For months, some of the biggest tech companies have been wrapped up in discussions with the European Commission (EC), seeking feedback and tweaking their plans to ensure their core platform services comply with the Digital Markets Act (DMA) ahead of that law taking force in the European Union tomorrow.

Under the DMA, companies designated as gatekeepers—Alphabet/Google, Amazon, Apple, ByteDance, Meta, and Microsoft—must follow strict rules to ensure that they don’t engage in unfair business practices that could limit consumer choice in core platform services. These include app stores, search engines, social networking services, online marketplaces, operating systems, web browsers, advertising services, cloud computing services, virtual assistants, and certain messaging services.

At its heart, the DMA requires more interoperability than ever, making it harder for gatekeepers to favor their own services or block other businesses from reaching consumers on their platforms.

Each gatekeeper will publish compliance reports in the coming days, detailing for the first time what changes they’ve made to comply with the DMA. All companies have already previewed changes coming in the buildup to the deadline. Some companies, like Google, have announced various changes impacting businesses and users, while others, like TikTok-owner ByteDance, are begrudgingly updating services now while still contesting their gatekeeper status.

Although the EC has said that the DMA is intended to protect fair and open markets—theoretically offering users more choices to enhance transparency, privacy, security, and competition online—some tech companies have warned that some of the changes coming under the DMA may increase risks or decrease choices for their users.

Last January, Apple warned that complying with the DMA required the company to take additional new steps “to reduce privacy and security risks the DMA creates.” According to Apple, DMA requirements linked to user choice—such as options to choose an alternative default contactless payment method other than Apple’s—could introduce new threats, like malware or malicious code used to scam users, that Apple can’t promise to protect against.

So far, all gatekeepers except for ByteDance have specified that changes coming soon will only impact users in the EU, the European Economic Area (EEA), and Switzerland. In a TikTok blog, ByteDance announced in March that new functionality added for DMA compliance will “roll out globally in the near future.”

However, it’s possible that other gatekeepers adjusting services may end up doing a cost-benefit analysis and, like ByteDance, eventually updating services in other parts of the world. This would potentially extend the DMA’s reach beyond the EU’s borders.

It also seems possible that other regions will quickly adopt the DMA’s standards. The EU and the US, for example, formed the EU-US Trade and Technology Council in 2021, which has been meeting more consistently in the ramp-up to DMA enforcement. Partly formed to cooperate on setting best practice technology standards, the next meeting is scheduled for this spring, just after the EC publishes summaries of gatekeepers’ compliance reports. Other countries, including Turkey, Australia, Brazil, India, and the United Kingdom, have already embraced the DMA model, according to the nonprofit tech policy think tank the Information Technology and Innovation Foundation (ITIF).

Some critics of the DMA, including ITIF, have urged countries to “carefully consider the full implications before copying the EU’s digital regulatory system,” warning of potentially burdensome restrictions possibly hampering innovation and distorting competition.

Now that the EC is preparing to enforce the DMA officially, its impact will soon become clearer. However, the EC does not expect the online world to immediately look different tomorrow in the EU than it does today.

Some companies, like Microsoft, have estimated that DMA updates may not be available to all EU users until April, while other companies may fall short of DMA standards and be ordered to make more changes after submitting their first compliance reports.

Gatekeepers are expected to share compliance reports starting this afternoon, but for now, here’s a brief overview of changes coming to core services offered in the EU by all six gatekeepers.

Apple warns DMA creates potential risks

In January, Apple announced changes coming to iOS, Safari, and the App Store that will “become available to users in the 27 EU countries beginning in March 2024.”

Some changes are small. The only change in Safari, for example, is that users will be prompted to choose a default browser when they first open Safari in iOS 17.4 or later.

But changes to the App Store and iOS are more significant.

In the App Store, developers can expect extensive changes “affecting apps across Apple’s operating systems, including iOS, iPadOS, macOS, watchOS, and tvOS.” These include new options to process payments for digital goods with alternative service providers or by linking out to a website. Developers can now offer deals, discounts, and promotions outside their apps, too.

To help developers navigate these options, Apple also developed business tools to estimate fees or potentially reduced commissions.

