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Absentee Ownership: How Amazon, Facebook, and Google Ruin Commerce Without Noticing

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Hi,

Welcome to BIG, a newsletter about the politics of monopoly and finance. If you’d like to sign up, you can do so here. Or just read on…

Tomorrow, the CEOs of Apple, Google, Facebook, and Amazon will testify before the House Antitrust Subcommittee. If done right, this hearing could be the most important hearing on monopoly power in decades. So today, in preparation, I’m going to write about how big tech regulates American commerce, using some stories I worked on over the past few weeks.

Three housekeeping items. First, a colleague and I wrote up for Politico a piece on the American tradition of taking on monopoly power, going all the way back to the 1600s. Second, I co-authored a report explaining how Amazon acquired its market power and the list of laws that need reform to make the corporation safe for democracy. Third, there is another antitrust suit against the cheer monopolist Varsity Brands. If you’re in that world, there’s more info at: https://www.takebackcheer.com

And now… let’s start with a weird picture of a Chinese return address…

Facebook, Google, and Counterfeiting

Last week, I got an email from a frustrated customer of the luxury shoe brand Rothy. “On Memorial Day weekend,” she wrote. “I was on Facebook and there was a sale on my favorite shoe brand, Rothy. The sponsored advertisement said Rothy so I clicked on it and ordered 2 pairs of shoes. When they arrived a few days later, I immediately knew they were counterfeit shoes. I went onto Paypal and requested a refund. A few days later, I received a response that I have to return them to China in order to provide a refund. The return address was in complete Chinese characters. How do Americans write 12 chinese characters?”

Rothy’s is a high quality branded women’s apparel company focusing on sustainability. Rothy shoes and bags are well-made, and the company charges a reasonably high price for them, a price chosen to convey that the Rothy brand means quality. It does not, as a rule, ever put its shoes on sale. I went back and forth with this customer, and she told me that she had called Rothy to complain, and “they shared that they are getting hammered by fraud on Facebook and Instagram but can't get these goliaths to stop it.”

Such a high quality brand offers an enticing target for Chinese counterfeiters, who have found the perfect criminal accomplice: Facebook. Chinese counterfeiters are buying ads offering Rothy’s shoes for a low price, and directing people to fake websites. People then buy the shoes, which are counterfeit, and customers then complain to Rothy’s. Facebook does take fake ads down, but it is reactive, not proactive about doing so. Rothy’s is in a constant whack-a-mole trying to find the fake ads so they can get Facebook to act.

It gets even more interesting when you throw the Facebook ad boycott into the mix. A few weeks ago, Rothy’s, like a lot of companies, pulled its ads from Facebook in solidarity with Black Lives Matter over Mark Zuckerberg’s policies around hate speech. Many companies did so, which had an interesting effect on ad prices. Facebook ad prices are done on an auction model, which means that high ad demand pushes prices up, and low ad demand pushes them down. With a boycott going on from advertisers, ad prices on that particular day were likely lower than usual. With no Rothy ads on Facebook and Instagram, and low ad prices, Chinese counterfeiters took advantage, and Facebook and Instagram were full of ads for fake Rothy’s. In other words, intentionally or not, Facebook damaged Rothy’s business by allowing counterfeiters to steal the company’s brand equity when the company sought to make a political point with its ad spending.

Why does Facebook enable such scams? It’s simple. The law lets Facebook make a lot of money enabling counterfeiting. Section 230 of the Communications Decency Act immunizes Facebook from any consequences for the content of ads bought on their platform; they can’t be sued for facilitating fraud and counterfeiting, so they don’t have any incentive to do anything about it. With no one at Facebook actually paying attention to the scam artists who are buying these ads, scams proliferate.

Contrast ad buying on Facebook with that of television ad purchases. Facebook’s ad sales are automated; anyone can just open a Facebook ad account and start buying advertising, with no third party audits on who is seeing the ad or where that ad is directing people. When you buy a television ad, by contrast, the process involves people at the TV networks interacting with ad agencies, as well as third party auditing through tracking companies. The automating of the ad buying process enables Facebook to have a higher profit margin, because they don’t have to hire anyone to vet advertising sales, especially when ad buyers are using small amounts of money. It also enables straightforward fraud.

Lest you think such negligence or bad behavior by Facebook is a one-off, automated ad systems run by both Facebook and Google routinely enable such brand destruction. Costco, for instance, has had to deal with fake coupons passed around on Facebook. Here’s what that fake coupon looked like:

Costco is warning customers about fake coupons that have been circulating on Facebook.

