The Corner Newsletter: September 10, 2021
Welcome to The Corner. In this issue, we examine Facebook’s move to block independent research of social media and the regulation of alcohol markets. We also announce details about a Sept. 22 webinar on the power, challenges, and potential of the news industry.
To read previous editions of The Corner, click here.
Facebook’s move to block independent research reignites calls for regulation
Facebook last month shut down a study run by a team of researchers from New York University examining ad targeting on the platform. The Ad Observatory project stalled when the company asserted that the browser plugin used to collect data from willing participants posed privacy risks and involved automated data scraping, which would violate its terms of service.
The clash is another example of why the public cannot continue to rely on private corporations to voluntarily serve the public’s interest, and it has prompted calls from researchers for legislation to ensure access to this type of data. “At this point, we all just have to acknowledge that voluntary transparency regimes have not succeeded,” Laura Edelson, co-creator of the plugin, told Columbia Journalism Review after the ban.
The Ad Observer plugin was released in May 2020, inspired by a project run by Julia Angwin’s team at ProPublica in 2017. It has helped expose unlawful advertising practices on the platform, such as letting advertisers in the U.S. sell racially discriminatory ads. In the U.K., Who Targets Me, a similar tool, helped unveil how in the 2017 election the Conservative Party exploited a legal loophole to break advertising spending limits on Facebook.
These and other related research projects take the approach of partnering with users to investigate social media platforms. For some social scientists, this is the only option amid the current scarcity of data for public research of social media, as this field has become more dependent in recent years on the voluntary cooperation of the the platforms. The result, however, has been a situation where “those with money to buy data, with relationships with the platforms, […] enjoy a bonanza of social data,” whereas those without money and relationships get little or nothing, Alexander Halavais, director of the Data & Society program at Arizona State University, wrote in 2019.
Halavais told Open Markets that social media platforms have become “governments of their own,” and they use their control over data to make it hard for researchers, such as those at NYU, to look “too close” at their business models. In 2019, he and 200 other researchers voiced their support for an initiative by the Knight Institute that unsuccessfully tried to get Facebook to change its terms of service to carve out space for research.
Even when Facebook agrees to collaborate, researchers say the corporation can always change its mind. This happened, for example, with the Social Science One initiative launched in 2018 by Harvard and Stanford professors eager to “unlock commercial information for public good in privacy protective ways.” A partnership for data release from Facebook that was supposed to take a few months to implement was delayed for almost two years, and ended up leaving many unsatisfied.
One of the initiative’s founders, Stanford Law professor Nate Persily, resigned from Social Science One in 2020 and is now among those who advocate for laws to force companies to share data and loosen privacy laws for research purposes, in the pursuit to better understand disinformation and societal discord compounded by algorithms.
Sharing Persily’s advocacy for legislation is George Washington University professor Rebekah Tromble, director of the Institute for Data, Democracy & Politics, who favors federal legislation to deal with the standoff. “No matter what that might look like in the end, it is essential that Big Tech companies no longer have the power to determine who has access [to data for public-interest research] and under what conditions,” she explained recently.
Free Webinar to Address Power and Potential of Journalism
Professor Nikki Usher and The New York Times’ Matt Thompson will discuss Usher’s new book, News for the Rich, White and Blue: How Place and Power Distort American Journalism, in an hourlong conversation Sept. 22 at noon ET.
In her book, Usher, a senior fellow with Open Markets’ Center for Journalism & Liberty, addresses issues facing the journalism industry: philanthropy and digital advertising, Beltway/Heartland divides, hyper-partisanship and media distrust, and the growing challenges to building a diverse newsroom and producing journalism for a multicultural democracy.
She will be joined in the Zoom conversation by Thompson, an astute observer of the evolution of media who is now editor of the Times’ Headway initiative. Open Markets’ executive director Barry Lynn will offer opening remarks.
