What A Day - In Tech We Antitrust

Episode Date: July 29, 2020

The CEO’s of Facebook, Amazon, Apple, and Alphabet will testify before Congress today in hearings that will examine whether their companies hurt consumers and stifle competition.The Trump administration isn't getting rid of DACA (yet) but it is trying to restrict it. And the country’s second largest teachers union says they’ll support their members if they want to strike rather than go back to schools that are unsafe. And in headlines: China suspends their extradition treaty with three countries, Trump’s supporters don’t want to vote by mail and that could be bad if he wants their votes, and a man in Florida goes on PPP spending spree.

It's Wednesday, July 29th. I'm Akilah Hughes. And I'm Gideon Resnick, and this is What A Day, where we applaud Governor Cuomo for his decision to investigate the chain smokers. Honestly, if they just stop giving them awards, I'll be fine with it. They don't have to do any further investigating. Yeah, I mean, they should get an award for worst and most dangerous concert. On today's show, a major hearing targeting big tech, then some headlines. But first, the latest. Are you aware that these protesters called for the governor to be lynched, shot, and beheaded? No.

You're not aware of that? I was not aware of that. Major protests in Michigan. You're the attorney general, and you didn't know that the protesters called for the governor to be lynched, shot, and beheaded. So obviously you couldn't be concerned about that. Well, there are a lot of protests around the United States. And on June 1st, I was worried about the District of Columbia, which is federal. In certain parts of the country, you're very aware of those. But when protesters with guns and swastikas.

I am aware of protesters in the federal government. This is my time and I control it. OK, so that was Congresswoman Pramila Jayapal questioning Attorney General Bill Barr yesterday on the very selective use of federal agents against anti-racist protesters and not armed anti-public health protesters who showed up in places like Michigan earlier this year amid stay-at-home orders. Point being that his decisions as the top law enforcement officer in the country, which also include reducing Roger Stone's sentence, are politically motivated. A.G. Barr, of course, denied this throughout his testimony.

In other news, today, Congress is going to grill another set of powerful men, the heads of Amazon, Apple, Facebook, and Alphabet, which owns Google. It will mark the first time all four have appeared together in a hearing and the very first time for Bezos ever. It'll be remote because pandemic. Excited to see who has the strongest Wi-Fi. So what can we expect? Yeah, besides seeing the strongest Wi-Fi streams for all these gentlemen, the general focus is antitrust and whether these four massive companies have hurt consumers and stifled rivals.

They are ubiquitous, of course, and kind of control much of daily life, which has drawn tons of scrutiny from both parties. And at least some of their businesses have grown during the coronavirus pandemic. So those questions have only increased throughout this as well. The hearing comes after a 13 month investigation by the House Antitrust Subcommittee. And according to the Washington Post, members of Congress have 1.3 million related documents to this and have held previous hearings and hundreds of interview hours leading up to it. And there are a lot of different antitrust issues at play here for the various companies. So Amazon, for instance, for acting as both a selling platform and a retailer, Google for its search dominance and online ads,

Facebook, of course, for social networks and gobbling up other social media companies, and Apple's relates to its usage of their app store. Yeah, aside from antitrust and whether these companies are monopolies, which they say they aren't, do we expect questions around other aspects of their business? Yeah. I mean, there may very well be Democrats who delve into these questions of misinformation on social platforms like Facebook and Twitter, even though Twitter is not a part of this. Republicans, meanwhile, have been eager to return to their unfounded claims of political

bias on some of these platforms. Great stuff. Either side could bring up this incident from this week in which both President Trump and his son, Donald Jr., shared misinformation about hydroxychloroquine on Twitter. That resulted in Jr.'s account being limited for 12 hours and the removal of a number of the videos that had circulated. So beyond the likely theatrics that are going to be involved here, this could actually produce some big moments and potentially kick off broader changes to the industry, akin to the tobacco hearings in the 90s, when cigarette executives were hauled before Congress and testified under oath that their products weren't addictive.

Yes or no? Do you believe nicotine is not addictive? I believe nicotine is not addictive, yes. Mr. Johnston? Congressman, cigarettes and nicotine clearly do not meet the classic definitions of addiction. There is no intoxication. We'll take that as a no. And, again, time is short.

I think each of you believe nicotine is not addictive. We just would like to have this for the record. I don't believe that nicotine or our products are addictive. I believe nicotine is not addictive. Okay, so clearly that was all wrong. That was Senator Wyden. That's a throwback. 1994, go off.

