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The Battle Over Big Tech Heats Up – Prominent Conservatives Come Out Against Klobuchar Tech Break Up Bill

By Peter RoffAmerican Liberty

U.S. Department of AgriculturePreston Keres/Office of Communications-Photography Services Center, Public domain, via Wikimedia Commons

Minnesota Democratic Sen. Amy Klobuchar has her eyes fixed firmly on the White House, and, if President Joe Biden chooses not to run again, she’d like to take his place as the party’s nominee. Before she can do that, however, she first has to burnish her progressive credentials.

One way she’s trying is by going on the attack against Big Tech, an effort that’s winning her plaudits from both sides of the aisle. It’s not just those who think Karl Marx’s economic theories make more sense than those espoused by Milton Friedman but those who say they believe markets work who are helping push her attempt to give the Federal Trade Commission the ability to set rules about what the dominant platforms – her words – can sell online without behaving in a manner that is “discriminatory.”

Klobuchar’s been working hard to get her bill on the Senate floor before everyone goes home for the seven-week long August recess. Based on recent developments, it doesn’t look like she’s going to get what she wants, especially now that a group of prominent free marketeers has come out against what she is trying to do.

Among the 46 who signed the letter sent to congressional leaders on July 19 in opposition to her American Innovation and Choice Online Act are influential economists like Arthur Laffer, Richard Rahn and Stephen Moore as well as the leaders of influential organizations like Americans for Tax Reform, the Center for Freedom and Prosperity, the Small Business & Entrepreneurship Council and American Commitment. Their message is a clear one. Reject what’s embodied in the Klobuchar bill. It expands the size and scope of government and exacerbates the inflationary pressures on America’s families.

Most importantly, they say in response to charges leveled by Big Tech opponents on the right, there’s nothing in the bill that would do anything to address the issue of censorship on social media platforms. Instead, the letter reads, her bill “would worsen these issues by forcing targeted companies into a ‘mother-may-I’ relationship with the federal government” while suggesting the near-universal buy-in to what she wants proposes to do by progressive groups should be enough to arouse significant suspicion.

“Whatever so-called ‘improvements’ that the left has in mind for content moderation will certainly not work out in favor of conservatives’ free speech,” the letter goes on. “If conservatives are unhappy with the status quo, just imagine Big Tech targeting conservative speech on behalf of Biden bureaucrats.”

That’s an argument that should move those like Colorado GOP Congressman Ken Buck back to his senses. Buck is a key leader on the right among those in the U.S. House of Representatives who have endorsed or are flirting with what Klobuchar wants to do.

It’s an argument that has weight even as the reality of things flies in the face of what people are saying online. Even if some conservative leaders and groups have been temporarily or permanently “de-platformed,” an issue about which people routinely post, those who espouse conservative ideas can reach more people for less money today than they could in the days when there were only three national television workers (four with PBS) and The New York Times set the news agenda for everyone.

The organizers of the letter also clearly intend for their arguments to move those whose interest in expanding the Federal Trade Commission’s antitrust powers is motivated by economic concerns. The most influential of these would be Iowa GOP Sen. Chuck Grassley, a one-time chairman of the Senate Finance Committee and Klobuchar’s principal Republican co-sponsor.

Their argument that the bill, while it applies to only a handful of tech sector giants now, is a proverbial camel’s nose under the tent leading to “future government regulation based on the size of a company, a government cap on innovation” and other developments eventually bringing the most productive and innovative sectors of the U.S. economy “under the heavy hand of government control” should be persuasive.

Whether they will be is not certain, even if these companies have allowed new voices to join the national conversation and added considerably to U.S. GDP. A new study by Laffer and John Barrington Burke on the economic impact of the Klobuchar bill shows these firms “provide services at steadily lower prices to consumers.” That is exactly the opposite of what monopolies do, meaning there’s little justification for going after them for violating the existing rules on antitrust and adding weight to the charge that Klobuchar’s base motivations are political.

As she no doubt intended, her bill is winning her plaudits from progressives for the way it turns antitrust law on its head. For nearly 50 years, a period that not coincidentally aligns with the long boom that saw the size of the U.S. economy grow to $20 trillion, antitrust enforcement occurred only when it could be shown consumers were harmed as the result of tangible, measurable outcomes like higher prices, reduced innovation or lower quality. Under the Klobuchar legislation, S. 2992, America would adopt a European-style attitude toward antitrust that allows governments to routinely pick winners and losers and target politically disfavored companies with frivolous lawsuits. According to the signers of the letter, that means “Bureaucrats win, consumers lose.”

That’s backed up by the Laffer/Burke study, which says that over the last decade, the high-tech sector has been the most instrumental in holding inflation down. Overall prices may have risen by 22 percent, but the cost of tech products and services has fallen by at least 16 percent.

Not all that long ago, Democrats and Republican leaders in Washington both believed a vigorous, powerful, intrusive federal government that made critical decisions about the direction of the nation’s economy was good for America. The GOP may have promised to run things more efficiently and at a lower cost than the other party but there was barely a dime’s worth of difference between them. Then the Reaganites came, bringing with them a flurry of new ideas that produced then-record job creation, price stability and economic expansion.

Some in the GOP have lost sight of that, even if they were part of it when it happened. In the post-Trump era, some leaders are more open to the idea of using federal power to regulate business to punish those they perceive to be hostile or unfair to conservatives. This is not okay. Chief Justice John Marshall famously wrote, “the power to tax is the power to destroy.” He might have said the same thing about the power to regulate – which some conservatives who ought to know better are talking about giving the federal government more power to break up the companies that make up “Big Tech” based on their size alone, their annual revenues or the perception, valid or not, that they are unfair to the right.


Americans’ Trust In Government, Media, And Other Major Institutions Nosedives To Record Low

By Jordan BoydThe Federalist

American flag
DAVID DIBERT/PEXELS

Confidence in major U.S. institutions such as the government, media, law enforcement, and Big Tech is at a record low and has not improved at all since 2021, a new report from Gallup found.

Of the 16 institutions Gallup measured Americans’ confidence in, “Congress” ranked the worst, with only 7 percent of those surveyed claiming they trusted the legislative body. That’s a 5-point drop since Gallup’s 2021 poll.

“The presidency” and “the U.S. Supreme Court” also lost a noteworthy amount of Americans’ trust since last year. While the presidency clocked 38 percent confidence last year and SCOTUS received 36 percent, both branches of government dropped into the low- to mid-20s in 2022.

Specifically, the court had a 25 percent vote of confidence with Americans before the Dobbs v. Jackson decision was released, and the presidency held 23 percent of Americans’ trust. That’s even lower than President Joe Biden’s current 38 percent approval rating.

Other institutions such as church or organized religion (31 percent), the criminal justice system (14 percent), big business (14 percent), newspapers (16 percent), and police (45 percent) marked their lowest votes of confidence since the 1990s, according to Gallup.

Americans have also significantly lost trust in the media. Only 11 percent of those surveyed said they have a “great deal” or “quite a lot” of confidence in “television news.” That confidence goes up to 16 percent with newspapers but, much like the TV news category, is still down 5 points from just last year.

Trust in the media is drastically split along partisan lines. While only 8 percent of Republicans and 8 percent of independents say they still have faith in TV news, 20 percent of Democrats reported confidence in broadcast media. When it comes to newspapers, only 5 percent of Republicans and 12 percent of independents say they have confidence, compared to 35 percent of Democrats.

