Tech Reform Battle Heats Up in U.S. Capitol

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Proponents and opponents of measures to reform Big Tech are busy this spring on Capitol Hill, and the fight over proposed antitrust regulation, in particular, is heating up. In this podcast episode we’ll hear two short interviews that provide a window into efforts to influence lawmakers. These examples are are very different in character.

The first segment is with Drew Harwell, a technology reporter at The Washington Post who shared the byline on a story last week on a campaign by Meta, the company that operates Facebook and Instagram, to besmirch its rival, TikTok, in part as a way to bolster Meta’s arguments against antitrust reforms.

And in the second segment, we’ll hear from Charlotte Slaiman, Competition Policy Director at Public Knowledge, a nonprofit that works on tech policy issues. Prior to joining Public Knowledge, Charlotte was a lawyer in the Anticompetitive Practices Division at the Federal Trade Commission. She shares details on Antitrust Day, a day of action proclaimed by more than 100 civil society groups and businesses advocated for the passage of two proposed bills: American Innovation and Choice Online Act (H.R. 3816, S. 2992) and the Open App Markets Act (H.R. 5017, S. 2710).

Meta Besmirches TikTok

Justin Hendrix:

So Drew, you had a much discussed piece this week with Taylor Lorenz, Facebook Paid GOP Firm to Malign TikTok. So someone came through with some emails that gave you some insight into this particular effort. What exactly happened?

Drew Harwell:

So there's this Republican strategy communications firm called Targeted Victory that has worked with Meta, the owner of Facebook, for a long time. They coordinated this very anti-TikTok press campaign that involved not just gathering every piece of bad press about TikTok from lots of different media markets across the country and involved, you know, using kind of like campaign helper/operative PR types in lots of states across the US, but also involved helping draft letters to the editor that were supposedly from concerned parents saying ‘TikTok is scary’ and sent those out to local newspapers, TV outlets. They pushed these what they call bad TikTok clips about pretty much everything under the sun that would be negative for TikTok, but a lot of them were these kind of moral panic stories about how TikTok is this a haven for, you know, ‘slap a teacher’ challenges, just like kooky teen stuff.

And some of them, you know, were like local news stories that seemed fairly legitimate, like normal parent concerns that a lot of parents have about social media; but some of them were about these totally made up challenges, like the ‘slap a teacher’ challenge. This was something that was not on TikTok but was written about as if it was something on TikTok, but had actually just been sort of like a rumor that had started on Facebook. And so it was this whole dirt slinging campaign that was based off these dubious stories that Targeted Victory, at Meta's behalf, was sort of filtering across the country.

Justin Hendrix:

What was the company trying to do with this campaign? Why in the world would they want to do this?

Drew Harwell:

So we can see specifically from the emails that the campaign directors were saying, you know, our goal is to say, ‘Hey, Meta is in the hot seat right now. Right? But the real threat is TikTok. Here's this company that is foreign owned- TikTok is owned by a Chinese company called ByteDance- that is using personal data of young people, much like a lot of social networks we know of including Facebook. And so their goal was really to say, you know, we get that Meta is the punching bag now, but let's make somebody else the punching bag for once. So, you know, that was part of it.

A couple of other big parts of it though, were one, Meta is facing a big antitrust push, right? There's regulators in DC and across the country who are saying ‘this company is too big, let's break it up, let's pass some regulation.’ And so you can even see in the emails, too, where the directors of the campaign are saying, ‘Hey, bonus points if part of this campaign involves saying that the proposals that lawmakers are looking at now about antitrust, that would tackle Facebook, that those are wrongheaded, that what they really should be focusing on is TikTok.’ All of this is at the backdrop that TikTok is ascendant and Meta is losing audience, losing cache. Facebook- earlier this year- announced that it lost users for the first time in its 18-year history. Meanwhile, TikTok is one of the fastest growing, most downloaded apps around the world. It's got a cultural presence that Facebook would love to have and does not have. And so this was a bit of competitive skullduggery where Facebook saw a way to use its political networks to take its competition down a peg.

