The United States government has long had an interest in boosting its high technology sector, with manifold objectives: for soft power, espionage, and financial dominance, at least. It has accomplished this through tax incentives, funding some of the best universities in the world, lax antitrust and privacy enforcement, and — in some cases — direct involvement. The internet began as a Department of Defense project, and the government invests in businesses through firms like In-Q-Tel.

All of this has worked splendidly for them. The world’s technology stack is overwhelmingly U.S.-dependent across the board, from consumers through large businesses and up to governments, even those which are not allies. Apparently, though, it is not enough and the country’s leaders are desperately worried about regulation in Europe and competition from Eastern Asia.

The U.S. Federal Trade Commission:

Federal Trade Commission Chairman Andrew N. Ferguson sent letters today to more than a dozen prominent technology companies reminding them of their obligations to protect the privacy and data security of American consumers despite pressure from foreign governments to weaken such protections. He also warned them that censoring Americans at the behest of foreign powers might violate the law.

[…]

“I am concerned that these actions by foreign powers to impose censorship and weaken end-to-end encryption will erode Americans’ freedoms and subject them to myriad harms, such as surveillance by foreign governments and an increased risk of identity theft and fraud,” Chairman [Andrew] Ferguson wrote.

These letters (PDF) serve as a reminder to, in effect, enforce U.S. digital supremacy around the world. Many of the most popular social networks are U.S.-based and export the country’s interpretation of permissive expression laws around the world, even to countries with different expectations. Occasionally, there will be conflicting policies which may mean country-specific moderation. What Ferguson’s letter appears to be asking is for U.S. companies to be sovereign places for U.S. citizens regardless of where their speech may appear.

The U.S. government is certainly correct to protect the interests of its citizens. But let us not pretend this is not also re-emphasizing the importance to the U.S. government of exporting its speech policy internationally, especially when it fails to adhere to it on its home territory. It is not just the hypocrisy that rankles, it is also the audacity requiring posts by U.S. users to be treated as a special class, to the extent that E.U. officials enforcing their own laws in their own territory could be subjected to sanctions.

As far as encryption, I have yet to see sufficient evidence of a radical departure from previous statements made by this president. When he was running the first time around, he called for an Apple boycott over the company’s refusal to build a special version of iOS to decrypt an iPhone used by a mass shooter. During his first term, Trump demanded Apple decrypt another iPhone in a different mass shooting. After two attempted assassinations last year, Trump once again said Apple should forcibly decrypt the iPhones of those allegedly responsible. It was under his first administration in which Apple was dissuaded from launching Advanced Data Protection in the first place. U.S. companies with European divisions recently confirmed they cannot comply with E.U. privacy and security guarantees as they are subject to the provisions of the CLOUD Act enacted during the first Trump administration.

The closest Trump has gotten to changing his stance is in a February interview with the Spectator’s Ben Domenech:

BD: But the problem is he [the British Prime Minister] runs, your vice president obviously eloquently pointed this out in Munich, he runs a nation now that is removing the security helmets on Apple phones so that they can—

DJT: We told them you can’t do this.

BD: Yeah, Tulsi, I saw—

DJT: We actually told him… that’s incredible. That’s something, you know, that you hear about with China.

The red line, it seems, is not at a principled opposition to “removing the security helmet” of encryption, but in the U.K.’s specific legislation. It is a distinction with little difference. The president and U.S. law enforcement want on-demand decryption just as much as their U.K. counterparts and have attempted to legislate similar requirements.

While the U.S. has been reinforcing the supremacy of its tech companies in Europe, it has also been propping them up at home:

Intel Corporation today announced an agreement with the Trump Administration to support the continued expansion of American technology and manufacturing leadership. Under terms of the agreement, the United States government will make an $8.9 billion investment in Intel common stock, reflecting the confidence the Administration has in Intel to advance key national priorities and the critically important role the company plays in expanding the domestic semiconductor industry.

