Category Archives: Big Tech

The forthcoming antitrust proposal by the US House of Representatives is being called a "thinly veiled call to break up" large technology firms including Apple, Google, and Facebook.

Following the US House of Representative's final hearing on the topic of big tech antitrust, a draft response claims that the as-yet unreleased proposals call for the breakup of Apple, Amazon, Facebook, and Google.

According to Reuters, Republican Congressman Ken Buck has responded to the forthcoming report, criticizing its main conclusions. "This proposal is a thinly veiled call to break up Big Tech firms," he wrote. "We do not agree with the majority's approach."

While Buck writes that he agrees with concerns about Big Tech, he objects to the report's plan to require companies to delineate a clear "single line of business." He reportedly points out that Amazon, for example, runs both its ecommerce store and the separate but hugely successful Amazon Cloud Services.

"The report offers a chilling look into how Apple, Amazon, Google, and Facebook have used their power to control how we see and understand the world," continued Buck. "[However] these potential changes need not be dramatic to be effective."

The House antitrust subcommittee is expected to publish its report before October 9. Any road to break-up will take years, and may not happen, depending on political will going forward.

See the rest here:

US House of Representatives to recommend break up of Big ...

My girlfriend, Emily, is always telling me I have to read this or watch that. I usually resist. I have my own obsessions to indulge, like quantum mechanics. Whats annoying is that her recommendations, when I grudgingly comply with them, often turn out to be sound.

This happened with two of Emilys recent picks. One is The Social Dilemma, a documentary on Netflix. It sounded boringanother expose of the perils of social media. Ho hum, old news. But the film gripped me. Its an in-depth look at how big tech companies, by amassing more and more data on us, are getting better and better at manipulating us, with devastating results.

The film has several strands. One envisions, with actors, how social media hurt an American family. A teenage girl, stung by a casual online remark about her ears, sinks into depression, while her older brother tumbles into the rabbit hole of conspiracy theories. The film also depicts evil AI algorithms, played by three versions of a single creepy actor, ensuring that the teenage boy remains addicted to his smartphone.

These dramatizations were a little hokey. The most compelling, and disturbing, component of the documentary consists of interviews with tech insiders worried about what they have wrought. Actually, worried is too bland a word. These veterans of Google, Facebook, Twitter and other companies are freaking out. Some think digital technologies, unregulated, might destroy civilization.

Google, et. al. equip legions of brilliant engineers with vast databases and powerful AI programs to make their products as addictive as possiblethat is, to maximize the time we spend staring at a screen. The designers of these devices find them irresistible, too. Tim Kendall, former head of monetization for Facebook, recalls that after spending all day trying to boost his firms profits, he went home to his wife and kids and could not stay off his phone. Knowing what was going on behind the curtain, I still wasnt able to control my usage.

The more time we spend on our screens, the more the companies learn about us, the more money they make from advertisingcommercial and politicaltailored to our fears and desires. And once they deduce what news and (mis)information we like, or might like, online sites feed us more of it, confirming our biases. If you begin a search on, say, climate change, Google may suggest different results depending on what it knows about you and others where you live, according to a former Google designer.

This data-driven pandering not only keeps us glued to our devices. It has also contributed to the proliferation of fake news and conspiracy theories and to social schisms in the U.S. and elsewhere. We end up living in parallel universes with radically different views of global warming, race, gender, immigration, crime, abortion and COVID-19.

Some techies believed, initially, that they were creating a better world. Our entire motivation was Can we spread positivity and love in the world?, says Justin Rosenstein, who helped design Facebooks like button. The possibility that teens would be getting depressed when they dont have enough likes, or it could be leading to political polarization, was nowhere on our radar.

Yes, digital technologies yield vast benefits. During the pandemic I keep in touch with friends and family via e-mail and Zoom, and I teach my classes online. I can do research for this articlerewatching Social Dilemma and looking up reviews on my laptopright here in my apartment. When I tire of brooding over the downside of tech, I can binge on Community and Arrested Development.

Our digital era is a blend of utopia and dystopia, says Tristan Harris, who left Google to cofound The Center for Humane Technology (a phrase that sounds increasingly oxymoronic). I can hit a button on my phone and a car shows up in 30 seconds and I can go exactly where I need to go. That is magic. But Harris fears techs ill effects are outweighing its benefits. If we dont agree on truth, he says, or even that there is such a thing as truth, were toast.

One pundit insists that newspapers, radio and television didnt destroy civilization, and neither will smart phones. Another retorts that smart phones are far more addictive than previous information technologies. When many of us wake up in the morning, he notes, the only question is whether we check our phones before we pee or while we pee. And modern methods of surveillance and persuasion make those employed in the predigital era look laughably crude.

Toward the end of the film, Social Dilemma identifies capitalism as the ultimate cause of the ills wrought by big tech. Rosenstein, the Facebook designer, notes that capitalism promotes short-term thinking based on this religion of profit at all costs. This approach, which views nature as something to be mined, literally and metaphorically, for monetary gain, has given us climate change and other environmental threats.

