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Big Tech Has Become Way Too Powerful -Robert Reich

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Conservatives and liberals interminably debate the merits of “the free market” versus “the government.” Which one you trust more delineates the main ideological divide in America.

In reality, they aren’t two separate things. There can’t be a market without government. Legislators, agency heads and judges decide the rules of the game. And, over time, they change the rules. The important question, too rarely discussed, is who has the most influence over these decisions and in that way wins the game.

Two centuries ago slaves were among the nation’s most valuable assets, and after the Civil War, perhaps land was. Then factories, machines, railroads and oil transformed America. By the 1920s most working Americans were employees, and the most contested property issue was their freedom to organize into unions.

Now information and ideas are the most valuable forms of property. Most of the cost of producing it goes into discovering it or making the first copy. After that, the additional production cost is often zero. Such “intellectual property” is the key building block of the new economy. Without government decisions over what it is, and who can own it and on what terms, the new economy could not exist.

But as has happened before with other forms of property, the most politically influential owners of the new property are doing their utmost to increase their profits by creating monopolies that must eventually be broken up.

The most valuable intellectual properties are platforms so widely used that everyone else has to use them, too. Think of standard operating systems like Microsoft’s Windows or Google’s Android; Google’s search engine; Amazon’s shopping system; and Facebook’s communication network. Google runs two-thirds of all searches in the United States. Amazon sells more than 40 percent of new books. Facebook has nearly 1.5 billion active monthly users worldwide. This is where the money is.

Despite an explosion in the number of websites over the last decade, page views are becoming more concentrated. While in 2001, the top 10 websites accounted for 31 percent of all page views in America, by 2010 the top 10 accounted for 75 percent. Google and Facebook are now the first stops for many Americans seeking news — while Internet traffic to much of the nation’s newspapers, network television and other news gathering agencies has fallen well below 50 percent of all traffic. Meanwhile, Amazon is now the first stop for almost a third of all American consumers seeking to buy anything. Talk about power.

Whenever markets become concentrated, consumers end up paying more than they otherwise would, and innovations are squelched. Sure, big platforms let creators showcase and introduce new apps, songs, books, videos and other content. But almost all of the profits go to the platforms’ owners, who have all of the bargaining power.

Contrary to the conventional view of an American economy bubbling with innovative small companies, the reality is quite different. The rate at which new businesses have formed in the United States has slowed markedly since the late 1970s. Big Tech’s sweeping patents, standard platforms, fleets of lawyers to litigate against potential rivals and armies of lobbyists have created formidable barriers to new entrants.

The patent system is crucial to innovation. The law gives 20 years of patent protection to inventions that are “new and useful,” as decided by the Patent and Trademark Office. But the winners are big enough to game the system. They make small improvements warranting new patents, effectively making their intellectual property semipermanent. They also lay claim to whole terrains of potential innovation including ideas barely on drawing boards and flood the system with so many applications that lone inventors have to wait years. The White House intellectual property adviser Colleen V. Chien noted in 2012 that Google and Apple were spending more money acquiring patents (not to mention litigating them) than on doing research and development.

Antitrust laws used to fight this sort of market power. In the 1990s, the federal government accused Microsoft of illegally bundling its popular Windows operating system with its Internet Explorer browser to create an industry standard that stifled competition. Microsoft settled the case by agreeing to share its programming interfaces with other companies. But since then Big Tech has been almost immune to serious antitrust scrutiny, even though the largest tech companies have more market power than ever. Maybe that’s because they’ve accumulated so much political power.

In 2012, the staff of the Federal Trade Commission’s Bureau of Competition submitted to the commissioners a 160-page analysis of Google’s dominance in the search and related advertising markets, and recommended suing Google for conduct that “has resulted — and will result — in real harm to consumers and to innovation.” But the commissioners chose not to pursue a case. Investigators also found evidence that Google was pushing its products ahead of competitors’ on search results, though no legal action was recommended on this point.

