Congress vs. Facebook, Amazon, Google and Apple.
Congress vs. Facebook, Amazon, Google and Apple.
Plus, a question about Trump and the burbs.
I’m Isaac Saul, and this is Tangle: a politics newsletter that tells you best arguments from both sides. Tangle is independent, ad-free and subscriber-supported. If someone sent you this email, they’re asking you to subscribe. You can read it for free and you can reach me anytime by replying to this email.
Today’s read: 11 minutes.
The Big Tech vs. Congress showdown, a question about Trump’s appeal to the suburbs and a COVID-19 update.
Screenshot of the Big Tech CEOs being sworn in yesterday.
BREAKING.
Herman Cain, the one-time Republican presidential nominee and former Godfather’s Pizza chief executive, has died of COVID-19. He was 74 years old. Cain, a longtime businessman, was at one point considered the leading Republican candidate in the 2012 presidential race. More recently, Cain was the co-chair of Black Voices for Trump and attended Trump’s Tulsa, Oklahoma, rally in June, just two weeks before his diagnosis with coronavirus.
Quick hits.
President Trump floated the idea of “delaying” the 2020 election on Twitter Thursday morning, citing concerns over mail-in ballots. “With Universal Mail-In Voting (not Absentee Voting, which is good), 2020 will be the most INACCURATE & FRAUDULENT Election in history,” he tweeted. “It will be a great embarrassment to the USA. Delay the Election until people can properly, securely and safely vote???” On April 23rd, Joe Biden said “Mark my words: I think he is going to try to kick back the election somehow; come up with some rationale why it can't be held." Editor’s Note: Trump has no power that will allow him to delay the election. And this is likely an effort to distract from quick hit #2.
The U.S. economy shrunk by 9.5% in the second quarter and weekly jobless claims rose for the second straight week. At an annualized rate, that’s a 32.9% fall in gross domestic product. It’s both the largest single quarter and largest annualized fall in GDP on record, since the figures began being tracked in 1947. The new figures are signs of a slowing economic recovery.
The United States announced it would remove some 12,000 troops from Germany yesterday. 6,400 forces will come home and another 5,400 will be shifted to other countries in Europe. The move will cost billions of dollars and take years to complete, and it is garnering bipartisan opposition from Congress. The White House says it’s repositioning to better counter threats from China and Russia. Democrats and some Republicans argued the move was a gift to Russia. About 25,000 troops will remain in Germany.
President Trump stopped buying television ads in Michigan, a sign his campaign may be giving up on or reevaluating its strategy in the crucial swing state. If Trump were to lose Michigan, he’d need to win in Pennsylvania, Wisconsin, Arizona, Florida and North Carolina to win the election. All of those states are leaning Democratic or toss-ups right now.
Oregon Gov. Kate Brown said the Trump administration agreed to a phased withdrawal of federal law enforcement agents from Portland, Oregon, yesterday. Federal officials said the agreement is contingent on Oregon state authorities securing the federal courthouse that has been under siege for weeks. Though Trump has used images of the protesters and rioters facing off with federal agents in his campaign videos, administration officials are becoming concerned the violent scenes “could risk becoming a liability” and backfire, since military veterans, the Wall of Moms and nurses in scrubs joined the protests.
BONUS: The late Rep. John Lewis, known as the “conscience of Congress,” penned an essay in The New York Times before his death. The civil rights icon asked the paper to publish the essay on the day of his funeral, which is today. In it, Lewis said his final days “filled me with hope about the next chapter of the great American story.” You can read it here.
What D.C. is talking about.
Big Tech. Yesterday, Congress finally got its chance to press the four most powerful tech CEOs on their companies’ practices. Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Apple’s Tim Cook and Google’s Sundar Pichai were all sworn in and spent the day defending themselves from a barrage of attacks on both sides. The central focus of the hearings was antitrust laws — which I know might sound boring. And in some ways, it is. But few things the government regulates have more direct impact on your life than these companies and those laws.