The successful big-tech firms have figured out how to mine our attention. Were more profitable to a corporation, Rosenstein says, if were staring at a screen, staring at an ad, then if were spending our time living our life in a rich way. Rosenstein and others say the government must regulate tech firms to limit the harm they do; the companies cannot be trusted to regulate themselves.

Shoshana Zuboff, a psychologist at Harvard Business School, contends that companies should not be free to gather and sell information on customers without their consent. These markets undermine democracy and they undermine freedom, and they should be outlawed, she says. This is not a radical proposal. There are other markets that we outlaw. We outlaw markets in human organs. We outlaw markets in human slaves.

These calls for reform bring me to Emilys other recommendation, an infamous 50-year-old essay, The Social Responsibility of Business Is to Increase Its Profits, by economist Milton Friedman. The New York Times, which printed the essay in 1970, just republished it along with commentary from scholars and businessfolk.

The essay had a huge impact on economics as well as business and politics. As the Times puts it, Friedmans libertarian economics influenced presidents and inspired greed is good. Friedmans manifesto is crediting with catalyzing the swerve of the U.S. and other western democracies toward free-wheeling capitalism, which governments encouraged with lower taxes.

Friedman rebuked calls for corporations to seek social goals, such as eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. Those who express support for these goals, Friedman asserted, are preaching pure and unadulterated socialism and undermining the basis of a free society. Note Friedmans equation of freedom with corporate freedom.

It is governments job, Friedman argued, to impose rules on businesses that promote general welfare, but such restrictions should be minimal. By freely pursuing profits in competition with each other, with minimal government interference, businesses produce goods, services and jobs that benefit all of society. So Friedman and his many free-market acolytes have claimed.

We are now reaping the consequences of Friedmans vision in the form of industries that pursue profits regardless of the social costs. These include big pharma, which foists drugs on us that often make us sicker; big oil, which has thwarted efforts to counteract global warming; and now big tech, which represents the apotheosis of Friedmans ideology.

Economist and Nobel laureate Joseph Stiglitz comments in the Times that the fallacies of Friedmans ideology are more obvious than ever. Stiglitz asks: Should Mark Zuckerberg let Facebook users spread wanton disinformation if it increases his bottom line? Friedman would say yes. Economic theory, common sense and historical experience suggest otherwise.

Friedmans rhetorical style reminds me of Marx. Both men exude supreme confidence in their judgments, the kind of confidence that inspires zealotry in devotees. Marx predicted that capitalism, by elevating profit above all other values, would inevitably bring about its own destruction. Friedman said capitalism would give us unbounded freedom and prosperity. Right now, Marx is looking more prescient.

Near the end of Social Dilemma, an interviewer asks tech-visionary-turned-critic Jaron Lanier to peer into our future. If we go down the current status quo, Lanier replies, for lets say another 20 years, we probably destroy our civilization through willful ignorance. We probably fail to meet the challenge of climate change. We probably degrade the worlds democracies, so they fall into some bizarre autocratic dysfunction. We probably ruin the global economy. We probablyhe shrugsdont survive. Asked what he fears most, Kendall, the former Facebook executive, replies, In the shortest time horizon? Civil war.

Give capitalism its due. As I acknowledge in a recent book, capitalism has boosted longevity and prosperity over the last two centuries. But our fanatical commitment to Friedman-style capitalism has burdened us with acute inequality, dysfunctional health care, surging climate change and vicious political polarization. Meanwhile we keep robotically swiping our smart phones as things fall apart.

I try to resist alarmism, as a general rule, but alarmism feels like realism lately.

Oh, and Emily, thanks a lot for those recommendations.

Further Reading:

Revolt against the Rich

The Coronavirus and Right-Wing Postmodernism

Does Optimism on Climate Change Make You Pro-Trump?

Did Thomas Kuhn Help Elect Donald Trump?

See also A Pretty Good Utopia (profile of economist Deirdre McCloskey in my free online bookMind-Body Problems)

Originally posted here:

Big Tech, Out-of-Control Capitalism and the End of Civilization - Scientific American

Apple, Amazon, Facebook, Google, Twitter, TikTok logos

Yesterday saw two huge clues for what Big Tech can expect in the years to come.

In the US, both the Democrats and the Republicans now have a fixed position on regulating tech.

They are both totally different.

First off Trump.

After the President shared a piece of disinformation on Facebook and Twitter about the relative dangers of Covid, the two companies reacted: Twitter hid his post and Facebook removed it altogether.

Trump responded by tweeting "Repeal Section 230!!!".

This is a key piece of legislation that stops companies like Facebook and Twitter from being liable for the things people post.

It essentially gives them "platform" rather than "publisher" status.

Just imagine for a second if all of the posts on Facebook - all of the accusations, all of the libellous content, all of it - was the responsibility of Mark Zuckerberg.

It doesn't work. Without Section 230 companies like Facebook, Twitter, TikTok etc couldn't function as they do now. They'd potentially have to moderate your content in real time.

Even for the most powerful artificial intelligence systems, that is not possible.

You might think: "Trump says he'll repeal Section 230, but will he actually?"

My response would be: "Look at TikTok."

Trump has well and truly followed up on his actions - without a judge's last minute intervention it would be illegal for Apple and Google's app stores to offer TikTok for download in the US now.

It's perfectly conceivable that a Trump presidency would follow through with his campaign threats.

