Fox News Said Roger Ailes Is Out, Then Said He’s Not. What the Hell Is Happening?
Update, 6:50 p.m.: OK, it looks like Ailes is still headed for the door, but the brief saga of Ailes’ ouster at Fox took a new turn Tuesday evening with reports from Drudge Report that the network’s other top talent isn’t happy with the move. Drudge reports that network stars Bill O’Reilly, Sean Hannity, and Greta Van Susteren, along with the hosts of Fox & Friends and The Five are scheduled to meet to discuss the possibility of a walkout in support of Ailes.
Original Post: What the hell is going on with Fox News chairman and CEO Roger Ailes? For days, reports have proliferated that Ailes’ boss, 21st Century Fox honcho Rupert Murdoch, and Murdoch’s sons were preparing to oust the Fox News chief in the wake of a sexual harassment lawsuit filed earlier this month by former Fox host Gretchen Carlson.
On Tuesday afternoon, the Drudge Report broke the news that Ailes would be out by Friday with a buyout package worth tens of millions. NPR reported the same, citing two anonymous sources. Fox News confirmed Ailes' exit to the Daily Beast but then walked it back. Then Drudge deleted an initial tweet, which appeared to show the terms of departure, and tamped down its home page's headline to the vague, "AILES FOX NEWS DRAMA." Deadline reports he is out. CNN’s Brian Stelter said exit talks were underway.
“Roger is at work,” the network said in a statement to several reporters. “The review is ongoing. And the only agreement that is in place is his existing employment agreement.”
Ailes has been one of the most powerful and influential figures in American media since he established the cable news network in 1996, and his departure would signal the end of an era in television and politics. Fox News is the nation’s most-watched cable news network and has tremendous influence among American conservatives in particular.
Carlson’s lawsuit, filed in New Jersey state court last week, alleges that, “Ailes has unlawfully retaliated against Carlson and sabotaged her career because she refused his sexual advances and complained about severe and pervasive sexual harassment.” Carlson had been a host of The Real Story With Gretchen Carlson until June.*
In the days after the suit was made public, Carlson’s attorney announced that more than a dozen women had come forward with similar stories about Ailes. Six spoke publicly to New York's Gabriel Sherman, portraying the Fox News chief as “a boss who spoke openly of expecting women to perform sexual favors in exchange for job opportunities.” On Tuesday, Sherman reported that Fox star Megyn Kelly had relayed her own account of harassment by Ailes to lawyers investigating on behalf of 21st Century Fox, the network’s parent company.
One way or another, it does seem like Ailes’ exit is in progress. We’ll update this post when we know more.
*Correction, July 19, 2016: This article originally misstated that Gretchen Carlson had been the host of Fox & Friends until June. Her last job at Fox News was as the host of The Real Story With Gretchen Carlson.
The Trump Camp Is Sending Very Mixed Signals About How Much It Plans to Shill for Wall Street
Donald Trump has made no secret of his desire to win over disaffected Bernie Sanders voters who have difficulty stomaching the idea of a Hillary Clinton presidency. To do so, he has tried to paint her as a pawn controlled by Wall Street donors while attempting to position himself as a untainted populist. On Monday, this resulted in the weird spectacle of Republicans including a plank in their party platform calling for the breakup of large financial institutions like Goldman Sachs and JPMorgan. The only obvious purpose of this otherwise philosophically aberrant decision was to place Trump somewhere to the left of Clinton on financial reform. “We believe that the Obama-Clinton years have passed legislation that has been favorable to the big banks,” Trump campaign manager Paul Manafort told reporters, “which is one of the reason why you see all of the Wall Street money going to her."
This is both absurd and savvy. Trump is no anti-bank crusader; quite to the contrary, he has promised to dismantle most of the Wall Street reforms passed under the Dodd-Frank Act while drastically slashing taxes for billionaires. But thanks to her paid (and still unreleased) speeches at Goldman Sachs, her husband's role in banking deregulation, and the fact that Clinton has done a fair bit of fundraising on Wall Street, many on the left still can't shake the feeling that Clinton has been bought and paid for by the banking industry. One can imagine Trump's act peeling off at least a handful of resentful Sanders fans.
On Tuesday, though, Fortune brings us some additional news that, if true, should make a complete mockery of those efforts. According to the magazine, “Trump has told prospective donors that, if elected president, he plans to nominate former Goldman Sachs banker Steve Mnuchin for U.S. Treasury Secretary.” Currently, Mnuchin is a hedge fund CEO, as well as Trump's chief fundraiser.
