B6 N THE NEW YORK TIMES, MONDAY, AUGUST 3, 2020TECHNOLOGY | ENERGYThe advertiser boycott of Face-
book took a toll on the social media
giant, but it may have caused
more damage to the company’s
reputation than to its bottom line.
The boycott, called #StopHate-
ForProfit by the civil rights
groups that organized it, urged
companies to stop paying for ads
on Facebook in July to protest the
platform’s handling of hate speech
and misinformation. More than
1,000 advertisers publicly joined,
out of a total pool of more than 9
million, while others quietly
scaled back their spending.
The 100 advertisers that spent
the most on Facebook in the first
half of the year spent $221.4 mil-
lion from July 1 through July 29, 12
percent less than the $251.4 mil-
lion spent by the top 100 advertis-
ers a year earlier, according to es-
timates from the advertising ana-
lytics platform Pathmatics. Of
those 100, nine companies for-
mally announced a pullback in
paid advertising, cutting their
spending to $507,500 from $26.2
million.
Many of the companies that
stayed away from Facebook said
they planned to return, and many
are mom-and-pop enterprises and
individuals that depend on the
platform for promotion. Mark
Zuckerberg, Facebook’s chief ex-
ecutive, has emphasized the im-
portance of small business, saying
during an earnings call on Thurs-
day that “some seem to wrongly
assume that our business is de-
pendent on a few large advertis-
ers.”
Facebook said that the top 100
spenders contributed 16 percent
of its $18.7 billion in revenue in the
second quarter, which ended on
June 30. During the first three
weeks of July, Facebook said,
overall ad revenue grew 10 per-
cent over last year, a rate the com-
pany expects to continue for the
full quarter.
The boycott complicated plan-
ning for advertisers. The Kansas-
based digital agency DEG had “a
whirlwind of a month” as its small
to midsize clients grappled with
whether they could reach enough
customers without Facebook, said
Quinn Sheek, its director of media
and search. Facebook and its sub-
sidiary Instagram make up more
than a third of digital spending for
DEG clients.
Of the 60 percent of DEG clients
that joined the July boycott, four
out of five are planning to return
to Facebook in August, with many
having “decided it’s too much for
them during a difficult economic
time to remain off,” Ms. Sheek
said. Still, the boycott helped am-
plify discussion of toxic content on
Facebook. The issue was raised in
a congressional hearing this past
week and in repeated meetings
between ad industry representa-
tives and Facebook leaders. Face-
book, which said it is working with
industry groups like the Global Al-
liance for Responsible Media, re-
leased the results of a civil rights
audit last month and agreed to
hire a civil rights executive.
“What could really hurt Face-
book is the long-term effect of its
perceived reputation and the as-
sociation with being viewed as a
publisher of ‘hate speech’ and
other inappropriate content,”
Stephen Hahn-Griffiths, the exec-
utive vice president of the public
opinion analysis company Rep-
Trak, wrote in a post last month.
In addition to the prevalence of
hate speech on the platform, its
critics have also focused on thecompany’s treatment of user pri-
vacy and foreign election interfer-
ence.
“You could argue that Facebook
has a bloodied nose and two repu-
tational black eyes,” Mr. Hahn-
Griffiths wrote.
Sheryl Sandberg, Facebook’s
chief operating officer, said during
the company’s earnings call that,
like the boycott’s organizers, “we
don’t want hate on our platforms,
and we stand firmly against it.”
The ad industry was already in
upheaval when the boycott began,
as businesses closed, layoffs
swept through the economy and
homebound consumers slowed
their shopping. Before they re-
duced spending on Facebook in
July, advertisers like Microsoft,
Starbucks, Unilever and Target
took a temporary break from the
platform in June, as many compa-
nies were reacting to pandemic-
related marketing budget cuts
and widespread protests over rac-
ism and police brutality. Disney’s
spending on Facebook has mostly
trended downward since late
March, according to Pathmatics.
Last month, large advertisers
like Procter & Gamble, Samsung,
Walmart and Geico sharply cur-
tailed paid advertising on Face-
book without joining the official
boycott, according to Pathmatics.
Others, like Hershey and Hulu,
beefed up their spending on alter-
nate platforms like Twitter and
YouTube.
Companies like Beam Suntory
and Coca-Cola have vowed to con-
tinue pressuring Facebook, espe-cially as the presidential race
heats up. On Thursday, the ice
cream company Ben & Jerry’s
said it planned to keep withhold-
ing spending on product promo-
tions through the end of the year
“to send a message.”
The advertiser boycott “was a
warning shot, an opening salvo,”
said Jonathan Greenblatt, the
chief executive of the civil rights
group the Anti-Defamation
League, which helped set up the
ad boycott. Organizers and other
groups now plan to expand the
boycott into Europe, to include
Facebook users, and to address
other concerns, like the presence
of child sexual abuse on the plat-
form.
