News & Insights for the AI Journey|Thursday, October 17, 2019
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FAANGs under Fire: Congress, Administration Looking at Possible Antitrust, Data Ethics Abuses 

The rising outcry against perceived anti-trust, data ethics and hate speech abuses of FAANG companies has sparked actions from Congressional committees, federal law enforcement agencies and regulators from both political parties looking into the activities of “Big Tech.”

The Associated Press reports that  the U.S. Justice Department and the Federal Trade Commission are investigating Google, Facebook, Amazon and Apple “over their aggressive business practices, and the U. S. House Judiciary Committee has announced an unprecedented antitrust probe, promising ‘a top-to-bottom review of the market power held by giant tech platforms.’”

This follows statements from at least two Democratic presidential candidates, U.S. Sen. Elizabeth Warren (D-Massachusetts) and former Vice President Joe Biden, who said he is “open to the idea,” for breaking up Big Tech companies (Facebook co-founder Chris Hughes recently announced his support for a break-up of the company).

One result has been extreme volatility among FAANG company stocks, which lost almost $140 billion in value earlier this week.

While the FAANGs declined to comment on the investigations, according to the AP, U.S. Rep. David Cicilline (D-Rhode Island), who heads the House investigation subcommittee, called a break-up of the companies a “last resort.”

Federal regulators have investigations underway against Facebook and its privacy practices related to information about its 2.4 billion users, and some industry observers have called for the company to spin off Facebook subsidiaries WhatsApp and Instagram. Even Facebook’s CEO (on what early Facebook investor Roger McNamee, author of Zucked, calls Mark Zuckerberg’s “annual apology tour”) has expressed support for regulation covering harmful content, election integrity, privacy and data portability.

Warren has proposed that tech companies above $25 billion have restrictions on expansion and be required to have parts of their companies to operate as separate entities. Facebook’s 2018 revenues: $56 billion.

Scrutiny of the FAANGs increased in 2017 after it was learned that Cambridge Analytica, a political data firm hired by President Trump’s 2016 election campaign, “gained access to information on 50 million Facebook users as a way to identify the personalities of American voters and influence their behavior,” the New York Times reported, leading to “questions about how the social media giant protects user information.”

Critics of Google, meanwhile, have spotlighted the company’s dominance in online search and its ability to “show its own products above competitors’ or feature its own ads prominently,” reported the AP, adding that the company “has also faced scrutiny over the practices it uses to get its search and other products featured on smartphones” via its Android operating system used in many smartphones.

Alphabet-owned Youtube has come under fire for not blocking hate speech and other extreme views from appearing on its video streaming site that have been linked to mass shootings and other acts of violence. Today, the Wall Street Journal reported that the company “said it is stepping up efforts to scrub hateful content from its platform..., taking on more of the task of judging the validity of information….”

In a blog released today, Youtube said “Today, we're taking another step in our hate speech policy by specifically prohibiting videos alleging that a group is superior in order to justify discrimination, segregation or exclusion based on qualities like age, gender, race, caste, religion, sexual orientation or veteran status. This would include, for example, videos that promote or glorify Nazi ideology, which is inherently discriminatory. Finally, we will remove content denying that well-documented violent events, like the Holocaust or the shooting at Sandy Hook Elementary, took place.”

Inquiries into Apple’s business practices are expected to focus on its app store, “where Apple controls all the access and sets commission rates for subscriptions and other purchases made through the apps,” the AP stated. “If it opens an investigation, the Justice Department is most likely to focus on whether Apple is abusing its veto and pricing power to throttle and gouge its competition. The commissions it collects are also the subject of a consumer lawsuit that the Supreme Court recently cleared to proceed.”

Amazon has drawn the ire not only of Sen. Warren but also of President Trump, who has been suspected of resenting criticism of him from the Amazon Founder Jeff Bezos-owned Washington Post. The e-commerce giant has been subjected to antitrust investigations by the European Union, which “has been conducting an early-stage probe into whether Amazon is using data to gain an edge on third-party merchants, who are both its customers and rivals. Italy has been looking into whether Amazon abused its dominance by offering preferential treatment to companies that used Amazon’s own delivery-management services,” according to the AP. The company also has been accused of replicating bestselling products on Amazon.com, then moving consumers to its own products.

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