Cigarettes are addictive if you didn't know. Anyway, let's get back to the main focus of the hearing, antitrust, and drill down a little bit on an example. Yeah, so beyond the basic overarching question about how big and powerful these companies have become, they're collectively worth almost $5 trillion. There are a lot of specifics that they want to explore. So let's take a look at Apple and a recent example that gets at the potential concerns. So ClassPass is the company that helps people sign up for exercise classes at local gyms. During the pandemic, it's had to shift its business, of course, since a lot of these gyms are closed now. And it started selling virtual classes via its app.

And according to the New York Times, that prompted Apple to reach out to ClassPass and say, we need 30% of the sales that you're making because these classes are now being sold via an iPhone app. That's because part of Apple's business is charging a 30% commission on in-app purchases. And that could be an issue considering that Apple controls almost half of all app sales. But back to ClassPass. They say the money that people are paying for virtual classes

is going to the gyms that are offering them, which in theory would help keep them afloat while they remain closed. And if that's the case, and there's this commission Apple is taking, they'd be trimming it off of money meant for those small businesses. Of course, a problem.

And Apple has said that the rules have been around for a decade and that if they waive the commission fee in this case, it wouldn't be fair to other companies. They also contend that the 30% helps with privacy and security and falls in line with other companies' platform fees. ClassPass, though, has reportedly stopped putting up virtual classes in its iPhone app, per the New York Times, and that can have a major impact on its sales of those classes, considering just how many people have iPhones. Yeah, and especially now with the pandemic, everything's moving online.

These issues feel more relevant than ever. All right, so what do we actually expect next? Yeah, so beyond the congressional investigation, which could result in new antitrust laws, the Federal Trade Commission is also investigating Facebook. The Justice Department is expected to file a lawsuit against Google. A number of attorneys general around the country are involved in an investigation of Apple. And then there are at least two European investigations of Apple as well. So a lot of moving parts to keep track of there that we will keep an eye on. But let's get into some more domestic news, Akilah. All right. Well, we got news on DACA yesterday. The Trump administration said that people who are already in the program will be allowed to renew their DACA status for a year rather than two years, as was the case. They also said that first time applicants will be rejected, according to a new memo from DHS.

The context here is that, as you might remember, Trump was trying to do away with the program altogether. Then last month, the Supreme Court blocked him because his officials at DHS didn't give a sound enough legal basis. The administration said they would review and figure out next steps. And I guess these are those next steps. The upside here, if you want to strain to find it, is that the administration isn't trying to immediately ram through another DACA termination dressed up with a better legal case. And in the meantime, there is an election in the fall. The obvious downside here is that the rules they've put out might be illegal. Last month, a federal judge ruled that the administration must immediately begin accepting new DACA applications. So court challenges are expected.

Aren't they always with these folks? And let's get into some news on COVID too. All right. So there's two quick updates on the pandemic. On the school's out forever tip, the country's second largest teachers union is saying that they support their members going on strike if their state or district reopens without adequate health and safety measures, though they say striking should be a last resort. The union, the American Federation of Teachers, is pushing for schools to wait to reopen classrooms if testing positivity rates are above 5% or the local infection rate is above 1%. And as we've talked about, few places pass that threshold. They're also calling for masks, upgraded ventilation systems, and spaced out classrooms. All of that costs money. And for what it's worth, the latest Republican relief bill sets aside only a fraction of the funding that school groups say they will need to open safely. And on the Trump's

old new tone tip, Trump is back to calling on states to reopen. But the twist here is that he's saying this while his own administration is telling states the exact opposite. I don't know. Is it a twist? It seems like what happens every other day. Anyways, this is according to a coronavirus task force report that the New York Times got a hold of. The report, which was sent to the states on Sunday, categorizes 21 of them as being in the red zone and recommends imposing additional restrictions like masking and closing gyms or limiting indoor capacity at other businesses. On Monday, a day after the report was sent out, Trump was in North Carolina, one of the red zone states, saying, quote, a lot of the

governors should be opening up states that they're not opening and we'll see what happens with them. And yesterday he said most of the country is Corona free. Yes. Yeah, I know. Weirdest, dumbest timeline. And that is the latest. It's Wednesday WOD Squad, and we got our first preview of awards season as the Emmys announced their nominees yesterday. We'll find out who won on September 20th at a virtual event hosted by Jimmy Kimmel. Netflix was the top streaming service with 160 nominations.

Schitt's Creek got 15, and Watchmen was the most nominated program with 26 noms. But Giddy, what surprised and or delighted you about this year's nominations? I'm surprised they're taking place. I think that was a bit of a shock to me. I was like, oh, interesting. And then I think surprise, I would say the Quibi nominations. They really seem to like sneak in under the wire there, you know, launch a new company, get Emmy noms.

Good for them, I guess. Right. I mean, I wonder if like getting Emmy nominations actually has an effect on like, if people will watch it because the free trial window's over. So who's buying Quibi to watch eight minutes of whatever was nominated? Maybe this will, you know, kick off another free trial again, which would be cool for me. And then Delighted, the Watchmen stuff is really cool.

