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Antitrust

Harold Feld Argues That Increased Regulation Will Be More Successful than Breaking Up Big Tech

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WASHINGTON, July 15, 2019 — Rather than seeking to break up big technology giants, Congress should instead focus on ratcheting up regulation of the online platform players to curb their greatest abuses, public interest advocate Harold Feld argued on Monday.

Feld, the author of the recent e-book, “The Case for the Digital Platform Act: Market Structure and Regulation of Digital Platforms,” argues for proactive behavior remedies to limit the extent of data collected by digital platforms, and to mandate data portability and rights of deletion.

These steps will be necessary to balance the promotion of competition with the protection of current benefits, Feld and others said at a roundtable event hosted by the German Marshall Fund.

Feld, vice president at Public Knowledge, said the first step towards regulation is definition. He defined a digital platform by three criteria. First, the service must be accessed via the internet.

Second, it must be multisided, allowing users to play multiple roles: content producers and consumers, information generators and searchers, product sellers and reviewers.

Finally, digital platforms enjoy particular types of powerful network effects. These network effects are a significant part of what make them so useful but can also make it difficult for competition to thrive.

Although the possibility of breaking up big tech should not be ruled out entirely, Feld explained that this would not necessarily have the expected effect, calling it “the starfish problem.” If certain species of starfish are torn apart, each individual arm will grow into a new starfish.

Mandating divestiture could have a similar result, said Feld. For example, if Google and YouTube were broken apart, the new companies would still dominate the markets of search engines and video sharing.

Likewise, the breakup of Facebook, Instagram, and WhatsApp would create three new platforms each dominant in their respective markets that would probably avoid competing with one another so as to preserve that power. If they were to initially compete, one platform would likely dominate over the other two.

Although recent months have seen bipartisan calls to break up big tech, Feld warned that such an effort would be “incredibly difficult” in the digital world and would fail to address the underlying factors that drove the market to consolidation in the first place.

Besides data regulation, other potential regulations include implementing consumer proprietary network information rules protecting the information of competitors that must operate on platforms to reach consumers, requiring fair and reasonable non-discriminatory licensing for certain intellectual property, and expanding the private right of action for consumers.

Although some argue against increased regulation on the basis that the market will work itself out, this is not only unlikely but simply not the private sector’s role, said Feld, urging Congress to create and implement digital platform regulation and potentially create a new regulatory body to oversee enforcement rather than letting a few huge companies set their own rules.

Some sort of “digital commerce commission” is necessary, agreed Benton Senior Fellow Gigi Sohn. She said that communications legislation has been inadequately enforced.

Instead of a new regulatory layer, the Federal Trade Commission and Federal Communications Commission should just do their jobs, argued former FCC Commissioner Mignon Clyburn. She suggested allocating more resources to the FTC and improving harmonization between the agencies.

Contrary to what some lawmakers suggest, Section 230 of the Communications Decency Act does not grant platforms complete immunity or protect them from criminal law, Feld said. Removing it would lead to widespread confusion and an “invariable deluge of lawsuits,” and likely do nothing to address the problem at hand.

“Until there’s something better, it needs to stay in place,” he said, adding that once Congress works to develop new content moderation regulations, the fight over Section 230 will become completely irrelevant.

Feld advocated for a mixed model of direct prohibition of certain types of harmful content, reporting requirements for potentially illegal activity, and private monitoring under government oversight.

He also suggested limiting penalties for breach of conduct by restricting an offender’s ability to post public content rather than banning them from the platform altogether.

(Photo of event by Emily McPhie.)

Antitrust

‘Time is Now’ for Separate Big Tech Regulatory Agency, Public Interest Group Says

‘We need to recognize that absolutely the time is now. It is neither too soon nor too late.’

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Photo of Harold Feld, senior vice president at Public Knowledge

WASHINGTON, June 21, 2022 – Public Knowledge, non-profit public interest group, further advocated Thursday support for the Digital Platform Commission Act introduced in the Senate in May that would create a new federal agency designed to regulate digital platforms on an ongoing basis.

“We need to recognize that absolutely the time is now. It is neither too soon nor too late,” said Harold Feld, senior vice president at Public Knowledge.

The DPCA, introduced by Senator Michael Bennet, D-CO., and Representative Peter Welch, D-VT., would, if adopted, create a new federal agency designed to “provide comprehensive, sector-specific regulation of digital platforms to protect consumers, promote competition, and defend the public interest.”

