Facebook hires lobbyist to help navigate Libra cryptocurrency


With help from Cristiano Lima and Eric Geller

Editor’s Note: This edition of Morning Tech is published weekdays at 10 a.m. POLITICO Pro Technology subscribers hold exclusive early access to the newsletter each morning at 6 a.m. Learn more about POLITICO Pro’s comprehensive policy intelligence coverage, policy tools and services, at politicopro.com.

A new(ish) day for Facebook: As Facebook takes heat for its online dominance and contends with how it has affected the journalism industry, the company is today unveiling its much-anticipated “News Tab” feature intended to better curate and promote news stories.

Answers to House Judiciary’s antitrust probe: The American Library Association told House Judiciary lawmakers it has been hurt by anti-competitive behavior from Amazon, part of input being collected in a sweeping congressional probe into competition in the tech sector.

Hurd says: Retiring GOP Rep. Will Hurd of Texas, in a sit-down with Cristiano, suggested the House impeachment inquiry is thwarting progress on key tech issues and that the country has much to lose if leading tech companies are broken up.

AND FINALLY, IT’S FRIDAY. WELCOME TO MORNING TECH! I’m your host, Alexandra Levine. Coming up Sunday: Episodes of the Discovery docuseries “Why We Hate” will focus on the internet’s role in hate and extremism.

Got a news tip? Write Alex at [email protected] or @Ali_Lev. An event for our calendar? Send details to [email protected]. Anything else? Full team info below. And don’t forget: add @MorningTech and @PoliticoPro on Twitter.

HELLO, FACEBOOK NEWS TAB — Facebook CEO Mark Zuckerberg is set to debut his company’s “News Tab” with great fanfare at an event today in New York. The new feature will start appearing immediately in some U.S. Facebook users’ feeds and will be built around Facebook hires — some of them veteran journalists — hand-picking news articles to promote. Those in turn will come from major press outlets with which Facebook is striking revenue-sharing agreements. But some critics are already dismissing the new feature as a tactic for the social network to diffuse concerns about its market power.

— “This is another Zuckerberg ploy to steal journalists’ content without compensating us,” Laura Bassett, an ex-HuffPost reporter who was laid off this year and co-founded the Save Journalism Project, told MT on Thursday. “This conveniently timed announcement is a thinly veiled PR stunt intended to distract the public following Zuckerberg’s public evisceration yesterday on the Hill.” (Zuck teased the News Tab at Wednesday’s marathon House Financial Services Committee hearing on Libra and a host of other issues.)

Remember: The House Judiciary Committee, as part of its expansive probe into potential antitrust violations by tech giants, examined the relationship between big tech companies and news organizations at a hearing in June. That lent firepower to the media industry’s campaign to fight the squeeze the tech industry has seemingly placed on newsrooms. And it may have helped prompt some Silicon Valley heavyweights to re-evaluate some of their algorithms, advertising and general handling when it comes to news stories. Google said in September it would tweak its search algorithm to do a better job at promoting original reporting. And at a summit with journalists in New York on Thursday, Twitter CEO Jack Dorsey reportedly said Twitter might be up for News Tab-type arrangements as long they were “sustainable.”

HOUSE JUDICIARY HEARS BACK ON ITS ANTITRUST PROBE — The American Library Association revealed Thursday that it told the House Judiciary antitrust subcommittee that its members have been harmed by Amazon — as well as by major traditional publishers — as a direct result of business practices that pervade the digital media market. At issue are pricing and licensing terms for e-books and streaming music and video, among other related grievances.

— Amazon and publishing giant Macmillan are “outright denying or delaying library access to digital content,” said ALA President Wanda Brown. Alan Inouye, the group’s senior director of public policy and government relations, added that “when Amazon — the world’s fifth largest publisher of e-books — refuses to sell to libraries, or when a Big 5 publisher like Macmillan places an eight-week embargo on e-book sales to America’s libraries, we believe it is time to take legislative action.” A report the group assembled on its concerns also raises alarm about what might happen if online giants like Amazon, Netflix, Hulu and Spotify decide to stop carrying older works. “The only way to ensure the availability of this content to future generations of researchers, students and artists,” the report said, “is for libraries to have the right to preserve it.”

— Building a case: The report summarizes what the ALA recently told House Judiciary lawmakers, who are still assembling a trove of documents they’re collecting from tech titans, plus smaller companies and groups they may have harmed, as part of their antitrust probe. (The association received the committee’s request for information on Sept. 13.) Panel leaders are awaiting more material from Amazon, Google parent Alphabet, Facebook and Apple after getting partial responses to their document requests last week, as Cristiano reported then.

HIGHLIGHTS FROM OUR Q&A WITH WILL HURD — Retiring GOP Rep. Will Hurd (Texas) said the Democrat-led impeachment process may be bogging down efforts to advance legislation on key tech issues in Congress, like data privacy. “I think that is taking us away from focusing on a lot of these issues,” Hurd said during a recent Q&A with Cristiano. The remarks came during a wide-ranging discussion that touched on several hotly contested tech debates, including on antitrust and the ethics of artificial intelligence.

— Hurd also said breaking up American tech companies would only hurt the U.S. in its race with China to develop emerging technologies and set global standards for them. “The answer is not breaking up good, amazing U.S. companies, because we need those companies to compete,” he said. “I’m glad we’re having conversations with CEOs that live in San Francisco, because if the company was run by a CEO in Beijing, guess what? They’re not showing up to have this debate.”