It’s unusual for commissioners not to accept staff recommendations, and they didn’t give a full explanation. The F.T.C. noted a competing internal report that recommended against legal action, but another plausible reason has to do with Google’s political clout. Google is now among the largest corporate lobbyists in the United States. Around the time of the investigation the company poured money into influencing both the commissioners and the commission’s congressional overseers.

Google is heading into a major fight with antitrust officials in the European Union for some of the same reasons the F.T.C. staff went after it. Not incidentally, Europe is also investigating Amazon for allegedly stifling competition in e-books, and Apple for doing the same in music. While many on this side of the Atlantic believe Europe is taking on these tech giants because they’re American, another possible explanation is that Google, Amazon and Apple lack as much political clout in Europe as they have here.

Economic and political power can’t be separated because dominant corporations gain political influence over how markets are maintained and enforced, which enlarges their economic power further. One of the original goals of antitrust law was to prevent this.

“The enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marching, not for economical conquests only, but for political power,” warned Edward G. Ryan, the chief justice of Wisconsin’s Supreme Court, in 1873. Antitrust law was viewed as a means of breaking this link. “If we will not endure a king as a political power,” Senator John Sherman of Ohio thundered, “we should not endure a king over the production, transportation and sale” of what the nation produced.

Sherman’s Antitrust Act easily passed Congress and was signed into law by President Benjamin Harrison on July 2, 1890. Twelve years later, President Teddy Roosevelt used it against the Northern Securities Company, which dominated rail transportation in the Northwest. In 1911, President William Howard Taft broke up the Standard Oil empire.

The underlying issue has little to do with whether one prefers the “free market” or government. The real question is how government organizes the market, and who has the most influence over its decisions. We are now in a new gilded age similar to the first Gilded Age, when the nation’s antitrust laws were enacted. As then, those with great power and resources are making the “free market” function on their behalf. Big Tech — along with the drug, insurance, agriculture and financial giants — dominates both our economy and our politics.

Yet as long as we remain obsessed by the debate over the relative merits of the “free market” and “government,” we have little hope of seeing what’s occurring and taking the action that’s needed to make our economy work for the many, not the few.

 

source: https://www.linkedin.com

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GOOGLE BOWS TO WORKER PRESSURE ON SEXUAL MISCONDUCT POLICY

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Google is promising to be more forceful and open about its handling of sexual misconduct cases, a week after thousands of high-paid engineers and others walked out in protest over its male-dominated culture.

Google bowed to one of the protesters’ main demands by dropping mandatory arbitration of all sexual misconduct cases. That will now be optional, so workers can choose to sue in court and present their case in front of a jury.

It mirrors a change made by ride-hailing service Uber after complaints from its female employees prompted an internal investigation. The probe concluded that its rank had been poisoned by rampant sexual harassment.

“Google’s leaders and I have heard your feedback and have been moved by the stories you’ve shared,” CEO Sundar Pichai said in an email to Google employees.

“We recognize that we have not always gotten everything right in the past and we are sincerely sorry for that. It’s clear we need to make some changes.” Thursday’s email was obtained by The Associated Press.

Last week, the tech giant’s workers left their cubicles in dozens of offices around the world to protest what they consider management’s lax treatment of top executives and other male workers accused of sexual harassment and other misconduct. The protest’s organizers estimated that about 20,000 workers participated.

The reforms are the latest fallout from a broader societal backlash against men’s exploitation of their female subordinates in business, entertainment and politics — a movement that has spawned the “MeToo” hashtag as a sign of unity and a call for change.

Google will provide more details about sexual misconduct cases in internal reports available to all employees. The breakdowns will include the number of cases that were substantiated within various company departments and list the types of punishment imposed, including firings, pay cuts and mandated counselling.

The company is also stepping up its training aimed at preventing misconduct. It’s requiring all employees to go through the process annually instead of every other year. Those who fall behind in their training, including top executives, will be dinged in annual performance reviews, leaving a blemish that could lower their pay and make it more difficult to get promoted.

But Google didn’t address protesters’ demand for a commitment to pay women the same as men doing similar work.