Justin Hendrix:

You point out it sort of worked. I mean, they apparently helped to influence Senator Richard Blumenthal, a Democrat from Connecticut to write a letter calling on TikTok executives to testify in front of the Senate, including some choice words about its promotion of behaviors that are harmful and destructive. You know, so I guess to some extent, Facebook got what it paid for?

Drew Harwell:

Yeah. And, you know, it's hard to really know in a vacuum how much of this would've just sort of blossomed organically without Meta shifting its weight around. But yeah, they helped foster these stories. They helped promote these stories in local news. You saw these across the country. So it's hard to know, were these actually just concerned parents who heard about some whispered campaign, kind of rumor thing? Or was this really you know, Meta using this very powerful- you know, Targeted Victory has been around for a long time. There's a reason that it's one of the highest paid Republican campaign beneficiaries in DC. It works with a lot of Republicans, including pretty much every Republican in office, you know? And so yeah, I think it's worth to say that it was effective. It was effective at-- you know, using, I will say, the media, including us, including the local media and the Washington Post and others- to filter these stories out and kind of paint TikTok as this is haven of naughty teens.

Justin Hendrix:

So Targeted Victory’s founder did point out that the Washington Post has published articles on some of these TikTok challenges, including the slap a teacher challenge apparently, as recently as October of 2021, and he really pushed back against your reporting. He said that they tried to reach out to you, but didn't get a response. He said that you and Taylor are both Democrats and went on to kind of discount the story. What did you make of that response?

Drew Harwell:

I'll start with the Democrat thing. I'm not a Democrat, not a Republican, I'm a reporter. I have written critically about TikTok in the past and been called a Republican. So I cherish that kind of attack. You know, the part about them reaching out and wanting to talk to us, we have a statement from them in the story. To be perfectly honest, he tried to get us to talk in a way that we could not use long, long after deadline. It would not have changed the story. This is kind of par for the course for working with PR people. But I just found that kind of interesting.

But for them to sort of point out the media complicity to be in this, I think there is something interesting there, because, you know, the media is not innocent in this. We play a part in filtering these moral panics to the public. You know, there are bad stories and we can't control every one of them. This thing we call journalism is just a first draft. Like we are just responding, we get it wrong, I get it wrong all the time. We try and do the best we can, but what I found kind of interesting about his response was they were kind of holding themselves out as innocent observers in this process. 'Hey, we're just passing the message along .' When really what we can tell from the emails was that they were actively, actively shaping this narrative and actively promoting TikTok as this bad actor with stories that were just dubious, right? And were helping sort of push those dubious stories. So I just found that kind of interesting that they play a part in this like we do, but they played an active role in helping push these dubious stories actively trying to, again, take down the competition for a business maneuver.

Justin Hendrix:

So you've seen a variety of different people respond to this story. I thought one that was interesting was Randi Weingarten, who had a tweet thread last night- of course, the American Federation of Teachers President- really pointing out that this is a sort of cynical campaign that ultimately sewed fear in the minds of parents, teachers, principals across the country, really kind of calling out Facebook for this behavior.

Drew Harwell:

Yeah. And I thought that was really interesting. You know, there are legitimate questions to ask about TikTok. Tiktok is very new. It is shaping a lot of kids' lives, you know, that is not in dispute. And so to know that there's purposefully concocted, like shaped information that's going out there to maybe confuse the image- I think that's problematic and I'm glad she called it out, right? Really what this sort of mudslinging did was just distract from real issues and helped sort of make this, you know, fair debate about social media and kids lives and how it's affecting schools and adults’ lives. Right. It kind of made this into a more sort of crass Pepsi versus Coke kind of thing. And so I was glad she called that out and I'm glad that we're having a conversation about TikTok, and I want it to be about legitimate questions and not just like ‘slap a teacher’ bogus nonsense.

Justin Hendrix:

I mean, there have been just even this week the Wall Street Journal reupped some of its reporting on TikTok related tics and other reported disorders- possible kind of neurological effects- of too much use of TikTok among teen girls in particular. So there are some real harms here.