Half of the companies that work
with the agency Allen & Gerritsen
in Boston and Philadelphia par-
ticipated in the boycott, said
Derek Welch, its vice president of
media. Many felt it was important
to “do something that is meaning-
ful and tangible in a sea of brands
putting out very well-meaning
statements,” he said.
Mr. Welch said the agency’s cli-
ents typically spend $150,000 to
$200,000 a month total on Face-
book. Several plan to continue
boycotting.
“The big companies that have
signed on have been great for visi-
bility and getting the word out,” he
said. “But this is really all about
these small businesses in aggre-
gate who are spending $30,000
here or $50,000 there, whose deci-
sions wouldn’t normally make too
much of a difference.”Did the 1,000-Advertiser
Boycott of Facebook Over
Hate Speech Work?
By TIFFANY HSU
and ELEANOR LUTZNine of the 100 highest-spending companies on Facebook cut their ad
spending to $507,500 from $26.2 million.JOSH EDELSON/AGENCE FRANCE-PRESSE — GETTY IMAGES$221.4M
spent in July by Facebook’s 100 top
ad spenders in first half of 2020
16
percent of second-quarter revenue
contributed by top 100 ad spenders
Three months ago, the Amazon chief
executive Jeff Bezos effectively de-
clared that his company would try to
lose money. Instead, Amazon declared
on Thursday the largest profit in its
history.
It was a bit awkward.
Companies are supposed to make
money, for sure. But this comes at a
moment when politicians and the public
are wondering if America’s digital su-
perstars are so powerful — and per-
haps, tilt the game to their advantage
— that they simply can’t be beaten.
A company like Amazon planning to
lose money and instead making billions
of dollars in profit is a pretty compel-
ling sign of dominance.
This week in technology made me
think of that old line about a once domi-
nant car company: What’s good for the
United States was good for General
Motors, and what was good for G.M.
was good for the country. (There’s a
debate about what the GM executive
meant by this, but it’s still a good line.
Stay with me.)
The bosses of four of America’s tech
giants, dragged (virtually) in front of
Congress this week, said some version
of that old saw. They said that their
successes are uniquely American, and
that their companies enrich the country
and the lives of people who live in it.
That’s true. It is, however, hard to
ignore that the fortunes of the country
and its leading corporate citizens are
currently going in opposite directions.
We learned on Thursday that the
United States wiped out five years of
economic growth in a matter of months,
as my colleague Ben Casselman put it.
During that period, Amazon, Apple,
Google and Facebook mostly raked in
money hand over fist.
In general, this makes sense. During
a pandemic, we have needed the prod-
ucts and services these companies
provide. That does not, however, guar-
antee them financial success.
Facebook’s Mark Zuckerberg said a
few months ago that the way his com-
pany makes money — selling ads to a
local bakery or an online luggage
maker — tends to naturally rise and fall
in tune with the economy. That’s mostly
true, but not right now. The economy is
tanking at its worst rate in many dec-
ades. Facebook’s advertising sales are
fine.
What has been bad for the United
States hasn’t yet been bad for Big Tech.
Is, then, what’s good for Big Tech good
for the country? I’m not sure.
There’s an axiom in technology that
change happens gradually, then sud-
denly. Tech companies can seem un-
beatable until they aren’t — often be-
cause of some rapid evolutionary
change. It happened to Nokia and Sun
Microsystems — whose old headquar-
ters was taken over by Facebook in a
symbol of one empire replacing a crum-
bled one.
So could there be a Fall of Rome
moment for today’s tech superpowers?
Yes, in theory, and we might never see
it coming. Right now, though, despite
broader economic pains and a growing
backlash to their power, these four
American tech superpowers appear to
be as close to invulnerable as you can
get.Your Take
We’ve spent a lot of time this week
talking about the congressional an-
titrust hearing and potential abuses of
power by Big Tech. We want to change
things up a bit and hear from our read-
ers.
Tell us about one tech invention of
the past decade that makes your life
fabulous, or at least easier, and why.
A reader in Allentown, Pa., Arthur
Weinrach, inspired us, writing in to
mention the many technological
changes that he’s grateful for, includingE-ZPass.
Tell us yours at ontech@nytimes.
Please include your name and location.
We will publish a selection of them.What didn’t get attention at the Big
Tech hearing
The antitrust code was written to tackle
railroads and steel companies that
grew strong enough to raise their
prices at will.
A hot conversation in legal schol-
arship is whether those laws apply to
Google, Facebook and other companies
that offer many products for no (mone-
tary) cost to us.
There are, however, at least a couple
of examples in which tech companies
are being accused of behavior that has
led to higher sticker prices for us. In
other words, there are conventional,
railroad-baron-type antitrust claims
against the tech giants, too.
These instances didn’t get much of an
airing during the congressional hearing
this week into tech company power, but
they’re worth paying attention to.