— And on political ads, the GOP lawmaker expressed skepticism about calls for online platforms to crack down on misleading messages from candidates. “I think there are things that we can be doing so that a false message, whether it’s done on purpose or not, doesn’t reach the velocity that some of these do,” he said. “But having social media companies or the private sector making the decision on First Amendment issues, that’s a tricky topic.” Pros can check out the full Q&A here.

FCC’S MONTHLY OPEN MEETING: WHAT TO WATCH — The FCC will delve this morning into a half-dozen agenda items, including one focused on competition: an order finding that Charter faces ample cable TV competition in Massachusetts and Hawaii, thanks to the availability of the AT&T TV NOW (a rebranded DIRECTV NOW) pay-TV streaming service. Sen. Ed Markey (D-Mass.) ahead of the meeting warned the FCC against making a decision that would hike prices for his constituents. He said that’s likely if the FCC approves the order, which comes in response to a petition from Charter asking the agency to conclude that it operates in competitive markets and should therefore face lesser regulation.

— “Research shows that basic service tier cable rates are 50% higher in unregulated communities than they are in regulated communities, and Charter has explicitly stated that if the Commission grants its petition, the company plans to almost double the rate paid by consumers that subscribe to the basic service tier in some communities,” Markey wrote Thursday in a letter to FCC chairman Ajit Pai. (If the commission approves Charter’s petition, according to Markey’s office, Charter would no longer need to adhere to rate regulations; that would make it possible for the company to raise prices, the office said.) Charter did not immediately respond to MT’s request for comment on the senator’s letter.

ENCRYPTION DEBATE CONTINUES — After top law enforcement and national security officials came out this month to pressure Facebook not to roll out end-to-end encryption in its messaging services — with the Justice Department hosting a widely watched summit on how online encryption could hamper child exploitation investigations — the National Security Council confirmed it’s working with the Departments of Commerce and Homeland Security on their own encryption events.

— After speaking at a conference in Washington on Thursday, senior White House official Grant Schneider, the federal chief information security officer and NSC senior director for cybersecurity, told POLITICO’s Eric Geller and other reporters that the Council is working with DOJ, Commerce and DHS on events related to the encryption debate “as they are engaging with stakeholders so that we can understand the risks associated in this space on both sides and then what options may be there for leadership to consider.”

— The big but: Commerce and DHS are starkly opposed to DOJ on whether to ban warrant-proof encryption, meaning the Trump administration risks presenting divergent messages. Schneider said there wouldn’t be any dissonance (“We are working with the interagency on this topic,” he said), and meanwhile, the administration is still interested in talking to tech companies about “what types of solutions exist” so policymakers can “have a conversation about risk tradeoffs.”

Twilio, a cloud communications platform based in San Francisco, is the newest member of USTelecom – The Broadband Association; Karyn Smith, Twilio’s general counsel and corporate secretary, has also joined the association’s board of directors.

Apple feels the bite: Former Apple lawyer Gene Levoff was indicted on insider trading charges.

TikTok probe: “Two bipartisan senators have called on the Trump administration to investigate whether the popular video app TikTok and other Chinese-owned content platforms pose a national security risk to the U.S. because of the data they collect on users and their potential to influence the 2020 election,” POLITICO reports.

Activism against Amazon: “More than 100 musicians … have signed an open letter pledging to boycott all Amazon festivals and events until the tech giant stops working with Immigration [and] Customs Enforcement,” Rolling Stone reports.

Google lawsuit: “An investor has hit Google’s founders and other executives of its parent company with a derivative shareholder lawsuit, claiming Alphabet Inc.’s top brass damaged the company by failing to prevent children’s privacy violations on YouTube,” Law360 reports.

Racism allegations at Verizon: “Around the country, current and former employees who have filed EEOC complaints against Verizon Wireless are going public with their stories,” ColorLines, a news site published by the racial justice organization Race Forward, reports. “They allege overt and subtle racism, retaliation and intimidation by the nation’s largest wireless provider.”

Headline OTD: “Now the Machines Are Learning How to Smell,” via WIRED.

Cook says: Apple CEO Tim Cook sat down with People en Español editor-in-chief Armando Correa to talk about the power of diversity — read it in People, or People en Español.

By the numbers: Twitter shares have taken a tumble, Reuters reports.

Opinion: “How Artists And Fans Stopped Facial Recognition From Invading Music Festivals,” via Evan Greer, deputy director of Fight for the Future, and Tom Morello of the band Rage Against the Machine, in BuzzFeed News.

Tips, comments, suggestions? Send them along via email to our team: Kyle Daly ([email protected], @dalykyle), Nancy Scola ([email protected], @nancyscola), Steven Overly ([email protected], @stevenoverly), John Hendel ([email protected], @JohnHendel), Cristiano Lima ([email protected], @viaCristiano) and Alexandra S. Levine ([email protected], @Ali_Lev).

TTYL.

Correction: Thursday’s edition of Morning Tech misstated the author of a book about the Pentagon under the Trump administration. The author is Guy Snodgrass, a retired military officer who served as an aide to former Defense Secretary Jim Mattis.





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