Tech companies are ‘too big, and we’ve allowed them to exercise monopoly power,’ says House Antitrust chairman David Cicilline

Last week, the House Antitrust Subcommittee held a unique hearing where executives from Sonos, Tile, Basecamp, and PopSockets laid out the challenges of working and competing with big tech companies like Apple, Google, and Amazon. It felt like a turning point in the conversation about big tech platforms and the power they have over competition, something PopSockets CEO David Barnett called “bullying with a smile.”

“Help us Congress, you’re our only hope,” said Basecamp’s David Heinemeier-Hansson. It was like that.

But the hearing was just one part of a lengthy Antitrust Subcommittee investigation into the competitiveness of digital markets led by Chairman David Cicilline (D-RI) that’s been going on for some time — a bipartisan investigation that’s about to conclude with a report and recommendations for new laws and regulations that govern how big tech platforms work. Cicilline joined Verge senior reporter Adi Robertson and editor-in-chief Nilay Patel for a special interview episode of The Vergecast this week where he talked about what he’s learned and how he plans to tackle the big platform monopolies.

The following excerpt has been lightly edited for clarity and length.


So we’re talking while opening arguments of impeachment are going on in the Senate. It seems like there’s just a lot of polarization in the world. But I was watching the [antitrust] hearing, and I was struck that there seems to be at least a bipartisan consensus on the problem, if not the substance.

You know, when we launched the investigation, that was done in a bipartisan way with the full support of the ranking member, the Republican leader on the Judiciary Committee as well as the ranking member of the subcommittee, [Rep. Jim] Sensenbrenner.

So the investigation has been thoroughly bipartisan and in a very real way. Our staffs are working closely together. And I think you’re right. I don’t know that we’ll have agreement on every single proposal or a recommendation that the final report makes, but I think there’s broad recognition from Republicans and Democrats that this market is not functioning properly, that there is a significant absence of competition and strong evidence of anti-competitive behavior by the dominant platforms. And I think there is a real understanding and expectation that we’re going to do something about this as a Congress. The American people are expecting us to. So it’s been very bipartisan. I hope it will stay that way.

One of the striking things from the hearing last week was how different the accusations against each of these companies was. How much do you think the same remedy is going to work for Google and Apple and Facebook and Amazon?

That’s a great question. We’ve been very careful in this investigation to solicit information from the platforms, both in testimony and in documents relevant to the way those platforms are operating, because I think they’re not all the same, and their behavior has been different in many respects.

So I think we’re going to look at solutions that provide a response broadly to the marketplace. There are some issues where I think there have been very serious concerns by a particular company in this area or this particular company in that area. But I think this is very much about the marketplace generally, and you will not see recommendations that are specific to a company, just like the investigation is not about a company, it’s really about the marketplace broadly. And so I hope the suggestions we develop, both in terms of legislation and in terms of proposed regulations, will address the marketplace broadly, but obviously respond to a number of different activities that we’ve seen throughout the investigation.

Do you think that you can craft a single framework that’s going to address the whole spread of problems from that hearing?

Yes, I do. The goal is to create competition, to protect competition in that digital marketplace so that when Amazon says “give us back money for selling your product at a lower cost,” people have an opportunity to think about another platform because that other platform will have had an opportunity to grow and be successful and enter the marketplace. So competition in each of these examples is the solution, and making sure that we’re promoting competition and protecting folks from a whole range of discriminatory behavior or bullying. I think you can imagine a number of ideas. I would just say you can’t engage in behavior that does X, Y or Z that would apply broadly to all of the large digital platforms.

That’s a pretty classic conception of a behavioral remedy. “You can’t do this.” We’re going to say you can’t do it. You’re forbidden from doing it. But there was a lot of talk about, especially with Amazon, the platforms self-dealing, cutting themselves better deals, selling their own products.

I spoke to Sen. Elizabeth Warren (D-MA) last year, and she said you can’t just do basic behavioral solutions. You’ve got to do a structural solution. And that’s why she was proposing breakups. Do you agree with her on that?

First of all, I think it’s hard. Congress has certain powers, and breaking up companies is actually not one of them.

So while we may have made a mistake by allowing some of these companies to get as large as they have — in fact, we have made a mistake. I think we should have had much more rigorous antitrust enforcement that would have prevented a number of these companies from getting as big as they are. That’s a problem.

And so I think what we have to figure out now is: are there ways to require a retrospective review of some transactions? There’s no way to ensure that if the transaction is approved based on a set of expectations, that you then have an option to go and see if those expectations were bad or something different happened and learn from that. But I think it’s harder for Congress to think about enacting a statute that breaks up companies.

But I do think that the other suggestion that Sen. Warren has made is a really interesting one and something I think about a lot: the notion of “You can be either a platform or you can be a manufacturer or a producer of services, but you can’t do both.” Sort of the Glass-Steagall of the internet. It’s kind of an interesting idea because people go to a platform thinking, somehow, when they do a search, there’s some neutral way that evidence is reviewed, and you’re provided with a result from that search.

Well, we know that that is not the case, the way items get into the Amazon buy box. And Amazon used its own private label to promote it or promotes its own goods. It creates sort of an inherent conflict. You know, you’re both a platform and a manufacturer of goods. And so it’s kind of an interesting idea to think: should you at least separate out those functions and say you can be one or the other, but you can’t be both?

I think these companies are too big, and we’ve allowed them to exercise monopoly power. We have to figure out how to correct that. I’m looking at kind of what are the current antitrust tools that are available to antitrust enforcers, and how we might use those to promote competition. But there is not a mechanism that I can think of that would allow us, as Congress, to go and break up a particular company. I think we can do a lot of things to correct the absence of competition in that space. Everything is on the table, in my view. But I have to think long and hard about how we could, in a congressional enactment, actually break up a company.

I’ve had a bunch of Microsoft executives from the ‘90s tweeting me all day about how Microsoft’s antitrust suit didn’t actually accomplish anything. And really, the question that they keep asking is: what shouldn’t you be able to integrate?