Promising to pick a Wall Street banker whom you have charged with the task of raising money for your campaign from other Wall Street bankers to head the Treasury Department may be the single most straightforward way a presidential candidate could auction himself off to the financial services sector. Presumably, Fortune's source, hedge funder manager and Trump fundraiser Anthony Scaramucci, is trying to reassure his fellow financiers that they need not take Monday’s platform news too seriously. Indirectly, he's telling Sanders diehards the same.
Of course, some believe Clinton herself might be eyeing a Goldman alum for Treasury Secretary—namely, her campaign's chief financial officer, Gary Gensler. Moreover, Gensler played his own role in the deregulatory mania of the 1990s as an official at the department. But the differences are two-fold. First, Gensler manages the Clinton campaign's money but doesn't raise it. Second, bankers hate him. In 2009 Gensler went to work for the Obama administration as head of the Commodities Futures Trading Commission, where “he surprisingly became the regulator Wall Street feared most in the wake of the financial crisis,” as Reuters put it. He pushed hard for strict rules about swaps trading, and was extremely aggressive about cranking out regs his agency was required to write up under Dodd-Frank. The man watched Wall Street burst into flames thanks to its own fecklessness and converted into a regulatory crusader.
But yeah, sure, Clinton's the pawn.
A New Lawsuit Says Snapchat Is Illegally Collecting Biometric Data
A law passed eight years ago in Illinois is causing legal problems for some of the largest social media companies in the U.S.
In May, two men filed a lawsuit against Snapchat under a state law passed in 2008 that requires a company to obtain written consent before using a person’s biometric information. The case, which was originally filed in Los Angeles County court, has been moved to U.S. District Court for the Central District of California last week.
The class-action suit alleges that Snapchat has been illegally collecting, storing, and using biometric information, including face geometry and iris scans, of its users without obtaining permission, which violates the Illinois Biometric Information Privacy Act.
Snapchat, through a company spokesperson, dismisses the lawsuit: “Contrary to the claims of this frivolous lawsuit, we are very careful not to collect, store or obtain any biometric information or identifiers about our community,” Snapchat says via email.
The plaintiffs, Jose Luis Martinez and Malcolm Neal, are suing Snapchat for allegedly “collecting, storing and using Plaintiffs’ and other similarly situated Illinois users’ biometric identifiers’ and information without informed written consent in violation of the Biometric Information Privacy Act (BIPA),” the lawsuit states.
The suit says that Snapchat collects biometric information when users take selfies with the Lenses feature, which allows users to augment their photos by adding animated features like a dog’s floppy ears, bee’s eyes, or a stream of rainbow vomit.
Snapchat, on its website, explains that the Lenses feature does not use facial recognition:
Some of the magic behind Lenses is object recognition. Object recognition is an algorithm designed to understand the general nature of things that appear in an image. It lets us know that a nose is a nose or an eye is an eye. But object recognition isn’t the same as facial recognition. While Lenses can recognize faces in general, they can't recognize a specific face.
The Illinois Biometric Information Privacy Act, was passed in the state in 2008, in an effort to control how companies collect and use biometric identifiers. The law bans companies from collecting and storing a person’s unique biometric data without first obtaining permission and notifying the user.
The plaintiffs are seeking damages in the form of $5,000 for each intentional violation of BIPA, or $1,000 if the court decides Snapchat was negligent. The Chicago Tribune says the plaintiffs are seeing over $5 million.
Facebook has been sued over its facial recognition technology under the same Illinois law. Texas and Illinois are the only two states in the U.S. that regulate how companies use and store biometric data.
Wall Street Is Worried That Netflix Has Reached Its Saturation Point
Netflix released its second-quarter earnings on Monday, and though the company had mostly good news to report, its stock dropped 15 percent in after-hours trade because of one big problem: Its once unstoppable subscriber growth is slowing down.
The streaming service reported $1.97 billion in revenue and a profit of $40.8 million, but it admitted that it had only added 1.54 million subscribers, a pretty big fail considering its own prediction that it would collect 2.5 million this quarter. The company wrote in its report, "We are growing, but not as fast as we would like or have been. Disrupting a big market can be bumpy." Bump.
Netflix added 160,000 U.S. subscribers and 1.52 million international subscribers in the second quarter, but it had projected that those numbers would be 500,000 and 2 million respectively. Meanwhile, the company has had slowing U.S. subscriber growth in every one of the last four quarters compared to the previous year.