The independent body would conduct hearings, research and investigations all while promoting competition and establishing rules with appropriate penalties.

Public Knowledge primarily focuses on competition in the digital marketplace. It champions for open internet and has openly advocated for antitrust legislation that would limit Big Tech action in favor of fair competition in the digital marketspace.

Feld published a book in 2019 titled, “The Case for the Digital Platform Act: Breakups, Starfish Problems and Tech Regulation.” In it, Feld explains the need for a separate government agency to regulate digital platforms.

Digital regulation is new but has rapidly become critical to the economy, continued Feld. As such, it is necessary for the government to create a completely new agency in order to provide the proper oversight.

In the past, Congress empowered independent bodies with effective tools and expert teams when it lacked expertise to oversee complex sectors of the economy but there is no such body for digital platforms, said Feld.

“The reality is that [Congress] can’t keep up,” said Welch. This comes at a time when antitrust action continues to pile up in Congress, sparking debate across all sides of the issue.

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Antitrust

FTC Commissioner Concerned About Antitrust Impact on Already Rising Consumer Prices

Noah Phillips said Tuesday he wants the commission to think about the impact of antitrust rules on rising prices.

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Screenshot of Federal Trade Commissioner Noah Phillips

WASHINGTON, May 17, 2022 – Rising inflation should be a primary concern for the Federal Trade Commission when considering antitrust regulations on Big Tech, said Commissioner Noah Phillips Tuesday.

When considering laws, “the important thing is what impact it has on the consumer,” said Phillips. “We need to continue to guard like a hawk against conduct and against laws that have the effect of raising prices for consumers.”

Current record highs in the inflation rate, which means money is becoming less valuable as products become more expensive, has meant Washington must become sensitive to further price increases that could come out of such antitrust legislation, the commissioner said.

Phillips did not comment on how such movies would mean higher prices, but that signals, such as theHouse Judiciary Committee’s antitrust report two years ago, that reign in Big Tech companies and bring back enforcement of laws could mean higher prices. He raised concerns that recent policies are prohibiting competition rather than facilitating it.

This follows recent concerns that the American Innovation and Choice Online Act, currently awaiting Senate floor consideration, will inhibit America’s global competitiveness by weakening major American companies, thus impairing the American economy. That legislation would prohibit platform owners from giving preference to their products against third-party products.

This act is one of many currently under consideration at Congress, including Ending Platform Monopolies Act and Platform Competition and Opportunity Act.

Small businesses have worried that by enacting some legislation targeting Big Tech, they would be impacted because they rely on such platforms for success.

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Antitrust

Critics and Supporters Trade Views on American Innovation and Choice Online Act

American Innovation and Choice Online Act is intended to protect fair competition among businesses, but panelists differed on its impact.

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Photo of Amy Klobuchar from August 2019 by Gage Skidmore used with permission

WASHINGTON, May 10, 2022 – Experts differed on the effect that antitrust legislation targeting big tech companies allegedly engaging in discriminatory behavior would have on small businesses.

Small businesses “want Congress not to do anything that will screw up or weaken the services that they rely on for their business,” said Michael Petricone, senior vice present of the Consumer Technology Association, at a Protocol Live event on Thursday.

Petricone said that antitrust bill would encourage tech companies to relocate to other countries, harming the American economy. He said small businesses would be affected the most.

Instead, Petricone called for  a “smarter immigration policy” to allow foreign innovators access to American tech market, as well as the defeat of the antitrust legislation.

But other said that small businesses suffer from predatory behavior by big tech companies. “Companies can’t get their foot in the door when there is already self-preferencing,” said Awesta Sarkash, representative for Small Business Majority, an advocacy organization, adding that 80% of small businesses say they want antitrust laws to protect them.

Self-preferencing on online platforms is detrimental to the success of small businesses who rely on social media advertising for business, she said. The new antitrust proposals would ensure an level playing field and promote fair competition, she said.

The American Innovation and Choice Online Act would prohibit certain online platforms from unfairly preferencing products, limiting another business’ ability to operate on a platform, or discriminating against competing products and services.

The bill sponsored by Sen. Amy Klobuchar, D-Minn, was introduced to the Senate on May 2 and is awaiting Senate floor consideration.

The debate follows concerns raised by both democrats and republicans about America’s global competitiveness as the bill would weaken major American companies.

If passed, the bill will follow the European Union’s Digital Services Act which similarly sets accountability standards for online platforms, preventing potentially harmful content and behavior.

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