Plenty of Republicans believe that much of social media has an anti-conservative bias. Trump would certainly find support from his own party to act.

The other big tech news from Tuesday was the release of The House Judiciary Committee's report into "antitrust".

This is the idea that Big Tech has got so big it is now flouts anti-competition rules.

This is a Democrat-led committee - the report was written by Democrats.

Story continues

The report concludes:"To put it simply, companies that once were scrappy, underdog start-ups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons."

The share price of all four company's dived as soon as the report was released.

Literally, the first recommendation is to prohibit "dominant platforms from operating in adjacent lines of business".

That would be massive. It could potentially stop companies like Google owning YouTube. Or Facebook owning Instagram.

The word "monopoly" is used 120 times in the report.

These weren't bi-partisan recommendations though - Republicans didn't support all the findings.

However, there is some common ground between the parties.

For example, Republican Ken Buck has said he agrees with much of the report.

And in terms of Section 230, Biden has also indicated he could support getting rid of it - albeit for different reasons to Trump.

And so we have two Presidential candidates, each with his own stick to bash Big Tech.

The company that perhaps is least hedged against these two approaches is Facebook. It's hard to know which option would be worse for the social network.

For others, well there's now a reasonable argument that can be made that Trump would be better.

Republican focus on social media bias would pretty much leave Apple and perhaps Amazon untouched.

The election issues in this campaign have been centred around Covid, Black Lives Matter, the economy and law enforcement.

But make no mistake, this is a huge election for Big Tech too.

The rest is here:

Big Tech: Between a rock and a hard place - Yahoo News

One of the biggest news publishing companies in the world has slowly backed away from its harsh public criticism of Big Tech platforms, as companies like Google and Facebook have begun to open up their wallets to news companies.

Why it matters: News Corp. has for years been the driving force behind much of the regulatory scrutiny of Big Tech and its impact on the publishing industry. Now it's becoming a beneficiary of the massive pockets of several of the largest tech companies.

Driving the news: News Corp. CEO Robert Thomson put out a statement lauding Google's new efforts to pay publishers around the world more than $1 billion to license and curate their content last week.

Catch up quick: In early 2018, News Corp. Executive Chairman Rupert Murdoch released a newsy statement calling on Google and Facebook to pay trusted publishers a carriage fee for their content similar to the model adopted between cable companies and TV networks.

State of play: News Corp. now has several partnerships with Big Tech firms, including significant paid licensing partnerships with Facebook and Apple News, as well as working partnerships with Amazon, Spotify, Snapchat and Twitter.

Between the lines: In 2019, News Corp. launched its own news aggregation service called Knewz. Sources familiar with the effort say it was never intended to be a market threat to Big Tech platforms, but rather putting into reality something the company wanted to invest in as a matter of principal.

Behind the scenes, the media giant has commented or consulted on numerous investigations into Big Tech's dominance, and is continuing to press for regulatory reform.

The big picture: There was a time several years ago that media companies, with proper investment and scale, could demand big ad dollars via traffic from platforms like Google and Facebook. Today, media companies with value and investment can pull something even more sustainable from those platforms: licensing fees.

Excerpt from:

News Corp. changes its tune on Big Tech - Axios

The New York Senate is currently reviewing a bill that, if enacted, would substantially expand the states ability to pursue antitrust actions against corporations. This summer, state senators Michael Gianaris and Rachel May introduced their co-sponsored Bill S8700A, the Twenty-First Century Antitrust Act, which seeks to amend New Yorks current antitrust laws to expand its scope to include abuse of dominance and unilateral conduct that could create monopolies, as well as to increase penalties for violations, including prison time.

Concerned with the rapid growth and influence of businesses, particularly in the tech sector, the sponsors contend that the current antitrust laws need to be clarified and augmented in order to address the size and power these businesses enjoy as they conduct business in New York. Specifically, the bill states that such corporations have engaged in practices in order to force competitors to sell their businesses to them, and that such unilateral action essentially creates a monopoly. Characterizing these actions as abuse of dominance, the bill seeks to expand the scope of the Donnelly Act, which currently voids any contract or agreement that creates a monopoly or otherwise restricts competition, by addressing such unilateral action. Even unsuccessful attempts to create monopolies would be considered violations of the law, similar to those of criminal schemes.

Furthermore, any person or corporation that violates the law could face a penalty of up to $1 million and/or imprisonment of up to 15 years. The Donnelly Act currently serves penalties of up to $100,000 and/or four years imprisonment. The bill also carves out an authorization for class action lawsuits for private antitrust actions, allowing plaintiffs to seek treble damages.

On September 14, 2020, the Senate Standing Committee on Consumer Protection held a hearing to weigh in on the bill, inviting NY Attorney General Letitia James, members of the tech community, academia, and other stakeholders to share their thoughts on boosting state antitrust regimes. Supporters of the bill recognized that abuse of dominance, a concept more prevalent in European countries than in the U.S., needed to be addressed since federal antitrust laws fall short of reaching businesses that engage in harmful, anticompetitive unilateral action. Such action, arguably, suppresses smaller competitors from entering the market and thus prevents consumers from enjoying the benefits of a free-market system. On the other hand, critics of the bill noted that it could dissuade businesses from engaging in or expanding activities in the state, and that the bill provides no guidance as to what constitutes dominance, let alone abuse of dominant position. Critics also note that the legislation seeks to punish corporations for their size, without any analysis of whether consumers benefit from their activities.