Only small businesses and the U.S. military seem to have captured more than 50 percent of Americans’ vote of confidence.


Attorney Generals Demand Biden Admin Stop Colluding With Big Tech To Censor Speech

By Jordan BoydThe Federalist

Facebook censorship

IMAGE CREDIT THOUGHT CATALOG/PEXELS

Attorneys general in Missouri and Louisiana filed a motion for preliminary injunction this week demanding a court stop Big Tech companies from colluding with the federal government to inform their political censorship sprees, after the White House has repeatedly bragged about exploiting its relationships with social media companies to suppress information the Biden administration deems “problematic.”

In the motion, Missouri AG Eric Schmitt and Louisiana AG Jeff Landry argue that the Biden administration, in partnership with Meta (formerly Facebook), Twitter, Google’s YouTube, and other Silicon Valley giants, has taken advantage of Big Tech’s grip on the social media platform market to suppress any speech contrary to their chosen narrative

“Freedom of speech is the very bedrock of this great nation, and needs to be protected and preserved. The federal government’s alleged attempts to collude with social media companies to censor free speech should terrify Missourians and Americans alike,” Schmitt said in a statement. “The federal government must be halted from silencing any more Americans, and this motion for preliminary injunction intends to do just that.”

The fed-inspired decision to “shadow-ban, de-platform, de-monetize, de-boost, restrict content access, and suspend many speakers, both temporarily and permanently,” a press release announcing the motion states, has silenced people “from doctors and scientists, to the owner of a conservative radio show, to everyday Americans who dare to voice their opinion in the public sphere.”

As noted by the state attorneys, it was during the height of the government’s panic over Covid-19 that Big Tech censored the authors of the Great Barrington Declaration who criticized the bureaucrats calling for continuous national lockdowns. The “extensive social-media censorship on multiple platforms” endured by authors such as Dr. Martin Kulldorff and Dr. Jay Bhattacharya came shortly after emails between then-Director of the National Institutes of Health Dr. Francis Collins and National Institute of Allergy and Infectious Diseases Director Dr. Anthony Fauci demanding a “quick and devastating … takedown” of the group’s criticism.

The motion follows a complaint from the state attorneys last month against the Biden administration and other federal officials for engaging in “open and explicit censorship programs” such as the Department of Homeland Security’s “Disinformation Governance Board.”

“Having threatened and cajoled social-media platforms for years to censor viewpoints and speakers disfavored by the Left, senior government officials in the Executive Branch have moved into a phase of open collusion with social-media companies to suppress disfavored speakers, viewpoints, and content on social-media platforms under the Orwellian guise of halting so-called ‘disinformation,’ ‘misinformation,’ and ‘malinformation,’” the original petition states.


Twitter Repeatedly Claims ‘Error’ To Disguise Deliberate Censorship Of Conservatives

By Jordan BoydThe Federalist

Twitter repeatedly locks the accounts of conservatives who criticize the left’s narrative. When outrage about the Big Tech company’s knack for political censorship bubbles, Twitter occasionally claims it made a mistake. This week, it happened again.

Citing an “error,” Twitter reinstated the account of “Relatable” podcast host Allie Beth Stuckey on Monday night. But that was only after it received backlash for locking the Christian conservative’s account because she criticized Fox News for celebrating a California couple who forced radical transgender ideology on their 14-year-old daughter when she was an infant.

“I’m stunned that Fox News ran a segment celebrating a girl whose parents ‘transitioned’ her into a boy when she was 5 because she apparently told them she was a boy ‘before [she] could talk.’ Absolutely maddening & heartbreaking,” Stuckey’s original tweet stated.

At the time of the suspension, Twitter claimed Stuckey violated its hateful conduct policy.

“You may not promote violence against, threaten, or harass other people on the basis of race, ethnicity, national origin, sexual orientation, gender, gender identity, religious affiliation, age, disability, or serious disease,” a message from Twitter stated.

It was only after Stuckey appealed and several prominent conservatives including Babylon Bee CEO Seth Dillon tweeted their disgust at Twitter’s decision that the company decided to reverse course on the commentator’s account.

“Just got word from @conservmillen that she’s been locked out for hateful conduct,” Dillon said. “It seems they’ll keep this up until everyone remaining on the platform either agrees with them or censors themselves.”

Stuckey may have won her appeal but Twitter has repeatedly used its sweeping “hateful conduct policy” to deplatform conservatives and even one popular satire account for affirming the realities of the sexes. That’s something even possible Twitter-buyer Elon Musk has noticed.

The Federalist’s John Daniel Davidson was indefinitely banned by Twitter in March after he tweeted that Rachel Levine, the U.S. assistant secretary for health, is obviously a man despite the corporate media, Big Tech, and the Biden administration’s insistence that he is a “trans woman.” Despite appealing numerous times, Davidson still is not allowed back on Twitter unless he bends a knee to Twitter and deletes his original tweet.

Davidson’s suspension occurred shortly after Twitter locked down the Babylon Bee account for calling a male a man. Similarly, Twitter suspended Babylon Bee Editor-in-Chief Kyle Mann for tweeting a joke about Twitter’s subjective user policies. Turning Point USA Founder and President Charlie Kirk and Libs of Tik Tok also suffered suspensions for contradicting the prevailing leftist narrative.

Leaked messages from what appears to be an internal Twitter conversation over Slack show that Twitter employees purposefully target Libs of Tik Tok because they don’t like that the anonymous creator exposes what gender-bendingTrump-hatingracistgroomer leftists have already revealed about themselves online.

Those suspensions were nothing new for Twitter, though. The company’s history of targeting anyone who harms their preferred narrative™ — such as President Donald Trump, Canadian truckers, doctors and scientists discussing the origins of Covid-19, and the New York Post — indicates that Twitter suppressing dissenters is no accident.

Twitter, the platform guilty of election interferencetargets conservatives, plain and simple. And any claims the Big Tech company makes of “error” are just a front for their demonstrated goal of silencing influential conservative ideas online.


Facebook Wiped A Conservative Wisconsin News Page After Wrongfully Censoring It For Months

‘Every American should be deeply concerned by the fact that a few unaccountable big tech companies are controlling the free flow of information.’

By Jordan BoydThe Federalist

Facebook
PEXELS

Facebook obliterated an award-winning conservative Wisconsin news page and cut off thousands of its followers without warning this week after wrongfully censoring it for months.

The Silicon Valley giant censored Wisconsin Right Now after the popular news site posted a story from The Australian to its Facebook feed that compared a picture of the infamous “Falling Man” from 9/11 to the horrific footage of Afghans falling from planes following President Joe Biden’s disastrous U.S. withdrawal from Afghanistan.https://fd234f0003ecc424d4282e89fd3ef1ef.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

Facebook quickly hid the post and slapped it with a community standards violation for “content related to suicide or self-injury.”

WRN appealed the violation, noting that the article did not advocate for self-harm, and Facebook reversed its decision but still unpublished WRN’s page.

A message from Facebook claimed that WRN “violates Facebook Pages terms” but did not specify why. The Big Tech company claimed that WRN could appeal if the unpublishing seemed to be a mistake but the link given by Facebook’s support team is broken.

Facebook did not respond to a request for comment.

