The American Prospect (tapped_xml) wrote,
The American Prospect

Some Friendly Chats Between Big Tech and Its Regulators

Xavier Vila/SIPA/AP Images

Communications obtained through FOIA requests reveal top staff at the Federal Trade Commission in constant contact with Big Tech lobbyists, relying on them for information, and generally seeing them as partners rather than companies subject to FTC regulation.

Last week, Federal Trade Commission (FTC) Chair Joseph Simons told Bloomberg News that the antitrust inquiry into tech platforms could end with breaking companies like Facebook apart, a statement he hedged almost immediately. “It’s not ideal because it’s very messy,” Simons said. “But if you have to, you have to.”

The resignation with which Simons viewed the prospect that the FTC might have to use statutory law to its logical conclusion makes clear that our Second Gilded Age’s inability to restrain runaway monopolies is the product of deficient will. And we know this not just because of one line in a news report, or the recent history of the FTC effectively taking bribes to halt investigations. Just take a stroll with me through a selection of available FTC internal emails.

When journalists or outside groups petition the FTC for Freedom of Information Act (FOIA) requests, the agency helpfully posts the results if the same subject gets requested more than three times in a calendar year. There are frequently requested records—internal emails and documents, mostly—about crowdfunding and football helmets, hotel pricing and online dating, even some personnel information about the most well-known former director of the Office of Policy Planning in agency history, a certain Ted Cruz.

But it’s the files involving Facebook, Google, Amazon, and Apple—the four Big Tech firms under scrutiny from the FTC and the Justice Department—that will sap your faith, if you had any left, that the agency will engage in a full investigation of the platforms. The communications depict top staff at the FTC constantly in contact with Big Tech lobbyists, relying on them for information, and generally seeing them as partners rather than companies subject to regulation. That this stuff has just been sitting on the FTC website for years suggests that the agency isn’t particularly ashamed of it, either.

The key documents involve communications between FTC staff and representatives from Facebook, Google, and Apple between January 1 and March 25, 2015. This was a particularly critical time for Google, because of a separate FOIA report filed by The Wall Street Journal. That March, the FTC inadvertently released a 160-page report of the Bureau of Competition, which recommended that the agency sue Google over the anti-competitive conduct of its search engine. In 2013, the FTC overruled the Bureau of Competition and settled with Google for peanuts.

Some of the communications involve this Wall Street Journal report, but the overriding sense one gets on reading them is just how much time Google and its Big Tech brethren spend with FTC staff. In just this three-month period, there are 19 instances of Rob Mahini, a senior policy counsel with Google, setting up meetings, lunches, or other meetups with FTC personnel. “Have a minute to chat this afternoon?” Mahini asks Aaron Burstein, an FTC adviser, in January 2015. “It would be great to have coffee to catch up,” Mahini writes to Henry Su in February. “I’d love to get together for lunch again. What works for you this month?” he asks Shaundra Watson the next day. There’s also a fair bit of flattery: little nuggets of information that Mahini passes around to FTC staff, pre-release demos of new site features, a flow of updates that make staff feel like trusted insiders.

This constant, low-level communication to work the staffs of the FTC’s top staffers and the commissioners themselves is surely common practice among other lobbyists and other agencies, but the relentlessness and aggressiveness in these emails is striking.

In some cases, the conversation goes the other way. On January 14, 2015, Neil Chilson, at the time an attorney adviser to Republican commissioner Maureen Ohlhausen, wrote Mahini looking for advice. “One of the offices here (you can guess which) is convinced that a major weakness of the use-based approach is that it cannot address sensitive inferences,” Chilson wrote. “You and I know that is exactly backwards, but I am looking for concrete examples to counter (to the Chairwoman’s office) that mistaken perception.”

To translate this from alien to English, then-Chairwoman Edith Ramirez’s staff had expressed concern about Google’s creating targets for advertising based on a user’s gender, age, height, and weight (the so-called “sensitive inferences”), and Chilson (who doesn’t consider that a problem) wanted Google’s lobbyist to give him examples of how this is no big deal. So this is Google working directly with an FTC official, who is giving the company intel about what a (mildly) adversarial commissioner is thinking, and asking for specific examples to rebut it, which Mahini gladly supplies. (After being made acting chief technologist at the FTC, Chilson now works for the Charles Koch Institute. The Kochs have been siding with Big Tech in policy debates.)

But the most interesting stuff in the FOIA documents concerns that Wall Street Journal article. On March 18, the day before the story’s release, Mahini wrote to top advisers to then-chair Ramirez. “We have an urgent situation that Kent Walker would like to speak with the Chairwoman about,” Mahini writes, and you can feel the panic. Kent Walker is the chief legal officer at Google. He’s quoted in the Wall Street Journal piece. Clearly he wanted to go over the imminent story release. Mahini even offers Walker’s personal cellphone for Ramirez to call.

A few days later, Johanna Shelton, Google’s top lobbyist, wrote an official-sounding email to FTC staff, describing Google as “deeply troubled by the FTC’s lack of an on-the-record clarification about the effect of the Bureau of Competition staff memo.” Shelton pushed the agency to correct what Google saw as erroneous news stories that the FTC’s settlement went against the Bureau of Competition’s recommendations (which it did). She was also upset that the FTC didn’t comment for the record about the story. “We believe it is critical for the FTC to defend its reputation, showing that it followed a thorough process and fully took into account the Bureau of Competition staff memo, among other internal agency opinions including the Bureau of Economics,” Shelton wrote.

Google wanted the FTC to take Google’s side and read from Google’s talking points about the settlement, which the FTC effectively did, in a formal statement from Ramirez, two days after the Shelton email. “Contrary to recent press reports, the Commission’s decision on the search allegations was in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel.” This mirrors precisely what Shelton wanted the FTC to say.

A separate public FOIA document series shows that Facebook CEO Mark Zuckerberg was initially named in a draft 2011 consent decree with the FTC over privacy violations. You can see the track changes where Zuckerberg’s name and all references to him were crossed out. Zuckerberg came up again in the recent $5 billion settlement with Facebook over violations of that 2011 consent decree; the FTC admitted they took more money from Facebook to keep Zuckerberg from testifying in the case. If Zuckerberg had been named in the 2011 consent decree, such an arrangement would have been nearly impossible. Perhaps Zuckerberg’s personal exposure would have kept Facebook on a cleaner path; clearly the company is desperate—and willing to pay a fortune—to protect its founder and CEO.

The larger point is that the FTC appears in these documents as practically an adjunct of Big Tech. Staffers are in constant contact with lobbyists, accommodations are made for their interests, and advice is sought from them on how to best protect the industry from scrutiny. If you think this same agency is going to do a 180 and become a strict regulator bringing down the most powerful actors in our economy, you are far more optimistic than I.

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