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meta-hypes-ai-friends-as-social-media’s-future,-but-users-want-real-connections

Meta hypes AI friends as social media’s future, but users want real connections


Two visions for social media’s future pit real connections against AI friends.

A rotting zombie thumb up buzzing with flies while the real zombies are the people in the background who can't put their phones down

Credit: Aurich Lawson | Getty Images

Credit: Aurich Lawson | Getty Images

If you ask the man who has largely shaped how friends and family connect on social media over the past two decades about the future of social media, you may not get a straight answer.

At the Federal Trade Commission’s monopoly trial, Meta CEO Mark Zuckerberg attempted what seemed like an artful dodge to avoid criticism that his company allegedly bought out rivals Instagram and WhatsApp to lock users into Meta’s family of apps so they would never post about their personal lives anywhere else. He testified that people actually engage with social media less often these days to connect with loved ones, preferring instead to discover entertaining content on platforms to share in private messages with friends and family.

As Zuckerberg spins it, Meta no longer perceives much advantage in dominating the so-called personal social networking market where Facebook made its name and cemented what the FTC alleged is an illegal monopoly.

“Mark Zuckerberg says social media is over,” a New Yorker headline said about this testimony in a report noting a Meta chart that seemed to back up Zuckerberg’s words. That chart, shared at the trial, showed the “percent of time spent viewing content posted by ‘friends'” had declined over the past two years, from 22 to 17 percent on Facebook and from 11 to 7 percent on Instagram.

Supposedly because of this trend, Zuckerberg testified that “it doesn’t matter much” if someone’s friends are on their preferred platform. Every platform has its own value as a discovery engine, Zuckerberg suggested. And Meta platforms increasingly compete on this new playing field against rivals like TikTok, Meta argued, while insisting that it’s not so much focused on beating the FTC’s flagged rivals in the connecting-friends-and-family business, Snap and MeWe.

But while Zuckerberg claims that hosting that kind of content doesn’t move the needle much anymore, owning the biggest platforms that people use daily to connect with friends and family obviously still matters to Meta, MeWe founder Mark Weinstein told Ars. And Meta’s own press releases seem to back that up.

Weeks ahead of Zuckerberg’s testimony, Meta announced that it would bring back the “magic of friends,” introducing a “friends” tab to Facebook to make user experiences more like the original Facebook. The company intentionally diluted feeds with creator content and ads for the past two years, but it now appears intent on trying to spark more real conversations between friends and family, at least partly to fuel its newly launched AI chatbots.

Those chatbots mine personal information shared on Facebook and Instagram, and Meta wants to use that data to connect more personally with users—but “in a very creepy way,” The Washington Post wrote. In interviews, Zuckerberg has suggested these AI friends could “meaningfully” fill the void of real friendship online, as the average person has only three friends but “has demand” for up to 15. To critics seeking to undo Meta’s alleged monopoly, this latest move could signal a contradiction in Zuckerberg’s testimony, showing that the company is so invested in keeping users on its platforms that it’s now creating AI friends (wh0 can never leave its platform) to bait the loneliest among us into more engagement.

“The average person wants more connectivity, connection, than they have,” Zuckerberg said, hyping AI friends. For the Facebook founder, it must be hard to envision a future where his platforms aren’t the answer to providing that basic social need. All this comes more than a decade after he sought $5 billion in Facebook’s 2012 initial public offering so that he could keep building tools that he told investors would expand “people’s capacity to build and maintain relationships.”

At the trial, Zuckerberg testified that AI and augmented reality will be key fixtures of Meta’s platforms in the future, predicting that “several years from now, you are going to be scrolling through your feed, and not only is it going to be sort of animated, but it will be interactive.”

Meta declined to comment further on the company’s vision for social media’s future. In a statement, a Meta spokesperson told Ars that “the FTC’s lawsuit against Meta defies reality,” claiming that it threatens US leadership in AI and insisting that evidence at trial would establish that platforms like TikTok, YouTube, and X are Meta’s true rivals.

“More than 10 years after the FTC reviewed and cleared our acquisitions, the Commission’s action in this case sends the message that no deal is ever truly final,” Meta’s spokesperson said. “Regulators should be supporting American innovation rather than seeking to break up a great American company and further advantaging China on critical issues like AI.”

Meta faces calls to open up its platforms

Weinstein, the MeWe founder, told Ars that back in the 1990s when the original social media founders were planning the first community portals, “it was so beautiful because we didn’t think about bots and trolls. We didn’t think about data mining and surveillance capitalism. We thought about making the world a more connected and holistic place.”

But those who became social media overlords found more money in walled gardens and increasingly cut off attempts by outside developers to improve the biggest platforms’ functionality or leverage their platforms to compete for their users’ attention. Born of this era, Weinstein expects that Zuckerberg, and therefore Meta, will always cling to its friends-and-family roots, no matter which way Zuckerberg says the wind is blowing.

Meta “is still entirely based on personal social networking,” Weinstein told Ars.

In a Newsweek op-ed, Weinstein explained that he left MeWe in 2021 after “competition became impossible” with Meta. It was a time when MeWe faced backlash over lax content moderation, drawing comparisons between its service and right-wing apps like Gab or Parler. Weinstein rejected those comparisons, seeing his platform as an ideal Facebook rival and remaining a board member through the app’s more recent shift to decentralization. Still defending MeWe’s failed efforts to beat Facebook, he submitted hundreds of documents and was deposed in the monopoly trial, alleging that Meta retaliated against MeWe as a privacy-focused rival that sought to woo users away by branding itself the “anti-Facebook.”

Among his complaints, Weinstein accused Meta of thwarting MeWe’s attempts to introduce interoperability between the two platforms, which he thinks stems from a fear that users might leave Facebook if they discover a more appealing platform. That’s why he’s urged the FTC—if it wins its monopoly case—to go beyond simply ordering a potential breakup of Facebook, Instagram, and WhatsApp to also require interoperability between Meta’s platforms and all rivals. That may be the only way to force Meta to release its clutch on personal data collection, Weinstein suggested, and allow for more competition broadly in the social media industry.

“The glue that holds it all together is Facebook’s monopoly over data,” Weinstein wrote in a Wall Street Journal op-ed, recalling the moment he realized that Meta seemed to have an unbeatable monopoly. “Its ownership and control of the personal information of Facebook users and non-users alike is unmatched.”