Drew Harwell:

Yeah. And you know, what I find interesting is that Facebook is pointing these out, right? Like, they are social media. You know, there are harms on both sides. Not to oversimplify it, but it's just interesting to me that Facebook would go to this…. you know, Facebook has been tarred and feathered for many years for a lot of elements, as we all know, related to social media. There are questions about harms of using Facebook as well, for kids and adults, right. We don't even have time to list them. And maybe some of them are overblown, just like maybe some of them about TikTok are overblown. And so I think it's worthwhile to assess each of these on the merits and not just conflate all of these into one big kind of a attack dog push as Facebook did.

Justin Hendrix:

So more transparency and more facts.

Drew Harwell:

Yeah.

Justin Hendrix:

Well, Drew, thank you very much for speaking to me.

Drew Harwell:

Yeah. Thank you for having me.

Antitrust Day Promotes Bills to Reform Big Tech

Justin Hendrix:

Charlotte, I understand that you are helping to coordinate a variety of different groups that are advocating in favor of legislation to reign in big tech companies to essentially do antitrust reform. What is going on?

Charlotte Slaiman:

Yes. So, we have over a hundred public interest organizations and businesses that are coming together today. We're calling it “Antitrust Day.” We are really concerned about the power of the big tech platforms. I think it's making it really difficult for consumers to have a choice, and for businesses to provide a disruptive alternative, which is what we really want. And there is some great legislation in Congress right now that has bipartisan support and really has a shot. So, we're coming together today to support that legislation. The website for Antitrust Day is antitrustday.org/action. And you can go there to email your Congressman and senators and tell them to support the American Innovation and Choice Online Act and the Open App Markets Act.

Justin Hendrix:

Can you say a little bit about who the groups are and name a couple of the businesses that are involved?

Charlotte Slaiman:

Yes. So, I'm here representing Public Knowledge. We are a nonprofit, working in the public interest. And big tech and competition is an issue that we've been working on for several years now. Fight for the Future is one of the great grassroots organizations that's been doing a lot of the work here, putting this together. Some of the businesses are DuckDuckGo, Yelp, Sonos, ProtonMail, some really privacy protective businesses and folks that are trying to offer consumers an alternative. But I think what they are finding is that the power of big tech is making things really hard for them.

Justin Hendrix:

So we're going to talk a little bit about two particular bills, the American Innovation and Choice Online Act and the Open App Markets Act. Maybe just quickly, can you tell me what the status of these two bills are in Congress?

Charlotte Slaiman:

Yes. So the American Innovation and Choice Online Act has passed with bipartisan support through the judiciary committee markup on both the house and the Senate side. And the Open App Markets Act has passed through the judiciary committee markup on the Senate side and has been introduced in the house, but hasn't yet made it through its markup. So, we think there's a lot of momentum behind these bills.

Justin Hendrix:

Now the American Innovation and Choice Online Act is interesting. What do you think, at this point, are its chances in the full Congress?

Charlotte Slaiman:

Well, of course it's always hard to know for sure, but what we can look at is the bipartisan support. And in particular, the vote in the Senate Judiciary Committee. The Innovation and Choice Online Act passed through committee on a vote of 16 to 6, so that required getting a fair amount of Republican support, in addition to all of the Democratic support that it received. So I think that's a really good indicator that once the Senators had time to really learn about the bill and the problem that we're seeking to address, that they recognize the importance of it. And it passed with an overwhelming majority. So, I'm hoping that we can see the same thing on the floor of the Senate.

Justin Hendrix:

What did you make of the Department of Justice coming out last week in support of this particular bill? Is that, you think, a helpful development?

Charlotte Slaiman:

Yes, that's huge. It is not common for federal agencies to endorse legislation, so that's a big deal. I think one of the things that the bills are doing is giving more tools to our Antitrust Enforcement Agencies to be able to address these very serious competition problems. I was an antitrust lawyer doing antitrust enforcement at the federal trade commission before I came to Public Knowledge. And so, I am intimately aware of the difficulties of bringing an antitrust case and the limitations of what we can do with those existing tools. So it makes perfect sense that DOJ was interested in this bill, but it's really great news for our effort.

Justin Hendrix:

One of the critiques I've seen from more right of center organizations around this particular bill is that, well, they characterize it as that antitrust is about keeping firms from using market power to harm consumers, but that this legislation is focused on rivals rather than consumers. Is that a fair characterization of what's going on here?

