The government continues to flood the zone against Silicon Valley
Orders and subpoenas, oh my!
Perhaps emboldened by antitrust lawsuits against Facebook and Google, other arms of the government, both at the federal and state level, are picking up the baton.
On Monday, the FTC in a 4-1 vote issued orders to Amazon, ByteDance, Discord, Facebook, Reddit, Snap, Twitter, What’sApp and YouTube to provide the agency with “data on how they collect, use, and present personal information, their advertising and user engagement practices, and how their practices affect children and teens,” according to a post on the FTC’s site.
(Image via Michael Reynolds/Shutterstock)
Separately, California’s Attorney General Xavier Becerra filed a petition in Sacramento County Superior Court asking the court make Amazon respond to “outstanding investigative subpoenas,” as the state looks into the company’s coronavirus protocols.
“Amazon has made billions during this pandemic relying on the labor of essential workers. Their workers get the job done while putting themselves at risk,” Attorney General Becerra said in a statement. “It’s critical to know if these workers are receiving the protections on the job that they are entitled to under the law. Time is of the essence. Amazon has delayed responding adequately to our investigative requests long enough. We’re seeking a court order to compel Amazon to comply fully with our investigative subpoenas.”
The FTC, through a 31-page order, is seeking information specifically related to:
how social media and video streaming services collect, use, track, estimate, or derive personal and demographic information;
how they determine which ads and other content are shown to consumers;
whether they apply algorithms or data analytics to personal information;
how they measure, promote, and research user engagement; and
how their practices affect children and teens.
In a statement, FTC Commissioners Rohit Chopra, Rebecca Slaughter and Christine Wilson said: “Social media and video streaming companies now follow users everywhere through apps on their always-present mobile devices. This constant access allows these firms to monitor where users go, the people with whom they interact, and what they are doing. But to what end? Too much about the industry remains dangerously opaque.
Massachusetts Sen. Edward Markey (D-Mass.) issued a statement in support of the investigation. "No comprehensive investigation of these websites would be complete without special attention to children and teens, a uniquely vulnerable population online," Markey said. "I am glad that the FTC heeded my calls to issue these orders, and I thank my bipartisan partners who joined me in advocating for this investigation."
Markey, together with Sen. Richard Blumenthal (D-Conn.) introduced a bill back in March that would specifically address the "non-transparent ways" digital media apps and platforms market to and collect information from users ages 16 and under.
While the FTC announcement doesn’t have any legal teeth (there’s no enforceable penalty or any law-enforcement action), information gathered can serve as a sort of stepping stone for any future potential action.
Last year, Facebook paid a $5 billion fine for violating an order in 2012.
In 2012, the FTC charged Facebook with eight separate privacy-related violations, including that the company made deceptive claims about consumers’ ability to control the privacy of their personal data.
...
To settle that case, Facebook agreed to an order that, among other things: 1) prohibited Facebook from making misrepresentations about the privacy or security of consumers’ information, 2) prohibited Facebook from misrepresenting the extent to which it shares personal data, and 3) required Facebook to implement a reasonable privacy program.
Also last year, the FTC fined Google and YouTube $170 million for allegedly violating the Children’s Online Privacy Protection Act.
In a complaint filed against the companies, the FTC and New York Attorney General allege that YouTube violated the COPPA Rule by collecting personal information—in the form of persistent identifiers that are used to track users across the Internet—from viewers of child-directed channels, without first notifying parents and getting their consent. YouTube earned millions of dollars by using the identifiers, commonly known as cookies, to deliver targeted ads to viewers of these channels, according to the complaint.
As government agencies try to put tech companies in a regulatory vice, the companies are continuing to draw the ire of not only legislators, but also users and its advertisers.
On Twitter, the hashtag #FacebookDisabledMe is picking up steam from small business owners claiming the company is randomly freezing their ad accounts.
