Social Media Is Addictive. Do Regulators Need to Step In?

by Michael Bailey | Jun 19, 2021 | Government & Law, Psychology, Society and Culture, Technology/Internet | 0 comments

Social media is designed to keep us scrolling even when we know we’d be better off putting the phone down. Yale SOM’s Fiona Scott Morton and her co-authors argue that smarter and more robust antitrust enforcement can help, by making room for new social media platforms that promote themselves as healthier alternatives.

Theodore Nierenberg Professor of Economics, Yale University

Written by Susie Allen

June 08, 2021

If you’ve ever delayed sleep to doomscroll on Twitter or checked Instagram just one more time to see if someone else liked that selfie, you know that social media can be a time suck. But is it addictive?

A growing body of medical evidence suggests it is, economist Fiona Scott Morton of Yale SOM writes in a new paper, co-authored with James Niel Rosenquist of Harvard Medical School and Samuel N. Weinstein of the Benjamin N. Cardozo School of Law. That has important implications for how regulators should oversee social media platforms. And it also has surprising implications for antitrust enforcement.

Scott Morton, Rosenquist, and Weinstein argue that antitrust enforcement has long relied on assumptions about how to measure consumer welfare that simply don’t work when a company is making a habit-forming product. Indeed, Scott Morton points out, the entire field of behavioral economics has arisen to give us more sophisticated ways to understand “irrational” decision making, including evaluating the impact on our welfare of goods and services that come with self-control issues, from gym memberships and energy-inefficient air conditioners to opioids.

The addictive qualities of social media are compounded by a lack of competition in the industry. When air conditioners compete, the more efficient ones can gain an advantage by advertising their low running costs. But without meaningful social media competition or regulation, companies have little incentive to change the addictive quality of their content.

“We don’t want to ban cars because they are dangerous, nor would that be a good solution for social media,” Scott Morton emphasizes. “Instead we limit the danger of cars with tools like speed limits, traffic lights, drivers’ licenses, and seatbelts—and we have lots of competition and choice. In digital media we need to find a way to control the stuff that’s harming us, and our children in particular, while keeping the healthy part.” She believes smarter antitrust enforcement could help, making room for newer and safer social media platforms in the market as well as more competition.

For decades, the medical community was hesitant to accept that addiction was possible without the ingestion of a physical substance. But, as Scott Morton and her co-authors write, growing understanding of so-called behavioral addiction has chipped away at that resistance. In fact, gambling addiction is now recognized in the latest edition of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders.

Social media and gambling can hijack the brain’s reward system in similar ways, the researchers argue. In the case of gambling, you’ll keep pulling the slot-machine lever even after you’ve lost hundreds of dollars, just in case the next one is a winner; in the case of social media, you’ll get lost in the infinite scroll, no matter what else you should be doing.

It’s no coincidence that many of us find social media so hard to resist. The business model platforms have adopted depends on people giving up their time: the longer a user is swiping away, the more revenue-generating ads they’ll see. Features such as likes, comments, autoplay, and algorithmic promotion of emotionally arousing content are designed to keep users coming back again and again.

Scott Morton has seen it all firsthand. “Twitter will show me some posts, I’ll look at them, and then two minutes later, they’ll meter out some more…You can watch them try to drip it out so that I stay on the platform longer,” she says.

In theory, of course, there’s nothing wrong with spending a lot of time on social media. Companies have argued that the hours we log represent positive engagement with the platform: we like what we’re seeing, and so we stay.

But in practice, Scott Morton and her co-authors note, survey data finds that a large number of heavy social media users wish they used social media less because of its negative effects on their lives—a classic tug-of-war between short-term impulses and long-term goals that is a hallmark of compulsive behavior. Early data also links social media use among adolescents to mood disorders and ADHD. The dangers seem particularly acute for girls.

So, what does this all mean for regulators trying to decide whether social media platforms are engaging in anti-competitive conduct? Baked into antitrust enforcement is the idea of increasing consumer welfare: enforcement ought to make life better for consumers by promoting competition so that goods become cheaper, better, or both.

Traditional antitrust enforcement focuses on improving our lives by increasing economic output, says Prof. Fiona Scott Morton. “But giving people a larger quantity of something they’re addicted to is likely not increasing social welfare.”

And economists have long argued that one especially useful way to look at consumer welfare is through what’s called output—the quantity of goods or services produced in a given market. “Historically, we have thought of pro-competitive things as being those that increase output and non-competitive things as those that decrease output,” Scott Morton explains.

If the merger of two ice cream companies results in an overall larger ice cream market, then (the basic argument goes) consumers must have benefited, either because ice cream was cheaper and they bought more, or because it was better and they bought more. If the merger reduces the size of the ice cream market, it must have been anticompetitive.

But the logic of output maximization falls apart when it comes to any addictive product. For someone addicted to, say, OxyContin, giving them more OxyContin represents an increase in output—but it surely doesn’t represent a simple increase in consumer welfare.

“This shortcut, which is, ‘Let’s use an output measure like number of pills to proxy for consumer surplus,’—it isn’t a valid shortcut anymore, not when you’ve got an addictive product,” Scott Morton says. “Giving people a larger quantity of something they’re addicted to is likely not increasing social welfare.”

So, rather than looking at output, regulators need to take a more expansive view of consumer welfare, Scott Morton and her co-authors argue—a view that incorporates the specific nature of the product in question. In the case of social media, an antitrust case might rely on whether a company’s business model offers incentives for addiction or has other negative effects on users’ behavior.

By looking at social media companies from this perspective, regulators can promote competition and innovation. It may seem paradoxical to argue that the answer to the problem of social media is more social media, but there’s good reason to believe it. Basic consumer protection regulations would also help by creating a level playing field.

With more companies vying for users, Scott Morton explains, they’ll have a greater incentive to differentiate in ways users value. In all kinds of markets—cars, movies, food—companies have thrived by promoting themselves as the safe option. A non-addictive social media platform could have similar consumer appeal.

Regulation could lead to more companies competing for social media users. And that means choice: “I can choose the site that offers me fewer ads, less addiction, more of the content that interests me.”