The company's $40.8 million profit, or 9 cents per share, beat analyst predictions of 2 cents per share, but the good news couldn't overshadow the bad. Netflix said that some subscriber "churn" (users canceling their subscriptions) was attributable to a $1 per month price increase that rolled out for new customers last year and is taking effect for grandfathered customers in 2016. "We think some members perceived the news as an impending new price increase rather than the completion of two years of grandfathering," the company said in its statement.
Netflix is still powerful in the streaming sector, of course, and is doing reasonably well financially, but the question is whether the company has reached a saturation point, both in the U.S. market and internationally. As with iPhones, there will eventually come a time when everyone who wants to subscribe to Netflix already does. And the company reported that streaming services have had setbacks in China, a potentially crucial market. It said, "We continue to explore options [in China] and, in the meantime, have plenty of work to do in our newly opened markets." It's never promising when you're using "in the meantime" in an earnings report.
The Open-Gangway Train Arrives in a Big Way to the U.S.
The New York City subway will order up to 750 open-gangway subway cars, Gov. Andrew Cuomo announced on Monday, bringing the nation’s largest transit system in line with its global peers. Open-gangway cars—known here as the “open car end” design, and allowing free passage through the train interior—may not be familiar to American riders, but they’ve helped improve subway systems around the world. For New York, this move is long overdue.
Together with wider doors and seats that fold into the walls, this design shift will make the subway faster, less crowded, and more on time. Other customer-friendly improvements will include bifurcating poles on trains, canopies over stairways to the sidewalk, and at some future date, a second wave of countdown clocks.
The plan had been to request just one of these open trains, which eliminate separations between cars to increase capacity by as much as 10 percent, as a trial run. While the language leaves room for backtracking, a strongly worded press release suggests Cuomo has his eye on the examples of Toronto, Paris and London…and perhaps that he has been readingSlate, in which I encouraged the governor to order these open cars back in February.
Over the next few days, tabloid columnists will probably start the drumbeat against the open gangway trains, arguing—as one of my colleagues did this morning—that they will provide a fertile habitat for New York’s “unusually colorful culture of vagrancy.”
Don’t believe it.
The GOP Platform Calls for Breaking Up Big Banks. Seriously!
Has the Republican Party turned on Wall Street?
In a rather surprising development Monday morning, Donald Trump's campaign manager, Paul Manafort, told a group of reporters that the official GOP platform would include a plank calling for the breakup of large U.S. financial institutions. "There has been some added components to [the platform] that reflect the issues that Mr. Trump has raised during the course of the campaign," he said, according to the American Banker. "We also call for reintroduction of the platform of Glass-Steagall so that would create barriers between what the big banks can do and avoid some of the crisis that led to 2008.”
This is a rather obvious play to lure disaffected Bernie Sanders voters over to Trump's side. Glass-Steagall was the Depression-era law separating commercial and investment banking that was repealed under President Bill Clinton in 1999. While one can debate how much its demise contributed to the 2008 financial crisis, many on the left have fixated on bringing it back as the ne plus ultra of financial reform. Sanders, of course, promised to resurrect the statute. Hillary Clinton did not during the primary campaign, arguing instead that Congress and regulators should do more to address dangers lurking in the so-called shadow banking system. This has earned her no shortage of grief from progressives who suspect she may be pandering to Wall Street donors.
Vowing to break up the banks would be a relatively easy way for Trump to capitalize on that skepticism. Doing it with the backing of the party woudl give it a bit more credibility. And what about the fact that the candidate has also said he would deregulate Wall Street by junking the Dodd-Frank financial reforms passed in 2010? Well, nobody ever accused Donald Trump of philosophical consistency. But beyond that, like many in the GOP, Manafort suggests that Dodd-Frank has been a burden on small banks. Bringing back Glass-Steagall, on the other hand, would affect big banks. Back in the real world, it's a pretty dishonest position. But rhetorically, you can see how they'd square it.
Policy logic aside, the move looks like a rather dim sign for Wall Street. Party platforms aren't binding, of course. But the authors of the GOP's document generally represent the conservative movement's hard-right flank, and with a few notable exceptions, haven't necessarily taken that many cues from their presumptive nominee. If they're open to the notion of vivisecting Goldman Sachs and JPMorgan, it could signal that the idea has currency in the party beyond Trump himself. And given that the Democrats' draft platform also includes a call for a “21st Century Glass-Steagall,” it's a notion both major American political parties have embraced.
