkey is then given a charity collection bucket and the power to oblige passers-by to contribute a slice of their income for the privilege of driving society forwards, generating unfathomable wealth and providing us all with access to free services which have improved our quality of life beyond measure.

As the government ponders the appropriate parameters of the new Digital Markets Unit and seeks to place arbitrary limits on what big tech companies can do for the first time in the history of their existence, it should consider users’ interests first. There is a strong case to be made for shoring up the rights of individuals and cracking down more harshly on abuse and other worrying trends. But let’s not fall into the same trap as our cousins Down Under in making online services more expensive to use and passing those costs down to consumers.

As the much-fabled ‘post-Brexit Global Britain’ begins to take shape, we have a valuable opportunity to set an example for the rest of the world on how to go about regulating the technology giants. The standards we will have to meet to do that are not terribly high. In essence, all the government needs to do is avoid the vast, swinging, ham-fisted meddling which has so often characterised attempts at regulation in the past and Britain can become something of a world leader in this field.

Originally published here.

Is this North Carolina Congressman hawking Bitcoin?

Sometime last week, Neeraj K. Agrawal, the communications director for the DC-based cryptocurrency think tank Coin Center, tweeted a link to an empty website: whitehouse.gov/bitcoin.pdf.

The idea he was trying to convey, in Internet speak, is that hopefully, one day we can look forward to the day when the Bitcoin whitepaper would be hosted on the White House’s website.

That would signal that the executive branch has endorsed elements of the cryptocurrency, and hosted the fundamental founding document to build confidence in the government using Bitcoin as a unit of currency.

That’s futuristic, crypto-fueled optimism that was nothing but a cheeky tweet in that moment.

Taking that to the next level, tech investor and entrepreneur Balaji Srinivasan put forward a challenge: which forward-thinking country or US state would host the Bitcoin white paper on their main domain?

Enter North Carolina Congressman Patrick McHenry.

U.S. Rep. Patrick McHenry (R-NC)

Hailing from Gastonia, a town I once worked in as a newspaper reporter, McHenry represents the 10th district in the northwestern part of the state, home to NASCAR drivers, the mighty Catawba River, and stretching to the stunning Blue Ridge Mountains.

He once represented part of Gaston County in the State House and was later elected to Congress as one of the youngest congressmen in 2004.

As the ranking member on the Financial Services Committee, McHenry has often been involved in regulatory debates and discussions on cryptocurrencies and financial projects, including Facebook’s Libra project.

At least in previous statements and letters, McHenry usually joined hands with his Democratic colleagues to oppose any competition to the US dollar, as we’ve noted in past press releases.

However, it seems McHenry is changing his tune on the future of innovation in the cryptocurrency space.

On Wednesday, he took on the challenge originally posted by Agrawal and followed by Srinivasan: he posted the Bitcoin whitepaper to his own website.

Not only that, but he stated that “policymakers should be on the side of innovation and ingenuity, which are vital to American competitiveness,” and urged his colleagues to join him.

Is this North Carolina Republican Congressman hawking Bitcoin? It seems the answer is yes.

Looking into it more, he’s grown more bullish on Bitcoin and tech-related financial services in the last two years and even clarified his position on why projects like Libra do not represent a true cryptocurrency.

Appearing on series of podcasts, including one with fellow Republican Congressman Dan Crenshaw, McHenry has been more vocal on why Bitcoin’s technology is like nothing before, and in fact, represents the future of financial and digital services.

And top it off — he posted the Bitcoin whitepaper on the congressional web server!

If McHenry’s statements are true, and if he is using his position as a Financial Services committee member to advance those ideas, I think we may have a consumer champion congressman to follow in the next two years.

As a fellow North Carolinian and advocate for consumer-friendly policies, I have been critical toward McHenry’s various positions in the past, specifically on legitimizing financial services for cannabis-related companies.

I believe the exact tagline I used was “The North Carolina Republican singlehandedly blocking progress on cannabis banking“.

Obviously, McHenry’s ideas and policies are more nuanced and deserve a closer look. I look forward to him expounding on that much more. So while we may not agree on cannabis banking, there still could be much to agree on with the congressman.

If more politicians in DC and various statehouses approached this issue like McHenry, perhaps our governments would be better vehicles for fostering innovation and helping grow consumer choice.

Kudos to you, Rep. McHenry.

Yaël Ossowski is deputy director of the Consumer Choice Center

Latest round of online deplatforming shows why we need increased competition and decentralization

Another week means another politically-charged rampage of deplatforming of social media profiles and entire social media networks.

Following the storming of the U.S. Capitol by some of his supporters, President Trump was promptly suspended from Twitter and Facebook and later dozens of Internet services including Shopify and Twitch.