So Tile was at the hearing. They built tracking products. We don’t know yet, but Apple is rumored to be building a tracking product. Apple’s products will obviously have greater access to the operating system of the iPhone than Tile’s product. Should that kind of conduct be prohibited? Should Apple have to have open APIs, which was part of the Microsoft consent decree?

I would have to think about the example you gave. But certainly if, in that example, Apple makes it much more difficult for people to access the Tile product using their software and … they constantly get reminders [asking], “Do you want to continue this service?” or constantly prodding them to have to answer a prompt. And that creates the kind of friction that ensures that their competitor doesn’t really have access to the marketplace. Or if they do, it’s short-lived.

I think what we have to look at is if the behavior of the company can fairly be described as anti-competitive. Are they using their market dominance to make it impossible for a competitor to enter the marketplace and survive, and as a result, leading to a reduction of innovation, a reduction of choices for consumers, maybe ultimately increasing costs? They’re only able to do that because they have so much market dominance.

How do we deal with the reality that these four large technology platforms are so big and control so much of the market? That they can, with a change of an algorithm, make it more difficult to access their software, make it almost impossible for a competitor to survive? That’s not good for the economy. It’s not good for consumer choices. It’s not good for innovation, and it’s not good for competition.

I’m curious about your view of the Microsoft / Netscape enforcement action, which seems to be the shadow over all of this. Did it work? Did it not work? Did just knocking Microsoft back a little bit create the environment for Google to emerge? There are multiple interpretations of what happened.

I don’t think there’s any question it worked. I don’t think there’s any question that made space for an enormous amount of additional innovation and competition, just pursuing the enforcement action itself, not the consent decree.

Are you hoping for a similar result here? Are you hoping to take it one step further?

This is not an investigation that results in an enforcement action investigation.

Congress is the only place that has the ability to actually change the statutes and update the laws and put proposed regulations in place that actually fix this marketplace. So unlike an enforcement action that focuses on the behavior — a single company gets directed to do a single thing — our work is much broader. And it is actually more significant because if we do it right, we can get this digital marketplace working properly. And that will benefit consumers. It will benefit the next great company that’s going to come down the pike because competition was possible.

But if you write a bunch of new laws and regulations, and then you staff an agency with creative, enthusiastic people who want to do it, you’re going to result in a bunch more enforcement actions, presumably.

Correct. Or much better behavior by digital platforms.

France will delay controversial tech tax

France and the United States have reached a truce on a debate over a controversial French “digital tax” that was set to hit some of America’s biggest tech companies.

This year, France passed a law requiring large digital service companies to pay a 3 percent tax on total annual revenue generated by providing services to French users. The US immediately pushed back on the plan, saying the tax was aimed squarely at major American tech companies like Google, Facebook, and Amazon. In response, the US threatened to implement massive tariffs on French goods.

But French president Emmanuel Macron said on Twitter this week that he’d had a “great discussion” with President Donald Trump about the tax. “We will work together on a good agreement to avoid tariff escalation,” Macron wrote. The Wall Street Journal reported that France had agreed to postpone the tax until the end of 2020 while the US postpones the tariffs.

Today, at the World Economic Forum in Davos, Switzerland, US Treasury Secretary Steven Mnuchin and French finance minister Bruno Le Maire formally announced the ceasefire, according to the Financial Times. But the negotiations will continue, as the two countries talk over a broader international agreement on taxes in 2020.

PSA: Never open a WhatsApp message from the crown prince of Saudi Arabia

Bay Area! I’ll be talking with Anna Wiener about Uncanny Valley, her brilliant new memoir of a life in tech, on February 4th at Manny’s in San Francisco. It’s our second-ever Interface Live event, and it would mean the world to me if you came to say hello and talk tech and democracy with us. Get your tickets here!

Some days, when you write a column about the latest interactions between big tech platforms and the government, you try to make a meticulous and layered argument based on a series of nuanced observations about the world. Other days, you just write down a bunch of facts and say — wait, what?!

The past 24 hours have been a wait, what?! sort of day.

It has been just under a year since Amazon CEO Jeff Bezos shocked the world with a Medium post disclosing that he had been the subject of an extortion attempt, hired the best person in the world to investigate it, and promised to get to the bottom of it. The story’s elements included an extramarital affair, family betrayal, stolen nudes, and the crusading reporting of the Washington Post, which Bezos owns. Within days, a hefty amount of circumstantial evidence hinted that the government of Saudi Arabia — and its crown prince, Mohammed bin Salman, were likely involved in the scheme.

Then, on Tuesday afternoon, the Guardian published a bombshell: a forensic examination conducted at Bezos’ request by the FTI Consulting found that his phone had most likely been hacked in 2018 after he received a WhatsApp message from a personal phone number belonging to MBS himself. Stephanie Kirchgaessner reports:

The encrypted message from the number used by Mohammed bin Salman is believed to have included a malicious file that infiltrated the phone of the world’s richest man, according to the results of a digital forensic analysis.

This analysis found it “highly probable” that the intrusion into the phone was triggered by an infected video file sent from the account of the Saudi heir to Bezos, the owner of the Washington Post.

The report was subsequently confirmed by the Financial Times and New York Times, and , and Vice published the full report from FTI. Among other things, the report suggests that MBS was attempting to intimidate Bezos, months before a Post columnist — MBS critic Jamal Khashoggi — was brutally murdered on the crown prince’s orders, according to the CIA.

The United Nations has called for further investigation related to the Khashoggi murder, in which MBS continues to deny his involvement. Here’s Jared Malsin, Dustin Volz and Justin Scheck in the Wall Street Journal.

“The circumstances and timing of the hacking and surveillance of Bezos also strengthen support for further investigation by U.S. and other relevant authorities of the allegations that the Crown Prince ordered, incited, or, at a minimum, was aware of planning for but failed to stop the mission that fatally targeted Mr. Khashoggi in Istanbul,” the officials said in a statement based on their review of the forensic analysis.

[…]

“At a time when Saudi Arabia was supposedly investigating the killing of Mr. Khashoggi, and prosecuting those it deemed responsible, it was clandestinely waging a massive online campaign against Mr. Bezos and Amazon targeting him principally as the owner of The Washington Post,” Ms. Callamard and Mr. Kaye said.