So has Krogers, which had to deal with a counterfeit ad promoting a fake contest for free groceries.

Scammers regularly rip off Kickstarter products, as Matt Binder on Mashable reported last year. “Scammers find an interesting or popular product from crowdfunding sites such as Kickstarter or Indiegogo, rip the item’s details, photos, and videos, and push them via Facebook ads as their own products,” Binder wrote. “Victims of the fraud are either never sent the product or receive a knockoff version.: 

This dynamic involved something an early 20th century economist named Thorstein Veblen called “Absentee Ownership,” which is when the locus of control and the locus of responsibility are different. Facebook isn’t legally responsible for the consequences of what goes up on its network, but it still has control over what goes up on its network. Meanwhile, Rothy’s has responsibility for its brand, but no control over how Facebook sells advertising by counterfeiters exploiting its brand.

The same incentives apply to Google, which has earned millions of dollars from companies selling fake health care plans, and has allowed advertisers to put up ads for fake customer service for Netflix as well as fake Microsoft Windows support. (Amazon has its own counterfeiting problem, which the Department of Homeland Security noted awhile back.)

Ultimately, fraud and counterfeiting destroy commerce, and make it impossible for people to create branded goods. There are two legal drivers of absentee ownership that enable this kind of bad behavior. The first is Section 230 of the Communications Decency Act, which immunizes these platforms from legal liability for enabling fraud and counterfeiting. (Incidentally, Senator Josh Hawley just introduced a bill today to strip this liability protection from companies that sell targeted ads, aka Google and Facebook, and that would solve this problem). The second is the refusal to enforce antitrust law; Facebook’s purchase of Instagram means that a potential competitor to Facebook was taken out of commission. It is possible Instagram might have tried to compete for ad dollars by promising a safer space for advertising, but since Zuckerberg bought this nascent competitor, Instagram never ended up being able to create a differentiated offering.

Monopolies are bad, but monopolies who don’t have to take responsibility for what they destroy are even worse.

So that’s story one, here’s story two.

“I’m from Amazon and I’m here to help.”

A few weeks ago, I got an email from a shoe retailer who told me about something odd happening with Amazon. He told me that his Amazon sales, which had been generally a high turnover reasonable business, were suddenly down 40%. He uses Amazon’s warehousing and logistics business, which is called Fulfillment by Amazon, which meant Amazon took care of making sure that his inventory got to customers.

Only, now that there were fewer sales, inventory began piling up, and he started getting warnings from Amazon that his metrics were below their standards and he was in jeopardy of losing storage capacity for the upcoming holiday season. This kind of million dollar penalty happens often among merchants who sell on Amazon, often randomly and for no discernible reason.

Increases or decreases in sales are a regular topic on the Amazon Seller Forums for merchants who have to sell through its Marketplace. Sometimes Amazon changes its algorithms or features for business reasons. But often stuff just breaks, and no one bothers to fix it. It’s hard to conceptualize this if you’ve never sold through Amazon, because as a consumer, the experience is generally good. But if Amazon has market power over you, the experience is one of hostile neglect. As one merchant put it:

Never expect Amazon to fix broken features unless it will add to their bottom line or the media get involved. Sometimes Amazon acts like that passive boyfriend who never really breaks up with you, they just ghost you until you give up. That is why some features/functions “break” and how much of Amazon’s seller support works.

Over the course of a week and a half, I tried to figure out what was going on with this Amazon algorithm change. It was a fascinating experience. At first, I thought it was an intentional conspiracy by Amazon, where Amazon was trying to further monopolize control over customers. The corporation, under this theory, would be directing consumers who normally bought from independent merchants to Zappos, which is an Amazon subsidiary.

That regulation of who sells what happens through what is called the Buy Box, which is the piece of web real estate shown to consumers that lets them buy an item. The screenshot of the Buy Box is below. Consumers can pick which merchant they buy from, but as you can tell from the small text in the red box, they are very unlikely to do so. So winning the Buy Box determines whether you can sell through Amazon. Suddenly, the theory went, Amazon was automatically awarding the Buy Box to its own branded subsidiary for unknown business purposes.

