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As Twitter and Facebook Clamp Down, Republicans Claim ‘Election Interference’

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SAN FRANCISCO — President Trump called Facebook and Twitter “terrible” and “a monster” and said he would go after them. Senators Ted Cruz and Marsha Blackburn said they would subpoena the chief executives of the companies for their actions. And on Fox News, prominent conservative hosts blasted the social media platforms as “monopolies” and accused them of “censorship” and election interference.

On Thursday, simmering discontent among Republicans over the power that Facebook and Twitter wield over public discourse erupted into open acrimony. Republicans slammed the companies and baited them a day after the sites limited or blocked the distribution of an unsubstantiated New York Post article about Hunter Biden, the son of the Democratic presidential nominee, Joseph R. Biden Jr.

The criticism did not stop the companies. Twitter locked the personal account of Kayleigh McEnany, the White House press secretary, late Wednesday after she posted the article, and on Thursday it briefly blocked a link to a House Judiciary Committee webpage. The Trump campaign said Twitter had also locked its official account after it tried promoting the article. Twitter then doubled down by prohibiting the spread of a different New York Post article about the Bidens.

The actions brought the already frosty relationship between conservatives and the companies to a new low point, less than three weeks before the Nov. 3 presidential election, in which the social networks are expected to play a significant role. It offered a glimpse at how online conversations could go awry on Election Day and underlined how the companies have little handle on how to consistently enforce what they will allow on their sites.

“There will be battles for control of the narrative again and again over coming weeks,” said Evelyn Douek, a lecturer at Harvard Law School who studies social media companies. “The way the platforms handled it is not a good harbinger of what’s to come.”

Facebook declined to comment on Thursday and pointed to its comments on Wednesday when it said the New York Post article, which made unverified claims about Hunter Biden’s business in Ukraine, was eligible for third-party fact-checking.

In a tweet, Twitter said, “We recognize that Twitter is just one of many places where people can find information online, and the Twitter Rules are intended to protect the conversation on our service, and to add context to people’s experience where we can.”

The service went down on Thursday evening in the United States and elsewhere; Twitter said it was investigating an issue with its software.

Mr. Trump said on Twitter on Wednesday that “it is only the beginning” for the social media companies. He followed up on Thursday by saying he wanted to “strip them” of some of their liability protections.

For years, Mr. Trump and other Republicans have accused Facebook and Twitter, which have headquarters in liberal Silicon Valley, of anti-conservative bias. In 2018, Mr. Trump said the companies, along with Google, “have to be careful” and claimed, without evidence, that they were intentionally suppressing conservative news outlets supportive of his administration.

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That issue has since come up repeatedly at Capitol Hill hearings, including in July when the chief executives of Facebook and Google, Mark Zuckerberg and Sundar Pichai, testified on antitrust issues.

Tensions have also been running high for Twitter and Facebook as they aim to avoid a replay of the 2016 election, when Russians used their sites to spread inflammatory messages to divide Americans. In recent weeks, the companies have said they will clamp down on misinformation before and after Election Day, such as by banning content related to the pro-Trump conspiracy theory QAnon and slowing down the way information flows on their networks.

But with Mr. Trump trailing Mr. Biden in the polls, the companies’ handling of the New York Post article has ruptured any truce they had managed to strike with conservatives.

Senator Josh Hawley, Republican of Missouri, asked the Federal Election Commission in a letter on Wednesday to investigate whether the companies’ actions could be considered an in-kind contribution to Mr. Biden’s campaign.

“I think it really is a new frontier,” Mr. Hawley said in an interview. “It will also lead to a new openness on the Republican side to think about what we are going to do about their monopoly power.”

Mr. Cruz, of Texas, and Ms. Blackburn, of Tennessee, said on Thursday that they would subpoena Mr. Zuckerberg and Jack Dorsey, Twitter’s chief executive, for a hearing on what they deemed “election interference.”