Specifically for iOS, updates include new options to distribute iOS apps in alternative marketplaces and new APIs enabling developers to create alternative app marketplaces, use alternative web browser engines for in-app browsing, and “submit additional requests for interoperability with iPhone and iOS hardware and software features.”

Perhaps more significantly for users, Apple introduced “new controls that allow users to select a third-party contactless payment app—or an alternative app marketplace—as their default.”

Using these alternatives, Apple warned, may diminish the user experience by impacting system performance or draining battery life. And some features, like Family Purchase Sharing and Ask to Buy, won’t work “with apps downloaded from outside of the App Store.”

https://arstechnica.com/?p=2008325

Following Google’s layoff of 12,000 employees and other cost-cutting moves, employees are reportedly expressing anger about CEO Sundar Pichai’s $226 million pay package.

“In the weeks since Pichai’s annual compensation was made public, internal Google platforms have filled with conversations and memes slamming the CEO for taking a pay bump while slashing costs elsewhere,” CNBC reported yesterday. CNBC’s report said internal memes shared by employees also criticized Google owner Alphabet’s recent authorization of a $70 billion stock repurchase program, the same amount as last year. Pichai is the CEO of both Alphabet and Google.

According to CNBC, one “popular meme showed an image of Shrek character Lord Farquaad with the text ‘Sundar accepting $226 million while laying off 12k Googlers, cutting perks, and destroying morale and culture.'” It also included the Farquaad quote, “some of you may die, but that is a sacrifice I am willing to make.”

The median Alphabet employee was paid $279,802 in 2022. Although Alphabet lists Pichai’s 2022 compensation as $226 million, most of it will vest over three years, and the amount could change. The total value is lower than the triennial award he got for the previous three-year period.

“We respect shareholders more than Googlers”

One meme with over 700 likes read, “$70 billion in buybacks shows we respect external shareholders more than Googlers,” according to CNBC. There were also reportedly memes “comparing Pichai to Apple CEO Tim Cook, who in January received over a 40 percent cut from his 2022 target total compensation.”

Cook requested a pay cut that dropped his target compensation to $49 million in 2023. In 2022, Cook’s target compensation was $84 million, but he ended up receiving $99.4 million.

CNBC said it viewed over a dozen memes shared in Google’s internal discussion forums, including one “with more than 1,200 likes [that] referred to comments from finance chief Ruth Porat, who wrote last month in a rare companywide email that the company is making ‘multi-year’ cuts to employee services.”

“Ruth’s cost savings applied to everyone… except our hardworking VPs and CEO,” the meme reportedly said. The spending cuts announced by Porat reportedly target office supplies, laptop replacements, fitness classes, snack bars, cafeterias, and more.

When contacted by Ars, a Google spokesperson declined to comment on the report of employee complaints.

After Google’s January announcement of 12,000 layoffs, Pichai reportedly said in a meeting with staff that Google executives would take a “very significant reduction in their annual bonus.” Pichai wrote in an email to employees that “I take full responsibility for the decisions that led us here,” saying that over the past two years the company “hired for a different economic reality than the one we face today.” Alphabet had 190,234 employees at the end of 2022.

In Q1 2023, Alphabet reported revenue of $69.8 billion and net income of $15.1 billion, outperforming analysts’ expectations.

CEO-to-worker pay ratio of 808:1

Pichai’s compensation includes a $218 million stock award that was granted in December 2022 and will vest over three years, according to a regulatory filing. The amount could change in value depending on the company’s stock performance. Pichai’s total pay in 2021 was listed as $6.3 million, and in 2020 it was $7.4 million.

Pichai’s listed annual pay varies significantly because of the large stock awards he’s granted once every three years. His 2019 pay was $280.6 million and his 2016 pay was about $200 million.

Alphabet reported that Pichai’s 2022 compensation was 808 times more than the median employee’s. “Given that CEO equity awards are currently made on a triennial cadence, while our broad-based employee equity awards are typically made on an annual cadence, the pay ratio can fluctuate significantly across years. For example, our 2020 pay ratio was 27:1; our 2021 pay ratio was 21:1; and our 2022 pay ratio is 808:1,” Alphabet’s filing said.

