How aggressively should a tech platform be allowed to compete before it becomes anticompetitive? In a summer overflowing with big issues for tech giants, from hate speech to election interference, competition might rank above them all. It was questions about competition that led the CEOs of Amazon, Apple, Facebook and Google to appear jointly before Congress for the first time last month. And the discussion that followed may have lasting consequences for multiple ongoing state and federal antitrust investigations, as well the new laws that Congress is expected to draft in response.
In recent weeks, the brunt of discussion about competition has centered around Apple. The company found itself in a new controversy over its App Store rules when the game developer Epic intentionally broke the rules to offer a new payment system that avoided Apple’s 30 percent cut. That prompted an immediate response from Apple, which booted Epic out of the App Store and threatened to terminate its developer account, which would break a large number of games that rely on Epic’s Unreal Engine. On Monday, a judge granted Epic a temporary restraining order against Apple preventing it from eliminating Epic’s account until the full matter can be heard.
The outlines of Epic’s complaint are familiar to anyone who has talked to a developer about the playing field for smaller companies in 2020. Apple has a monopoly on iOS; it uses that monopoly to extract rents from everyone who uses it; and those rents eliminate competitors and discourage innovation. The nuances matter, and Ben Thompson does a great job walking through them here. But the idea that Apple’s greed is warping the entire field of software development, which had a breakout moment in June with the Basecamp controversy and continued through the antitrust hearing, is rapidly becoming conventional wisdom.
But just because there’s widespread agreement a company’s business practices are unfair doesn’t mean they’ll change. Just ask Jeremy Stoppelman, the CEO of Yelp, whose company has waged an epic, lonely crusade against Google for most of its life. I sometimes joke that in place of a product roadmap, Yelp has a chief lobbyist. (He’s very good, for what it’s worth.) Yelp was founded in 2004, and benefited hugely from high placement in Google search ranking for years. But as Google became more interested in local search results, it began promoting its own listings above Yelp, strangling its growth to the point that Stoppelman now says it’s a “minor miracle” his company even exists.
Stoppelman joined my boss Nilay Patel and I on an episode of The Vergecast that dropped today, and I invite you to give it a listen. Over the course of an hour, Stoppelman told us about his company’s response to COVID-19, the bleak state of affairs for local business right now, and — most relevant for our purposes here — Yelp’s long struggle against the search giant.
I had never spoken to Stoppelman before, and I was excited to ask him a question I have long had about Yelp — why doesn’t it compete harder than it does? The product has been relatively stagnant for years, and even if you think Google has abused its market power — which I do — it isn’t as if local search is a solved problem. Yelp’s reviews are still generally better than Google’s, and the devastation COVID-19 has wrought on local businesses would seem to offer the company fresh room to innovate.
In light of all that, I found this exchange interesting. Here it is:
Casey Newton: We’re still sort of talking about Google as if it’s the only possible entry point to Yelp. And the thing that happened since your company was founded was the rise of mobile phones; the app stores exist, right? There’s a world in which the Yelp app is just so freaking good that everybody has to run out and download it and this is how they access all their local information. So even just to play devil’s advocate, what is the answer to, “Come on, Yelp, can you just actually compete a little bit harder?” You have other tools to get customers’ attention that are not antitrust cases.
Jeremy Stoppelman: Yeah, I would say that you could look at our traffic makeup. We still get a huge portion of our traffic from Google. So while I feel better about our market position, and we are more diversified traffic-wise and without the mobile app ecosystem emerging, we would be in a far worse position — who knows where we would be, frankly, if that didn’t exist. So I would call that a lifeline rather than, “Oh, you’re totally fine. Nothing to worry about. You’re a bunch of whiners, so stop complaining and get back to work.”
I think the other thing to remember is, think of the enormous resources a monopoly power has and can put against you. You look at mapping technology, not many people can afford to play in the mapping space period anymore. What happened to Navteq and some of these big maps players? Google entered the market, they gave away a free product essentially, although they now charge for it, and some of the independent mapping players fell over as a result. So these big monopolies bring in insane amounts of resources to fight.
