What Happened Today: October 3, 2023
Amazon and Google under fire for monopolization; Suge Knight still isn't talking; Crocodile romance down under
The Big Story
Ongoing legal proceedings against Amazon and Google have confirmed long-standing suspicion that both tech giants have leveraged monopoly-like positions to undermine competitors while reaping in billions of dollars in revenue. Referencing redacted portions of the Federal Trade Commission’s monopoly lawsuit against Amazon, The Wall Street Journal reported on Wednesday how the online retail giant’s secret algorithm tool known as Project Nessie allowed Amazon to raise or lower prices in such a way that forced competitors to follow suit, creating arbitrage opportunities that boosted Amazon’s margins. Citing sources familiar with the case, the WSJ reports that according to the FTC, Amazon earned at least $1 billion in surplus profit by using the algorithm.
Prosecutors also argue that Amazon’s policies punishing third-party sellers for offering lower prices on other platforms amount to an abuse of the company’s domain position—Amazon controls 40% of all U.S. e-commerce. The company denies those allegations.
In the ongoing antitrust case against Google, evidence presented in the courtroom has revealed that the search giant might have implemented an algorithm that degraded billions of search queries a day to drive up results for advertisers. Wired reported on Tuesday that during a Google employee’s testimony, a briefly displayed exhibit (during the closed trial, spectators can only take notes on the proceedings) showed internal Google documents that appeared to describe a policy of swapping out organic search results for links to product pages that generate revenue for Google. As Wired noted, “[The] behind-the-scenes substitution of your actual query with a different query that just happens to generate more money for the company … [will ultimately] generate results you weren’t searching for at all.”
In The Back Pages: Facebook, Google, and Amazon Aren’t Consumer Choices. They are Monopolies That Endanger American Democracy.
The Rest
→ Credit card companies are racking up losses at the highest rate in almost 30 years, though this current uptick is unusual in that it’s occurring outside an economic decline, Goldman Sachs analysts said in a new report. The bank says the losses could continue to rise through the end of 2024 into 2025 if the trend adheres to similar credit card cycles seen during the Great Recession of 2008. According to the Federal Reserve Bank of New York, Americans now owe more than $1 trillion on their credit cards.
→ Graph of the Day:
On the occasion of Sam-Bankman Fried’s fraud trial kicking off this week, the X account Unusual_Whales has rounded up a list of the generous donations that SBF made to various political groups and campaigns, the vast majority of which were in support of Democratic candidates and policy issues. While rejecting SBF’s motion for a temporary release from jail during a preliminary hearing last week, U.S. District Judge Lewis Kaplan told his attorneys, “Your client in the event of conviction could be looking at a very long sentence.” He added, “If things begin to look bleak ... maybe the time would come when he would seek to flee.”
→ The police chief in Marion, Kansas, who raided a small weekly newspaper in central Kansas in August, has resigned his post. Gideon Cody was suspended from the force following the release of body camera footage of a police officer under his charge digging through the desk of a reporter who’d been investigating the chief. In the video obtained by the Associated Press in a public records request, the officer calls Cody over to the desk to look through the reporter’s documents. “It kind of leads you to believe that there’s some smoking gun somewhere that everybody knows about and we’re going to try to get ahead of it,” said Eric Meyer, the editor and publisher of the Marion County Record.
→ Approaching the finish line, South Korean roller skater Jung Cheol-won celebrated his approaching victory just a little too soon when he raised his arms in triumph and slowed down just in time to allow Taiwan’s Huang Yu-Lin to claim the gold medal of the 3,000-meter relay race at the Asian Games on Monday. “I made a rather big mistake,” Jung said of losing by .01 seconds. “I didn’t come at full speed to the finish line. I let my guard down too early. I am very sorry.” The loss was particularly poignant for Jung and one of his relay teammates, as the gold would have come with an exemption from South Korea’s mandatory 18- to 24-month military service in the country’s defense against North Korea.
→ Following the arrest last week of a suspect in the 1996 murder of Tupac Shakur, Marion “Suge” Knight, the Death Row Records co-founder who was in the car with Tupac the night he was murdered, says authorities have arrested the wrong man. “I’m not going to get on the stand and testify … 1,000% I wouldn’t go,” Suge told TMZ from jail, where he’s been serving a 28-year sentence for a 2015 manslaughter conviction. The suspect, Duane Davis, was arrested in Las Vegas after years of talking about his knowledge of what happened to Tupac in books and various interviews. Prosecutors told reporters that Davis was the “on-ground, on-site commander” for the hit on Tupac, perhaps providing the last chapter on what’s been decades of speculation about Tupac’s demise. “There was only two people in the car, and ‘Pac’s not gonna be able to tell the story, I ain’t gonna tell the story,” Suge told TMZ.
→ Video of the Day:
A scene from the joyous Sukkot all-night celebrations on Kingston Avenue, in the heart of Hasidic Brooklyn. The video was provided to The Scroll by Chabad of Central Brooklyn Rabbi Yehuda Levin, who described the celebration as “literally all night dancing. Every single night of Sukkot.”