Some threads.

Is the case against MBS being behind the hack open and shut? On one hand, there’s no smoking gun. On the other, no one has proposed a credible-sounding alternate culprit. The gist is that after MBS’ WhatsApp account sent Bezos a video file, Bezos’ phone went crazy and started transmitting an enormous amount of data:

That file shows an image of the Saudi Arabian flag and Swedish flags and arrived with an encrypted downloader. Because the downloader was encrypted this delayed or further prevented “study of the code delivered along with the video.”

Investigators determined the video or downloader were suspicious only because Bezos’ phone subsequently began transmitting large amounts of data. “[W]ithin hours of the encrypted downloader being received, a massive and unauthorized exfiltration of data from Bezos’ phone began, continuing and escalating for months thereafter,” the report states.

Still, information security types aren’t satisfied with the FTI report, arguing that someone with access to the phone and the malicious file should be able to find direct evidence that it was the culprit. See Alex Stamos on this point.

What malware was used in the attack? What vulnerabilities were exploited? Could my phone be hacked in the same way? We don’t know, we don’t know, and we don’t know, respectively.

OK, but who made the malware used in the attack? Probably one of those shadowy hacker-for-hire outfits. The FTI report “suggested that the Tel Aviv-based NSO Group and Milan-based Hacking Team had the capabilities for such an attack,” Sheera Frenkel reports in a Times piece about the hack. NSO Group denied it; Hacking Team didn’t respond.

Is this the craziest series of events ever to befall the CEO of a major tech platform? Yes and it’s not even close.

What was the best tweet about all this? Oh, probably Jake Tapper’s.

Second place goes to Jeff Bezos.

The crown prince of Saudi Arabia has recently sent me a message on WhatsApp. Should I open it? Absolutely not. And probably stay out of his embassies, too.

The Ratio

Today in news that could affect public perception of the big tech platforms.

Trending down: Apple dropped plans to let iPhone users fully encrypt backups of their devices in iCloud after the FBI complained that the move would harm investigations. The tech giant’s reversal, which happened about two years ago, shows how much Apple has been willing to help US law enforcement despite casting itself as a defender of customer information.

Governing

Facebook and Twitter have evidence that could save people from prison, but they’re reluctant to give it up. They argue that the Stored Communications Act forbids them from divulging the content of communications unless a specific exemption applies. Megan Cassidy from the San Francisco Chronicle reports:

Facebook and Twitter provide online portals specifically for law enforcement to request information during emergencies and investigations. Government officials armed with search warrants routinely collect private user messages to help win convictions.

Defendants and their attorneys have no such recourse. In addition to the legal firewalls, Facebook also requires defense counsels to deliver subpoenas in person to their Menlo Park headquarters or to an authorized agent.

Critics are worried that Facebook’s fact-checking partners aren’t getting the resources they need to adequately address misinformation. The six partners tasked with evaluating content in the US are all growing their staff, but so far it hasn’t been enough to quell fears. (Chris Mills Rodrigo / The Hill)

Facebook has allowed a major pro-Trump Super PAC, the Committee to Defend the President, to run ads with lies. Some of the ads claim former Vice President Joe Biden is “a criminal who used his power as Vice President to make him and his son RICH.” Who’s excited for 11 more months of this? (Popular Information)

Facebook has made serious improvements to election security ahead of the caucuses next month, the company argues in a new op-ed in the Des Moines Register. The changes include opening rapid-response centers to monitor suspicious activity on the platform, and growing the security teams.

Voters in the Seattle area will be able to vote by smartphone in an upcoming election. It’s a historic moment for American democracy. But security experts warn that while mobile voting could increase turnout, it could also make the system much more vulnerable to a cyberattack. Yikes! (Miles Parks / NPR)

Amazon and Facebook each spent roughly $17 million on lobbying efforts in 2019. The new federal disclosures tell a story of a sector tapping its deep pockets to beat back regulatory threats and boost its bottom line. (Tony Romm / The Washington Post)

Presidential candidate Mike Bloomberg said breaking up tech companies “is not an answer.” He added that he doesn’t think Sens. Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) “know what they’re talking about” when it comes to breaking up big tech companies. He also did not offer “the answer.” (Makena Kelly / The Verge)

While Apple may not provide official support to law enforcement agencies to access iPhones, police departments across the US already have the ability to crack mobile devices. They often use third-party companies to unlock and access information on encrypted mobile devices (including iPhones) at a relatively low cost. (Michael Hayes / OneZero)

There’s been very little consistency in how companies are complying with California’s new privacy law. Some have incorrect information on their websites about how the law affects them and consumers. Others lack a clear process to respond to customers who request their data. (Greg Bensinger / The Washington Post)

Joshua Collins, a 26-year-old socialist trucker running for Congress in Washington State, is leveraging TikTok in a new kind of political campaign. (Makena Kelly / The Verge)

San Francisco Pride members voted to ban Google and YouTube from their parade. They say the company isn’t doing enough to stop hate speech on its platforms. (Shirin Ghaffary / Recode)

City officials in Suzhou, a city of six million people in eastern China, sparked outrage online when they published surveillance photos of residents wearing pajamas in public. The people in the photos were identified with facial recognition software, and officials called their behavior “uncivilized.” (Amy Qin / The New York Times)

Britain unveiled sweeping new online protections for children’s privacy. The rules will require platforms like YouTube and Instagram to turn on the highest possible privacy settings by default for minors, and turn off by default data-mining practices like targeted advertising and location tracking for children in the country. (Natasha Singer / The New York Times)

Industry

ByteDance is seeking a new CEO for TikTok. The massively popular video app has come under fire from American politicians who worry that it might present a national security threat. Bloomberg’s Kurt Wagner and Sarah Frier have the story:

The company has interviewed candidates in recent months for the CEO role, which would be based in the U.S., according to people familiar with the matter, who asked not to be named because the search is private. In one potential scenario, the new CEO would oversee TikTok’s non-technical functions, including advertising and operations, while current TikTok chief Alex Zhu would continue to manage the majority of product and engineering out of China, one person said. The hiring process is ongoing and the envisioned role could still change depending on who is selected, the people added.

