Start Up No.1583: Amazon demands FTC antitrust recusal, Robinhood fined $70m, the hijacked Klein bottle, and more


Why can’t we just have a physical menu, rather than a QR code that points to a web address that shows a menu? CC-licensed photo by Alpha on Flickr.

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A selection of 10 links for you. Do not scan. I’m @charlesarthur on Twitter. Observations and links welcome.


Eventually you’ll realise you should buy Social Warming, my latest book, about why social media drives us all a little mad – even if we don’t use it.


Amazon says the new FTC chair, Lina Khan, should recuse herself from investigations • The New York Times

David McCabe:

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Amazon demanded on Wednesday that Lina Khan, the new chair of the Federal Trade Commission and an avowed critic of the company, recuse herself from any antitrust investigation into the e-commerce giant.

The company argued in a 25-page petition to the FTC that Ms. Kahn could not be impartial in antitrust matters involving the company because she had been intensely critical of Amazon as a scholar and writer and because she had worked on the staff of a congressional investigation of the company.

“At a minimum, this record creates the appearance that the FTC, under Chair Khan’s leadership, would not be a neutral and impartial evaluator of the evidence developed in any antitrust investigation against Amazon or in deciding whether to bring enforcement actions against the company,” the company said in the filing.

Amazon said Ms. Khan should be recused from “at least all of the current antitrust investigations of Amazon of which the commission has notified Amazon.” The company is the subject of an FTC inquiry, as well as investigations by state attorneys general.

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The hilarious fact, as pointed out by monopolist critic Matt Stoller, is that the “demand” was written by Thomas Barnett. Who? The guy who ran antitrust for George W Bush from April 2004 to 2008, just the period when Amazon (and Google) were swallowing up smaller rivals.

But Amazon, never wanting to leave things to chance, also hired another ex-DOJ Antitrust person to help file the complaint. Can Khan complain that Amazon has a functional monopoly of ex-DOJ Antitrust leaders?
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Robinhood agrees to pay $70m to settle regulatory investigation • WSJ

Dave Michaels:

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Robinhood now has 31 million customers, 18 million of whom have funded accounts, according to a settlement document made public Wednesday.

Finra alleged a series of failings by Robinhood, which agreed to a $57m fine and $12.6m in compensation for harmed investors. Many allegations involved problems with technology that automated the opening of new accounts or trading strategies and updated clients about their balances or borrowed funds.

The company opened 90,000 new accounts from 2016 to 2018 despite red flags signaling possible identity theft or other fraud, Finra said. Robinhood qualified thousands of other accounts to trade options even though the clients didn’t meet eligibility criteria, according to Finra.

One example cited by Finra: A new customer, who was 20 years old, was rejected for options trading after noting that he had little investing experience and a low risk tolerance. Three minutes later, the customer changed his risk appetite to “medium” and said he had three years of investing experience. Within seconds, Robinhood approved him for options, according to Finra’s settlement document.

In another example that turned into tragedy, a 20-year-old Robinhood customer, identified as Customer A, took his own life in June 2020 after seeing an account notice that he had a negative balance of $720,000. The customer was rattled by the notice because he thought he had turned off his ability to borrow funds from the brokerage to trade, according to the settlement document.

Robinhood also misinformed the customer about the value of his position; it was actually negative $365,530, or half what Robinhood’s system showed, the settlement states.

…Robinhood misled other traders who similarly believed they couldn’t use borrowed money, or margin, if they turned off that feature, Finra said. Clients who disabled margin could still wind up using borrowed money if they made certain types of options trades, the regulator said.

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Finra’s biggest-ever fine. Move fast and break the bank.
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Bring back menus, because QR codes are terrible • Slate

Christina Cauterucci:

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Before the pandemic, I’d shudder at the sight of a restaurant table full of people all staring at their phones. I was always happy not to be them or be sitting with them. I always kept the lively conversation flowing at my table. I had good boundaries between my on- and offline lives. But now, restaurants around the world have nonconsensually turned us all into the people I used to judge. I hate it. And it’s time for us to go back.

