Connect with us


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.


‘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.

Continue Reading


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.

Continue Reading


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.



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.

Continue Reading


Signup for Broadband Breakfast

Get twice-weekly Breakfast Media news alerts.
* = required field