Even the image-sharing site Pinterest, famous for recipes and DIY project presentations, has banned Trump and any mention of contesting the 2020 Election. He’ll have to go without sourdough recipes and needlework templates once he’s out of office.

Beyond Trump, entire social media networks have also been put in the crosshairs following the troubling incursion on Capitol Hill. The conservative platform Parler, a refuge for social media dissidents, has since had its app pulled from the Google and Apple stores and had their hosting servers suspended by Amazon’s web service company AWS.

This pattern of removing unsavory profiles or websites isn’t just a 2021 phenomenon. The whistleblower website Wikileaks – whose founder Julian Assange remains in prison without bail in the UK awaiting extradition to the United States – was similarly removed from Amazon’s servers in 2012, as well as blacklisted by Visa, Mastercard, PayPal, and their DNS provider. Documents reveal both public and private pressure by then U.S. senator and Intelligence Committee Chairman Joe Lieberman was instrumental in choking Wikileaks off from these services.

Then it was politicians pressuring companies to silence a private organization. Now, it’s private organizations urging companies to silence politicians.

However the pendulum swings, it’s entirely reasonable for companies that provide services to consumers and institutions to respond quickly to avoid risk. Whether it’s due to governmental decree or public backlash, firms must respond to incentives that ensure their success and survival.

Whether it’s Facebook, Twitter, Gab, or Parler, they can only exist and thrive if they fulfill the wishes and demands of their users, and increasingly to the political and social pressures placed on them by a cacophony of powerful forces.

It’s an impossible tightrope.

It is clear that many of these companies have and will continue to make bad business decisions based on either politics or perception of bias. They are far from perfect.

The only true way we can ensure a healthy balance of information and services provided by these companies to their consumers is by promoting competition and decentralization.

Having diverse alternative services to host servers, provide social networks, and allow people to communicate remains in the best interest of all users and consumers.

Such a mantra is difficult to hold in today’s hostile ideological battleground inflated by Silicon Valley, Washington, and hostile actors in Bejing and Moscow, but it is necessary.

In the realm of policy, we should be wary of proposed solutions that aim to cut off some services at the expense of others.

Repealing Section 230 of the Communications Decency Act, for example, would be incredibly harmful to users and firms alike. If platforms become legally liable for user content, it would essentially turn innovative tech companies into risk-averting insurance companies that occasionally offer data services. That would be terrible for innovation and user experience.

And considering the politically charged nature of our current discourse, anyone could find a reason to cancel you or an organization you hold dear – meaning you’re more at risk for being deplatformed.

At the same time, axing Section 230 would empower large firms and institutions that already have the resources to manage content policing and legal issues at scale, locking out many start-ups and aspiring competitors who otherwise would have been able to thrive.

When we think of the towering power of Big Tech and Big Government, some things can be true all at the same time. It can be a bad idea to use antitrust law to break up tech firms as it will deprive consumers of choice, just as these companies are guilty of making bad business decisions that will hurt their user base. How we respond to that will determine how consumers will continue to be able to use online services going forward.

All the while, every individual Internet user and organization has it in their power to use competitive and diverse services. Anyone can start up an instance of Mastodon (as I have done), a decentralized micro-blogging service, host a private web server on a Raspberry Pi (coming soon), or accept Bitcoin rather than credit cards.

Thanks to competition and innovation, we have consumer choice. The question is, though, if we’re courageous enough to use them.

Yaël Ossowski is deputy director at the Consumer Choice Center.

Antitrust tech hearings dig for consumer harm but come up short

Armed with face masks and fresh customer complaints, members of the House Subcommittee on Antitrust, Commercial, and Administrative Law convened both virtually and in-person on Thursday, for the first of many hearings on competition in the tech sector.

It was a six-hour marathon of gobbledygook legal turns of phrase and static-prone troubleshooting for lawmakers.

The witnesses were CEOs from some of the four largest companies in America: Jeff Bezos of Amazon, Mark Zuckerberg of Facebook, Tim Cook of Apple, and Sundar Pichai of Google.

Together, these companies serve billions of global consumers for a variety of needs, and have become very rich by doing so. They employ millions of people, make up big portions of the American economy, and have been the trailblazers for innovation in virtually every free nation.

It is also true that they’ve made many mistakes, errors in judgment, and have made it easy to be bashed by all sides.

Despite that, these companies are true American success stories. And that’s not even considering the industrious biographies of their CEOs on the witness stand: an immigrant from India; the son of a teenage mother and immigrant stepfather; a college dropout; and a gay southern man shunned by the Ivy League. Each of them is a self-made millionaire or billionaire in their own right.