“Every American should be deeply concerned by the fact that a few unaccountable big tech companies are controlling the free flow of information in our democracy, and that the decisions they make are often arbitrary and unfair,” Jim Piwowarczyk, WRN owner and contributor, told The Federalist. “What has happened to us is a very troubling example of this, and we call on Facebook to reverse its decision.”

Even before Facebook nuked WRN’s main page, the social media company restricted the page’s ability to invite new followers to “like” the page and live-stream videos for simply reporting the news.

Even though WRN won numerous awards for its airtight coverage of the Kyle Rittenhouse trial, Facebook limited the news site’s ability to share articles about the young gunman.

“We led coverage on this case, going to the scene, interviewing witnesses a half-hour after it happened, uncovering missing ballistics evidence mentioned during the trial, and more,” Piwowarczyk explained.

Facebook still suppressed WRN’s coverage even after the media company published an analysis stating the firearm charge against Rittenhouse wouldn’t stand under Wisconsin gun laws, something the judge presiding over the case publicly ruled one day later.

“Facebook then did not remove the violations when Rittenhouse was acquitted,” Piwowarczyk said.

Facebook also enlisted the help of its fake “fact-checkers” to censor reposts about Hillary Clinton’s role in promoting the Russian collusion hoax and a meme about Rittenhouse playing video games with his judge.

“We have reported many stories the mainstream media will not, and it is highly questionable and troubling that Facebook would seek to prevent Wisconsin voters in a key battleground state (where Facebook-traced money was involved in elections) from learning all sides of the equation in the political debate and other news stories, especially as the midterm elections loom,” Piwowarczyk said.


If Congress Doesn’t Rein In Big Tech, Censors Will Eliminate The Right From Public Discourse

This week Twitter revealed it will not tolerate dissent from trans ideology. But that will be just the beginning.

By John Daniel DavidsonThe Federalist

Rachel Levine
GOVERNOR TOM WOLF

Something both convoluted and disturbing happened on Twitter this week that illustrates why it’s not enough for lawmakers in Washington to haul Big Tech executives before congressional committees every now and then and give them a good talking to.

Congress actually has to do something about this. Regulating social media giants like Twitter and Facebook as common carriers, prohibiting them from censoring under the absurd pretext that speech they don’t like is “harmful” or “abusive,” would be a good place to start. If that doesn’t happen, Twitter will eventually ban every conservative voice and every media outlet that dares to challenge left-wing pieties about race, gender, and a host of other issues.

Here’s what happened. On Wednesday evening, around the time Twitter began censoring Federalist articles by appending a warning they “may be unsafe” and their contents could be “violent or misleading,” I got a notice from Twitter support letting me know that someone had complained about a tweet of mine noting that Rachel Levine, the U.S. assistant secretary for health, is a man.

As a result, my tweet would be banned, but only in Germany, where, according to Twitter’s explanation of what it calls, “country withheld content,” an “authorized entity” issued a “valid legal demand” to block my tweet. 

I had written the tweet in response to news this week that Twitter locked the account of Charlie Kirk for saying Levine is a man. Banning Kirk made no sense, I wrote, because Levine “is obviously a man — a man who dresses like a woman, but a man nonetheless.”

To be clear, Levine is a 64-year-old man who spent the first 54 years of his life “presenting” or living publicly as a man. He was married and fathered two children. In 2011, he decided to “transition” and began dressing and presenting as a woman, changing his name to Rachel Levine (previously, he went by Richard, his given name). He divorced his wife of 25 years in 2013.

Levine is and will always be a man. His story is a sad one, and far from mocking or berating him, conservatives should pray for him and hope that he gets the help he obviously needs.

But none of this is really about Levine. It’s about Twitter. Twitter locked Kirk’s account after it locked the account of The Babylon Bee earlier this week for posting an article headlined, “The Babylon Bee’s Man of the Year is Rachel Levine,” riffing on an actual USA Today piece naming Levine as one of its 2022 women of the year, despite the fact that Levine is a man.

After Twitter locked out the Bee, which is a satirical publication, its Editor in Chief Kyle Mann tweeted, “Maybe they’ll let us back into our @TheBabylonBee Twitter account if we throw a few thousand Uighurs in a concentration camp,” which prompted Twitter to lock Mann’s account for “hatful conduct.” Later, the Bee’s founder Adam Ford was locked out of Twitter for retweeting Mann. 

While all this was going on, articles at The Federalist suddenly started getting blocked by Twitter. There seemed to be no rhyme or reason to the handful of articles that were blocked, but it started with an article by Libby Emmons published Wednesday morning entitled, “Everybody Knows Rachel Levine Is Truly A Man, Including Rachel Levine.”

When my colleague Tristan Justice asked Twitter about it, a spokesperson told him, “the URLs referenced were mistakenly marked under our unsafe links policy — this action has been reversed.” Nothing to see here, it was all just a big mistake! 

But we all know it wasn’t. It was no more a mistake than my tweet getting flagged in Germany, of all places, or Kirk and Mann and Ford and the Bee all getting locked out of their accounts. This kind of behavior from social media companies has become all too common for anyone to believe that getting locked out of your account or getting an article taken down is ever a mistake, and certainly not when the tweet or article in question is asserting the plain truth that a man does not become a woman simply by growing his hair out and putting on a skirt. When you’re account is locked over that, it’s on purpose, and the point is to shut you up.

And it’s not just Twitter. This week, YouTube removed a bunch of videos from the recent Conservative Political Action Conference, including a speech by J.D. Vance and a panel discussion with Federalist CEO Sean Davis, Rachel Bovard, and Sen. James Lankford, R-Okla. — a panel discussion that happened to be about the harms of Big Tech and how federal law protects them from liability.

It’s obvious that these firms will eventually silence everyone who dissents from their woke ideology. They’re not even trying to hide it anymore. If you say that Rachel Levine is a man, or that Lia Thomas, the University of Pennsylvania swimmer who just won an NCAA Division I national championship, is a man, they will come after you. It doesn’t matter that Levine and Thomas are in fact men. Truth is no defense against censorship by Big Tech.

So until Congress — under what would have to be a Republican majority, given Democrats’ enthusiasm for online censorship — acts to put an end to this, it will continue. And the list of things you can’t say will grow. Before long, you won’t be able to say, for example, that abortion is the taking of a human life, that gay marriage is not the same as marriage between a man and a woman, or that children should not be taught that America is systemically racist.

In such an environment, the only way to ensure the censors don’t come after you is to follow the extraordinary example of U.S. Supreme Court nominee Judge Ketanji Brown Jackson, who was asked by Sen. Marsha Blackburn, R-Tenn., on Tuesday during the confirmation hearing to define the word “woman.” Jackson replied, infamously, “I’m not a biologist.”


Babylon Bee Censorship Shows Why Fifth Circuit Should Uphold Texas’ Social Media Law

By Clare MorellThe Federalist

twitter

Earlier this week, Twitter locked the account of The Babylon Bee, a right-leaning parody site, after it awarded Rachel Levine, a transgender Biden administration official, the title of “man of the year” in reaction to USA Today naming Levine one of its “women of the year” last week. This is just the most recent example in a long train of Big Tech censorship actions.

Taking a stand against Big Tech censorship, the state of Texas passed an anti-discrimination social media law (HB 20) last September. It seeks to limit Big Tech companies’ power to silence viewpoints they don’t like.

