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Internet Giants Face New Political Resistance in Washington

Google’s headquarters in Mountain View, Calif. “There needs to be more aggressive enforcement action on tech companies like Google,” says Senator Richard Blumenthal, a Democrat from Connecticut.Credit...Christie Hemm Klok for The New York Times

WASHINGTON — Last month, Facebook and Google came out forcefully against a bill that would hold companies accountable for hosting sex trafficking on their websites. They said that while they worked hard to combat sex trafficking, changing the law “jeopardizes bedrock principles of a free and open internet” that have been crucial to innovation for decades.

By this week, the two companies were hoping to reach a compromise with lawmakers, an acknowledgment that they could not stop the bill entirely because of strong political headwinds.

The shifting position illustrates the changing political reality in Washington for some of the country’s biggest technology companies. After years of largely avoiding regulation, businesses like Facebook, Google and Amazon are a focus of lawmakers, some of whom are criticizing the expanding power of big tech companies and their role in the 2016 election.

The attacks cover a smattering of issues as diverse as antitrust, privacy and public disclosure. They also come from both sides, from people like Stephen K. Bannon, President Trump’s former chief strategist, as well as Senator Elizabeth Warren, a liberal Democrat from Massachusetts.

Many of the issues, like revising antitrust laws, have a slim chance of producing new laws soon. But they have become popular talking points nonetheless, amplified by a series of missteps and disclosures by the companies, including Facebook telling Congress this month that fake accounts linked to Russia had bought over $100,000 in political ads on the service.

“There is much stronger agreement among me and my colleagues that there needs to be more aggressive enforcement action on tech companies like Google,” said Senator Richard Blumenthal, a Democrat from Connecticut and a sponsor of the sex trafficking bill.

The companies, recognizing the new environment in Washington, have started to fortify their lobbying forces and recalibrate their positions. In the last year, Amazon has added antitrust to its roster of issues, hiring a former senior Senate staff member who helped shape antitrust policies. Google has paid several outside lobbying firms to argue against the sex trafficking bill, according to recent federal filings.

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Senator Rob Portman, Republican from Ohio. He and Mr. Blumenthal drafted a bill that would let state and local authorities prosecute websites that host content related to sex trafficking. Facebook and Google strongly oppose the bill.Credit...Jonathan Ernst/Reuters

“We are disruptive, and that creates a lot of tension, concern, worry and jealousy and sometimes rightfully identifies real problems that need solutions,” said Ed Black, president of the Computer and Communications Industry Association, which represents Facebook, Google, Amazon and other tech companies.

Tech companies have faced political pressure in Europe for years. That is expected to continue, with regulators prepared to push a new set of proposals to get the tech companies to pay more in taxes.

The politics for the companies in the United States began to change after the 2016 presidential election, when attention turned to the role social media sites play in shaping public opinion. The scrutiny grew after companies struggled to eliminate fake content from their sites, raising fears that the platforms were too big to manage.

After Facebook revealed to Congress that it had accepted money for political ads from fake accounts linked to Russia, Senator Mark Warner, a Democrat from Virginia, started calling for new disclosure laws for the companies. He plans to begin writing a bill this week that requires Facebook and other social media companies to release funding sources for political ads, as is required for television broadcasters.

“This is uncharted territory,” Mr. Warner said in an interview. “The growth in political advertising is in the digital world, and if this is the most targeted and potentially most effective way into politics, the paid advertising rules that broadcasters rely upon should also apply in the social media world.”

Perhaps no issue in Washington has exposed the vulnerability of the tech companies as much as the sex trafficking bill. At the heart of the debate for the tech companies is a change to a 20-year-old law that prevents people from suing internet companies for things people post on websites. The companies, supported by some civil liberties groups, say the existing law has protected free speech and allowed internet companies to grow without fear of lawsuits.

The bill being debated, written by Senator Rob Portman, a Republican from Ohio, and Mr. Blumenthal, would allow state and local authorities to prosecute sites that host content related to sex trafficking. Their bill, which has bipartisan support from dozens of members in the Senate, would also enable people to sue websites.

