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Senators Continue to Grill Witnesses About Perceived Lack of Antitrust Enforcement Against Big Tech



Photo of FTC Bureau of Competition Director Bruce Hoffman from the agency's Twitter feed

WASHINGTON, September 25, 2019 – A Senate Judiciary subcommittee devoted to antitrust on Tuesday grilled witnesses about what appeared to a dearth of startups, and also expressed concern about a lack of antitrust enforcement.

Determining which acquisitions are beneficial and which aren’t is not as easy as it seems, said Antitrust Subcommittee Chairman Mike Lee, R-Utah. He said it was important that competition is unharmed and that consumer choice maintains stability.

While a hearing on September 17 focused on divisions and conflicts between the nation’s two antitrust enforcers – the Justice Department and the Federal Trade Commission – Tuesday’s hearing focused on “Examining Acquisitions of Nascent or Potential Competitors by Digital Platforms.”

The U.S. economy has churned out the lowest number of startup companies in decades, said Ranking Member Amy Klobuchar, D-Minn. Threatened competition is the sign of monopoly’s ever-increasing dominance, she said. In order to build the next great American company, the economy must have lower entry barriers for new ideas to take seed.

Antitrust enforcement isn’t working, said Sen. Richard Blumenthal, D-Conn. This is the case within the pharmaceutical, aircraft and digital industries.

The FTC needs to be more aggressive in confronting anti-competitive issues, he said.

Sen. Josh Hawley, R-Mo., said that he was increasingly concerned about the FTC’s inability to protect the public interest and competition, particularly where big tech is concerned.

Specifically, he cited the FTC’s investigation into how Facebook may be using strategic tactics to stifle its competition. Facebook has allegedly been utilizing Instagram’s platform to block content and terms related to Snapchat’s owner Snap Inc.

The witnesses present at the hearing acknowledged the negative side-effects of company acquisitions, but also noted that mergers may possess pro-competitive aspects.

Bruce Hoffman, director of the FTC’s Bureau of Competition, said that the Commission is committed to examining the effectiveness of its antitrust enforcement efforts.  The Bureau of Competition’s Technology Task Force helps deepen the agency’s understanding of technology markets and strengthens its ability to protect consumers from anti-competitive conduct.

Concerns about eliminating future market participants, Hoffman said, can arise when evidence shows that independent entry would have pro-competitive effects that would be lost with the merger.

Digital players in the market may be pursuing deals that fly under the antitrust radar, said Diana Moss, president of the American Antitrust Institute. Given big tech’s significant record of serial acquisitions, it’s imperative that enforcers consider the longer-term implications of market concentrations and barriers to entry.

Antitrust enforcers have the adequate tools to evaluate the competitive effects in digital technology markets, she said. They just need to use them. It’s time to address the weak enforcement of tech mergers.

Distinguishing the difference between nascent and potential competitors is crucial, said John Yun, director of economic education at the Global Antitrust Institute. Potential competitors are defined as firms that are predicted to have a competing product in the future, but not currently. Whereas a nascent competitor refers to a current product that could already become a potential competitor.

The acquisition of a potential or nascent competitor, Yun said, can clearly result in an outcome that is harmful to consumers and innovation. However, a merger can also unlock a great deal of consumer value.

American economic growth is dependent on the economic activity that comes from young firms scaling into successful companies, said Patricia Nakache, general partner at Trinity Ventures. Policymakers, entrepreneurs and venture capitalists must work together to encourage innovation.

Public markets are not as welcoming to small companies as they once were, she added. However, startups often view larger companies as potential customers or distribution channels. For that reason, these companies can provide unique insight to the market.

The Commission works hard on its investigations, Hoffman said, however it has limits on the actions it can do. The elements that the agency focuses on are capability and likely effects of these mergers, rather than the intent.

The results of such mergers could go either way, said Yun. The problem is that enforcers are not exactly certain what they are looking for regarding anticompetitive conduct.

The biggest acquisitions, said Moss, are not within social media platforms but with artificial intelligence, data analytics and cloud computing. Those are the industries that enforcers need to analyze, rather than the ones discussed the most on mainstream media.


Key Republican: Anticompetitive Practices of Big Tech Present a Threat to Innovation

Rep. Ken Buck said tech companies’ practices are anticompetitive and threaten innovation, free speech and national security.



Screenshot of Rep. Ken Buck from the Heritage Foundation webcast

WASHINGTON, January 13, 2023 — Rep. Ken Buck, R-Colo., argued on Wednesday that the anticompetitive practices of large tech companies present a threat to innovation, free speech and national security — and that even Republicans who are traditionally wary of antitrust legislation should view it as a key tool for curbing Big Tech’s power.

“I’m a free market person — I apply that principle to just about everywhere — but if you don’t have a market, you can’t have a free market,” Buck said at a Heritage Foundation event. “And when Google controls 94 percent of the online searches in this country, you don’t have a free market.”

Buck said that it was the responsibility of Congress to actively shape antitrust law, rather than “leaving it up to the courts to create something over the next 30 years.”

Among the several anti-Big Tech bills that have been proposed, Buck highlighted as his priority legislation that would prevent certain companies from acting as both buyers and sellers in digital advertising markets.

The bill applies to companies that generate more than $20 billion in digital ad revenues — specifically targeting Google and Facebook — and has so far received bipartisan support in both the House and the Senate.

Tech companies have spent millions of dollars lobbying against proposed antitrust bills, making it politically precarious for some members of Congress to support them, Buck said. Still, he urged his colleagues to consider the harms allegedly caused by social media platforms.

“We know that Instagram recognized that there was body shaming going on, there was depression among teenage girls, there was a higher suicide rate among teenage girls, and they doubled down,” Buck said. “They didn’t just say, ‘We’ve got to deal with this issue’ — they decided they were going to start marketing to a younger group.”

More competition in the market could give teens and parents access to better alternatives, Buck said, but the power held by the largest platforms makes it nearly impossible for competitors to emerge.

Rep. Buck linked free speech issues for tech industry to antitrust

“How do you have free speech, how do you have competition in the marketplace when you’ve got four companies that are so big that they can wipe out any kind of competitor?” he asked.

Buck has long been a critic of Big Tech, and introduced legislation to ban the TikTok app from U.S. government devices more than a year before similar legislation was passed as part of the bipartisan spending bill in December. This decision had nothing to do with fear of TikTok as a competitor to U.S. companies, he said.

“TikTok is dangerous, not because of its competition in the marketplace — I think it’s healthy in that sense; if Microsoft or some company had bought it, I’d be all in favor of that kind of competition for Facebook — but the bottom line is [that] how it’s being used by an adversary is dangerous and concerning.”

Although the TikTok ban won broad Republican support, alongside a variety of proposals to target tech companies’ privacy or content moderation practices, many antitrust bills have been less popular.

Buck has been open about his struggles in convincing other Republicans to pursue antitrust action, telling The Washington Post in March that “the antitrust bills that we are currently considering will not move forward under Republican leadership, and that’s been a very clear signal that has been sent.”

And now that the House is under Republican control, several experts have predicted that antitrust legislation is unlikely to move forward any time soon.

In an op-ed published Wednesday, President Joe Biden called on members of Congress to overcome partisan disagreements and keep tech companies in check by passing digital privacy, antitrust and content moderation legislation.

Rep. Cathy McMorris Rodgers, R-Wash., who chairs the House Energy and Commerce Committee, responded to Biden’s comments in a statement that agreed with the need for privacy and content moderation action but did not mention antitrust.

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‘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.’



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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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.



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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