Cory Doctorow, a special advisor to the Electronic Frontier Foundation, told Ars that his vision of a better social media future goes even further than requiring interoperability between all platforms. Social networks like Meta’s should also be made to allow reverse engineering so that outside developers can modify their apps with third-party tools without risking legal attacks, he said.

Doctorow said that solution would create “an equilibrium where companies are more incentivized to behave themselves than they are to cheat” by, say, retaliating against, killing off, or buying out rivals. And “if they fail to respond to that incentive and they cheat anyways, then the rest of the world still has a remedy,” Doctorow said, by having the choice to modify or ditch any platform deemed toxic, invasive, manipulative, or otherwise offensive.

Doctorow summed up the frustration that some users have faced through the ongoing “enshittification” of platforms (a term he coined) ever since platforms took over the Internet.

“I’m 55 now, and I’ve gotten a lot less interested in how things work because I’ve had too many experiences with how things fail,” Doctorow told Ars. “And I just want to make sure that if I’m on a service and it goes horribly wrong, I can leave.”

Social media haters wish OG platforms were doomed

Weinstein pointed out that Meta’s alleged monopoly impacts a group often left out of social media debates: non-users. And if you ask someone who hates social media what the future of social media should look like, they will not mince words: They want a way to opt out of all of it.

As Meta’s monopoly trial got underway, a personal blog post titled “No Instagram, no privacy” rose to the front page of Hacker News, prompting a discussion about social media norms and reasonable expectations for privacy in 2025.

In the post, Wouter-Jan Leys, a privacy advocate, explained that he felt “blessed” to have “somehow escaped having an Instagram account,” feeling no pressure to “update the abstract audience of everyone I ever connected with online on where I am, what I am doing, or who I am hanging out with.”

But despite never having an account, he’s found that “you don’t have to be on Instagram to be on Instagram,” complaining that “it bugs me” when friends seem to know “more about my life than I tell them” because of various friends’ posts that mention or show images of him. In his blog, he defined privacy as “being in control of what other people know about you” and suggested that because of platforms like Instagram, he currently lacked this control. There should be some way to “fix or regulate this,” Leys suggested, or maybe some universal “etiquette where it’s frowned upon to post about social gatherings to any audience beyond who already was at that gathering.”

On Hacker News, his post spurred a debate over one of the longest-running privacy questions swirling on social media: Is it OK to post about someone who abstains from social media?

Some seeming social media fans scolded Leys for being so old-fashioned about social media, suggesting, “just live your life without being so bothered about offending other people” or saying that “the entire world doesn’t have to be sanitized to meet individual people’s preferences.” Others seemed to better understand Leys’ point of view, with one agreeing that “the problem is that our modern norms (and tech) lead to everyone sharing everything with a large social network.”

Surveying the lively thread, another social media hater joked, “I feel vindicated for my decision to entirely stay off of this drama machine.”

Leys told Ars that he would “absolutely” be in favor of personal social networks like Meta’s platforms dying off or losing steam, as Zuckerberg suggested they already are. He thinks that the decline in personal post engagement that Meta is seeing is likely due to a combination of factors, where some users may prefer more privacy now after years of broadcasting their lives, and others may be tired of the pressure of building a personal brand or experiencing other “odd social dynamics.”

Setting user sentiments aside, Meta is also responsible for people engaging with fewer of their friends’ posts. Meta announced that it would double the amount of force-fed filler in people’s feeds on Instagram and Facebook starting in 2023. That’s when the two-year span begins that Zuckerberg measured in testifying about the sudden drop-off in friends’ content engagement.

So while it’s easy to say the market changed, Meta may be obscuring how much it shaped that shift. Degrading the newsfeed and changing Instagram’s default post shape from square to rectangle seemingly significantly shifted Instagram social norms, for example, creating an environment where Gen Z users felt less comfortable posting as prolifically as millennials did when Instagram debuted, The New Yorker explained last year. Where once millennials painstakingly designed immaculate grids of individual eye-catching photos to seem cool online, Gen Z users told The New Yorker that posting a single photo now feels “humiliating” and like a “social risk.”

But rather than eliminate the impulse to post, this cultural shift has popularized a different form of personal posting: staggered photo dumps, where users wait to post a variety of photos together to sum up a month of events or curate a vibe, the trend piece explained. And Meta is clearly intent on fueling that momentum, doubling the maximum number of photos that users can feature in a single post to encourage even more social posting, The New Yorker noted.

Brendan Benedict, an attorney for Benedict Law Group PLLC who has helped litigate big tech antitrust cases, is monitoring the FTC monopoly trial on a Substack called Big Tech on Trial. He told Ars that the evidence at the trial has shown that “consumers want more friends and family content, and Meta is belatedly trying to address this” with features like the “friends” tab, while claiming there’s less interest in this content.

Leys doesn’t think social media—at least the way that Facebook defined it in the mid-2000s—will ever die, because people will never stop wanting social networks like Facebook or Instagram to stay connected with all their friends and family. But he could see a world where, if people ever started truly caring about privacy or “indeed [got] tired of the social dynamics and personal brand-building… the kind of social media like Facebook and Instagram will have been a generational phenomenon, and they may not immediately bounce back,” especially if it’s easy to switch to other platforms that respond better to user preferences.

He also agreed that requiring interoperability would likely lead to better social media products, but he maintained that “it would still not get me on Instagram.”

Interoperability shakes up social media

Meta thought it may have already beaten the FTC’s monopoly case, filing for a motion for summary judgment after the FTC rested its case in a bid to end the trial early. That dream was quickly dashed when the judge denied the motion days later. But no matter the outcome of the trial, Meta’s influence over the social media world may be waning just as it’s facing increasing pressure to open up its platforms more than ever.

The FTC has alleged that Meta weaponized platform access early on, only allowing certain companies to interoperate and denying access to anyone perceived as a threat to its alleged monopoly power. That includes limiting promotions of Instagram to keep users engaged with Facebook Blue. A primary concern for Meta (then Facebook), the FTC claimed, was avoiding “training users to check multiple feeds,” which might allow other apps to “cannibalize” its users.

“Facebook has used this power to deter and suppress competitive threats to its personal social networking monopoly. In order to protect its monopoly, Facebook adopted and required developers to agree to conditional dealing policies that limited third-party apps’ ability to engage with Facebook rivals or to develop into rivals themselves,” the FTC alleged.