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How Facebook Is Changing Your Internet

Behind the scenes, Facebook is involved in high-stakes diplomatic battles across the globe that have begun fragmenting the internet itself.

The following video contains a Facebook newsfeed. While information contained in it is based on real posts and real events, the feed and characters depicted within it have been created for illustrative purposes. Section 1: INTRO On the surface Facebook seems pretty straight forward. You use it to spy on exes and make people jealous about that vacation you took that was actually a disaster. But in becoming such a central part of day-to-day communications Facebook has transformed into its own geopolitical force. One in five minutes spent online are spent on Facebook. It’s a cyber kingdom with a population of over 2 billion. That power has made the leaders of many countries feel threatened. So governments have started to push back, attempting to regain some control over how their citizens communicate. Our story begins here — where the fight between companies and countries has begun fragmenting the internet itself. TITLE: How Facebook is Changing Your Internet To understand Facebook’s role in how the internet is breaking apart, you first have to leave the U.S. Zuck: “Its great to be here in Barcelona with you” Zuck: “Its great to be here in Berlin” Zuck: “Its great to be here in India” Zuck: “I Wanted to come to Legos first” Want to win an election in Ecuador? Are you trying to build a business in Brazil? Network in the Netherlands? Or are you trying to have your single go no. 1 in Senegal? It doesn’t matter where you are or what you’re doing — Facebook has become a necessity for real world success. Section 2: Expansion Model In part, that’s because the company has gone through extreme efforts to reach far flung corners of the globe. They’re putting satellites into space and developing internet-beaming solar powered drones. Here’s one taking off now. 1. Zuck: “Connectivity can’t be a privilege for just the rich and powerful. (It needs to be something that everyone shares, an opportunity for everyone.”) The company is subsidizing connectivity in the developing world with the mission to make Facebook accessible to all. Here on the outskirts of Nairobi, Facebook made a deal with a telecom provider and now customers of that company can use Facebook free of charge. For those users, Facebook might be their entire experience of the internet. “If you grew up and never had a computer and you’ve never used the internet and someone asked you if you wanted a data plan, you response would probably also be “what’s a data plan and why would I want one?” They call it “Free Basics” a kind of mini version of the internet that gives users free access to Facebook and a few other sites. They’re rolling it out in developing countries all around the world. So why does it matter if they gives away free Facebook access? KENYA - EX: 1 of Unintended Consequence Let’s say you live in Nairobi and your name is Phyl. You find some cheap handbags made of the finest chinese pleather and decide to sell them online. With Facebook offering free internet and just about everyone you know using the site, you decide there’s no need to pay for a shop, so you snap a photo of a blue bag, post it on your facebook page and soon customers from across East Africa are liking your photo. Some people even place orders, even a few who don’t have a data plan because they’re using Facebook’s free version of the internet. They’re happy because they found a bag and didn’t pay any sales tax or data fees. Your happy because you avoided renting a shop and got cash. So life is good. But then you realize, your entire economic existence is resting in the hands of a coder in a hoody who loves avocado toast sitting in Silicon Valley. The more you think about it, the more uncertainty there is. What would happen if Facebook decided to start taking a cut of your business? Or what would happen if the Kenyan government added fees to Facebook, would they pass it on to you? And what if you decided to cut them out and go straight to the customer yourself? How could you possibly have a chance against Facebook? Questions like these, have led some critics to compare Facebook’s dominance in places like Kenya to a form of digital colonialism. For Kenyans, these issues are still theoretical, but for others the issues are much more real. JAKARTA - Ex: of Unintended Consequence #2 Let’s say you live in Indonesia and you’re a devout Muslim man. You’re not convinced about this whole internet thing and you don’t want to spend a good chunk of your monthly income to get a connection. But your daughter keeps telling you, the internet thing really is a thing. So she sets you up with Facebook’s free version of the internet. Online you discover cat videos are surprisingly fun to watch. Then you see a video of your mayor. In it, he