We've talked about that show being awesome. And then also Mrs. America. I've had a lot of people say that Mrs. America is really good. I haven't seen it. Maybe this will finally, you know, get me off my butt and watch it. Oh, I hope so. Check it out. What's it out to you, though?

What were you excited about here? OK, so obviously super hype about Watchmen. All the WAD squad knows that I love Watchmen and I've been like harping on this for months. So if you were cool and you took my suggestion and watched it, you know exactly why it got all those nominations. And my friend Cord Jefferson got a nomination for his episode, which I knew he would. So fingers crossed for him. Really excited for him. I was a little disappointed because Rami Malek did not get nominated for Mr. Robot, which I also told everyone to watch. So I guess, you know, win some, lose some.

All right. Well, just like that, we have checked our temps. If you're at home, it's a great time to watch TV. So get caught up, stay safe, and we will check in with you all again tomorrow. Let's wrap up with some headlines. Headlines. China is suspending Hong Kong's extradition treaties with Canada, Australia and the UK. This move comes as a response to the three countries cancelling their extradition agreements with Hong Kong after China passed a controversial national security law late last month. The UK and others were concerned that anyone extradited from their countries to Hong Kong

could now be sent straight to China, where the legal system is considered by many to be corrupt and opaque. New Zealand followed the other three countries in suspending their treaties, and the U.S. is expected to do the same. Additionally, the EU is now limiting exports to Hong Kong of technology that could be used for suppression. Former Vice President Joe Biden detailed part of his economic plan to fight systemic racism during a campaign event yesterday. The proposal calls for investing in POC-owned small businesses, creating more affordable housing while getting rid of discriminatory regulations, and providing relief from student debt. All of this is the fourth and final part of Biden's Build Back Better agenda, which was made to help the economy bounce

back after the pandemic. Also yesterday, Senator Bernie Sanders introduced a bill that would give every American their own high-quality mask aptly named masks for all. The legislation calls for the USPS to deliver every mask and to also make free masks available at accessible pickup sites around the country. The massive manufacturing project would require support from the Defense Production Act. By the way, if the government does give you a free mask, you're legally banned from having a viral meltdown in a target. It's true.

It's in the bill. Trump telling everyone that vote by mail is bad could have an unexpected consequence for him. Now his supporters think vote by mail is bad. In several swing states, Democrats have way outpaced Republicans in the number of absentee ballots requested. In North Carolina, requests have gone up by 600% over 2016 among Democrats, but only 50% among Republicans. If you're doing the math at home, you'll notice that could mean less votes for Trump. Of course, Trump supporters will still vote in person, but voting by mail is often easier and bypasses any number of problems at polling places. It's also safer during a pandemic in case that's something those guys are concerned about.

Trump's vote by mail opposition has turned getting out the vote into a minefield for local GOP operatives. In Florida, Republicans are pushing in-person early voting as a more COVID-safe voting alternative that doesn't offend the big, beautiful voters. Staying in Florida because we love it. A man in Florida was arrested after getting almost $4 million in paycheck protection loans and immediately buying a Lamborghini and jewelry. The movie about this guy's fraud spree would be called Catch Me If You Can. Spoiler alert, you definitely can. 29-year-old David Hines applied for $13.5 million worth of loans for seven moving companies he owned, none of which have any online footprint. Throughout May and June, he made a ton of lavish purchases with the money he spent, including dating websites,

luxury hotels, and a shopping spree at Saks Fifth Avenue. Somehow I can smell this man's cologne through my computer. To be fair, Hines isn't alone in abusing the flawed PPP program. Numerous business owners inflated their employee numbers to get a higher loan, and the federal government has filed dozens of criminal cases to get that money back. Hines' lawyer said he is a legitimate business owner and is, quote, anxious to tell his side of the story. I can help you out there, Mr. Hines. His side of the story is, I want to do Entourage in real life. God bless you, David. I can't wait to hear your story.

Yeah, go off Vinny Chase. And those are the headlines. That's all for today. If you like the show, make sure you subscribe, leave a review, tell us if you approve of our cologne, and tell your friends to listen. And if you're into reading and not just great quotes from Turtle and the TV show entourage like me, What A Day is also a nightly newsletter. Check it out and subscribe at crooked.com slash subscribe. I'm Akilah Hughes.

I'm Gideon Resnick. And congrats Emmy nominees. One day they'll have a podcast award. And we'll win. What a Day is a Crooked Media production. It's recorded and mixed by Charlotte Landis. Sonia Tun is our assistant producer. Our head writer is John Milstein, and our senior producer is Katie Long.

Our theme music is by Colin Gilliard and Kshaka.