Zhu, who co-founded a predecessor to TikTok called Musical.ly, took over the business last year, though ByteDance also has a Chinese version of TikTok called Douyin, which is run by a different management team. The eventual corporate structure involving Zhu and the new CEO is still unclear, the people said, and Bytedance has hired executive search firm Heidrick & Struggles to help lead the process.

Researchers at Stanford have developed a new metric to track the time people spend on their devices. They say it’s more accurate than “screen time,” which treats all time spent online as more or less equal. (Will Oremus / OneZero)

Google launched three new experimental apps to help people use their phones less as part of a “digital wellbeing” initiative. One of the apps invites people seal their devices in a phone-sized paper envelope, similar to the pouches some artists require fans to put their phones into at concerts. No thanks! (Jay Peters / The Verge)

Small businesses are posting about the difficulties of competing with Big Tech, and the messages are going viral on social media. Sometimes, that virality has kept the businesses afloat. Other times, it’s made things harder. (Input)

Some of the biggest companies in the world are funding climate misinformation by advertising on YouTube, according to a study from activist group Avaaz. More than 100 brands were found to be running ads on videos that were promoting misleading information about climate change. (Alex Hern / The Guardian)

British telecom company Vodafone just quit the Facebook-founded Libra Association, the latest company to do so after PayPal, Mastercard, Visa, Mercado Pago, eBay, and Stripe left last year. I can’t remember the last time Libra got any good news. (Nikhilesh De / Coindesk)

Bonus industry content: The former director of newsletters at The New Yorker and BuzzFeed interviewed Casey about the making of this newsletter.

And finally…

The president’s impeachment trial is underway in the Senate, and rules prohibit senators from bringing electronic devices onto the floor. And yet seven senators have been spotted wearing their Apple Watches:

Republican Sens. Mike Lee of Utah, John Thune of South Dakota, Jerry Moran of Kansas, James Lankford of Oklahoma, John Cornyn of Texas and Tim Scott of South Carolina all are wearing them on the floor. Also spotted with the smartwatch: an aide to Senate Majority Leader Mitch McConnell.

So, too, is Democratic Sen. Patty Murray of Washington. Virginia Democratic Sen. Mark Warner owns an Apple Watch, but it could not be confirmed if he had it on the floor.

It should be pretty easy to tell. Just wait to see if he stands up 10 minutes before every hour.

Talk to us

Send us tips, comments, questions, and your unopened messages from the Saudi prince: casey@theverge.com and zoe@theverge.com.

Ted Cruz now has an impeachment podcast, too

Impeachment podcasts are the hot new thing in podcasting, and now one of the actual impeachment jurors is getting in on the boom. Senator Ted Cruz (R-TX) launched a podcast today called Verdict with Ted Cruz, in which he sits across from a stupendously softball interviewer (“you are not only a senator, you are a constitutional lawyer, one of the brightest legal minds in the country”) and opines on the day’s impeachment proceedings.

It sounds as though Verdict will be publishing daily throughout the trial. Cruz said today’s episode was recorded shortly after he left the first day of Senate proceedings, bringing him to the podcast studio at 2:42AM ET. Episodes will be recorded “as soon as I leave the Senate floor,” Cruz wrote on Twitter.

With the immense interest around President Trump’s impeachment proceedings, many podcast studios and news outlets have found impeachment shows to be a quick way to build an audience. The audience built up on those podcast feeds will remain even after the proceedings end, and networks may be able to later redirect listeners to new political shows.

Verdict gives Cruz a way to tap into that interest and offer what will certainly be a more slanted take on the day’s events than a traditional news podcast might. So far, the podcast has 879 subscribers on YouTube. It’s also available on Spotify, which doesn’t provide subscriber numbers.

Seattle is the first area in the US where residents can vote via smartphones

King County, where Seattle is located, announced on Wednesday that it’s implementing smartphone voting for an upcoming board of supervisors election.

King County’s 1.2 million residents can use their cellphones to vote in the election, which begins on January 22nd and continues until 8PM PT on February 11th.

The program is a collaboration between King County Elections; the county’s conservation district; mobile-voting nonprofit Tusk Philanthropies; the National Cybersecurity Center; and Democracy Live, a technology firm that develops electronic balloting.

“It will be easier than ever for voters to access their Conservation District ballot and cast their vote,” said Julie Wise, King County director of elections, in a statement. “Here at King County Elections, we are always looking for ways to improve access and engage our voters and this election could be a key step in moving toward electronic access and return for voters across the region.”

In an interview with NPR, Bradley Tusk, CEO and Founder of Tusk Philanthropies, emphasized the positive impact the technology could have on voter turnout. Per NPR, King County’s board of supervisors election has seen less than 1 percent of eligible voters turn out in past years.

But the expansion of smartphone voting has met strong resistance, especially in the wake of the 2016 presidential election, during which Russian hackers infiltrated state voter registration systems, accessed the private emails of Clinton campaign staff, and engaged in numerous other cybercrimes. While there’s no evidence that Russia altered any votes in 2016, cybersecurity experts have cited the incidents as evidence that foreign powers might target US elections down the road.

Of course, internet voting carries many of the same risks as other internet activity: links can be spoofed, devices can be compromised by malware, users can be impersonated, and systems can be DDoS’d.

In 2018, the National Academies of Sciences, Engineering, and Medicine warned against all forms of online voting, recommending that US elections stick to paper ballots for the foreseeable future. The US Senate Intelligence Committee warned against the practice as well in its heavily redacted report on Russian election interference, which was released last July.

The Democratic National Committee has also nixed proposals that would allow Iowa and Nevada to conduct virtual caucuses, citing security concerns.

Virtual voting isn’t a new idea. In 2010, the DC Board of Elections and Ethics created an internet-based election portal and invited security experts to probe it for vulnerabilities. The board scrapped the portal after a University of Michigan student breached it.