When previously confronted with accusations that it shortchanges women — made by the U.S. Labour Department and in lawsuits filed by female employees — Google has maintained that its compensation system doesn’t discriminate between men and women.

The changes didn’t go far enough to satisfy Vicki Tardif Holland, a Google employee who helped organize and spoke at the protests near the company’s Cambridge, Massachusetts, office last week.

“While Sundar’s message was encouraging, important points around discrimination, inequity and representation were not addressed,” Holland wrote in an email responding to an AP inquiry.

Nevertheless, employment experts predicted the generally positive outcome of Google’s mass uprising is bound to have ripple effects across Silicon Valley and perhaps the rest of corporate America.

“These things can be contagious,” said Thomas Kochan, a Massachusetts Institute of Technology management professor specializing in employment issues.

“I would expect to see other professionals taking action when they see something wrong.”

Some employers might even pre-emptively adopt some of Google’s new policies, given its prestige, said Stephanie Creary, who specializes in workplace and diversity issues at the University of Pennsylvania’s Wharton School.

“When Google does something, other employers tend to copy it,” she said.

Google got caught in the crosshairs two weeks ago after The New York Times detailed allegations of sexual misconduct against the creator of Google’s Androidsoftware, Andy Rubin.

The newspaper said Rubin received a USD90 million severance package in 2014 after Google concluded the accusations were credible. Rubin has denied the allegations.

Like its Silicon Valley peers, Google has already acknowledged that its workforce is too heavily concentrated with white and Asian men, especially in the highest-paying executive and computer-programming jobs. Women account for 31 per cent of Google’s employees worldwide, and it’s lower for leadership roles.

Critics believe that gender imbalance has created a “brogammer” culture akin to a college fraternity house that treats women as sex objects. As part of its ongoing efforts, Google will now require at least one woman or a non-Asian ethnic minority to be included on the list of candidates for executive jobs.

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GOOGLE OUTLINES STEPS TO TACKLE WORKPLACE HARASSMENT

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Google on Thursday outlined changes to its handling of sexual misconduct complaints, hoping to calm outrage that triggered a worldwide walkout of workers last week.

“We recognise that we have not always gotten everything right in the past and we are sincerely sorry for that,” chief executive Sundar Pichai said in a message to employees. “It’s clear we need to make some changes.”

Arbitration of harassment claims will be optional instead of obligatory, according to Pichai, a move that could end anonymous settlements that fail to identify those accused of harassment.

“Google has never required confidentiality in the arbitration process and it still may be the best path for a number of reasons (e.g. personal privacy, predictability of process), but, we recognise that the choice should be up to you,” he said in the memo.

image: https://content.thestar.com.my/smg/settag/name=lotame/tags=all

A section of an internal “Investigations Report” will focus on sexual harassment to show numbers of substantiated concerns as well as trends and disciplinary actions, according to the California-based company.

He also said Google is consolidating the complaint system and that the process for handling concerns will include providing support people and counselors. Google will update its mandatory sexual harassment training, and require it annually instead of every two years as had been the case.

Less booze

Google is also putting the onus on team leaders to tighten the tap on booze at company events, on or off campus, to curtail the potential for drunken misbehavior.

“Harassment is never acceptable and alcohol is never an excuse,” Google said in a released action statement. “But, one of the most common factors among the harassment complaints made today at Google is that the perpetrator had been drinking.”

Google policy already bans excessive consumption of alcohol on the job; while on company business, or at  work-related events.Some teams at the company have already instituted two-drink limits at events or use ticket systems, Google said.

Google executives overseeing events will be expected to strongly discourage excessive drinking, according to the company, which vowed “onerous actions” if problems persisted. The company also promised to “recommit” to improving workplace diversity through hiring, retention, and career advancement.’ –

Googleplex walkout

Thousands of Google employees joined a coordinated worldwide walkout a week ago to protest the US tech giant’s handling of sexual harassment. A massive turnout at the “Googleplex” in Silicon Valley was the final stage of a global walkout that began in Asia and spread to Google offices in Europe.

