The New York Times - USA (2020-10-25)

THE NEW YORK TIMES NATIONALSUNDAY, OCTOBER 25, 2020 N 23

was a “remarkable success” that
made DKN one of the largest pub-
lishers in Vietnam.
The outlet, the email claimed,
was “having a profound impact on
saving sentient beings in that
country.”
The Vietnamese team was
asked to help Epoch Media Group
— the umbrella organization for
Falun Gong’s biggest U.S. media
properties — set up its own Face-
book empire, according to that
email. That year, dozens of new
Facebook pages appeared, all
linked to The Epoch Times and its
affiliates. Some were explicitly
partisan, others positioned them-
selves as sources of real and unbi-
ased news, and a few, like a humor
page called “Funniest Family Mo-
ments,” were disconnected from
news entirely.
Perhaps the most audacious
experiment was a new right-wing
politics site called America Daily.
Today, the site, which has more
than a million Facebook follow-
ers, peddles far-right misinforma-
tion. It has posted anti-vaccine
screeds, an article claiming that
Bill Gates and other elites are “di-
recting” the Covid-19 pandemic
and allegations about a “Jewish
mob” that controls the world.
Emails obtained by The Times
show that John Nania, a longtime
Epoch Times editor, was involved
in starting America Daily, along
with executives from Sound of
Hope, a Falun Gong-affiliated ra-
dio network. Records on Face-
book show that the page is operat-
ed by the Sound of Hope Network,
and a pinned post on its Facebook
page contains a promotional vid-
eo for Falun Gong.
In a statement, The Epoch
Times said it had “no business re-
lationship” with America Daily.
Many of the Facebook pages
operated by The Epoch Times and
its affiliates followed a similar tra-
jectory. They began by posting vi-
ral videos and uplifting news arti-
cles aggregated from other sites.
They grew quickly, sometimes
adding hundreds of thousands of
followers a week. Then, they were
used to steer people to buy Epoch
Times subscriptions and promote
more partisan content.
Several of the pages gained sig-
nificant followings “seemingly
overnight,” said Renee DiResta, a
disinformation researcher with
the Stanford Internet Observa-
tory. Many posts were shared
thousands of times but received
almost no comments — a ratio,
Ms. DiResta said, that is typical of
pages that have been boosted by
“click farms,” firms that generate
fake traffic by paying people to
click on links over and over again.
The Epoch Times denies using
click farms or other illicit tactics
to expand its pages. “The Epoch
Times’s social media strategies
were different from DKN, and
used Facebook’s own promotional
tools to gain an increased organic
following,” the outlet said, adding
that The Epoch Times cut ties
with Mr. Trung in 2018.
But last year, The Epoch Times

was barred from advertising on

Facebook — where it had spent

more than $1.5 million over seven

months — after the social network

announced that the outlet’s pages

had evaded its transparency re-

quirements by disguising its ad

purchases.

This year, Facebook took down

more than 500 pages and accounts

linked to Truth Media, a network

of anti-China pages that had been

using fake accounts to amplify

their messages. The Epoch Times

denied any involvement, but

Facebook’s investigators said

Truth Media “showed some links

to on-platform activity by Epoch

Media Group and NTD.”

“We’ve taken enforcement ac-

tions against Epoch Media and re-

lated groups several times,” said a

Facebook spokeswoman, who

added that the social network

would punish the outlet if it vio-

lated more rules in the future.

Since being barred from adver-

tising on Facebook, The Epoch

Times has moved much of its op-

eration to YouTube, where it has

spent more than $1.8 million on

ads since May 2018, according to

Google’s public database of politi-

cal advertising.

Where the paper’s money

comes from is something of a mys-

tery. Former employees said they

had been told that The Epoch

Times was financed by a combina-

tion of subscriptions, ads and do-

nations from wealthy Falun Gong

practitioners. In 2018, the most re-

cent year for which the organiza-

tion’s tax returns are publicly

available, The Epoch Times Asso-

ciation received several sizable

donations, but none big enough to

pay for a multimillion-dollar ad

blitz.

Mr. Bannon is among those who

have noticed The Epoch Times’s

deep pockets. Last year, he

produced a documentary about

China with NTD. When he talked

with the outlet about other

projects, he said, money never

seemed to be an issue.

“I’d give them a number,” Mr.

Bannon said. “And they’d come

back and say, ‘We’re good for that

number.’ ”

‘Moral Objective Is Gone’

The Epoch Times’s pro-Trump

turn has upset some former em-

ployees, like Ms. Belmaker.

Ms. Belmaker, now a freelance

writer and editor, says she still be-

lieves in many of Falun Gong’s

teachings, but has grown disen-

chanted with The Epoch Times,

which she sees as running con-

trary to Falun Gong’s principles of

truth, compassion and tolerance.

“The moral objective is gone,”

she said. “They’re on the wrong

side of history, and I don’t think

they care.”