But in the context of this hearing, they were America’s villains.

The potshots in the hearing came from both Democrat and Republican congressmen, each using their bully pulpits to reel out various accusations and grievances on the representatives from Big Tech. But lost in all of this was the consumer.

The scene was analogous to George Orwell’s Two Minute Hate on repeat, the face of Emmanuel Goldstein replaced by a WebEx video call on full screen with smiling CEOs surrounded by the furniture in their home offices.

For Democrats, these companies have grown far too large using unscrupulous business practices, beating competitors with lower prices, better service, speed, and slick branding – allowing them to purchase or bully their competition.

For Republicans, it’s all about the bias against conservatives online, facilitated by the thorny content moderation that selectively edits which social media posts are allowed to stand.

What’s missing from this story so far? American consumers.

The justification of the hearing was to determine whether these companies have abused the trust of the public and whether consumers have been harmed as a result of their actions.

But more often than not, questions from committee members hinged on the and “business acumen” of decisions taken within the company, classifying rudimentary strategy decisions as illegal and hostile moves.

Platforms Opening to Third-Party Sellers

An example is Rep. Pramila Jayapal, of Washington State. She represents the district where Amazon was founded by Jeff Bezos. She condemned Amazon for collecting data on third-party sellers who are able to use Amazon’s website to sell products.

“You have access to data that your competitors do not have. So you might allow third-party sellers onto your platform, but if you’re continuously monitoring the data to make sure that they’re never going to get big enough to compete with you, that is the concern that the committee actually has,” said Jayapal.

Here, we’re talking about Amazon’s online platform, which sells millions of goods. Two decades ago, Amazon opened up its platform to merchants for a small fee. It was a win for sellers, who could now have easier access to customers, and it was a win for customers who now can buy more products on Amazon, regardless of who the seller was.

When Amazon sees that certain product categories are very popular, they will sometimes make their own, knowing they have the infrastructure to deliver products at high satisfaction. This brand is called Amazon Basics, encompassing everything from audio cables to coolers and batteries.

Rep. Jayapal says that by collecting data on those merchants in their store, Amazon is effectively stealing information…that sellers voluntarily give in exchange for using Amazon’s storefront.

However, the end result of the competition between Amazon’s third-party sellers and Amazon’s own products (on Amazon’s platform) is something that is better for the consumer: there is more competition, more choice, and more high-quality options to choose from. This elevates the experience for a consumer and helps save them money. This is far from harm.

The same can be said of Apple and its App Store, which came under fire from the chairman of the committee, Rep. David Cicilline. He said Apple was charging developers who use the App Store “exorbitant rents” that veered toward “highway robbery”.

Apple CEO Tim Cook was quick to retort by pointing out that the App Store is a platform for its own apps, but it also allows third-party developers to use that store for a fee. This is an entirely new market space that never existed before Apple opened it, and thus is a net gain for any developer who uses the store, and benefits consumers who click and download even more.

Business As Usual

Throughout the hearing, public officials pointed to internal documents as proof of the malfeasance of the tech firms. The documents were unearthed by the committee and contained emails and memos on mergers, acquisitions, and business practices from all four tech firms.

The Financial Times classified these documents as evidence that the companies “chased dominance and sought to protect it.”

Rep. Jared Nadler of New York chased down Mark Zuckerberg for his decision to purchase the photo-app Instagram back in 2012, calling the move “outright illegal” because he believed Facebook bought it to “essentially put them out of business.”

Today, Instagram is an incredibly popular app that has grown to half a billion users, thanks to Facebook’s investments, talent, and integration. It’s made consumers very happy, and has become an attractive product for advertisers as well. Again, no harm for the consumer.

Pro-Consumer, not Pro or Anti-business

One of the most astute lines from the hearing came from the sole representative from North Dakota.

“Usually in our quest to regulate big companies, we end up hurting small companies more,” said Rep. Kelly Armstrong. Indeed.

And add to that the eventual scenario whereby only the highly connected and vastly wealthy tech companies will be able to comply with stringent regulation from Washington. That’s not what consumers want, and it’s not what Americans want either.

If Congress aims to use antitrust power to break up or heavily regulate the enterprises built by Google, Amazon, Facebook, or Apple, it won’t be done lightly. It would likely leave a lot of damage in its wake for small and medium-sized businesses, many of whom rely on these major firms to conduct their business. In turn, consumers rely on those companies for products and services.

Each of these companies represent a case study in innovation, entrepreneurship, and giving the people what they want to create a huge network of consumers. There’s a lot to learn there.

Instead of using the law to break up companies, what if we learned from their success to empower more consumers?

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