Some 20,000 Google employees and contractors participated in the protest in 50 cities around the world, according to organisers. Demma Rodriguez, head of equity engineering and a seven-year Google employee, said during the walkout that it was an important part of bringing fairness to the technology colossus.

“We have an aspiration to be the best company in the world,” Rodriguez said. “But we also have goals as a company and we can’t decide we are going to miss those.” The protest took shape after Google said it had fired 48 employees in the past two years – including 13 senior executives – as a result of allegations of sexual misconduct.

Demands posted by organisers included an end to forced arbitration in cases of harassment and discrimination for all current and future employees, along with a right for every Google worker to bring a co-worker, representative, or supporter when filing a harassment claim.In a statement organisers commended Google for the response, but said more changes are needed.

“We demand a truly equitable culture, and Google leadership can achieve this by putting employee representation on the board and giving full rights and protections to contract workers,” organiser Stephanie Parker said in the statement.

Along with sexual harassment, Google needs to address racism and discrimination that includes inequity in pay and promotions, organisers said. “They all have the same root cause, which is a concentration of power and a lack of accountability at the top,” Parker said. – AP

Source:  https://www.thestar.com.my/tech/tech-news/2018/11/09/google-outlines-steps-to-tackle-workplace-harassment/#HJzOgT86K4srKCt1.99

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POOR WEBSITE DESIGNS COULD TRIGGER LEGAL ACTIONS

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Internet marketing has become so popular that e-commerce retail sales in the United States are on pace to double between 2009 and 2018, with sales amounting to US$127.3 billion in just the second quarter of 2018, according to an August 2018 update from the U.S. Census Bureau.

The transaction value of e-commerce service industry contracts reached $600 billion in 2016. Despite the rush to digital commerce, the rules for business transactions are still the same, whether they are concluded on paper or electronically.

Essentially, that means legally valid sales agreements need to demonstrate clearly that both vendors and consumers are aware of — and consent to — the terms of the agreements. It is especially important for vendors to ward off expensive class action suits by including contract terms that prohibit such suits and instead rely on arbitration to resolve any issues with consumers.

Yet recent federal court cases indicate that poorly presented Internet contracts can result in the nullification of arbitration provisions and class action prohibitions — thus giving consumers greater leverage in legal disputes with vendors. Usually the breakdown occurs when vendors mismanage either the display or the content of their websites — and sometimes both.

Website Messages Must be Conspicuous

The most recent example is a June case in which the U.S. Court of Appeals for the First Circuit issued a decision. The case stemmed from complaints that Uber Technologies wrongly added the cost of local tolls in and around Boston to customers’ bills. In Cullinane v. Uber, a federal district court initially ruled in favor of Uber and dismissed the complaint.

However, such is the state of differing perspectives on applicable laws, that the appellate court overturned the district court and ruled against the company.

Uber failed to convince the appeals court that the website sales agreement properly displayed both an arbitration clause and a prohibition against litigation, because the notice was not “conspicuous” enough to be legally valid. Absent adequate notice to the customer, there could be no agreement between the parties over terms and conditions, the court said in denying Uber’s motion to compel arbitration.

The case provided insight into the importance to vendors of arbitration clauses as a way to fend off class action suits.

Compared to litigation, arbitration is a “speedy, fair, inexpensive, and less adversarial” process, the U.S. Chamber of Commerce said in an amicus brief in the Uber case. Members of the organization “have structured millions of contractual relationships — including enormous numbers of on-line contracts — around arbitration agreements.”

Similar suits dealing with the issue include a second case against Uber with a different plaintiff and over a different issue, as well as separate cases involving Amazon and Barnes & Noble.

In each case, courts have gotten into the weeds of website design, finding flaws in styles, the choice of colors, the size of printing fonts, and the use of hyperlinks.

For example, in Cullinane v. Uber, the appellate court noted that the website connection to the contract terms “did not have the common appearance of a hyperlink” because it was framed in a gray box in white bold text, rather than the normal blue underline style. Other screens on the site utilized similar highlight features causing the court to conclude that if “everything on the screen is written with conspicuous features, then nothing is conspicuous.”