Alphabet’s CEO-to-employee ratio was 1,085:1 in 2019, when Pichai was awarded $280.6 million and the median salary was $258,708. Apple reported a pay ratio in 2022 of 1,177:1. Apple’s ratio is likely to drop in 2023 because of Cook’s pay cut.

In a December 2022 filing, Alphabet said that the “vesting of a significant portion of the award will depend on Alphabet’s total shareholder return (relative to S&P 100 companies), and this performance-based equity may not vest at all.” Alphabet also said it increased the proportion of “performance stock units” in Pichai’s pay package from 43 percent to 60 percent, and changed the S&P 100 percentile target from the 50th percentile to the 55th percentile.

These changes will “further align Mr. Pichai’s compensation to long-term shareholder value creation and Alphabet’s stock performance relative to the S&P 100 over the applicable performance periods,” the company said.

https://arstechnica.com/?p=1936849

A YouTuber, Marshall Daniels—who has posted far-right-leaning videos under the name “Young Pharaoh” since 2015—tried to argue that YouTube violated his First Amendment rights by removing two videos discussing George Floyd and COVID-19. Years later, Daniels now owes YouTube nearly $40,000 in attorney fees for filing a frivolous lawsuit against YouTube owner Alphabet, Inc.

A United States magistrate judge in California, Virginia K. DeMarchi, ordered Daniels to pay YouTube $38,576 for asserting a First Amendment claim that “clearly lacked merit and was frivolous from the outset.” YouTube said this represents a conservative estimate and likely an underestimate of fees paid defending against the meritless claim.

In his defense, Daniels never argued that the fees Alphabet was seeking were excessive or could be burdensome. In making this rare decision in favor of the defendant Alphabet, DeMarchi had to consider Daniels’ financial circumstances. In his court filings, Daniels described himself as “a fledgling individual consumer,” but also told the court that he made more than $180,000 in the year before he filed his complaint. DeMarchi ruled that the fees would not be a burden to Daniels.

According to Daniels, who filed his complaint in 2020, he was a victim of “reverse censorship” on YouTube, which harmed him by demonetizing his account by removing videos with the titles “Fauci Silenced Dr. Judy Mikovits from Warning the American Public” and “George Floyd, Riots & Anonymous Exposed as Deep State Psyop for NOW.” Daniels alleged that the videos were removed not for violating YouTube community guidelines against harassment or cyberbullying, but “by the behest of members of Congress.”

In his repeatedly tossed-out complaint, Daniels said that Congress members Nancy Pelosi (D-Calif.) and Adam Schiff (D-Calif.) coerced YouTube into removing the videos by making statements suggesting that Section 230 didn’t cover platforms found to be pushing disinformation and writing letters to Google executives about their enforcement of policies banning COVID-19 misinformation.

Daniels claimed he was advancing a “novel legal theory” by suing Alphabet, but DeMarchi said that his argument failed in part because it was based on a statute that specifically precluded liability for federal actors like Pelosi and Schiff.

“None of his arguments are persuasive, as he articulated no plausible legal theory—novel or otherwise—for holding private entities liable as government actors in the circumstances presented,” DeMarchi wrote in the order granting attorney fees to Alphabet, which normally only happens under “exceptional circumstances.”

Internet law expert Eric Goldman wrote in a blog that Daniels’ arguments defending his “MAGA-ish content” were “misguided.” Goldman characterized DeMarchi’s order as “a polite way for a judge to say ‘not even close’ and ‘I can’t believe you tried this.’”

Neither Daniels’ attorneys nor Google immediately responded to Ars’ request for comment.

https://arstechnica.com/?p=1923313

An appeals court has revived a lawsuit that accuses Google, YouTube, DreamWorks, and a handful of toymakers of tracking the activity on YouTube of children under 13. In an opinion released Wednesday, the Ninth US Circuit Court of Appeals ruled that the Children’s Online Privacy Protection Act does not bar lawsuits based on individual state privacy laws.

