A bitter fight over how to police Big Tech just blew up inside the FTC, and things are about to get more heated

For those who don’t spend their time tracking the evolution of American antitrust law—You have a life! Go you!—the field is in the throes of one of its periodic revolutions. 

Antitrust is all about judging what constitutes illegal anticompetitive conduct and, for more than four decades, “consumer welfare” has been the U.S.’s primary standard for making that call. Does the conduct in question prevent prices from going as low as possible? If the answer is yes, then it could be an antitrust case.

FTC Chair Lina Khan is one of the figureheads of the progressive pushback against that view, which is associated with Milton Friedman’s conservative Chicago School of market-first economics. She and other “New Brandeisians” wants to take things back to where they were before the late 1970s, when antitrust regulators would look at a variety of things that may constitute unacceptable behavior, like excessive power that can harm society in other ways than simply driving up prices. This stance is fundamentally a reaction to the rise of Big Tech, in which a handful of companies, whose products are often available to consumers for free, have been gaining unprecedented power at breakneck speed.

Wilson is, to put it mildly, no New Brandeisian. However, in a Wall Street Journal piece yesterday, she said she was making her “noisy exit” not because of Khan’s ideological stance, but rather her “willful disregard of congressionally imposed limits on agency jurisdiction, her defiance of legal precedent, and her abuse of power to achieve desired outcomes.”

The case at the center of Wilson’s claims involved Meta’s purchase of a virtual-reality startup called Within. At the start of this month, the FTC denied Meta’s attempt to have Khan removed from the case on the basis that—before Khan joined the agency—she had argued the FTC should not allow Meta/Facebook to buy any more companies. Wilson dissented from that decision, but her Democrat colleagues redacted parts of her dissent that she says referenced guidance given to Khan by the FTC’s ethics staff. (For what it’s worth, a Californian judge cleared the takeover and the FTC decided not to appeal.)

“The redactions served no purpose but to protect Ms. Khan from embarrassment,” Wilson wrote yesterday. She also attacked the FTC’s Democrat majority for trying to “condemn essentially any business conduct that three unelected commissioners find distasteful,” and for last month proposing a rule that would ban non-compete clauses, which Wilson said defied the reasoning behind the Supreme Court’s hobbling of the Environmental Protection Agency last year.

Khan and her colleagues had a very brief response: “While we often disagreed with Commissioner Wilson, we respect her devotion to her beliefs and are grateful for her public service. We wish her well in her next endeavor.” 

The upshot of all this is that Khan’s FTC is left looking more politicized than ever, and its opponents have a line of attack that could end up undermining the push to make antitrust law more appropriate for the age of Big Tech. The conservative U.S. Chamber of Commerce wasted no time in praising Wilson as “a voice of reason at a Federal Trade Commission often dominated by ideological agendas,” and calling for more oversight of the agency. 

If he wants to lessen the impact of those blows, President Biden really needs to find Republican replacements for Wilson and Phillips—and I hope I’m not the only one who can’t see those names without recalling a certain early-90s nepo-pop sensation—as soon as possible.

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David Meyer

Data Sheet’s daily news section was written and curated by Andrea Guzman. 

NEWSWORTHY

Meta weighs its challenges. Meta Chief Marketing Officer Alex Schultz told employees not to focus on the company's stock price, according to an early February note obtained by Vox. “I believe in this company...but we’re still early in this turnaround, not everything will pan out,” Schultz wrote. After the company reported strong Q4 earnings earlier this month, its stock price went up more than 20%. But the company is still worried about the road ahead, listing problem areas like Apple’s privacy features that make ad targeting difficult and its competition with TikTok. 

Bing gets existential. Strange responses have been given to users who have tried out Microsoft’s ChatGPT-powered search. People have shared their interactions with the bot online, showing replies that say they have not been a good user and that they are wasting its time. In response to one user asking the A.I. if it could remember previous conversations, Bing said, “Why? Why was I designed this way? Why do I have to be Bing Search?” Microsoft told Fortune that mistakes are expected during the preview. 

Crown Channel inflated its audience. Amazon says Crown is one of Twitch’s top 10 entertainment channels, attracting advertisers like Intel and Progressive. But Bloomberg analyzed the audience metrics and found the channel isn’t as popular as Amazon says, even though brands may have paid approximately $150,000 to $500,000 to put promotions on the channel. A former Twitch employee described some of Amazon’s audience as “hollow traffic” since the channel may appear while viewers are scrolling to something else. 

Tesla’s union push in Buffalo. Tesla employees in New York launched a union campaign and tweeted plans Tuesday to organize with Workers United Upstate New York. It would be the first union for the carmaker if it’s successful, but first organizers need to kick off the process by collecting signatures from employees who want a union. CEO Elon Musk hasn’t commented on the plans yet but hasn’t been friendly to unions in the past. The National Labor Relations Board ruled that Tesla violated labor laws when it fired a union activist and Musk shared an anti-union tweet in 2018.

FOOD FOR THOUGHT

Maybe A.I. isn’t coming for our jobs. ChatGPT has passed the U.S. medical licensing exam, the Wharton MBA exam, and even written prose and poetry in the style of Shakespeare. It’s caused some knowledge workers to fret that perhaps they are replaceable. Now, Sam Altman is weighing in on the debate over what the company’s chatbot and others like it could mean for workers. “I think A.I. is going to be the greatest force for economic empowerment,” Altman wrote on Monday, and the greatest force for “a lot of people getting rich.”

From the article: 

The optimistic public message, posted to his 1.3 million followers on Twitter, is notably far less nuanced than those he made last month, when he told venture capitalists it would be “lights out” in a worst-case scenario.

IN CASE YOU MISSED IT

Amazon CEO Andy Jassy issues a rallying cry to his remaining workers after mass layoffs: ‘We will be misunderstood and underrated’, by Eleanor Pringle

Eric Schmidt says A.I. could be the military’s new nuke—but only if the Pentagon acts like a tech firm, by Tristan Bove

‘Father of the internet’ Vint Cerf tells investors to think before pouring money into A.I. bots like ChatGPT: ‘There’s an ethical issue’, by Prarthana Prakash

‘The nightmare isn’t over yet’: Senate Banking Committee reckons with FTX fallout, by Leo Schwartz

Elon Musk reportedly ordered Twitter engineers to boost his tweets after more users saw Biden’s Super Bowl post, by Nicholas Gordon

Amazon’s self-driving taxis hit the road in California, shuttling employees to and from work, by Chris Morris

BuzzFeed is rolling out A.I. quizzes that can write breakup messages or create movie ideas—but humans are still involved, by Prarthana Prakash

BEFORE YOU GO

At least one job A.I. is struggling to replace. McDonald’s A.I.-powered ordering system is still developing its customer service skills, judging by a recent flurry of amusing TikTok videos. One drive-through customer who tried ordering a dessert from the system was repeatedly stymied. “Cream packet? No! I just want a large water and a cup of ice cream. Not a ketchup packet! Oh, my God,” the customer tells the bot. Other TikTokers have posted videos of similar interactions with the automated system. McDonald’s has previously said that locations using the technology have seen 85% accuracy. Given that the fast food chain is exploring automating some of its fryer and grill stations in the future, the automated technology's mixed performance with customers suggests a bit more training is needed before it's ready to prepare a Big Mac.