“More social media sites means I can choose the site that offers me fewer ads, less addiction, more of the content that interests me,” Scott Morton says.

How far are we from a world of safer social media? Scott Morton thinks there’s reason to be optimistic. Indeed, considering how long it took to rein in exploitative practices in products such as cigarettes and credit cards, there’s an argument that social media regulation is on a fast track.

Lawmakers and regulators are paying more attention because “today, the harms are really much more visible to everybody,” Scott Morton says. “I think the younger generation is speaking up more and they understand it. The Europeans are moving quickly. So all of that is, I think, creating an environment where there might really be some progress.”

https://insights.som.yale.edu/insights/social-media-is-addictive-do-regulators-need-to-step-in

Even Nobodies Have Fans Now

by Michael Bailey | Jan 6, 2020 | Psychology, Society and Culture, Technology/Internet | 0 comments

Nick Walters listens to a bunch of different podcasts, but none speak to him the way “Failing Upwards” does. The weekly show, hosted by the men’s-wear enthusiasts and self-proclaimed “grown dirtbags” Lawrence Schlossman and James Harris, undertakes to navigate the “millennial male zeitgeist.” Mostly, they talk about clothes and New York.

Walters, a 24-year-old commercial banker, lives in Cleveland. He first heard about the show from a friend and recognized himself not just in the hosts but also in its community of listeners — mainly guys on Instagram who share his perspective on fashion and life. “If I know that another guy listens to ‘Failing Upwards,’ we’re going to talk about it,” he says. “It’s kind of like a TV show, like if you’re into ‘Game of Thrones.’ ”

Much like “Game of Thrones,” “Failing Upwards” claims its own extended universe. Fans are known to one another as the Fail Gang. They worship the same streetwear god (Jonah Hill) and a sartorial ritual known as “the fit check,” hypebeast-speak for “Who are you wearing?” Walters fantasizes about going on the show and already knows what he would wear: a pair of Yeezy Boost 700 Wave Runners, a John Elliott hoodie and Eric Emanuel basketball shorts. He likes these clothes, but just as important, he believes that this outfit would impress Schlossman and Harris. “I want to meet the hosts so bad,” he admits. “I want to be friends with them.” He plans on moving to New York someday, and he told me that if they cross paths, he believes that could happen. “We have enough similar interests and a similar sense of humor that, yeah, I think we would hit it off.”

All across the podcast realm, from the heights of self-help to the depths of true crime, imagined relationships are blossoming. Listeners may press play for the content, but many of them eventually come to nurture something like a one-way friendship with the hosts. This kind of daydreaming is an in-joke of the form, best articulated by a popular meme: On first glance, it appears to be a picture of a kid eating ice cream with his friends. Upon closer inspection, he’s actually alone; the three laughing women are models printed on a billboard advertising ice cream. The caption: “How it feels to listen to podcasts.”

Among sociologists and armchair theorizers, this unique type of pining is known as a parasocial relationship — a term coined in 1956 to describe the connection between television viewers and a new class of entertainment personalities, including announcers, game-show hosts and anyone else who spoke in direct address to the camera. “The spectacular fact about such personae is that they can claim and achieve an intimacy with what are literally crowds of strangers,” the sociologists Richard Wohl and Donald Horton wrote in Psychiatry. “This intimacy, even if it is an imitation and a shadow of what is ordinarily meant by that word, is extremely influential with, and satisfying for, the great numbers who willingly receive it and share in it.”

Parasocial relationships are, by definition, one-sided, but like normal friendships, they can deepen over time, enriched by the frequent and dependable appearance of the charming persona on the television set. Podcasts, with their own unique set of formal quirks, are perhaps even better poised to foment this kind of bond. An ideal complement to multitasking, the podcast is ingrained in daily household chores, the morning commute, the bedtime routine. A two-way conversation can be taxing. Podcasts allow us to get to know someone else without all the stress of making ourselves known. If listening demands anything at all, it’s only a bit of imagination. As hosts chatter on, we might picture their faces, their posture, their clothes, the empty cans of seltzer on the table, perhaps even their off-air lives beyond the show. “The host is this disembodied voice that is pervading your intimate spaces, so there’s kind of that room for imaginative bonding between the listener,” says Gina Delvac, producer of the friendship podcast “Call Your Girlfriend,” hosted by Ann Friedman and Aminatou Sow. “You have to remember that there’s no fourth wall. When you’re talking to someone, you’re whispering in their ear. You’re in the shower with them. You’re on their commute to work.”

Over hours of listening, the asymmetry increases. Hosts begin to feel like dear friends, while listeners remain eternal strangers. For the hosts themselves, and other figures who exist within the extended universe of a show, the lopsidedness can feel awkward or uncanny. When Delvac — a silent but known character in the “Call Your Girlfriend” universe — meets fans on the street, she’s often consumed by a feeling of amnesia. “They’re like: ‘Oh, my God. We know each other. We know each other so well!’ And I’m like, ‘Did we go to school together?’ Was she, like, my sister’s friend? ‘How do I know you?’ I’m, like, racking my brain,” she explains. “It can seriously feel sometimes, from the producer or podcaster end, like having a brain injury or some weird sci-fi disease.”

This sense of connection to a distant stranger begins, unsurprisingly, with religion. Fanaticus, the Latin origin of “fan,” was used to describe female temple attendants driven into frenzy by devotion to the gods. This type of chaotic piousness, as a secular behavior, might be traced to the mid-1800s, a time when mass culture was on the rise. In a recent New Yorker article, “Superfans: A Love Story,” the writer Michael Schulman finds early examples in the concert-hall frenzy known as Lisztomania and the protests in England that followed the fictional death of Sherlock Holmes. The shortened word “fan” first appeared around 1900 in reference to the enthusiastic crowds at baseball games. Throughout the 20th century, the term would grow in scope to include worshipers of any entertainment figure — from matinee idols to Elvis to the Beatles. At that point, such devotion was a personal affliction, enjoyed alone in an adolescent daydream. Though fans might write letters, attend concerts or join clubs, the ability to band together as a group was still somewhat limited by the bounds of time and space.

