Amazon Targets Smaller Businesses with Local Ads Team; Big Tech Fights to Halt Antitrust Bill

by Hannah Dillon on 10th Jun 2022 in News

In this weekly segment, ExchangeWire sums up key industry updates in media, marketing, and commerce from around the globe. In this edition: Amazon establishes a new Local Ads team in a blow to rival Meta; tech companies campaign against a 'self-referencing law' that could hinder their market power; Twitter agrees to Musk's demands for data following the billionaire's threats to abandon their deal; and Meta faces legal action for Instagram's role in causing a preteen's eating disorder.

Amazon’s launches Local Ads team in blow to Meta

Ecommerce behemoth Amazon has quietly begun hiring for its Local Ads team, a newly established crew focused on sourcing ads from city-specific ad companies.

According to Business Insider, job postings from Amazon refer to the Local Ads team as “a rare opportunity to join a start-up business” within the Amazon Ads team, and will help “create a brand new business and revenue stream for Amazon Advertising.” These workers will be tasked with bringing smaller, localised advertisers over to Amazon, a move that is likely to shake some of the giant’s larger competitors, namely Google and Meta.

As Amazon has historically worked with larger brands who can afford to pay a hefty premium for a slot on the site, smaller companies have typically flocked to platforms such as Meta’s Facebook and Instagram for advertising space. Meta has even benefited from its involvement with smaller advertisers, using the dependence small businesses have on its platforms to one-up competitors and stave off regulators. By Amazon announcing that it is turning its focus towards smaller companies, the ecommerce giant is not only venturing into a new avenue for its USD$31bn (£24.7bn) ad business, but striking a major blow to some of its largest rivals.

Tech companies lobby against ‘self-preferencing’ antitrust bill

Tech giants including Amazon and Alphabet are leading an intense campaign to prevent Congress from passing a new law to restrain their market power.

The American Innovation and Choice Online Act, which US senators approved in January of this year, would prevent large tech firms from using their market dominance to give their own products an advantage against competitors. Should the bill be passed by Congress, it is likely to open the door to a surge of new legislation that would reshape the US tech industry and rein in the power of large tech companies.

“This is one of the most significant campaigns that we have run in recent years,” said Matt Schruers, president of the Computer & Communications Industry Association.“That is because there has never been such a serious proposal to undermine US competitiveness and put US users at risk.”

The bill specifically targets Amazon, Alphabet, Apple, and Meta, and has received support from senators for both the Democratic and Republican parties, in addition to the Biden administration. The bill would prevent Google from listing its own products at the top of search results, in addition to banning Amazon from prioritising its online store over third-party alternatives.

The momentum behind the bill has raised alarm amongst tech giants, who are now rushing to preserve their market power. The Financial Times (FT) reportsthat executives from Alphabet, Amazon, and Apple have all personally spoken to members of Congress in an effort to block the bill. Google is also reported to have suggested a number of amendments to the proposed legislation, while Amazon has called on senators in Washington to oppose the bill on the basis that it could result in significant job losses.

Twitter to play ball with Musk after threats to trash deal

Twitter has agreed to hand over data concerning fake accounts on the platform to Elon Musk after the billionaire threatened to rescind his offer to buy the company.

The microblogging site will give the Tesla-boss access to data comprising over five million daily tweets, a real-time record of tweets, the devices they were tweeted from, and details of the accounts that tweet, according to the Washington Post.

Twitter’s relinquishment of this data follows Musk’s threats to walk away from his USD$44bn (£34bn) deal to buy out the social media site on Monday (6th June) unless the tech giant provides accurate data on fake accounts on the site. The entrepreneur has been publicly sceptical of the company’s claim that bots account for fewer than 5% of its user base, which totals to 229 million globally.

In a letter addressed to Twitter’s chief legal officer, Musk stated he was entitled to conduct his own measurement of fake accounts, “to enable him to prepare for transitioning Twitter's business to his ownership,” and accused the company of intentionally "thwarting" his attempts to do so.

Twitter has maintained that it “has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement." The social media company added that it was still committed to the acquisition at the price and terms agreed in April and, according to reports, Twitter’s chief legal officer Vijaya Gadde told employees on Wednesday (8th June) to anticipate a shareholder vote on the deal as early as July or August of this year.

Family sues Meta for catalysing daughter’s eating disorder

Meta is facing legal action over allegations that its image-sharing platform, Instagram, ignited an eating disorder, self-harming behaviours, and suicidal thoughts in a preteen girl.

Filed in the US District Court for the Northern District of California on Monday (6th June) by the Social Media Victims Law Centre, the lawsuit concerns teenager Alexis Spence. Spence created her first Instagram account without her parents’ knowledge at the age of 11, despite the platform’s minimum age requirement of 13. According to the case, Instagram’s algorithm immediately exposed Spence to content glorifying anorexia and self-harming, causing significant damage to her mental health.

Now aged 19, Spence has been hospitalised for anorexia, anxiety, and depression, and is struggling to recover from self-harming behaviours due to what the complaint describes as, “the harmful content and features Instagram relentlessly promoted and provided to her in its effort to increase engagement.”

In support of its complaint, the lawsuit makes numerous references to the Facebook Papers, leaked documents from Meta exposing the firm’s awareness that Instagram worsens mental health and body image amongst its users, particularly teenage girls. Previously unpublished documents from the leaks in which the company referred to “tweens” as “herd animals” who “want to find communities where they can fit in,” have been cited by the case to prove Meta’s intentions to draw younger, vulnerable users to the platform.

“If you look at the extensive research that [Meta] performed, they knew exactly what they were doing to kids, and they kept doing it,” commented Matthew P. Bergman, the founder of the Social Media Victims Law Centre and representative for the Spence family. “I wish I could say that Alexis’ case is aberrational. It’s not. The only aberration is that she survived.”