Antitrust laws are also known as competition laws. Their stated goal is to preserve fair competition in certain marketplaces, which means preventing some companies from becoming monopolies or keeping out competition. In America, the preservation of competition in antitrust laws is central to protecting consumers. If a company has outsized power or influence in a market place, or violates laws to stifle competition, it can then jack up prices or abandon any attempt at providing a quality product. By enforcing these laws, the government protects consumers from paying too much or being forced into consuming bad products.
But yesterday’s hearing, which lasted almost five hours, went way beyond just protecting consumers. In fact, it focused far more on protecting competition and addressing political power. Congress has been investigating these companies for a year, reviewing over 1.3 million documents and conducting hundreds of hours of interviews. They “had the receipts,” as the kids like to say.
The tech CEOs were testifying remotely (of course) in front of hostile parties on the left and right. Republican members of Congress focused largely on what they say is Big Tech’s bias against the right, while the Democrats focused more on the potential of breaking these companies up because of their alleged anti-competitive practices. The hearing oscillated between antitrust laws (the stated reason for the hearing), how the companies moderate social media posts, digital advertising, the growth of e-commerce and how the companies interact with foreign nations compared to the United States.
What the right is saying.
The right does not seem interested in enforcing antitrust laws against these companies. “Everyone seems to hate America’s giant tech companies these days—except the hundreds of millions of people who use their products,” The Wall Street Journal editorial board said.
While everyone seems to pretend these businesses face zero competition, the reality is much different. And the CEOs came prepared to make that point. Apple iTunes is fighting Spotify and Amazon prime, while Apple phones face competition in every direction (from Samsung to Google). Facebook has Snap and TikTok dominating new young users and is in a constant battle with Twitter. Even Amazon, which is the presumed “dominator” of the online marketplace, has only 1% of the global retail business, less than 4% in the U.S. and has massive challengers like Walmart entering their space. And, of course, all four compete with each other constantly.
“Amazon has prospered in part by becoming a marketplace for small business, not by excluding it,” the WSJ editorial board said. “Some 1.7 million small and medium-sized businesses sell via Amazon, and the company says more than 200,000 had more than $100,000 in sales in 2019.
Plenty of conservatives found the CEOs’ answers on pressing questions unsatisfactory, but there was still a sense this had nothing to do with antitrust laws at all. “This isn't about antitrust concerns, and it never was,” Tiana Lowe said in the Washington Examiner. Instead, she argued that it’s about political power. We know what would happen if a successful antitrust lawsuit was brought against a company like Facebook.
“Instagram and WhatsApp would likely just become their own companies again,” Lowe wrote. “That would do absolutely nothing for Democrats wanting Facebook to censor President Trump and absolutely nothing for Republicans wanting to keep up coronavirus pseudoscience.”
Reason’s Eric Boehm agreed, saying the rare arguments that actually focused on antitrust law were hollow. “If anything,” Boehm wrote, “the marketplace created by Amazon or the ‘app store’ created by Apple have increased online competition by giving millions of small businesses and web developers a place to sell their digital goods.”
What the left is saying.
The left was out for scalps. Rep. David Cicilline (D-RI) got the party started by declaring: “Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.”
Throughout the day, Democrats brought up example after example of these big four companies using their consolidated power to keep out — or simply purchase — any competition that popped up. The Los Angeles Times editorial board said the CEOs got “raked over the coals.”
“Amazon is responsible for about 40% of e-commerce in the United States and holds a similar lead in the market for hosting internet-based services,” The LA Times board wrote. “Alphabet’s Google handles more than 90% of the world’s internet searches, and its YouTube user-generated video platform is the most popular in the United States. Facebook is the world’s largest social network and, along with Google, dominates online advertising. Apple doesn’t corner the market on any products or services, but the only way to sell software and services to the roughly 1 billion iPhones and iPads in use worldwide is to pass through Apple’s App Store.”