Passed in 1998 and amended in 2012, COPPA requires websites to obtain parental consent for the collection and dissemination of personally identifiable information of children under the age of 13. COPPA gives the FTC and state attorneys general the ability to investigate and levy fines for violations of the law.

Several states across the US have laws similar to COPPA on the books. The revived lawsuit cites laws in California, Colorado, Indiana, and Massachusetts to argue that Hasbro, DreamWorks, Mattel, and the Cartoon Network illegally lured children to their YouTube channels in order to target them with ads.

A federal judge in San Francisco dismissed the original lawsuit, ruling that COPPA bars individuals from suing companies for privacy violations. In a unanimous decision, the Ninth Circuit judges hearing the appeal disagreed with the district court’s reasoning. COPPA is not, in fact, the only route to enforcement, according to the ruling.

“Since the bar on ‘inconsistent’ state laws implicitly preserves ‘consistent’ state substantive laws, it would be nonsensical to assume Congress intended to simultaneously preclude all state remedies for violations of those laws,” wrote Judge Margaret McKeown.

This is not the first time YouTube has faced legal problems for how it handles children’s data. The Alphabet subsidiary was fined $170 million by the FTC and the New York state attorney general in 2019 for COPPA violations.

The case, which seeks damages for a seven-year time period between 2013 and 2020, now heads back to district court.

https://arstechnica.com/?p=1906948

Meta and Alphabet have lost their dominance over the digital advertising market they have ruled for years, as the duopoly is hit by fast-growing competition from rivals Amazon, TikTok, Microsoft and Apple.

The share of US ad revenues held by Facebook’s parent Meta and Google owner Alphabet is projected to fall by 2.5 percentage points to 48.4 percent this year, the first time the two groups will not hold a majority share of the market since 2014, according to research group Insider Intelligence.

This will mark the fifth consecutive annual decline for the duopoly, whose share of the market has fallen from a peak of 54.7 percent in 2017 and is forecast to decline to 43.9 percent by 2024. Worldwide, Meta and Alphabet’s share declined 1 percentage point to 49.5 percent this year.

Jerry Dischler, head of ads at Google, told the Financial Times that fierce rivalry from new entrants reflects an “extremely dynamic ad market.”

Regulators in the US and Europe have added antitrust scrutiny such as pursuing Google for allegedly promoting its products over rivals.

In December, Facebook owner Meta was served with a complaint from the EU’s watchdogs over concerns that the social network’s classified advert service is unfair to rivals. Tech groups are fighting harder than ever for a share of the $300 billion digital ads market, even as companies worldwide are cutting their ad budgets in response to rising interest rates and high inflation.

Amazon and Apple have expanded their advertising teams. In July, Netflix announced it would partner with Microsoft to build an advertisement-supported tier of its streaming service.

Meta chief executive Mark Zuckerberg has blamed recent revenue falls on Apple’s privacy changes that make it harder to track users and target advertising, as well as the growing popularity of viral videos app TikTok, owned by Chinese parent ByteDance.

https://arstechnica.com/?p=1906620

Sponsors of a key bipartisan antitrust bill have tried for months to secure a Senate vote and potentially pass “the first major bill on technology competition” to come before the Senate “since the dawn of the Internet.”

Now, The Wall Street Journal reports, that bill will remain “in limbo” as Congress has failed to schedule a vote before its recess. This could signify that Big Tech companies will prevail—through intense lobbying and criticism—and prevent the bill from passing a Senate floor vote. In just one week this summer, one industry group reportedly spent $22 million in ads against the bill.

The bill is controversial because it targets large companies like Amazon, Alphabet, Meta, and Apple. It stops them from self-preferencing business practices, like promoting their products above others or forcing smaller businesses to buy ad space to compete. Critics, like Google, say the law could threaten everything from the quality of online services to national security, but supporters, like bill co-sponsor Representative David Cicilline (D-RI), say much of the criticism boils down to “lies coming from Big Tech.”

Cicilline, Amazon, Apple, Google, and Meta did not immediately respond to Ars’ requests for comment. The tech companies “either declined to comment or didn’t respond to requests for comment” from WSJ.