By 2011, the FTC alleged, then-Facebook had begun terminating API access to any developers that made it easier to export user data into a competing social network without Facebook’s permission. That practice only ended when the UK parliament started calling out Facebook’s anticompetitive conduct toward app developers in 2018, the FTC alleged.

According to the FTC, Meta continues “to this day” to “screen developers and can weaponize API access in ways that cement its dominance,” and if scrutiny ever subsides, Meta is expected to return to such anticompetitive practices as the AI race heats up.

One potential hurdle for Meta could be that the push for interoperability is not just coming from the FTC or lawmakers who recently reintroduced bipartisan legislation to end walled gardens. Doctorow told Ars that “huge public groundswells of mistrust and anger about excessive corporate power” that “cross political lines” are prompting global antitrust probes into big tech companies and are perhaps finally forcing a reckoning after years of degrading popular products to chase higher and higher revenues.

For social media companies, mounting concerns about privacy and suspicions about content manipulation or censorship are driving public distrust, Doctorow said, as well as fears of surveillance capitalism. The latter includes theories that Doctorow is skeptical of. Weinstein embraced them, though, warning that platforms seem to be profiting off data without consent while brainwashing users.

Allowing users to leave the platform without losing access to their friends, their social posts, and their messages might be the best way to incentivize Meta to either genuinely compete for billions of users or lose them forever as better options pop up that can plug into their networks.

In his Newsweek op-ed, Weinstein suggested that web inventor Tim Berners-Lee has already invented a working protocol “to enable people to own, upload, download, and relocate their social graphs,” which maps users’ connections across platforms. That could be used to mitigate “the network effect” that locks users into platforms like Meta’s “while interrupting unwanted data collection.”

At the same time, Doctorow told Ars that increasingly popular decentralized platforms like Bluesky and Mastodon already provide interoperability and are next looking into “building interoperable gateways” between their services. Doctorow said that communicating with other users across platforms may feel “awkward” at first, but ultimately, it may be like “having to find the diesel pump at the gas station” instead of the unleaded gas pump. “You’ll still be going to the same gas station,” Doctorow suggested.

Opening up gateways into all platforms could be useful in the future, Doctorow suggested. Imagine if one platform goes down—it would no longer disrupt communications as drastically, as users could just pivot to communicate on another platform and reach the same audience. The same goes for platforms that users grow to distrust.

The EFF supports regulators’ attempts to pass well-crafted interoperability mandates, Doctorow said, noting that “if you have to worry about your users leaving, you generally have to treat them better.”

But would interoperability fix social media?

The FTC has alleged that “Facebook’s dominant position in the US personal social networking market is durable due to significant entry barriers, including direct network effects and high switching costs.”

Meta disputes the FTC’s complaint as outdated, arguing that its platform could be substituted by pretty much any social network.

However, Guy Aridor, a co-author of a recent article called “The Economics of Social Media” in the Journal of Economic Literature, told Ars that dominant platforms are probably threatened by shifting social media trends and are likely to remain “resistant to interoperability” because “it’s in the interest of the platform to make switching and coordination costs high so that users are less likely to migrate away.” For Meta, research shows its platforms’ network effects have appeared to weaken somewhat but “clearly still exist” despite social media users increasingly seeking content on platforms rather than just socialization, Aridor said.

Interoperability advocates believe it will make it easier for startups to compete with giants like Meta, which fight hard and sometimes seemingly dirty to keep users on their apps. Reintroducing the ACCESS Act, which requires platform compatibility to enable service switching, Senator Mark R. Warner (D-Va.) said that “interoperability and portability are powerful tools to promote innovative new companies and limit anti-competitive behaviors.” He’s hoping that passing these “long-overdue requirements” will “boost competition and give consumers more power.”

Aridor told Ars it’s obvious that “interoperability would clearly increase competition,” but he still has questions about whether users would benefit from that competition “since one consistent theme is that these platforms are optimized to maximize engagement, and there’s numerous empirical evidence we have by now that engagement isn’t necessarily correlated with utility.”

Consider, Aridor suggested, how toxic content often leads to high engagement but lower user satisfaction, as MeWe experienced during its 2021 backlash.

Aridor said there is currently “very little empirical evidence on the effects of interoperability,” but theoretically, if it increased competition in the current climate, it would likely “push the market more toward supplying engaging entertainment-related content as opposed to friends and family type of content.”

Benedict told Ars that a remedy like interoperability would likely only be useful to combat Meta’s alleged monopoly following a breakup, which he views as the “natural remedy” following a potential win in the FTC’s lawsuit.

Without the breakup and other meaningful reforms, a Meta win could preserve the status quo and see the company never open up its platforms, perhaps perpetuating Meta’s influence over social media well into the future. And if Zuckerberg’s vision comes to pass, instead of seeing what your friends are posting on interoperating platforms across the Internet, you may have a dozen AI friends trained on your real friends’ behaviors sending you regular dopamine hits to keep you scrolling on Facebook or Instagram.

Aridor’s team’s article suggested that, regardless of user preferences, social media remains a permanent fixture of society. If that’s true, users could get stuck forever using whichever platforms connect them with the widest range of contacts.

“While social media has continued to evolve, one thing that has not changed is that social media remains a central part of people’s lives,” his team’s article concluded.

Photo of Ashley Belanger

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Meta hypes AI friends as social media’s future, but users want real connections Read More »

meta-argues-enshittification-isn’t-real-in-bid-to-toss-ftc-monopoly-trial

Meta argues enshittification isn’t real in bid to toss FTC monopoly trial

Further, Meta argued that the FTC did not show evidence that users sharing friends-and-family content were shown more ads. Meta noted that it “does not profit by showing more ads to users who do not click on them,” so it only shows more ads to users who click ads.

Meta also insisted that there’s “nothing but speculation” showing that Instagram or WhatsApp would have been better off or grown into rivals had Meta not acquired them.

The company claimed that without Meta’s resources, Instagram may have died off. Meta noted that Instagram co-founder Kevin Systrom testified that his app was “pretty broken and duct-taped” together, making it “vulnerable to spam” before Meta bought it.

