Start Up No.1725: how the FTC is changing antitrust, Lynch loses v HP, Wordle for airports, fossil fuel says ‘plastics’, and more


As former chief adviser to the Prime Minister, Dominic Cummings has strong opinions about his former boss.CC-licensed photo by 70023venus200970023venus2009 on Flickr.

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A selection of 10 links for you. Getting things (un)done. I’m @charlesarthur on Twitter. Observations and links welcome.


How the FTC is reshaping the antitrust argument against tech giants • WSJ

Christopher Mims:

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The FTC, under its Biden-appointed chairwoman, Lina Khan, has been shifting the terms of the argument, focusing less on harm to consumers or even rivals, and more on how the bigness of Big Tech harms companies that are, in essence, its partners.

To understand, we have to look at an unusual word the FTC has used of late: “monopsony”. If a monopoly is a market with one dominant seller, a monopsony is its inverse, a market where one buyer is pre-eminent. Monopolists can gouge consumers. A monopsonist has the same power over sellers.

Big tech’s platforms—the things that have made them so much money—effectively make them market-controlling middlemen, and the FTC is saying that the tech giants are abusing their positions as, in effect, the ultimate proxy buyers for all users of their platforms.

By this logic, Apple’s App Store is the dominant place that app sellers must go to sell their software and services, because globally, it rakes in twice the revenue of its next-biggest competitor, Google’s Play store. Amazon wields its power over companies that want to sell goods online. Google and Facebook lord theirs over the publishers selling ad space.

For those suspicious of Big Tech’s power, it might seem like the FTC’s small band of legal X-wings have found the thermal exhaust port in Big Tech’s collective Death Star. The companies, of course, frame the situation differently, and see the FTC as the tyrannical Empire imposing its will over a world where they have provided unprecedented opportunities for app developers and other whole new categories of business.

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Important development that Mims spent some time unravelling. If you don’t have a WSJ subscription, this link should let you read the piece.

Khan, of course, achieved a sort of antitrust nerd fame through her 2017 law school article about Amazon’s “antitrust paradox” which pointed out that just looking at prices to consumers “underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive.” Now she’s putting that into practice.
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HP wins huge fraud case against Autonomy’s Mike Lynch • WIRED

Chris Stokel-Walker:

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After years of wrangling, HP has won its civil fraud case against Autonomy founder and chief executive Mike Lynch. The ruling, the biggest civil fraud trial in UK history, came just hours before the UK home secretary Priti Patel approved Lynch’s extradition to the United States, where he faces further fraud charges.

The UK’s High Court found that HP had “substantially succeeded” in proving that Autonomy executives had fraudulently boosted the firm’s reported revenue, earnings, and value. HP paid $11 billion for the firm back in 2011 and later announced a $8.8bn write-down of its value. In court, HP claimed damages of $5bn, but the judge said the total amount due would be “considerably less” and announced at a later date. Kelwin Nicholls, Lynch’s lawyer and a partner at law firm Clifford Chance, said his client intends to appeal the High Court ruling. In a later statement, Nicholls said his client would also appeal the extradition order in the UK’s High Court.

This week’s events are the latest twist in an extradition process that began in November 2019, when the US Embassy in London submitted a request for Lynch to face trial in the United States on 17 counts, including wire fraud, conspiracy, and securities fraud. Lynch denies all charges against him.

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One point that stood out in the ruling: it’s not enough to say that HP should have done more due diligence. The judge said: “It would be beguiling but wrong to think that the answer could be ‘caveat emptor’. Of course, had I found that HP was in fact aware, before the Acquisition, of the matters of which complaint is now made, that would be different, for in those circumstances it could not say that it had reasonably relied on what it saw and read. But I have found that it was not actually aware and that its reliance was reasonable.”

Very bad news for Lynch, though.
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Dominic Cummings, the man trying to take down Boris Johnson • NY Mag

Tanya Gold (a British journalist) explaining this unusual Englishman to Americans:

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He believes that gifted people are repelled by politics. “When you talk to them, increasingly their attitude is: Politics is a shitshow, government’s a shitshow, we don’t want to get involved with that, you’re dealing with clowns, you don’t build anything.” Instead, “a lot of these people prefer to build their own kind of walled garden where they can feel like they’re building something that’s worthwhile and creating wealth and doing their own thing and thinking increasingly: How do I insulate myself from politics and government? All of which is a very bad thing.”