Sponsors continue to combat any misinformation on the Hill, and Senate Majority Leader Chuck Schumer (D.-NY) said supporters are actively working on securing Senate votes. Cicilline said Big Tech has not won yet. “We continue to have very strong bipartisan support in both chambers, and the votes to pass it in both chambers,” Cicilline said. “It’s really just a matter of getting it on the calendar.”

Among the bill’s opponents influencing Congress to delay the vote is the Computer & Communications Industry Association, which represents tech companies like Amazon, Alphabet, and Meta. CCIA President Matt Schruers tells Ars that his team has been “regularly talking to staffers and members of Congress.” He said that the bill was “never ready for prime time” and “as more members understand the details and the problems it would create for privacy, security, and the economy, they have reservations about supporting it in a floor vote.”

The independent non-partisan policy institute the Center for American Progress declined to comment, but previously conducted a lengthy analysis of both sides of this debate. One of the most publicized issues that critics have with the bill is that it could potentially limit Big Tech companies’ abilities to moderate content without discrimination claims. The idea is that the companies would be so afraid of being sued that they would let every bit of offensive content fly on their platforms.

Wired called the argument “weak,” but the bill’s sponsors—who have been continually willing to engage critics and amend the bill to acknowledge legitimate concerns—are stuck entertaining the argument. WSJ reported that content moderation amendments are being considered, but if the sponsors strike the content moderation part of the bill, they risk losing Republican votes. Those votes will be vital in passing the law and depend on the bill’s explicit protections against discriminatory content moderation, a popular conservative rallying point right now.

For now, supporters of the antitrust bill remain optimistic. They can only hope that Schumer will stick to a reported plan to vote on the American Innovation and Choice Online Act when Congress reconvenes this fall. However, Schumer also planned to hold a vote early this summer, which never happened. If he fails to schedule the vote again, mid-term elections could tip control of Congress to Republicans and possibly doom the bill.

Another bill co-sponsor, Senator Chuck Grassley (R-IA), said that further delays in regulating Big Tech would be bad for the economy and customers. The Department of Justice, Department of Commerce, and the Biden administration have expressed support for the bill. There’s some confidence that the bipartisan support it currently enjoys will save it from being squashed.

If passed, the law would be enacted immediately, with enforcement guidelines from DOJ and the Federal Trade Commission written within a year. After that, the maximum penalty that Big Tech companies could expect to pay is 15 percent of its total US revenue for the period of the violation. Legal experts say that the law would probably never be litigated because very few companies would take the risk of not complying and potentially being sued. If passed, the law would effectively mean the end of America trusting Big Tech to regulate itself—or ceding regulatory power to the European Union.

“Big Tech companies want to protect the status quo, which allows them to expand their influence over our decisions, whether you’re a small businessperson or a consumer,” Grassley said. “If we want action, we need a Senate vote and we need that Senate vote to be soon.”

Senator Amy Klobuchar (D-MN) told Ars that she believes the bill is still on track. “It’s past time we put common sense rules of the road in place for big tech platforms,” Klobuchar said. “Despite more than $100 million being spent against us on ads and the thousands of lobbyists and lawyers fighting this bill, we still have broad support. I have had constructive conversations with Senator Schumer and other colleagues about timing and I am hopeful that when we return in the fall we will vote on this bipartisan legislation.”

Sen. Schumer and Sen. Grassley did not immediately respond to Ars’ requests for comment.

https://arstechnica.com/?p=1872215

Imagine an online world where what users want matters, and interoperability reigns. Friends could choose whichever messaging app they like and seamlessly chat cross-app. Any pre-installed app could be deleted on any device. Businesses could finally access their Facebook data, and smaller tech companies could be better positioned to compete with giants. Big Tech could even face consequences for not preventing the theft of personal info.

As the US struggles to pass legislation to protect Internet consumers, in the EU, these ideals could become reality over the next few years. EU lawmakers today passed landmark rules to rein in the power of tech giants such as Alphabet unit Google, Amazon, Apple, Facebook (Meta), and Microsoft, establishing a task force to regulate unfair business practices in Big Tech.

