Elections have consequences

I’m Alan Chapell. I’ve been working at the intersection of privacy, competition and advertising for decades and I’m now writing for The Monopoly Report. If you have a tip to share in confidence, ping me at my last name at Gmail.

Our latest Monopoly Report podcast is out with Duncan McCall - Co-founder and former CEO of location graph company PlaceIQ.

Big tech, the election, and shifts in advertising

Now that most of the votes are in, it looks like the Republicans will have complete control over the U.S. Government - with the only thing eluding the GOP at this point is a filibuster proof majority in the Senate. I know that Ari Paparo has already weighed in on the election - and I agree with many of his views.

Confident predictions are hard to come by - but there are a few things that I think are fairly likely to happen in Trump’s second term. We’ll have David LeDuc from the NAI on the pod over the next few weeks to provide his take. See below for mine…

Higher Confidence

• Lina Kahn is out at the FTC – The ads business won’t have to suffer the term “surveillance capitalism” from Washington for a while. While the FTC wasn’t a huge focus during Trump’s first term, I think you’ll see a fairly significant rollback of Kahn’s agenda (e.g., merger rules) during his second term.

  Some have speculated that Biden may try to renominate Lina Kahn to a second term within the FTC during the lame duck Congressional session. I see that as unlikely because: (a) Democrats don’t really have the chutzpah to make this type of move (I could see the GOP trying it if the roles were reversed), (b) The Dem’s current margin in the Senate isn’t robust enough to push Kahn’s nomination through, and (c) I just don’t think Ms. Kahn wants anything to do with a Trump Administration.

  It’s hard to imagine any company more delighted by changes at the FTC than Kochava.

• FTC Merger Rules will be folded - Ari and I discussed the Lina Kahn FTC guidelines on mergers with Terry Kawaja on a recent Monopoly Report pod. The Trump FTC will almost certainly reverse course. And I suspect that we’ll see a fair amount of merger activity in our space - particularly involving AI tools.

• JD Vance becomes Tech / Regulatory Czar – Perhaps with input from Elon Musk, Vivek Ramaswamy and maybe even Omarosa, Vance is likely to have Dick Cheney-level influence over certain issues, including the Google antitrust trials. Vance’s ties with the tech industry are well documented, so he clearly has an interest. That said, Vance should be prepared to be overruled whenever President Trump feels the urge.

• Repeal of Biden Executive Orders on AI - Elon Musk didn’t go to all this trouble just to have government red tape get in the way of his ambitions.

Medium Confidence

• GOP led Federal privacy law – I would have put this one in the high likelihood bucket if the Republicans had managed to gain 60 Senate seats. If there is a federal privacy law enacted this term, I can say that it will look very different from ADPPA/APRA and other more recent attempts. It’ll probably look closer to the Kerry McCain privacy bill from 2011. I’m even hearing that Ted Cruz will use his new role as chair of the Senate Commerce Committee to model something similar to the Texas state privacy law. In other words, it’ll be a fairly weak notice and choice law with no private right of action and at least some pre-emption of many of the current privacy laws coming from the U.S. States. That doesn’t bode well for the Washington My Health My Data Act - and the GOP probably even figures out a way to dismantle the CPPA (i.e., California’s mini-FTC).

  Part of me wonders if Ashkan Soltani’s departure from the CPPA isn’t evidence that he sees the writing on the wall when it comes to pre-emption of CCPA and other state privacy laws. There’s lots of people whom I respect that point out that the Dems will use the filibuster to prevent such a law. Me? I think the GOP will figure out a way to get the law passed - filibuster be damned (assuming it survives at all).

• Google’s DOJ Antitrust Cases - This is one area where Ari and I disagree. I recognize that the Google search antitrust case was brought during Trump’s first term. But as we get closer to resolution in both the search and ad tech cases, President Trump’s dealmaking instincts will take over (likely steamrolling whatever deal JD Vance had cooking). Two things that Google has in spades is money and charm - and I predict that such things will go a long way with this administration. It may take a year or two, but I think both those cases get dropped with minimal pain for Google. That’s not to say that the Google Network business doesn’t get spun out. But if you’re looking for an attempt at a more complete breakup of Google - look outside the U.S.

• Ad tech Twitter remains fully in tact… for now - Lot’s of frustration around the the direction of X - with a bunch of people I respect seriously contemplating leaving the platform. But where in the world will they go - Truth Social? Are Bluesky or Threads viable options for the adtech community? I know I’m not the only one grappling with this - suggestions welcome.

• Health and precise location rules are relaxed - The Kahn FTC made a huge deal about restricting the collection of “sensitive” data - particularly from health apps and sensitive points of interest. And the HHS made a similarly big deal about pixel data from HIPAA covered entities. The tl;dr is that what gets viewed as “sensitive” at the Federal level will be recalibrated downward. As a privacy guy, I think that’s a shame - there was lots of stuff taking place in health and location prior to 2020 which was really problematic in my view. Cross-context tracking might be more palatable if we collectively jettisoned the bottom tier of practices.

• Section 230 under attack - I agree with Ari that the GOP will claim that big tech is censoring conservative views. And one of the ways that sentiment may manifest itself is in a rethinking of Section 230. JD Vance certainly wants it. While I think there are smart arguments in favor of reforming Section 230, perhaps the best argument for keeping Section 230 intact is that almost any reforms will have ENORMOUS unintended consequences.

Alan’s Hot Takes…

Here are a few additional stories that hit me over the past week:

• Browsers? – I’ve gotten away from writing about browsers and ads. Will def return to that soon. Meanwhile, a few readers have told me that Microsoft Edge browser is treating TPC from MSFT owned domains differently from those run by non-MSFT domains. If true, that seems like a big deal to me. Please DM me with evidence.

• Privacy Sandbox Report from the CMA - The UK Competition and Markets Authority has finally published it’s Q2 2024 Sandbox Report. Not much mention of the Google’s new direction re: choice prompts other than to imply that the continued presence of “some” cookies will somehow fix Sandbox latency and other endemic challenges. Also, the references testing conducted during 1H 2024 was mentioned mostly in passing. (Maybe the results will be covered in the NEXT CMA Report?) Finally, I found the mention (on page 4) of “a formal consultation period for strategic decisions” such as roadmap changes to be intriguing. But we need more details.

• Apple will be fined under the EU DMA - Apple is reportedly about to become first company that gets fined under the EU Digital Markets Act, the relatively new EU competition law that went into effect this past spring. The fine could be as high as [checks notes] $38 Billion dollars! That’s almost DOUBLE what Google had been paying Apple every year.

• The Electronic Privacy Information Center (EPIC) has filed a complaint with the FTC against OpenAI - EPIC is alleging violations of consumer protection laws through the development and deployment of its AI products, including GPT models and API integrations. Hard to see where this complaint goes given the changes taking place in the FTC. Now that it appears we'll have a very different approach to antitrust enforcement in the U.S., how do we think companies like Meta, MSFT, OpenAI, Perplexity and Google will adapt? I’ll be looking at this in 2025. Anyone with a smart, informed opinion want to come on the pod and discuss?

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