Tech giants racking up wins in antitrust battles

The agency has argued that the deal would stifle competition and give Microsoft, which produces the popular Xbox gaming console, an unfair advantage against its rivals. 

But as my colleague Cat Zakrzewski wrote, a judge ruled that the agency “had not demonstrated it was likely to show that the deal would substantially limit competition.”

While the decision could be appealed and the FTC is pursuing a separate administrative complaint against the deal, the move marked the latest victory for one of the world’s most powerful tech companies against a growing tide of antitrust threats in the United States. 

Here’s a look at where those battles stand:

High-profile losses for antitrust advocates

Antitrust enforcers and smaller rival companies who have accused tech giants of violating competition laws have been dealt a string of recent defeats: 

• State attorneys general in April lost an attempt to revive their antitrust lawsuit seeking to break up Meta after the initial challenge was dismissed in 2021. 
• Fortnite maker Epic Games in April lost an appeal of its lawsuit accusing Apple of holding a monopoly over its App Store, largely siding with a lower-court ruling that handed Apple a win in the closely watched bout. 
• The FTC in February lost its bid to block Facebook parent company Meta from acquiring virtual reality company Within, a case that was seen as a test of the agency’s attempts to challenge potential threats to competition in emerging markets. 
• D.C.’s antitrust lawsuit accusing Amazon of harming consumers by blocking sellers from offering better prices elsewhere was tossed in March 2022.

(Amazon founder Jeff Bezos owns The Washington Post. Interim CEO Patty Stonesifer sits on Amazon’s board.)

Proponents of more stringent antitrust enforcement have also suffered legislative setbacks:

• A major package of antitrust bills targeting tech giants like Google, Amazon, Meta and Apple failed to get floor votes in the House or Senate last Congress, and its prospects for passage took a massive hit with Republicans regaining control of the House.
• Federal lawmakers scrapped legislation to allow news publishers to bargain collectively with the tech giants from a defense package in December, and California lawmakers last week put a similar first-of-its kind state measure on hold until next year.
• State legislators’ efforts to pass antitrust legislation targeting app store giants like Apple and Google have run into major hurdles and largely failed to crystallize. 

Blockbuster cases still up in the air

While losses are piling up for antitrust advocates, several closely watched cases are still up for grabs or looming as a threat for Silicon Valley: 

• A federal judge in April rejected Google’s motion to dismiss a Justice Department lawsuit accusing it of holding a monopoly over digital advertising, and a separate lawsuit between the tech giant and the federal government over its search engine is ongoing.
• While the FTC’s initial lawsuit to break up Meta was dismissed in 2021, a federal judge ruled in 2022 that an amended complaint could move forward in a win for the agency.
• A judge rejected Amazon’s motion to dismiss a separate lawsuit from California Attorney General Rob Bonta accusing the giant of antitrust violations over its pricing practices, and D.C. Attorney General Brian Schwalb has pushed to revive D.C.'s case.
• The FTC is expected to file a major antitrust lawsuit against Amazon’s sprawling e-commerce business this year.

In response to the Microsoft ruling on Tuesday, FTC spokesman Douglas Farrar said in a statement, “In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”

Microsoft vice chair and president Brad Smith said in a statement: “We’re grateful to the court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution.”

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Tax prep sites gave millions of taxpayers’ personal info to Facebook and Google

A congressional report says that millions of H&R Block, TaxSlayer and TaxAct customers’ personal data was shared with Google and Facebook, in some cases dating back as far as 2011, our colleague Julie Zauzmer Weil reports.

Weil writes: “The congressional investigation, led by Sen. Elizabeth Warren (D-Mass.), follows a report last year by the technology journalism website the Markup. Warren and six other lawmakers wrote to the Justice Department on Tuesday urging criminal charges against the companies for violating laws that prevent tax preparers from sharing their clients’ personal information.”

The companies tracked user information that’s commonly placed into tax preparation websites using pixels, a tool frequently used for ad targeting on social media platforms. When customers typed information into the forms, pixels sent that data to Google and Facebook, the congressional report says.

The lawmakers argue that the development is reason enough “to support a plan being developed by the IRS to build its own free tax preparation software, rather than steering taxpayers to commercial tax preparation software,” Weil adds.

Amazon challenges inclusion in forthcoming E.U. digital rules

Amazon challenged its inclusion in a group of companies that are subject to forthcoming E.U. online content rules, the first challenge from a Big Tech company, Foo Yun Chee reports for Reuters. 

The Digital Services Act directs qualifying entities to run annual risk assessments about illegal content on their sites, submit to independent audits and provide researchers with critical data about how their platforms operate. Violators can face fines up to 6 percent of their global revenue. The company and several other major platforms have been designated as large entities due to the size of their E.U. user bases. 

Amazon says it does not fit the description of a “very large online platform,” arguing “it is not the largest retailer in any of the EU countries where it operates and bigger rivals in these countries have not been designated” in the same way, the report says.

Regulating AI will be ‘one of the hardest tasks’ Congress undertakes, Schumer says

Senate Majority Leader Chuck Schumer (D-N.Y.) said that regulating artificial intelligence will be one of the most difficult tasks Congress takes up.

Schumer was speaking to reporters after the Senate’s first classified AI briefing where U.S. intelligence officials were present. He emphasized that Congress and the private sector will have to work together to promote innovation but also ensure AI safeguards are in place so innovation “doesn't get out of control” or be used for negative purposes.

“I’ve studied this issue, but this briefing showed just the depth, complexity, but necessity of getting something real done,” Schumer said. “It’s going to be very hard. It’s going to be one of the hardest tasks that Congress has ever played to, but it’s probably one of the very most important and we can’t run away from it.”

The Senate held its first of three all-member briefings on AI last month. Schumer a week later outlined a congressional AI regulation plan as President Biden met with AI experts in San Francisco to discuss the technology’s opportunities and risks. Several lawmakers have said it would take months before legislation regulating the emerging technology is introduced.

Rant and rave

Reactions pour in on yesterday’s Microsoft-Activision news. New York Times tech reporter Kellen Browning:

Forbes gaming and TV reporter Paul Tassi:

Axios business editor Dan Primack:

Agency scanner

The FCC aims to stop SIM swappers with new rules (The Verge)

Inside the industry

Google hit with lawsuit alleging it stole data from millions of users to train its AI tools (CNN)

TikTok parent ByteDance to allow US staff to cash out on shares-sources (Reuters)

China to lay down AI rules with emphasis on content control (Financial Times)

Competition watch

The next challengers joining Nvidia in the AI chip revolution (Wall Street Journal)

Privacy monitor

You can say no to a TSA face scan. But even a senator had trouble. (Shira Ovide)

A woman and her daughter plead guilty to abortion-related charges supported by Meta-provided Facebook chats (The Verge)

Workforce report

Amazon union is sued by former members seeking a new election for union officers (The Associated Press)

Microsoft cuts more jobs (Axios)

Daybook

• The Senate Commerce Committee votes on FCC nominee Anna Gomez and others at 10 a.m.
• The House Oversight Committee considers a bill to expand AI training within the executive branch at 10 a.m.
• The Center for Strategic and International Studies holds a discussion on the strategic implications of cloud computing at 1:30 p.m.
• The Senate Judiciary Committee convenes a hearing on AI, intellectual property and copyright at 3 p.m.
• Reps. Mike Gallagher (R-Wis.) and Ro Khanna (D-Calif.) speak with Elon Musk on Twitter Spaces to discuss AI regulations at 7 p.m.
• FTC Chair Lina Khan testifies to the House Judiciary Committee tomorrow at 10 a.m.

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