Rather than enshittification, what Meta did to Instagram could be considered “a consumer-welfare bonanza,” Meta argued, while dismissing “smoking gun” emails from Mark Zuckerberg discussing buying Instagram to bury it as “legally irrelevant.”

Dismissing these as “a few dated emails,” Meta argued that “efforts to litigate Mr. Zuckerberg’s state of mind before the acquisition in 2012 are pointless.”

“What matters is what Meta did,” Meta argued, which was pump Instagram with resources that allowed it “to ‘thrive’—adding many new features, attracting hundreds of millions and then billions of users, and monetizing with great success.”

In the case of WhatsApp, Meta argued that nobody thinks WhatsApp had any intention to pivot to social media when the founders testified that their goal was to never add social features, preferring to offer a simple, clean messaging app. And Meta disputed any claim that it feared Google might buy WhatsApp as the basis for creating a Facebook rival, arguing that “the sole Meta witness to (supposedly) learn of Google’s acquisition efforts testified that he did not have that worry.”

Meta argues enshittification isn’t real in bid to toss FTC monopoly trial Read More »

ftc-sues-uber-over-difficulty-of-canceling-subscriptions,-“false”-claims

FTC sues Uber over difficulty of canceling subscriptions, “false” claims

Several tech executives attended the president’s inauguration ceremony, and Amazon founder Jeff Bezos and Meta founder Mark Zuckerberg have held meetings with the president at the White House in recent months.

Efforts to gain favour with the White House have not led to a softer stance on antitrust actions under Ferguson, who Trump named to lead the FTC and who has accused Big Tech of censorship. He has signalled that he will sustain the crackdown on the industry unleashed by his predecessor Lina Khan.

“The Trump-Vance FTC is fighting back on behalf of the American people,” Ferguson added, referring to US vice-president JD Vance.

Lawyers for the FTC in court filings said Uber falsely claimed users would save roughly $25 a month through the $9.99 service, but did not account for the cost of the subscription in its calculations.

They added that Uber made it difficult to cancel the service, requiring users to take at least a “dozen different actions and navigate a maze of at least seven screens, if they guess the right paths to use.”

Uber said: “Uber does not sign up or charge consumers without their consent, and cancellations can now be done anytime in-app and take most people 20 seconds or less.”

The FTC under former president Joe Biden’s administration brought a lawsuit against Amazon over its Prime subscription service. That case is due to be heard later this year in Seattle.

The FTC sued Uber during Trump’s first term over claims the ride-hailing app mishandled personal data and “exaggerated earnings” for prospective drivers. Uber settled both lawsuits and paid a $20 million settlement to provide refunds to affected drivers.

© 2025 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

FTC sues Uber over difficulty of canceling subscriptions, “false” claims Read More »

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FTC now has three Republicans and no Democrats instead of the typical 3-2 split

After declaring the FTC to be under White House control, Trump fired both Democratic members despite a US law and Supreme Court precedent stating that the president cannot fire commissioners without good cause.

House Commerce Committee leaders said the all-Republican FTC will end the “partisan mismanagement” allegedly seen under the Biden-era FTC and then-Chair Lina Khan. “In the last administration, the FTC abandoned its rich bipartisan tradition and historical mission, in favor of a radical agenda and partisan mismanagement,” said a statement issued by Reps. Brett Guthrie (R-Ky) and Gus Bilirakis (R-Fla.). “The Commission needs to return to protecting Americans from bad actors and preserving competition in the marketplace.”

Consumer advocacy group Public Knowledge thanked Senate Democrats for voting against Meador. “In order for the FTC to be effective, it needs to have five independent commissioners doing the work,” said Sara Collins, the group’s director of government affairs. “By voting ‘no’ on this confirmation, these senators have shown that it is still important to prioritize protecting consumers and supporting a healthier marketplace over turning a blind eye to President Trump’s unlawful termination of Democratic Commissioners Slaughter and Bedoya.”

Democrats sue Trump

The two Democrats are challenging the firings in a lawsuit that said “it is bedrock, binding precedent that a President cannot remove an FTC Commissioner without cause.” Trump “purported to terminate Plaintiffs as FTC Commissioners, not because they were inefficient, neglectful of their duties, or engaged in malfeasance, but simply because their ‘continued service on the FTC is’ supposedly ‘inconsistent with [his] Administration’s priorities,'” the lawsuit said.

US law says an FTC commissioner “may be removed by the President for inefficiency, neglect of duty, or malfeasance in office.” A 1935 Supreme Court ruling said that “Congress intended to restrict the power of removal to one or more of those causes.”

Slaughter and Bedoya sued Trump in US District Court for the District of Columbia and asked the court to declare “the President’s purported termination of Plaintiffs Slaughter and Bedoya unlawful and that Plaintiffs Slaughter and Bedoya are Commissioners of the Federal Trade Commission.”

FTC now has three Republicans and no Democrats instead of the typical 3-2 split Read More »

ftc-investigates-“tech-censorship,”-says-it’s-un-american-and-may-be-illegal

FTC investigates “tech censorship,” says it’s un-American and may be illegal

The Federal Trade Commission today announced a public inquiry into alleged censorship online, saying it wants “to better understand how technology platforms deny or degrade users’ access to services based on the content of their speech or affiliations, and how this conduct may have violated the law.”

“Tech firms should not be bullying their users,” said FTC Chairman Andrew Ferguson, who was chosen by President Trump to lead the commission. “This inquiry will help the FTC better understand how these firms may have violated the law by silencing and intimidating Americans for speaking their minds.”

The FTC announcement said that “censorship by technology platforms is not just un-American, it is potentially illegal.” Tech platforms’ actions “may harm consumers, affect competition, may have resulted from a lack of competition, or may have been the product of anti-competitive conduct,” the FTC said.

The Chamber of Progress, a lobby group representing tech firms, issued a press release titled, “FTC Chair Rides MAGA ‘Tech Censorship’ Hobby Horse.”

“Republicans have spent nearly a decade campaigning against perceived social media ‘censorship’ by attempting to dismantle platforms’ ability to moderate content, despite well-established Supreme Court precedent,” the group said. “Accusations of ‘tech censorship’ also ignore the fact that conservative publishers and commentators receive broader engagement than liberal voices.”