Perhaps the most egregious example of these companies crushing their competition was Amazon’s use of data it collected from sellers on its platform to create competing products of its own. Google’s Sundar Pichai also struggled to explain whether Google alters its search engines to benefit its own products over the competition. When these practices were probed, neither CEO had anything close to a satisfactory response.
In Recode, Jason Del Ray broke down how Amazon’s power over its sellers needs to be reigned in — or nobody will be able to compete. Del Ray addressed Jeff Bezos’s defense against accusations of leveraging its data on competitors and using it to build rival products, which essentially amounted to “it happens but it’s not a practice.”
“Even if Bezos is right and Amazon only rarely abuses its position over its own sellers, the complaints shared during the hearing show that the company has grown so big and powerful that even abuses of neglect have the power to crush the small businesses that power Amazon’s success — but also are so dependent on the platform that it can crush them without even noticing,” Del Ray said.
My take.
If anyone should have a bone to pick with Big Tech, it’s me. Nearly a decade ago, when my professional journalism career began, media outlets were becoming increasingly reliant on Facebook and Google for revenue. Facebook’s algorithms determined how much traffic stories would get based on how people reacted to them in the first hour the post was up on Facebook. Their feed was the new front page of the newspaper, people said. Google’s advertising programmatics populated the pages of those news stories (and still do) that drove revenue to media outlets.
This dynamic drove the clickbait craze that peaked around 2014 and 2015. Around that time, Facebook was telling publishers they were going to “pivot to video,” insisting large media companies staff out video teams that would thrive on the evolving social media network. Many news outlets took them at their word. Instead, it turns out that Facebook lied about how many views videos were getting, buried political and news content deep in people’s feeds, and in many ways abandoned its plan to dominate the video space. Google simultaneously helped knife the media industry by pissing everyone’s work across the internet for free.
Ask any journalist, or media executive who’s been around a minute, and they’ll lament the fact that Facebook and Google killed newspapers.
What fewer people in the media are willing to admit is that most of this was predictable. It’s easy to blame Google and Facebook for the unthinkable destruction of newspapers, and they deserve some blame. It’s harder to say we could have — and should have — seen it coming and innovated accordingly. Plenty of media companies were adapting in 2014, building out subscription platforms and diversifying their revenue streams, while others attempted to pivot to video and game the Facebook algorithms for traffic.
Today, as this very newsletter demonstrates, the industry is changing again. News companies are forcing Google and Facebook to pay for the content they create. Media companies are asking people to pay for subscriptions to stay afloat. Independent publishers, like me, are moving to platforms like this, and asking loyal groups of readers (like you) to pay for content to keep us afloat. It’s a whole new business model that can and likely will thrive without much of Google’s or Facebook’s help.
Amazon, Google, Facebook and Apple employ plenty of shady practices that need to be reigned in. Amazon’s warehouse workers have described horrendous conditions and should have the power to unionize. Google’s search engine dominates too much of the space to be boosting its own products. Apple should lower the entry fee for someone to launch something in its app store.
But the idea that they’re violating antitrust laws is tough for me to buy. For one, American antitrust law is unique in that it’s not about protecting competitors — it’s about protecting consumers. Democrats didn’t effectively demonstrate how consumers were being hurt by these companies. In fact, most of their meandering attacks demonstrated how impactful the companies have been, and how beloved they are by most Americans.
Facebook’s acquisition of Instagram, for example, wasn’t just stifling competition, even if emails show that was Zuckerberg’s intent. Facebook made Instagram better. Go back and watch old clips of how Facebook was mocked for spending a billion dollars on an “app that made your photos look worse” and you’ll realize how much our hindsight bias is at play.
On Tuesday, Democrats embarrassed themselves by talking over Attorney General William Barr, refusing to let him speak and using their time to monologue for campaign ads. Yesterday, Republicans were up. They gleefully squandered an opportunity to press these CEOs about their work with the Chinese government, slave labor’s role in producing their products overseas and the different ways they’ve helped to spread harmful misinformation and upend our democracy.