Addition of Abuse of Dominance

Abuse of dominance does not currently exist as a stand-alone violation of U.S. federal law. This bill, however, would permit New York state to punish companies holding a dominant position, even if they do not quite possess a monopoly, which, according to U.S. Department of Justice (DOJ) guidelines, means maintaining at least two-thirds market share. As currently drafted, the legislation does not define what constitutes a dominant position. Looking at the European Unions definition for guidance, abuse of dominance occurs when a company exploits its strong position to eliminate competition by, for example, charging unreasonably high prices or blocking competitors in the market by forcing consumers to buy a product that is related or conditional to the sale of another product.[1]

Absence of Leniency

Notably absent from the proposed bill is the creation of leniency or amnesty procedures. In contrast, the DOJ has its long-established Leniency Program, which allows individuals and corporations alike to come forward to federal authorities if they detect an antitrust offense before anyone else self-reports and cooperates. Under the federal Antitrust Criminal Penalty Enhancement and Reform Act (ACPERA), which provides incentives for corporations to self-report any antitrust violations and cooperation with authorities, damages are limited in civil actions arising from a violation of Section 1 or 3 of the Sherman Act or any similar state law. Departing from the federal provisos, the proposed bill creates a potentially unworkable tension between federal and state regimes where a corporation or individual cooperating with the DOJ for leniency credit may still be subject to liability and face severe penalties in New York. leniency applicants are only subject to single damages, whereas the proposed act could lead to the possibility of facing treble damages brought by the New York State Attorney General.

Enhanced Penalties

As discussed above, the New York legislation seeks to expand the prison sentence for antitrust crimes and increase the maximum available penalty, to 15 years and $1 million, respectively. The proposed penalties differ from those at the federal level, where per se violations under Section 1 of the Sherman Act can lead to fines for corporations up to $100 million, and for individuals up to $1 million plus imprisonment for up to 10 years.[2]

The bill is now under review by the Senates Consumer Protection Committee before submission to the governor. If the bill is enacted, corporations doing business or contemplating doing business in New York will have to take significant caution to avoid liability under the Twenty-First Century Antitrust Act. However, given the undefined terms and inconsistencies with federal law, litigation in connection with interpreting the Twenty-First Century Antitrust Act is foreseeable. Accordingly, the DOJ, the American Bar Association, members of Big Tech and business leaders may also want to provide comments to address their concerns with the proposed law. Once enacted, however, the law will force a business to balance its interests in operating in New York against any potential penalties it may face, and evaluate its dominance in the market as it progresses. That being said, other states may follow suit and pass similar legislation.

[1] Abuse of a dominant position, European Commission, available at https://ec.europa.eu/competition/consumers/abuse_en.html#:~:text=refusing%20to%20deal%20with%20certain,the%20sale%20of%20another%20product.%5B2%5D 15 U.S.C. 1, 2, 3.

Read more:

Big Tech, Beware: New Bill Aims to Expand Antitrust Laws to Large Businesses Doing Business in New York - JD Supra

With a framed Joe Biden poster in the background, Amazon.com Incs Jay Carney made no secret of his long history with the presidential candidate while speaking at a virtual policy roundtable during Augusts Democratic party convention.

Carney, who is Amazons public policy and communications chief, touted the hundreds of thousands of jobs his company has created and joined Microsoft Corps President Brad Smith as one of two senior tech executives to have a public role at the convention - hinting at Amazons potential influence on a Biden administration if the democrat wins the White House.

Amazon appears to have taken an early lead making in-roads with the Biden camp, according to data gathered by Reuters from OpenSecrets and campaign finance records, along with interviews with over a dozen stakeholders including anti-monopoly groups, lobbyists, congressional aides, competitors and lawmakers.

Joining Amazon, Alphabets Google and Microsoft are among the top five contributors to Joe Bidens candidate campaign committee in the 2020 cycle, according to data from OpenSecrets, a website which tracks money in politics and campaign finance records.

The firms are prohibited by law from donating themselves. The contributions were either made by the companys political action committees (PACs) themselves, members of the PAC or their employees.

Tech is strengthening relationships in case of a Biden victory to ensure they have a voice in an onslaught of federal and state investigations into their business practices, according to campaign finance records and interviews.

The industrys coziness with the Democratic Party, which dates back through several elections, has critics of their market dominance worried.

Sally Hubbard, who has worked with Democratic lawmakers in the past and currently focuses on monopoly power of tech companies at Washington-based Open Markets Institute, does not want a Biden victory to translate into a repeat of what was widely viewed as President Barack Obamas hands off approach to tech.

Are we going to see the same thing with a Biden administration? she asked, adding there will be a significant amount of pressure from anti-monopoly groups and the progressive wing of the Democratic party to hold the companies accountable.

Depending on the stance of a potential Biden administration, existing antitrust probes under President Trump and state attorneys general could intensify or be weakened.