→ Public schools in England will ban students from using cell phones while school is in session, the Education Secretary Gillian Keegan announced on Monday. While a growing number of public schools already have similar restrictions in place, the new policy forbids students from using phones even during breaks in the day in an attempt to reduce distractions and temper cyberbullying exacerbated by students posting on social media platforms. Some detractors of the rule say it could prevent students who care for younger siblings after school from staying in touch with family members. Others noted that the policy will not be a legal requirement but rather non-statutory guidance that schools will be able to implement as they see fit. However, several legislators noted they could adopt the policy and enshrine it into law.
→ Something in the air is adding a romantic charge to Queensland’s Koorana Crocodile Farm, where local researchers say army helicopters flying at a low altitude, along with intense electrical storms, could be driving a rather robust mating season. Since the reptiles possess rather rudimentary voice boxes, they rely on their windpipes to send simple vibrations through the water, messages that include prompts to initiate breeding. The reverberations from military helicopters flying training missions at a nearby army base, along with sudden drops in barometric pressure from storms, could be omitting low-frequency signals that male crocs mistake for mating calls.
TODAY IN TABLET:
The Chained Reader by David Samuels
How the logic of machines makes us less human
The Girl With the Afro by Marra B. Gad
Why there was no dancing at my bat mitzvah
This piece was originally published in Tablet, October 2017
Facebook, Google, and Amazon Aren’t Consumer Choices. They are Monopolies That Endanger American Democracy.
Can users of what is essentially privatized social infrastructure really log off?
By Matt Stoller
When it comes to platform monopolies, there’s a weird libertarian myth about our ability as consumers to choose our fate. If you don’t like Facebook, goes this argument, just turn it off. For Facebook, Google, or Amazon, this myth goes, it is your individual choice whether to use them. And if you choose to use these services, you are complicit in giving them your data. As the Onion put it in a recent headline, “Nothing Stopping You From Deleting Your Facebook Account Right Now.” The article concluded, “at press time, sources told reporters they were unsurprised you were too fucking weak to pull the trigger.”
This is not uncommon, as our brains are wired to respond to this kind of stimulus, which is similar to slot machines in casinos. Google has thousands of engineers, and like other Silicon Valley technology companies in the “attention economy,” the company uses psychological techniques to addict us to its services so it can sell our attention to advertisers. This works on all of our brains and is especially dangerous to children.
Michael Turk’s story is instructive on how little power we as consumers really have to quit these services. Turk is a tech-savvy parent and a libertarian Republican. One of his teenage sons is addicted to his computer, and in particular, to online hangouts, video games, and YouTube. Turk went into his son’s machine and blocked access to his various online hangouts. But he couldn’t filter out YouTube because his son used Google’s Chrome browser, and Chrome makes that quite difficult. Turk is quite skilled with IT; by way of background, he worked in telecom, and he ran the Bush/Cheney reelection e-campaign in 2004. But even this expert couldn’t figure out how to block his child from accessing YouTube.
Eventually, Turk resorted to installing a different browser and restricting all Google products. But then he realized that his son’s school district has a deal with Google. His son cannot access his homework unless he goes through Google.com. Upon realizing this, Turk decided to file a complaint with the Federal Trade Commission. This libertarian argued that the government must bust up Google because there’s too much power in Google’s hands.
Turk is right. Google has seven different products with more than a billion users. The company’s reach is so powerful that it can not only work to addict us and move our attention where it wants, but it can integrate its search into our browser, the maps of our physical world, and our news. Because of deals with school districts, it can, and does, interpose itself between parents and children. And these are just its consumer-facing aspects; in the core infrastructure of the internet, in the online advertising market that structures how citizens engage in commercial communications with one another and how and whether we pay for news, art, and culture, Google and Facebook have become the ultimate regulators.
Facebook, Google, and Amazon all have this level of reach, in ways you see and in ways you don’t. Facebook, for instance, has tracking software on 35 percent of the top 1 million visited websites. For Google, that number is 85 percent. They collect data on you through any legal means, not just your voluntary submissions—which are required to use the omnipresent services these companies provide—but from invisible tracking technologies like embedded pixels, dropped cookies, GPS technology, device fingerprinting, or even from tracking your friends.
Even if you don’t have a Facebook account, Facebook still has pictures of your face. They get information on you from retailers, credit bureaus, and anyone who is selling. Amazon may or may not be your shopping destination of choice, but it does fulfillment, runs websites, and engages in logistics for a host of third parties at which you probably do shop. Regardless of whether you think you use their services, these companies have you as their user.
Even if you or I could log off, their power extends far beyond each of us individually. They shape our culture, as we are finding with Google and Facebook immediately being used to spread conspiracy theories in the wake of the Las Vegas shooting, or Amazon suggesting combinations of bomb-making material to customers through its recommendation engine. Their business model pulls revenue from authors and journalists—and determines whose work will be promoted and read. Newspapers change their layouts and journalistic priorities to suit Facebook’s algorithm, changing the very character of the information that our society and decision-makers depend on.
