Regulators turned on Big Tech this week. Now for the good news #Breaking112
The maker of Ben & Jerry’s and Dove had paused its US advertising on the platforms in June because of concerns over hate speech and divisive content, triggering a sharp decline in shares of Facebook and Twitter.
Unilever was the 30th-highest spender on Facebook advertising in 2019, pouring more than $42 million into the platform, according to estimates by the advertising intelligence company Pathmatics.
The boycott was scheduled to run through at least the end of 2020. On Thursday, Unilever said it would resume advertising on the platforms next month because they had “committed to concrete steps to further manage harmful content moving forward” including independent audits.
“We will closely assess the platforms’ deliverables against their timelines and commitments, as well as polarization in the social media newsfeed environment post-election as the year progresses,” Unilever said.
Of course, it’s possible that this good news won’t do much to lift spirits in Silicon Valley, which has been put on notice this week by regulators on both sides of the Atlantic in ways that are impossible to ignore.
As many as 38 state attorneys general filed yet another antitrust lawsuit against Google on Thursday. The suit alleges that the company has operated an illegal monopoly in the markets for online search and search advertising.
It mirrors an antitrust suit filed by the Justice Department and 11 states this fall that claimed Google uses anticompetitive agreements to secure a dominant position for its search engine on smartphones.
But it also goes further, tacking on additional allegations that Google moved to block or relegate results from search engines that specialize in travel, home improvements and entertainment.
Google responded to the latest lawsuit in a blog post, arguing that changes demanded by the state attorneys general would harm the quality of search results and come at the expense of businesses.
Texas and nine other states sued Google on Wednesday, alleging that the company has stifled competition and enjoys “monopolistic power.” So for those of you keeping track at home, Google is now facing three antitrust lawsuits in the United States.
The barrage of legal action comes as EU regulators unveil new legislation that would given them sweeping new powers to take on Big Tech, threatening huge fines and raising the prospect of breakups or bans for repeat offenders.
The industry’s biggest players face new obligations to remove illegal and harmful content from their platforms under the draft EU legislation called the Digital Services Act. A second proposal called the Digital Markets Act would subject firms to strict rules designed to prevent unfair competition.
Companies that don’t follow the proposed EU content policies could be fined up to 6% of global revenues, and repeat offenders could see their platforms temporarily banned. Powers to levy antitrust fines of up to 10% of global revenues will be extended to more areas, and in the future offenders could be forced to sell parts of their business if they continue to break the rules.
It could be years before the new EU rules or the US lawsuits have much of an effect on Big Tech, but this could come to be seen as a pivotal week in the evolution of the internet and how societies police the behavior of tech firms.
America is under attack
Microsoft said on Thursday that dozens of its customers were targeted in the attack, which was carried out by sophisticated hackers who gained entry by planting malware in third-party software produced by SolarWinds.
As many as 18,000 SolarWinds customers — out of a total of 300,000 — may have been running software containing the vulnerability, SolarWinds disclosed in an investor filing this week.
According to Microsoft, the installation of the malware “created an opportunity for the attackers to follow up and pick and choose from among these customers the organizations they wanted to further attack.”
More than 40 Microsoft customers were “targeted more precisely and compromised through additional and sophisticated measures,” the company said. Of those, 80% were located in the United States. Microsoft said that organizations in Canada, Mexico, Belgium, Spain, the United Kingdom, Israel and the United Arab Emirates were also targeted.
Some 44% of the victims were in the information technology sector, Microsoft said, while 27% were government or contractor targets. Another 18% were think tanks or non-governmental organizations.
It could take months or years to determine the full extent of the damage caused by the attack. “It’s certain that the number and location of victims will keep growing,” Microsoft President Brad Smith wrote in a blog post.
“It’s critical that we step back and assess the significance of these attacks in their full context,” added Smith. “This is not ‘espionage as usual,’ even in the digital age. Instead, it represents an act of recklessness that created a serious technological vulnerability for the United States and the world.”
The moment of truth for Brexit
Deal or no deal?
Months of negotiations between the United Kingdom and the European Union are about to reach a conclusion.
“It’s the moment of truth. We have very little time remaining, just a few hours to work through these negotiations in a useful fashion,” chief EU negotiator Michel Barnier said on Friday.
The pound weakened 0.4% to $1.35 on Friday as both sides continued to say there were big differences to resolve and little time remaining if a deal is to be approved by lawmakers before the deadline on January 1.
Analysts have warned that the pound could plummet below $1.20 if negotiations fail and the United Kingdom is forced to trade with its biggest export market on World Trade Organization terms next year. That would throw significant grit into the wheels of a relationship worth nearly $1 trillion and knock $40 billion off UK GDP next year.
“This finale could bring either sweet confirmation or a rude shock for markets,” said Han Tan, a market analyst at FXTM.
Darden Restaurants and Winnebago report results before US markets open.
Also today: Nike earnings are up after markets close
Coming soon: Brexit trade talks could conclude shortly. On Monday, Tesla makes its debut on the S&P 500.