Amazon said that the company plans to evolve with Europe’s “regulatory landscape” and review what the new legislation means for Amazon, its customers, and its partners. Microsoft declined to comment. None of the other Big Tech companies mentioned immediately responded to a request for comment for this story.

It remains unclear exactly how challenging these new regulations—the Digital Markets Act and the Digital Services Act—will be to enforce.

Critics say that not much will change, arguing that tech giants will be able to easily afford massive fines for DMA violations or DSA breaches. And at an estimated 80 members, the DMA task force is too small to monitor compliance.

Once published in the EU’s Official Journal, “both acts will enter into force,” with the DMA applicable after six months. The DSA works a little differently. It will apply to all digital service providers after 15 months or “from January 1, 2024, whichever comes later,” but for “very large online platforms and very large online search engines,” compliance will be enforced after only four months.

It’s possible that the EU regulations—and any enforcement issues that may arise—will influence how the US approaches Big Tech regulation in the future, but the move is likely to impact millions of global users, depending on how (or if) companies act to remain in compliance.

Stronger rules for “gatekeepers”

Known as the Digital Services Act package, the new rules were first proposed in 2020. The package seeks to better protect people across the EU using digital services for both business and pleasure, aiming “to create a safer digital space where the fundamental rights of users are protected and to establish a level playing field for businesses.”

That starts with the DMA taking power back from so-called “gatekeepers,” Big Tech companies like Apple, Google, or Meta that seem to limit innovation by controlling how users shop and talk online.

Impact assessments of both laws detail why it’s necessary to target very large online platforms for stronger enforcement to pave the way for smaller tech companies to drive more innovation and give users more choices.

Other goals of the regulations include preventing disinformation spread and the sale or trade of illegal goods online.

Not everyone is optimistic that the EU regulations will adequately function to diminish Big Tech’s dominance, though. In a statement, European Consumer Organization Deputy Director-General Ursula Pachl cautioned that if the DMA’s new task force “does not hire the experts it needs to monitor Big Tech’s practices in the market, the legislation could be hamstrung by ineffective enforcement.”

The Electronic Frontier Foundation, a nonprofit dedicated to defending online civil liberties, criticized the DSA in an email statement: “It gives way too much power to government agencies to flag and remove potentially illegal content and to uncover data about anonymous speakers.”

“We can expect a highly politicized co-regulatory model of enforcement with an unclear role of government agencies, which could create real problems,” said EFF International Policy Director Christoph Schmon. “Respect for the EU’s fundamental rights charter and inclusion of civil society groups and researchers will be crucial to ensure that the DSA becomes a positive model for legislation outside the EU.”

In the past, Big Tech has proven to be skilled at subverting laws that are challenging to enforce. Last year, the US Federal Trade Commission reported that companies like Alphabet, Meta, Microsoft, Amazon, and Apple spent the past decade wielding wealth to overpower rivals and skirt laws designed to increase competition.

https://arstechnica.com/?p=1864235

Regulators in Europe and the UK have opened an antitrust probe into a deal between Google and Meta on online advertising, in the latest effort to tackle the market power of the world’s biggest technology companies.

The move follows US antitrust investigators who are also probing an agreement informally known as “Jedi Blue.” The search engine giant and Facebook’s parent company have been accused of working together to carve up advertising profits, acting together to buttress their businesses.

The EU and UK probes represent the latest assault on Big Tech from global regulators that are also preparing to unleash new rules designed to challenge the primacy of groups such as Google, Meta, and Amazon. In response, US tech groups have launched lobbying efforts in Washington and Brussels in an effort to protect their interests.

“Advertising is very important and because of that, it is important that there is competition on who can place ads where,” Margrethe Vestager, the EU’s competition chief, told the Financial Times. She said the UK and the EU had agreed to open the probe into the matter on the same day.

She added: “There are other people than Google doing it. What we suspect here is that there may have been an agreement between Google, and then Facebook, only to use Google services and not competing services. That’s a giant problem.”

Companies found in breach of EU law stand to lose up to 10 percent of global revenues, but the legal processes could take years.

Google said that “the allegations made about [the Jedi Blue] agreement are false.” It added: “The goal of this program is to work with a range of ad networks and exchanges to increase demand for publishers’ ad space, which helps those publishers earn more revenue.”

