Pluralistic: 01 Jun 2021

Today's links

The Canadian flag; in each of the red side-bars, there is a leaning telephone pole trailing cut wires; in place of the maple leaf, there is a giant pair of scissors whose blades are superimposed with the wordmarks for the CRTC in French and English.

Canadian telco monopolists run the show (permalink)

If there's one lesson you'd hope governments would take away from the pandemic and the lockdown, it's that good internet policy – universal access at fair prices, managed in the public interest – is a prerequisite for all good policy.

Canada didn't get the memo.

Last week, the CRTC – Canada's telecoms regulator – released its long-awaited decision on the wholesale prices paid by small, innovative ISPs to access the facilities of Canada's telecoms monopolists.

It's the worst such decision in history.

Ian Scott (a former teleco lobbyist that Justin Trudeau's Liberals put in charge of the CRTC) shocked the nation by reversing the Commission's own policy, dramatically raising wholesale prices, signing a death-warrant for Canada's entire independent ISP sector.

The decision means hundreds of millions of dollars in windfall profits for the Big Three Canadian telco monopolists, and ends ambitious plans by Canada's wonderful indie ISPs like Teksavvy to lay both rural and urban fiber.

Even worse: Scott has reversed the CRTC's order for the Big Three to refund millions in price-gouged overcharges to indie ISPs, despite a vast public record that indicates that this money was illegally extracted.

It's the latest in a string of terrible internet policy decisions from Scott's CRTC, including a rule that indie telcos that bid on wireless spectrum must also strike deals with the Big Three monopolists, guaranteeing that such efforts will lose money and fail.

Ian Scott is a dingo babysitter, a fox in the henhouse, a gator in the swamp. Teksavvy is calling on the Liberals to #FireIanScott.

According to the Toronto Star, the Liberal government isn't happy with Scott's decision, but it's hard to imagine them taking action on this issue, given the Liberals' idiotic internet regulation attempts.

Trudeau will be remembered as the first Liberal PM to be stupider about the internet than the Tories. After all, his first broken election promise was the repeal of Bill C-51, the Tories' mass surveillance act, which he whipped his caucus to vote for.

Today, the Liberals are pushing hard for Bill C-10, an internet censorship bill that has far-reaching implications for everything from podcasts to blog posts, despite government misinformation to the contrary.

The Trudeau reality-distortion-field is in full effect with Bill C-10, with Liberal spin-doctors having convinced Canadians that opposition to Bill C-10 comes from Tory simps who've been conned about the true extent of the bill.

But C-10 really does reach into every aspect of Canadians' online lives, and will empower future government appointees to inflict harms even greater than the damage Ian Scott is dealing to the nation's digital future.

Worse, the NDP and Bloc Quebecois have joined with with the Liberals in supporting this bill, refusing to back amendments that would have repaired many of the serious defects in the language.

Assuming that anything the Tories want to do to the internet is fucking awful is a pretty good rule of thumb, but not this time. Not only are they right about the potential harms of C-10, but they're also poised to weaponise it after their next election win.

After all, as bad as schmucks like Ian Scott are, Tory appointees are even worse: just imagine how PM Doug Ford (or worse, PM Faith Goldy) would use these censorship powers.

(Image: Hardyplants, Famartin, CC BY-SA, modified)

A shell game con artist; his head has been replaced with the Android robot's head, and the pea under the shell has been replaced with a Google Maps location pin.

Google cheats on location privacy (permalink)

Arizona AG Mark Brnovich is suing Google for lying to its users about location privacy, tracking them even after they opted out. A newly released set of unredacted Google records are explosive evidence of the company's deception.

The documents show that Google deliberately engineered its products so that you couldn't get your own location, or share it with an app, without also giving your location data to Google, too.

They reveal a system so deliberately tangled that even senior Google product managers who worked on location systems didn't understand how they worked.

They also reveal internal message board conversations between Googlers who were outraged to learn how hard it was to disable location tracking.