Instead, they focused on the myth of “Big Tech’s anti-conservative bias” because a few liberals in Silicon Valley have written some mean emails. Few companies have done more to benefit Republican politics than Facebook, Twitter and Google in the last decade — any assertion otherwise is pure victimhood fiction. Republican Rep. Jim Sensenbrenner demonstrated this absurdity by trying to press Facebook CEO Mark Zuckerberg about why Donald Trump Jr. was “censored” on Twitter, a platform Zuckerberg has nothing to do with, and an incident of “censorship” that didn’t actually happen.
As my friend and ultimate teammate Marques Brownlee put it…
Speaking of…
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COVID-19 update.
More than 150,000 people have now died of COVID-19 in the U.S., according to counts from Johns Hopkins University and The New York Times. After seeing a surge of new cases, the situation in Texas and Arizona has improved slightly. In Florida and California, things continue to deteriorate.
Yesterday, Dr. Anthony Fauci and former FDA commissioner Scott Gottlieb both forcefully denounced hydroxychloroquine as a coronavirus treatment after a viral video of Houston doctors praising the drug was shared by the president and viewed over 20 million times. Hydroxychloroquine was also praised by a professor of epidemiology at Yale School of Public Health who said it’s successful at treating the virus if administered early on in combination with the “antibiotics azithromycin or doxycycline and the nutritional supplement zinc.”
In the meantime, the White House launched a new “Embers Strategy” which will send ”increased personal protective equipment, coronavirus test kits and top health officials like Drs. Anthony Fauci and Deborah Birx to coronavirus hotspots across the U.S.,” according to Axios. The plan is meant to show a renewed focus from Trump on addressing the virus’s spread.
Your questions, answered.
Asking a question is easy. All you have to do to reach me is reply to this email and write in. I answer a reader question in almost every newsletter. Give it a try!
Q: In the last few days, it seems like all Trump is talking about is “the suburbs.” What’s behind this sudden focus? He seems to say the suburbs are in rapid decline or will be destroyed by Joe Biden, and it seems like a major focus for his campaign all of the sudden.
— Danielle, “Suburban” Detroit, Michigan
Tangle: Your eyes are not deceiving you. In the last week, the Trump campaign seems to be narrowing its focus on winning back the suburban voters who polls show are fleeing Trump’s base. In 2016, those voters were key to Trump’s win — but he is underwater with them right now.
It’s not a very subtle strategy. Trump has repeatedly shared videos, tweets and stories designed to warn Americans that left-wing mobs are coming to destroy their neighborhoods when they’re done with American cities. If history is any indication, this will be effective. Fear is a very strong political motivator, and the president knows that better than anyone. On Twitter last week, he shared a story from The New York Post about some of Biden’s admittedly flawed housing plans and said “suburban housewives of America” must read the article to understand how “Biden will destroy your neighborhood and your American dream.”
Then yesterday, Trump sent out an update: “I am happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low income housing built in your neighborhood,” he tweeted. “Your housing prices will go up based on the market, and crime will go down. I have rescinded the Obama-Biden AFFH Rule. Enjoy!”
Naturally, many in the media and on the left responded to Trump’s new focus by calling it racist. The housing programs Obama and Biden have pushed are intended to desegregate America and make the suburban lifestyle more accessible across class and racial divides. Trump trashing those programs without any legitimate alternative, and using words like “preserve,” reeks of a dated kind of fear-mongering and actual red-lining that was centered on keeping suburban neighborhoods white.
I’m not saying these housing policies are perfect. There are good arguments against them, including the New York Post story the president shared. Higher density living likely means more taxes and more crowded schools, and there are legitimate fears over those changes. And it’s clear Trump is once again planning to run a campaign on fear. The more interesting question to me is: will it work?