“I’m looking forward to asking Jack and Mark about silencing media that go against their political beliefs,” Ms. Blackburn said in a tweet.

Representative Jim Jordan, an Ohio Republican and the ranking member of the House Judiciary Committee, sent Mr. Dorsey a letter excoriating Twitter for blocking the article and asking for a detailed summary of the process behind the decision.

Mr. Pichai, Mr. Zuckerberg and Mr. Dorsey have already agreed to testify before the Senate Commerce Committee on Oct. 28 about the federal law that shields their platforms from lawsuits. Conservatives have called for changes to the law, Section 230 of the Communications Decency Act, which makes it impossible to sue web platforms over much of the content posted by their users or how they choose to moderate it.

Ajit Pai, the Republican chairman of the Federal Communications Commission, said on Thursday that he planned to move forward with a proceeding to clarify the law.

“Social media companies have a First Amendment right to free speech,” Mr. Pai said in a statement. “But they do not have a First Amendment right to a special immunity denied to other media outlets, such as newspapers and broadcasters.”

Mr. Trump was even more pointed, saying in a tweet on Thursday that the companies needed to be deprived of their Section 230 protections “immediately.”

Others applauded the aggressiveness of the social media companies.

“The actions taken by Facebook, Twitter and Google show that these platform companies are indeed willing to enforce their existing policies, in particular around ‘hack and leak’ material,” said Shannon McGregor, senior researcher with the Center for Information, Technology and Public Life at the University of North Carolina at Chapel Hill.

Unlike previous criticism of Facebook and Twitter for acting too slowly in taking down content, the uproar this time has centered on how they may have acted too hastily. (The exception was Google’s YouTube, which said after about 36 hours that it would allow a New York Post video about the article to remain up without restrictions.)

The speed with which Facebook moved was uncharacteristic, fueled by how quickly the article took off online and the sensitivity of the material, according to two Facebook employees, who were not authorized to speak publicly.

Within three hours after The New York Post published its article on Wednesday, Facebook said it would reduce the distribution of the piece across the network so that it would appear less frequently in users’ individual News Feeds, one of the most highly viewed sections of the app.

The company billed it as part of its “standard process to reduce the spread of misinformation,” said Andy Stone, a Facebook spokesman. That process included spotting some “signals” that a piece of content might be false, according to Facebook’s guidelines for content moderation. The company has not clarified what those signals were.

Twitter then went further by blocking people from linking to the article altogether. That meant the article could not circulate at all on Twitter, even in private messages between users.

Because the article contained images of purported personal emails from Hunter Biden, Twitter said sharing it violated its policy against the distribution of hacked material. The emails also showed private contact information, a violation of Twitter’s privacy policies.

The backlash was instant. Republicans immediately tested the limits of Twitter’s rules, with some tweeting screenshots of the article. Francis Brennan, the director of strategic response for the Trump campaign, posted the entire article in a string of 44 tweets. The article was also copied and published on the webpage of the House Judiciary Committee’s Republican minority.

Twitter scrambled to keep up. If tweets with the screenshots showed the emails, the company removed them. Mr. Brennan’s tweets were allowed to remain because they did not include the emails.

Late Wednesday, as the furor grew, Twitter tried to address it. “We know we have more work to do to provide clarity in our product when we enforce our rules in this manner,” a spokesman tweeted.

Twitter also said people whose accounts were locked could easily change that by simply deleting the offending tweet.

Also late Wednesday, Mr. Dorsey weighed in to criticize his company’s communication about the decision. “Blocking URL sharing via tweet or DM with zero context as to why we’re blocking: unacceptable,” he wrote on Twitter.

Internally, Mr. Dorsey griped to employees that users hadn’t been shown a sufficient explanation when prevented from sharing the New York Post article, a person with knowledge of the comments said.

Mike Isaac reported from San Francisco and Kate Conger from Oakland, Calif. Daisuke Wakabayashi contributed reporting from Oakland, David McCabe from Washington, and Tiffany Hsu from Hoboken, N.J.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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