Update, 6:30 P.M.: The RNC has blasted out a final draft of the party's platform, complete with the section on Glass-Steagall. It comes a bit out of left-field, conspicuously tacked onto the end of long section about President Obama's alleged abuse of regulatory power.
The current President and his allies on Capitol Hill have used those agencies as a superlegislature, disregarding the separation of powers, to declare as law what they could not push through the Congress.
The Environmental Protection Agency has rewritten laws to advance the Democrats’ climate change agenda. The Department of Health and Human Services has ignored the enacted text of the Affordable Care Act to do whatever it wants in healthcare. Both the Department of Labor and National Labor Relations Board have scrapped decades of labor law to implement the agenda of big labor. The Dodd-Frank law, the Democrats’ legislative Godzilla, is crushing small and community banks and other lenders. The Federal Communications Commission is imperiling the freedom of the internet. We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment. [Bolds mine]
This is sort of amusing: Officially, the Republican party now favors rebuilding the wall between commercial and investment banking, which would lead to the dismantling of the United States' largest financial conglomerates, even though it's still decrying just about every other regulatory decision by the Obama administration as gross overreach. We'll see if Sanders' fans buy it.
The first five pagraphs of this story have been updated to reflect the final draft of the platform (I cut out a few "ifs"). For the sake of transparency, I've left the original text from the end of my article below.
Original: But, here's the thing. I haven't been able to find any sign that Manafort is telling the truth at this point. On Monday morning, Republican convention organizers handed out draft text of the platform, and the section on banking includes nothing on bringing back Glass-Steagall. Instead, it spends a lot of time calling on Congress to curtail the Consumer Financial Protection Bureau's powers, then says:
Republicans believe that no financial institution is too big to fail. We support legislation to ensure that the problems of any financial institution can be resolved through the bankruptcy code. [Note: Dodd-Frank has this. It’s called the living will provision.] We endorse prudent regulation father banking system to ensure that FDIC-regulated banks are properly capitalized [Note: Dodd-Frank also has this] and taxpayers are protected on bailouts. We will end the government’s use of disparite impact theory in enforcing anti-discrimination laws with regard to lending.
And here's the full section.
Note, there's nothing in there about chopping banks down to size. It just says no financial institution, no matter how big, is too big to fail. And far as I've been able to glean, nothing changed between when this document was handed out and when the platform committee formally adopted it. (I tried calling the RNC to confirm, but the staff in D.C. sent me to an office line in Cleveland that got me nowhere.)
Anyway, it's possible that Manafort knows something I don't. Maybe Republicans really want to bring back “Wall Street's Worst Nightmare,” as Business Insider exaggeratedly put it. Or maybe everybody he's operating in a fog of confusion because it's 2016 and nothing politicians or their handlers say means anything anymore. I'll be sure to add updates as they come in.
Why There Was Nothing Buffoonish About Mike Pence’s Visit to Chili’s
When Indiana Gov. Mike Pence, Donald Trump’s newly named running mate, tweeted that he and his family had stopped for dinner at a suburban New Jersey Chili’s this weekend before returning home to Indiana, the online ridicule from New York foodies was immediate.
After Debut, Trump VP Pick Mike Pence Dines At NY Chili's. Sad!https://t.co/Gp7zA45gAs— Gothamist (@Gothamist) July 17, 2016
@mike_pence you get a weekend in NY and you go to Chili's? wow.— Adam Horowitz (@adhlawyer) July 16, 2016
But the joke was on the folks getting a quick laugh at Pence’s expense. Whatever Pence’s actual reasons for picking Chili’s following appearances with Trump in Manhattan—earnest craving, savvy trolling of media elites—it was the perfect restaurant for him to be photographed in (dining on a Quesadilla Explosion Salad, no less). After all, Chili’s may be one of the most the most politically neutral restaurants in the United States.
As the Wall Street Journal noted in 2014, according Experian Marketing Services Chili’s patrons are almost as likely to be liberal-leaning as conservative. Using a base score score of 100, Experian’s survey of thousands of restaurant patrons found that Chili’s had a score of 99 in the conservative category, falling only to 94 on the liberal side.
Compare that to Chipotle, where Hillary Clinton famously stopped after announcing her candidacy last spring and ordered a chicken burrito bowl with guacamole. Was Clinton trying to send a message? Almost certainly. According to Experian, Chipotle’s liberal score is 145—which, as the Wall Street Journal wrote at the time, means liberals “are 45% more likely than the average American to visit a Chipotle.” (Chipotle’s conservative score, on the other hand, is a mere 88.) At the time, Chipotle was one of the most popular brands in the restaurant trade.