The law does so by prohibiting social media platforms with more than 50 million active monthly users in the United States from censoring users or their expressions based on the viewpoint expressed. Along with explicitly prohibiting viewpoint discrimination by social-media companies, the law enables censored users to seek declaratory and injunctive relief in court.

Texas’ law was cause for hope for many nationwide who want the giant social media platforms to be held accountable for their suppression of free speech. Unfortunately, Judge Robert Pitman, an Obama appointee, in early December enjoined the Texas non-discrimination social media law from going into effect.

But those who want a fair and democratic public discourse need not despair yet. That lower court decision was appealed, and soon the U.S. Court of Appeals for the Fifth Circuit will hear oral arguments on this appeal.

A wide range of distinguished amici have argued to the court that it should uphold the Texas statute and thereby protect Americans from censorship. The briefs include a profound story by David Mamet, an eminent doctor’s account of how even privatized suppression threatens science, and an exploration of the thought of John Stuart Mill by Columbia students against censorship.

Texas’ Law Doesn’t Intrude on Free Speech

What may need more explanation here is why the protection against tech censorship does not intrude on the tech company’s own free speech. As argued in an amicus brief filed by the Center for Renewing America and the Claremont Institute’s Center for Constitutional Jurisprudence, there are good First Amendment reasons for upholding the Texas law and reversing Judge Pitman’s flawed and biased order.

First, the appellate court should correctly recognize that the First Amendment applies differently to speakers than to those who host or transmit speech. While the government forcing a person or group to speak a particular message raises First Amendment concerns, regulating the terms under which entities host or transmit others’ speech complies with the Constitution.

For instance, for centuries courts have required common carriers, industries that play a central role in economic, social, and political life, such as telephones, utilities, and airlines, to treat customers without discrimination. The numerous legal requirements have never raised First Amendment concerns. HB 20’s protection of Texans against social media’s discriminatory viewpoint censorship falls within this general rule, allowing for government regulation of hosting or transmitting speech to ensure such channels of communication are open to all comers.

Social Media Censorship Isn’t ‘Editorial Discretion’

Pitman’s opinion errs by treating social media’s discriminatory censorship as “editorial discretion” that expresses a coherent “message” worthy of First Amendment protection like a newspaper op-ed page or a parade.

Unlike a newspaper editor or parade organizer, however, social media companies do not review all content they host; they review only a tiny fraction. A newspaper op-ed page or parade expresses the judgment of its editors and organizers with every article or marcher it includes, as well as with the newspaper or parade as a whole. By necessity, a newspaper or parade, given its limited size, exercises powerful editorial control over its content.

In contrast, a social media firm is a passive conduit. It rarely edits, and its infinite bandwidth gives it no need to edit. Moreover, platforms cannot express themselves in the billions of posts they cannot review. Nor can the platforms’ stealthy, inconsistent, and often hidden acts of content moderation constitute a coherent “message,” let alone an expression worthy of First Amendment protection.

Finally, non-discrimination requirements to refrain from discriminatory censorship of others do not burden the platform’s own speech because social media platforms are free to tweet or post as much as they’d like.

Social Media Platforms Are Common Carriers

Secondly, the court should recognize that Texas can lawfully regulate social media because the platforms are common carriers. For centuries, common carrier laws have required certain industries that hold themselves out to the public to serve all without discrimination. Communications networks have always operated under these non-discrimination requirements. The Texas social media law simply applies these historical precedents to the modern public square: social media platforms. 

Pitman ignores the centuries of cases in which courts and regulatory agencies imposed non-discrimination requirements on railroads, telephones, and internet firms and simply asserts that “this Court starts from the premise that social media platforms are not common carriers.”

The opinion justifies this finding with no precedent, but with circular reasoning that because social media companies currently discriminate, they cannot be regulated as common carriers. By Pitman’s reasoning, then, if a telephone company started to discriminate, the state of Texas could no longer regulate it as a common carrier. 

Left’s Disturbing Protection of Big Tech

Undermining the power of the state to regulate is indeed a strange move for liberals like Pitman, who generally welcome government power into every aspect of our lives. Pitman’s ruling reveals the left’s disturbing protectiveness of Big Tech and a preference for a public discourse controlled by content moderators.

Furthermore, in recognizing Big Tech’s deplatforming and censoring as a First Amendment-protected exercise of “editorial discretion,” the lower court is jeopardizing the bodies of civil rights and common carriage law by essentially asserting that discrimination is expression worthy of First Amendment protection.

Pitman and others on the left incorrectly view the First Amendment’s free speech guarantees as protecting Big Tech’s censorship, rather than preserving Justice Oliver Wendell Holmes’s famous concept of the vigorous marketplace of ideas.

It is long past time for states to impose non-discrimination requirements on Big Tech and to hold these companies accountable for their viewpoint censorship. The Fifth Circuit should recognize the substantial government interest in doing so and reverse the lower court’s error-ridden decision. The Texas law would serve the nation as a model for restoring our cherished principles of free speech.


Congress must protect IP from Big Tech and China

By George LandrithThe Desert Review

The U.S. economy runs on startups. For all of America’s mega-corporations, it’s young firms that create most of our new jobs during periods of economic growth. Those startups depend on America’s famously strong laws protecting their inventions and intellectual property. The only way someone with a big idea but minimal resources can out-compete established firms is through government protection of their innovations.

Today, we are failing in that responsibility. Our laxity is empowering predators foreign and domestic — endangering not only the next Apple, Microsoft, or Facebook, but our entire economy.

For years, the greatest threat to American intellectual property has been China. Chinese IP piracy became endemic — totaling an estimated $600 billion in costs to the U.S. per year. A CNBC survey of American corporations found that one-third had experienced IP theft by Chinese pirates. Testifying before Congress, Facebook CEO Mark Zuckerberg said, “I think it’s well documented that the Chinese government steals technology from American companies.”

More telling than Zuckerberg’s acknowledgment was the strange equivocation by other Big Tech executives at the hearing. The CEOs of Apple, Amazon, and Google — individuals famous for their breadth of knowledge and laser focus on their businesses — all shrugged and testified only that they hadn’t personally seen any Chinese IP piracy.

There is a reason those firms might not want to shine a light on IP theft: it’s a valuable part of their own business models.

In January, the U.S. International Trade Commission issued a ruling finding that Google infringed on five patents belonging to Sonos, a company that makes smart speakers. The story is a worst-case scenario for a startup. Sonos developed one of the most advanced wireless audio systems in the market — a product so impressive that Google wanted to partner with the company. Sonos alleges that early in the partnership, Google lifted Sonos-patented technology for Google’s own audio equipment.

Sonos was no fluke. Google faced 48 patent infringement lawsuits in 2021. But Google is not the only perpetrator.

In 2020, a federal jury ordered Amazon to pay $5 million to Texas-based Vocalife for infringing on its patents. Apple was recently ordered to pay $300 million in damages to Optis Wireless Technology for infringement.

It’s no accident that the number of IP lawsuits rose in 2020 for the first time since 2015, and court awards rose to $4.67 billion from just $1.5 billion in 2019.

It makes holding China to account much harder. If the richest and most powerful businesses in America are ignoring our intellectual property laws — why shouldn’t our global adversaries?

The issue here isn’t complicated: When laws against theft aren’t enforced, thieves are going to steal. Slaps on the wrist aren’t going to deter pickpockets in Beijing, Silicon Valley, or anywhere else. Congress has to tighten up our IP laws and stiffen penalties, and the Justice Department needs to ramp up enforcement while there are still startups left to save.