I confirmed that Amazon had done this for Zappos with a number of different brands. I even saw a letter from a major product company telling its retailers that yes, indeed, Zappos now had the advantage on them through Amazon. Over the next week, product makers complained to Zappos about the situation. Their other third party channels were being destroyed, which meant the brands would become entirely dependent on Amazon/Zappos. The situation returned to normal, Zappos stopped immediately winning the Buy Box. But then a few days later, it flipped back; Zappos started getting its immense advantage again. Finally, in the middle of last week, it returned to the status quo of Zappos being one of many merchants that could win the Buy Box.

But something about the story didn’t quite make sense. There was no obvious reason for the changes, as Amazon benefits whether Zappos makes the sale or not. As the Institute for Local Self-Reliance just put out, Amazon makes a lot of money from third party merchants.

Image

It also turns out there was a much larger set of algorithm changes beyond the specific line of business I was tracking. Thousands of merchants were suffering, and sellers were also trying to figure out whether the change in the Buy Box was a technical glitch or something more sinister. The truth was, no one knew, and Amazon was denying anything was wrong (which is their usual tactic, whether something was broken or not). Here are some of the cries from help from merchants whose businesses, and thus livelihoods, had suddenly fallen apart:

“I’m having the same issue. Called support and they just gave me the rundown of how my account is fine and that lots of factors control the buybox. Very scary."

“I am also a victim of this Glitch since July 1st…Lost a lot of sale and buy box even though my rates are the lowest…Please help… I even tried to add my items to the cart to purchase but was not able to add them to my cart… I am desperate for the help.”

“Just because Amazon CAN help doesn’t mean they WILL.”

“Like many things on Amazon, stuff just breaks and no one ever tends to fix it. You can report these but you are just wasting your time as they will just heal randomly but no one from Amazon support will ever be able to actually resolve these issues and instead will just cut and paste random junk about buy boxes.”

There is now an entire media ecosystem and consulting world surrounding how to succeed on Amazon, replete with specialized software tools designed to win the Buy Box. One common piece of advice to deal with the recent Buy Box glitch was, “When Amazon sales plummet because of a glitch, one short-term solution is to lower your price by 1-2 percentage points to win the Buy Box. Then, as soon as you win it, raise the price. You won’t be able to do this manually, though. You need a real-time repricer like Sellery to stay ahead.” In other words, the way to deal with Amazon’s neglect is to buy consulting and software services.

In the end, I couldn’t figure out what was actually happening. Amazon’s secret algorithm toys with hundreds of thousands of businesses, with no recourse or transparency, and no active regulation even by Amazon itself.

This situation reflects the same absentee ownership dynamic on display in the counterfeiting ads enabled by Facebook and Google above. Amazon has control of the Marketplace structure, how consumers buy, and even the inventory of third parties, but it doesn’t have responsibility for any of it. Amazon gets paid whether it makes Zappos a dominant seller or whether it extracts fees from merchants for its warehousing and marketplace services, or whether its algorithm has glitches or not. It can’t be sued, because all merchants have to sign arbitration clauses in their contracts that prohibit lawsuits. Amazon is the government of online commerce, and who goes bankrupt based on Amazon’s arbitrary decisions is literally irrelevant to Bezos.

In 1986, Ronald Reagan made a famous joke about the coercive power of an incompetent and haphazard government over independent farmers, saying “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” Today, for merchants in America, Amazon is that government.

Congress versus $5 Trillion

These stories brings us to the big hearing tomorrow. After a year of investigating, the Antitrust Subcommittee now has the four CEOs up to testify at noon, men who in aggregate represent $5 trillion of market capitalization and the raw power over the channels of commerce that amount of money represents.

Congress has dealt with the power of monopolies. In 1950, Congressman Emanuel Celler, chair of that same Antitrust Subcommittee, wrote in Reader’s Digest on a threat made by General Electric in the refrigerator industry. A GE salesman had told a customer of a rival that GE would sell compressor’s “at any cost,” with the goal of killing off a competitor, the Tecumseh Company. GE CEO Charles Wilson, in testifying before Congress, was asked about this situation, to which Wilson admitted that, yes, a salesman had made such an offer, but not under orders. Wilson had talked to the President of Tecumsah to let him know that GE had no intention of destroying its rival. “I told him it was bunk,” said Wilson, “and that the salesman had been talked to.”

Celler wrote that, while it was good that GE had decided not to ruin its competition, the problem was the power it had to do so in the first place. “I don’t like to see men first ter­rorized,” Celler noted, “and then relieved to find that Charles Wilson is feeling kindly and won’t let his men shoot.” And that is the feeling that merchants have with Amazon, Facebook, Google, and Apple. They just hope that Jeff Bezos, Mark Zuckerberg, Sundar Pichai, Tim Cook or one of their underlings, are feeling kindly.