So I would say it’s a minor miracle that we’re still standing. I’m very proud of the fact that we’ve competed successfully. But I think in my mind there was no question we would be a significantly bigger company with more resources to invest if Google had played fair and not tipped the scales in their favor to make sure that their content, their local results are always at the top and increasingly taking up more and more of the page. When it comes to local, if you do a local search on Google — especially mobile — it’s a chore to find organic results anymore.
Stoppelman’s view seems to be that no matter what Yelp does to differentiate itself, Google will always ensure that it comes out on top. His preferred solution, as articulated in the partially Yelp-funded site Focus On The User, is to give companies like his access to the answer boxes that now appear on Google search results alongside the traditional 10 blue links.
“This means creating an interoperable box and ranking Google’s content alongside other business listing pages across the web,” states Focus On The User, which Yelp built alongside its fellow aggrieved local search player, TripAdvisor. “An organic, merit-based process should pin the most relevant businesses from the web to the map. That box should provide a clear path to the source content, not a small link designed to generate a low [click-through rate].”
From a product standpoint, I can see how this approach could benefit Google users. And as an advocate for an open web, I would love to see Google sending more traffic outside its walls. As a legal argument, though, Yelp’s complaints have always struck me as a little weak. How much right should Yelp — or Congress — have to redesign Google? The current state of affairs does feel untenable. But many of the proposed situations seem weak.
It’s also worth pointing out that many small businesses themselves feel bullied by Yelp, which aggressively sells them advertising and other tools to enhance their profiles. Many businesses see Yelp as a tool that unfairly lets their worst customers slander them, and they have few alternatives if they feel they have been wrongly accused of bad service or worse. Tweet the word “Yelp” on Twitter, and the word “extortion” will often come back to you from some aggrieved merchant.
Still, from Apple to Google, it feels like a dam has broken this summer. Even if Congress or the courts choose to dismiss some of the individual complaints, the larger mood shows every sign of holding. The reason people keep speaking up about unfairness on the tech platforms is because they are, in a variety of ways, unfair. More developers are speaking up about it now every day. And for the first time in a long time, the regulators are seriously listening.
Today in news that could affect public perception of the big tech platforms.
🔽 Trending down: Facebook has continued to sell discriminatory ads after settling multiple lawsuits with civil rights groups accusing the company of violating federal anti-discrimination laws through its ad targeting platform. On Tuesday, Facebook said it would eliminate the multicultural affinity categories that enabled some of this discrimination. (Jeremy B. Merrill / The Markup)
⭐ Republican party leaders linked to the White House helped boost the primary campaign of Marjorie Taylor Greene, a QAnon supporter with a history of making racist and bigoted remarks. Some donations came from groups connected to the White House chief of staff Mark Meadows. Julia Carrie Wong at The Guardian explains:
The Your Voice Counts Pac affiliated with Meadows first donated $2,000 to Greene’s campaign in March. Greene received further support from the Meadows family when the RightWomen Pac, whose executive director is Debbie Meadows, Mark’s wife, endorsed Greene and spent $17,500 to oppose Cowan in the runoff.
Greene also received significant backing from the House Freedom Fund, the Pac associated with the House Freedom Caucus, of which Meadows was a member before he was tapped as White House chief of staff. Meadows is still featured on the House Freedom Fund’s website. In addition to spending more than $30,000 on an independent expenditure campaign to support Greene over Cowan, the House Freedom Fund raised nearly $90,000 from its own donors, earmarked for Greene’s campaign.