Politically, the power of Silicon Valley’s tech monopolists is overwhelming. Mark Zuckerberg is musing on what kinds of information about an American election he will deign to give U.S. government officials and deciding which kind of transparency policy he will design for American politics. Mayors are throwing themselves at Jeff Bezos’ feet to get Amazon’s second headquarters, even as Amazon wipes out their local retail tax base; one place in Georgia is offering to change its name to the “City of Amazon.” These companies lobby D.C. heavily and spread plenty of money around think tanks and academia to ensure that their interests are served and that opposing voices are filtered out.
Ultimately these institutions are not just businesses; they are social infrastructure, like the electric grid, the water supply, the cable company, or airlines. Even people who don’t fly benefit from, say, a convention business in their city or other commercial activity that comes with being connected to air travel and air-freight networks.
Yet people treat big tech as if you, as a consumer, have a choice. No one ever said that if you dislike American Airlines, you should just choose not to use air travel. Or that if you bristle at being overcharged by a cable company, you should forgo access to the internet. People can distinguish between the power of a monopoly and the product that someone has monopolized. Yet when it comes to platform monopolies, there’s a stubborn libertarian myth—that has found substantial support among liberals and conservatives alike—that the consumer is king and we are, therefore, complicit in the choices that tech titans are making for us.
Mark Zuckerberg used to call Facebook a “social utility,” and he was right about that. It is a caretaker of the social grid, the database of your relationships that it structures for its benefits. Google is a caretaker of your search data, which again, it structures for its benefits. Even the premise that we should have to choose, as consumers, to not get access to our social relationships or our search data, is outrageous. There are many people who need Facebook to communicate with family or friends. That doesn’t make the relationships those people have with each other Mark Zuckerberg’s property. Yet we act as if we as individual consumers have a real choice when the options are to operate according to Mark Zuckerberg’s rules or to forgo contact with our friends and family. That’s not consumer choice; that’s blackmail.
The reason this consumer myth is being peddled is to protect lucrative monopolies that are worth hundreds of billions of dollars to their stockholders and officers, who would rather preserve their wealth and power at whatever social cost. What the consumer myth suggests is that politics, or collective action to impose public rules, is just an excuse for personal weakness, and therefore illegitimate. This psychological posture is very similar to the one that foreclosure defense attorneys told me about during the financial crisis, when the feeling of shame so overtook people who were being abused by their bank that they didn’t feel like they deserved their due-process rights: Shame on you for losing your house, went the myth. Today, the myth is shame on you for needing a search engine or social network or a place to buy a book.
Facebook, Google, and Amazon are among the most valuable companies in the world. If consumers could just walk away on a whim, they wouldn’t be very valuable, would they? In Europe, the myth of consumer choice on the internet isn’t as strong, and so the European Union is choosing a different path from our model of allowing this social infrastructure to operate at the whim of tech oligarchs. The EU is imposing a privacy regime that says that if a company wants to use your data to target you with ads, it has to ask you permission first. And it can’t deny you access to its “free” service if you don’t give consent. This is a way of saying that your relationship with your friends, family, or a publisher of a newspaper isn’t Mark Zuckerberg’s property to do with as he pleases.
Neither Google nor Facebook has shown the willingness to oversee what is on its network for purposes beyond their own profit, which has allowed for a lot of bad actors—from political propagandists to financial scam artists to terrorists—to cause harm. Congress, the Federal Trade Commission, and the Department of Justice need to start holding these companies accountable both for the immediate harm that they cause and for their larger and more damaging effect on American civil society.
The effort to control tech monopolies needs to begin with a map of how they operate so that we can figure out what pieces to spin off. For instance, Google’s ability to vertically integrate search, YouTube, and Chrome makes its deals with schools far more pernicious than they would otherwise be. The dominant platforms should be regulated so they are neutral in how they operate, rather than favoring content or services from their own portfolio.
We need investigations by government regulators, legislators, and antitrust enforcers to bring much-needed information about their operations to light. Regardless, this myth that we as individual consumers can escape from these all-encompassing commercial and surveillance titans must end. It is time, in other words, to stop thinking like consumers, and start thinking like engaged citizens.
oh goody! Unelected regulators and big government as our saviors. They've done so much to earn our trust that we can relax if they embed themselves further than they already have with big tech.
The actual power of these tech giants lies in the exclusivity of their trade. In other words, unless you are someone who possesses a thorough knowledge and understanding of the inner-workings of the technology sector, all its lingo, ins and outs, they’ve pretty much got you over a barrel and can merely fast talk you into looking like an idiot, not to mention tell you one thing while doing quite another. They live and operate in a rarefied atmosphere and only someone with the same ability to move and breathe in that same atmosphere is going to be able to catch them at their game.
There is no one currently like that - or anywhere near it - in any government.