One issue involves Apple’s App Store.
A lawsuit that is winding its way
through U.S. courts claims that Apple’s
commission of as much as 30 percent
on digital app transactions makes all
iPhone apps more expensive than theywould be without Apple’s monopoly
over iPhone app distribution.
Another involves Amazon’s market-
place. Some merchants have said that
Amazon punishes them if they list what
they sell on Amazon for lower prices on
Walmart.com or other spots. Those
sellers claim that Amazon is in essence
pushing up the prices on products on
competitor’s shopping sites.
Members of Congress didn’t ask
Apple and Amazon about these allega-
tions, and the companies have previ-
ously denied them.
Tim Wu, a professor at Columbia Law
School and a contributing Opinion
writer for The New York Times, told me
that he believed those price claims
were the strongest potential antitrust
case against Amazon on legal grounds.
He said, though, that there’s a dis-
tinction between “technical antitrust
and public opinion antitrust.” Intricate
discussions about price-setting are
boring in congressional hearings.Before we go...■Europe vs. Big Tech: The European
Union and some of its member coun-
tries have been relatively aggressive in
suing America’s tech giants and re-
stricting them through new laws. But,as my colleague Adam Satariano
writes, there’s a belief that those tactics
haven’t been effective, and now officials
in Europe are drafting several new laws
and regulations that aim at the heart of
how the U.S. digital stars operate.■Bond with your co-workers by rob-
bing a (virtual) bank: Bored by Zoom
calls for work? My colleague David
Segal has a fun look at people holding
business meetings and work bonding
sessions in Minecraft, Grand Theft Auto
and other video games. Just don’t get
killed by zombies on your lunch break.■Seven. Billion. Video. Views: If you
have kids, they have probably watched
the slightly unnerving YouTube videos
released by CoComelon and Blippi, two
giants of children’s entertainment. Both
are now part of a single empire whose
YouTube videos generate more than
seven billion views each month, Bloom-
berg News writes. Children’s program-
ming is among the most popular desti-
nations on YouTube, which has made
some parents and children’s advocates
uncomfortable.Without Trying, Amazon Still Reaps a Fortune
As the wealth of tech giants balloons, the country is going in the opposite direction.
KENNY BRANDENBERGEROn Tech
By SHIRA OVIDE
This essay was adapted from the On Tech
newsletter, which gets delivered every
weekday. To sign up, go to nytimes.com/
newsletterspayments. Included in the deal is a
15-year agreement in which Mara-
thon would provide 7.7 billion gal-
lons of petroleum a year to the
gasoline station chain. Marathon
said it expected the deal to close in
early 2021 after review by an-
titrust officials.
Last year, Marathon agreed to
spin off its Speedway chain under
pressure from investors that in-
cluded the hedge fund Elliott Man-
agement Corporation. The Cana-
da-based convenience store oper-
ator Alimentation Couche-Tard
had also expressed interest in
buying the stores.
The spin-off underlines the tur-
moil in oil refining. Struggling
with lower sales, Marathon an-
nounced last week that it would
not restart two refineries in New
Mexico and California that it had
idled in April.
Its refinery in Martinez, Calif.,
was under particular pressure be-
cause of California’s tight envi-
ronmental specifications, and it
will be converted into a terminal
facility. The Gallup plant, New
Mexico, was hurt by a small local
market and high costs.
Both gasoline and diesel sales
have recovered some in recent
weeks, but jet fuel sales are se-
verely depressed and there is no
sign of a recovery for at least an-
other year, analysts say.HOUSTON — Marathon Petro-
leum, the largest U.S. independent
refiner, announced on Sunday that
it had sold its Speedway gas sta-
tion chain to the Japanese retail
group Seven & I Holdings for $21
billion.
The sale of Speedway, one of the
country’s largest convenience
store chains with nearly 4,000 out-
lets, is the biggest corporate deal
in the oil sector since the coro-
navirus slashed demand for fuel
early this year.
With the addition of Speedway,
Seven & I’s 7-Eleven chain will
have around 14,000 stores.
Marathon Petroleum, based in
Ohio, has been struggling finan-
cially and has shuttered opera-
tions in two refineries. It had been
seeking to spin off Speedway for
months. Negotiations between
Marathon and Seven & I had
stumbled earlier this year over
price.
Marathon praised the deal in its
announcement as a step forward
in its efforts to shore up its fi-
nances and stave off pressure
from activist investors seeking to
dismantle the company.
Marathon said it expected the
deal to bring in $16.5 billion in af-
ter-tax cash proceeds, much of
which would go to paying down
debts and to support dividendJapanese Retail Group Buys
Speedway Gas Station Chain
After absorbing Speedway’s nearly 4,000 outlets from Marathon Petroleum,
the 7-Eleven convenience store chain will have around 14,000 stores.DARREN HAUCK/GETTY IMAGESBy CLIFFORD KRAUSS