Russia and China are both trying to influence the 2020 election, albeit in different ways. While Russia is more open in its strategy and its preference for Donald Trump, China’s efforts, and its preference for Joe Biden, are narrower and more secretive. (Declan Garvey / The Dispatch)
The Department of Defense is deploying personnel abroad to look for malicious software that might be used to harm the 2020 US election. It’s part of a plan to allow the department to identify malware targeting other countries’ networks that might later be used in the US. (Shannon Vavra / CyberScoop)
Trump’s WeChat ban could have big implications for Hollywood, which has increasingly looked to China as a major source of growth. Disney has invested heavily in its theme parks in Hong Kong and Shanghai and in promoting its wide array of movies in the country. (Wendy Lee and Ryan Faughnder / Los Angeles Times)
General Atlantic and Sequoia Capital, two major investors in ByteDance, are helping to drive Oracle’s bid to buy TikTok. Oracle has recently emerged as an alternative buyer to Microsoft, which had first expressed interest in TikTok. (Rolfe Winkler, Miriam Gottfried and Cara Lombardo / The Wall Street Journal)
A TikTok employee is suing the Trump administration for putting his family’s livelihood at risk by passing an executive order that targets the popular app. TikTok is also suing the Trump administration, though the two cases are separate. (Brian Fung / CNN)
Facebook is planning to take legal action against the Thai government for forcing it to block a group deemed critical of the country’s monarchy. Facebook said the Thai government compelled it to block users in Thailand from accessing Royalist Marketplace — a group with 1 million members. (Rishi Iyengar / CNN)
Police in Hong Kong are using a new national security law to target, and at times hack into, the social media accounts of executives, politicians and activists. While tech companies have cut off data sharing with police, the problem of detecting when they are trying to break into someone’s account is thornier. (Paul Mozur / The New York Times)
YouTube took down twice as many videos in the second quarter of 2020 as the first. The spike was due to an increased reliance on automated filters during the pandemic, which aren’t as reliable as humans. (Issie Lapowsky / Protocol)
YouTube banned the controversial creator known as LeafyIsHere for repeatedly violating the company’s harassment policies. The company started rolling out new measures to try to prevent creator-on-creator harassment over the last year in response to criticism, a lot of which we covered here last summer. (Julia Alexander / The Verge)
⭐ Gun sellers have adopted a new tactic to evade Facebook’s rules against selling firearms on Facebook Marketplace. The new tactic involves posts purporting to sell stickers, alongside images of gun makers’ logos. Sellers then ask users to send them a private message for more information. Here’s Parmy Olson at The Wall Street Journal:
The Journal, using a simple search for “gun sticker” and “stickers,” over two days earlier this month surfaced more than 40 posts that purported to be selling stickers, next to images of gun makers’ logos, or a particular caliber ammunition. After that search, Facebook’s recommendation algorithm offered a Journal reporter a full page of more than 50 similar postings across multiple U.S. states.
A separate, one-day analysis conducted last week by Storyful identified more than a dozen listings for stickers of popular gun brand logos, including Smith & Wesson Brands Inc. and Remington Outdoor Co., across 10 U.S. cities. In Lexington, Ky., and San Angelo, Texas, for instance, the search found two listings in each city for stickers related to gun brands. Storyful is a social-media intelligence agency owned by News Corp, which also owns the Journal. While some gun manufacturers have profile pages on Facebook, there is no indication they sell firearms on the site.
Facebook launched Facebook Shop as a test in the US today, as it doubles down on e-commerce. The tab within the main Facebook app allows users to find and buy products. (Ashley Carman / The Verge)
Facebook is moving away from the Oculus brand, renaming its annual virtual reality developer conference from Oculus Connect to Facebook Connect. The company is also changing the name of its virtual reality organization to “Facebook Reality Labs.” (Lucas Matney / TechCrunch)
The unpaid work of moderating Facebook groups is becoming harder during the pandemic. Moderators are finding the divisiveness of real life is seeping into their online communities. (Heather Kelly / The Washington Post)
An Instagram account is chronicling anonymous accusations about the F-Factor diet and sparking a feud between two lifestyle influencers. (Katherine Rosman and Abby Ellin. / New York Times)
Jaron Lanier, who is sometimes credited as the father of virtual reality, thinks we should delete all our social media. But he also sees hope in how the Black Lives Matter movement is using Facebook and Twitter. (Zach Baron / GQ)
Reddit’s small live-streaming service, the Reddit Public Access Network, might be expanding to more subreddits soon. RPAN live streams are currently limited to just over a dozen subreddits. (Jay Peters / The Verge)
Google Discover is now surfacing a carousel of “short videos” as a TikTok ban looms. The ban could create space for US companies to try and replicate TikTok’s success, which many are already trying to do. (Abner Li / 9To5Google)