It all started when outdoor dining resumed after initial waves of mandated closures last spring. Wary of wayward coronaviruses lingering on physical menus, restaurants taped QR codes to their tables and outsourced the act of menu delivery to the diner and her smartphone. This might have made sense when it still seemed possible that the coronavirus was largely spreading through surface transmission. But we now know that the risk of infection via a contaminated surface is low. In tons of communities across the US, vaccination rates are high and COVID-19 case rates are low. People are attending indoor concerts, grinding at dance clubs, and heading back to the office.

And yet, even as we eat and slobber and sneeze in restaurants seated at full capacity, in many of those establishments, we’re still obliged to use our own smartphones to figure out what we want to eat. Why? Why should we be scared to go back to touching a communal piece of paper when we’re already breathing one another’s theoretically more dangerous air?

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Or not even a communal piece of paper – write it on a blackboard (or whiteboard). There is a puzzling attraction to QR codes.
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OpenStreetMap looks to relocate to EU due to Brexit limitations • The Guardian

Alex Hern:

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OpenStreetMap, the Wikipedia-for-maps organisation that seeks to create a free and open-source map of the globe, is considering relocating to the EU, almost 20 years after it was founded in the UK by the British entrepreneur Steve Coast.

OpenStreetMap Foundation, which was formally registered in 2006, two years after the project began, is a limited company registered in England and Wales. Following Brexit, the organisation says the lack of agreement between the UK and EU could render its continued operation in Britain untenable.

“There is not one reason for moving, but a multitude of paper cuts, most of which have been triggered or amplified by Brexit,” Guillaume Rischard, the organisation’s treasurer, told members of the foundation in an email sent earlier this month.

One “important reason”, Rischard said, was the failure of the UK and EU to agree on mutual recognition of database rights. While both have an agreement to recognise copyright protections, that only covers work which is creative in nature.

Maps, as a simple factual representation of the world, are not covered by copyright in the same way, but until Brexit were covered by an EU-wide agreement that protected databases where there had been “a substantial investment in obtaining, verifying or presenting the data”. But since Brexit, any database made on or after 1 January 2021 in the UK will not be protected in the EU, and vice versa.

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The rotting internet is a collective hallucination • The Atlantic

Jonathan Zittrain:

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This month, the best-selling author Elin Hilderbrand published a new novel. The novel, widely praised by critics, included a snippet of dialogue in which one character makes a wry joke to another about spending the summer in an attic on Nantucket, “like Anne Frank.” Some readers took to social media to criticize this moment between characters as anti-Semitic. The author sought to explain the character’s use of the analogy before offering an apology and saying that she had asked her publisher to remove the passage from digital versions of the book immediately.

There are sufficient technical and typographical alterations to ebooks after they’re published that a publisher itself might not even have a simple accounting of how often it, or one of its authors, has been importuned to alter what has already been published. Nearly 25 years ago I helped Wendy Seltzer start a site, now called Lumen, that tracks requests for elisions from institutions ranging from the University of California to the Internet Archive to Wikipedia, Twitter, and Google—often for claimed copyright infringements found by clicking through links published there. Lumen thus makes it possible to learn more about what’s missing or changed from, say, a Google web search, because of outside demands or requirements.

For example, thanks to the site’s record-keeping both of deletions and of the source and text of demands for removals, the law professor Eugene Volokh was able to identify a number of removal requests made with fraudulent documentation—nearly 200 out of 700 “court orders” submitted to Google that he reviewed turned out to have been apparently Photoshopped from whole cloth. The Texas attorney general has since sued a company for routinely submitting these falsified court orders to Google for the purpose of forcing content removals.

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As Zittrain points out, the web is built on shifting sands, and that has consequences for what we think is knowledge: if what a judge cites in a ruling is no longer online, what does that mean for the ruling?
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A sleazy company hijacked my Amazon listing for Klein bottles • Kleinbottle

Clifford Stoll:

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although I’ve sold Klein bottles for 25 years, I have never trademarked my business name, “Acme Klein Bottle”.  It’s called a “common-law trademark”.

  For the past 5 years, I’ve had a listing on Amazon, where I sold only large Klein bottles,  This listing received 199 five-star reviews and 2 four-star reviews.  No bad reviews at all. (I’m honored, of course).  My Amazon customers are mainly parents who buy Klein bottles for their kids around the holidays.