Biden, for his part, has criticized large internet companies during interviews and campaign events. He has urged the revocation of a key legal shield protecting internet companies from liability over user-generated content. He has also expressed concern over market concentration and privacy issues in the technology industry; criticized Amazon for not paying taxes; and expressed displeasure with Facebook and its founder Mark Zuckerberg.

His two main advisors on tech policy include Bruce Reed, who served as Bidens chief of staff from 2011-13, and Stef Feldman, the campaigns policy director, according to a source with the Biden campaign. Reed and Feldman did not respond to requests for comment via the campaign.

A spokeswoman for Amazon said the companys PAC did not contribute to the Biden campaign. She said Amazon supported both the Democratic and Republican National Convention with technology and digital services to increase viewership.

We work with each administration in the same way ... our approach will not change regardless of who wins the election, the spokeswoman added.

Biden campaign spokesman Matt Hill said Joe Biden is against the abuse of power. Many technology giants and their executives have not only abused their power, but misled the American people, damaged our democracy, and evaded any form of responsibility. That ends with a President Biden, Hill added.

Google declined comment. Microsoft said the contributions were made by its employees.

Techs ties to Biden run deep. Amazons Carney worked in former President Barack Obamas administration as press secretary for a little over three years. He was Vice President Bidens communications director for the first two years of the Obama administration.

Amazon General Counsel David Zapolsky is a top fundraiser for Biden, also known as a bundler who as individuals have raised more than $25,000. Bundlers are sometimes rewarded with plum positions in their beneficiarys administration, such as key jobs in federal agencies and influential advisory commissions. Zapolsky has also directly contributed a little over $250,000 to different funds supporting Bidens presidency, according to campaign finance records. Zapolsky did not comment.

Meanwhile the Biden campaigns transition team and working groups have added at least eight people who worked for Facebook, Google, Amazon and Apple and others with ties to these companies.

A senior policy counsel for a progressive Senate Democrat, who did not wish to be named, said Big Techs closeness with the Biden campaign is worrying. The battle for the left wing of the Democratic party on this issue will be on whether they can get crucial appointments in the administration and less about moving Biden toward progressive options, the aide added.

Republican Senator Josh Hawley, a close ally of Trump and a vocal critic of large tech companies, said the progressives may get a rhetorical nod in their direction now and then, but the Biden campaigns fundraising shows the progressives will struggle. For Amazon in particular to be featured at a political convention is really, really worrisome, Hawley told Reuters. Its taking their lobbying to a whole new level.

To be sure, many large technology companies - their employees, PACs or PAC members - have been top contributors to Democratic presidential campaigns in the past three election cycles, with one notable exception: Amazon. However, contributions from the Seattle-based retailers employees have now made Amazon the fifth largest contributor to the Democratic nominees candidate campaign committee, according to data from OpenSecrets and campaign finance records. Large technology companies are entirely missing from the Trump campaign committees top 20 contributors list.

Donations from senior Amazon executives to the Biden campaign during the primaries were second only to Microsoft, according to data from the Revolving Door Project, which is part of the Center for Economic and Policy Research.

I think all the fundraising we are seeing is probably going to buy them (Amazon) access, but in terms of policy results, I think its going to buy them very little, said an advisor on tech policy to the Biden campaign, who did not wish to be named. There is a lot of collective outrage against tech in Washington these days, and they simply cannot fly under the radar.

Link:

Amazon and Big Tech cozy up to Biden camp with cash and connections - NBC News

It looks like were in for another big tech CEO hearing.

The Senate Commerce Committee voted Thursday to move forward with subpoenas for Twitters Jack Dorsey, Facebooks Mark Zuckerberg and Sundar Pichai, the CEO of Alphabet. The unusual decision to subpoena the social media chief executives adds yet another politically volatile event to the schedule in the run-up to the most contentious election in modern U.S. history.

The hearing will focus on Section 230 of the Communications Decency Act, the key law that shields online platforms from legal liability for the content their users create.

While the topic might sound dry for the unacquainted, the law is an explosive topic, both politically and in the eyes of the tech industry, which could be left reeling from even what might seem like minor changes to the legal shield.

Committee Chairman Roger Wicker called the decision to hold the hearing imperative in order for Americans to receive a full accounting from the heads of these companies about their content moderation practices.

Remarkably, the decision to subpoena the CEOs was unanimous, with ranking Democrat Maria Cantwell joining the vote to subpoena the companies after initially opposing the decision.

Cantwell previously called the idea of issuing subpoenas an extraordinary step intended to chill the efforts of companies to remove misinformation and harassment from their platforms.

Republican members of the Senate Commerce Committee include Wicker, Ted Cruz, John Thune and Rick Scott. Democrats on the committee include Cantwell, Amy Klobuchar, Brian Schatz and Kyrsten Sinema.

Section 230 is generally regarded as the legal infrastructure that made the social internet possible, from Facebook accounts and comments sections to Yelp and Amazon reviews. Its a short law, but in 2020 an increasingly controversial one, as lawmakers scramble for levers to limit or at least threaten to limit the power of big tech companies.

Republicans see dismantling Section 230s legal protections as a way to punish social media companies for perceived anti-conservative bias a common refrain on the right that is regularly undermined by the ubiquity of right-leaning content on platforms like Facebook.