The government’s equity stake will be funded by the remaining $5.7 billion in grants previously awarded, but not yet paid, to Intel under the U.S. CHIPS and Science Act and $3.2 billion awarded to the company as part of the Secure Enclave program. Intel will continue to deliver on its Secure Enclave obligations and reaffirmed its commitment to delivering trusted and secure semiconductors to the U.S. Department of Defense. The $8.9 billion investment is in addition to the $2.2 billion in CHIPS grants Intel has received to date, making for a total investment of $11.1 billion.

Despite its size — 10% of the company, making it the single largest shareholder — this press release says this investment is “a passive ownership, with no Board representation or other governance or information rights”. Even so, this is the U.S. attempting to reassert the once-vaunted position of Intel.

This deal is not as absurd as it seems. It is entirely antithetical to the claimed free market capitalist principles common to both major U.S. political parties but, in particular, espoused by Republicans. It is probably going to be wielded in terrible ways. But I can see at least one defensible reason for the U.S. to treat the integrity of Intel as an urgent issue: geology.

Near the end of Patrick McGee’s “Apple in China” sits a section that will haunt the corners of my brain for a long time. McGee writes that a huge amount of microprocessors — “at least 80 percent of the world’s most advanced chips” — are made by TSMC in Taiwan. There are political concerns with the way China has threatened Taiwan, which can be contained and controlled by humans, and frequent earthquakes, which cannot. Even setting aside questions about control, competition, and China, it makes a lot of sense for there to be more manufacturers of high-performance chips in places with less earthquake potential. (Silicon Valley is also sitting in a geologically risky place. Why do we do this to ourselves?)

At least Intel gets the shine of a Trump co-sign, and when has that ever gone wrong?

Then there are the deals struck with Nvidia and AMD, whereby the U.S. government gets a kickback in exchange for trade. Lauren Hirsch and Maureen Farrell, New York Times:

But some of Mr. Trump’s recent moves appear to be a strong break with historical precedent. In the cases of Nvidia and AMD, the Trump administration has proposed dictating the global market that these chipmakers can have access to. The two companies have promised to give 15 percent of their revenue from China to the U.S. government in order to have the right to sell chips in that country and bypass any future U.S. restrictions.

These moves add up and are, apparently, just the beginning. The U.S. has been a dominant force in high technology in part because of a flywheel effect created by early investments, some of which came from government sources and public institutions. This additional context does not undermine the entrepreneurship that came after, and which has been a proud industry trait. In fact, it demonstrates a benefit of strong institutions.

The rest of the world should see these massive investments as an instruction to build up our own high technology industries. We should not be too proud in Canada to set up Crown corporations that can take this on, and we ought to work with governments elsewhere. We should also not lose sight of the increasing hostility of the U.S. government making these moves to reassert its dominance in the space. We can stop getting steamrolled if we want to, but we really need to want to. We can start small.

Last time I checked in on how the second Trump administration was going to approach the globally-relevant business of antitrust enforcement, I was cautiously optimistic. Some key trust-busting suits were filed under the first Trump administration and, while sloppy, there seemed to be seeds planted for a continuation of a more active FTC. I knew this administration would be catastrophic, and even my tiny speck of optimism was misplaced.

Josh Sisco, of Bloomberg, in a profile of FTC chair Andrew Ferguson:

His concerns, too, may also be resolved with more novel compromises. In May Ferguson launched an investigation into ad agencies, alleging that they colluded in politically motivated ad boycotts, a bugbear of conservative media and X.com owner Elon Musk in particular.

Shortly after, the FTC signed off on Omnicom Group’s $13.5 billion buyout of rival Interpublic, a tie-up that would create the world’s biggest ad agency. To secure the regulator’s approval, the two groups promised they wouldn’t engage in any such boycotts in the future, but made no economic concessions.

That deal may prove to be a template for the FTC under Ferguson. By focusing attention on the alleged ad boycotts and leaving the underlying businesses untouched, the terms appealed to the MAGA faithful and corporate interests.