Our modern sense of “fandom” — not just 50 million Elvis fans, but a community of 50 million Elvis fans — most likely began with the Star Trek conventions of the 1970s, which helped create a new infrastructure for fan engagement. These early gatherings of a few thousand people in a rented hotel ballroom would eventually give rise to phenomena like ComicCon, enormous gatherings that have reconceived fans not just as passive viewers but as active, and highly integral, participants. They are no longer merely worshipers of a top-down product but creators and stewards of a shared, bottom-up identity.

Today’s fandom is more like a stateless nation, formed around a shared viewing heritage but perpetuated through the imaginations and interrelations of those who enjoy and defend it. When their common cause comes under threat — through chart competition, cancellation or critique — fans can organize to increase streams, denigrate critics and rally executives to right perceived wrongs. Often they even resort to using the tools of politics while seeking redress. After this year’s disappointing “Game of Thrones” finale, more than 1.7 million fans signed a Change.org petition to remake Season 8 with “competent writers.” (So far, no change has been made.)

In an age defined by political dysfunction, the appeal of any sort of democratically secured victory — however small, however pathetic — isn’t hard to understand. Now that the fandom template has been cemented, it has begun to attach to more obscure or arcane media enterprises: indie-pop artists like Charli XCX, faceless meme makers and even podcasts. The profit model of the podcast world is arranged, perhaps serendipitously, to capitalize on this type of fan relationship. Justin Lapidus, vice president of growth marketing and digital products for the direct-to-consumer linen brand Brooklinen, says podcast listeners are a perfect match for the company’s core demographic: 18-to-54-year-olds with “higher household incomes.” When he looks for shows to advertise on, he tends to make “efficient” plays for smaller, but more committed, audiences. “It doesn’t really matter what genre their podcast is in,” he says. “Whatever they buy, their listeners will buy, for the most part.”

Beyond advertising, podcasts that achieve solvency tend to do so through a stitched-together network of social-media hustles, the sum of which serves to cultivate and monetize an audience’s sense of connection. Though large podcasts often enjoy financial support from traditional media companies and emergent podcast networks, many small and midsize shows — arguably those most indicative of the form — have come to rely on Patreon, a membership platform that invites fans to become financial supporters of creative projects in exchange for a tiered benefits package of the creator’s invention. At the lowest membership tiers, usually $1 to $5 per month, podcast supporters receive benefits like bonus episodes or access to V.I.P. chat rooms. As the tiers increase in price, the rewards grow more substantial, often involving direct engagement with the hosts or entry into the universe of the show itself.

Through these high-tier benefits, the parasocial bond can take on a degree of two-sidedness, absorbing qualities of conventional friendship, but only in a partial, commoditized way. For $51 per month, the hosts of “Dumb People Town,” a comic “celebration of dumb people doing dumb things,” will visit your social-media profile, then film themselves reacting to your life in the same way they break down stories on the show. For $100 per month, the host of “McMansion Hell” will make fun of “a building of your choice”; the hosts of “Mueller, She Wrote” will invite you on the podcast to “share your fantasy indictment league picks.”

According to Wyatt Jenkins, senior vice president for product at Patreon, podcasts are the second-largest category on the site, and the fastest-growing. In the past three years, the number of Patreon pages for podcasts has quadrupled, while revenue intake in the category has increased eightfold. “Roughly 40 percent of our members — this is a guess — are probably doing it altruistically,” he says. “As a vertical, podcasting communities retain memberships very, very well. A lot higher than some other verticals. They release regular weekly content, and they create this incredibly strong bond.”

Because both Patreon pages and ads depend on a sense of personal connection, podcast hosts benefit further when an audience corrals itself into something like a community. This most often occurs in Facebook groups, Discord servers or subreddits — online forums that transform isolated passive listeners into active participants. Some podcast tribes even claim their own names: There are the naddpoles (“Naddpod”) and the MBMBAMbinos (“My Brother, My Brother and Me”). There’s the Scoop Troop (“Hollywood Handbook”), the Wholigans (“Who? Weekly”) and Baby Nation (“The Baby-sitters Club Club”). Fans of “Pod Save America” can be recognized by their T-shirts, which proudly proclaim “Friend of the Pod.”

When these online communities are especially successful, they tend to spin off into subsidiary forums. The wildly popular true-crime podcast “My Favorite Murder” supports a vast constellation of unofficial Facebook groups, many only tenuously connected to the subject of the show. Listeners, who self-describe as Murderinos, can now join “My Favorite Curls” (for murder fans with curly hair), “My Favorite Murder Disnerderinos” (for fans who love murder and Disney), “My Favorite Skin Condition” (for Murderinos with eczema and psoriasis) and “My Favorite Free Emotional Labor” (for calling out and educating problematic Murderinos). In one metagroup, called “My Favorite Thunderdome,” members can tag Murderinos from other subgroups and sub-subgroups for the sole purpose of arguing. This group puts out a regular roundup, “The Weekly Thunder,” which summarizes drama from elsewhere in the “My Favorite Murder” Facebook universe. Once you’re this many layers deep, the podcast itself becomes something of an afterthought — just one moving part in the more complex Murderino ecosystem. “Some of them are people who are, like, too into murder,” says Sophia Carter-Kahn, a frequent lurker in the group who listens to the show only occasionally. “I’ve seen people who are like, ‘I bought this tooth online that’s from this, like, murder victim.’ ”

At the furthest end of this fandom paradigm, the community itself is large enough to begin to overtake the very podcast it came from. The subreddit forum for the left-wing comedy podcast “Chapo Trap House” is, at least in name, a forum for discussing the weekly show. In practice, it serves as an erratic clearinghouse for whatever content its fans feel moved to post: socialist memes, cringe-worthy right-wing tweets and, very often, objections to the show itself. Even among fans, such critiques are numerous, prone to rebuking the show’s overwhelming whiteness, its inconsistently calibrated irony and its outsize reputation on the left. (The show takes in about $142,000 per month on Patreon.) Critiques of the show itself are so frequent that they’ve now become a kind of meme on the subreddit.

