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Antitrust

Who’s On First? Congress Upset With Wasteful and Petty Antitrust Squabbles Between Justice and FTC

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Photo of Makan Delrahim by Masha Abarinova

WASHINGTON, September 17, 2019 – Congress on Tuesday put a spotlight on federal antitrust investigators scrutinizing Google and Facebook, as members of the Senate Judiciary Committee honed in on whether the Justice Department and the Federal Trade Commission were wasting efforts by investigating the same companies.

The American people increasingly understand that competition is critical to their well-being, said Sen. Amy Klobuchar, D-Minn. However, despite the emphasis on competition, America still has a huge monopoly problem within technology, pharmaceutics and other industries.

There’s no reason for the FTC and DOJ to split up an investigation, said Sen. Michael Lee, R-Utah. Consumers deserve better than that. Splitting up an antitrust investigation, Lee said, is simply unacceptable.

FTC Chairman Joseph Simons said that his agency remains committed to marshaling its resources efficiently in order to protect consumers and promote competition, and he confirmed the agency’s continuing investigation of Facebook, against whom it secured a $5 billion privacy fine.

Simons also said that U.S. antitrust agencies promote convergence towards sound policy through bilateral engagement with foreign competition agencies.

The only company that the FTC said it could disclose that it’s investigating is Facebook, Simons said. Simons also added that the FTC has not interviewed anyone from Facebook regarding the investigation.

For his part, Justice Department Antitrust Division chief Makan Delrahim said that his agency doesn’t hesitate to investigate or litigate multibillion-dollar mergers.

Highlighting one antitrust power that rival agency FTC lacks, Delrahim said that criminal enforcement is one of the department’s most powerful deterrents against price-fixing, bid rigging and market allocation.

Delrahim also said that he cannot deny that both the agencies’ time has been wasted on petty squabbles over the same company. However, it is often the case that the FTC and Justice are looking at different elements of the same companies.

With regard to Google, Delrahim said that he and the 50 state attorneys general who recently opened an antitrust investigation of the search engine giant have issued civil investigative demands. It’s important that the Justice Department and the states don’t “trip over each other” early in the investigation, he said.

Sen. Josh Hawley, R-Mo., said he was concerned about a pattern of lacking pro-competition enforcement.

The FTC and the Justice Department seem to have a “culture of paralysis,” he said. He questioned why Congress should continue wasting money for these enforcement efforts without first dealing with each agency’s respective issues.

Members also brought up the Trump Administration’s possible involvement with antitrust affairs. Sen. Patrick Leahy, D-Vt., mentioned how the White House ordered the antitrust division to block the merger of AT&T and Time Warner.

Could he confirm that no one from the White House directly or indirectly expressed their interests regarding this matter?, Leahy asked Delrahim. Delrahim said that his department received no input from the White House on any decision.

Sen. Richard Blumenthal, D-Conn., said that there appears to be a perception problem between antitrust enforcers and the companies that they go after. He said that after Facebook received a $5 billion dollar fine from the FTC, the company’s stocks increased the next day.

The fact that these agencies have come here without specifics, he said, reinforces the idea that federal antitrust enforcement is an “empty suit.”

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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