appears to say the Quran is lying. You can’t believe it. The video has millions of hits. NAT POP MAYOR AHOK: “Thus ladies and gentlemen, if you feel that you can’t vote for me because you’re afraid you will go to hell, you are being lied to, but that’s alright because this is your personal calling.” In response, you and hundreds of thousands of other people come out to protest calling for the mayor to be removed from office. Six-months-later he’s voted out of office. But the problem is — the video that got you so angry was edited to make the statement seem more provocative than it actually was. But you don’t know that. And you don’t even have the ability to seek out other information because Facebook’s free version of the internet only gives you access to a few sites. So you’re left only with — A Facebook reality. Section 3: Cause And Facebook’s reality is one that’s based on an algorithm. And that algorithm rewards engagement, which often means prioritizing inflammatory posts. Combine that with Facebook’s ambitious mission to bring internet to the developing world and you’ve got a problem. On one hand, Facebook’s efforts bring information to more of the world than ever before. On the other hand, you have the world as it looks today, where guys like your Uncle Joe bicker on behalf of candidates using rumors and propaganda. Trump Supporter: “Fuck political correctness, Build the wall!” This is a space where protests flare up around lies and measured voices are shouted down by radical ones. Duterte Nat Pop: “President Obama is a son of a whore” Trump nat pop: “We will have so much winning if I get elected” Wilders: There is lots of Moroccan scum in Holland Mr. Zuckerberg has said the company is working on squashing fake news, but the problem goes further into what gets promoted and why. But for Facebook, there isn’t a lot of incentive to cut down on the half truths and misconceptions. Its main goal is to hold its audience captive and grow its community ever larger. Written Quote on Screen: “Growth for the sake of growth is the ideology of the cancer cell.” At stake is the future of the internet itself. Facebook and only a handful of other major internet companies control our online lives, and each is aggressively trying to expand. Does the Kenyan government care if Facebook has allowed Phyl to circumnavigate their tax system? Does the Indonesian government care that 200,000 people are in their streets protesting? The answer is yes. Section 4: Effect The end result pits countries against companies. And not all governments are willing to cede power to Facebook. So they create new laws to govern their country’s digital space that cater to their interests. This goes against the way the internet was original supposed to work, as a way for people to share information without borders or rules. Now, Instead of one internet — there are many. Some are controlled by countries, others by companies. And everyone wants more control. Section 5: China Comparison There’s no better place to see the fragmentation of the internet than in China. Nat Pop Zuck: Xin Nian Kuai Le China’s internet is cut off from the rest of the world by filters that keep websites like Facebook from working. Tank Man Clip It’s sort of an anti-internet. Instead of facilitating free communication, it often works as a means to control that communication. Instead of connecting China to the world, it cuts it off. According to China’s internet, this event never even happened. But if you compare China’s internet to Facebook, some uncomfortable parallels emerge. While facebook lets you post plenty of articles and links from the greater internet, it also operates by its own rules. Just like China’s internet, a central authority tracks what you do and decides what you see. Most of the time your feed is hiding a baby photo from that girl Jane who may have been in your 4th grade class, but you can’t quite remember. But sometimes it’s hiding more. For example, these images were all banned from Facebook because they didn’t meet its community standards and now they’re in this video. We think it’s important to show them, but because we did, Facebook could now block our video. [Cut to black] OUTRO The question is: Whose values are we following? Should we cater to the values of Facebook’s algorithm and policies in order to be heard? Even understanding Facebook’s values can be difficult. In many places they promote free speech, yet in others, they are willing to consider censoring. They push for encryption in some places, but turn around and in other places to fight privacy laws that would damage their ad business. That inconsistency is driving fragmentation. And while Facebook claims to be connecting people, they’re doing it their way, with their rules. And you don’t really have a say in it. That’s because Facebook isn’t a democracy, it’s a business. And their business interests are changing the future of your internet. ENDIT

