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U.S., states sue Facebook as an illegal monopoly, setting stage for potential breakup
U.S., states sue Facebook as an illegal monopoly, setting stage for potential breakup
"The U.S. government and 48 attorneys general filed landmark antitrust lawsuits against Facebook on Wednesday, seeking to break up the social networking giant over charges it engaged in illegal, anti-competitive tactics to buy, bully and kill its rivals.
The twin lawsuits filed in federal district court allege that Facebook under its CEO, Mark Zuckerberg, behaved for years as an unlawful monopoly — one that had repeatedly weaponized its vast stores of data, seemingly limitless wealth and savvy corporate muscle to fend off threats and maintain its stature as one of the most widely used social networking services in the world.
The state and federal complaints chiefly challenge Facebook’s acquisition of two companies: Instagram, a photo-sharing tool, and WhatsApp, a messaging service. Investigators said the purchases ultimately helped Facebook remove potentially potent rivals from the digital marketplace, allowing the tech giant to enrich itself on advertising dollars at the cost of users, who as a result have fewer social networking options at their disposal.
The lawsuits together represent the most significant political and legal threats to Facebook in its more than 16-year history, setting up a high-profile clash between U.S. regulators and one of Silicon Valley’s most profitable firms that could take years to resolve. Antitrust regulators explicitly asked a court to consider forcing Facebook to sell off Instagram and WhatsApp to remedy their competition concerns. Such a punishment would unwind Zuckerberg’s digital empire and severely constrain Facebook’s ambitions.
The Federal Trade Commission, led by Republican Chairman Joe Simons, brought its lawsuit in a D.C. district court. Letitia James, the Democratic attorney general of New York, led her Democratic and Republican counterparts from dozens of states and territories in filing their complaint in the same venue. Appearing at a news conference, James on Wednesday sharply rebuked Facebook for having put “profits ahead of consumers’ welfare and privacy.”
“Today, we are sending a clear and strong message to Facebook and every other company that any efforts to stifle competition, hurt small business, reduce innovation and creativity, [and] cut privacy protections will be met with the full force of our offices,” James said.
The lawsuits drew swift rebukes from Facebook, which pledged to “vigorously defend” its business practices in a sign of the bruising legal war still to come.
“People and small businesses don’t choose to use Facebook’s free services and advertising because they have to, they use them because our apps and services deliver the most value,” Jennifer Newstead, the company’s vice president and general counsel, said in a statement.
The looming legal battle marks a dramatic fall from grace for Facebook, which Zuckerberg and his college companions launched from a Harvard University dorm room in 2004 as a way to help students meet their fellow classmates. Zuckerberg’s original, bare-bones website would be unrecognizable to the more than 2 billion users globally who now post a steady stream of photos, videos and other life updates on the site daily, part of Facebook’s ever-expanding digital empire, which includes newer gambits, such as virtual reality.
For years, U.S. regulators had maintained a hands-off approach to Facebook and its Silicon Valley peers, seeking to incubate their continued success. The lack of scrutiny stood in stark contrast to Europe, which saw serious threats in the tech industry and its growth-at-all-costs mentality — and sought to penalize Facebook and other companies in response.
But the 2016 presidential election eventually would rouse U.S. policymakers to the potential pitfalls posed by technology giants, including Facebook, which witnessed a series of high-profile scandals that drew once-unfathomable calls in Washington to punish the industry. Democrats and Republicans since then have found rare accord in challenging preeminent digital firms over their ever-expanding footprints and the consequences they pose.
Last month, the Justice Department filed a similarly sweeping antitrust lawsuit against Google, arguing the company struck special deals and engaged in other wrongful tactics to expand its search and advertising empires. Other antitrust watchdogs have set their eyes on Apple and Amazon, raising the potential for additional action on the horizon. Together, the cases threaten a dramatic reshaping of Silicon Valley, much in the way that the government’s multiyear battle with Microsoft decades earlier helped foster the very Web companies now seen as too powerful.
“It is a significant recognition we’ve got work to do, the tech sector is concentrated, and we need to find a way to restore competition,” said Phil Weiser, the Democratic attorney general of Colorado.
U.S. investigators initiated their antitrust probes targeting Facebook last year. Dozens of attorneys general led by James in New York promised a broad reviewof Facebook’s business, aiming to explore the nexus between its digital dominance and ever-growing efforts to siphon users’ data.
The FTC, meanwhile, took aim at Facebook almost immediately after concluding an investigation into the company over its entanglement with Cambridge Analytica, a political consultancy, that forced the tech giant to pay a $5 billion penalty.
Regulators turned their attention to Facebook’s purchase of Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014, two deals that the government could have blocked at the time but did not. For Facebook, the two transactions — and their jaw-dropping size — reflected its aggressive attempts at the time to pivot to smartphone devices, as millions of users began to spend more time on iPhone and Android apps than desktop computers and traditional websites. Instagram and WhatsApp now boast nearly 190 million U.S. users, according to eMarketer.