Importantly, President Trump and Attorney General William Barr have taken particular interest in attacking Section 230. Earlier this year, Trump lashed out at Twitter for moderating his false claims with an executive order threatening the law. While the order was largely toothless, Trumps focus on Section 230 set the agenda for the Barrs Department of Justice and for Republicans in Congress eager to follow his lead. The order also roped the FCC into getting involved.

In June, the Justice Department laid out the groundwork for a set of concrete reform proposals that would undermine the law, couching the proposal as an effort to rid platforms of illicit content like child abuse. Last month, Barr sent draft legislation to Congress incorporating those proposals.

Democrats have more recently warmed up to the idea of going after Section 230, but for different reasons. While the right mostly complains about political censorship, Democratic lawmakers see changing Section 230 as a way to hold platforms accountable for rampant misinformation and other forms of toxic content that continue to thrive on social platforms.

Lindsey Grahams bill, the EARN IT Act, is probably the best known legislation targeting Section 230 so far. A toned-down version of that bill advanced out of its committee but hasnt yet faced the full Senate.

In June, Senators John Thune and Brian Schatz, both members of the committee issuing subpoenas, introduced a bipartisan Section 230 bill known as the PACT Act that focused mostly on moderation transparency.

To make matters even more confusing, another Graham-sponsored bill focused on Section 230 emerged earlier this month hours after Trump called on his party to repeal Section 230 immediately. That proposal did not have bipartisan sponsorship.

Whatever happens with the next big tech hearing and with all of these Section 230 bills, its clear that theres a bipartisan appetite for doing something to change techs critical legal shield, even if the what isnt yet clear.

What is clear: Tinkering with such a foundational law could have a huge cascade of effects for the internet as we know it and isnt something to be undertaken lightly if at all.

Go here to read the rest:

Section 230 will be on the chopping block at the next big tech hearing - TechCrunch

The Media Research Center has launchedCensorTrack,a website dedicated to#FreeSpeechAmerica, a campaign designed tofight online censorship of conservatives.

Our position is that if they can do it to the president of the United States, they can do it to anyone, and in fact that is exactly what is happening... everyplatform in Silicon Valley today is censoring conservatives, MRCfounder and president Brent Bozell told attendees of a virtuallaunch event on Sept. 17.

WHAT IS SECTION 230 OF THE COMMUNICATIONS DECENCY ACT, AND WHY IS IT UNDER FIRE?

The Media Research Center has launched CensorTrack, a website dedicated to #FreeSpeechAmerica, a campaign designed to fight online censorship of conservatives.

Were going to be coordinating our effort with those on Capitol Hill, trying to work in a bipartisan manner to take our concerns,Bozell added.

MRC vice president Dan Gainor saidCensorTrack.org is the first initiative of Free Speech America and will featureanalysis of tech companies,a look at fact-checkers, an examination of specific censorship issues, a breakdown ofpoliticians, pundits and media figures who helpthe tech industry censor conservatives, and potential remedies.

Weve gone back to the basics and are working actively, proving the problem. Weve done that by creating an archive of incidents of bias, as well as a resource for people interested in the issue or writing about it, Gainor said.

What we are seeing in the tech world right now is the greatest danger and encroachment to freedom of expression and thought, I think, in the history of our country,First Liberty Institute CEO Kelly Shackelford said.Tech companies are now an information highway, common couriers. And they control this information, and theyre engaging in extensive censorship.

NBC NEWS UNDER FIRE FOR APPARENTLY PUSHING GOOGLE TO REMOVE CONSERVATIVE SITES FROM AD PLATFORM

Sen.Marsha Blackburn, R-Tenn., attended the virtual launch event, telling listeners thatSection 230 of the Communications Decency Act (CDA) should not be used as an opaque shield by the tech industry.

Section 230 states that "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."

The section has been pivotal in the rise of today's social media giants by allowing not only Internet service providers but also Google, Twitter,Facebook, YouTube and others to be shielded from liability from content posted on their platforms by third parties, in most cases.

Critics says Section 230 gives tech companies too much power over what is and is not allowed on their sites. Supporters including a wide range of Internet companies, free-speech advocates and open-Internet proponents say that without the law, online communication would be stifled and social media as we know it would cease to exist,Washington Post's Rachel Lerman wroteearlier this year.

Blackburn plans totake action, althoughSection 230 has many defenders inits current state, and President Trump's attempts to alter how social media platforms are regulated have been met with resistance.

HAWLEY INTRODUCES BILL TARGETING BIG TECH COMPANIES OVER POLITICAL CENSORSHIP CONCERNS

What we are doing with Section 230 reform is clarifying who can use it, when they use it, how they are going to use it, and what it can apply to. And were changing language, removing that otherwise objectionable language that has caused or allowed big tech to say, 'Well we find this, thator the other objectionable,'Blackburn said.

Bozell agreed, telling attendees that Section 230 needs to be addressed.

We are going to be advancing the ideas of Section 230. We think it's time for this to be addressed. These are not impartialplatforms,these arepublishersand they have to betaken into account, he said.

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Fox Business' Evie Fordham contributed to this report.