There are reasons to be wary of this hearing. As Dave Dayen noted, the format is such that each member of Congress gets only five minutes to grill all four CEOs, though members can stay for multiple rounds. These CEOs are going to be testifying remotely instead of in-person, which means they can be surrounded by lawyers who give them answers off screen. And while I had hoped for subpoenas for documents, it seems less likely that the Judiciary committee wants to fight to get such information. One of Facebook’s original investors, Roger McNamee, told CNBC that "This is at best the first step in a long process...Each one deserves a multi-day hearing." He’s right, and I suspect there will be more hearings in future Congress’s.

Even so, just having these CEOs being forced to answer is a meaningful step forward. And some of the members genuinely understand the stakes. Here’s Congresswoman Pramila Jayapal, who pointed out that the problem of big tech is fundamentally political. “We need to move very quickly, as a Congress,” she said, “to reassert our authority into regulation of these tech companies and [their] anticompetitive practices.”

In America, the law is meant to protect us from arbitrary threats and the abuse of power in our commercial sector, in particular from monopolies and financial predators. It’s been a long time, over forty years, since policymakers even understood that their job was, in part, to regulate commerce so as to promote fair competition and the liberty that comes with it. As a result, others regulate our commerce, the most significant being Facebook, Google, Amazon, and Apple. But the tide is turning. These men will in the end have to answer for how they regulate, and the public, through Congress, will finally start getting a say.

Thanks for reading. Send me tips, stories I’ve missed, or comment by clicking on the title of this newsletter. And if you liked this issue of BIG, you can sign up here for more issues of BIG, a newsletter on how to restore fair commerce, innovation and democracy. If you really liked it, read my book, Goliath: The 100-Year War Between Monopoly Power and Democracy.

cheers,

Matt Stoller

P.S. A contact sent this note to me that I found interesting on Amazon/Whole Foods and cattle ranching.

I came across an Amazon scam yesterday that I’ll pass along for your files. I was talking to a farmer/rancher who lives up the road from me...she and her husband do mostly dairy, but they do some beef cattle too. She said slaughter houses are backed up by several months right now (COVID), so they haven’t been able to get their beef slaughtered. But, there’s a guy who buys 12-18 steer a month from them...she asked him what he does with them...he puts them in a pasture for a month and then sells them as “grass fed” (which rich suburbanites pay a premium for) to Whole Foods (who has front-of-the-line status at slaughter houses)...mind you, they feed these animals primarily grain (which is fine, but not what people think they’re buying) - only in the last month of their lives are they “grass fed”...and right now it works particularly well because Amazon can butt in line at the slaughter house. Fucking ridiculous...people pay primo $ for what is really just standard beef, and it gets to market easily while others wait.



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BREAKING NEWS: ECJ rules US Cloud services fundamentally incompatible with EU Privacy laws

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The US "culture of surveillance" received a major EU push back today, with the European Court of Justice ruling against the legitimacy of the EU's Standard Contractual Clauses as a way of transferring data to legal regimes outside of the Union. As we wrote 2 years ago, the Austrian Max Schrems, responsible for the previous dismissal of the 'Safe Harbour' agreement between the US and EU, stated that its successor "Privacy Shield goes down as soon as EU Courts deliberate". It seems he was right.

As covered yesterday at Euroactiv:

Schrems’ concern is that Section 702 of the US Foreign Intelligence Surveillance Act (FISA), permits the National Security Agency to collect foreign intelligence belonging to non-Americans located outside the US, by way of obtaining their data stored with electronic communications services providers, such as Facebook.

The European Court of Justice in session (image via Court of Justice of the European Union)

Indeed, regulations like the Cloud Act have already resulted in US cloud companies giving up the fight for privacy, prompting European cloud giants to team up and provide an alternative.

Ruling today: no more "Privacy Shield"

Today, the CJEU Judgement invalidates "Privacy Shield" in a US Surveillance case. The first statement from Max Schrems' NOYB organization on the CJEU ruling can be read here.