Charlotte Slaiman:

Yeah, I don't think that's fair. So the Consumer Welfare Standard, it's honestly a bit of a misnomer. It's really not supposed to be only about consumers. And it's often criticized, I think, rightly for being primarily about price, but it's not only about price. It is, under current law, supposed to take into account impacts on other market participants.

One that we talk about a lot is the impact on workers. The Consumer Welfare Standard is supposed to now, under existing law, take account of workers, and it's supposed to take account of the impact on other businesses. It's about competition, not just about consumers and consumer prices.

And these bills are also about consumers. To the extent that antitrust is concerned about consumers, which certainly are a very important goal of competition, it is to let consumers choose and give consumers what we want. And that is also a goal of these bills. Public Knowledge is a consumer organization. We are representing consumers and that is the heart of our interest in these bills.

We need to see innovation, and so that's why we're talking about businesses. We want new startups and businesses that are interested in trying something new. That's what consumers need, that's what consumers want. So, our interests are really aligned here with those small businesses that are trying to disrupt the status quo, which I think really isn't working for consumers.

Justin Hendrix:

So another right of center critique of this is– almost like sort of looking through the mirror on the comments that you just made– the argument is that the tech sector is actually very dynamic at the moment. You see these new platforms and people always point to TikTok coming along and challenging Facebook or YouTube, and that this type of bill may chill that dynamism, and perhaps create a situation where tech firms are somehow less competitive globally. Do you hear that type of rhetoric typically, and how do you respond to it?

Charlotte Slaiman:

Yeah, we do hear that. So, the bills are very narrowly targeted at the largest and most powerful firms. So, I really think it's going to open up markets for new small businesses to be able to flourish and thrive. Only the very, very largest firms are going to be subject to these bills and be limited by these bills. And I think that's actually going to be a huge boon to our global competitiveness. Competition is how we get great new innovations that take the world by storm. And because we haven't been seeing that competition for many years now, the same few companies are in charge, I think we're really missing out on those innovations. And Europe recently agreed to their Digital Markets Act and I don't want those great new disruptive innovations to only be happening in Europe. I want them to be happening here in the United States. So, I think we need to pass this antitrust legislation to open up our markets here at home so that we can have that kind of disruptive innovation we really want to see.

Justin Hendrix:

The last particular kind detracting argument that I'll bring up with you is this idea that these big tech firms need to be big because we need them to help us secure our national security. How do you think about that? Or do you engage with those particular arguments?

Charlotte Slaiman:

So, I think we should look at whether the big tech platforms are currently protecting our national security. I think there's this idea that they are representing American interests abroad. And I think that's just not true. They are companies that are doing what is best for their bottom line, and that doesn't always line up with what the American people might want.

I think about the Hong Kong protests. There was an app that everyone was using to coordinate those protests. It was called HK Live, and in the middle of that incredible protest in Hong Kong, Apple shut down the app for iPhones. People with an iPhone couldn't access that app anymore. And I don't think that was in the interest of democracy. So, I just think we need to really look at whether this claim is true. And I think competition is really going to be the answer.

Justin Hendrix:

So let's move over to the Open App Markets Act, the OMA. This one in particular kind of draws a different set of criticisms really around how it works and the way that it would instruct tech firms to manage their devices and kind of create interoperability. Why is this bill so important, from your perspective?

Charlotte Slaiman:

So this too is about competition and competition to flourish. And you can really see it from the consumer perspective. If you have an iPhone, you're really only seeing the apps that Apple has approved. And if someone has a great idea for an app that doesn't comply with what Apple is looking for, as a consumer, you may not be able to access that app on your iPhone at all. So, I think that's a very direct consumer impact that we really want to fix.

Justin Hendrix:

So one of the criticisms that comes from detractors on this one and in particular now, I'm looking at a letter that the Competitive Enterprise Institute sent to senators, is the idea that app makers really have a responsibility to secure the security of apps on their platforms, because so much sensitive information is collected by these apps. How do you think you'd address that particular critique? Does the Open App Markets Act make potentially apps less safe?