State and federal investigators, however, found that the two acquisitions reflected a troubling strategy at Facebook dating back more than a decade — an aggressive ploy to buy or kill competitive threats, large or small, before they could sap away the social networking giant’s popularity.
The government lawsuits at times point to correspondence from Zuckerberg, who acknowledged in 2012 — before purchasing Instagram — that Facebook had fallen “very behind” in photo sharing and needed to make the critical acquisition to catch up, according to the FTC complaint. In making its move, Facebook sought to wield its “power as a sword,” the state attorneys general found, threatening negative repercussions against Instagram and its founders if they did not agree to a sale.
State and federal investigators detailed a similar troubling pattern with WhatsApp, highlighting additional emails from Zuckerberg, who saw the company and other messaging services at the time as “the next biggest consumer risk” for his social networking empire. In 2013, a year before the acquisition, WhatsApp had outpaced Facebook’s messenger product globally as measured by the number of messages sent daily, state officials estimate.
In acquiring the company, Facebook initially promised users that it would preserve WhatsApp’s independence and strong privacy protections, state investigators said. But Facebook reversed course years later, frustrating regulators, who said the bait-and-switch had the effect of eliminating a privacy-protective competitor from the digital marketplace.
Facebook’s aggressive “buy-or-bury” strategy, the state attorneys general added, ultimately meant that users who were “otherwise dissatisfied with the data usage and privacy options available on Facebook have nowhere else to go.” In the meantime, Facebook reaped massive profits, since its popularity helped it generate data about users’ relationships and interests — which in turn generated more money from advertisers.
Facebook on Wednesday strenuously sought to rebut the state and federal charges: Newstead, the company’s general counsel, stressed that WhatsApp and Instagram became successful precisely because of the tech giant’s massive investments in them.
“This is revisionist history. Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses,” she said, arguing that federal regulators could have stopped the Instagram and WhatsApp deals but did not.
“The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,” she said.
The argument, however, has hardly dissuaded the company’s critics, including those in Congress, who found reason for suspicion after concluding their own antitrust investigation this year. The review unearthed a trove of emails from Zuckerberg and his lieutenants apparently plotting against competitors in a series of discussions in which they referenced making a “land grab” for rival apps.
Legal experts also said that the government was well within its rights to challenge those transactions on grounds that they ultimately enabled Facebook to act anticompetitively. Ian Conner, the director of the agency’s Bureau of Competition, said in a statement that the FTC seeks to “provide a foundation for future competitors to grow and innovate without the threat of being crushed by Facebook.” The agency voted 3-2 to bring the case, with Simons, a Republican, siding with the commission’s two Democrats in favor of a lawsuit.
Investigators on Wednesday also faulted Facebook for the way in which the company manages its vast trove of user data and the policies that govern when and how third-party app developers and other companies can access it. Such tactics allowed Facebook to stamp out potential rivals before they could become too popular, investigators found.
In 2013, for example, Facebook sought to neuter the rise of Vine, a short-video service launched by Twitter, the FTC complaint says. Facebook that January cut Vine off from accessing Facebook’s features, such as users’ friend lists, in effect halting its growth, according to the federal agency.
“Facebook has hindered, suppressed, and deterred the emergence and growth of rival personal social networking providers, and unlawfully maintained its monopoly in the U.S. personal social networking market, other than through merits competition,” the FTC charged."
Wednesday, December 09, 2020
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The controversy behind a star Google AI researcher’s departure
The controversy behind a star Google AI researcher’s departure
Timnit Gebru says she was pushed out of the company; now some are worried it will have a chilling effect on academics in tech.
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Google’s workplace culture is yet again embroiled in controversy.
AI ethics researcher Timnit Gebru — a well-respected pioneer in her field and one of the few Black women leaders in the industry — said earlier this week that Google fired her after blocking the publication of her research around bias in AI systems. Days before Gebru’s departure, she sent a scathing internal memo to her colleagues detailing how higher-ups at Google tried to squash her research. She also criticized her department for what she described as a continued lack of diversity among its staff.
In her widely read internal email, which was published by Platformer, Gebru said the company was “silencing in the most fundamental way possible” and claimed that “your life gets worse when you start advocating for underrepresented people” at Google.
After Gebru’s departure, Google’s head of AI research Jeff Dean sent a note to Gebru’s department on Thursday morning saying that, after internal review, her research paper did not meet the company’s standards for publishing. According to Gebru, the company also told her that her critical note to her coworkers was “inconsistent with the expectations of a Google manager.”
A representative for Google declined to comment. Gebru did not respond to a request for comment.
