Photos: Mark Wilson / Getty Images; The Washington Post
Capitol Hill wants Facebook’s blood, but President Trump isn’t interested. Instead, the tech behemoth Trump wants to go after is Amazon, according to five sources who’ve discussed it with him. “He’s obsessed with Amazon,” a source said. “Obsessed.”
What we're hearing: Trump has talked about changing Amazon’s tax treatment because he’s worried about mom-and-pop retailers being put out of business.
A source who’s spoken to POTUS: “He’s wondered aloud if there may be any way to go after Amazon with antitrust or competition law."
Trump’s deep-seated antipathy toward Amazon surfaces when discussing tax policy and antitrust cases. The president would love to clip CEO Jeff Bezos’ wings. But he doesn’t have a plan to make that happen.
Behind the president's thinking: Trump's wealthy friends tell him Amazon is destroying their businesses. His real estate buddies tell him — and he agrees — that Amazon is killing shopping malls and brick-and-mortar retailers.
Trump tells people Amazon has gotten a free ride from taxpayers and cushy treatment from the U.S. Postal Service.
“The whole post office thing, that's very much a perception he has,” another source said. “It's been explained to him in multiple meetings that his perception is inaccurate and that the post office actually makes a ton of money from Amazon."
Axios' Ina Fried notes: The Postal Service actually added delivery on Sunday in some cities because Amazon made it worthwhile.
Trump also pays close attention to the Amazon founder's ownership of The Washington Post, which the president views as Bezos’ political weapon.
Trump never talks about Mark Zuckerberg or Facebook: He isn’t tuned in to the debate over how they handle people’s data, and thinks the Russia story is a hoax, sources say.
Axios' Kim Hart points out: "Trump told Axios last year he doesn’t mind Facebook because it helps him reach his audience. He's an old-school businessman who sees the world in terms of tangible assets: real estate, physical mail delivery, Main Street, grocery stores. It reminds me of the story Jim wrote a while back about Trump’s fixation with 1950s life. Amazon takes direct aim at some of the core components of mid-century business.”
One warning sign for Facebook: Vice President Mike Pence is concerned about Facebook and Google, according to a source with direct knowledge.
Though Pence isn't yet pushing internally for any specific regulations, he argues these companies are dangerously powerful.
The source said the V.P. worries about their influence on media coverage, as well as their control of the advertising industry and users’ personal info.
When private discussions have turned to the idea of busting Facebook and Google, Pence has listened with keen interest and is open to the suggestion that these two companies need shaking up.
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Justice Department faces uphill battle over encryption
Illustration: Lazaro Gamio/Axios
Law enforcement's ongoing battle to access encrypted data on devices is taking a strange turn: The Justice Department is simultaneously poised to push new regulations for encryption while coping with a damaging report on how the FBI botched the DOJ's last regulatory push.
Why it matters: At least one congressman thinks the report might hinder any new effort to move encryption legislation through the House. It also gives plenty of ammunition to the already vocal critics of that legislation, including tech companies, security researchers and national security experts.
Driving the news: The new report from the DOJ's Office of the Inspector General finds the FBI unwittingly misled Congress about exhausting all options to break into iPhone of a suspect in the 2015 San Bernardino terrorist shootings.
"None of this changes what we already knew, that the FBI can conduct investigations without backdoors. In fact, this validates it," Rep. Will Hurd (R-Texas) told Axios.
The report: Former Director James Comey made the phone the focal point of Congressional testimony in 2016 that the FBI was powerless to conduct some investigations without new laws or a court order to allow it access encrypted data.
But the FBI subdivision that ultimately found a private sector solution — the Remote Operations Unit (ROU) — didn't even know about the iPhone woes until after the squabble between the FBI and Apple went to court.
Elements in the FBI wanted a finger on the scale: Per the report, one official "became frustrated that the case against Apple could no longer go forward, and he vented his frustration ...[H]e expressed disappointment that the ROU Chief had engaged an outside vendor to assist with the Farook iPhone, asking the ROU Chief, '[What] did you do that for?'"
Meanwhile: Political forces are rallying to make a new push for encryption backdoors:
The New York Times reports that the DOJ met with researchers that claim they can solve a key problem in regulating encryption, which is that every known expert in cryptography believes that creating a digital entryway for law enforcement risks a security catastrophe.
How can the DOJ argue this to lawmakers? The central tenant of the DOJ's argument is that there's no way to conduct critical investigations without extraordinary access into cellphones. The FBI report has not done wonders for their credibility on that specific point.
Sen. Ron Wyden (R-Ore.) said in a statement: “It’s clear now that the FBI was far more interested in using this horrific terrorist attack to establish a powerful legal precedent than they were in promptly gaining access to the terrorist’s phone.”
This may never end: In the 1990s, cryptographers and security experts assumed that, like all good wars, the first round would be the last one. It wasn't.
"This is just going to keep happening," Hurd said.
In a morning tweet, President Trump reacted to yesterday's report from Axios' Jonathan Swan that he is "obsessed" with Amazon's effects on American retail, which caused Amazon's stock price to lose billions in value during yesterday's trading. Trump also claimed that the U.S. Postal Service is Amazon's "Delivery Boy," even though a source told Axios yesterday, “It's been explained to him in multiple meetings that his perception is inaccurate and that the post office actually makes a ton of money from Amazon."