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Conservative group launches website to battle big tech companies over online censorship - Fox News

A rally in the wilting Tech sector prevented a complete Monday washout. Still, at the end of the day, the week is off to a rough start as concerns about the virus, politics, and banks ganged up on most of Wall Street.

That turnaround in Tech does raise some hopes going into Tuesday. Consider keeping an eye on futures trading overnight to get a sense of whether any of that strength can flow into tomorrows open.

Having theNasdaq(COMP) go positive at one point in the last few minutes was quite a statement, even if COMP couldnt hold those gains at the close. The area the market depended on so much during the long rally (Tech) came back, with stocks likeApple Inc.(NASDAQ: AAPL),Netflix Inc(NASDAQ: NFLX),QUALCOMM, Inc.(NASDAQ: QCOM), andMicrosoft Corporation(NASDAQ: MSFT) all having nice days.

On the other end, Financials continue to get beat up. Theyre deep in the red, and Industrials got hammered too. Most of the big banks fell 3%, and industrials likeHoneywell International Inc(NYSE: HON),Lockheed Martin Corporation(NYSE: LMT), andCaterpillar Inc.(NYSE: CAT) all finished sharply lower amid fears of the virus spreading in Europe. Leading the indices lower was the small-capRussell 2000(RUT), which finished the day down 3.35%not too far off the lows, relative to the other indices (see chart below).

That said, there are still plenty of positives out there and not necessarily any reason for investors to panic. Consider these positive signs from Mondays session:

Ironically, resurgence of the virus in Europe and parts of the U.S. could be a positive force for stocks if it brings buying interest back into the stay at home stocks in Tech that helped lead momentum in July and August. Some of the quarantine names likePeloton Interactive Inc(NASDAQ: PTON) andZoom Video Communications Inc(NASDAQ: ZM) are up pretty sharply over the last week. Whether the FAANGs and semiconductors can regather their former glory remains a question.

Some analysts, however, dont think thats necessarily bound to happen. They see the current turbulence as a sign of the market trying to find leadership outside the Tech sector. Today was a bad day for that argument because Financials, Materials, and Industrialsall sectors youd expect to be doing better if theres a shift back toward cyclical sectors going ongot crushed. The selling in Financials might have reflected concerns over reports in the media about possible money laundering in parts of the industry, however.

Another industry taking it on the chin was travel, where investors seemed spooked about talk of a new virus-related lockdown in the U.K. after 4,000 new cases were reported Sunday. AirlinesincludingDelta Air Lines, Inc.(NYSE: DAL) andUnited Airlines Holdings Inc(NASDAQ: UAL)were among the hardest hit, but cruise lines and hotels suffered too.

Selling at the height of Mondays weakness was pretty dramatic. At one point, there was more than 91% down-volume on the New York Stock Exchange (NYSE), the strongest selling pressure since June 26 on a volume basis and since June 11 on a breadth basis.

Any time the down volume exceeds 90%, its considered a Major Distribution Day (MDD). Typically, these are considered contrarian events, but context is key for the indicator, according to my fellow TDAmeritrade Network* contributor Michael McKerr,Sr Strategist, Institutional Trading Education.

Typically, he writes, when a MDD occurs near a recent high, they often come in clusters as additional length and momentum need to be worked off, typically with a lower low. But when they occur after a prolonged period of selling, they often can be one and done. How will this time play out?

Though things did bounce back a bit in the late going, most of the session was characterized by risk-off trading. That was evident in the dollar index, which slugged its way to a one-month high above 93.50. This could be a sign of investors flocking to perceived safety, as seen back when the pandemic first slammed markets. Keep an eye on the dollar over the next few days to see if it keeps attracting new interest, as that could be a sign of more risk-off action to come.

Still, bonds didnt do much to write home about Monday, with the 10-year yield falling only a couple basis points to 0.67%. Thats historically low, but yields have generally been holding in there. The yield curve isnt really showing much change over the last few months, though 30-year yield is down slightly from recent highs.

Technically, we talk a lot about moving averages being potential support for the major indices. Admittedly, they didnt do much to help when the market cratered back in March. What happened then was just way too few people interested in buying when stocks fell, meaning they had to fall lower, despite whatever moving average had just been pierced. Ultimately, it took a drop back toward the late-2018 lows before things found a stopping point.

You never can tell, as the old song goes, but its a little harder to see that happening this time. First of all, theres just too much Fed support in place. Second, people remember how fast the market popped back off the floor after the March knock-out punch, and might not want to be sitting on the sidelines if theres a repeat.

If the 200-day moving average of 3,100 for the SPX cant hold, look for potential further support at the psychological level of 3,000. Thats where theres a double-bottom on the charts from back in June. The level held very nicely then, though thats no guarantee it happens again.

Another level to remember is 3226, which would represent a 10% pullback from the all-time highs hit in August. Any 10% drop represents an official correction for the SPX, something the COMP is already in.

Theres nothing particularly rare about a market correction. They typically happen once or twice a year, at least. If this latest move down from the August peak has you worried, remember not to make decisions based on fear. Instead, consider carefully thinking through whether anything really material happened in the last month thats changed how you want to be positioned for the long term. Stocks dont always go up in a straight line.