Gebru’s allegation of being pushed out of the powerful tech company under questionable circumstances is causing a stir in the tech and academic communities, with many prominent researchers, civil rights leaders, and Gebru’s Google AI colleagues speaking out publicly on Twitter in her defense. A petition to support her has already received signatures from more than 740 Google employees and over 1,000 academics, nonprofit leaders, and industry peers. Her departure is significant because it hits on broader tensions around racial diversity in Silicon Valley as well as whether or not academics have enough freedom to publish research, even if it’s controversial, while working at major companies that control the development of powerful technologies and have their own corporate interests to consider.
Do you work at Google and want to talk? Please email Shirin Ghaffary at shirin.ghaffary@protonmail.com to reach her confidentially. Signal number available upon request.
What led to Gebru’s departure
People are still trying to unravel exactly what led to Gebru’s departure from Google.
What we know is that Gebru and several of her colleagues were planning to present a research paper at a forthcoming academic conference about unintended consequences in natural language processing systems, which are the tools used in the field of computing to understand and automate the creation of written words and audio. Gebru and her colleagues’ research, according to the New York Times, “pinpointed flaws in a new breed of language technology, including a system built by Google that underpins the company’s search engine.” It also reportedly discussed the environmental consequences of large-scale computing systems used to power natural language processing programs.
As part of Google’s process, Gebru submitted the paper to Google for internal review before it was published more broadly. Google determined that the paper was not up to its standards because it “ignored too much relevant research,” according to the memo Dean sent on Thursday.
Dean also said in his memo that Google rejected Gebru’s paper for publication because she submitted it one day before its deadline for publication instead of the required two weeks.
Gebru asked for further discussion with Google before retracting the paper, according to the Times. If Google couldn’t address her concerns, Gebru said she would resign from the company.
Google told Gebru it couldn’t meet her conditions and the company was accepting her resignation immediately.
It’s a standard process for a company like Google to review the research of its employees before it’s published outside it. But former colleagues and outside industry researchers defending Gebru questioned whether or not Google was arbitrarily enforcing its rules more strictly in this scenario.
“It just seems odd that someone who has had books written about her, who is quoted and cited on a daily basis, would be let go because a paper wasn’t reviewed properly,” said Rumman Chowdhury, a data scientist who is the former head of Responsible AI at Accenture Applied Intelligence and has now launched her own company called Parity. Chowdhury has no affiliation with Google.
The conflict and Gebru’s firing/resignation reflect a growing tension between researchers studying the ethics of AI and the major tech companies that employ them.
It’s also another example of deep, ongoing issues dividing parts of Google’s workforce. On Wednesday, the National Labor Relations Board (NLRB) issued a complaint that said Google had spied on its workers and likely violated labor laws when it fired two employee activists last year.
After several years of turmoil in Google’s workforce over issues ranging from Google’s controversial plans to work with the US military to sexual harassment of its employees, the past several months had been relatively quiet. The company’s biggest public pressure came instead from antitrust legal scrutiny and Republican lawmakers’ unproven accusations that Google’s products display an anti-conservative bias. But Gebru’s case and the recent NLRB complaint show the company is still fighting internal battles.
“What Timnit did was present some hard but important evaluations of how the company’s efforts are going with diversity and inclusion initiatives and how to course-correct on that,” said Laurence Berland, a former Google engineer who was fired after organizing his colleagues around worker issues and one of the employees contesting his dismissal with the NLRB. “It was passionate, but it wasn’t just non-constructive,” he said.
Why Gebru’s departure matters
In the relatively new and developing field of ethical AI, Gebru is not only a foundational researcher but a role model to many young academics. She’s also a leader of key groups like Black in AI, which are fostering more diversity in the largely white, male-dominated field of AI in the US.
(While Google doesn’t break out its demographics specifically for its artificial intelligence research department, it does annually share its diversity numbers. Only 24.7 percent of its technical workforce are women, and 2.4 percent are Black, according to its 2020 Diversity & Inclusion report.)
“Timnit is a pioneer. She is one of the founders of responsible and ethical artificial intelligence,” said Chowdhury. “Computer scientists and engineers enter the field because of her.”
In 2018, Gebru and another researcher, Joy Buolamwini, published groundbreaking research showing facial recognition software identified darker-skinned people and women incorrectly at far higher rates than lighter-skinned people and men.
Her work has contributed to a broader reckoning in the tech industry about the unintended consequences of AI that is trained on data sets that can marginalize minorities and women, reinforcing existing societal inequalities.
Outside of Google, academics in the field of AI are concerned that Gebru’s firing could scare other researchers from publishing important research that may step on the toes of their employers.
“It’s not clear to researchers how they’re going to continue doing this work in the industry,” said UC Berkeley computer science professor Moritz Hardt, who specializes in machine learning and has studied fairness in AI. “It’s a chilling moment, I would say.”