  Well, sometime in May, Amazon seller “Amvoom”, from Shenzen China, trademarked the word “Amvoom”.  On June 22nd, they used Amazon’s Brand Registry to re-brand my listing on Amazon (replacing my brand, “Acme Klein Bottle” with “Amvoom”)  They could do this because Amazon’s Brand Registry only respects issued trademarks.  In essence, they told Amazon the they owned the Klein bottle listing.  In turn, they are now in charge of that Klein bottle listing on Amazon. So instead of “Handmade Klein Bottle”, Amazon now lists “AMVOOM Handmade Klein Bottle”.

  Amvoom does not sell Klein bottles. Likely, they don’t know what one is.  Instead, they redirected my 199 reviews to their product (a black-head remover). They did so by adding a second “color option” for their black-head remover, which was just a pointer to my Amazon Klein bottle listing.  In turn, all my reviews show up on their black-head remover.  The ordinary color of their item costs $12.  The oddball color shows a photo of a Klein bottle and costs $75.  All the reviews are combined on their black-head remover listing, so both “colors” have five-star reviews.  Their main listing shows fiver-star reviews.  But if you read their reviews, you’ll see the black-head device has lots of reviews talking about Klein bottles and mathematics.

  To make their blackhead remover listing look legit, Amvoom then submitted several hundred orders over Amazon, and immediately cancelled each order.  These depleted my Klein bottle inventory on Amazon – even though nothing was paid for, and nothing was shipped.  In turn, this removed the “second color option” for their blackhead-remover, since Amazon felt that the Klein bottles were out of stock.  Result: their black-head remover listing got 199 positive reviews, and the Klein bottle did not show up as a “color choice” in the Amvoom black-head listing.

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Depending on your age, you’ll have zero, one or two questions. What’s a Klein bottle? (This.) Who’s Clifford Stoll? He’s famous for catching a hacker because he spotted a fractional discrepancy in the charges for a time-sharing computer – which tells you how long ago that was. (He also thought the internet was a fad. Ah well..) Now he’s highlighting a different kind of hacking. About time.
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Juul and the business of addiction • The Verge

An interview with Lauren Etter, who has written a book about Juul, a vape maker that rose and then, dramatically, fell:

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[Juul] launched in 2015, ultimately, and just became the most popular e-cigarette on the market. They marketed it on social media, on Instagram, on Facebook, on Twitter. They sent kind of traveling troupes of these nicotine Juul marketers that handed out free samples at parties, on yachts, in the Hamptons, at raves, and it just became extremely popular.

It became popular among 20-year-olds, and among teenagers as well, middle school and high school students. So that was the moment, as it became just a runaway success, that it attracted the attention of public health regulators, of the FDA, of members of Congress. It just became this huge issue, where Scott Gottlieb, the then-FDA commissioner, called it an epidemic of youth usage. So basically, the company found itself under this incredible scrutiny from every angle. And at the same time, the traditional tobacco industry had also been trying to innovate on cigarettes, their declining business. The cigarette had been in decline for decades. Everybody agreed that the business was only going to continue to decline as people realized the adverse health effects of smoking, and it was not as cool to smoke cigarettes anymore.

And so as big tobacco tries to innovate, they cannot out-innovate Silicon Valley. So at the end of the day, Altria, the maker of Marlboro cigarettes, decides to invest in Juul. In my book, I write that was the moment the glass shattered for Juul. It just attracted so much scrutiny, because all of these years, the founders of Juul had been saying, “We are the anti-cigarette. We’re going to kill the cigarette. We’re going to kill the tobacco industry,” and suddenly they’re in bed with the tobacco industry. That really kind of put them on blast in a new way.

They were under health regulators’ scrutiny, and their valuation, which once stood at $38 billion, was just tumbling quarter after quarter after quarter. And now, there’s been a huge reorganization in the company. They brought in all these new executives, many from the tobacco industry, and they’re essentially fighting for their survival right now. Juul, like every other e-cigarette maker, has submitted an application to the FDA, and now the FDA has to determine whether or not it’s in the public health’s interest to allow this product to continue to be marketed.

