Tech is reshaping the world — and not always for the better. Whether it’s the rules for Apple’s App Store or Facebook’s plan for fighting misinformation, tech platform policies can have enormous ripple effects on the rest of society. They’re so powerful that, increasingly, companies aren’t setting them alone but sharing the fight with government regulators, civil society groups, and internal standards bodies like Meta’s Oversight Board. The result is an ongoing political struggle over harassment, free speech, copyright, and dozens of other issues, all mediated through some of the largest and most chaotic electronic spaces the world has ever seen.
A judge had ruled in November that postal workers who, in solidarity with Tesla’s unionized Swedish mechanics, refused to deliver the plates had to let Tesla pick them up. But Fortune writes that another Swedish court overturned the ruling pending a final decision.
The strike began when Tesla refused to bargain with around 120 unionized Swedish mechanics. Soon, other unions joined, including dockworkers and postal workers, then the strike spread to unions in Denmark and Norway.
Keith Berman, who claimed he wasn’t taking compensation in his role as CEO, actually splashed out a bunch of company money on himself. Also, he claimed that he could test for covid in 15 seconds. Also also, my guy used a “fake persona to repeat false and misleading statements to investors on internet message boards.”
A judge ruled on Thursday that Zhao — who resides in the United Arab Emirates — must stay in the US ahead of his February 2024 trial, citing his “enormous wealth and property abroad” as well as a lack of ties to the US.
The Free Law Project has updated its bot system with support for Bluesky, so our Verge-curated Tech Cases Bot now has a home there in addition to X/Twitter and Mastodon. Follow it for easy updates to cases like Epic v. Google whenever new documents are filed!
“The only thing that has changed is that Microsoft will now have a non-voting observer on OpenAI’s Board, which is very different from an acquisition such as Google’s purchase of DeepMind in the UK,” said Microsoft’s president Brad Smith to Bloomberg.
Amicus briefs in the big First Amendment case against the bad Texas and Florida social media laws are getting filed, and Public Knowledge’s submission contains a citation to Welcome to hell, Elon as support for the idea that the real product of any social platform is content moderation. I truly hope Clarence Thomas reads this thing.
You have seen evidence that Google Chat communications were deleted with the intent to prevent their use in litigation. You may infer that the deleted Chat messages contained evidence that would have been unfavorable to Google in this case.
More notably: he intends to let jurors decide where they believe Google has monopoly power, if any. There’s a big white write-in box waiting for them.
He will also personally decide if Epic’s contract with Google was legal — if so, Epic will pay $398,931.23 for sneaking its own payment system into Fortnite regardless of the jury’s verdict.
As 404 Media notes, an investigation into alleged “hacker-for-hire shop” Appin has been removed — Reuters says temporarily — after what Reuters calls a preliminary court order that the news outlet is fighting. There’s no clear evidence of factual errors here, which might make this a case of de facto press censorship in India. You can still read the feature here.
Bloomberg’s sources say that the conclusion to the European Commission’s probe into iMessage should spare Apple from needing to offer other companies some level of interoperability with the service.
The investigation officially ends in February, with new Digital Markets Act rules aimed at Big Tech’s ”platform gatekeepers” coming into full effect in March, with the intent of creating a level playing field for all.
This happened last week, but I saw it today because of Techdirt’s great post about the dismissal. Indiana’s attorney general actually filed two lawsuits against TikTok in December 2022, but they were consolidated, the Associated Press reports.
It’s not technically off for everyone: the judge ordered Epic and Google to discuss a settlement this week while court is out of session. But the judge, jury, and journalists won’t be back until Monday, December 11th — that’s when we’re coming back for closing arguments (unless, of course, they settle).
Meanwhile, I’m working on an epic recap of everything we’ve learned. Stay tuned for that!
Oh, in case you missed it on Friday:
The New York Times reported that at the United Nations climate summit, Vice President Kamala Harris said a new final rule put in place by the Environmental Protection Agency will heavily curb energy companies’ methane emissions.
As the Times notes, 50 oil and gas companies pledged similar reductions, though environmental groups are skeptical. In an open letter, 320 organizations signed an open letter criticizing the “voluntary efforts” as a “distraction from the task at hand.”
[The New York Times]
I thought we were done — but we came back to decide a few last things.
First, Google tried to argue Epic didn’t have enough evidence for a jury to win. Judge Donato dismissed that, saying he saw “more than enough evidence for the jury to find for plaintiff on each of their claims.”
Second, Judge Donato says the whole jury verdict will follow the rule of reason standard — no per se, not even for the Activision Blizzard Project Hug deal.