In one semi-sarcastic post calling for a “Chapo General Strike,” fans joked that they would cancel their subscriptions unless the show met certain demands: a single nonwhite guest, equity for the producer Chris Wade, the host Felix Biederman’s naming four women he likes who aren’t in his immediate family. Among the more serious, and more ubiquitous, demands was a call for the show to cancel, denounce or otherwise divorce itself from the host Amber A’Lee Frost, who regularly transgresses the discursive norms of the online left. (Frost most recently drew flak for giving a flippant interview to the British website Spiked, which ran under the headline “Meet the Anti-Woke Left.”)

Frost, for her part, has called the show’s subreddit an “incubator of smug, joyless, antisocial sanctimony,” which raises the question: What, exactly, are its members really fans of? If a podcast is not its particular content, and the certain set of people who choose to make that content, then what exactly is a podcast at all?

A few years ago you might have said podcasting was just radio for the internet. Today, the audio is almost beside the point. Today’s podcast hosts are not just on-air personae, but community managers, designers of incentives, spokespeople for subscription toothbrushes and business-to-business software. The worth of a podcast is no longer just its content, but rather the sum of the relations it produces — fan to host, fan to fan, fake friends eating ice cream on billboards together.

Jamie Lauren Keiles is a writer who lives in Ridgewood, Queens. She last wrote about Mike Gravel’s presidential campaign.

Illustrations by Mrzyk & Moriceau. Photo illustration by Maurizio Cattelan and Pierpaolo Ferrari

How Each Big Tech Company May Be Targeted by Regulators

by Michael Bailey | Sep 10, 2019 | Amazon, Government & Law, Technology/Internet | 0 comments

Via NYTImes, By Jack Nicas, Karen Weise and Mike Isaac

Sept. 8, 2019

Amazon, Apple, Facebook and Google have been the envy of corporate America, admired for their size, influence and remarkable growth.

Now that success is attracting a different kind of spotlight. In Washington, Brussels and beyond, regulators and lawmakers are investigating whether the four technology companies have used their size and wealth to quash competition and expand their dominance.

The four firms are lumped together so often that they have become known as Big Tech. Their business models differ, as do the antitrust arguments against them. But those grievances have one thing in common: fear that too much power is in the hands of too few companies.

The attorney general of New York, Letitia James, said Friday that the attorneys general in eight states — she and three other Democrats, plus four Republicans — and the District of Columbia had begun an antitrust investigation of Facebook.

On Monday, a separate bipartisan group led by eight attorneys general is expected to announce an investigation of Google, according to two people familiar with the plan, who spoke on the condition of anonymity before the official announcement.

And in Washington on Thursday, the House antitrust subcommittee is scheduled to hold its third hearing on the impact of competition on data and privacy.

Here is the case against Big Tech — and what Big Tech has said in response.

Amazon: Favoring its own products?

Antitrust scrutiny of Amazon centers on whether the company improperly favors its own products over those of third-party sellers.Credit: Hiroko Masuike/The New York Times

Over the years, politicians and regulators have floated the idea of breaking up of Amazon. That included spinning off its hugely profitable cloud computing business or rolling back its acquisition of Whole Foods.

But much of the recent scrutiny of Amazon in Europe and Washington centers on whether the company improperly favors its own products over those of third-party sellers, which depend on sales from the e-commerce giant. Regulators are also looking at whether sellers need to use certain Amazon services, like ads and its fulfillment network, to sell their products.

When Amazon began, it was mostly structured like a traditional retailer, buying products from brands and manufacturers at a wholesale price and selling the items to consumers.

Amazon has expanded what’s available on its site by having third-party merchants sell products directly to customers. By 2015, more than half the sales on Amazon — 51 percent — were made by these outside sellers. Last year, that grew to 58 percent.

One line of antitrust questioning looks at the products that Amazon sells under its own brands, like AmazonBasics for batteries or Mama Bear for diapers and wipes. Amazon has more than 140 private labels, according to TJI Research.

Lawmakers have asked if Amazon takes advantage of data it collects from sellers to develop its own offerings. They have also questioned whether Amazon’s products get preferential promotion on its site.

Amazon has told Congress that it uses aggregated data like overall sales, not information “related specifically to individual sellers,” and that private-label products make up about 1 percent of total sales.

Italy’s antitrust authority is looking into whether Amazon gives better visibility and search rankings to sellers that ship products through its vast fulfillment network, which sellers pay to use. Lawmakers in Washington have asked similar questions.

Amazon counters that products sold via its logistics network do well in its algorithms because it provides a better and more reliable shipping experience for customers.

Amazon also faces questions about its growing advertising business, which had more than $10 billion in revenue this past year. Much of that came from product ads that show up high as sponsored listings in search results.

At a House hearing in July, Representative Val B. Demings, a Democrat from Florida, asked a lawyer for Amazon what prevented it “from using ads as another way to charge a toll for using its platforms.”

The lawyer, Nate Sutton, who used to work at the antitrust division of the Justice Department, responded that the ads were “an optional service” and that the large majority of products sold on Amazon were not sold through advertisements.

Apple: The power of the App Store

Scrutiny of Apple focuses on how the company controls its App Store. Credit: Emma Howells/The New York Times

Apple’s critics have homed in on its control of the App Store, the digital marketplace for apps on iPhones, iPads and Mac computers. The App Store has become a crucial way for digital businesses to reach customers, and Apple exerts strict control over which companies can appear in the store and how.

Apple says it has the right to “curate” the App Store to ensure high quality and to rid the store of fraud. As a result, Apple’s store generally includes fewer fraudulent apps than Google’s.

But while Apple is the App Store’s sole referee, it is also one of the biggest competitors on it. Apple has bet its future on getting customers to spend more on its apps and services, and that relies in part on people opting for them over the apps of rivals.

Some app developers have accused Apple of abusing its control of the App Store to harm competitors and benefit itself. Spotify has filed such a complaint with European regulators, and makers of parental-control apps have complained to regulators in Europe, Russia and the United States about Apple’s restriction of their apps after the release of its own competing service.