Open Markets Calls on Biden Administration to Reinforce State Control Over Alcohol Markets
In August, the Open Markets Institute filed a letter with the U.S. Treasury Department calling on the administration to reinforce state control over alcohol markets. The statement was in response to a request for comments after President Joe Biden called on regulators to update federal regulation of the sale of beer, wine, and alcohol in his Executive Order on Promoting Competition in the American Economy. In the statement, Open Markets emphasized that the existing system of regulation has proven highly successful in protecting public health, small and innovative producers, independent retailers, and the consumer.
Read our letter and our amicus brief in Tennessee Wine and Spirits Retailers Association v. Byrd.
🔊 ANTI-MONOPOLY RISING:
Apple announced on Aug. 26 that app developers would be able to offer customers alternative payment methods, outside Apple’s App Store, for services and products. The decision comes after a lawsuit filed by small app developers alleging Apple’s restrictions on payment methods and pricing tiers are monopolistic. However, other practices by Apple’s App Store are still being investigated by the Department of Justice (The Washington Post).
On Aug. 19, the Federal Trade Commission resubmitted its lawsuit alleging Facebook monopolized the social media market by illegally acquiring competitors WhatsApp and Instagram rather than innovating to compete with them. The U.S. District Court for the District of Columbia dismissed the suit in June, citing lack of evidence. The revised lawsuit provides greater detail on Facebook’s illegal monopolization of the market by citing more facts and analysis. (NPR)
An antitrust trial between the FTC and life sciences company Illumina got underway on Aug. 24. The FTC argues that the Illumina’s acquisition of cancer screening company Grail would harm innovation and increase prices. Grail and its competitors use DNA sequencing technology from Illumina, and the merger between the two companies would give the new entity “incentive and ability to foreclose downstream rivals.” (Reuters)
📝 WHAT WE'VE BEEN UP TO:
Alexis Goldstein published an article in Bloomberg about the intersection between the decentralized nature of cryptocurrencies and tax laws. She argues that there is no technical reason why crypto platforms should be allowed to dodge tax requirements. “The lack of tax information from major cryptocurrency platforms … [is] a design decision,” she wrote. The piece was mentioned in Bloomberg Opinion Radio, U.Today, Coin Tribune, and Juice Storm.
Daniel Hanley wrote in Democracy Journal about why Congress should incorporate federal corporate chartering into their anti-monopoly agenda to democratize the economy and to ensure corporations operate in the public interest. Politicians and policymakers “should use all relevant areas of law to fundamentally transform the relationship citizens have with corporations.”
Sally Hubbard co-led a special 31 Ways 31 Days session for Black Money on Anti-Competitive and Artificial Intelligence Threats to Black-Owned Businesses. “Monopolies are hampering the growth of Black entrepreneurs and often stealing their intellectual property.”
Claire Kelloway published an article in The Washington Monthly about how Big Chicken is seeking further consolidation just as Americans are finally beginning to focus on the dangers of poultry monopolism. She tied the problem directly to poor enforcement of traditional rules against vertical integration. “Corporations such as Cargill have avoided scrutiny by arguing that their control over meat production from grain to grocery shelf trims margins and improves efficiency.”
Nikki Usher received significant coverage on her book News for the Rich, White, and Blue, including a feature on “The Majority Report with Sam Seder,” an interview on Vox Conversations, a quote in The Washington Post, an appearance on the Niskanen Center’s "Science of Politics” podcast, and a mention in a Politico opinion piece in commentary about the downside of journalism designed primarily for those who who can pay. “If lower-income readers get priced out of quality news, they risk going uninformed or, worse still, being taken in by misinformation by free fake news operations, ideological outlets posing as straight news, or viral bursts on social media.”
Open Markets signed a letter along with nearly 60 public interest groups urging House leaders to call a vote on six antitrust bills. “Reining in these companies is an essential first step to reverse the damage of concentrated corporate power throughout our economy,” the letter read. The letter was reported on by Broadband Breakfast.
Alexis Goldstein was featured on CNBC’s "Squawk Box” television show discussing the inequities of the U.S. tax system. The video ran in The Global Herald. Goldstein also appeared on Crypto News 24h speaking about crypto taxes, and was quoted in Bloomberg. “What's really unfair here is people like Elon Musk pay a lower rate of taxes on their capital gains on their doge coin trading than a janitor who is getting up every day and having a higher risk of exposure to covid does on their wages," she said. Goldstein was also quoted in Politico speaking about Open Markets’ work to stop a crypto provision that would allow industry players like decentralized finance services to avoid tax reporting requirements. The piece also ran in Good World News and News Break.