Uber’s petition for a rehearing of the case was denied by the appeals court in a July 23, 2018, ruling. The company had no comment on the litigation, Uber spokesperson Alix Anfang told the E-Commerce Times.

Pulling the Trigger on Consent

Of equal importance with presentation is the vendor’s choice of using active or passive mechanisms to obtain customer consent to the terms and conditions of agreements.

In Nicosia v. Amazon, the U.S. Court of Appeals for the Second Circuit overturned a district court decision favoring the company, and instead ruled in favor of the consumer plaintiffs.

The Second Circuit described two major types of customer consent mechanisms. The first, called a “clickwrap” procedure, involves the use of an “I accept” button, which forces customers to “expressly and unambiguously manifest assent,” according to the court.

A more passive alternative is a “browserwrap,” which “involves terms and conditions posted via a hyperlink” and does not request an express showing of consent. “In a seeming effort to streamline customer purchases, Amazon chose not to employ a clickwrap mechanism,” the court noted in the August 2016 ruling.

Ultimately, the court based its decision not on the consent mechanism per se, but on Amazon’s failure to display its terms adequately. The result was that “reasonable minds could disagree” on the adequacy of the company’s notice to consumers.

Amazon declined to comment for this story, spokesperson Cecilia Fan told the E-Commerce Times.

The significant variance among federal courts on the validity of Internet contracts may be caused more by different judicial perceptions than by differing laws covering “conspicuous” or “reasonably communicated and accepted” terms.

While these cases have been brought in federal courts, there is no federal standard for what constitutes adequate notice. Thus, for procedural reasons associated with the Federal Arbitration Act, federal judges have relied on applicable contracting law in different states, including California, Massachusetts, Washington and New York.

“I do not yet see a majority of courts moving toward a single legal standard, especially not one that is adapted to today’s technology,” said Liz Kramer, a partner at Stinson, Leonard, Street.

The U.S. Appeals Court for the Second Circuit reached opposite results in recent cases “despite pretty similar circumstances,” she told the E-Commerce Times. One problem “is that state law applies, and the states are not consistent on what makes terms conspicuous enough to form part of the contract.”

“Different courts define the standard in different ways, but they all boil down to the principle that the arbitration clause — and the links to the clause — must be clearly presented to the consumer in order for there to be a meeting of the minds — in other words, an acceptance — of the arbitration clause,” said Mark Levin, a partner at Ballard Spahr.

“It is not so much the standard that is unsettled, but the application of the standard to the facts, since each website is unique and there are a multitude of factors, both in content and visual display, to consider in determining whether the consumer accepted the clause,” he told the E-Commerce Times.

“Even if there was a U. S. Supreme Court decision, or legislation that defined a single standard, there would still be a need to apply that standard to unique facts in virtually every case,” Levin said.

Web Designers Should Seek Legal Help

While vendors strive to create ever more attractive and compelling websites, designers and marketing staffs need to address the basic nuts and bolts of contract communications, said Levin.

For electronic documents, vendors should “refer to the arbitration clause near the beginning of the terms and conditions, make sure the link to the clause is obvious and clear, minimize the number of mouse clicks it takes for the reader to get to the clause, and refer to the arbitration clause again at the end, close to an electronic signature or ‘I agree’ button,” he advised.

The easiest way for e-commerce vendors to avoid trouble is to skip any indirect notification procedure, suggested Stinson’s Kramer. Deliberate downplaying of key contract terms is an invitation to legal challenge.

“The best way to ensure that an arbitration agreement is enforceable with customers who agree online, or through an app, is to have them actually click ‘I agree’ after reviewing the terms and conditions,” she said.

“Great care should be taken in designing and structuring a website arbitration clause, since courts scrutinize every detail, cautioned Levin.

“This is definitely an area where businesses should enlist legal counsel to help with the design, substance and placement of the clause to help ensure that a court will enforce it,” he said. “If adequate attention is not paid to these issues at the outset, the business could end up in a debilitating class action lawsuit.”

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