Their statement notes that the EU Commission gave in to US pressure, not undertaking a deep assessment of US surveillance laws but quickly passing Privacy Shield to protect the business of US businesses to the detriment of the privacy and security of EU citizens. Quoting Herwig Hofmann, law professor at the University of Luxembourg and one of the lawyers arguing the Schrems cases before the CJEU:

The CJEU has invalidated the second Commission decision violating EU fundamental data protection rights. There can be no transfer of data to a country with forms of mass surveillance. As long as US-law gives its government the powers to vacuum-up EU data transiting to the US, such instruments will be invalidated again and again. The Commission’s acceptance of US surveillance laws in the Privacy Shield decision left them without defence.

Many German Data Protection Authorities have already concluded at various points that the use of Office 365 in schools is illegal and use of foreign-hosted chat and video communication services poses compliance problems, recommending Nextcloud Talk instead. The Swedish and Dutch have come to the same conclusion repeatedly. The CJEU rules that DPA's have a duty to take action and not bow under political pressure, as has happened repeatedly already. Just looking away is not a solution.

Consequence: US cloud services not GDPR compliant

US cloud firms like Microsoft are already regularly shown to flaunt European privacy laws, as was shown again recently in an extensive Data Protection Impact Assessment of Office 365 by the Dutch government exposing dozens of GDPR violations.

With this latest ruling, the ECJ puts another major roadblock in the way of US cloud services, challenging the basic premise that they are a viable solution for use with any privacy-sensitive data. Businesses, schools and government organizations putting data from their employees, customers, students and citizens on Office 365, Google G Suite or one of the dozens of other US-based SaaS services now risk massive fines under the GDPR.


DPIA commisioned by the Dutch government mid 2020 shows a series of issues in Office 365
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Trump may not respect the election. We need a Democratic senate more than ever | Sidney Blumenthal

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Trump is already hinting he may refuse to leave office if voted out. The Senate must be ready to protect democracy

Donald Trump’s declaration that he might not accept the results of the 2020 election has fundamentally transformed the campaign, making plain what had previously only been suspected. No other president has ever made such a statement.

“I have to see,” said Trump in an interview with Chris Wallace of Fox News on 19 July, after Wallace asked him if he would accept the election outcome. “No, I’m not going to just say yes. I’m not going to say no, and I didn’t last time either.” Indeed, in 2016, Trump claimed that the election was being “rigged” against him.

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Trump's free-speech legal folly has merely emboldened his critics | Lloyd Green

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The president remains as keen to sue as ever – but his attempts to intimidate his targets have proved a spectacular flop

Donald Trump always had a problem with free speech. Back in the day, he sued reporter Tim O’Brien and the New York Times for allegedly underestimating his wealth. Trump claimed that he was worth billions, but O’Brien pegged the number at no more than $250m, not shoddy but also not jaw-dropping. In the end, New Jersey’s courts tossed Trump’s libel claim, but only after the tabloid star acknowledged that his personal balance sheet was influenced by his own guesstimates.

Time passes and some things don’t change. Trump remains censorious as ever while the courts continue to deny him the relief he ultimately seeks – free media that fawns and flatters but does not actually hold him to account.

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This is what happens when the War on Terror is turned inward, on America | Hamilton Nolan

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Trump has realized that our vast post-9/11 security state can be used to police internal bogeymen like antifa

A strange and necessary ingredient of America’s descent towards fascism is that it will have little impact on the majority of people. As militarized federal agents are deployed into major cities to snatch protesters and charge them with harsh federal crimes for daring to deface the ruling party’s monuments, most Americans will continue living their normal lives with no discernible changes, at least for the time being. People wake up and eat breakfast and spend their days doing mundane tasks in fascist countries, too.

If there was ever a tipping point, we are past it. Trying to stare hard at the daily news to determine the exact point at which we slip into fascism is like staring at a baby to see when it turns into an adult. By the time you perceive it, it’s already happened. It is important to understand that the crackdown phase that we are now in – the unaccountable government forces, the riot police, the teargas, the targeted political prosecutions that will come next – are not something new, but something old. This isn’t about Donald Trump. This is about America, baby. This is what we do.

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Issue 6: Beyond the Bread and Butter

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Ari Laurel, an organizer with TWC Seattle, reflects on her experience with the Capitol Hill Organized Protest. She connects it to tech workers’ struggles, and considers the role that organizers can play in it all.

A view of CHAZ/CHOP from inside the barricades.

A view of CHAZ/CHOP from inside the barricades. Photo provided by Ari Laurel.

