News Information and Media Site: Byers Market: Tim Cook doesn't want an antitrust fight. He's going to get one anyway.

June 19, 2020

By DYLAN BYERS in Los Angeles &

AHIZA GARCÍA-HODGES in San Francisco

Good morning. 🗣️ It's Juneteenth. Sen. John Cornyn, R-Texas, says he will introduce legislation to make the commemoration of the end of slavery a national holiday. (The roots of Juneteenth stretch back to Galveston, Texas, in 1865.)

• Several companies including Twitter, Uber, Nike and The NFL have made it a company holiday. Amazon, Google and Facebook are urging a day of reflection. Apple is holding a three-day celebration across its offices worldwide.

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Bay vs. Beltway

Tim Cook doesn't want an antitrust fight. He's going to get one anyway.

Moving the Market: Earlier this week, Tim Cook split from his contemporaries at Amazon, Google and Facebook by refusing to declare his willingness to testify before Congress on antitrust issues. Whether he testifies or not, the last 72 hours show why the antitrust fight is one Apple won't be able to avoid.

• But first, context: It's likely Cook doesn't want to testify because he doesn't believe Apple should be tied in with Amazon, Google and Facebook in the antitrust debate. Those companies dominate the digital economy; whereas Apple's core iPhone business accounts for less than half of the U.S. smartphone market.

• From a public-relations perspective, congressional hearings are like perp walks. If Jeff Bezos, Sundar Pichai, Mark Zuckerberg and Tim Cook show up to Congress to testify (in person or via teleconference), the photos of those four will circulate in perpetuity. Cook and Apple will forever be part of antitrust's Mount Rushmore.

• Apple isn't commenting, but it's possible Cook has made the calculation that it's better to be criticized for not testifying than to be lumped in with the other tech firms. While that will draw criticism, it will also force a conversation that Apple actually wants to have, which is: Is Apple actually a monopoly? The answer is no.

However. The antitrust debate isn't just about monopolies. It's about whether or not companies use their power to harm consumers by stifling competition. And this is where the last 72 hours come in. Because as our colleague David Ingram reports, Apple's App Store has become "a flashpoint in the Big Tech debate."

• On Tuesday, the European Union launched two antirust probes into whether Apple violated competition laws through its Apple Pay service and App Store, which could ultimately result in a 10 percent tax on Apple's annual revenues in Europe.

• The same day, David Heinemeier Hansson, the chief technology officer of Basecamp, began aggressively criticizing Apple for taking a 30 percent cut of revenue on Basecamp's "Hey" email app. (Apple charges that commission on most in-app purchases).

• Apple's decision on "Hey" is within the bounds of its longstanding policy — and Apple sent an email to Basecamp outlining that policy yesterday — but the tiff has nevertheless forced a larger debate over whether or not Apple should be taking such a large cut.

The blowback: On Thursday, Rep. David Cicilline, the chairman of the House antitrust subcommittee, and the man who has summoned Bezos, Pichai, Zuckerberg and Cook to testify, said "the idea of exacting a 30 percent premium ... is unconscionable."

• Meanwhile, Microsoft President Brad Smith criticized Apple for creating "higher walls and far more formidable gates" in its App Store than ever existed during Microsoft's 1990s antitrust battle.

• Other businesses are growing more vocal. Epic Games and Match Group have joined longtime critics like Spotify in protesting the fees. Analyst Ben Thompson says 50 developers have relayed stories of Apple trying to "squeeze" more revenue from them.

The big picture: Forget whether or not Apple is justified in extracting a 30 percent fee (it may be!). The public relations battle has already been lost. Lawmakers, businesses and the media have come to their own conclusions, and they've decided that Apple deserves to be scrutinized for anticompetitive behavior.

• Moreover, as the first company to pass a $1 trillion market cap, it's going to be very difficult for Cook to make the case that his power is not deserving of Congressional scrutiny.

What's next: Apple will hold its annual Worldwide Developers Conference on Monday, but there's no reason to believe that they'll announce any changes to their policy on in-app purchases. If their email to Basecamp proved anything, it's that they're quite resolute in their belief that they're on the right side of this argument.