However, other counties have successfully implemented forms of smartphone voting. West Virginia allowed overseas voters to submit absentee ballots via a blockchain-based voting app called Voatz in the 2018 midterm election. Around 150 people voted that way, however, a small fraction of King County’s eligible electorate. Counties in Utah, Oregon, and Colorado have also tested mobile voting for small numbers of overseas voters.

Another key difference: West Virginia’s online ballots went through an app dedicated to secure voting, which verified each voter’s identity via facial or fingerprint recognition.

King County voters can submit through a mobile web portal, verifying their identities with their name, birthdate, and a signature. Democracy Live CEO Bryan Finney told NPR that officials in Washington will be able to verify signatures since the state votes entirely by mail. The elections office plans to count paper copies of all electronic ballots as well.

The board of supervisors election is one of many “pilots” that Tusk plans to implement over the next five years in counties around the US. There’s no indication yet of whether King County plans to expand the system to statewide or national elections.

Senator asks Jeff Bezos for more information on Saudi-linked hack

One day after news broke that the crown prince of Saudi Arabia may have been personally involved in the hack of Amazon CEO Jeff Bezos’ phone, a United States senator is asking for more information.

As first reported yesterday by The Guardian, a forensic analysis of Bezos’ phone determined that spyware was planted on the device after Crown Prince Mohammed bin Salman sent a seemingly innocuous video on WhatsApp to the CEO, who also owns The Washington Post. The Saudi government, and the prince specifically, have been linked to the murder of Post journalist Jamal Khashoggi, who was critical of the regime.

Bezos’ private photos were later leaked to the National Enquirer. In a statement released today, a United Nations official said the spyware attack was “an effort to influence, if not silence, The Washington Post’s reporting on Saudi Arabia” and called for further investigation. (The Saudi government has denied wrongdoing.)

Bezos responded to the news this afternoon by tweeting a photo of himself attending a memorial ceremony for Khashoggi.

Sen. Ron Wyden (D-OR) has now sent a letter to Bezos asking for details on the hack.

“To help Congress better understand what happened — and to help protect Americans against similar attacks — I encourage you to provide my office with information regarding your case,” the letter to Bezos reads.

Wyden asks for more detail on the basis for the belief that the WhatsApp video was the source of the hack, whether the spyware “called home” to any servers, and if “off-the-shelf surveillance software” was used in the attack.

The senator’s letter asks for a response by February 14th.

The need for a federal privacy law has never been greater

Bay Area! I’ll be talking with Anna Wiener about Uncanny Valley, her brilliant new memoir of a life in tech, on February 4th at Manny’s in San Francisco. It’s our second-ever Interface Live event, and it would mean the world to me if you came to say hello and talk tech and democracy with us. Get your tickets here!

Last June, after a series of developments related to facial recognition and customer tracking, I warned that a Chinese-style social credit system was beginning to take shape in the United States. Among other things, a school district in western New York announced plans to deploy a facial-recognition system to track students and faculty; the Washington Post reported that airports had accelerated their use of facial-recognition tools, and the United States began requiring visa applicants to submit social media profiles along with their applications.

That column left open the question of what role American law enforcement might play in building a system that feels increasingly dystopian. But now, thanks to a superb investigation by Kashmir Hill, we know much more. Hill tells the story of Clearview AI, a small and mostly unknown company that has been scraping publicly available images — including billions from Facebook, YouTube, and Venmo profiles — and selling access to the police. She writes:

Until now, technology that readily identifies everyone based on his or her face has been taboo because of its radical erosion of privacy. Tech companies capable of releasing such a tool have refrained from doing so; in 2011, Google’s chairman at the time said it was the one technology the company had held back because it could be used “in a very bad way.” Some large cities, including San Francisco, have barred police from using facial recognition technology.

But without public scrutiny, more than 600 law enforcement agencies have started using Clearview in the past year, according to the company, which declined to provide a list. The computer code underlying its app, analyzed by The New York Times, includes programming language to pair it with augmented-reality glasses; users would potentially be able to identify every person they saw. The tool could identify activists at a protest or an attractive stranger on the subway, revealing not just their names but where they lived, what they did and whom they knew.

Hill’s report is chockablock with surprising details, and you should read it in full if you haven’t already. When it landed online Saturday, it galvanized discussions around how quickly tech companies are eroding privacy protections, with Congress remaining idle so far despite years of discussions around a national privacy law.

Some threads to pull on.

Is this legal? As Ben Thompson explains today in a paywalled post, LinkedIn sued a company that had scraped its public profiles in a fashion similar to Clearview. But it lost the lawsuit, seemingly giving a green light to other companies seeking to do the same thing. Last year, Facebook told Congress that it gathers information about logged-out users to prevent this sort of scraping. But former Facebook chief security officer Alex Stamos explained to me that actually preventing that scraping is much easier said than done.

Is this the end of privacy? No, because laws protecting individual privacy can still be effective — even at the state level. On Tuesday, the Supreme Court declined to hear an appeal from Facebook on a case involving the company’s use of facial-recognition technology. Facebook used the tech to tag photos with user names, running afoul of an Illinois law requiring companies to get their consent first. As a result, Facebook will likely have to face a multi-billion-dollar class action lawsuit. A strong federal privacy law could make products like Clearview’s illegal, or regulate them to offer protections from some of the more obvious ways the technology will be misused.

Is our current freak-out about facial recognition ignoring the larger point? Surveying recent municipal efforts to ban use of the technology by law enforcement, Bruce Schneier argues persuasively that we need to take a broader view of the issue. We can be (and increasingly are) tracked in all manner of ways: by heart rate, gait, fingerprints, iris patterns, license plates, health records, and (of course) activity on social networks. The forces working to end individual privacy are a hydra, Schneier argues, and need to be dealt with collectively. He writes:

The point is that it doesn’t matter which technology is used to identify people. That there currently is no comprehensive database of heart beats or gaits doesn’t make the technologies that gather them any less effective. And most of the time, it doesn’t matter if identification isn’t tied to a real name. What’s important is that we can be consistently identified over time. We might be completely anonymous in a system that uses unique cookies to track us as we browse the internet, but the same process of correlation and discrimination still occurs. It’s the same with faces; we can be tracked as we move around a store or shopping mall, even if that tracking isn’t tied to a specific name. And that anonymity is fragile: If we ever order something online with a credit card, or purchase something with a credit card in a store, then suddenly our real names are attached to what was anonymous tracking information.