Chili’s may not have the cachet that Chipotle did when Clinton visited, which was before an E. coli outbreak battered the chain’s reputation. Sales at Chili’s are falling, as would-be customers increasingly prefer fast-casual options over casual sit-down establishments. And Chili’s turnaround efforts—like adding a new honey chipotle flavoring to its popular baby back ribs and putting tablets at every table so customers can order without the help of wait staff—has failed to reverse the slide in customer traffic. (You might even say Chili’s could use some help becoming great again!)
So there’s likely one group who may be grateful for Pence’s surprise Chili’s visit: the management at Brinker International, the parent company of Chili’s. And they may already be favorably disposed toward him.
See, when the person manning Chili’s Twitter feed wrote, “In case you were wondering, we exclusively support the Margarita Party,” a few hours after Pence’s visit, he or she was lying.
Brinker International Inc. does not share its customers’ seemingly bipartisan leanings. A recent investigation by Eater found that between 2011 and 2014, 89 percent of Brinker International’s political action committee and executive donations went to Republicans. Things have only changed slightly since then. According to Open Secrets, while contributions from individuals affiliated with Brinker are leaning Democrat in this election cycle, the same is not true for the firm’s political action committee. Over 90 percent of the donations made by the Brinker International Inc. Political Action Committee to other political action committees, House and Senate members, or people running for those offices in the 2016 cycle also went to Republicans, including a $10,000 donation to Team Ryan, House Speaker Paul Ryan’s fundraising operation.
At the same time, Chili’s is kind of like us—it’s trying to make a comeback from hard times. Yet it remains a version of us stuck in the past, even if there are now tablets at the tables. It’s from the era before the craze for purportedly artisanal food, before the broader aversion to fatty, unhealthy meals, and before young professionals’ overwhelming tilt toward urban living. It’s definitely not p.c. Heck, Pence wouldn’t even have found a Chili’s in Manhattan if he’d tried. (There is one in Trump’s home borough of Queens, at John F. Kennedy International Airport.) It’s a place to feel comfortable. And unlike, say, Chipotle, Chili will never lecture its customers on wholesome, healthy food.
In other words, the kinds of voters the Trump campaign hopes to sign on, whether they lean right or (optimistically for Trump) left, may see something of themselves in Chili’s. Aligning oneself with this slightly faded casual-dining giant is about much more than trolling political elites. It’s about declaring common cause. And in this case, that likely comes better from Pence than Trump, part of whose appeal is that he isn’t us.
So Pence gave a business that both needs the publicity and is favorably disposed toward his party a likely boost. At the same time, he communicated something about himself to the kind of Americans the Trump campaign really, really needs.
What a political pro.
The Government Is Finally Punishing Herbalife
The Federal Trade Commission has finally closed its investigation into Herbalife—the nutritional-supplement company (and multilevel-marketing business) whose critics have accused it of being a pyramid scheme. That unsavory term is precisely what the FTC is not accusing Herbalife being—but its agreement with the company will force Herbalife to pay a hefty fine and commit to restructuring its business, one in which its products are sold by its “members.”
Finally, You Can Review Airlines Like Hotels. Will That Make Them Any Better?
Few industries in the United States are as notorious for poor customer service as domestic airlines. And few seem so immune to customer pressure to get better at their jobs.
There are a lot of reasons for that, including regulations that insulate the domestic carriers from foreign competition. But one seems to be that technology has encouraged customers to base their airline decisions largely on price, via sites such as Kayak and Expedia that by default sort flights from cheapest to most expensive. This is in stark contrast to, say, the restaurant industry, where Yelp and others have placed customer reviews and ratings at the forefront of their recommendation services. Somewhere in the middle are hotel sites, which tend to incorporate both prices and star ratings.
Now, at last, a major travel site has begun incorporating customer reviews into its airline recommendations. TripAdvisor, which has proven influential in the hotel and restaurant industries, this week began allowing users to post star ratings and reviews of airines, both foreign and domestic. Those reviews will go into both an overall star rating for each airline and a new metric called “FlyScore” that rates individual flight routes on a 1-10 scale. The FlyScore combines the user airline reviews with several other factors, including the duration of the flight plan and the amenities available onboard, to generate a rating for any given itinerary. Users can now view that rating along with the price of each flight when deciding which one to book.