CHART OF THE DAY:A SMALL CAP CONFLUENCE.The Russell 2000 Index (RUTcandlestick), like the rest of the market, saw a massive selloff as its low got very close to its 100 day simple moving average of 1461 (blue line). Whats interesting here is that the 200-day moving average (purple line) is just a few ticks lower at 1455.Data Source: FTSE Russell Indexes.Chart source: Thethinkorswim platform from TDAmeritrade.For illustrative purposes only. Past performance does not guarantee future results.

TD Ameritrade commentary for educational purposes only. Member SIPC.

Photo by Michail Sapiton on Unsplash

2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Big Comeback For Apple, Netflix, And Other Big Tech Names Softens Some Of The Pain - Benzinga

Collectively, the stocks that make up the S&P 500 are trading at a value not seen since the peak of the dot-com bubble, and you can peg that rise to a similar cause tech stocks.

While this bubble too may burst, it's not likely to do so in as dramatic a fashion or have as prolonged an effect, said Barclays analyst Maneesh Deshpande. The tech companies that have driven the rally since the selloff this spring are much bigger, more stable, more mature and profitable organizations than those that spurred the dot-com boom, and investors have much more muted growth expectations for them than they did for the dot-com counterparts, he said.

Unlike the dot-com boom, "there's no sort of really wild optimism here," Deshpande told Business Insider in an interview on Friday. "The valuations are substantially higher" than they've been in the past, "but the downside is not going to be that substantial."

Still, in a research note on Thursday, Deshpande downgraded the biggest tech stocks Facebook, Amazon, Netflix, Microsoft, Apple, and Google parent Alphabet, collectively dubbed by Deshpande as FANMAG to a market weight rating from overweight on the potential that they could be sold off in coming months.

Deshpande made the comparison to the dot-com era in his research note. The S&P stocks are trading at 18.7 times their expected earnings for the year-long period that begins a year from now. He chose to look at that later timeframe because the near-term earnings of many companies are expected to be poor, thanks to the recession, and investors are widely understood to be looking past those numbers.

That ratio of price to year-out earnings for the index is the highest it's been since 2000, according to Barclays' research. By contrast, over the last five years, the median ratio for the S&P has been 15.2 times expected year-out earnings.

But those broad numbers obscure the reality that much of that rise in valuation is being driven by the FANMAG stocks and a small group of companies built around ecommerce. That's different from the dot-com boom, when the S&P benefitted from a much wider spread rise in valuations.

This time around, those select few tech and ecommerce companies Deshpande dubbed them the "resilient" stocks are trading at 29.2 times their expected year-out earnings. That valuation exceeds the overall S&P 500's peak ratio in the dot-com boom. It's also 50% above the median valuation ratio those stocks have posted over the last 5 years and 25% above their previous high.

"Our worry is that current valuations are quite elevated and in bubble territory," Deshpande said in his research note. "While a bubbly rally might continue, it could equally burst."

There are good reasons why the resilient companies' stocks have performed so well during the pandemic. Most notably, the companies have been able to take advantage of it, gaining market share against their non-digital rivals.

In a normal recession, investors would largely rotate out of growth and cyclical stocks and into defensive plays companies like consumer staples or healthcare providers that are more insulated from the effects of a downturn, Despande said. But this recession has been unusual because of the degree to which it has shifted consumer spending, boosting the businesses of certain companies that are able to cater to citizens who have been hunkered down in their homes.

Seeing that, investors particularly everyday ones have been buying up shares in these resilient companies.

"This time, these guys are the new defensive" stocks, Deshpande told Business Insider.

But as good as business might be for those companies, at least relatively speaking, they are looking overvalued, he said. Bubbles can go on for a while, but eventually they deflate, one way or another.

What might pop the balloon this time around is a vaccine, Deshpande said. The widespread release of an effective vaccine would help spur the broader economy, allowing people to return to offices, restaurants, and movie theaters and to decrease their reliance on video conferencing software, food delivery services, and streaming video providers.

When that starts to happen, investors will likely rotate out of some of the big tech stocks and into some of the cyclical stocks that are likely to see their revenue and earnings start to surge, Deshpande said. Given their relative valuations, those cyclical stocks are likely to look cheap compared with the resilient ones despite what will likely be similar growth expectations.

"You have to look at valuations" of the resilient stocks, particularly the FANMAG group, he said. "At some point," he continued, "you have to say this is too much."

That said, Deshpande isn't expecting a huge selloff when the rotation comes and the bubble pops. He doesn't expect a repeat of the dot-com bust, where it seven years for the S&P and the Dow to regain their lost ground and 15 years for the Nasdaq.

The dot-com boom was led by a bunch of younger, immature companies, many of which were losing money. That's just not the case today, Deshpande said. The FANMAGs in particular, which comprise 73% of the market cap of the resilient stocks, are stable and mature, he said.

"These are solid companies," he said. "There's no doubt that they're making money."

Got a tip about the tech industry or tech investing? Contact Troy Wolverton via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

The rest is here:

BARCLAYS: Tech stocks priced at dot-com bubble levels are at serious risk of bursting. Here's why the next meltdown will be far less severe than in...