Regulating this system means addressing all three steps of the process. A ban on facial recognition won’t make any difference if, in response, surveillance systems switch to identifying people by smartphone MAC addresses. The problem is that we are being identified without our knowledge or consent, and society needs rules about when that is permissible.

Are privacy experts being needlessly alarmist? I try to ration my alarmism judiciously in this newsletter. But once you start looking for examples of companies using their data to build social-credit systems, you find them everywhere. Here, from earlier this month, is a tool Airbnb is developing to evaluate the risks posed by individual risks:

According to the patent, Airbnb could deploy its software to scan sites including social media for traits such as “conscientiousness and openness” against the usual credit and identity checks and what it describes as “secure third-party databases”. Traits such as “neuroticism and involvement in crimes” and “narcissism, Machiavellianism, or psychopathy” are “perceived as untrustworthy”.

Who will this tool discriminate against? And what recourse will those discriminated against have? These are two questions we should take into any discussion of technology like this.

Finally, is there a good Marxist gloss on all this? Sure. Here’s Ben Tarnoff with a provocative piece in The Logic calling for a revival of Luddism to counter oppressive technology of the sort Clearview manufactures. (His piece predates Hill’s by a couple days, but the point stands.)

One can see a similar approach in the emerging movement against facial recognition, as some city governments ban public agencies from using the software. Such campaigns are guided by the belief that certain technologies are too dangerous to exist. They suggest that one solution to what Gandy called the “panoptic sort” is to smash the tools that enable such sorting to take place.

We might call this the Luddite option, and it’s an essential component of any democratic future. The historian David F. Noble once wrote about the importance of perceiving technology “in the present tense.” He praised the Luddites for this reason: the Luddites destroyed textile machinery in nineteenth-century England because they recognized the threat that it posed to their livelihood. They didn’t buy into the gospel of technological progress that instructed them to patiently await a better future; rather, they saw what certain technologies were doing to them in the present tense, and took action to stop them. They weren’t against technology in the abstract. They were against the relationships of domination that particular technologies enacted. By dismantling those technologies, they also dismantled those relationships — and forced the creation of new ones, from below.

Last June, writing about the rise of American social credit systems, I noted that they were developing with very little public conversation about them. The good news is that the public conversation has now begun. The question is whether advocates for civil liberties will be able to sustain that conversation — or to turn it into action.

The Ratio

Today in news that could affect public perception of the big tech platforms.

Trending up: European businesses say that using Facebook apps helped them generate sales corresponding to an estimated EUR 208 billion last year, which translates to about 3.1 million jobs. The news comes from a study Facebook commissioned with Copenhagen Economics.

Trending down: A new analysis of coordinated inauthentic behavior on Facebook shows the social network is still failing to keep up with the spread of disinformation and media manipulation on the platform. Analysts are still calling for Facebook to release more information about the coordinated campaigns to increase transparency in the process.

Governing

First off today, a call for help from our friends at Vox.com. The California Consumer Privacy Act gives Californians certain rights over the data businesses collect about them. Have you taken advantage of this new law? Fill out this form to help Vox’s reporting on what happens when you do: http://bit.ly/2NMn19o

Apple, Amazon, Facebook and Google took a public lashing at a congressional hearing on Friday. Some of their smaller rivals, including Sonos and Tile, pleaded with federal lawmakers to take swift action against Big Tech. Tony Romm at The Washington Post has the story:

The pleas for regulatory relief resonated with lawmakers, led by Rep. David N. Cicilline (D-R.I.), the chairman of the House’s top antitrust committee. “It has become clear these firms have tremendous power as gatekeepers to shape and control commerce online,” Cicilline said to open the session.

The hearing at the University of Colorado at Boulder put public faces on the pain caused by some of the largest tech companies in the United States. Cicilline and other lawmakers have sought to determine if federal antitrust law is sufficient to hold Silicon Valley leaders accountable — and whether changes to federal law are necessary to address anti-competitive concerns in search, smartphones, e-commerce and social networking.

“I think it’s clear there’s abuse in the marketplace and a need for action,” said Rep. Ken Buck (R-Colo.).

Four Facebook competitors are suing the social network for allegedly anticompetitive behavior. They’ve asked a judge to order Mark Zuckerberg to give up control of the company and force him to sell off Instagram and WhatsApp. (Robert Burnson / Bloomberg)

As seven University of Puerto Rico students prepare to go on trial in February for participating in a nonviolent protest more than two years ago, documents released to their defense attorneys reveal that Facebook granted the island’s Justice Department access to a trove of private information from student news publications. (Alleen Brown and Alice Speri / The Intercept)

Democratic candidates’ spending on Facebook ads shows how campaigns are plotting their way through the primary states. Since October, Pete Buttigieg has spent about a fifth of his overall Facebook budget on ads targeting voters in Iowa. Andrew Yang has spent more than 85 percent of his Facebook budget in Iowa and New Hampshire. (Nick Corasaniti and Quoctrung Bui / The New York Times)

Facebook took down a network of pages that were coordinating posts defending Robert F. Hyde, a figure who has become embroiled in the impeachment investigation. The pages described themselves as representing groups of supporters of President Trump. (Rebecca Ballhaus / The Wall Street Journal)

A Massachusetts judge ordered Facebook to turn over data about thousands of apps that may have mishandled its users’ personal information. The move was a clear rejection of the tech giant’s earlier attempts to withhold the key details from state investigators. (Tony Romm / The Washington Post)

Nationalist propaganda has been spreading on WhatsApp ahead of an upcoming election in Delhi. The propagandists appear to be targeting university students who oppose India’s new Citizenship Amendment Act, which is widely perceived to be anti-Muslim. (Anisha Sircar / Quartz)