Last year, the Supreme Court found that a Texas state law prohibiting large social media companies from moderating posts based on a user’s “viewpoint” is unlikely to withstand First Amendment scrutiny. The Supreme Court majority opinion said the court “has many times held, in many contexts, that it is no job for government to decide what counts as the right balance of private expression—to ‘un-bias’ what it thinks biased, rather than to leave such judgments to speakers and their audiences. That principle works for social-media platforms as it does for others.”

FTC investigates “tech censorship,” says it’s un-American and may be illegal Read More »

ftc-launches-probe-of-microsoft-over-bundling

FTC launches probe of Microsoft over bundling

John Lopatka, a former consultant to the FTC who now teaches antitrust law at Penn State, told ProPublica that the Microsoft actions detailed in the news organization’s recent reporting followed “a very familiar pattern” of behavior.

“It does echo the Microsoft case” from decades ago, said Lopatka, who co-authored a book on that case.

In the new investigation, the FTC has sent Microsoft a civil investigative demand, the agency’s version of a subpoena, compelling the company to turn over information, people familiar with the probe said. Microsoft confirmed that it received the document.

Company spokesperson David Cuddy did not comment on the specifics of the investigation but said the FTC’s demand is “broad, wide ranging, and requests things that are out of the realm of possibility to even be logical.” He declined to provide on-the-record examples. The FTC declined to comment.

The agency’s investigation follows a public comment period in 2023 during which it sought information on the business practices of cloud computing providers. When that concluded, the FTC said it had ongoing interest in whether “certain business practices are inhibiting competition.”

The recent demand to Microsoft represents one of FTC Commissioner Lina Khan’s final moves as chair, and the probe appears to be picking up steam as the Biden administration winds down. The commission’s new leadership, however, will decide the future of the investigation.

President-elect Donald Trump said this month that he will elevate Commissioner Andrew Ferguson, a Republican attorney, to lead the agency. Following the announcement, Ferguson said in a post on X, “At the FTC, we will end Big Tech’s vendetta against competition and free speech. We will make sure that America is the world’s technological leader and the best place for innovators to bring new ideas to life.”

Trump also said he would nominate Republican lawyer Mark Meador as a commissioner, describing him as an “antitrust enforcer” who previously worked at the FTC and the Justice Department. Meador is also a former aide to Sen. Mike Lee, a Utah Republican who introduced legislation to break up Google.

Doris Burke contributed research.

This story originally appeared on ProPublica.

FTC launches probe of Microsoft over bundling Read More »

report:-google-told-ftc-microsoft’s-openai-deal-is-killing-ai-competition

Report: Google told FTC Microsoft’s OpenAI deal is killing AI competition

Google reportedly wants the US Federal Trade Commission (FTC) to end Microsoft’s exclusive cloud deal with OpenAI that requires anyone wanting access to OpenAI’s models to go through Microsoft’s servers.

Someone “directly involved” in Google’s effort told The Information that Google’s request came after the FTC began broadly probing how Microsoft’s cloud computing business practices may be harming competition.

As part of the FTC’s investigation, the agency apparently asked Microsoft’s biggest rivals if the exclusive OpenAI deal was “preventing them from competing in the burgeoning artificial intelligence market,” multiple sources told The Information. Google reportedly was among those arguing that the deal harms competition by saddling rivals with extra costs and blocking them from hosting OpenAI’s latest models themselves.

In 2024 alone, Microsoft generated about $1 billion from reselling OpenAI’s large language models (LLMs), The Information reported, while rivals were stuck paying to train staff to move data to Microsoft servers if their customers wanted access to OpenAI technology. For one customer, Intuit, it cost millions monthly to access OpenAI models on Microsoft’s servers, The Information reported.

Microsoft benefits from the arrangement—which is not necessarily illegal—of increased revenue from reselling LLMs and renting out more cloud servers. It also takes a 20 percent cut of OpenAI’s revenue. Last year, OpenAI made approximately $3 billion selling its LLMs to customers like T-Mobile and Walmart, The Information reported.

Microsoft’s agreement with OpenAI could be viewed as anti-competitive if businesses convince the FTC that the costs of switching to Microsoft’s servers to access OpenAI technology is so burdensome that it’s unfairly disadvantaging rivals. It could also be considered harming the market and hampering innovation by seemingly disincentivizing Microsoft from competing with OpenAI in the market.

To avoid any disruption to the deal, however, Microsoft could simply point to AI models sold by Google and Amazon as proof of “robust competition,” The Information noted. The FTC may not buy that defense, though, since rivals’ AI models significantly fall behind OpenAI’s models in sales. Any perception that the AI market is being foreclosed by an entrenched major player could trigger intense scrutiny as the US seeks to become a world leader in AI technology development.

Report: Google told FTC Microsoft’s OpenAI deal is killing AI competition Read More »

ftc-“click-to-cancel”-rule-seeks-to-end-free-trial-traps,-sneaky-auto-enrollments

FTC “click to cancel” rule seeks to end free trial traps, sneaky auto-enrollments


No more jumping through endless hoops to cancel subscriptions, FTC rule says.

It will soon be easy to “click to cancel” subscriptions after the US Federal Trade Commission (FTC) adopted a final rule on Wednesday that makes it challenging for businesses to opt out of easy cancellation methods.

“Too often, businesses make people jump through endless hoops just to cancel a subscription,” FTC chair Lina Khan said in a press release. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”

The heart of the new rule requires businesses to provide simple ways to cancel subscriptions. Under the rule, any subscription that can be signed up for online must be able to be canceled online. And cancellation paths for in-person sign-ups must be just as easy, offered either by phone or online.

In guidance released Wednesday, the FTC recommended that businesses keep “three guardrails in mind” to ensure cancellation methods comply with the law. First, customers cannot be required to talk to a live agent or chatbot to cancel if that wasn’t required for sign-up. Next, any phone cancellation methods cannot include charges and must be offered during normal business hours. And finally, canceling services in person must always be optional.

To comply with the rule, businesses offering “negative option marketing” such as subscriptions, automatic renewals, and free trial offers—to both consumers and other businesses—are prohibited from misleading customers. They must clearly disclose all terms of the deal prior to accepting payment, including explaining how much and how often customers will be charged, when free trials or promotions end, any deadlines to avoid charges, and, importantly, how to cancel.

“All this information should be clear, conspicuous, and available to your customers before they enroll. And certain key information related to charges and cancellation must appear right when and where the customer agrees to the negative option, every time,” the FTC said.