Johnny Ryan was quoted in The New York Times commenting on Ireland’s inability to enforce data privacy law. “G.D.P.R. enforcement against Big Tech has been paralyzed by Ireland’s failure to deliver,” he said. Ryan also appeared as keynote speaker for the Consent 2021 international workshop speaking about data privacy law. The workshop was covered in Silicon Republic. “This is the biggest data breach ever recorded. It occurs hundreds of millions of times every day and what the advertising industry calls consent is just a thin veneer of compliance theatre,” said Ryan.
Sally Hubbard was mentioned in ToolBox for her previous work revealing the dangerous power of Amazon, Google, and the other Big Tech monopolies. Toolbox quoted a statement Hubbard made to the NYT in 2020: “The fear of retaliation is a real fear. Any of these companies could bury them tomorrow. Google could bury them in their search results. Amazon can bury them in their search results.”
Alexis Goldstein was included in a piece in The Hill commenting on how Biden nominees for the Federal Reserve can help meaningfully fight the climate crisis. “From a policy perspective, it's things like looking at capital requirements, looking at risk weights, thinking about the ways that climate risk impacts financial stability,” she continued. “We just want them to actually translate that into more than just acknowledgements. We want to translate it into policy changes.”
Barry Lynn was praised by Ezra Klein in The New York Times for leading Open Markets in successfully pushing new ideas around competition policy. “I had a conversation with Lynn recently, who runs the Open Markets Institute, which has been incredibly influential in driving this new thinking on competition policy. And I was struck by how much … he was thinking about power not competition. I mean, we talked about Amazon for a while. And his big critique of Amazon was not that it was too big and had to be made smaller. But that it had the power to treat different people differently.”
Open Markets’ 2019 study on agricultural consolidation was used by the Biden administration to shape new food chain policy. This was mentioned on ABC 8 News and Fox 8. “The Biden administration points to a 2019 study from the Open Markets Institute, which found the four largest beef packing companies control 82-percent of the market.”
Alexis Goldstein was quoted in Common Dreams commending the U.S. Department of Education’s announcement to forgive $1.1 billion in loans for 115,000 people who left the now-defunct ITT Technical Institute chain before graduating, but urging further action for the wider population. It’s “a relief that many scammed former students of ITT Tech will be getting long overdue relief. [But] Broad-based student debt cancellation is still needed.”
Open Markets continued receiving recognition as the former employer of new FTC Chairwoman Lina Khan. The latest hits included The Guardian, The Hill, CNET, JD Supra, Next TV, USA Dots, and London Daily. “It also noted that Khan worked for the Open Markets Institute, which says on its website that it "pioneered analysis of how Google, Amazon and Facebook wield [monopoly] power in ways that threaten democracy and individual liberty," for about seven years.”
📈 VITAL STAT: 80%
Facebook’s share of the U.S. “personal social networking” market since 2012, as measured by time spent by users.
📚 WHAT WE'RE READING:
“The Alston Case: Why the NCAA Did not Deserve Antitrust Immunity and Did not Succeed under a Rule-of-Reason Analysis” (Michael A. Carrier and Chris Sagers, George Mason Law Review): The authors discuss the Supreme Court’s recent holding in NCAA v. Alston and analyzes the faults in the arguments put forth by the NCAA to justify its conduct.
Nikki Usher’s New Book:
News for the Rich, White, and Blue: How Place and Power Distort American Journalism
Nikki Usher, a senior fellow at Open Markets Institute’s Center for Journalism & Liberty, has released her third book, News for the Rich, White, and Blue: How Place and Power Distort American Journalism. In her latest work, Usher offers a frank examination of the inequalities driving not just America’s journalism crisis but also certain portions of the movement to save it.
Open Markets Employment Opportunities
You can find the full job listings here.
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