Recently, The Epoch Times has

shifted its focus to the coronavi-

rus. It pounced on China’s mis-

steps in the early days of the pan-

demic, and its reporters wrote

about misreported virus statistics

and Chinese influence in the

World Health Organization.

Some of these articles were

true. But others pushed exagger-

ated or false claims, like the the-

ory that the virus was engineered

in a lab as part of a Chinese biolog-

ical warfare strategy.

Some of the claims were re-

peated in a documentary that both

NTD and The Epoch Times posted

on YouTube, where it has been

viewed more than five million

times. The documentary features

the discredited virologist Judy

Mikovits, who also starred in the

viral “Plandemic” video, which

many social platforms pulled this

year for spreading false claims.

The Epoch Times said, “In our

documentary we offered a range

of evidence and viewpoints with-

out drawing any conclusions.”

Ms. Belmaker, who still keeps a

photo of Master Li on a shelf in her

house, said she recoiled whenever

an ad for The Epoch Times

popped up on YouTube promoting

some new partisan talking point.

One recent video, “Digging Be-

neath Narratives,” is a two-minute

infomercial about China’s mishan-

dling of the coronavirus. The ad’s

host says The Epoch Times has an

“underground network of

sources” in China providing infor-

mation about the government’s

response to the virus.

It’s a plausible claim, but the

video’s host makes no mention of

The Epoch Times’s ties to Falun

Gong, or its two-decade-long cam-

paign against Chinese commu-

nism, saying only that the paper is

“giving you an accurate picture of

what’s happening in this world.”

“We tell it like it is,” he says.

‘They’re on

the wrong

side of

history, and

I don’t think

they care.’

Genevieve

Belmaker, former

Epoch Times

staffer, below

“You have brutal competition, but

at the same time, you have neces-

sary cooperation.”

Apple and Google are joined at

the hip even though Mr. Cook has

said internet advertising,

Google’s bread and butter, en-

gages in “surveillance” of con-

sumers and even though Steve

Jobs, Apple’s co-founder, once

promised “thermonuclear war”

on his Silicon Valley neighbor

when he learned it was working

on a rival to the iPhone.

Apple and Google’s parent

company, Alphabet, worth more

than $3 trillion combined, do com-

pete on plenty of fronts, like

smartphones, digital maps and

laptops. But they also know how

to make nice when it suits their in-

terests. And few deals have been

nicer to both sides of the table

than the iPhone search deal.

Nearly half of Google’s search

traffic now comes from Apple de-

vices, according to the Justice De-

partment, and the prospect of los-

ing the Apple deal has been de-

scribed as a “code red” scenario

inside the company. When iPhone

users search on Google, they see

the search ads that drive Google’s

business. They can also find their

way to other Google products, like

YouTube.

A former Google executive,

who asked not to be identified be-

cause he was not permitted to talk

about the deal, said the prospect

of losing Apple’s traffic was “terri-

fying” to the company.

The Justice Department, which

is asking for a court injunction

preventing Google from entering

into deals like the one it made

with Apple, argues that the ar-

rangement has unfairly helped

make Google, which handles 92

percent of the world’s internet

searches, the center of con-

sumers’ online lives.

Online businesses like Yelp and

Expedia, as well as companies

ranging from noodle shops to

news organizations, often com-

plain that Google’s search domi-

nation enables it to charge adver-

tising fees when people simply

look up their names, as well as to

steer consumers toward its own

products, like Google Maps.

Microsoft, which had its own an-

titrust battle two decades ago, has

told British regulators that if it

were the default option on

iPhones and iPads, it would make

more advertising money for ev-

ery search on its rival search en-

gine, Bing.

What’s more, competitors like

DuckDuckGo, a small search en-

gine that sells itself as a privacy-

focused alternative to Google,

could never match Google’s tab

with Apple.

Apple now receives an estimat-

ed $8 billion to $12 billion in annu-

al payments — up from $1 billion a

year in 2014 — in exchange for

building Google’s search engine

into its products. It is probably

the single biggest payment that

Google makes to anyone and ac-

counts for 14 to 21 percent of Ap-

ple’s annual profits. That’s not

money Apple would be eager to

walk away from.

In fact, Mr. Cook and Mr. Pichai

met again in 2018 to discuss how

they could increase revenue from

search. After the meeting, a sen-

ior Apple employee wrote to a

Google counterpart that “our vi-

sion is that we work as if we are

one company,” according to the

Justice Department’s complaint.

A forced breakup could mean

the loss of easy money to Apple.

But it would be a more significant

threat to Google, which would

have no obvious way to replace

the lost traffic. It could also push

Apple to acquire or build its own

search engine. Within Google,

people believe that Apple is one of

the few companies in the world

that could offer a formidable al-

ternative, according to one for-

mer executive. Google has also

worried that without the agree-

ment, Apple could make it more

difficult for iPhone users to get to

the Google search engine.

