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Mar 12, 2019

Analysis | The Technology 202 | EU's top competition cop says Amazon probe in 'quite advanced' stage

By Cat Zakrzewski Cat Zakrzewski Technology



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European Union Commissioner Margrethe Vestager speaks at South by Southwest. (Erik Carlson/ATX Video Marketing)
AUSTIN — The European Union’s top competition cop says her preliminary investigation into Amazon’s data practices is in “quite advanced” stages.
Margrethe Vestager — who has emerged as the world’s toughest Big Tech regulator — is racing against the clock to determine whether to bring a formal antitrust case against the e-commerce giant before her term as commissioner ends in October. Her team is probing whether Amazon uses the data it collects from businesses that sell products on its platform to inform its own product sales and undercut its competitors.  (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)
“Since it’s not given that I can continue for the commissioner for competition, I would like to take more decisive steps before I have to go,” Vestager told a small group of reporters at South by Southwest. “We’re pushing it for obvious reasons.” 
As Europe seeks to crack down on Big Tech, Vestager is especially focused on the competition issues that arise when companies are both marketplaces that host other sellers -- and retailers competing to peddle their own products. Vestager wants to make sure the biggest players that drive the digital economy -- a la Amazon -- are not abusing their market dominance and hurting consumers as they use data from competitors to inform their own business decisions. 
A formal case against Amazon could set the tone for how policymakers across the world -- even in the U.S. -- might treat the issue. 
It extends far beyond one e-commerce giant, Vestager told me. “Amazon is not the only one,” Vestager said. “Google also has this nature because they also are being the navigation tool to find a lot of businesses, businesses that they themselves compete with.” 
Vestager said Google Shopping is another example of her worries. In 2017, she fined Google for steering customers to its own service that lets people compare products from around the Web over competing online shopping services.
That $2.7 billion fine and others have built Vestager's reputation as Silicon Valley's top nemesis across the pond. And at a time when many American politicians are just talking about antitrust and reining in Big Tech, Vestager has built a record on taking action. She also fined the search engine a record-setting $5 billion for forcing Android phone manufacturers to pre-install the Google search app and Chrome Web app on the phones. She's also fined Amazon and Apple for failing to pay taxes.
As 2020 Democratic presidential candidates steered the conversation at South by Southwest toward how they would regulate the technology industry, there was perhaps no more approporiate year for Vestager to attend the festival.  
But her approach differs from that of presidential hopeful Sen. Elizabeth Warren, who gave an impassioned pitch at the festival for her plan to break up Big Tech. 
When I asked her about Warren's plan, Vestager said Europe could also try to break up the companies through legislation. “It would for us be an issue of the very, very, very last resort,” she said. 
Warren (D-Mass.) and Vestager are concerned about the same competition issue, though. In our interview, Warren said she wanted to break up Amazon so it could not unfairly use the data it collects from sellers to compete with them. 
“It’s like in baseball. You can be the umpire; that’s like the platform,” Warren said. “Or you can own the team; that’s one of the businesses. But you don’t get to be the umpire and own the team in the league.”
As Vestager looks long-term at the work she wants to do to ensure European authorities are prepared to address competition issues involving technology, she tells me she's closely watching the hearings the U.S. Federal Trade Commission is holding on how the agency should address digital challenges. 
"I really like this approach, that they get a stock taking," she said. "We're interested as colleagues and colleagues from my services will come over and have a listening ear."
BITS, NIBBLES AND BYTES

Presidential candidate Sen. Elizabeth Warren (D-Mass.) (AP Photo/Frank Franklin II)
BITS: Warren says Facebook's decision to remove (and later restore) her ads calling for the breakup of tech giants underscores her point: that the social network has too much power. 
Curious why I think FB has too much power? Let's start with their ability to shut down a debate over whether FB has too much power. Thanks for restoring my posts. But I want a social media marketplace that isn't dominated by a single censor. #BreakUpBigTech https://t.co/UPS6dozOxn
— Elizabeth Warren (@ewarren) March 11, 2019
Facebook removed several of Warren's posts yesterday that called for the unwinding of several large technology mergers, including Facebook's acquisitions of WhatsApp and Instagram. After Politico spotted the ads' removal, the company later restored them. 
“We removed the ads because they violated our policies against use of our corporate logo,” the company said in a statement. “In the interest of allowing robust debate, we are restoring the ads.”
NIBBLES: The Department of Homeland Security is rushing to deploy facial recognition systems across the country to comply with an executive order, but it's doing so without proper vetting and using methods some privacy advocates say are against the law, according to BuzzFeed News's Davey Alba. 
“U.S. Customs and Border Protection is scrambling to implement this “biometric entry-exit system,” with the goal of using facial recognition technology on travelers aboard 16,300 flights per week — or more than 100 million passengers traveling on international flights out of the United States — in as little as two years, to meet Trump's accelerated timeline for a biometric system that had initially been signed into law by the Obama administration,” according to 346 pages of documents shared with BuzzFeed.
Officials are rushing to implement the system with few legal guardrails, at a time when there are serious questions about the accuracy of facial recognition technology — especially among certain racial minorities.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) responded on Twitter:
I’m a believer in privacy - which means I reject unlimited, unchecked, warrantless surveillance.
Tracking consent should be given freely (aka not holding a service hostage for it) - whether it’s a gov or a corp.
Warrants, & their requirements, are supposed to mean something. https://t.co/RY2jtLYLCp
— Alexandria Ocasio-Cortez (@AOC) March 11, 2019