One noteworthy aspect of the American Dream is that the most important businesses of 20 years from now are probably ones we haven’t heard of yet. In order for them to lead us into the future, the government must protect them from foreign adversaries and Big Tech.


Grassley: We Wouldn’t Have Such a Censorship Problem ‘If More Journalists Did Their Job’

‘Simply put we deserve better than woke monopolists and their liberal lapdogs deciding what we can discuss.’

By Kylee ZempelThe Federalist

Chuck Grassley

IMAGE CREDIT U.S. CUSTOMS AND BORDER PROTECTION/FLICKR

Some things never change. The corrupt media peddles false narratives, Big Tech censors conservatives for “disinformation,” and Republican Sen. Chuck Grassley absolutely takes them to town for it.

That’s what happened during a floor speech on Thursday when the Iowa lawmaker tore into tech companies and the corporate media for colluding to censor conservative viewpoints, especially those that threaten Democrat narratives such as the Russia collusion hoax. Grassley was personally irked after Facebook flagged one of his posts linking to a Fox News article as “false information.”

It was an article about new allegations against the Hillary Clinton campaign and its associates that were brought to light in Special Counsel John Durham’s Feb. 11 federal court filing. It cited Durham’s filing directly, as well as a former chief congressional investigator who became acutely knowledgeable about the situation while working on the Trump-Russia probe for the House Intelligence Committee under California Republican Rep. Devin Nunes.

“Why does Facebook and one of its third-party fact-checker partners get to make the decision that this news article is considered false information?” Grassley asked. “That decision should be made by the American people who should be able to view that content and decide for themselves. It shouldn’t be decided by our Big Tech overlords who seem to only find fault with content that is conservative or goes against the liberal narrative.”

Though useful idiots will retort that Facebook, Twitter, YouTube, and the like don’t single out conservatives for censorship, the evidence suggests otherwise. Just this week, Twitter allowed the private information of people who had donated to the Canadian Freedom Convoy to spread on its site after a leftist hacked GiveSendGo and doxxed them. Yet Twitter cited its hacked materials policy as the justification for censoring the bombshell Hunter Biden laptop story right before the 2020 election, despite no evidence of hacking.

As Grassley mentioned, these are also the same tech and media companies that amplified the Steele dossier and broader fake Russia collusion narrative for years, and that are now “doing the bidding for the Clinton camp.”

“Why are they so afraid of reporting that exposes the Russia collusion hoax?” Grassley asked the question to which we already know the answer. It’s the massive hoax they staked their reputations and careers on and which has since unraveled piece by piece.

“This wouldn’t be an issue today if more journalists did their job of being the police of our society and reported on all investigations not just ones that appeal to a certain political party,” Grassley said. “What kind of message does this censorship send to a reporter who does take on the new allegations against the Clinton campaign and its associates and its labeled disinformation?”

It’s time to rethink Section 230 of the Communications Decency Act, Grassley prescribed, referring to the provision that grants tech monopolies immunity regarding its users’ content. Big Tech has weaponized the provision, however, using it in its ideological purges of what it calls “misinformation” and “dangerous” content.

“It has become increasingly clear that these dominant platforms controlling discussion and dialogue are more beholden to cancel culture and not to the fundamental free speech principles that this country was founded upon,” Grassley said. “…Simply put we deserve better than woke monopolists and their liberal lapdogs deciding what we can discuss.”


China isn’t our only intellectual piracy problem

If the richest and most powerful businesses in America are ignoring our intellectual property laws, why shouldn’t our global adversaries?

By George LandrithDeseret News

A woman walks below a Google sign on the campus in Mountain View, Calif.
A woman walks below a Google sign on the campus in Mountain View, Calif., in 2019. Earlier this month, the International Trade Commission ruled that Google infringed on a patent held by Sonos.
 Jeff Chiu, Associated Press

The U.S. economy runs on startups. For all of America’s brand-name mega-corporations, it’s young firms that create most of our new jobs during periods of economic growth.

Those startups, in turn, depend on America’s famously strong laws protecting their patented inventions and other intellectual property. The only way someone with a big idea but minimal resources can outcompete established firms is through proper government protection of their innovations.

Today, we are failing in that responsibility. Instead, our laxity is empowering predators foreign and domestic — endangering not only the next Apple, Microsoft, or Facebook, but our entire economy.

For years, the greatest threat to American intellectual property has been China. As our economy became more globalized and digitized, Chinese IP piracy became endemic — totaling an estimated $600 billion in costs to the U.S. economy per year. In 2019, a CNBC survey of American corporations found that nearly one-third of respondents had experienced IP theft by Chinese pirates in the past decade. Testifying before Congress in 2020, Facebook CEO Mark Zuckerberg said, “I think it’s well documented that the Chinese government steals technology from American companies.”

More telling than Zuckerberg’s acknowledgment, however, was the strange but unmistakable equivocation by the other Big Tech executives at the hearing. When asked the same question, the CEOs of Apple, Amazon and Google — individuals famous for their breadth of knowledge and laser focus on their businesses — all shrugged and testified only that they hadn’t personally seen any Chinese IP piracy.

While many, including the U.S. Attorney General, slammed them for “kowtowing” to Beijing, there is another reason those firms might not want to shine too bright a light on IP theft: it’s become a valuable part of their own business models.Report ad

Early this month, the U.S. International Trade Commission issued a final ruling finding that Google infringed on five patents belonging to Sonos, a company that makes smart speakers. The story is a worst-case scenario for a startup innovator. Over a decade ago, Sonos developed one of the most advanced wireless audio systems in the market — a product so impressive that Google wanted to partner with the company on it. Sonos alleges that early in the partnership, Google lifted Sonos-patented technology for Google’s own audio equipment — and continued doing so for future products despite Sonos calling the tech giant out for infringement.

Sonos’s experience was no fluke. Google faced 48 patent infringement lawsuits in 2021.

That’s more than any other company, but Google is certainly not the only alleged perpetrator.

Sonos has accused Amazon of stealing the same technologies for use in its Echo audio systems. Additionally, in 2020, a federal jury ordered Amazon to pay $5 million to Texas-based Vocalife for infringing on its patents to make Echo. Meanwhile, Apple was recently ordered to pay $300 million in damages to Optis Wireless Technology for patent infringement.

It’s no accident, then, that the number of IP lawsuits rose in 2020 for the first time since 2015, and court awards rose to $4.67 billion from just $1.5 billion in 2019.

It also makes holding China to account much harder. After all, if the richest and most powerful businesses in America are ignoring our intellectual property laws — supposedly some of the strongest in the world — why shouldn’t our global adversaries?

The real issue here isn’t complicated: When laws against theft aren’t vigorously enforced, thieves are going to steal. That’s true as much for sophisticated IP infringement as it is for the wave of organized shoplifting in California today. With billions of dollars at stake, slaps on the wrist or gentle nudges aren’t going to deter highly motivated pickpockets in Beijing, Silicon Valley, or anywhere else. Congress has to tighten up our IP laws and stiffen penalties, and the Justice Department needs to ramp up enforcement while there are still innovative American startups left to save.

One noteworthy aspect of the American Dream is that even in a mature $20 trillion economy, the most important businesses of 20 years from now are probably ones we haven’t heard of yet. In order for them to lead us into the future, however, the federal government must protect them and their intellectual property from the racketeering operations that too many foreign adversaries and Big Tech elites have turned into.


