With help from Leah Nylen
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— Tough to copy: The Russian government may envy China’s ‘Great Firewall’ — but the Kremlin will be hard-pressed to duplicate Beijing’s ultra-tight internet restrictions.
— Priced out: A federal judge found Amazon’s alleged anticompetitive conduct raised prices for consumers, opening up the company to a new legal line of attack.
— VOICE migrants: A Senate subcommittee hearing slated for this morning includes a push for a tech industry-backed expansion of green cards for highly skilled immigrants.
IT’S TUESDAY, MARCH 15. Welcome to Morning Tech! Having been inspired by the great minds at the Daily Mail, this newsletter will now exclusively be using units of measurement corresponding to large African land mammals. Relatedly — if anyone knows what $52 billion in microchip subsidies comes out to in wildebeests, please advise.
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RUSSIA EYES A DIGITAL IRON CURTAIN: As the Kremlin moves to block or throttle more foreign websites and Russian citizens rush to deploy workarounds such as virtual private networks, concern is growing that Moscow plans to recreate Beijing’s tough restrictions — known collectively as the “Great Firewall” — that shield Chinese citizens from much of the broader internet.
But Russia likely possesses neither the infrastructure nor the technical capabilities to mirror China’s relative success in walling off its citizens from the web. And even if it did, it’s unclear whether Russian President Vladimir Putin and his top advisers have the political capital to do it.
— Technical difficulties: The Russian government has struggled for years to restrict online content. Between 2018 and 2020, for example, the Kremlin couldn’t get its nominal ban on messaging app Telegram to actually take hold.
“You had Kremlin officials who would have Telegram on their phone even though it was technically illegal, and who would make fun of the Russian internet-censor people for not being able to block it,” said Justin Sherman, a fellow at the Atlantic Council, a think tank.
Unlike the Chinese internet — which from Day One was structured with tight controls on content in mind — Sherman said Russian internet infrastructure is “extremely diffuse,” with hundreds of service providers spread across a vast country. That makes it tough to find the kinds of choke points the Chinese built directly into their networks.
Ineffective bureaucracies have also caused trouble for the Kremlin. While Russian internet regulator Roskomnadzor has for years required internet service providers to install deep packet inspection equipment on their networks (which would allow the government to review, reroute or block web traffic), Sherman said there’s a financial incentive for providers to simply not install it, and government officials don’t follow up consistently to ensure they do so.
There have also been unintended consequences to some of the Russian government’s more hamfisted efforts. Last year’s throttling of Twitter, for example, inadvertently led to the blocking of many other websites on the Russian web and negatively impacted Russian businesses.
— Proceed with caution: Sherman said the Kremlin is slowly improving the technical capabilities it needs to filter out unwanted internet content. But Russian citizens, unlike those in China, have had years of exposure to U.S. tech platforms. Instagram had over 80 million Russian users before it was blocked by Moscow last weekend, and many Russian businesses relied on foreign tech services to make sales and advertise.
Russians already face significant hardship due to sanctions imposed by the U.S. and its allies. And Grant Baker, a research associate for technology and democracy at advocacy group Freedom House, said the Kremlin is likely aware of how far it can push internet restrictions before sparking a backlash.
“It’s a lot harder to institute something like the Great Firewall when people have come to depend on these platforms,” said Baker, adding that the length of the Instagram ban will be “a real test” of the Kremlin’s commitment to controlling the internet.
— The old-fashioned way: Of course, if Putin really is committed to recreating China’s Great Firewall, his officials may not need cutting-edge techniques to get the job done. If the government wants to crack down on VPN use, for example, Sherman said it could simply track individuals selling or trafficking the required equipment and harass them or haul them to jail.
“Internet control is not just about code,” Sherman said. “It’s also about the economy of fear and harassment, and traditional coercion that the Kremlin weaponizes.”
JUDGE: AMAZON’S PRICING MAY VIOLATE ANTITRUST LAW — The world’s largest online retailer will face an antitrust lawsuit over its pricing policies for third-party sellers, according to a decision published on Monday in a class-action lawsuit brought against Amazon on behalf of consumers. The decision, filed in the U.S. District Court in Seattle, is the first of its kind against Amazon, and it’s likely to provide support for a similar lawsuit filed against Amazon by D.C. attorney general Karl Racine, as well as a state-led antitrust suit against Google.