Meta said its “non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements.”

Both groups vowed to cooperate with regulators.

Google and Meta have become regular targets of EU antitrust probes in recent years, and Europe has become the center of a regulatory backlash against the economic strength of Big Tech.

Vestager said the European Commission is also investigating the suspicion that Google may have acted alone without Meta’s knowledge. “We have not concluded yet if it’s a Google thing alone or if they were in it together. It’s not a given that Meta was conscious of the effects of the deal, and that’s what we have to investigate,” she said.

The co-ordinated investigation by Brussels and the UK’s Competition and Markets Authority is the second time in under a year that the two regulators have mounted a joint assault on Big Tech, following a probe into Facebook in June.

The commission and CMA are assessing to what extent Meta abused its dominant position in the social media or digital advertising markets through its use of data. That probe is ongoing.

Andrea Coscelli, CMA chief executive, said: “We’re concerned that Google may have teamed up with Meta to put obstacles in the way of competitors who provide important online display advertising services to publishers.”

The CMA first uncovered problems with Google and Meta’s dominant role in the online advertising market in a report published in July 2020. Google has more than a 90 per cent share of the £7.3 billion search advertising market in the UK, and Meta controls more than half of the £5.5 billion display advertising market.

The UK watchdog said Google and Facebook were protected by “such strong incumbency advantages… that potential rivals can no longer compete on equal terms.” It said the market power of both companies had a “significant impact on prices and revenues.”

The CMA is aiming to tackle potential harms stemming from the platforms’ power on the web through its new digital markets unit, a technology regulator that sits within the watchdog. The unit is expected to be formally launched through new legislation in the coming months.

© 2022 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

https://arstechnica.com/?p=1840350

Growing tensions between Microsoft, Amazon, Alphabet, Meta, and Apple lie behind the death of the Internet Association (IA), the nine-year-old lobby group that was Big Tech’s voice in Washington, according to insiders and industry observers.

The Washington-based group, which dubbed itself the “unified” voice of the internet industry, will shut at the end of the year after both Microsoft and Uber, among others, pulled their financial support, leaving an insurmountable funding gap.

“Our industry has undergone tremendous growth and change,” it said in a statement, adding that its closure was “in line with this evolution.”

The closure is a sign of the increasingly different policy objectives of its Big Tech members, said observers, with Microsoft in particular looking to distance itself from its Silicon Valley peers.

“Microsoft has realized that it doesn’t want to be associated with Google, Facebook and Amazon,” said Barry Lynn, executive director of the Open Markets Institute, an anti-monopoly campaign group. “It’s really, really simple.”

A number of smaller tech companies had also become frustrated that their priorities were at odds with Big Tech’s agenda.

“This org could’ve saved itself years ago by kicking out everyone with a market cap greater than $500 billion,” tweeted Luther Lowe, Yelp’s head of public policy. Yelp left the association in 2019. “I made this suggestion to the leadership a few years ago, but it was shot down, so we quit.”

A person familiar with Microsoft’s decision-making said the company no longer saw value for money in its involvement with the IA. Membership dues are calculated according to companies’ size, based on revenue.

An earlier report from Politico suggested the biggest contributors, Microsoft among them, were paying up to $800,000 to $1 million per year. Microsoft declined to comment.

Despite being the second most valuable US technology group, Microsoft has been able to dodge the latest focus on antitrust in Congress. Unlike the CEOs of Facebook, Google, Apple and Amazon, Microsoft’s Satya Nadella was left out of the blockbuster congressional hearing in July 2020 that saw the others summoned for a lengthy grilling.

Microsoft has also not yet been the focus of any action announced by President Joe Biden’s reinvigorated Federal Trade Commission.

The company, which went through lengthy antitrust scrutiny in the early 2000s that led it to the brink of being broken up, now boasts about a more collaborative approach with regulators. An internal memo written by Microsoft president Brad Smith and sent to staff in June outlined the company’s strategy.