Sisco can call this a “novel compromise” all he wants, but this is nothing more than a perverted gift. Under Khan, Ferguson also objected to the FTC’s involvement in regulating non-compete agreements, saying it was an overreach for the commission, but has used his power under the Trump administration to go after transgender care because of course he has.

Karl Bode, of Techdirt, has been keeping tabs on how they have been faring on matters of competition:

That was, unsurprisingly, all bullshit. Six months into Trump’s second term and it has been a nonstop nightmare for consumer protection, corporate oversight, labor law, regulatory independence, and already underwater activist battles against media consolidation and monopoly power.

[…]

The only remaining remnants of Lina Khan’s antitrust legacy has been the fact that the Trump administration hasn’t killed several of her prominent antitrust cases against tech giants like Meta and Google. But again, this isn’t because Trump wants to genuinely rein in corporate power, it’s because he wants to maintain leverage over companies that control the flow of online information.

As I wrote over the weekend, this administration has kneecapped the U.S. Privacy and Civil Liberties Oversight Board, one of the few checks on overreaches by the country’s federal government. All of these things have international implications. That board, for example, is responsible for the court that handles privacy complaints from Europeans. The merger of those two ad agencies means less competition worldwide. But Ferguson has affirmed the key conservative pillars of being supposed victims of the world around them and doing harm to trans people. That is his job, apparently. Being a trustbuster? Not so much.

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Out of the U.S. today comes a slew of new proposed restrictions against data brokers and their creepy practices.

The Consumer Financial Protection Bureau:

[…] The proposed rule would limit the sale of personal identifiers like Social Security Numbers and phone numbers collected by certain companies and make sure that people’s financial data such as income is only shared for legitimate purposes, like facilitating a mortgage approval, and not sold to scammers targeting those in financial distress. The proposal would make clear that when data brokers sell certain sensitive consumer information they are “consumer reporting agencies” under the Fair Credit Reporting Act (FCRA), requiring them to comply with accuracy requirements, provide consumers access to their information, and maintain safeguards against misuse.

The Federal Trade Commission:

The Federal Trade Commission will prohibit data broker Mobilewalla, Inc. from selling sensitive location data, including data that reveals the identity of an individual’s private home, to settle allegations the data broker sold such information without taking reasonable steps to verify consumers’ consent.

And also the Federal Trade Commission:

The Federal Trade Commission is taking action against Gravy Analytics Inc. and its subsidiary Venntel Inc. for unlawfully tracking and selling sensitive location data from users, including selling data about consumers’ visits to health-related locations and places of worship.

Both of the proposed FTC orders require these businesses to “maintain a sensitive location data program designed to develop a list of sensitive locations and prevent the use, sale, license, transfer, sharing, or disclosure of consumers’ visits to those locations”. These include, for example and in addition to those in the above quotes, shelters, labour union offices, correctional facilities, and military installations. This order was previewed last month in Wired.

As usual, I am conflicted about these policies. While they are yet another example of Lina Khan’s FTC and other government bureaucrats cracking down on individually threatening data brokers, it would be far better for everyone if this were not handled on a case-by-case basis. These brokers have already caused a wealth of damage around the world, and only they are being required to stop. Other players in the rest of the data broker industry will either self-govern or hope they do not fall into the FTC’s crosshairs, and if you believe the former is more likely, you have far greater faith in already-shady businesses than I do.

There is another wrench in these proposals: we are less than two months away from a second Trump presidency, and the forecast for the CFPB looks unfriendly. It was kneecapped during the first administration and it is on the chopping block for those overseeing a advisory committee masquerading as a government agency. The future of the FTC is more murky, with some indicators it will continue its current path — albeit from a Republican-skewed perspective — while others suggest a reversal.

The centring of the U.S. in the digital activity of a vast majority of us gives it unique power on privacy — power it has, so far, used in only very small doses. The future of regulatory agencies like these has relevance to all of us.