Politicians, meanwhile, are obsessed with the media and little else. “People just don’t understand the extent to which they are dominated by what’s going to appear on TV tonight what’s going to appear in the papers tomorrow,” he says. Johnson is an example of a man who governs — or performs — for the media. In Cummings’s telling, he is an imbecile. “In January 2020,” Cummings says, “I was sitting in No. 10 with Boris and the complete fuckwit is just babbling on about: ‘Will Big Ben bong for Brexit on the 31st of January?’ He goes on and on about this day after day. Eventually I say to him: ‘Who cares? What are you talking about? Why are you babbling on about Big Ben? It’s completely ludicrous. We won the election a few weeks ago. We have an eighty-seat majority. You are literally only in this study because for six months we actually had a plan that focused on the country, not on the stupid media. And that’s why we won, despite all the pundits saying we are idiots, we didn’t know what we are doing. Now we have proved them wrong, we have an eighty-seat majority, we don’t have to worry about their babbling.’” He looks aghast: “‘Why the fuck are we sitting around having these meetings about what will the Sun do tomorrow about Big Ben?’”

Cummings says he wanted to tackle the problems of the state: productivity, skills, schools, NHS management, national security, defense procurement. He once told a journalist, “I guess I’m plagued by worries of disaster more than is normal.”

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A fascinating piece, including the observant line that “There is a joke in British political circles that Dominic Cummings exists to destroy prime ministers.”
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Suicide hotline shares data with for-profit spinoff, raising ethical questions • POLITICO

Alexandra Levine:

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Crisis Text Line is one of the world’s most prominent mental health support lines, a tech-driven nonprofit that uses big data and artificial intelligence to help people cope with traumas such as self-harm, emotional abuse and thoughts of suicide.

But the data the charity collects from its online text conversations with people in their darkest moments does not end there: the organization’s for-profit spinoff uses a sliced and repackaged version of that information to create and market customer service software.

Crisis Text Line says any data it shares with that company, Loris.ai, has been wholly “anonymized,” stripped of any details that could be used to identify people who contacted the helpline in distress. Both entities say their goal is to improve the world — in Loris’ case, by making “customer support more human, empathetic, and scalable.”

In turn, Loris has pledged to share some of its revenue with Crisis Text Line.

…[in relation to the ethical question of sharing the data] Others questioned whether the people who text their pleas for help are actually consenting to having their data shared, despite the approximately 50-paragraph disclosure the helpline offers a link to when individuals first reach out.

The nonprofit “may have legal consent, but do they have actual meaningful, emotional, fully understood consent?” asked Jennifer King, the privacy and data policy fellow at the Stanford University Institute for Human-Centered Artificial Intelligence.

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How the fossil fuel industry is pushing plastics on the world • CNBC

Katie Brigham:

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We’re in the midst of an energy transition. Renewable power and electric vehicles are getting cheaper, the grid is getting greener, and oil and gas companies are getting nervous.

That’s why the fossil fuel giants are looking towards petrochemicals, and plastics in particular, as their next major growth market.

“Plastics is the Plan B for the fossil fuel industry,” said Judith Enck, Founder and President of the nonprofit advocacy group Beyond Plastics.

Plastics, which are made from fossil fuels, are set to drive nearly half of oil demand growth by midcentury, according to the International Energy Agency. That outpaces even hard-to-decarbonize sectors like aviation and shipping.

“Every company who is currently engaged in producing plastic, if you look at their capital budgets for the next two to three years, they’re all talking about expansion plans,” said Ramesh Ramachandran, CEO of No Plastic Waste, an initiative from the Mindaroo Foundation that’s working to create a market-based approach to a circular plastics economy.

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And try this for a number:

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Alan Gelder of Wood Mackenzie forecasts that every year through 2050, there will be 10 million metric tons of growth in the market for petrochemicals, which are used to make plastics and other products. He says much of that will be shipped overseas.

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We are definitely going to need a spare planet just for all the empty bottles.
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Twitter says it has quit taking action against lies about the 2020 election • CNNPolitics

Daniel Dale:

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Twitter quit taking action to try to limit the spread of lies about the 2020 election, the company said on Friday – a day after another social media platform, YouTube, removed a Republican congressman’s campaign ad because it included a 2020 lie.

Twitter spokesperson Elizabeth Busby told CNN on Friday that “since March 2021,” Twitter has not been enforcing its “civic integrity policy” in relation to lies about the 2020 election. That was the policy under which the company had suspended or even banned users for lying about the 2020 election, affixed fact-check warning labels to tweets containing such lies and limited others’ ability to share those inaccurate tweets.

The civic integrity policy still exists, Busby said in an email, but it is “no longer” being applied to lies about the 2020 election in particular. Busby said that’s because the policy is designed to be used “during the duration” of an election or other civic event, and “the 2020 U.S. election is not only certified, but President Biden has been in office for more than a year.”

Lies about the 2020 election, however, have never gone away. In fact, they continue to play a major role in American politics.

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Hasn’t been doing it on Twitter since March of last year. Biden had been in office for only a couple of months then. Katie Harbath, ex-Facebook elections policy, told me last week that she’s very worried by the lack of visible action being taken by social networks over election interference.
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Joni Mitchell removes music from Spotify in support of Neil Young against Joe Rogan • WSJ

Anne Steele:

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Joni Mitchell said she decided to remove all of her music from Spotify Technology in a move supporting Neil Young’s crusade against what he deems misinformation spread on Joe Rogan’s podcast.