Frankly, I don’t think so. Trump’s specific focus on the suburbs is because almost half of all voters are from the ‘burbs, and his job approval rating amongst suburban voters is just 38%. But it’s even worse when it comes to race relations and the recent protests. 65% of suburban voters have a favorable view of the Black Lives Matter movement, which Trump has lambasted.
The issue now, though, is that this isn’t 1968 and Trump isn’t Richard Nixon. For one, the president is running on a pitch that America is in chaos and the cities are spinning out of control. But he’s the president. He’s in charge now, and the alleged chaos is happening on his watch. Nixon wasn’t president when he ran a very similar campaign — he was running against the chaos he had no power to change.
The second obvious issue is that many suburban “housewives,” as Trump archaically called them, are not housewives. Suburban moms are working women in 2020. They’re also participating in many of the protests Trump is deriding, including the ones in Portland, where the “wall of moms” that’s been gassed and shot at by federal protesters has been getting outsized media attention.
Finally, there’s the issue of the actual pushes Trump is making. If someone was unsure how to feel about this new pitch and dug into Trump’s policy proposals, they’d find that the 2015 Affirmatively Furthering Fair Housing (AFFH) rule Biden and Obama pushed was essentially requiring local governments to “proactively ensure fair housing in order to receive federal housing funding,” as Politico put it. Racial discrimination in housing is a real thing and, of all people, the president should understand it. He and his family participated in it themselves.
The rule was made to give more teeth to the Fair Housing Act, which combats housing segregation. As I said, there’s a good argument to be made that these rules created undue burdens on local governments — and conservatives were making that argument well. But with his tweets and his speech in Texas, Trump has made it clear he was motivated by the goal of keeping poor people out of suburban areas. Many low-income advocates saw that as a not-so-subtle dog whistle for people of color.
“Just because people are poor doesn’t mean they’re bad,” former Housing secretary Julián Castro said. “That’s obvious to most, but not to bigots like” Trump.
Which one of these arguments is going to win over the suburban voters Trump is trying to win back? 60 years ago, maybe it’s the story Trump is telling of left-wing mobs and poor people flocking to the burbs to ruin your “suburban lifestyle.” But in 2020, I have serious doubts that’s a convincing argument to the voters Trump needs on his side in order to get re-elected.
A story that matters.
The Treasury Department agreed to lend the Postal Service $10 billion yesterday, asking for “proprietary information about the mail service’s most lucrative private-sector contracts” in return. It’s an incredibly important injection of funds for the service and will keep it solvent for at least another year, The Washington Post reports. Some USPS advocates were worried the terms of the deal required the Postal Service to hand over information on its contracts, which are typically kept private. But with the 2020 election around the corner, and a huge increase in mail-in voting expected, the Postal Service needs to be fully operational for things to go well. The $10 billion is a major step in that direction.
Numbers.
8%. The percentage of American adults who view Iran as an ally or friendly to the U.S, the lowest percentage of any country polled.
75%. The percentage of American adults who view Iran as an enemy or unfriendly to the U.S.
85%. The percentage of American adults who view Canada as an ally or friendly to the U.S., the highest percentage of any country polled.
35%. The percentage of Americans who support the “defund the police” movement.
60%. The percentage of Americans who oppose the “defund the police” movement.
48%. The percentage of Americans who support “broken window policing where law enforcement focuses on policing low-level offenses.”
42%. The percentage of Americans who oppose “broken window policing where law enforcement focuses on policing low-level offenses.”
28%. The percentage of registered voters who think it is important that Joe Biden picks a person of color as his running mate.
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Have a nice day.
Scientists say the long sought after blood test for Alzheimer’s is finally here. The newly developed test can identify the disease just as accurately as other tests that are far more expensive and far more invasive. This means its diagnosis could become more widely available, which should help improve treatment for patients. Incredibly, the test was also able to identify the disease “20 years before memory and thinking problems were expected in people with a genetic mutation that causes Alzheimer’s.” The test could be available for clinical use in as little as two to three years.