Apple has said that it faces fierce competition and that it doesn’t favor its own products in the App Store; and that it isn’t a monopoly because it doesn’t have a majority share in most markets.

Facebook: Consolidation of social media

Jessica Chou for The New York Times

For years, venture capitalists and tech strategists across Silicon Valley have admired Mark Zuckerberg’s foresight.

While many industry experts wondered during Facebook’s early years whether it would turn out to be the next MySpace, Mr. Zuckerberg was always searching for an edge to stave off any threats of digital irrelevance for his company.

His efforts have worked — perhaps too well. The Federal Trade Commission is investigating what some have called Facebook’s “program of serial defensive acquisitions,” a method of maintaining the company’s dominance in social networking.

Regulators could claim the acquisitions were a violation of the Sherman and Clayton Antitrust Acts — two laws that have been foundational in the past century of federal antitrust prosecutions.

That could include some of Facebook’s largest acquisitions, like Instagram, the photo-sharing network that it bought for $1 billion in 2012. At the time, it was an enormous sum for a smartphone app. Just two years later, Facebook spent $19 billion for WhatsApp, the global messaging application used by more than a billion people.

Competitors believe that long before Facebook bought either of those companies, Mr. Zuckerberg kept a close eye on start-ups that could pose a threat to his company. Facebook has acquired more than 70 companies over roughly 15 years.

For investigators, one other eyebrow-raising acquisition was Facebook’s purchase of Onavo, a mobile analytics company, in 2013.

Onavo’s apps were marketed as free products that allowed consumers to manage and compress their data and download rates, a cost savings for people who live in countries where unlimited data plans aren’t common. But the service also gave Facebook insight into what new competitors were doing.

Facebook walked away from at least one acquisition late last year, the social video app Houseparty, for fear of attracting antitrust scrutiny from regulators in Washington, according to two people familiar with the matter.

It has also taken steps to improve its user data policies as a result of a previous Federal Trade Commission investigation into Facebook’s privacy practices. The social network reached a settlement with the agency in July, paying $5 billion in fines and agreeing to some concessions involving improved oversight of the company.

Facebook has made the case that it faces stiff competition both at home and abroad, pointing to fast-rising competitors like Apple in the United States and WeChat in China. Further, as it testified before Congress in the summer, the company claims that the barriers to starting a would-be challenger to its business are lower than ever. Start-ups like Snapchat, TikTok and others have sprung up quickly over the past 10 years, snapping up early adopters and teenagers, a youthful demographic that Facebook — and its advertisers — value immensely.

Google: What appears in search results

How Google, which sells everything from smartphones to business services, presents search results could be an area of interest for regulators. Credit: Damien Maloney for The New York Times

Google is dominant in several different markets and could face antitrust claims in multiple jurisdictions.

One battle is likely to be in search. When Google debuted in 1996, its search results were a simple list of 10 blue links to websites it believed could answer the user’s query. “We want to get you out of Google and to the right place as fast as possible,” Larry Page, Google’s co-founder, said in an interview with Playboy in 2004.

Years later, Google has changed from sending users elsewhere to answering their questions itself. It has crowded its search results with its own products and services, such as Google Maps, Google Images and Google Flights. Google has gotten so good at answering users’ questions, more than half of Google searches now end on Google, without a click to another site, according to a recent analysis by Rand Fishkin, an online-search analyst.

Google’s new approach has given users quicker answers. But some competitors argue that Google is abusing its dominance in search and inducing internet users to not click beyond Google, which starves those competitors of customers for their products or users to see ads on their sites.

How Google presents its search results could be subject to antitrust laws because it has an effective monopoly, handling more than 90 percent of searches worldwide, according to some estimates. Because Google has become the primary way customers find businesses, steering users to its own products could be considered anticompetitive behavior under some laws.

The Federal Trade Commission investigated Google for such a practice. They settled, and the agency did not conclude there was harm to consumers. In 2017, the European Union fined Google $2.7 billion for favoring its shopping service over rivals in search results.

Google has said that it faces ample competition and that its search engine is designed to give users the most relevant results, not favor itself.

While Google is predominantly known for search, it makes most of its money on digital ads. It dominates that market, too.

Over two decades, Google has built a complex web of services that underpin the sale of most ads on the internet. Google is the biggest seller of digital ad space. It is among the biggest providers of digital-ad analytics. And it is, in effect, the broker in most digital-ad transactions.

Competitors say Google has leveraged that control of the internet’s ad ecosystem to push companies to use its advertising technology and buy its ads.

Brian O’Kelley, the former chief executive of the ad-technology firm AppNexus, said Google had undercut his business. He argued that Google forced advertisers to use Google’s competing ad technology if they wanted to work with other Google-owed services. And this year, the European Union fined Google $1.7 billion for imposing unfair terms on companies that used its search bar on their websites in Europe.

Google said in response to the fine that it had made several product changes to increase the visibility of competitors. “We’ve always agreed on one thing 一 that healthy, thriving markets are in everyone’s interest,” the company said.

Google’s Android software backs at least three of every four of the world’s smartphones, according to analyst’s estimates. Google has achieved such scale by giving Android away for free — almost. In return for handset makers’ use of its version of Android, Google has required them to place its search engine front and center on their phones and preinstall a series of other Google apps.

The strategy has helped Google broaden its dominance in online search, reach more than a billion monthly users across nine separate services and continue to expand its advertising business.

Regulators are considering whether Google unfairly leverages Android’s dominance. Handset makers are effectively locked into Android because it is the only available smartphone software that hosts the apps that users demand, like Instagram and Uber. (Apple’s software also hosts the apps but is exclusively for iPhones.) With that leverage, Google imposes unfair terms on the handset makers, critics have argued.

The European Union agreed, fining Google $5.1 billion last year.

Google has argued that Android has increased competition in the smartphone market by enabling phone makers to compete with Apple.

Give Up Phone Number. Give Up Privacy.

by Michael Bailey | Aug 16, 2019 | Privacy, Technology/Internet | 0 comments

I Shared My Phone Number. I Learned I Shouldn’t Have.

NYTImes Personal tech columnist asked security researchers what they could find out about him from just his cellphone number. Quite a lot, it turns out.