A viral video titled “Truth From an Iranian,” which has amassed more than 10 million views across Facebook, Twitter, and YouTube, was created by a registered lobbyist who previously worked for a militia group fighting in a bitter civil war in Libya. The video praised the US drone strike that killed Iranian Gen. Qassem Soleimani. (Ryan Broderick and Jane Lytvynenko / BuzzFeed)

Joe Biden said in an interview last week that he wants to revoke one of the core protections of the internet: Section 230 of the Communication Decency Act. He appears to have deeply misunderstood what the law actually does. (Makena Kelly / The Verge)

Attorney General William Barr has intensified a long-running fight between law enforcement and technology companies over encrypted communications. Some FBI agents worry his forceful approach could sour valuable relationships they have fostered with tech companies. (Sadie Gurman, Dustin Volz and Tripp Mickle / The Wall Street Journal)

French President Emmanuel Macron and Donald Trump agreed to a truce in an ongoing digital tax dispute that impacts big tech companies. Paris offered to suspend down payments for this year’s digital tax and Washington promised to keep negotiating toward a solution rather than acting on a tariff threat. (Reuters)

Peter Thiel’s guiding philosophy is libertarianism with an abstract commitment to personal freedom but no particular affection for democracy, says Max Read. The PayPal co-founder and Facebook board member (and Clearview AI investor!) has wed himself to state power, but not because he wants to actually participate in the political process. (Max Read / Intelligencer)

The New York Times created a game to demonstrate how easy it is to give up personal information online. The only way to win the game is to hand over personal data. Relatable!

MediaReview wants to turn the vocabulary around manipulated photos and video into something structured. The proposed definitions allow images or videos to be “Authentic,” “MissingContext,” “Cropped,” “Transformed,” “Edited,” or “ImageMacro.” Sure, why not! (Joshua Benton / NiemanLab)

If we wanted media that was good for democratic societies, we’d need to build tools expressly designed for those goals, says Ethan Zuckerman, Director of the Center for Civic Media at MIT. Those tools probably won’t make money, and won’t challenge Facebook’s dominance—and that’s okay. (Ethan Zuckerman / Medium)

Industry

Researchers are challenging the widespread belief that screens are responsible for broad societal problems like the rising rates of anxiety and sleep deprivation among teenagers. In most cases, they say, the phone is just a mirror that reveals the problems a child would have even without the phone. Nathaniel Popper at The New York Times explains the findings:

The researchers worry that the focus on keeping children away from screens is making it hard to have more productive conversations about topics like how to make phones more useful for low-income people, who tend to use them more, or how to protect the privacy of teenagers who share their lives online.

“Many of the people who are terrifying kids about screens, they have hit a vein of attention from society and they are going to ride that. But that is super bad for society,” said Andrew Przybylski, the director of research at the Oxford Internet Institute, who has published several studies on the topic.

Facebook plans to hire 1,000 people in London this year, in roles like product development and safety. The company is continuing to grow its biggest engineering center outside the US despite fears about Brexit. (Paul Sandle and Elizabeth Howcroft / Reuters)

Facebook gave Oculus Go a permanent $50 price cut. (Sam Byford / The Verge)

Adam Mosseri, the head of Instagram, is the person in charge of Project Daisy — the photo sharing app’s initiative to take away likes on the platform. This profile reveals a current tension of Mosseri’s reign at Instagram: the man who is working to mostly eliminate likes really wants to be liked. (Amy Chozick / The New York Times)

Countless purveyors of bootleg THC vape cartridges are hawking their wares in plain sight on Instagram and Facebook. These illegal operators appear to be doing so with impunity, using the ease and anonymity of Instagram to reach a massive audience of young people who vape. (Conor Ferguson, Cynthia McFadden and Rich Schapiro / NBC)

Jack Dorsey asked Elon Musk how to fix Twitter during a video call last week. Musk said Twitter should identify start by identifying and labeling bots. (Kurt Wagner / Bloomberg)

Instagram is removing the orange IGTV button from its home page. Only 1 percent of Instagram users have downloaded the standalone IGTV app in the 18 months since it launched. (Josh Constine / TechCrunch)

Instagram is democratizing who can succeed in the dance industry, allowing nontraditional talent to break in. It’s no longer just about having the right look or connections. (Makeda Easter / Los Angeles Times)

Instagram has also revolutionized the way tattoo artists grow their businesses. Many artists estimate that more than 70 percent of their clients now come from the photo-sharing app. (Salvador Rodriguez / CNBC)

Snap CEO Evan Spiegel says TikTok could become bigger than Instagram. App intelligence company App Annie ranked TikTok just behind Instagram in terms of monthly active users in 2019. (Hailey Waller / Bloomberg)

TikTok’s parent company, ByteDance, is preparing a major push into games, the mobile arena’s most lucrative market. It’s a realm Tencent has dominated for over a decade. (Zheping Huang / Bloomberg)

More than 70,000 photos of Tinder users are being shared by members of an online cyber-crime forum, raising concerns about the potential for abusive use of the photos. Ominously, only women appear to have been targeted. (Dell Cameron and Shoshana Wodinsky / Gizmodo)

A new report suggests Bumble, the “by women, for women” dating app that is trying to keep women safer online, has little strategy for how to achieve its lofty goals. It also struggles with a cliquey internal culture, according to some employees.

And finally…

Facebook apologized after its platform translated Xi Jinping, the name of the Chinese leader, as “Mr. Shithole” in English. The mistranslation caught the company’s attention when Daw Aung San Suu Kyi, the de facto civilian leader of Myanmar, wrote on her official Facebook page about Mr. Xi’s two-day visit to her country.

Xi is a brutal dictator who runs concentration camps that reportedly house more than 1 million people whose only crime is being Muslim. So I’d say “Mr. Shithole” suits him just fine.

Talk to us

Send us tips, comments, questions, and your Clearview results: casey@theverge.com and zoe@theverge.com.