— Paying the price: Under a pricing policy in place until 2019, Amazon forbid sellers on its platform from listing the same goods more cheaply on other websites. Because Amazon also charges sellers hefty fees — at least 15 percent commissions, and sometimes as high as 40 percent, when sellers use its fulfillment service — Judge Richard A. Jones said Amazon’s policy effectively increased the price sellers charged consumers everywhere for their products. He wrote that such a pricing provision “could — and as plaintiffs allege, does in fact — raise the cost of products on external platforms that charge lower fees than Amazon.” An Amazon spokesperson did not respond to a request for comment prior to publication.
— A big first: Jones’ ruling is the first to address Amazon’s pricing policy, which it changed in 2019 under scrutiny from the Federal Trade Commission and European regulators. A successful antitrust case, at least under U.S. law, typically needs to prove that consumer prices increased as a result of anticompetitive conduct — not an easy task in the case of the tech industry, since tech platforms are generally free for users.
The finding could help the case brought by Racine last year, as well as an antitrust suit pending against Google in New York. In that suit, state attorneys general claim the search giant’s price rules around its ad auctions harmed rival advertising exchanges and other web publishers selling ads.
SENATOR TO PUSH TECH INDUSTRY’S IMMIGRATION PRIORITIES: Sen. Alex Padilla (D-Calif.) plans to advocate for several immigration provisions supported by the tech industry as part of a hearing his Senate Judiciary subcommittee will hold today.
“Right now, there is a backlog of 1.4 million people who are eligible for employment-based visas,” Padilla told MT. The senator said the U.S. is “still relying on an immigration framework that was last overhauled before the launch of the World Wide Web.”
The hearing comes as the Senate prepares to scrutinize provisions in the House’s competitiveness bill, the America COMPETES Act (H.R. 4521). That language would lift several barriers that currently prevent many highly skilled immigrants from entering the U.S., where they often take jobs American tech companies have struggled to fill.
The tech industry is lobbying aggressively for the inclusion of those proposals in a final competitiveness package — an outcome Padilla also supports, according to spokesperson Tess Whittlesey. But the immigration provisions are not part of the Senate’s rival competitiveness package (S. 1260), raising the possibility that they’ll ultimately get stripped out as the two chambers prepare to reconcile the two bills.
— Streamlining visas: Whittlesey said the senator plans to focus on “tremendous employment-based visa backlogs [and] arbitrary worldwide and per-country caps” on those visas as part of this morning’s hearing. Whittlesey also said Padilla will discuss potential remedies, including the recapture of unused visas for new applicants, as well as a process for exempting spouses and children from current green card caps, which would allow successful applicants to bring their families to the U.S. Some of these proposals were included in the now-moribund Build Back Better Act (H.R. 5376).
— More from Padilla: The senator will also feature at a summit POLITICO Live is holding this Wednesday to mark The Recast’s inaugural Power List, which launched last Friday and highlighted Padilla as California’s first Latino senator. Tech activist Timnit Gebru will also be interviewed by Recast author Brakkton Booker.
Leigh Oliver is a new partner at the U.S. antitrust practice of international law firm Clifford Chance. … Suzanne Allen is returning to the U.S. Patent and Trademark Office after being detailed to work in the office of Sen. Thom Tillis (R-N.C.), the ranking Republican on the Senate Judiciary Subcommittee on Intellectual Property. Peter-Anthony Pappas will be the USPTO’s new detailee in Tillis’ office.
Year of the Bear: Chinese tech stocks suffered their biggest loss since 2008 on Monday, wiping out more than $2.1 trillion from their peak earlier this year, Bloomberg reports.
The new message in a bottle: The Wall Street Journal reports on a new website being used to circumvent the Kremlin’s internet restrictions by sending Russians text messages about the war in Ukraine.
ICYMI: West Wing Playbook highlights an $80,000 Facebook ad buy that has a “cheapfake” version of President Joe Biden hawking car insurance savings (we’re also confused).
Made for each other: Russian propaganda outlet RT, driven from tech platforms around the world, has found a safe haven in far-right social networking site Gab.
Foxconn on the move: Apple’s favorite supplier is eyeing a $9 billion high-tech manufacturing facility in Saudi Arabia, according to the Wall Street Journal.
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