By Brian X. Chen, Via NYTimes

Aug. 15, 2019

For most of our lives, we have been conditioned to share a piece of personal information without a moment’s hesitation: our phone number.

We punch in our digits at the grocery store to get a member discount or at the pharmacy to pick up medication. When we sign up to use apps and websites, they often ask for our phone number to verify our identity.

This column will encourage a new exercise. Before you hand over your number, ask yourself: Is it worth the risk?

This question is crucial now that our primary phone numbers have shifted from landlines to mobile devices, our most intimate tools, which often live with us around the clock. Our mobile phone numbers have become permanently attached to us because we rarely change them, porting them from job to job and place to place.

At the same time, the string of digits has increasingly become connected to apps and online services that are hooked into our personal lives. And it can lead to information from our offline worlds, including where we live and more.

In fact, your phone number may have now become an even stronger identifier than your full name. I recently found this out firsthand when I asked Fyde, a mobile security firm in Palo Alto, Calif., to use my digits to demonstrate the potential risks of sharing a phone number.

Emre Tezisci, a security researcher at Fyde with a background in telecommunications, took on the task with gusto. He and I had never met or talked. He quickly plugged my cellphone number into a public records directory. Soon, he had a full dossier on me — including my name and birth date, my address, the property taxes I pay and the names of members of my family.

From there, it could have easily gotten worse. Mr. Tezisci could have used that information to try to answer security questions to break into my online accounts. Or he could have targeted my family and me with sophisticated phishing attacks. He and the other researchers at Fyde opted not to do so, since such attacks are illegal.

“If you want to give out your number, you are taking additional risk that you might not be aware of,” said Sinan Eren, chief executive of Fyde. “Because of collisions in names due to the massive number of people online today, a phone number is a stronger identifier.”

There is no simple solution to this. In some situations, giving your digits to institutions like your bank provides an extra layer of security. But in most cases, the potential dangers and annoyances of handing out your number outweigh the benefits, as you will read below.

How your phone number exposes you

It took only an hour for my cellphone number to expose my life.

All that Mr. Tezisci, the researcher, had to do was plug my number into White Pages Premium, an online database that charges $5 a month for access to public records. He then did a thorough web search and followed a data trail — linking my name and address to information in other online background-checking tools and public records — to track down more details.

In an hour, this is what came up:

My current home address, its square footage, the cost of the property and the taxes I pay on it.
My past addresses from the last decade.
The full names of my mother, father, sister and aunt.
My past phone numbers, including the landline for my parents’ home.
Information about a property I previously owned, including its square footage and the mortgage taken out on it.
My lack of a criminal record.

While Fyde declined to hack into my accounts using the obtained information and my number, the company warned that there was plenty an attacker could do:

A hacker could try to reset my password for an online account by answering security questions like “What is your mother’s maiden name?” or “Which of the previous addresses did you live at?”
An attacker could use the personal information linked to my phone number to trick a customer service representative for my phone carrier into porting my number onto a new SIM card, thus hijacking my digits — a practice called SIM swapping.
A hijacker with control of my phone number could then break into my accounts if I had mechanisms in place to receive a security code in a text message when logging in to an online account.
A scammer could also use my hijacked phone number to trick members of my family into sharing their passwords or sending money.
A scammer could also target my phone number with phishing texts and robocalls.
An intruder could use knowledge of my phone number to call my voice mail inbox and try to crack the personal identification number to listen to my messages.

Marketers could also take advantage:

An ad tech agency could add my number to a detailed profile about me, linked to other information about my identity and web-browsing activities.
If I signed up for an internet service with my phone number, a brand that bought my digits from an ad firm could upload them into an ad tech tool to correlate the number with my online profile and serve targeted ads.
A shady marketing agency could add my number to a database to blast me with spam calls and text-messaged promotions.

When it’s wise to share your number (and when it’s not)

There are some situations when sharing your phone number is reasonable.

When you enter your user name and password to get into your online banking account, the bank may call or text you with a temporary code that you must enter before you can log in. This is a security mechanism known as two-factor verification. In this situation, your phone number is a useful extra factor to prove you are who you say you are.

“A phone number is a better identifier than just your name, but sometimes you want that,” said Simon Thorpe, director of product for Twilio, a communications company that works with phone carriers on combating robocalls.

But which companies should you trust with your phone number? Here’s where things get tricky.

Plenty of tech companies let you use your phone number to protect your accounts from unauthorized access. But even some legitimate brands like Facebook have been scrutinized for improper use of phone numbers.

Last year, a study by the tech blog Gizmodo found that after a Facebook user set up two-step verification with his phone number, advertisers that uploaded his digits into Facebook’s database could match them to his Facebook profile and serve targeted ads. Separately, some people complained this year that the social network allowed them to look up a person’s Facebook profile just by typing a phone number into its search bar.

The company has removed the ability to find people’s profiles by entering their phone number, said Rochelle Nadhiri, a Facebook spokeswoman. She added that when a user set up two-step verification with a phone number, the company would not use the information to serve targeted ads.

But when large companies like Facebook abuse your digits, whom do you trust?

Unfortunately, there is no neat solution. It all involves work.

That includes first asking yourself whether the benefits of giving out your phone number outweigh the potential risks.

You might also want to set up a second phone number to cloak your personal digits altogether. You could share this second phone number with people and brands you don’t entirely trust. Apps like Google Voice and Burner let you create a different number that you can use for calls and texts.

As for two-factor authentication, most tech companies offer other verification options. They include apps that generate temporary security codes or a physical security key that can be plugged in. Generally, those are safer to use than a phone number.

Here’s a bonus piece of advice. If you have business cards with your personal number printed on them, shred them and order new ones with just your office line.

Eventually, I spoke to Mr. Tezisci about his experience tracking me. He said he was surprised by how easily a person could be targeted with a single set of numbers.

“I only spent an hour, and I was able to see all your addresses and all phone numbers,” he told me. “I think that’s scary, isn’t it? And I selected the legal options. If I were a scammer, I would have gone for your relatives.”