The Worker’s Perspective

By Ari Laurel

On Monday, June 9, someone ordered the Seattle police via text message to evacuate the East Precinct station. Neither the police chief, nor the mayor, nor Mike Solan of the Seattle Police Officers Guild would own up to making the call to evacuate. But with the pigs gone, Seattle’s Capitol Hill neighborhood, where I live, was about to see a transformation of the roughly six-block area. At the start of the week, the police left the precinct building fenced and boarded. The surrounding area was covered in layers of barricades, all decorated with graffiti. The occupants of the space named it the CHAZ (Capitol Hill Autonomous Zone), and later the CHOP (Capitol Hill Organized Protest).

Many of us who live on or near Capitol Hill received frantic texts from family members urging us to be safe from the lawless activity in the Zone, an appeal that became more and more laughable as the week went on. These lawless activities consisted of gardening, sharing food, watching documentaries, or playing music at all hours on the field. By Friday, the CHOP had become a curiosity; each afternoon it was flooded with thousands of visitors.

While all this was happening around us, many of us in TWC Seattle felt purposeless and ill-prepared. Up until the pandemic, we had mostly focused on the “labor” half of “labor organizing.” It was hard to get information about the ever changing currents in the Zone, and it was hard to know who were trustworthy sources. We wanted to effectively mobilize, and we wanted to make space for radical Black and Indigenous community voices — of which there were many. But we also found ourselves frustrated with the number of institutional and corporate nonprofit voices entering the fray. Night after night, there was at least one new person proselytizing about voting for “real change,” as we sat in the middle of an intersection won by back-to-back nights of direct action.

Community members at the agitational center of the space expressed worry about the political direction of the movement: was it being co-opted by nonprofits? By broad socialist organizations? By informants? Had we forgotten the demands? Had we forgotten to stay vigilant? Seattle police were still posted around the corner, ready to don riot gear at a moment’s notice. The disappointing truth for why the CHOP was renamed: it was not much of an “autonomous zone.” The police were not beaten, they were simply driven out by bad PR, and eventually they would be back.

Then, one morning, the Seattle Department of Transportation arrived, setting up new barricades along the road right next to the precinct. Prior to this, all the barricades were placed at guarded intersections, leaving the CHOP open only to pedestrians. But this change not only opened the road for police to drive right up to the precinct, it also made the CHOP vulnerable to drive-by shootings and other violence from outside the area. After multiple shootings wherein there was no response except by volunteer medics, the precinct has now been retaken, and the protests have resumed. Now ID checkpoints have been set up in the neighborhood so that even residents cannot leave or enter without police approval — making real what was a baseless claim that the police and their supporters had made about the CHOP while it was still active. As usual, warnings of the dangers of a copless world are the projection of the police state we already live in.

A volunteer medic initiatives, on wheels

A volunteer medic initiatives, on wheels. At Capitol Hill.

It’s clear that people at CHOP are able to determine their needs for the space. The mutual aid stations, memorials, and community gardens all culminated into a sort of prefigurative vision for a healthy society. In spite of this, it was also easy to infiltrate. The Department of Transportation cut up the CHOP by claiming they had spoken to “core organizers” of the movement. Unorganized individuals readily trusted this claim, but others saw it as the city exploiting the movement’s leaderlessness. There have been plenty of personalities and opportunists ready to take center stage. Other individuals, such as the white woman who ran the “No Cop Co-op,” turned out to be police informants right under everyone’s noses. And at its most popular, pockets of the CHOP resembled something closer to a Burning Man decompression party than an organized protest. You can’t have a strong movement without community accountability, and you can’t have community accountability without organization.

From reactionaries, this occupation was called an Antifa plot to threaten the country’s leadership. From the left, the CHOP was often highly idealized and painted as the dawning of a revolution. But the reality is that the shortcomings of the CHOP (and there are many) reveal the gaps in our own organizing and the work that still needs to be done.

Lately I have been talking with others in TWC about “to what end” we are organizing. Exactly why don’t we want tech companies to collaborate with the US military? Why don’t we want police to have access to facial recognition software? We are workers, but we are also part of this community. The nature of tech work is changing before our eyes, spurred on by the pandemic and recession. As a former tech worker, now a contractor with a much lower wage, I can attest to the fact that these divisions are blurring. Overnight, a swath of full-time salaried positions in tech have suddenly become contract positions, while more marginalized people are winding up in the gig economy as “essential workers.” And as jobs become more precarious, more people will want to join the protests. Capitol Hill’s reputation of being a neighborhood for six-figure earners in tech is changing fast, just like things are changing in the streets.