Under the “click to cancel” rule, businesses must also get consumers’ informed consent before issuing charges and maintain records of consent for a minimum of three years. Those records could be in the form of a ticked checkbox or a signature, the FTC said, noting the agency offers “some flexibility on what that proof looks like.”

“Don’t try to distract people with other information,” the FTC said. “Get proof of consent and maintain it for at least three years.”

That provision is designed to end unfair and deceptive practices that the FTC found, such as inadequate disclosures about free trials or sneaky auto-enrollments. Those “practices have been a persistent source of consumer harm for decades,” the FTC’s notice on the final rule said, “saddling shoppers with recurring payments for products and services they never intended to purchase nor wanted to continue buying.”

The FTC confirmed that some provisions of the final rule will go into effect within 60 days, but most will take effect after 180 days. Violators risk civil penalties and other forms of consumer redress that weren’t previously available under the FTC act, the notice in the federal register said.

Some frustrated individual commenters asked for stiff penalties, the FTC’s notice said.

“There needs to be a substantial penalty when a service is requested to be cancelled, but the charges continue,” one commenter urged the FTC. “I dropped my TV service from Comcast three months ago and they continue to charge me. Every time I need to re-contact them, I waste an hour.”

FTC made few concessions to critics

More than 16,000 comments were submitted during proposed rulemaking, including concerns raised by cable firms who worried that the FTC’s rule might make it so easy to cancel a subscription that customers miss out on benefits, including deals often offered to retain their business.

At that time, Michael Powell, CEO of The Internet & Television Association (NCTA), defended using live agents to process cancellation requests. He warned that “a consumer may easily misunderstand the consequences of canceling,” incurring unexpected costs in situations like “canceling part of a discounted bundle” that “may increase the price for remaining services.”

Powell further argued that the rule could raise costs for customers, alleging that the FTC had significantly underestimated compliance costs that “could easily exceed $100 million for initial implementation by” the cable industry alone.

But the FTC strongly disagreed with some estimates of compliance costs. For example, in the notice in the federal register, the FTC noted that “because NCTA members who enroll consumers online already, clearly, have websites, the Commission rejects the notion that adding ‘click to cancel’ functionality to websites that already include an order path for enrolling, and likely also include functionality for registering a payment mechanism for automated billing, would cost $12–$25 million.”

Ultimately, the FTC disputed the NCTA’s data and rejected the notion that the rule would “require building online cancellation systems virtually from the ground up and expensive ongoing recordkeeping requirements across all services,” pointing any concerned commenters to “the detailed cost-benefit analysis” of the rule provided in the federal register notice.

There were only a few major changes to the final rule following the public commenting period. Notably, the FTC dropped a provision that would have required businesses to send annual reminders about recurring charges, as well as another prohibiting promotions or deals offered during the cancellation process in efforts to retain customers without customers opting in to seeing those offers.

The FTC said that it’s only dropped these provisions for now, noting that the Commission plans to keep the record “open on these issues” and may seek additional comments.

Exemptions available but seem unlikely

Perhaps of greatest interest to businesses, the FTC also added “a provision allowing requests for exemptions.” But those will likely be reserved for businesses already complying with the rule, the FTC said, while explaining that each request for exemptions will be weighed individually.

“Because such decisions are highly fact dependent, the Commission must consider exemptions, even of larger groups, on an individualized basis pursuant to the FTC’s Rules of Practice,” the FTC’s notice said.

Some businesses may qualify for recordkeeping exemptions, the FTC said, but only if “it is technologically feasible to make it impossible for customers to enroll without providing unambiguously affirmative consent.”

“Sellers must either maintain records of each consumer’s unambiguously affirmative consent or demonstrate they satisfy the technological exemption provision,” the FTC’s notice said.

The Commission specifically confirmed that it will not be granting “blanket exemptions to sellers who contract with third parties while offering subscription services.” While some businesses claimed this leaves them on the hook for cancellations they cannot process, the FTC found that “an exemption for all sellers who contract with third parties to manage aspects of their negative option programs would effectively nullify the Rule by incentivizing less than legitimate sellers to contract with actors engaged in deceptive practices to maximize negative option enrollments and frustrate cancellation with impunity.”

“A seller cannot evade its responsibility to deal honestly with consumers by contracting with a third party who does not,” the FTC’s notice said.

Official: FTC rule “may not survive legal challenge”

The final rule narrowly passed by a vote of 3–2, with commissioner Melissa Holyoak providing a dissenting statement accusing the agency of rushing the rule to score political points for the Biden administration ahead of the presidential election.

Vice President Kamala Harris will likely continue Biden’s war on “junk fees” if elected, Reuters reported, and Holyoak claimed that Khan pushed for the rule’s adoption to help follow “through on a campaign pledge made by the Chair’s favored presidential candidate.”

According to Holyoak, the final rule is deeply flawed, “improperly generalizing” unfair and deceptive practices “from narrow industry-specific complaints and evidence to the entire American economy.” She argued that the FTC only based the rule on 35 cases, which is allegedly not enough to establish that harmful practices are “prevalent.”

“Whatever the merits of the past cases, the Majority does not remotely come close to explaining how the evidence in those limited cases are similar to the myriad contexts an economy-wide rule would inevitably apply to,” Holyoak suggested.

She also claimed that “if similarity among complaints and cases only at the highest level of generality constitutes the ‘prevalence’ sufficient to ground an economy-wide rulemaking, then a ‘prevalence’ determination is in fact no meaningful guardrail on the Commission’s conduct at all.”

In the press release, the FTC discussed the wide reach of harms, noting that it “receives thousands of complaints about negative option and recurring subscription practices each year,” with the number “steadily increasing over the past five years.”

But Holyoak insisted that the final rule is such an overreach that it “may not survive legal challenge.”

“The Chair has put political expediency over getting things right,” Holyoak said, raising “the possibility that foreordained outcomes and political goals curtailed considering the rulemaking record with an open mind and without prejudgment, as law requires.”

A key legal flaw, Holyoak claimed, is that the rule prohibits any misrepresentations of a negative option, not just those relating to “deceptive terms.” That means businesses risk civil penalties for any material fact deemed misleading, which she alleged “fails to meet” the level of “specificity” required for FTC rulemaking. That seeming textual oversight “will no doubt invite serious legal challenge on this basis,” Holyoak predicted.