A thread by Jason Kint of Digital Content Next gives chapter and verse on the revelations from the document drop:

What I found particularly striking, though, was the history of location privacy in Google's settings. At one point, the company made it easy to turn off location tracking, and then was aghast when users disabled tracking in droves.

A chart showing the location tracking opt-outs after Google made it easy to disable location tracking in 2017.

This is surprising given how strong the power of defaults is: most users never change any settings. The fact that users disabled location tracking widely and immediately speaks volumes about how much people value location privacy.

But despite this "revealed preference" (to use econo-jargon), Google's response wasn't to turn location tracking off by default – rather, it responded by using dark patterns to turn tracking back on and make it nearly impossible to disable again.

The location tracking opt-outs were smeared out across multiple sets of preference screens, and the company leaned hard on its mobile device partners to follow suit. The names of the manufacturers who caved are still redacted in the docs, except for LG.

This is a prime example of consent theater: the company asks you for your consent to creepily follow you 24/7. You say no, so it asks again, in such a convoluted way that you don't even realize you've said yes. Talk about "manufacturing consent."

It's worth asking why Google was so thirsty for our location. The company will claim that it's because location tracking improves search results, which is doubtless true; location data lets them give good results for "pizza" instead of making you search for "pizza nyc."

But that's not the main event from a business perspective. As the UK Competition and Markets Authority Report on ad-tech made clear, Facebook and Google have monopolized the ad market by offering "attribution."

What's "attribution?" It's when a company shows you an ad and then tracks every click you make, every location you visit and every purchase you make (merging data from payment processors) to prove to advertisers that you bought something after seeing an ad for it.

Attribution solves the age-old advertising problem, famously articulated by the department store mogul John Wanamaker: "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

That may be great news for advertisers, but who gives a shit? The fact that advertisers' lives are made easier if I let them follow me around 24/7 forever to see if their ads worked is not my problem.

I mean, advertisers' lives would be easier if, instead of showing you an ad, they could reach inside your bank-account, withdraw some of your money, and send you a product because they think you need it. We'd be idiots to let them, though.

Advertisers are willing to pay huge premiums for attribution tracking (despite the fact that, as with the entire ad-tech stack, attribution data is full of Big Tech frauds that make advertising look far more effective than it ever is or will be).

That's why Google was so desperate to keep location turned on – why it was willing to commit outright fraud and to bully its partners into following suit.

One of the major promises of a Google antitrust breakup is the possibility of ending attribution. Unfortunately, that's not what many competition regulators view as the "solution to "the attribution problem."

Indeed, the CMA's report sees the major attribution problem as being a lack of competition among attributors. Rather than allowing Facebook and Google to monopolize attribution, the CMA proposes to let everyone get in on the game.

This is not what we need from our competition policy. We don't want competition to see which companies can inflict the most human rights abuses at the lowest cost.

The first page of the DC antitrust suit against Amazon, superimposed with the Prime logo; a vintage newspaper caricature of Roosevelt as a club-swinging trustbuster is superimposed on the Prime wordmark so that he appears to be about to bat the dot off the 'i' in 'Prime.'

The antitrust case against Prime (permalink)

The starting gun on Big Tech trustbusting was fired in 2017, when Lina Khan, then a law student (now an FTC trustbuster!) published "Amazon's Antitrust Paradox," a law-review article showing how Amazon formed a monopoly without legal trouble.

The key was a Reagan-era shift in antitrust policy, based on the theories of the Nixonite criminal Robert Bork. Bork held that the only time we should fight monopolies is when they inflicted "consumer welfare" harms, by driving up prices.

That meant that monopolies that made prices go down – by abusing their workers and suppliers, rather than their customers – were safe from antitrust enforcement. Borkism was hugely popular with wealthy people, who bankrolled its global expansion.

Every president since Reagan has embraced and furthered the "consumer welfare" doctrine, which meant that when Amazon tapped into the capital markets for billions, it was able to safely offer prices below their wholesale cost, using investor cash for subsidies.

Then, after it had extinguished all its competitors, it could end its subsidy and switch it to its suppliers – forcing them to cut their margins and wages to unsustainable levels to maintain those prices.

