More DSA Regulator Questions About Social Media Recommender Algorithms

Report from Euractiv

In Brief – The European Commission has announced that Snapchat, TikTok and YouTube have received requestions from Digital Services Act (DSA) regulators to provide information explaining how their recommender systems are designed and use generative AI to direct content to users. The DSA is the EU's landmark law directing how digital platforms engage in content moderation and the Commission directly regulates the largest platforms, who are designated as “VLOPs”. The Commission’s questions focus on how recommender systems may drive users to extreme or harmful content, what controls are in place to allow users to opt out of these systems, and the effectiveness of those controls. All three platforms are being asked about harmful content related to "civic discourse", such as information about elections, while YouTube and Snap are also asked about protecting youths and mental health, and Snap alone about illicit drugs. The companies have until November 15 to produce documents based on their DSA compliance efforts.

Context – Placing the Commission in charge of regulating the VLOPs, platforms with at least 45 million European users, was a key DSA provision. No more deferring to small state regulators in Ireland under the “one stop shop” of the GDPR. VLOPs also face stricter criteria for dealing with objectionable material. The Commission initially designated 19 platforms as VLOPs, later added three popular online pornography sites to the roster, and then ecommerce platforms Temu and Shein. The Commission has already opened full scale DSA investigations of five VLOPs: X, TikTok, Facebook, Instagram, and AliExpress. Meta was not included this time because the questions are already part of their DSA investigation. TikTok already faces some too. While member state DSA regulators got underway months after Commission regulators, Ireland’s DSA agency recently asked 12 major platforms based in Ireland about their reporting processes for illegal content, including mid-size services like Etsy not designated as VLOPs, but several VLOPs as well. Apparently the more regulators the better.

Epic Files Another Antitrust Lawsuit Against Google (and Samsung)

Report from The Hill

In Brief – Epic Games, which defeated Google in an antitrust trial last December, has filed a lawsuit alleging that Google and Samsung are violating federal antitrust law by conspiring the create an “Auto Blocker” feature designed to stop smartphone users from downloading apps from third-party app stores. Google and Samsung both responded to the suit with statements that Google did not request that Samsung design the feature, and both argued that downloads from unknown sources on the internet have long been recognized as a security risk and giving users the capability to block such downloads by default is a pro-consumer capability. The Auto-Blocker blocks a wide range of downloads, including apps that don’t come from Samsung’s Galaxy Store and Google’s Play Store. The default setting on new Samsung phones is on but users are asked during initial setup if they want it on or off, and can disable it temporarily or permanently later.

Context – Epic Games filed antitrust suits against both Apple and Google in 2020 alleging that their 30% commissions were monopoly rents. Apple largely prevailed in court. Google decisively lost. It struck many observers as odd that the “closed” Apple ecosystem with a larger market share was on the right side of US antitrust law while the more open Android was not. But Apple had a bench trial while Google faced a jury of individuals potentially primed against Big Tech, and Apple’s closed system was straightforward and had long claimed to protect user security while Google’s system was complicated. Judge James Donato has issued his remedy order requiring Google to fully open Android to third-party app stores and prohibits any Google conduct to incent device makers to undermine those competitors, so evidence to that effect will be key here. There are many moving parts on app store regulation in many global markets, including the European Commission’s DMA regulators determining whether Apple’s and Google’s new EU app store rule comply with the new law, and the federal judge who decided the Epic v Apple case is being asked to make a similar decision to Donato's on Apple’s US anti-steering compliance plan.

Federal Judge Rejects Amazon Effort to Dismiss FTC’s Antitrust Lawsuit

Report from Bloomberg

In Brief – US District Judge John Chun, who is overseeing a collection of antitrust cases targeting Amazon’s marketplace practices, has rejected the company’s bid to have the Federal Trade Commission’s major complaint dismissed. The judge’s order, which does discard some charges, was sealed for a few days to give the two sides time to ask for redactions. However, on the big question of whether the main federal charges will proceed, the answer is yes. The order permits the FTC to continue prosecuting its claims that the company violated federal antitrust laws, while tossing out some of the claims brought by state attorneys general about alleged breaches of state laws. Chun said that Amazon's arguments that its marketplace policies are pro-competitive need to be argued at the trial that is currently scheduled for October 2026.

Context – When news of Judge Chun’s mixed ruling broke there were reports that it was a win or Amazon. That was fake news. Mixed results on motions to dismiss are par for the course, especially with complaints involving several allegations and theories. For example, it was huge news in 2021 when a federal judge completely dismissed the FTC’s antitrust complaint alleging that Meta monopolized the social media market by acquiring Instagram and WhatsApp. And even that shock result was overturned when the judge later accepted the FTC’s amended complaint. Partial dismissals are generally not news and mean things move forward. For example, Google was able to get some State AG charges dismissed from the DoJ’s search-related antitrust complaint, but the suit proceeded. Google ended up losing. Sometimes judges do dismiss entire cases. eBay recently had a DoJ complaint tossed. Chun himself recently dismissed an antitrust case targeting Amazon. It was brought by consumers and the judge ruled that their claims of harm as “indirect purchasers” of Amazon logistics improperly applied federal antitrust law. However, this decision adds to earlier rulings by Chun and a California judge that allow suits to proceed that allege Amazon illegally pushed sellers to raise their prices on other online forums.

Judge Orders Google to Open Android to Competing App Stores in US

Report from VentureBeat

In Brief – Federal Judge James Donato has issued an order requiring Google to open its Android operating system to third-party app stores following last December’s jury verdict that Google illegally monopolized Android app distribution and in-app payments. Donato gives Google eight months to implement changes allowing third-party developers to operate alternative app stores, distribute their app store apps within Google’s Play Store, and give their app stores access to all the apps in the Play Store. Developers are also allowed to use their own in-app payments alternatives. Finally, the judge prohibits Google from using any incentives or policies to encourage developers and device manufacturers to preference Google apps, including the Play Store, or undermine third-party apps or app stores. The order applies only to the US market, runs for three years, and Epic and Google will collaborate to appoint a three-person technical committee to handle disputes. Google responded that they would appeal the original verdict, saying it was based on a “flawed finding” that Android was a market itself and ignores competition between Android and Apple, and that they will ask for the remedy plan, which they claim will cause unintended harm to consumers, developers, and device makers, to be paused while they appeal.

Context – Epic Games filed antitrust suits against both Apple and Google in 2020 alleging that their 30% commissions were monopoly rents. Apple largely prevailed in court. Google decisively lost. It struck many observers as odd that the “closed” Apple ecosystem with a larger market share was on the right side of US antitrust law while the more open Android was not. But Apple had a bench trial while Google faced a jury of individuals potentially primed against Big Tech, and Apple’s closed system was straightforward and had long claimed to protect user security while Google’s system was complicated. The judge who oversaw the Epic v Apple case is currently being asked to make a similar ruling on Apple’s anti-steering policies, while both companies are facing demands to open up in Europe, Japan, South Korea and other markets.