Elon Musk, CEO and CTO of SpaceX, CEO and product architect of Tesla Motors, and chairman of SolarCity. (Photo by Scott Olson/Getty Images)
BYTES: Elon Musk is pushing back against the Securities and Exchange Commission's motion to hold him in contempt of court, calling it an "unconstitutional power grab" in a response filing, according to CNET's Daniel Van Boom.
The Tesla chief executive said he did not violate a previous settlement that put restrictions on his use of social media and that the government is trying to silence him. Under this settlement, Musk was supposed to have lawyers preapprove any tweets that could impact the company's stock. But the SEC says Musk's tweet from Feb. 19 about production levels hadn't been reviewed by the company's lawyers, in violation of the court's order.
“The tweet was simply Musk’s shorthand gloss on and entirely consistent with prior public disclosures detailing Tesla’s anticipated production volume,” Musk’s lawyers wrote. “Moreover, it is clear from the context of the tweet that it was celebratory and forward-looking—a type of statement that courts have concluded is immaterial as a matter of law.”
PRIVATE CLOUD

Facebook CEO Mark Zuckerberg (AP Photo/Andrew Harnik)
— As Facebook chief executive Mark Zuckerberg reorients the company toward privacy and encrypted messaging, little-seen data suggests that many users were already moving away from Facebook's core social network, my colleague Elizabeth Dwoskin reports.
According to the analysis of data Facebook shared with TV ratings company Nielsen, “people in the United States have been spending a lot less time on Facebook and on Messenger since 2016 — about 10 percent less time per person in any given month than they had in the same month the previous year,” Dwoskin wrote. “And that is true for all age brackets.”
— More technology news from the private sector:

The payment to Amit Singhal, who ran Google’s search division and was accused of groping an employee, was revealed on Monday in a shareholder lawsuit.
New York Times

"We live in a time where the anger against big tech has increased tenfold," said Kevin Systrom. "That doesn’t mean that the answer is to break all of the companies up."
Recode

"It’s show time."
The Verge
PUBLIC CLOUD
— Technology news from the public sector:

The National Association of Secretaries of State is asking the social media companies to direct prospective voters to government sites after claims TurboVote occasionally failed to properly process registrations, among other missteps.
ProPublica

‘Congress needs to get serious about keeping our children’s information safe,’ Sen. Hawley said.
The Verge

The lawmaker on Monday issued a rare rebuke of the agency, charging that regulators had "failed" to protect consumers and their personal data from abuse.
Tony Romm

A bipartisan group of lawmakers on Monday unveiled legislation that would create cybersecurity standards for internet-connected devices, often known as the “internet of things.”
The Hill
RANT AND RAVE
Presidet Trump is on the defensive after a video of him calling the chief executive of Apple "Tim Apple" at a White House event last week went viral. In a tweet yesterday, he said it was a "easy way to save time & words."
At a recent round table meeting of business executives, & long after formally introducing Tim Cook of Apple, I quickly referred to Tim Apple as Tim/Apple as an easy way to save time & words. The Fake News was disparagingly all over this, & it became yet another bad Trump story!
— Donald J. Trump (@realDonaldTrump) March 11, 2019
The tweet only gave the viral story -- and jokes about it-- a second wind.
From my colleague Philp Bump:
People are criticizing Trump for saying he said "Tim Apple" to save time. But who among us couldn't use an extra nearly half-second to use as we wish? https://t.co/EVBbTsvYYt
— Philip Bump (@pbump) March 12, 2019
From the BBC's Dave Lee:
Odds on a heckler shouting "Tim Apple!" at the Apple event later this month?
— Dave Lee (@DaveLeeBBC) March 11, 2019
From Lincoln Michel:
To save even more time, I propose we refer to Tim Cook of Apple simply as "Tapple."
— Lincoln Michel (@TheLincoln) March 11, 2019
404 ERROR
— News about tech incidents and blunders:

Hackers accessed the names, addresses, social security numbers and medical information of customers of several Michigan healthcare companies in a ransomware attack.
Hamza Shaban
CHECK-INS
Today
  • South by Southwest continues in Austin through Sunday, March 17. 
  • The House Committee on Energy and Commerce hosts a legislative hearing on restoring net neutrality protections at 11 a.m. 
  • The Senate Judiciary Committee will hold a privacy hearing, focused on Europe's General Data Protection Regulation and California's privacy law. 
  • The House Judiciary Committee holds a hearing on the proposed merger of T-Mobile and Sprint at 2 p.m. 
  • The Senate Committee on Commerce, Science and Transportation hosts a hearing on broadband investments in rural America at 2:30 p.m. 

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