This was "Amazon's antitrust paradox": it could inflict vast monopoly harms on the economy but never face antitrust enforcement because it harmed workers and other businesses, not "consumers."

Now that the Big Tech trustbusting movement is in full swing, state attorneys general and the feds (DoJ and FTC) have brought antitrust actions against GAFAM, including multiple suits against Amazon.

One of the more interesting suits is DC Attorney General Karl Racine's cast against Amazon:

As Matt Stoller explains, the DC-Amazon case has a better chance of succeeding than any of the other antitrust actions brought so far, because it accuses Amazon of driving up prices.

To understand how that works, you need to understand the role Amazon Prime plays in the company's business. Jeff Bezos described Prime as "a moat around our best customers." Once you pay for fast, flat-rate delivery, you're powerfully incentivized to order from Amazon.

Locking customers into buying from Amazon locks businesses into selling on Amazon. That allows Amazon to structure its own market – and the markets of all other businesses.

For example, Amazon gives search preference to Prime-eligible items. Realistically, if you're an Amazon seller and you're not in the first screen or two of results, you will not make any sales.

(Incidentally, if you've ever seen those breakdowns of the ad-tech market that show Amazon making billions from ad-sales and wondered how that worked, it's not actual ad-sales revenue in the way that Google and Facebook get paid for ads)

(Those "ad-sale" billions are the fees Amazon charges its own sellers for search-results preference – to have a "sponsored product" show up in the results when you search on Amazon – it's not an "ad" – it's a "bribe")

If you want to be Prime eligible, you have to sign up for a lot of conditions: you have to promise you won't sell more cheaply anywhere else, you have to let Amazon pack and ship your products, and you have to give up commissions of up to 45% on each sale.

To recap: Prime means you have to sell on Amazon because that's where everyone buys. To sell on Prime, you have to give Amazon 45% of the sale-price, and you can't sell more cheaply anywhere else.

What that means is that every merchant that wants to sell on Amazon (which is every merchant that wants to sell goods on the internet outside of China) has to charge 35-45% more for its products, and not just on Amazon, but everywhere.

The "free shipping" you get on Prime items is actually paid for by a one-third markup that everyone who buys anything on Amazon, or in any other store, pays.

In other words, Amazon hasn't just used its monopoly power to raise prices on its own customers, but on everyone's customers. And that is the one thing that US antitrust law still vigorously punishes.

This day in history (permalink)

#15yrsago Canadian MP has .CA registry censor site that criticized him

#10yrsago Sensation: Acerbic novel about pop culture and popular madness as functions of parasitic manipulation

#5yrsago United Arab Emirates hacked UK journalist

#5yrsago Untangling the Web: the NSA’s supremely weird, florid guide to the Internet

#5yrsago Company Town: Madeline Ashby’s tale of sex and Singularity cults is a locked-door mystery at sea

#5yrsago Geek Feminist Revolution: Kameron Hurley’s measured essays on the importance of rage

#1yrago After Jim Crow, broken windows

#1yrago Australia caves on "robodebt"

Colophon (permalink)

Today's top sources: Peter Nowack.

Currently writing:

  • Spill, a Little Brother short story about pipeline protests. Last Thursday's progress: 306 words (3117 words total).

  • A short story about consumer data co-ops. PLANNING

  • A Little Brother short story about remote invigilation. PLANNING

  • A nonfiction book about excessive buyer-power in the arts, co-written with Rebecca Giblin, "The Shakedown." FINAL EDITS

  • A post-GND utopian novel, "The Lost Cause." FINISHED

  • A cyberpunk noir thriller novel, "Red Team Blues." FINISHED

Currently reading: Analogia by George Dyson.

Latest podcast: How To Destroy Surveillance Capitalism (Part 06)
Upcoming appearances:

Recent appearances:

Latest book:

Upcoming books:

  • The Shakedown, with Rebecca Giblin, nonfiction/business/politics, Beacon Press 2022

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