Charlotte Slaiman:

No, it doesn't. And I think this sort of relies on the idea that we can trust Apple to take care of our privacy. And I don't think that's right. If there were another choice for an app store on your iPhone, then we might really have competition on privacy. Then users could choose. And if Apple made a high profile mistake, we might see a lot of people switching to the alternative app store. Right now, I think users are really stuck in a situation where they have to trust Apple, that Apple is providing them the most privacy protective experience and the most secure experience. And we don't trust them anymore.

Justin Hendrix:

So this particular letter contains some just really kind of catastrophic language around what the Open App Markets Act would do. The idea that it would essentially ensure that potentially fraudulent actors gain access to the personal data of millions. What do you see as the primary purpose of this bill? I'm certain, it's not to ensure that fraudulent actors gain access to the personal data of millions.

Charlotte Slaiman:

That's right. The primary purpose is so that there can be competition on your phone so that users have control and can choose the apps that we want. And that if someone wants to offer an alternative, if they don't want to work with Apple's payment processor, if they don't want to be limited in the types of communications they can have with their own customers, that they will be able to have an alternative way to reach consumers. And that consumers will have an alternative way to reach those apps that they want. And I think that is going to create a lot more freedom in the system so that Apple's not in control of everything. And that is a big change, but I think that will be an important change.

Justin Hendrix:

There seems to me, to be in all these antitrust fights, just some real primary disagreements about what the harms of these tech platforms really represent, or whether they represent any harm at all. And I'm really surprised by the extent to which it seems like never the twain shall meet on these points of view. That there's just a very different way of thinking about competition and its implications for the economy and for society more generally across these different aisles.

Charlotte Slaiman:

I mean, that's something I struggle with too, because as an antitrust lawyer, I feel like I didn't often have to justify why competition is good, because we all sort of were on the same page, that competition was the goal. And it was just a question of how best to achieve it. But when you leave that little antitrust bubble, we now have to explain why competition is important.

So, I think competition puts users in the driver's seat. And that is about much more than just low prices. Companies have to listen to what we want. They have to figure out what we want and they have to provide it, if there is competition. If they are worried that users are going to leave, they have to behave better. And if they're not worried that users are going to leave, they are not going to behave well. They are just going to do what's best for their bottom line. And competition aligns that much better with what the user wants. If they're not fearing competition, there are all kinds of things that a powerful platform can do that is not at all what the user wants.

So, I think that sort of ties this fight to so many other issues that we're working on. I hope that in a competitive environment, that companies will be competing on privacy. I hope that they will be competing to offer different content moderation options. I hope that they will be competing to provide a secure experience. I hope they will be providing a diversity of options. We have different life experiences and different ways that we use our technology. And maybe if there was a competitive environment, there would be different products that meet all of our different needs. So I really think competition is such an important value, but we do have to drill down on what that really means to people. And it's not just prices.

Justin Hendrix:

So clearly, you're in favor of these two particular acts moving through this year. What else is on your agenda, from an antitrust perspective? What else are you trying to push for?

Charlotte Slaiman:

Yes. So, these are the two antitrust bills that are showing the most promise right now and moving along the fastest. But there was a whole package of antitrust legislation that got marked up on the house side. It included interoperability requirements, it included structural separation, it included more funding for the antitrust agencies, which I think is so crucially important. So, there's a lot more that we want to do on the antitrust side.

And we also need comprehensive privacy legislation. We also need a digital regulator, which is something that PK is spending a lot of time thinking about and working on. So there is a lot more to do, but I think this will be a huge, huge first step, if we can get the American Innovation and Choice Online Act, and the Open App Markets Act passed into law, we'll be in a much better position to achieve those other goals next.

Justin Hendrix:

The midterms must be on your mind.

Charlotte Slaiman:

Yes, yes. This is our key moment of opportunity. There's not a lot of time left in Congress. It goes by really fast. And so, we really need Congress to make this a priority and get this done before the midterms. I think this is our chance.

Justin Hendrix:

Charlotte, I hope you'll come back and tell me more, as these things advance.

Charlotte Slaiman:

Yes. I would love to. Thank you so much, Justin.