Monday was supposed to be Apple’s day. In a sprawling two and a half hour launch, the iPhone maker announced a raft of new software enhancements, including a new operating system for iPads (iPadOS), the killing off of iTunes in favour of three separate apps for music, TV and podcasts and upgrades to iPhone iOS that offer greater privacy and the much-heralded dark mode.
A lot of it was hyperbole (“Your calendar events never looked so awesome”) and playing catch up with features in Android or other apps (including being able to swipe your finger across the iPhone’s keyboard to type).
But the big news on Monday was that the Department of Justice was investigating Google and Apple; while the and Federal Trade Commission (FTC) is looking into Facebook and Amazon. All are accused of anticompetitive tactics for promoting their own services over that of rivals.
Facebook’s shares fell by 7% on Monday, and Apple’s by 1%, while tech stocks on the Nasdaq were down.
Google has been fined three times by the European Union, for a total amount of €8.2bn ($9.3bn), including €1.5bn in March, for anticompetitive behaviour.
As Republican Senator David Cicilline said this week: “This is long overdue”.
US lawmakers have been furious about the unfettered power that Big Tech wields, while Democratic hopefuls (led by Senator Elizabeth Warren) are calling for these monopolistic companies to be split up.
Both the DoJ and FTC reportedly still need to begin their investigations, while deciding which aspects to pursue. The FTC is already working on the 2011 consent decree that Facebook signed to let its users know if their privacy was breached, but clearly didn’t after the Cambridge Analytica saga.
It’s a marked turnaround from previous government attitudes to the Big Tech giants. Facebook was able to buy up two seemingly competitive services (Instagram and WhatsApp) without competition authorities giving these purchases due consideration. Facebook’s new “pivot to privacy” announced by CEO Mark Zuckerberg earlier this year hardly makes sense for strident competition. Similarly, as the largest sellers of online advertising, Google and Facebook have not been challenged by a rigorous and competitive market and could therefore have sold cheaper advertising.
In a court case launched last October Facebook is accused of overstating its video views for as much as 900% – and knowingly hiding this information for over a year. Sound familiar? Facebook was accused in September 2016 of overstating video views (which is defined as a whole three seconds) by 60% to 80%
We have a word for that: it’s called lying. This erroneous overstating of video views has irreparably damaged the news industry (but like this week’s Apple announcements, more of that another time).
Meanwhile, Twitter said it “accidentally” silenced critics of the Chinese government during the recent 25-year Tiananmen Square anniversary, while Facebook pledged to take down blatantly false anti-vaccination misinformation but still recommended it on its main platform and Instagram. YouTube has been showing recommendations of small children doing innocent things as “an open gate for pedophiles,” [sic] as the New York Times described it. This has been identified before but nobody told Google’s algorithms about what to watch next.
As Cicilline added: The “internet is broken”. Someone has to fix it before it is ruined for successive generations.
This column first appeared in Financial Mail