Should any portion of the rule be struck down through a legal challenge, the FTC included a provision on severability, allowing the remainder of the rule to remain in force.

Too soon to guess impact on subscription prices

According to Holyoak, the broad final rule “tilts the playing field in ways that are likely to pervert business incentives,” perhaps leading businesses to stop offering negative option billing models, “even when businesses and consumers could derive significant value from them.”

“Even honest businesses will have reason to reconsider the use of negative option billing now that it means subjecting themselves to potential civil penalties for misreading Commission tea leaves,” Holyoak said.

Further, she alleged that consumers could be harmed if the rule preempts state laws or potentially increases transaction costs for businesses that potentially stop offering cheaper negative option billing. Businesses could also pass on to customers the costs of legal fees incurred in efforts to obtain an exemption, Holyoak suggested.

“Raising the transaction costs will reduce a business’ sales and the utility consumers derive from these services. In other words, in our good intentions, we may harm the consumers and competition we are supposed to protect,” Holyoak warned.

But while Holyoak seems sure that consumers could be harmed by the rule potentially limiting negative option billing and spiking subscription costs, the FTC argued that “consumers cannot realize these benefits when sellers make material misrepresentations to induce consumers to enroll in such programs, fail to provide important information, bill consumers without their consent, or make cancellation difficult or impossible.”

At least one individual customer the FTC notice cited insisted that the rule was necessary to end a wide range of abusive charges draining the wallets of many Americans.

“Implementing this consumer-protection rule has the potential to save American consumers millions of dollars and prevent unscrupulous companies from using byzantine cancellation procedures to squeeze unwarranted funds out of their customers,” the commenter said.

Photo of Ashley Belanger

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

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smart-tvs-are-like-“a-digital-trojan-horse”-in-people’s-homes

Smart TVs are like “a digital Trojan Horse” in people’s homes

Similarly, the report’s authors describe concerns that the CTV industry’s extensive data collection and tracking could potentially have a political impact. It asserts that political candidates could use such data to run “covert personalized campaigns” leveraging information on things like political orientations and “emotional states”:

With no transparency or oversight, these practices could unleash millions of personalized, manipulative and highly targeted political ads, spread disinformation, and further exacerbate the political polarization that threatens a healthy democratic culture in the US.

“Potential discriminatory impacts”

The CDD’s report claims that Black, Hispanic, and Asian-Americans in the US are being “singled out by marketers as highly lucrative targets,” due to fast adoption of new digital media services and brand loyalty. Black and Hispanic communities are key advertising targets for FAST channels, per the report. Chester told Ars:

There are major potential discriminatory impacts from CTV’s harvesting of data from communities of color.

He pointed to “growing widespread racial and ethnic data” collection for ad targeting and marketing.

“We believe this is sensitive information that should not be applied to the data profiles used for targeting on CTV and across other platforms. … Its use in political advertising on CTV will enable widespread disinformation and voter suppression campaigns targeting these communities,” Chester said.

Regulation

In a letter sent to the FTC, FCC, California attorney general, and CPPA , the CDD asked for an investigation into the US’ CTV industry, “including on antitrust, consumer protection, and privacy grounds.” The CDD emphasized the challenges that streamers—including those who pay for ad-free streaming—face in protecting their data from advertisers.

“Connected television has taken root and grown as an unregulated medium in the United States, along with the other platforms, devices, and applications that are part of the massive internet industry,” the report says.

The group asks for the FTC and FCC to investigate CTV practices and consider building on current legislation, like the 1988 Video Privacy Protection Act. They also request that antitrust regulators delve deeply into the business practices of CTV players like Amazon, Comcast, and Disney to help build “competition and diversity in the digital and connected TV marketplace.”

Smart TVs are like “a digital Trojan Horse” in people’s homes Read More »

donotpay-has-to-pay-$193k-for-falsely-touting-untested-ai-lawyer,-ftc-says

DoNotPay has to pay $193K for falsely touting untested AI lawyer, FTC says

DoNotPay has to pay $193K for falsely touting untested AI lawyer, FTC says

Among the first AI companies that the Federal Trade Commission has exposed as deceiving consumers is DoNotPay—which initially was advertised as “the world’s first robot lawyer” with the ability to “sue anyone with the click of a button.”

On Wednesday, the FTC announced that it took action to stop DoNotPay from making bogus claims after learning that the AI startup conducted no testing “to determine whether its AI chatbot’s output was equal to the level of a human lawyer.” DoNotPay also did not “hire or retain any attorneys” to help verify AI outputs or validate DoNotPay’s legal claims.

DoNotPay accepted no liability. But to settle the charges that DoNotPay violated the FTC Act, the AI startup agreed to pay $193,000, if the FTC’s consent agreement is confirmed following a 30-day public comment period. Additionally, DoNotPay agreed to warn “consumers who subscribed to the service between 2021 and 2023” about the “limitations of law-related features on the service,” the FTC said.

Moving forward, DoNotPay would also be prohibited under the settlement from making baseless claims that any of its features can be substituted for any professional service.

A DoNotPay spokesperson told Ars that the company “is pleased to have worked constructively with the FTC to settle this case and fully resolve these issues, without admitting liability.”

“The complaint relates to the usage of a few hundred customers some years ago (out of millions of people), with services that have long been discontinued,” DoNotPay’s spokesperson said.

The FTC’s settlement with DoNotPay is part of a larger agency effort to crack down on deceptive AI claims. Four other AI companies were hit with enforcement actions Wednesday, the FTC said, and FTC Chair Lina Khan confirmed that the agency’s so-called “Operation AI Comply” will continue monitoring companies’ attempts to “lure consumers into bogus schemes” or use AI tools to “turbocharge deception.”

“Using AI tools to trick, mislead, or defraud people is illegal,” Khan said. “The FTC’s enforcement actions make clear that there is no AI exemption from the laws on the books. By cracking down on unfair or deceptive practices in these markets, FTC is ensuring that honest businesses and innovators can get a fair shot and consumers are being protected.”

DoNotPay never tested robot lawyer

DoNotPay was initially released in 2015 as a free way to contest parking tickets. Soon after, it quickly expanded its services to supposedly cover 200 areas of law—aiding with everything from breach of contract claims to restraining orders to insurance claims and divorce settlements.