A spokesman for Apple de-

clined to comment on the partner-

ship, while a Google spokesman

pointed to a blog post in which the

company defended the relation-

ship.

Even though its bill with Apple

keeps going up, Google has said

again and again that it dominates

internet search because con-

sumers prefer it, not because it is

buying customers. The company

argues that the Justice Depart-

ment is painting an incomplete

picture; its partnership with Ap-

ple, it says, is no different than

Coca-Cola paying a supermarket

for prominent shelf space.

Other search engines like

Microsoft’s Bing also have reve-

nue-sharing agreements with Ap-

ple to appear as secondary search

options on iPhones, Google says

in its defense. It adds that Apple

allows people to change their de-

fault search engine from Google

— though few probably do be-

cause people typically don’t tin-

ker with such settings and many

prefer Google anyway.

Apple has rarely, if ever, pub-

licly acknowledged its deal with

Google, and according to Bern-

stein Research, has mentioned its

so-called licensing revenue in an

earnings call for the first time this

year.

According to a former senior

executive who spoke on the con-

dition of anonymity because of

confidentiality contracts, Apple’s

leaders have made the same cal-

culation about Google as much of

the general public: The utility of

its search engine is worth the cost

of its invasive practices.

“Their search engine is the

best,” Mr. Cook said when asked

by Axios in late 2018 why he part-

nered with a company he also im-

plicitly criticized. He added that

Apple had also created ways to

blunt Google’s collection of data,

such as a private-browsing mode

on Apple’s internet browser.

The deal is not limited to

searches in Apple’s Safari

browser; it extends to virtually

all searches done on Apple de-

vices, including with Apple’s vir-

tual assistant, Siri, and on

Google’s iPhone app and Chrome

browser.

The relationship between the

companies has swung from

friendly to contentious to today’s

“co-optation.” In the early years

of Google, the company’s co-

founders, Larry Page and Sergey

Brin, saw Mr. Jobs as a mentor,

and they would take long walks

with him to discuss the future of

technology.

In 2005, Apple and Google

inked what at the time seemed

like a modest deal: Google would

be the default search engine on

Apple’s Safari browser on Mac

computers.

Quickly, Mr. Cook, then still a

deputy to Mr. Jobs, saw the ar-

rangement’s lucrative potential,

according to another former sen-

ior Apple executive who asked

not to be named. Google’s pay-

ments were pure profit, and all

Apple had to do was feature a

search engine its users already

wanted.

Apple expanded the deal for its

big upcoming product: the

iPhone. When Mr. Jobs unveiled

the iPhone in 2007, he invited Eric

Schmidt, Google’s then chief ex-

ecutive, to join him onstage for

the first of Apple’s many famous

iPhone events.

“If we just sort of merged the

two companies, we could just call

them AppleGoo,” joked Mr.

Schmidt, who was also on Apple’s

board of directors. With Google

search on the iPhone, he added,

“you can actually merge without

merging.”

Then the relationship soured.

Google had quietly been develop-

ing a competitor to the iPhone:

smartphone software called An-

droid that any phone maker could

use. Mr. Jobs was furious. In 2010,

Apple sued a phone maker that

used Android. “I’m going to de-

stroy Android,” Mr. Jobs told his

biographer, Walter Isaacson. “I

will spend my last dying breath if

I need to.”

A year later, Apple introduced

Siri. Instead of Google underpin-

ning the virtual assistant, it was

Microsoft’s Bing.

Yet the companies’ partnership

on iPhones continued — too lucra-

tive for either side to blow it up.

Apple had arranged the deal to re-

quire periodic renegotiations, ac-

cording to a former senior execu-

tive, and each time, it extracted

more money from Google.

“You have to be able to main-

tain those relationships and not

burn a bridge,” said Mr. Sewell,

Apple’s former general counsel,

who declined to discuss specifics

of the deal. “At the same time,

when you’re negotiating on behalf

of your company and you’re try-

ing to get the best deal, then, you

know, the gloves come off.”

Around 2017, the deal was up

for renewal. Google was facing a

squeeze, with clicks on its mobile

ads not growing fast enough. Ap-

ple was not satisfied with Bing’s

performance for Siri. And Mr.

Cook had just announced that Ap-

ple aimed to double its services

revenue to $50 billion by 2020, an

ambitious goal that would be pos-

sible only with Google’s pay-

ments.

By the fall of 2017, Apple an-

nounced that Google was now

helping Siri answer questions,

and Google disclosed that its pay-

ments for search traffic had

jumped. The company offered an

anodyne explanation to part of

the reason it was suddenly paying

some unnamed company hun-

dreds of millions of dollars more:

“changes in partner agreements.”

Apple and Google Set

Their Rivalry Aside

To Rake In Billions

From Page 1

A Justice Department

antitrust lawsuit is

targeting a secretive

partnership.

ADAM FERRISS

.