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It’s not quite Bad Blood (about Theranos) but it certainly shows that the tobacco industry is the kiss of death.
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Heaven or high water • Popula

In 2019 Sarah Miller decided to see whether estate agents in Miami Beach would discuss how the sea level rise was going to affect property prices, and pretended to be a buyer:

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[The estate agent] gestured at the unusual rainy day, for this time of year, late March. “Usually at night, you will be looking at the best spectacle of a sunset here,” he said. He was framed by Biscayne Bay, and made me think of expensive butter sitting on a blue ceramic dish. I ooohed and ahhed over the view, quite genuinely, because if you don’t think about the fact that it’s filled with thousands of pounds of post-Hot Pilates ceviche poops, Biscayne Bay is breathtaking.

I asked how the flooding was.

“There are pump stations everywhere, and the roads were raised,” he said. “So that’s all been fixed.”

“Fixed,” I said. “Wow. Amazing.”

I asked how the hurricanes were.

He said that because the hurricanes came from the tropics, from the south and this was the west side of Miami Beach, they were not that bad in this neighborhood. “Oh, right,” I said, as if that made any sense.

I asked him if he liked it here. “I love it,” he said. “It is one of the most thriving cities in the country, it’s growing rapidly.” He pointed to a row of buildings in a neighborhood called Edgewater that were all just three years old. “That skyline was all built in the last three years.”

Wow, I said, just in the last three years . . . “They’re not worried about sea level rise?”

“It’s definitely something the city is trying to combat. They are fighting it, by raising everything. But so far, it hasn’t been an issue.”

I couldn’t wait to steal this line, slightly altered. “I am afraid of dying, sure, but so far, it hasn’t been an issue.”

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YouTube TV launches 4K and offline downloads today, but they don’t come cheap • The Verge

Chris Welch:

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YouTube TV is today revealing more details about two anticipated new features: 4K playback and offline downloads. As it turns out, the service will be bundling them together in a new add-on package it’s calling “4K Plus.” There’s no getting one without the other.

4K Plus is available starting today and will cost an extra $19.99 per month on top of the standard $64.99 YouTube TV subscription. That sounds awfully expensive, but at least there’s this: customers will receive a free one-month trial — and if you sign up early, 4K Plus will be discounted to $9.99 each month for the first year. That’s easier to swallow than $20, but you’ll eventually be shifted over to the full price once that initial promotion expires. So for the first year, you’re looking at a $75 monthly bill, and $85 if you keep 4K Plus after that. Add in taxes and fees and, well, ouch.

For now, offline downloads will likely be a bigger deal for many customers than 4K streaming. Outside of select sporting events, there’s still a dearth of 4K content on network and cable TV.

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That is super-expensive, especially given that there are tons of free YouTube download tools. YouTube is gradually turning into an American cable channel, the thing it was going to replace.
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He thought he could outfox the gig economy. He was wrong • WIRED

Lauren Smiley:

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Jeffrey Fang, Doordash delivery guy, knows you judge his parenting skills, and he’ll join in your condemnation in a moment. He’ll explain that bringing his kids along on his Saturday night shift “made sense, until it didn’t,” and that in hindsight, he understands that it really, really didn’t. But right now, on the night of February 6, he’s not thinking clearly, and you’ll have to excuse him as he sprints pell-mell down a promenade of swank homes after the thief who just stole his phone.

He sees the thief dive into the back seat of a silver sedan, and as the car accelerates Fang keeps running alongside and grabs the passenger door handle—less DoorDash Dad than some kind of bespectacled Jason Bourne. The phone, you see, is his “moneymaking tool”; it’s how he feeds his family. But each stride is taking him farther from his unlocked Honda Odyssey minivan, parked illegally, engine humming, in a driveway where he was making a delivery, with precious cargo in the back seat.

His kids.

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This (via John Naughton) is not a short read, but it will tell you everything you could ever need to know about life spent ducking and diving in the gig economy. It would look just as good in the New Yorker (a stablemate): a comprehensive, written-through piece about what life near the bottom of the sediment of American life is like.
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Errata, corrigenda and ai no corrida: none notified

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