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Leah Nylen, Josh Sisco, and Dina Bass, Bloomberg:

The US Federal Trade Commission has opened an antitrust investigation of Microsoft Corp., drilling into everything from the company’s cloud computing and software licensing businesses to cybersecurity offerings and artificial intelligence products.

Seems like a lot of people who thought Microsoft would escape antitrust investigations in the U.S. might have been a little too eager.

This kind of scrutiny is a good thing, and long overdue. Yet one of the unavoidable problems of reducing the influence of these giant corporations now is the pain it is going to cause — almost by definition. If a corporation is abusing its power and scale to such a degree the FTC initiates an investigation, unwinding that will have — to put it mildly — an effect. We are seeing this in the Google case. This is true for any situation where a business or a group of people with too much influence needs correcting. That does not mean it should not happen.

It is true that Microsoft’s products and services are the backbone of businesses and governments the world over. These are delivered through tight integrations, all of which encourages further fealty to this singular solution. For example, it used its dominant position with Office 365 to distribute Teams for free, thereby making it even harder for other businesses to compete. It then leveraged Outlook and Teams to boost its web browser, after doing the same with Windows. If it charged for Teams out of the gate, this would be having a different discussion.

Obviously, the FTC’s concerns with Microsoft’s business practices stretch well beyond bundling Teams. According to this Bloomberg report, the Commission is interested in cloud and identity tying, too. On the one hand, it is enormously useful to businesses to have a suite of products with a single point of management and shared credentials. On the other hand, it is a monolithic system that is a non-starter for potential competitors.

The government is understandably worried about the security and stability risks of global dependence on Microsoft, too, but this is odd:

The CrowdStrike crash that affected millions of devices operating on Microsoft Windows systems earlier this year was itself a testament to the widespread use of the company’s products and how it directly affects the global economy.

This might just be Bloomberg’s contextualizing more than it is relevant to the government’s position. But, still, it seems wrong to me to isolate Windows as the problem instead of Crowdstrike itself, especially with better examples to be found in the SolarWinds breach and its track record with first-party security.

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The U.S. Federal Trade Commission:

The Federal Trade Commission is taking action against software maker Adobe and two of its executives, Maninder Sawhney and David Wadhwani, for deceiving consumers by hiding the early termination fee for its most popular subscription plan and making it difficult for consumers to cancel their subscriptions.

A federal court complaint filed by the Department of Justice upon notification and referral from the FTC charges that Adobe pushed consumers toward the “annual paid monthly” subscription without adequately disclosing that cancelling the plan in the first year could cost hundreds of dollars. Wadhwani is the president of Adobe’s digital media business, and Sawhney is an Adobe vice president.

The inclusion of two Adobe executives as co-defendants is notable, though not entirely unique — in September, the FTC added three executives to its complaint against Amazon, a move a judge recently upheld.

The contours of the case itself bear similarities to the Amazon Prime one, too. In both cases, customers are easily coerced into subscriptions which are difficult to cancel. Executives were aware of customer complaints, according to the FTC, yet they allegedly allowed or encouraged these practices. But there are key differences between these cases as well. Amazon Prime is a monthly cancel-anytime subscription — if you can navigate the company’s deliberately confusing process. Adobe, on the other hand, offers three ways to pay for many of its products: on a monthly basis which can be cancelled at any time, on an annual basis, or on a monthly basis locked into an annual contract. However, it predominantly markets its products with the latter option, and preselects it when subscribing. That is where the pain begins.

The difficulty and cost of cancelling an Adobe subscription is legendary. It is right up there with gyms for how badly it treats its customers. It has designed a checkout process that defaults people into an annual contract, and a cancellation workflow which makes extricating oneself from that contract tedious, time-consuming, and expensive. If Adobe wanted to make it obvious what users were opting into at checkout, and easy for them to end a subscription, it could have designed those screens in that way. Adobe did not.

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