“There will be many days when some in the tech sector will complain loudly about the risks of regulation,” read the memo, which the company shared with the FT. “There are real risks, and they need a fair hearing. But as a company, we will continue to be more focused on adapting to regulation than fighting against it.”

https://arstechnica.com/?p=1822325

A trio of major tech CEOs—Alphabet’s Sundar Pichai, Facebook’s Mark Zuckerberg, and Twitter’s Jack Dorsey—once again went before Congress this week to explain their roles in the social media ecosystem. The hearing nominally focused on disinformation and extremism, particularly in the wake of the January 6 events at the US Capitol. But as always, the members asking the questions frequently ventured far afield.

The hearing focused less on specific posts than previous Congressional grillings, but it was mainly an exercise in people talking to plant their stakes. Considered in totality, fairly little of substance was accomplished during the hearing’s lengthy six-hour runtime.

Nonetheless, a few important policy nuggets did manage to come up.

On Section 230

Section 230 is an enormously misunderstood snippet of law that has become a rallying cry for reformers in both parties. At a high level, Section 230 basically means that Internet companies have legal immunity for the content their users generate or for the moderation choices they do or don’t make around that content.

On the left, proposed Section 230 reforms are largely targeted at limiting abuse and disinformation. From the right, proposed Section 230 reforms, including repeal proposals, tend to focus more on claims of alleged “bias” among social media firms. All manner of bills to amend or repeal the law have been introduced in both the previous and current Congress, by both Republican and Democratic sponsors.

Zuckerberg set the stage ahead of time by including a plea to reform Section 230 in his written testimony (PDF).

“I believe that Section 230 would benefit from thoughtful changes to make it work better for people,” he wrote, adding:

We believe Congress should consider making platforms’ intermediary liability protection for certain types of unlawful content conditional on companies’ ability to meet best practices to combat the spread of this content. Instead of being granted immunity, platforms should be required to demonstrate that they have systems in place for identifying unlawful content and removing it. Platforms should not be held liable if a particular piece of content evades its detection—that would be impractical for platforms with billions of posts per day—but they should be required to have adequate systems in place to address unlawful content.

Pichai’s prepared testimony (PDF), on the other hand, basically asked Congress to leave well enough alone. “Regulation has an important role to play in ensuring that we protect what is great about the open web, while addressing harm and improving accountability,” he wrote, adding:

We are concerned that many recent proposals to change Section 230—including calls to repeal it altogether—would not serve that objective well. In fact, they would have unintended consequences—harming both free expression and the ability of platforms to take responsible action to protect users in the face of constantly evolving challenges.

During the hearing, neither Pichai nor Dorsey seemed particularly inclined to back Zuckerberg’s take on what’s best for the future of the Internet. Pichai said he thought the accountability and transparency the Facebook CEO mentioned were “important principles” and that there were some legislative proposals floating around in Congress that Google would “welcome.”

Dorsey, however, pointed out that most platforms are not anything like the size of Facebook, which reaches about 2.8 billion monthly users. “I think it’s going to be very hard to determine what’s a large platform and a small platform, and it may incentivize the wrong things,” he cautioned.

On violence, Trump, and deplatforming

All three CEOs also were asked to say, yes or no, if they felt their platforms had a role in the violence of the Capitol riot.

“I think the responsibility lies with the people who took action to break the law and do the insurrection,” Zuckerberg replied. “And secondarily with the people who spread that content, including the former president.

It’s something of a tightrope, Zuckerberg seemed to say, indicating that Facebook tried to act proactively in the fall “to secure the integrity of the election” against a likely tide of misinformation. “And then on January 6, President Trump gave a speech… calling on people to fight.”

Dorsey was the only witness to agree outright that his company played a role. “Yes,” he confirmed. “But you have to take into consideration the broader ecosystem [of misinformation]. It’s not just about the technological systems that we use.”

Republican members of the committee remained frustrated with the bans and suspensions former President Donald Trump earned from Facebook, Twitter, and YouTube in the wake of the January 6 insurrection at the Capitol.

Facebook has called in its Oversight Board to make the final ruling on Trump’s suspension, and Zuckerberg confirmed in the hearing that if the board says Trump’s account should be reinstated, “then we will honor that.”

https://arstechnica.com/?p=1752214