Hillicon Valley — States probe the tech giants

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Today is Friday. Welcome to Hillicon Valley, detailing all you need to know about tech and cyber news from Capitol Hill to Silicon Valley. Subscribe here: thehill.com/newsletter-signup.

Follow The Hill's tech team: Chris Mills Rodrigo (@millsrodrigo) and Rebecca Klar (@rebeccaklar_).

State investigations into tech giants dominated the news Friday. First, a coalition of states led by New York Attorney General Letitia James (D) appealed a district judge's dismissal of an antitrust case against Facebook. That group is also reportedly probing Meta's virtual reality unit Oculus.

Second, a less-redacted version of a complaint filed by a group of AGs led by Texas' Ken Paxton (R) was unsealed Friday. Highlights of the complaint include an allegation that Google's Sundar Pichai and Facebook's Mark Zuckerberg signed off on an ad deal dubbed Jedi Blue.

Let's jump into the news.

More Meta, more problems

A bipartisan coalition of state attorneys general are pushing forward with their antitrust probes into Facebook parent company Meta.

The group has filed an appeal in their case based on the company's prior acquisitions and a reported new joint inquiry with the federal government on the company's virtual reality unit.

The appeal: New York Attorney General Letitia James (D) led a coalition of 48 attorneys general Friday in filing an appeal arguing that a district court judge's dismissal of their case against Facebook, initially filed in December 2020, was in error.

"Time and again, the social media giant has used its market dominance to force small companies out of business and reduce competition for millions of users. We're filing this appeal with the support of almost every state in the nation because we will always fight efforts to stifle competition, reduce innovation, and cut privacy protections, even when we face a goliath like Facebook," James said in a statement.

The latest effort by the states comes after a judge on Tuesday denied Facebook's motion to dismiss the Federal Trade Commission's (FTC) complaint against it filed at the same time as the states'.

New probe: As the attorneys general and FTC push forward with their cases, they're also reportedly probing Meta's virtual reality unit, Oculus, over potential anti-competitive practices, Bloomberg reported Friday.

The FTC and a group of states led by New York have questioned outside developers that make Oculus apps in recent months, people with knowledge of the matter told Bloomberg.

Read more here.

Google-Facebook mess

Facebook's Mark Zuckerberg and Google's Sundar Pichai personally approved a deal that would see the social media giant gain an advantage in the search engine's ad auctions, according to a group of state attorneys general.

The 2018 arrangement potentially gave Facebook illegal advantages, the attorneys general from 15 states and Puerto Rico, led by Texas's Ken Paxton (R), allege in court filings unsealed Friday.

The coalition initially filed its antitrust lawsuit alleging that Google holds a monopoly over the advertising technology market in 2020, then filed an updated complaint in November. The document released Friday is a less redacted version of the newer complaint.

It includes internal emails showing that the deal to limit header bidding practices, named Jedi Blue, was negotiated by top officials, including Zuckerberg and Facebook COO Sheryl Sandberg. The existence of the deal had already been revealed in a previous iteration of the case.

A Google spokesperson defended the agreement in a statement to The Hill on Friday while denying that Pichai personally greenlighted it.

"We sign hundreds of agreements every year that don't require CEO approval, and this was no different," Peter Schottenfels of Google said. "And contrary to AG Paxton's claims, the fact of this agreement was never a secret - it was well-publicized."

A spokesperson for Meta, the newly formed parent company of Facebook, also defended the agreement.

Read more.



YouTube took action against conservative commentator Dan Bongino's channel Friday, suspending it for violating the platform's COVID-19 misinformation policy and demonetizing it for at least 30 days.

The week-long posting suspension stems from a video where Bongino said that masks are "useless" in stopping the spread of the disease.

YouTube's COVID-19 policy specifically prohibits content denying the effectiveness of wearing masks, which the vast majority of the scientific community agrees reduces the risk of infection.

The video was Bongino's first "strike" under the policy, resulting in a one-week suspension from posting.

If the Bongino account violates the policy again within a 90-day window, a two-week suspension would be applied. If a third violation were accrued in the same timeframe, the channel would be permanently removed.

YouTube also removed Bongino's channel from its Partner Program, which allows users to monetize their content through advertising, on Friday for "repeatedly violating" guidelines on harmful and dangerous acts.

Read more.


Microsoft will review how the company responds to allegations of workplace sexual harassment, including how the company handles allegations against co-founder Bill Gates, the Microsoft board of directors announced Thursday.

The inquiry comes after a majority of Microsoft shareholders voted for a resolution in November demanding more accountability in addressing workplace sexual harassment complaints at the company's annual meeting.

"We're committed not just to reviewing the report but learning from the assessment so we can continue to improve the experiences of our employees," CEO Satya Nadella said in a statement.

The review will lead to a public release of a transparency report that assesses the effectiveness of Microsoft's workplace sexual harassment and gender discrimination policies and trainings, including a review of concerns raised by employees in a 2019 email thread, according to the board's announcement.

Read more here.

More trouble across the pond

Meta, the parent company for Facebook, is being sued for £2.3 billion ($3.2 billion) in a class action lawsuit in the United Kingdom for allegedly exploiting user data.

The senior adviser to British watchdog group Financial Conduct Authority (FCA), Liza Lovdahl Gormsen, is suing Meta on behalf of people who used Facebook in the U.K. between 2015 to 2019 for allegedly making users give personal data in order to get on the platform and earning billions of dollars from the tactic, Reuters reported.

"In the 17 years since it was created, Facebook became the sole social network in the UK where you could be sure to connect with friends and family in one place," Lovdahl Gormsen said.

"Yet, there was a dark side to Facebook; it abused its market dominance to impose unfair terms and conditions on ordinary Britons, giving it the power to exploit their personal data," Lovdahl Gormsen added.

Read more here.


An op-ed to chew on: The ransomware unicorn

Lighter click: Godzilla lense for reality

Notable links from around the web:

'Crypto colonizers' in Puerto Rico try to sell locals on the dream (The Washington Post / Nitasha Tiku)

Amid the Hype over Web3, Informed Skepticism Is Critical (Centre for International Governance Innovation / Elizabeth M. Renieris)

Seeing Without Looking (Real Life / M.R. Sauter)


One last thing: Cybertruck plans on hold

Tesla is reportedly delaying the production of the new Cybertruck until 2023, pushing back initial plans to begin making the new vehicle later this year.

A person familiar with the matter told Reuters on Thursday that Tesla is tweaking the pickup truck to make it more attractive in a hot market for electric vehicles. Tesla will start limited production of the Cybertruck in the first quarter of 2023, the source added.

Tesla CEO Elon Musk unveiled the Cybertruck in 2019 with initial plans to roll out production of the vehicle in 2021.

Read more here.

That's it for today, thanks for reading. Check out The Hill's technology and cybersecurity pages for the latest news and coverage. We'll see you Monday.