Shareholders Press Google and YouTube To Disclose White House Requests To Scrub COVID-19 Videos

Big Tech under fire for removing content that questions Biden administration COVID policies

By Alana GoodmanThe Washington Free Beacon

Shareholders in Google and YouTube are pressing the tech giants to disclose any requests they have received from the Biden administration to scrub politically “problematic” information from the platforms, according to a copy of a shareholder proposal obtained by the Washington Free Beacon.

The National Legal and Policy Center, an ethics watchdog group that holds a voting stake in Google and YouTube’s parent corporation Alphabet, submitted the shareholder proposal to the company this week, following a string of controversies over Google and YouTube’s removal of videos that question the Biden administration’s COVID-19 policies.

The proposed disclosure requirement could shed light on whether the administration has directed tech companies to remove information that it deems misleading, a scenario that raises concerns about government censorship. In July, the White House said it was “in regular touch” with social media platforms to discuss ways to combat “misinformation” online.

“The case for this kind of disclosure is double barreled. All citizens should be aware when the government engages in censorship, even if it is through a private-sector company, and shareholders of that company should know when they become a party to it,” said NLPC chairman Peter Flaherty.

“The administration keeps labeling certain information about the pandemic ‘disinformation,’ and gets it yanked off social media, only to later embrace the same information. Alphabet should not be contributing to such a farce.”

If the proposal is approved by a shareholder vote—a significant hurdle since the company’s voting shares are largely controlled by its founders and insiders—Alphabet would be required to “provide a report, published on the company’s website and updated semi-annually—and omitting proprietary information and at reasonable cost—that specifies the Company’s policy in responding to requests to remove or take down material from its platforms by the Executive Office of the President, Centers for Disease Control, or any other agency or entity of the United States Government,” according to a copy of the NLPC’s submission.

Alphabet would also have to disclose “an itemized listing of such take-down requests, including the name and title of the official making the request, the nature and scope of the request, the date of the request, the outcome of the request, and a reason or rationale for the Company’s response, or lack thereof.”

The NLPC said coordination between Alphabet and the Biden administration could amount to “unconstitutional censorship, opening the Company to liability claims by victims,” citing Supreme Court rulings “that private entities may not engage in suppression of speech at the behest of government, as it has the same effect as direct government censorship.”

YouTube faced criticism this week after deleting a controversial but widely shared video of Joe Rogan’s interview with virologist Robert Malone that criticized the COVID-19 vaccine. Florida governor Ron DeSantis (R.), Sen. Ron Johnson (R., Wis.), and Rep. Nicole Malliotakis (R., N.Y.) have blasted Google and YouTube for scrubbing their videos that questioned certain Democratic policies, such as mask mandates and vaccine passports.

Google has also acknowledged manipulating its autofill feature to discourage users from searching for claims that COVID-19 originated from a lab in Wuhan—a theory that was later determined to be credible by intelligence officials.

In July, White House spokeswoman Jen Psaki told reporters that the administration was “in regular touch with these social media platforms, and those engagements typically happen through members of our senior staff, but also members of our COVID-19 team, given, as [Surgeon General] Dr. [Vivek] Murthy conveyed, this is a big issue of misinformation, specifically on the pandemic.”

Psaki said the administration flagged “problematic” posts for social media companies and urged the platforms to “take faster action against harmful posts.”

Alphabet is likely to seek a waiver from the Securities and Exchange Commission to avoid bringing up the NLPC’s proposal for consideration. Under the Biden administration, the SEC has taken a supportive stance toward left-leaning activist shareholders. In November, the administration expanded the type of proposals that companies are required to consider to include “certain proposals that raise significant social policy issues.”

In 2021, progressive shareholder activists successfully installed three fossil fuel opponents on the Exxon Mobil board, after forcing the company to disclose its impact on carbon emissions in 2017. The past year also saw a record number of corporate board diversity proposals from activist shareholders.


Right Responds To Cancel Culture By Building Its Own Infrastructure, And The Left Goes Nuts

By Margot ClevelandThe Federalist

White House Devin Nunes and Donald Trump

Last week the corrupt media’s penchant for spinning all things conservative caused a near-fatal case of whiplash.

The left began by chastising conservatives for supposedly building “its own echo chamber,” but by the next day, when news broke that Devin Nunes was resigning from Congress to serve as the CEO of Donald Trump’s new media company, the complained-of conservative ecosystem merely represented grift. Both narratives are false, however, which is precisely why leftists peddled them so hard.

Axios launched the “echo chamber” accusation with its article titled, “Right wing builds its own echo chamber.” “Conservatives are aggressively building their own apps, phones, cryptocurrencies and publishing houses in an attempt to circumvent what they see as an increasingly liberal internet and media ecosystem,” the Axios article began.

The article then highlighted plans for the YouTube alternative Rumble and Trump’s social media company, Truth Social, to expand their reach by taking the companies public. Also highlighted was the social app Gettr that former-Trump aide Jason Miller launched, as well as conservative efforts to compete in cryptocurrency, phones, cloud storage, and book publishing.

“The bottom line,” Axios closed, was that, “Conservative media has been a powerhouse for a long time, but this phase of its expansion isn’t just about more or louder conservative voices — it’s about building an entire conservative ecosystem.”

The refusal by conservatives to continue “to consume” the product of the increasingly “deranged and unaccountable lefty media” is not about building an echo chamber, however: It is about competition and choice. And branding these new business ventures an “ecosystem” and “echo chamber” merely reveal the left’s panic over their inability to control the narrative.

The corrupt media quickly put a brake on the echo-chamber attack when the day after Axios bemoaned the loosening of the left’s stranglehold over corporate America came news that Nunes would retire in January to serve as the new CEO of Trump’s Truth Social company. No longer was the story about an “ecosystem,” it was now about “grift.”

“How Devin Nunes’s new media job for Trump explains the GOP grift machine,” the Washington Post headlined an op-ed by columnist Paul Waldman. Waldman supported his thesis by pointing out that “with Republicans poised to win the House, Nunes was in line to become the chair of the Ways and Means Committee, which writes the nation’s tax laws.”

“There was a time when the Ways and Means chair was considered second only to House Speaker in prestige and power,” the Post opinion piece continued. Leaving behind that likelihood, Waldman reasoned, showed Nunes’s supposed desire to “get in on the grift.”

Leave it to a liberal to think grift is foregoing the second most powerful position in the U.S. House of Representatives to accept a position in the private sector in a fledgling organization.

In reporting on Nunes’s announcement, The New York Times’s Jonathan Weisman likewise focused on the fact that if the California representative continued his congressional career, he would “assume the help of the powerful Ways and Means Committee if Republicans took control of the House, as they are favored to do.” This move, Weisman declared, represented a signal by Nunes to “where he thinks power lies in the Republican Party and the conservative movement.”

Nunes’s decision to leave Congress to become Truth Social’s CEO does represent a signal—just not the one Weisman claims. To see the reason behind the move, the Times’ congressional correspondent need only have re-read his article, where a handful of paragraphs later, Weisman wrote:

From his perch on the Intelligence Committee, he ran interference for Mr. Trump against accusations that his 2016 campaign had collaborated with Russian intelligence. Mr. Nunes also organized a united Republican front opposing the first impeachment of the president for withholding military assistance to Ukraine to pressure its government to dig up dirt on Mr. Biden.