This is both long overdue and welcome. TripAdvisor hotel reviews have always had their flaws and biases, but in aggregate, they do seem to correlate at least somewhat with the quality and service you can expect of a given establishment. And while a bad TripAdvisor score isn’t going to turn American Airlines into Emirates overnight, it should at least give customers some useful new data to draw on when booking a flight. Ideally, it will also give airlines a little more incentive to actually make sure their passengers have a decent experience.
So, which airlines are getting the best and worst reviews so far? Since the reviews have only been widely available for a few days, data is scant for some of the smaller international carriers. The next person to rate Air Iceland or Mandarin Airlines will be the first. But already reviews have poured in for the largest carriers, including the major domestics. And if you have experience with the airlines in question, you probably won’t be terribly surprised by how they’re doing so far. Here’s a sampling of the aggregate rating for a handful of notable airlines, as of July 15. Each of those listed here has more than 500 reviews.
- Singapore Airlines: 4.5 stars
- Emirates: 4.5 stars
- Southwest Airlines: 4.5 stars
- JetBlue Airways: 4.5 stars
- Delta Airlines: 4 stars
- Lufthansa: 4 stars
- Air France: 3.5 stars
- British Airways: 3.5 stars
- China Southern Airlines: 3.5 stars
- Ryanair: 3.5 stars
- American Airlines: 3 stars
- United Airlines: 3 stars
If there are any huge surprises in these early returns, I’m not seeing them. If anything, the ratings for American and United might be a little higher than I expected, given the level of vitriol they incur on social media. That said, 3 stars on TripAdvisor is nothing to gloat about. The median score so far is 3.7, the company told the Washington Post—just a little lower than the median for hotel reviews. And the featured “recent reviews” when I visited the site Friday were not exactly flattering.
I’ve written in the past about some of the subtle biases that shape restaurant ratings on Yelp. Some may turn out to apply to TripAdvisor airline reviews as well, while others won’t. Regardless, customer reviews seem unlikely to have as profound an impact on airlines as they have on restaurants, given the relatively limited competition they face, especially on domestic routes. It’s not as if United is unaware that it isn’t exactly beloved—it already ranks last in at least one existing customer satisfaction survey. It’s just that, well, running a big airline is hard, and delivering consistently great customer service would require a pretty dramatic turnaround in the corporate culture. No doubt there are a lot of other priorities on its list—like cutting down on those FAA safety violations—besides bumping its 3 stars on TripAdvisor up to 3.5.
Still, it can’t hurt to add a highly visible new customer satisfaction metric to the equation for the airlines to try to improve. If nothing else, passengers subjected to a terrible experience now have a convenient place to vent about it.
T-Mobile’s Plan to Give You Free Data for Pokémon Go Is Bad but Also So Good
T-Mobile really, really wants you to know that it's hip to the haps. The company calls itself the "Un-carrier" and debuts new promotions on a corporate holiday called T-Mobile Tuesdays, so it should shock no one that the mobile provider has found a way to hop on the Pokémon Go bandwagon. If T-Mobile were a character in Mean Girls, it'd be Amy Poehler's Mrs. George. I'm not like a regular carrier—I'm a cool carrier!
On Thursday, T-Mobile announced that it would offer free, unlimited Pokémon Go data for one year in order to help customers "take their Pokémon Go skillz to a whole new level." This means that while customers will still pay for mobile data in general, any data they use in the Pokémon Go app won't count toward their monthly total. To claim the promotion you have to be a T-Mobile customer, of course, and then download the T-Mobile Tuesdays app to actually lock in the deal.
T-Mobile has announced lots of promotions like this, including free data for music streaming and video streaming (which are both data-intensive) if customers use certain approved content providers. This practice is called zero-rating, and cuts against net-neutrality principles by privileging certain internet traffic and subtly steering customers to use some Internet services over others. A big part of an open internet is a level playing field where people can freely choose the services they want to use.
Additionally, as Wired and the Wall Street Journal point out, Pokémon Go isn't even burning through that much data. Playing the game consistently will obviously use more data than not playing it, but analysts say that the game's average data consumption per hour falls far below music or video streaming.
Still, many people are reporting frustrations that suggest the T-Mobile promotion will have some big fans. It's a little bit harder to ask people to be principled about net neutrality when they've got Pokémon to catch.
Pokémon Go has me using up almost all my data— Queen C (@PrepInSC) July 15, 2016
Pokemon go literally breaks my heart bc I don't have enough data to always play it outside— lauren (@youngchvsers) July 15, 2016