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Behind the scenes, Facebook is involved in high-stakes diplomatic battles across the globe that have begun fragmenting the internet itself.CreditCredit...Albert Gea/Reuters

Companies like Google and Facebook vehemently opposed the law when it was introduced, warning that it would expose web companies to numerous lawsuits because the actions of users are hard to police. The bill had provisions that would shield companies like Google and Facebook that have policies to combat sex trafficking, but the companies pushed back nonetheless.

Starting about two weeks ago, as politicians stepped up their attacks against their businesses, Facebook and Google realized that the political landscape had changed, according to two people with knowledge of the decisions who spoke on the condition of anonymity because the internal corporate decisions were private. So instead, the companies began trying to negotiate changes to the bill with Mr. Portman and other senators instead of trying to stop it entirely.

As of Tuesday, Facebook and Google were still trying to negotiate changes with Senate staff members. One effort, by Google, would block state attorneys general from prosecuting web platforms for hosting any third-party sites that aided sex trafficking. Google said the Justice Department should be the sole agency in charge of enforcing sex trafficking laws.

Mr. Portman has viewed enforcement by state attorneys general as the centerpiece of the legislation. He will not agree to weakening the enforcement role of local and state prosecutors, according to his spokesman, Kevin Smith.

“We’ll continue to engage members of Congress, anti-trafficking organizations and the industry to try and get to a resolution that addresses the problem without creating unintended side effects,” Susan Molinari, Google’s vice president of public policy, said in a statement.

Facebook appeared more eager to reach a deal with lawmakers, according to two Senate staff members and a tech industry official, who all said the company had expressed a willingness to allow state law enforcement. They spoke on the condition of anonymity because Facebook’s discussions with the lawmakers were private.

“We strongly believe that there is a legislative solution that can address this terrible problem while ensuring that the internet remains open and free and that responsible companies can continue to work to stop sex trafficking before it happens,” Erin Egan, a vice president of public policy at Facebook, said in a statement.

Senators have not held back their continued frustration with the tech industry, even as the position of the companies has changed somewhat. On Tuesday, the Senate commerce committee held an emotional hearing on bill, called the Stop Enabling Sex Traffickers Act, that included the mother of a teenage victim of trafficking.

The Senate invited Facebook and Google to testify but they declined, according to a member of the committee staff, instead sending their trade group, the Internet Association, to represent them.

“Silicon Valley holds itself out as being more than just an industry but a movement to make the world a better place,” Mr. Portman said in the hearing. “But selling human beings online is the dark side of the internet.”

Other issues related to tech companies have gained less traction. The earliest criticism of big tech companies came from left-leaning politicians and economists, whose ideas were largely dismissed by Washington lawyers and regulators as fringe ideas. But there are signs that the companies are starting to take them more seriously now as well.

The New America Foundation, a left-leaning research group in Washington that is financed by Google and Eric Schmidt, the chairman of its parent company, recently fired a division of antitrust scholars who had been critical of the company. Google has denied playing a role in the split. In California, big tech companies joined internet service providers like AT&T and Comcast — their adversaries on many policy issues — to fight a state broadband privacy law, fearing that it could embolden other states and federal regulators to write broader internet privacy rules.

Even Amazon’s recent move to buy Whole Foods Market for $13.4 billion generated political attention. Amazon and Whole Foods have a small portion of the overall grocery market, an important measure in antitrust decisions, and the deal quickly passed an antitrust review by the Federal Trade Commission.

But some lawmakers raised questions about Amazon’s deep pockets and its ability to undercut the prices of smaller competitors.

Senator Amy Klobuchar, a Democrat from Minnesota, pressed F.T.C. officials to justify their decision, arguing that the agency should have looked at longer-term competition factors. She has also introduced a bill that would force companies to prove that their deals would not be anticompetitive in the future.

We need to start adjusting to a world where we are right now,” said Ms. Klobuchar. “Antitrust laws haven’t been updated since the 1950s. In the 1950s, they didn’t envision a major search engine dominating the internet. They didn’t even have the internet.”

Follow Cecilia Kang on Twitter @ceciliakang.

A version of this article appears in print on  , Section B, Page 1 of the New York edition with the headline: Pressure Is Growing To Rein In Tech Titans. Order Reprints | Today’s Paper | Subscribe

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