That a longtime congressional correspondent could pen those lines and The New York Times could unironically publish them shows exactly why Nunes left Congress to lead Truth Social.

Having lived through the heyday of the Russia-collusion hoax, as chairman of the House Intelligence Committee Nunes fought to expose the truth of the Crossfire Hurricane disaster to the American public. Yet the corporate press fed the lies of the Democrat ranking member to the country instead. The California Republican saw a repeat of this ploy with the Ukraine impeachment proceedings. Hatred for Trump proved the breaking straw to the already biased establishment press.

Then came the censorship, limiting conservatives’ ability to counter the corrupt media. Again, Nunes experienced that firsthand, being shadow-banned by Twitter in 2018.

And if any more proof were needed of corporate cronies’ ability to control information, the burying of the Hunter Biden laptop story that implicated then-candidate Joe Biden in a pay-to-play scandal right before the 2020 election handed Nunes—and our country—the final piece of evidence.

So Nunes had a choice: Stay in Congress and chair the House’s most powerful committee as a Republican, limited by the Democrat-controlled executive branch, or surrender the cozy conclave and create an enterprise to counter the slant and censorship that over the last five years has grown exponentially. The left might not understand Nunes’s decision, but here’s hoping it learns his reason soon—and the hard way.


Facebook Quietly Admits Its Third-Party ‘Fact-Checks’ Are ‘Opinions’

By Jordan BoydThe Federalist

Facebook Quietly Admits Its Third-Party ‘Fact-Checks’ Are ‘Opinions’

Facebook admitted that its so-called “fact-checking” program is actually cranking out opinions used to censor certain viewpoints.

In its latest legal battle with TV journalist John Stossel over a post about the origins of the deadly 2020 California forest fires, Facebook, now rebranded and referred to as “Meta,” claims that its “fact-checking” program should not be the target of a defamation suit because its attempts to regulate content are done by third-party organizations who are entitled to their “opinion.”

Stossel’s original complaint questioned whether “Facebook and its vendors defame a user who posts factually accurate content, when they publicly announce that the content failed a ‘fact-check’ and is ‘partly false,’ and by attributing to the user a false claim that he never made?” Facebook, however, claimed that the counter article authored by Climate Feedback is not necessarily the tech giant’s responsibility.

Facebook went on to complain that Stossel’s problem isn’t with the Silicon Valley giants’ “labels” on his content but with the obscure organizations that Facebook employs to do its “fact-checking” dirty work.

“The labels themselves are neither false nor defamatory; to the contrary, they constitute protected opinion,” Facebook admitted. “And even if Stossel could attribute Climate Feedback’s separate webpages to Meta, the challenged statements on those pages are likewise neither false nor defamatory. Any of these failures would doom Stossel’s complaint, but the combination makes any amendment futile.

It’s no secret that Facebook uses its “fact-checking” program to curb information that it wants to be censored, and this November lawsuit gives more insight into the Big Tech company’s methods and twisted rationale.

“The independence of the fact checkers is a deliberate feature of Meta’s fact-checking program, designed to ensure that Meta does not become the arbiter of truth on its platforms,” the lawsuit stated before admitting that “Meta identifies potential misinformation for fact-checkers to review and rate. … [I]t leaves the ultimate determination whether information is false or misleading to the fact-checkers. And though Meta has designed its platforms so that fact-checker ratings appear next to content that the fact-checkers have reviewed and rated, it does not contribute to the substance of those ratings.”


China’s Attacks on Tech Are a Losing Strategy in Cold War II

Forcing DiDi and Alibaba to toe the Communist Party line may help Xi build a police state but will stall the nation’s dynamic industry.

By Niall FergusonBloomberg

Fiddle Didi.
Fiddle Didi. Source: AFP/Getty Images

“Investors have to rethink the entire China structure,” David Kotok of Cumberland Advisers said last week. For Hong Kong, the One Country, Two Systems principle was “dead.”  As for the crackdown on some of the nation’s tech giants, the Beijing government’s treatment of Alibaba “is not a one-off. Neither is DiDi. Everything China touches must be viewed with suspicion.”

Wait, you’re saying that investing in the other side in the early phase of Cold War II might have been a bad idea? You’re telling me that “long totalitarianism” was not a smart trade?

For the past three years, I have been trying to persuade anyone who would listen that “Chimerica” — the symbiotic economic relationship between the People’s Republic of China and the United States of America, which I first wrote about in 2007 — is dead. The experience has taught me how hard it can be for an author to kill one of his own ideas and replace it with a new one. The facts change, but people’s minds — not so much.

Chimerica was the dominant feature of the global economic landscape from China’s accession to the World Trade Organization in 2001 to the global financial crisis that began in 2008. (I never expected the relationship to last, which was why I and my co-author Moritz Schularick came up with the word: Chimerica was a pun on “chimera.”)  At some point after that, as I have argued in Bloomberg Opinionpreviously, Cold War II began.

Unlike with a “hot” war, it is hard to say exactly when a cold war breaks out. But I think Cold War II was already underway — at least as far as the Chinese leader Xi Jinping was concerned — even before former President Donald Trump started imposing tariffs on Chinese imports in 2018. By the end of that year, the U.S. and China were butting heads over so many issues that cold war began to look like a relatively good outcome, if the most likely alternative was hot war.

Ideological division? Check, as Xi Jinping explicitly prohibited Western ideas in Chinese education and reasserted the relevance of Marxism-Leninism. Economic competition? Check, as China’s high growth rate continued to narrow the gap between Chinese and U.S. gross domestic product.  A technological race? Check, as China systematically purloined intellectual property to challenge the U.S. in strategic areas such as artificial intelligence. Geopolitical rivalry? Check, as China brazenly built airbases and other military infrastructure in the South China Sea. Rewriting history? Check, as the new Chinese Academy of History ensures that the party’s official narrative appears everywhere from textbooks to museums to social media. Espionage? Check. Propaganda? Check. Arms race? Check.

A classic expression of the cold war atmosphere was provided on July 1 by Xi’s speech to mark the centenary of the Chinese Communist Party: The Chinese people “will never allow any foreign force to bully, oppress, or enslave us,” he told a large crowd in Beijing’s Tiananmen Square. “Anyone who tries to do so shall be battered and bloodied from colliding with a great wall of steel forged by more than 1.4 billion Chinese people using flesh and blood.” This is language the like of which we haven’t heard from a Chinese leader since Mao Zedong.

Most Americans could see this — public sentiment turned sharply negative, with three quarters of people expressing an unfavorable view of China in recent surveys. Many politicians saw it — containing China became just about the only bipartisan issue in Washington, with candidate Joe Biden seeking to present himself to voters as tougher on China than Trump. Yet somehow the very obvious trend toward cold war was ignored in the place that had most to lose from myopia. I am talking about Wall Street. Even as China was ground zero for a global pandemic, crushed political freedom in Hong Kong and incarcerated hundreds of thousands of its own citizens in Xinjiang, the money kept flowing from New York to Beijing, Hangzhou, Shanghai and Shenzhen.

According to the Rhodium Group, China’s gross flows of foreign domestic investment to the U.S. in 2019 totaled $4.8 billion. But gross U.S. FDI flows to China were $13.3 billion. The pandemic did not stop the influx of American money into China. Last November, JPMorgan Chase & Co. spent $1 billion buying full ownership of its Chinese joint venture. Goldman Sachs Group Inc. and Morgan Stanley became controlling owners of their Chinese securities ventures. Just about every major name in American finance did some kind of China deal last year.

