Politico Morning Tech: Apple-Epic showdown begins with scuffle over witness

May 3, 2021 Media

— The trial begins: Apple and Epic Games will today face off in federal civil court, in a case that could change the mobile tech world as we know it.

— Reality check: New policy papers from the American Economic Liberties Project debunk some of the major claims that Facebook, Apple, Google and Amazon have made in their antitrust battles.

— Racing against the clock: The FCC is moving fast this month to dole out billions in dollars of subsidies to help close the digital divide.

FIRST IN MT: NEW RESEARCH FROM ANTI-MONOPOLY GROUP:Policy briefs out today from the nonprofit AELP lay out the arguments Amazon, Facebook, Google and Apple have made — pulled from public materials as well as “private conversations with legislators and staff” — and offer a set of counterpoints. “These corporations have made misleading arguments to policymakers about their lines of business,” AELP wrote.

Amazon, for instance, has argued that it only makes up a “small fraction of retail,” in order to prove to policymakers and regulators that it doesn’t have monopoly power. But AELP found this argument is “misleading”: Amazon has between a 40 and 74 percent share of the online retail market. “More than half of all online product searches begin directly on Amazon,” AELP wrote.

And Google has famously argued that “competition is only a click away,” claiming that it’s simple to move from one platform to another. But it costs publishers and advertisers a lot of money to switch from Google to other platforms, according to the brief.

Small business angle: Just in time for Small Business Week, one of the policy briefs focuses specifically on the effect that Google and Facebook have had on small businesses and their owners. The group spoke to a number of small business owners about how their interactions with the social media giants have harmed their wallets and business models.

One small business owner said Google’s recommended advertising plan “drains our budget” and there’s “no way of validating” whether the system is helping them reach their intended audience.

Another owner described how Facebook “holds small businesses hostage” by cornering them into paying to boost posts or else reach a much smaller audience. “A majority of small business owners report that Facebook ads don’t reach their intended audience,” AELP wrote. “Instead, Facebook forces small businesspeople to pay more to ‘boost’ posts, and then allows bots to create ad views that small businesses are charged for.”

The intended audience: AELP is one of a few trustbusting advocacy groups that has successfully agitated about antitrust reform in Congress and across the U.S. These policy briefs will likely end up in the hands of lawmakers and their staff, bolstering the left’s viewpoint as Congress gets closer to potential legislative changes.