Barstool Sports founder forced to delete tweet threatening to fire union supporters ‘on the spot’

Barstool Sports has agreed to delete a pair of anti-union tweets and to notify its employees about their right to unionize, Bloomberg Law reports. One tweet, which was posted by the company’s co-founder David Portnoy, threatened to fire any employees who attempted to contact a union supporter “on the spot.” The informal settlement with the National Labor Relations Board also confirmed that Barstool Sports was behind a fake twitter account posing as a Barstool labor movement in an apparent attempt to out union supporters. It is illegal in the US for an employer to threaten reprisal against its employees for unionizing.

The dispute arose shortly after staff at The Ringer announced their plans to unionize on August 12th. Later that day, Portnoy re-posted a 2015 blog post responding to the news in which he dared the company’s employees to unionize so he could “smash their little union to smithereens.” He followed up on Twitter on August 13th by threatening to fire and sue union supporting employees. In response the IWW Freelance Journalists Union filed a complaint with the National Labor Relations Board.

One of Portnoy’s tweets threatened to fire employees “on the spot” for contacting a union supporter.
Image: Twitter via Bloomberg Law

Barstool Sports did not admit fault as part of the settlement, but it now has to remind its employees of their right to unionize via both email, as well as through notices posted at its offices in Dallas, Chicago, Los Angeles, and Watertown, Mass. In the notice, which was posted by IWW Freelance Journalists Union on its Twitter account, the company says it will not attempt to prevent its employees from unionizing, and will not threaten those that do.

The company also agreed to remove a video titled “Professor Nate breaks down the entire Barstool Sports Union controversy,” in the settlement. The video mocked Rep. Alexandria Ocasio-Cortez after she criticized Portnoy’s tweets. Bloomberg Law reports that the video, which claimed Ocasio-Cortez was just trying “to get a retweet from the president” has been deleted from YouTube, but remains up on Facebook as of publication.

The settlement also confirms that the company was behind a fake union twitter account called Barstool Sports Union which claimed to represent “the labor movement inside Barstool Sports.” The Twitter account solicited DMs from the company’s employees in what appeared to be an attempt to identify union supporters. “Would prefer to stay anonymous right now in beginning stages of unionization. DM. Serious inquiries only,” the account tweeted on the same day as Portnoy’s two anti-union tweets. The company removed the account as part of the settlement.

This isn’t the first time an employer has been criticized for posting anti-union tweets. Last year a judge ruled that Tesla CEO Elon Musk broke the law when he tweeted that joining a union meant giving up Tesla stock options. Musk was told to be present at a meeting at the company’s Fremont factory where a notice would be read to confirm that Tesla broke the law.

The patent that would have cost Nintendo $10 million is worthless, judge rules

A Dallas company that successfully sued Nintendo for $10 million for patent infringement may not have invented anything in the first place, a federal court has ruled. Although the novelty of Wii Tennis and other Wii Remote games has long since been replaced with newer models, Nintendo faced a slew of patent lawsuits challenging its motion-sensor technology when it introduced the Wii in the early 2000s, and in 2017 a jury actually ruled in favor of one of them, iLife Technologies.

But federal Judge Barbara G. Lynn ruled Friday that iLife’s patent is not valid. If you’re going to patent something, you have to explain what you’ve actually invented, what’s new that competitors could rip off. Judge Lynn seems to suggest in her ruling that what iLife’s patent application describes isn’t unique or new, but more of an abstract idea.

In 2015, iLife’s then-CEO described technology that could monitor sudden death syndrome in babies or prevent falls among the elderly. But Judge Lynn’s ruling says that the key patent’s primary claim basically boils down to “we use an accelerometer and processor to transmit motion sensing data somehow,” with no indication that iLife has invented any new way to do that thing better than before.

“Overall, claim 1 encompasses a sensor that senses data, a processor that processes data, and a communications device that communicates data, and no further inventive concept is recited to transform the abstract idea into a patent-eligible invention,” Lynn writes in her ruling. It’s not clear whether iLife Technologies even exists any more; but as Ars Technica notes, its website has been taken down.

”Nintendo has a long history of developing new and unique products, and we are pleased that, after many years of litigation, the court agreed with Nintendo,” Nintendo of America spokesman Ajay Singh said in a statement. “We will continue to vigorously defend our products against companies seeking to profit off of technology they did not invent.”

Correction: The judge in the case is named Barbara M. G. Lynn; an earlier version of this post misspelled her name as Glynn.

Eight Senators snuck Apple Watches into impeachment hearings despite electronics ban

Eight senators have been spotted wearing Apple Watches to President Trump’s impeachment trial, seemingly breaking the chamber’s ban on electronics during the proceedings. The apparent violations were spotted by Roll Call, which saw Apple Watches on the wrists of six Republican senators and two Democratic senators, as well as an aide to Senate Majority Leader Mitch McConnell.

Under rules published last week, senators are prohibited from bringing any electronics into the chamber. “No use of phones or electronic devices will be allowed in the Chamber. All electronics should be left in the Cloakroom in the storage provided,” the rules read.

No specific reason was given for the ban — whether it’s a concern about senators recording private conversations, causing a commotion on social media, or just being distracted during an important proceeding. Apple Watches include messaging and recording features, and newer models can come with LTE to keep users connected even when there’s no Wi-Fi. They’re a lot harder to tweet from and read emails on than a smartphone, though.

Senator Ted Cruz — or at least, his social media manager — mocked the ban, tweeting an image of an iPhone that says “come and take it” after he was accused of tweeting during the proceedings. But Cruz hasn’t been spotted with an iPhone on the Senate floor, and a Cruz spokesperson later confirmed to The Verge that he didn’t bring his phone onto the Senate floor.

Taking photos, videos, or audio recordings has been banned in the House of Representatives since 2017, with violators paying up to a $2,500 fine starting on their second offense. The Senate’s ban is broader than that, prohibiting electronics even when they’re not in use. But it doesn’t appear to have implemented a fine like in the House, so it may be trickier to enforce — especially for something as low profile as a smartwatch.

Update, 8:35 PM ET: Added confirmation from a spokesperson for Sen. Cruz that he did not bring his phone onto the floor.