As DoNotPay’s legal services expanded, the company defended its innovative approach to replacing lawyers while acknowledging that it was on seemingly shaky grounds. In 2018, DoNotPay CEO Joshua Browder confirmed to the ABA Journal that the legal services were provided with “no lawyer oversight.” But he said that he was only “a bit worried” about threats to sue DoNotPay for unlicensed practice of law. Because DoNotPay was free, he expected he could avoid some legal challenges.

According to the FTC complaint, DoNotPay began charging subscribers $36 every two months in 2019 while making several false claims in ads to apparently drive up subscriptions.

DoNotPay has to pay $193K for falsely touting untested AI lawyer, FTC says Read More »

connected-cars’-illegal-data-collection-and-use-now-on-ftc’s-“radar”

Connected cars’ illegal data collection and use now on FTC’s “radar”

wipe your data when you sell —

The regulator is warning OEMs to respect data privacy or it will get mad.

An image of cars in traffic, with computer-generated bounding boxes over each one, representing the idea of data collection

Getty Images

The Federal Trade Commission’s Office of Technology has issued a warning to automakers that sell connected cars. Companies that offer such products “do not have the free license to monetize people’s information beyond purposes needed to provide their requested product or service,” it wrote in a blog post on Tuesday. Just because executives and investors want recurring revenue streams, that does not “outweigh the need for meaningful privacy safeguards,” the FTC wrote.

Based on your feedback, connected cars might be one of the least-popular modern inventions among the Ars readership. And who can blame them? Last January, a security researcher revealed that a vehicle identification number was sufficient to access remote services for multiple different makes, and yet more had APIs that were easily hackable.

Later, in 2023, the Mozilla Foundation published an extensive report examining the various automakers’ policies regarding the use of data from connected cars; the report concluded that “cars are the worst product category we have ever reviewed for privacy.”

Those were rather abstract cases, but earlier this year, we saw a very concrete misuse of connected car data. Writing for The New York Times, Kash Hill learned that owners of connected vehicles made by General Motors had been unwittingly enrolled in OnStar’s Smart Driver program and that their driving data had been shared with their insurance company, resulting in soaring insurance premiums.

The FTC is not taking specific action against any automaker at this point. Instead, the blog post is meant to be a warning to the industry. It says that “connected cars have been on the FTC’s radar for years,” although the agency appears to have done very little other than hold workshops in 2013 and 2018, as well as publishing guidance for consumers reminding them to wipe the data from their cars before selling them.

(By contrast, the California Privacy Protection Agency announced last year that its enforcement division had begun making inquiries with automakers to ensure they complied with the state’s 2018 Consumer Privacy Act.)

The FTC says that automakers and other businesses must protect users’ data against illegal collection, use, and disclosure. It points to recent enforcement actions against companies in other sectors that have illegally collected or used geolocation data, surreptitiously disclosed sensitive user data, and illegally used sensitive data for automated decisions.

The FTC says the easiest way to comply is to not collect the data in the first place.

Connected cars’ illegal data collection and use now on FTC’s “radar” Read More »

apple-wouldn’t-let-jon-stewart-interview-ftc-chair-lina-khan,-tv-host-claims

Apple wouldn’t let Jon Stewart interview FTC Chair Lina Khan, TV host claims

The Problem with Jon Stewart —

Tech company also didn’t want a segment on Stewart’s show criticizing AI.

The Daily Show host Jon Stewart’s interview with FTC Chair Lina Khan. The conversation about Apple begins around 16: 30 in the video.

Before the cancellation of The Problem with Jon Stewart on Apple TV+, Apple forbade the inclusion of Federal Trade Commission Chair Lina Khan as a guest and steered the show away from confronting issues related to artificial intelligence, according to Jon Stewart.

This isn’t the first we’ve heard of this rift between Apple and Stewart. When the Apple TV+ show was canceled last October, reports circulated that he told his staff that creative differences over guests and topics were a factor in the decision.

The New York Times reported that both China and AI were sticking points between Apple and Stewart. Stewart confirmed the broad strokes of that narrative in a CBS Morning Show interview after it was announced that he would return to The Daily Show.

“They decided that they felt that they didn’t want me to say things that might get me into trouble,” he explained.

Stewart’s comments during his interview with Khan yesterday were the first time he’s gotten more specific publicly.

“I’ve got to tell you, I wanted to have you on a podcast, and Apple asked us not to do it—to have you. They literally said, ‘Please don’t talk to her,'” Stewart said while interviewing Khan on the April 1, 2024, episode of The Daily Show.

Khan appeared on the show to explain and evangelize the FTC’s efforts to battle corporate monopolies both in and outside the tech industry in the US and to explain the challenges the organization faces.

She became the FTC chair in 2021 and has since garnered a reputation for an aggressive and critical stance against monopolistic tendencies or practices among Big Tech companies like Amazon and Meta.

Stewart also confirmed previous reports that AI was a sensitive topic for Apple. “They wouldn’t let us do that dumb thing we did in the first act on AI,” he said, referring to the desk monologue segment that preceded the Khan interview in the episode.

The segment on AI in the first act of the episode mocked various tech executives for their utopian framing of AI and interspersed those claims with acknowledgments from many of the same leaders that AI would replace many people’s jobs. (It did not mention Apple or its leadership, though.)

Stewart and The Daily Show‘s staff also included clips of current tech leaders suggesting that workers be retrained to work with or on AI when their current roles are disrupted by it. That was followed by a montage of US political leaders promising to retrain workers after various technological and economic disruptions over the years, with the implication that those retraining efforts were rarely as successful as promised.

The segment effectively lampooned some of the doublespeak about AI, though Stewart stopped short of venturing any solutions or alternatives to the current path, so it mostly just prompted outrage and laughs.

The Daily Show host Jon Stewart’s segment criticizing tech and political leaders on the topic of AI.

Apple currently uses AI-related technologies in its software, services, and devices, but so far it has not launched anything tapping into generative AI, which is the new frontier in AI that has attracted worry, optimism, and criticism from various parties.

However, the company is expected to roll out its first generative AI features as part of iOS 18, a new operating system update for iPhones. iOS 18 will likely be detailed during Apple’s annual developer conference in June and will reach users’ devices sometime in the fall.

Listing image by Paramount

Apple wouldn’t let Jon Stewart interview FTC Chair Lina Khan, TV host claims Read More »