If tech workers are to accept that we are part of the greater Seattle community, we must also accept that our bread-and-butter victories in the workplace aren’t an end in themselves. Even if all the big tech companies became more democratic, equitable, and stable tomorrow, their existence would still give us urgent reason to work beyond bread and butter. Campaigns like #NoTechForICE aren’t to simply absolve our CEOs of wrongdoing so we can feel better about where we work. Our efforts are indelibly intertwined with the struggle for Black and Indigenous liberation. We organize to keep tech out of the hands of police, because we share the long-term vision of police abolition. This is non-negotiable.

A memorial for lives lost at the hands of police

A memorial for lives lost at the hands of police. At Capitol Hill.

Much of organizing is the slow work carried out in between these flashpoints. And it’s in these moments that our frustration belies our own growth areas as organizers. In the short term, we might ask ourselves: “What can workers do to bring the more radical voices to the front? How should we prepare to show up for our community when the next opportunity comes?” But what of the long term? A volunteer group like TWC may not ever be at the forefront of this sort of movement, which is and should be led by Black and Indigenous groups. But that doesn’t mean we are apart from it. Tech contracts support the massive carceral state and the systems that people seek to abolish. If we’re going to be accountable to the demands being made in the streets, we need to be explicit about the fact that our goals lie beyond reforming our work environments, and instead toward changing the nature of tech work itself.

In The News

What does police abolition mean for the tech companies that empower and profit from police violence? Silicon Valley has made billions of dollars by empowering the police with surveillance and data analysis technology that they pitch as unbiased — but it’s not. The more we see so-called “unbiased tech” in the hands of law enforcement, the more clear it becomes that Big Tech and police are accomplices in systemic racism and violence against Black communities. This mutually beneficial relationship with the cops seriously calls into question the legitimacy of tech companies’ statements in “solidarity” with Black lives. Edward Ongweso Jr writes:

In their quest to regain legitimacy by depoliticizing crime as a category and technology as a tool, law enforcement have created the conditions for racist policing to be perpetually reproduced. Nowhere is this more clear than in the implementation of predictive policing and facial recognition software, two tools that have at best simply maintained the status quo and at worst have deepened the racial disparities behind criminalization, police violence, and incarceration.

There is a new campaign for advertisers to boycott Facebook as a response to the company’s jaw-dropping inaction regarding hate speech and hate groups on its platform, as well as other offenses, like enabling voter suppression. Dozens of companies have joined the boycott, but they are a small fraction of Facebook’s 8 million advertisers. Will it be effective? A former Facebook moderator told us why they see little reason for hope:

Advertisers, politicians, and some investors want to change FB’s policies, but none of them are talking about the people who have to implement the policy. Zuck stated a while ago there are 35,000 moderators, that’s a lot of people to ignore. BLM [Black Lives Matter] are protesting the nastiness people are allowed to post online, but the people who have to clean it up are a disenfranchised anonymous underclass.

It certainly seems Zuck isn’t worried, saying “My guess is that all these advertisers will be back on the platform soon enough.” This story reminds us of the big banks that caused the 2008 financial crisis, were deemed “too big to fail,” and bailed out. If Facebook is too big to fail, what should be done? One idea is an antitrust approach to breaking up big tech companies that maintain too much control over our lives. Zuck has made one thing clear: he will not be changing its policies unless there is a strong incentive to do so, and we know the only thing he cares about is shareholder value – not moderators or other workers, or civic or political duty.

As much of the US continues to rise up in defense of Black lives, more and more Black tech workers are speaking out publicly about the discrimination they suffer at tech companies. Black women spoke about how Pinterest had discriminated against them when they were employees. Black Facebook workers filed a complaint with the Equal Employment Opportunity Commission for racial discrimination. A Black female software engineer wrote about the horrific mistreatment she suffered at the hands of her managers at Capital One. We know that this is just the tip of the iceberg, as NDAs often prevent employees from speaking up about discrimination in tech. Meanwhile, tech companies continue to ask Black employee groups to help them fix their race problems for free.

The discrimination is not limited to employees. Black startup founder Nerissa Zhang wrote about her experience being ignored by VCs, only to have them respond to identical pitch emails when sent by her male Asian co-founder.