Brian X. Chen is the lead consumer technology writer. He reviews products and writes Tech Fix, a column about solving tech-related problems.

Why Aren’t We Being Protected?

by Michael Bailey | Jun 15, 2019 | Government & Law, Privacy, Technology/Internet | 0 comments

An excellent and important read to understand where we are as a country on this subject, and where we could/should be. Big as California is, they can’t get everything right.

In the big picture, successes and failures combined, California tries harder than most, if not all, of the other states in this country, to make their general population’s health and welfare a priority.
The rest of the country could follow that model to the benefit of us all. It needn’t take so long for Federal officials to figure things out.

Why Is America So Far Behind Europe on Digital Privacy?

Legislators should seize the moment to pass meaningful protections for the digital age.

Via NYTimes, The Editorial Board

June 8, 2019

In the past year, Congress has been happy to drag tech C.E.O.s into hearings and question them about how they vacuum up and exploit personal information about their users. But so far those hearings haven’t amounted to much more than talk. Lawmakers have yet to do their job and rewrite the law to ensure that such abuses don’t continue.

Americans have been far too vulnerable for far too long when they venture online. Companies are free today to monitor Americans’ behavior and collect information about them from across the web and the real world to do everything from sell them cars to influence their votes to set their life insurance rates — all usually without users’ knowledge of the collection and manipulation taking place behind the scenes. It’s taken more than a decade of shocking revelations — of data breaches and other privacy abuses — to get to this moment, when there finally seems to be enough momentum to pass a federal law.

Congress is considering several pieces of legislation that would strengthen Americans’ privacy rights, and alongside them, a few bills that would make it easier for tech companies to strip away what few privacy rights we now enjoy.

[If you use technology, someone is using your information. We’ll tell you how — and what you can do about it. Sign up for our limited-run newsletter.]

American lawmakers are late to the party. Europe has already set what amounts to a global privacy standard with its General Data Protection Regulation, which went into effect in 2018. G.D.P.R. establishes several privacy rights that do not exist in the United States — including a requirement for companies to inform users about their data practices and receive explicit permission before collecting any personal information. Although Americans cannot legally avail themselves of specific rights under G.D.P.R., the fact that the biggest global tech companies are complying everywhere with the new European rules means that the technocrats in Brussels are doing more for Americans’ digital privacy rights than their own Congress.

The toughest privacy law in the United States today, is the California Consumer Privacy Act, which is set to go into effect on Jan. 1, 2020. Just like G.D.P.R., it requires companies to take adequate security measures to protect data and also offers consumers the right to request access to the data that has been collected about them. Under the California law, consumers not only have a right to know whether their data is being sold or handed off to third parties, they also have a right to block that sale. And the opt-out can’t be a false choice — Facebook and Google would not be able to refuse service just because a user didn’t want their data sold.

While the California Legislature is still working out the precise details of the law and its implementation, other states — including New York — are hard at work on their own privacy legislation. The prospect of a patchwork of state-level rules explains why tech companies are suddenly eager for Washington to step in to set a national standard.

If a weak federal privacy law pre-empts state law, it would roll back the protections that Californians are supposed to get — and it would make it impossible for other states to set the bar even higher. That’s exactly what’s going on with privacy bills introduced by Senator Marco Rubio (the American Data Dissemination Act) and Senator Marsha Blackburn (the Balancing the Rights of Web Surfers Equally and Responsibly Act). Both offer weak privacy protections bundled with federal pre-emption. If passed, they would gut the California law. In the House, Representative Suzan DelBene’s Information Transparency and Personal Data Control Act also pre-empts state law, while offering a respectable amount of privacy protection, like a requirement for companies to secure opt-in consent before collecting user data. Still, even that bill lacks some rights that the California law provides.

The Senate bills that take privacy seriously do not contain pre-emption clauses. Senator Catherine Cortez Masto’s DATA Privacy Act, for instance, bears similarities to the California law and to the G.D.P.R., as does Senator Ed Markey’s significantly more ambitious Privacy Bill of Rights Act. Although Ms. Cortez Masto’s bill does not create a private right of action — that is, the ability for consumers to sue tech companies for privacy violations — Mr. Markey’s does, and invalidates arbitration clauses that could otherwise shield companies from individual lawsuits. Consumer lawsuits are a hot-button issue — in the California law, the private right of action exists only in a limited form thanks in part to corporate lobbying. Most interestingly, Mr. Markey’s bill requires the creation of a public list of data brokers in the United States — third party companies who buy and sell your data.

Not all bills on the table take an omnibus approach. Some appear to be highly specific swipes at Facebook. For example, a social media privacy bill introduced by Senators Amy Klobuchar and John Kennedy does not add very much to consumer privacy, but each of its provisions — like one that forbids a change to a product that “overrides the privacy preferences of a user” — seems to be a reference to something Facebook has done in the past. Senators Mark Warner and Deb Fischer have introduced a bill circumscribing experimentation on users without their consent. It might seem shocking that any company would do such a thing, but, in fact, Facebook tinkered with its News Feed in 2014 to test whether it could alter its users’ emotions. (The bill also bars designing sites targeted at children under the age of 13 “with the purpose or substantial effect of cultivating compulsive usage, including video auto-play functions initiated without the consent of a user” — a provision aimed at YouTube and its effect on children.)

Where the Warner/Fischer bill looks to alleviate the harmful effects of data collection on consumers, Senator Josh Hawley’s Do Not Track Act seeks to stop the problem much closer to the source, by creating a Do Not Track system administered by the Federal Trade Commission. Commercial websites would be required by law not to harvest unnecessary data from consumers who have Do Not Track turned on.

A similar idea appeared in a more comprehensive draft bill circulated last year by Senator Ron Wyden, but Mr. Wyden has yet to introduce that bill this session. Instead, like Mr. Warner, he seems to have turned his attention to downstream effects — for the time being, at least. This year, he is sponsoring a bill for algorithmic accountability, requiring the largest tech companies to test their artificial intelligence systems for biases, such as racial discrimination, and to fix those biases that are found.