💸 How to give it 💸

Sheryl Sandberg has announced a series of new steps Facebook is taking to address racial inequality, including a $200 million commitment to Black-owned businesses and organizations.

• Facebook will also expand its work training program to reach 1 million Black people, give 100,000 scholarships to Black students and launch a Lift Black Voices feature.

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Future of speech, pt 1.

Mark Zuckerberg shuts down Trump ads

Big in the Bay, big in the Beltway: Facebook has removed 88 ads posted by President Donald Trump, the Trump campaign and Vice President Mike Pence that featured a symbol used by the Nazi party in World War II to identify political dissidents in concentration camps, our colleagues Ben Collins and Brandy Zadrozny report.

• "We removed these posts and ads for violating our policy against organized hate," Facebook said. "Our policy prohibits using a banned hate group's symbol to identify political prisoners without the context that condemns or discusses the symbol."

The big picture: Facebook's decision here was entirely consistent with its policy on hate speech and, as far as these things go, among the easier content decisions Facebook has had to make. Needless to say, that hasn't stopped baseless conspiratorial thinking on both the right and the left about ulterior motives.

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Future of speech, pt. 2

Jack Dorsey adds another Trump warning

Big in the Bay, big in the Beltway: Twitter added a "manipulated media" label to a video posted on President Trump's Twitter account last night that showed a doctored video with a CNN-style chyron that read "Terrified Todler Runs From Racist Baby."

• "Multiple journalists confirmed that the video, which was shared by President Trump, is edited and features a fake CNN chyron," Twitter said. "The original CNN story, which is from 2019, reported on a friendship between two toddlers."

The big picture: Trump is continuing to test the boundaries of acceptable speech on social media platforms — and increasingly crossing the line.

Market Links

• Mark Zuckerberg gets whiplashed (Information)

• Alexis Ohanian will ban hate speech on Reddit (Bloomberg)

• Devin Wenig denies involvement in eBay cyberstalking (Recode)

• Emmett Shear sees Twitch become a BLM platform (NYT)

• Jeffrey Katzenberg blames COVID-19, again (Deadline)

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Mask off

Adam Aron tempts fate

Talk of Tinseltown: AMC Theaters chief Adam Aron has laid out a plan for reopening 600 theater venues in the United States, and it doesn't include forcing moviegoers to wear masks.

• "We did not want to be drawn into a political controversy," Aron told Variety's Brent Lang. "We thought it might be counterproductive if we forced mask wearing on those people who believe strongly that it is not necessary."

The big picture, via CNN's John Passantino: "This is exactly how you get drawn into a political controversy."

Washington Post/Getty

🏈 Sports report

Anthony Fauci warns NFL

Talk of TV Land: Dr. Anthony Fauci, the country's highest-ranking infectious disease specialist, says the NFL will need to seal off players, coaches and team staff members in "a bubble" if they want to proceed with this year's season.

• "Unless players are essentially in a bubble — insulated from the community and they are tested nearly every day — it would be very hard to see how football is able to be played this fall," Fauci told CNN.

The big picture: Fauci's warning casts doubt on the NFL's ambitious plan to proceed with its 2020 season as originally planned, with games in 22 states and fans in the stadiums — a plan the league's media and advertising partners surely want to see come to fruition.

• "The NBA, Major League Soccer and other leagues have announced plans to create enclosed campuses where their players, coaches and staff members will live and play full time in venues without fans," NYT's Ken Belson reports.

• "The NFL has not announced any plans for constructing a similar bubble. ... [It] acknowledged Dr. Fauci's warning and said it would adjust its guidelines to align with public health recommendations... But... offered few specifics beyond testing players."

What's next: "The league has said it remains committed to keeping to its schedule of opening the regular season on Sept. 10, with fans in attendance," Belson reports.

• Bonus: NYT's John Branch assesses the state of sport as it emerges from cultural hibernation. So far, he writes, there are only "loose plans, good intentions and a nervous hope that it doesn't go wrong."