Hillicon Valley — DOJ, states target Google’s ad dominance

The Department of Justice filed its second lawsuit targeting Google’s market power, this time focusing on the Silicon Valley giant’s dominance in the ad space.

Meanwhile, the Senate kicked off its first hearing of the year with a rare display of unity. The issue that bridged the gap across the aisle? Ticketmaster and an opportunity for lawmakers to outwit each other with Taylor Swift references.  

This is Hillicon Valley, detailing all you need to know about tech and cyber news from Capitol Hill to Silicon Valley. Send tips to The Hill’s Rebecca Klar and Ines Kagubare. Subscribe here.

TAKE TWO 🎬

DOJ vs. Google

The Department of Justice (DOJ) and a handful of states sued Google over the tech giant’s dominance in the digital ad space, according to a complaint filed Tuesday.  

The case is the second antitrust lawsuit the DOJ has filed against Google, adding to the mounting legal battles from state and federal antitrust enforcers targeting the Silicon Valley giant.  

The suit was filed along with Virginia, California, Colorado, Connecticut, New Jersey, New York, Rhode Island and Tennessee.  

“One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising.

“Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the complaint states.  

• A Google spokesperson said the lawsuit “attempts to pick winners and losers in the highly competitive technology sector” and “largely duplicates” claims made in a suit led by the Texas attorney general.
  
• “DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow,” the spokesperson added in a statement.
  
• The DOJ and states are seeking to unwind Google’s alleged “anticompetitive acquisitions” in the advertising space as part of the joint case. 

Read more here.

Ticketmaster, Taylor Swift and the Senate’s rare unity

Ticketmaster defended its online market power in the digital ticketing space at a packed — and unusually unified — Senate Judiciary hearing Tuesday, after months of increased scrutiny following a chaotic sale of tickets to Taylor Swift’s upcoming tour.

The company has long been a target of lawmakers after its 2010 merger with Live Nation, but sparks started to fly after the messy rollout and ultimate cancellation of the public sale to the pop star’s nationwide tour.

The hearing kicked off the committee’s activity for the year with rare bipartisan unity — and may offer hope for lawmakers looking to revamp antitrust law.

Senators on both sides of the aisle grilled Live Nation Entertainment’s president and chief financial officer, Joe Berchtold, over the company’s claim that there is more competition today than 13 years ago and that bots were to blame for the debacle.  

“May I suggest, respectfully, Ticketmaster ought to look in the mirror and say, ‘I’m the problem, it’s me,’ ” Sen. Richard Blumenthal (D-Conn.) said, quoting recent Swift lyrics. 

Read here about The Hill’s five takeaways from the hearing. 

NOEM BLAMES JAN. 6 PANEL FOR PHONE HACK

South Dakota Gov. Kristi Noem (R) said on Monday that her personal cellphone number “has been hacked and used to make hoax calls.”

Noem said her phone was hacked following the release of her and her family’s personal information, including her Social Security number, by the House Jan. 6 committee.

“Callous mishandling of personal information has real world consequences,” Noem said in a statement. “If you get such a phone call from my number, know that I had no involvement.”

Noem said she has asked U.S. Attorney General Merrick Garland and Congress to investigate the leak.

Read more here. 

REP. LIEU: ‘I AM FREAKED OUT BY AI’

Rep. Ted Lieu (D-Calif.) on Monday called on Congress to take more steps to regulate artificial intelligence (AI) in a New York Times op-ed, citing risks associated with self-driving vehicles and facial recognition systems.

“As one of just three members of Congress with a computer science degree, I am enthralled by AI and excited about the incredible ways it will continue to advance society,” he wrote. “And as a member of Congress, I am freaked out by AI, specifically AI that is left unchecked and unregulated.”

• Lieu outlined that while AI can have its advantages, including instantaneous search results, navigation systems and fraud protection on credit cards, its risks may cause more harm if it continues to go unregulated.
  
• He said teachers and newspaper editors may find it “increasingly difficult” to determine whether someone’s assignment was written by AI or the students.

Read more here. 

FBI: North Korean hackers behind $100M crypto heist

The FBI confirmed on Monday that North Korean-sponsored hackers known as the Lazarus Group were behind the theft of $100 million worth of cryptocurrency from California-based crypto firm Harmony.

Last year, Harmony reported that unknown hackers stole money from one of its blockchain bridges and that it was working with law enforcement and forensic specialists to identify the perpetrators and retrieve the stolen funds. The company said at the time that it had attempted to reach out to the hackers with an embedded message sent to the culprit’s crypto wallet address. 

Harmony’s hack was one of several crypto thefts that occurred last year. Just two months after Harmony was hacked, it was reported that another crypto firm based in California — Nomad — had lost $190 million worth of virtual currency in a series of thefts. 

Last year, the FBI also blamed the Lazarus Group for stealing more than $600 million in cryptocurrency from the virtual game Axie Infinity. The U.S. sanctioned the group in 2019. 

Read more here. 

BITS & PIECES

An op-ed to chew on: Building AI with democratic values starts with defining our own 

Notable links from around the web:  

The Unknown Hedge Fund That Got $400 Million From Sam Bankman-Fried (The New York Times / David Yaffe-Bellany, Matthew Goldstein and Royston Jones Jr.) 

Ex-Twitter engineer tells FTC security violations persist after Musk (The Washington Post / Joseph Menn) 

Jeff Bezos wants the world to know he’s a philanthropist (Vox / Whizy Kim) 

One more thing: Students to embrace ChatGPT

Many college students are approaching artificial intelligence with optimism and a willingness to embrace how the technology can enhance their learning, despite the consternation it has caused educators.

ChatGPT, a free AI technology made public in November, has pushed a debate on using AI in education to the mainstream. The platform works as a chatbot, giving human-like responses to questions and tasks it is asked to complete. Students might then use the responses to supplement their work — or even complete their work in full. 

For educators, this has sparked concerns of cheating and a loss of critical learning skills their students need. In some K-12 public schools, ChatGPT has been blocked. In some colleges, professors have changed how assignments work to limit opportunities ChatGPT could be used for cheating. 

College students are at the beginning of discovering the capabilities of ChatGPT and many are optimistic, but still cautious about what the future could hold. 

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 tomorrow.