A grand bargain privacy bill is said to be in the works, with a handful of lawmakers from both parties haggling privately over the details. Forward-thinking legislation — and the public hearings that would inform its passage — are urgently needed. Americans deserve a robust discussion of what privacy rights they are entitled to and strong privacy laws to protect them.

Congress’s earliest attempts to regulate computing in the 1980s and 1990s were embarrassing. The Congressional Record shows that the Computer Fraud and Abuse Act of 1984, for instance, was prompted by a fantastical Hollywood film about a boy hacker. The Communications Decency Act of 1996 — many sections of which were deemed unconstitutional by the Supreme Court in the following year — had its origins in a moral panic about internet pornography touched off by questionable research. All this lent support to the received wisdom that the tech industry is best left to its own devices without the interference of a clueless legislature. More recent attempts, like the abortive Stop Online Piracy Act, an overbroad piece of copyright enforcement legislation that was killed in 2012 after furious backlash from internet users, have not instilled much confidence in Capitol Hill’s understanding of technology. But encouragingly, many of the privacy bills introduced this session show a sophisticated understanding of the market for personal information, the nation’s woefully inadequate cybersecurity and the many dangers posed by a sector of the economy that has proved itself incapable of self-regulation. Legislators have stepped up their game.

A single bill is of course not the end of government’s responsibilities to its citizens. Any regulation must evolve alongside technology to safeguard fundamental freedoms. But a strong law would be a welcome start. The California privacy law will go into effect in less than seven months. Congress should seize the moment and the public momentum to enshrine digital privacy rights into federal law.

Taming the Apex Predators of Tech

by Michael Bailey | May 23, 2019 | Business & Finance, Technology/Internet | 0 comments

To rein in monopolies, maybe we need to rethink what a monopoly is.

Via NYTimes, By Kara Swisher

May 21, 2019

In a tech galaxy that now seems far, far away, everyone was terrified of Bill Gates. He was the Apex Predator of Tech.

You wanted to make software? Microsoft would crush you. You wanted to start an online service? Microsoft would decimate you. You wanted to make a browser to navigate the World Wide Web? Chomp!

It was that last one that finally stopped Mr. Gates and Microsoft. The government accused the company of being a monopoly and of engaging in anticompetitive practices against Netscape and its Navigator browser. In 2001 the government won a landmark case against the company that required it to submit to more oversight and make it easier for other companies to offer competing software.

The Sherman Antitrust Act had prevailed over the leading power in tech, and what happened after was a resurgence of innovation that ushered in a spate of new companies and ideas. You can draw a pretty straight line from that decision to the growth of Google and Amazon and Apple, the explosion of Facebook and the introduction of start-ups like Uber, Airbnb, Pinterest and Slack.

In recent years tech has backtracked, except this time we have several Apex Predators instead of just one. Google and Facebook are the most obvious. More and more people in the media and in politics, as well as consumers, have become fearful of these companies for the damage they can do and the unregulated power they wield.

Something has to be done, but what? Even as distrust of big tech companies increases and governments move to control them, their businesses have never been more successful.

One option is privacy legislation. Europe passed such a law in 2016. While there is no national privacy law in the United States, California will soon have a state-level law, and other states are considering similar reforms. The idea of restricting tech companies’ use of personal data becomes more popular with every hack and every instance of abuse. Still, the likelihood of the United States passing a national privacy law with teeth is small.

Then there are the fines, such as a multibillion-dollar one that the Federal Trade Commission is considering to punish Facebook for privacy violations. While the fine would be the largest the agency has ever levied, it would also be far too small to make a difference. When Facebook announced it might have to hand over $5 billion as its get-out-of-jail-free card, Wall Street cheered and Facebook stock rose.

Meanwhile, there’s a lot of talk about the ways that countries can work together to improve the online ecosystem. Prime Minister Jacinda Ardern of New Zealand met with President Emmanuel Macron of France last week, for example, about creating an intergovernmental effort to end online extremism. While laudable in theory, very little of this hand-wringing is likely to result in any rules with heft. In addition, the prospect of governments making rules around the restriction of speech is rife with ethical dilemmas.

Finally there’s the biggest gun: Using antitrust law to break up big tech companies. Calls for antitrust action have become increasingly loud, most notably in a recent essay in this paper by the Facebook co-founder Chris Hughes. His statement that the company should be broken up attracted a lot of attention, especially after he called the power held by Mark Zuckerberg, his former college roommate, “un-American.” That had to hurt, even if the blow is likely to be glancing, since antitrust cases are slow-moving and hard to pull off.

And yet the idea of using antitrust to rein in these companies got a significant boost recently with the Supreme Court’s decision to allow a lawsuit from consumers aimed at how Apple runs its App Store to proceed in a lower court.

Breaking with the more conservative wing of the court in a 5-4 decision, Justice Brett Kavanaugh wrote in the majority opinion that Apple’s arguments that it wasn’t subject to a lawsuit over its app prices “disregard statutory text and precedent, create an unprincipled and economically senseless distinction among monopolistic retailers and furnish monopolistic retailers with a how-to guide for evasion of the antitrust laws.”

Apple has and will continue to argue that it is not a monopoly in either hardware and software — which is true. But the case, though narrow, is still a flashing neon sign of change. It centers on rethinking the idea of what a monopoly is with an eye to the power of the network effect. Even if a company doesn’t completely dominate its sector, if its platform can exercise what amounts to an iron-fisted control over consumers, perhaps it should be considered a monopoly after all.

Google and Facebook are good examples, because they hold sway in all kinds of ways that make it hard for other companies to compete and for consumers to escape. Google’s share of the search market allows it to dominate mapping, recommendations, email, video, documents and more, while Facebook rules the social media world through its main app along with Instagram and WhatsApp.

None of this is good for consumers, except perhaps by the measure of convenience, because the choices they have are limited and never likely to challenge the status quo. In other words, these companies are Apex Predators, too. You don’t have to be as powerful as Bill Gates once was to be just as harmful.

The question now is: How do we get consumers on top of the food chain for once?

Kara Swisher, editor at large for the technology news website Recode and producer of the “Recode Decode” podcast and Code Conference, is a contributing Opinion writer.

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