Third and perhaps most intriguingly, Judge Donato says he has has been “forced” to investigate Google, on his own, outside of this trial, for conducting “a frontal assault on the fair administration of justice” by intentionally deciding not to preserve chats. But he also says he will let the jury decide to infer whether Google destroyed evidence in this case — he will not issue a mandatory inference instruction in this trial, he says.
He has decided “the best course of action is for the jury itself to decide whether it will make an inference. I am not going to constrain the jury’s discretion by making that inference for them,” he says.
We’re still hearing more argument over jury instructions — I’ll update this post if there’s more that feels notable.
My biggest question was how the heck we’re going to get from a bunch of competing theories about what market definition should be to the actual questions in front of the jury. Does the judge pick market definition, like one did in Epic v. Apple? Do we have to go with the ones Epic named? Does the jury get to make it up?
Here’s Dan McCuaig, a partner at Cohen Milstein, who spent over a decade in the DOJ’s antitrust division. Not only did he answer my question, he also gave us an elegant summary of the how the process works.
Market definition is a question of fact rather than law. So, in a jury trial, the jury decides what the relevant market is. (The judge instructs the jury how to make that determination.) The jury then determines whether the challenged restraint/activity generated anticompetitive harm in that market. (If not, the defendant wins.) If so, the jury determines whether that same restraint/activity also generated procompetitive benefits in that same relevant market. (If not, the plaintiff wins.) If so, the jury then determines whether there was some less restrictive alternative that could have achieved the same (or virtually the same) procompetitive benefits with no (or substantially less) anticompetitive harm, and, ultimately, the jury balances the anticompetitive effects against the procompetitive benefits to determine, on balance, whether the challenged restraint/activity harmed or benefited the competitive process.
The jury need not find the same relevant market as the plaintiff has proposed in order for the plaintiff to win but, as a practical matter, the jury will always or almost always come out for the defendant if it rejects the plaintiff’s proposed relevant market.
Epic v. Apple was a bench trial, so the judge served as finder of fact — and thus made the call on relevant market.
If you take a look at the near-final jury instructions (pdf) for this case, you’ll see the flow sounds like what McCuaig is describing. You’ll also see that a jury seems inclined to consider Epic’s original proposed markets: “Android app distribution” and “in-app billing services on Android devices.”
Bernheim’s penultimate word was to point out there’s a well-known concept that explains that competition naturally happens, even in monopolies:
The cellophane fallacy says that even a monopolist will raise its price to the point people will switch to something else, and then business people say we’re competing, but you’re competing at a very high price, way above a competitive level and the antitrust laws are supposed to stop that.
Epic lead attorney Gary Bornstein announced that Epic rests its case. The jury has been dismissed for a week. We’ll be back on December 11th with closing arguments and jury instructions.
I’m working on one more post for you before I leave for the day, though — refresh our StoryStream in a couple minutes for that.
Epic v. Google won’t be over for a bit yet, as we’ll come back December 11th for closing arguments and jury instructions before the verdict. But the evidence is all in. Both Epic and Google have rested their cases. See you the week after next!
Epic has made some hay out of the idea that Google took 18 months to match Apple’s subscription price cut, but Google’s lawyer just called out Bernheim for that — because while the Epic Games Store launched with a 12 percent service fee in December 2018, Microsoft didn’t match that with its PC games store until mid 2021.
(Epic has since come back to point out that the Epic Games Store launched with no traction, and would have taken a while to gain some — and that Microsoft did move from 70/30 to 85/15 in 2019. So maybe it influenced Microsoft right away?)
Google hasn’t gotten a lot of points on Bernheim IMO, but it did just seem to nail him for comparing what he calculated as Google Play’s average service fee (26 percent) to ranges of fees (such as 13 percent to 23 percent for the Galaxy Store) in his slide.
Google suggested he should have pointed out that Google’s range was 4 percent to 30 percent, which I have to admit seems right! Bernheim wore it well, saying the comparison was appropriate because Play’s average fee was higher than the top of the other ranges, but he seemed to know he got got on that one.
➡ Tucker compared Google’s fee to fees of app stores on other platforms. “When game console platforms charge 30 percent, their margins are much lower.”
➡ Tucker “uses list prices for commissions,” suggesting that Amazon charges 20 to 30 percent when it actually charges more like 10 percent and the Galaxy Store charges as low as 13 percent, suggests Bernheim.
Bernheim says Google’s economist Tucker didn’t appropriately consider switching costs between Android and iPhone — and not necessarily because it’s hard to switch.
Rather, because a 50 cent increase in prices to the end user (“that’s about 50 cents for the average smartphone user over the life of their phone,” he says) wouldn’t be enough to overcome the switching costs that do exist, given people only switch phones every 2.7 years on average.