Venture capitalists gave us even more reasons to want to be free of their influence. Leaked audio from the Clubhouse app emerged in which well-known investors spoke about how journalists have too much power, with the conversation centered around investor Balaji Srinivasan’s personal grievances against particular journalists, whom the VCs believe must be “punished.” After the conversation became public, Srinivasan offered a Bitcoin bounty for “memes on this episode.” We’ve wondered before who calls the shots in our industry, and this incident was yet another stark reminder that those making crucial decisions about who “gets funded” do not have our best interests at heart.

Citing human rights concerns over new Chinese national security laws, Facebook, Microsoft, Twitter, Zoom, Google and Telegram have “paused” cooperation with Hong Kong requests for user information. TikTok has pulled out of Hong Kong altogether, while Apple is still “assessing” the situation. Just a couple of months ago, Google abandoned plans to offer a new cloud service in China. These examples show that tech companies see at least some lines that shouldn’t be crossed. But apparently those lines do not prevent them from monitoring protesters and selling their data, or monitoring employees in their own homes.

Uber is testing a feature that lets California drivers set their own fares – or so they say. Michael Bories, a long-time Uber driver in San Francisco, told us: “It’s actually just a fare multiplier in .1 increments, and only if drivers know the app settings. The base fare value is still Uber’s decision, but now they can blame drivers for adjusting the price above their lower-than-minimum wage.” Uber’s new feature seems to be a response to California’s AB5 law, under which Uber drivers are considered employees, and not independent contractors. As The Verge wrote in January, “Uber’s goal is to — despite the new law — continue classifying drivers as independent contractors that Uber simply helps connect with riders. Classifying drivers as employees would cost the company hundreds of millions of dollars a year by forcing it to provide benefits like minimum wage guarantees, overtime, unemployment insurance, and workers’ compensation.” Another feature, called Uber Drive Pass, is being offered to drivers, according to Bories, “to prepay Uber to have the service fee reduced to $0 on each ride you accept, but they still collect the $3 marketplace fee, and each request counts against your prepaid ride count – even if you didn’t meet their gold standard of a 10-second response to ride requests.” Drivers are organizing against a 2020 ballot initiative called Prop 22, backed by Uber and other companies, and which a new report says would “create a permanent underclass of workers.”

On a more hopeful note, researcher and former Google employee Jack Poulson published an exhaustive report on Silicon Valley’s thousands of military, surveillance, and defense contracts. Jack, a member of TWC in Toronto, told us, “This work started with getting invited to a diplomatic meeting of sorts between tech companies and the defense industry, but was ultimately a matter of 1,000 hours collecting and curating public data on contractors and their subsidiaries and subcontractors.” The first article about the report highlights how “Big Tech’s relationship with American military and law enforcement operations continues to blossom.” We hope a closer look at the eye-opening report helps #TechWontBuildIt, #NoTechForICE, and ongoing organizing.

In History

Just over two years ago, Google workers declared their right to have a say in how their work gets used — and won. As Ben Tarnoff writes in an interview with one of the organizers:

For months, Google employees have led a campaign demanding that the company terminate its contract with the Pentagon for Project Maven, a program that uses machine learning to improve targeting for drone strikes. Nearly five thousand Google workers signed an internal petition to cancel the project, and dozens resigned.

The campaign was successful: Google pulled out of the controversial defense project. When we organize, we win.

For more tech worker organizing history, see collectiveaction.tech.

In Song

Transgender Biscuits, by Fantastic Negrito

Last week, Salon wrote that protest music has come “roaring back to life” – but from featuring labor songs and music with radical politics in this newsletter since 2018, we know protest music was never dead. ✊ 🎶

All the people with love in your heart
Get unified, get organized (change, change, change)
Unity
Unity

I got fired because I’m a woman
I got fired because I’m Black
I got fired because I’m a white man
I got fired because I’m fat
I got fired because I’m an asshole
I got fired because I’m gay
I got fired because I’m a Muslim
I got fired for being late

Ooh, looks like nobody’s coming
To my party, no no no no no no no no

All the people with love in your heart
Get unified, get organized (change, change, change)
Unity
Unity

I got fired because I’m Asian
I got fired because I’m cute
I got fired because I’m ugly
I got fired because I’m a Jew
I got fired because I’m Christian
I got fired because I’m brown
I got fired for being real
I got fired for talking loud

Ooh, looks like nobody’s coming
To my party, no no no no no no no no

Suckas
Uncle gotta find (change, change, change, change, change)
Change
Change
Change, change, change (Change, change, change, change, change)

There’s an Oakland rain
Falling on my head right now
Fallin’ on my head (right now)

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michelslm
13 days ago
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