We wrote about this two weeks ago, as agencies and small businesses told me they were inexplicably getting shut down. Last week, BuzzFeed reported that
in relentlessly scaling its ad juggernaut — which is projected by analysts to bring in $80 billion this year — Facebook created a financial symbiosis with scammers, hackers, and disinformation peddlers who use its platforms to rip off and manipulate people around the world. The result is a global economy of dishonesty in which Facebook has at times prioritized revenue over the enforcement of policies seemingly put in place to protect the people who use its platform.
Company insiders said the ad platform’s issues are exacerbated by Facebook's continued reliance on a small army of low-paid, unempowered contractors to manage a daily onslaught of ad moderation and policy enforcement decisions that often have far-reaching consequences for its users. Internal documents and messages, as well as interviews with eight current and former employees and contractors, show that Facebook's ad workers have at times been told to ignore suspicious behavior unless it “would result in financial losses for Facebook,” and that the company is pushing to grow revenue in regions that flood its pages with scams.
The FTC order will want to look at all this. However, in a weird way, the order can bee seen as a fishing attempt, as its choice of companies seems, on the surface, odd. Why YouTube and not Google? And Discord? Where’s LinkedIn? In his dissent (the lone dissenter), FTC commissioner Noah Joshua Phillips writes:
The 6(b) orders are instead an undisciplined foray into a wide variety of topics, some only tangentially related to the stated focus of this investigation. The actions undertaken today trade a real opportunity to use scarce government resources to advance public understanding of consumer data privacy practices—critical to informing ongoing policy discussions in the United States and internationally—for the appearance of action on a litany of gripes with technology companies.
He added later:
The biggest problem is that today’s 6(b) orders simply cover too many topics to make them likely to result in the production of comparable, usable information—yet another feature proper oversight and public comment could have flagged. Rather than a carefully calibrated set of specifications designed to elicit information that the agency could digest and analyze as a basis for informing itself, Congress, stakeholders, and the public, these 6(b) orders instead are sprawling and scattershot.
There is some credence to this. It’s always best for regulators to be specific. However, the last decade or so has shown that tech companies move faster than the law and perhaps the strongest antidote to curbing the power, if not the behavior, of these companies is to flood the zone with regulatory orders.
With a Biden administration about to commence, and a perhaps a Democratic-controlled Senate and House, it will be interesting to see how the government moves forward. Biden famously called Silicon Valley “little creeps” while also leaning on Big Tech throughout the campaign. If Google and Facebook do end up breaking up, an underlying question, as the FTC’s newest orders imply, will be: is it in the best interests of the consumer?
Thank you for allowing me in your inbox today, and every day. If you have tips, or thoughts on the newsletter, drop me a line. Or you can follow me on Twitter. If you arrived here via social or through a colleague, please consider signing up. Thanks for reading, and I’ll see you tomorrow!
Joe Cocker with Leon Russell, “The Letter”
Some interesting links:
For platforms:
Facebook is a Doomsday machine (The Atlantic)
Fed up teens are outing their rapists on TikTok (GEN)
For media gawking:
So Jeffrey Toobin had a Zoom incident. What now? (New York Times)
For potential media deals:
Group Nine Media explores blank-check company for digital media (Wall Street Journal)
For dying models:
The desperate last days of local news (The New Republic)
The real reason local newspapers are dying (Men Yell at Me)
Can the Left’s favorite network break through, post-Trump (Vanity Fair)
For future of media models:
Vox Media Studios targets $100 million in 2021 revenue (Axios)
Introducing TikTok on Samsung TV (TikTok)
For revolving door:
m/SIX Names Belinda Smith as CEO, NA / Americas (PR Newswire)
Too Much Information? Former ‘CBS Evening News’ Producer Seeks Role as ‘News Concierge’ (Variety)
For a year in charts:
2020: The year in charts, from Covid-19 to the election (Vox)
For more on opinion sections:
The thrill pillars of opinion (Neal Ungerleider)