And it wasn’t only Wall Street. PepsiCo Inc. spent $705 million on a Chinese snack brand. Tesla Inc. ramped up its Chinese production. There were also massive flows of U.S. capital into Chinese onshore bonds. Chinese equities, too, found American buyers. “From an AI chip designer whose founders worked at the Chinese Academy of Sciences, to Jack Ma’s fast-growing and highly lucrative fintech unicorn Ant Group and cash cow mineral-water bottler Nongfu Spring Co., President Xi Jinping’s China has plenty to offer global investors,” my  Bloomberg opinion colleague Shuli Ren wrote last September.

Recent months have brought a painful reality check. On July 2, Chinese regulators announced an investigation into data security concerns at DiDi Global Inc., a ride-hailing group, just two days after its initial public offering. DiDi had raised $4.4 billion in the biggest Chinese IPO in the U.S. since Alibaba Group Holding Ltd.’s in 2014. No sooner had investors snapped up the stock than the Chinese internet regulator, the Cyberspace Administration of China, said the company was suspected of “serious violations of laws and regulations in collecting and using personal information.”

The cyberspace agency then revealed that it was also investigating two other U.S.-listed Chinese companies: hiring app BossZhipin, which listed in New York as Kanzhun Ltd. on June 11, and Yunmanman and Huochebang, two logistics and truck-booking apps run by Full Truck Alliance Co., which listed on June 22. Inevitably, this nasty news triggered a selloff in Chinese tech stocks. It also led several other Chinese tech companies abruptly to abandon their plans for U.S. IPOs, including fitness app Keep, China’s biggest podcasting platform, Ximalaya, and the medical data company LinkDoc Technology Ltd.

To add to the maelstrom, on Thursday Senators Bill Hagerty, a Tennessee Republican,  and Chris Van Hollen, Democrat of Maryland, called on the Securities and Exchange Commission to investigate whether DiDi had misled U.S. investors ahead of its IPO. Also last week, U.S. tech companies such as Facebook, Twitter and Google came under increased pressure from Hong Kong and mainland officials over doxxing, the practice of publishing private or identifying information about an individual online.

For several years, I have been told by numerous supposed experts on U.S.-China relations a) that a cold war is impossible when two economies are as intertwined as China’s and America’s and b) that decoupling is not going to happen because it is in nobody’s interest. But strategic decoupling has been China’s official policy for some time now. Last year’s crackdown on financial technology firms, which led to the sudden shelving of the Ant Group Co. IPO, was just one of many harbingers of last week’s carnage. 

The proximate consequences are clear. U.S.-listed Chinese firms will face growing regulatory pressure from Beijing’s new rules on variable interest entities as well as from U.S. delisting rules.

The VIE structure has long been used by almost all China’s major tech companies to bypass China’s foreign investment restrictions. However, on Feb. 7, the State Council’s Anti-Monopoly Committee issued new guidelines covering variable interest entities for the first time. Recognizing them as legal entities subject to domestic anti-monopoly laws has allowed regulators to impose anticompetition penalties on major VIEs, including Alibaba, Tencent Holdings Ltd. and Meituan. This new framework substantially increases risks to foreign investors holding American deposit receipts in the tech companies’ wholly foreign-owned enterprises. For example, Beijing could conceivably force VIEs to breach their contracts with their foreign-owned entities. In one scenario, subsidiaries of a Chinese variable interest entity that are deemed by Beijing to be involved in processing and storing critical data could be spun out from the VIE — just as Alibaba was reportedly forced to spin out payments subsidiary Alipay in 2010.

The stakes are high. There are currently 244 U.S.-listed Chinese firms with a total market capitalization of around $1.8 trillion, equivalent to almost 4% of the capitalization of the U.S. stock market.


Big Tech’s Immunity in Jeopardy

By Peter RoffAmerican Action News

Anthony Quintano from Westminster, United States via Wikimedia Commons

A federal appellate court’s decision to rehear a case in which a controversial provision of 1996’s Communications Decency Act protecting Big Tech firms from civil suits because they are “distributors of content” rather than “publishers” is giving people hope the recent wave of Internet censorship may soon end. 

The U.S. Court of Appeals for the Second said July 16 it would rehear the arguments “en banc” following a ruling by a three-judge panel that upheld a lower court’s decision in Dorman v Vimeo, in which it was argued the tech platform was insulated from liability after it terminated the video streaming feed of a group posting videos of individuals saying they’d abandoned homosexuality to pursue a Christian way of living. 

Vimeo, the Epoch Times reported, argued successfully its terms of service agreement prohibited the streaming of materials promoting “conversion therapy,” a controversial technique legislators in several blue states are currently trying to ban, especially for children under the age of 18.  Others including the plaintiff argue however that the tech firm’s action is censorship and is damaging in both the legal and common sense of the word.

Robert Tyler, general counsel for the Advocates for Faith & Freedom said the decision to have the appeal reargued in front of the entire court puts the immunity provision of Section 230 “in the crosshairs of judicial review.” 

“Section 230 was not intended to give Big Tech the right to exclude persons from their platform just because the customer is black, Muslim, white, Christian, homosexual, or formerly homosexual. That is plain invidious discrimination,” Tyler said.

The case is important because the digital age has moved the public square from inside the local community to well out into cyberspace. Facebook and Twitter are now the host of the national conversation, fueled by information people gather by using search engines like Google. This is a new reality, leaving more than a few conservatives fearful their opinions and publications and websites are being censored by the “woke” individuals inside the Big tech companies that make decisions about search engine rankings and what can be seen. 

The appellate court’s latest action suggests Section 230, which many of its critics believe is the legal justification for online censorship, may not long survive. It is rare for an entire appellate court to rehear a case just to reaffirm a three-judge panel’s decision. Even if it doesn’t, however, those who follow tech platforms and the laws that govern them say there is no guarantee the censoring of individual messages, the de-platforming of people like former President Donald J. Trump, or the termination of services would come to an end if this one part of the CDA is ruled unconstitutional. 

Without Section 230 protection – or something like it – platforms and Internet service companies might someday be held responsible for what appears on screens and servers in much the same way the publishers of newspapers are responsible for what appears in print. Not that it would get anyone very far. The bar for proving damages in cases where libel or defamation are alleged was high even before the United States Supreme Court sent it into the stratosphere in its 1964’s Times v Sullivan decision.

Now, the standard of proof in such cases is so rigorous it is rarely met and, even if it is, the requirements involved in proving damage are so onerous as to hardly be a deterrent to sloppy reporting, deliberate maligning, and censorship. 

Trump’s recently announced class-action suit against Big Tech CEOs over his de-platforming may be another matter. He contends his first amendment rights were violated following the disruption inside the U.S. Capitol on Jan. 6 by these companies acting as agents of the federal government. If he can prove that to be the case, it invokes constitutional scrutiny and potentially tilts the outcome in Trump’s favor. 

Ultimately, the court will probably rule in a way that protects the most speech for the most people. The first amendment is an American absolute, not necessarily applicable in all cases – the government can’t imprison me over what I tell my children – but we generally believe as a country that even private institutions should give the amendment due deference. If Big Tech can be shown to have failed in this regard, the consequences could be interesting. 


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