“Irresponsible people are spreading lies that are costing people their lives,” the folk singer wrote on her website. “I stand in solidarity with Neil Young and the global scientific and medical communities on this issue.”

Spotify removed Mr. Young’s music on Wednesday after he wrote an open letter to his record label and management asking them to take it down in objection to Mr. Rogan’s podcast.

Ms. Mitchell, famous for her 1971 album “Blue,” linked to Mr. Young’s letter in her brief post. Mr. Young, the “Heart of Gold” and “Harvest Moon” singer, said Spotify is spreading fake information about Covid-19 vaccines through Mr. Rogan’s show.

…While more than 40 of Mr. Rogan’s episodes have been removed for policy violations, none of them have been related to the pandemic, according to a person familiar with the matter.

While his initial letter has been removed from his website, Mr. Young has since posted more on the topic, encouraging other artists to join him.

Both Mr. Young and Ms. Mitchell are signed to Warner Music Group Corp. record labels, which license and distribute their music to streaming services including Spotify. The label made a request to take Ms. Mitchell’s music down, which can take several hours. The folk singers also have the same manager.

Ms. Mitchell, 78 years old, had 3.7 million monthly listeners and 1.1 million followers on Spotify.

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Still not getting near Rogan’s reach. Canadians, eh. Of course, this is about principle; and by Sunday evening it had provoked Spotify to publish its rules on content that will be taken down, which you’d have to work pretty hard to breach. There may be a little more on this, though: some of the bigger, older musicians might like the publicity. (Nils Lofgren joined Young and Mitchell late on Sunday.)
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Airportle by Scott’s Cheap Flights

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This is a fork of the open source clone of the game Wordle, adapted for travel-lovers by Scott’s Cheap Flights.

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This is appallingly hard. Even if you’re a seasoned traveller. All the rest are just going to be guessing. LHR, LGW, LTN, LAX, SFO, OK I’m done.
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This clever app makes you way more productive — automatically • Fast Company

JR Raphael:

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Heyday is different. The new service, created by a pair of pals named Sam and Samiur, aims to act as your info-organizing assistant—without ever demanding any deliberate effort on your part. It simply shows up alongside whatever material you’re viewing at any given moment and gives you an intelligent overview of related info you’ve looked at before—in any app or service, and anywhere on the web.

“So many tools in the productivity space are built for people who almost get joy out of organizing things,” says Sam DeBrule, one of Heyday’s cofounders (in a comment that could have absolutely been aimed at me). “We thought, ‘Okay. If we built a product that was really intended to help folks who want to get the benefit of things being organized for them automatically, what would that look like?’”

As it turns out, it would look an awful lot like the tools you’re already relying on—everything from Twitter to Google Search and even your existing email, word processing, and note-taking apps of choice. That’s because Heyday is less of an app, in the traditional sense, and more of a layer. And as part of that positioning, it integrates seamlessly with all your other stuff instead of asking you to learn something new.

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Layers as ways of interacting seems interesting. If trying and binning productivity tools is your thing, knock yourself out.
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More than 80% of NFTs created for free on OpenSea are fraud or spam, company says • Vice

Jordan Pearson:

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As the NFT market has exploded, so has the amount of theft and fraud associated with it. Artists are by now familiar with the experience of finding, like in a horror movie, their own art staring back at them in OpenSea’s digital gallery, being hawked by an anonymous stranger.

Now, OpenSea has revealed just how much of the NFT activity on its platform is defined by fakery and theft, and it’s a lot. In fact, according to the company, nearly all of the NFTs created for free on its platform are either spam or plagiarized.

The revelation began with some drama. On Thursday, popular NFT marketplace OpenSea announced that it would limit how many times a user could create (or “mint”) an NFT for free on the platform using its tools to 50. So-called “lazy minting” on the site lets users skip paying a blockchain gas fee when they create an NFT on OpenSea (with the buyer eventually paying the fee at the time of sale), so it’s a popular option especially for people who don’t have deep pockets to jumpstart their digital art empire.

This decision set off a firestorm, with some projects complaining that this was an out-of-the-blue roadblock for them as they still needed to mint NFTs but suddenly couldn’t. Shortly after, OpenSea reversed course and announced that it would remove the limit, as well as provided some reasoning for the limit in the first place: the free minting tool is being used almost exclusively for the purposes of fraud or spam.

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I know, I’m as shocked as you.
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Errata, corrigenda and ai no corrida: none notified

• Why do social networks drive us a little mad?
• Why does angry content seem to dominate what we see?
• How much of a role do algorithms play in affecting what we see and do online?
• What can we do about it?
• Did Facebook have any inkling of what was coming in Myanmar in 2016?

Social Warming, my latest book, and find answers – and more.


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