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Advocates for Antitrust Enforcement Say Consumer Welfare Standard Only One Layer of Competition Law



Photo of Capitol Forum event by Masha Abarinova

WASHINGTON, December 6, 2019 – Antitrust enforcement must adapt to the changing structures of the media market, according to experts at a Capitol Forum conference Thursday. Economic change, said Jonathan Kanter of Paul, Weiss, has introduced questions about the goals of enforcement as well as how to modernize antitrust policies.

Enforcement involves a combination of keeping prices low and protecting the competitive process, Kanter continued. It’s also unclear whether Congress intended for the scope of antitrust laws to be so narrow, he said.

The specifics of consumer welfare standards were never written into law, Kanter added. It would be helpful for Congress to provide clearer guidance to the courts about enforcement procedures.

Consumer welfare standard and price theory are only some of the layers in the enforcement process, said Alec Stapp from the International Center for Law and Economics. Privacy protection is one aspect of quality control that came with the advent of digital platforms, he said.

News Media Alliance’s David Chavern emphasized how current antitrust regulations prioritize digital platforms over news services.

Digital content is subsidized by declining print media sales, he said. Although the government cannot regulate the press, big tech platforms such as Google heavily influence the monetization of news and how it is presented to the audience.

Lack of innovation in traditional media, Chavern said, has resulted in fewer news startups as well as a repressed economy. Moreover, the more data a company controls, the more prevalent it is in advertising. Google, he said, ultimately chooses the news for users.

In contrast, Stapp argued that broad technological change has reduced the newspaper industry’s distribution monopoly over the past couple of decades.

News outlets must adapt to innovation in order to stay afloat, he said. Business-model experimentation, such as implementing a paywall for online content, can help these companies diversify their revenue.

Stapp also discouraged news publishers from forming a coalition against Google or other tech conglomerates. Since Google generates the most money off search advertisements, he said, these outlets may lose some of their online traffic.

Withdrawing from Google may also hurt news outlets’ relationship with consumers, Stapp added, because privacy protection laws favor companies that maintain a first-party relationship with its users. The current emphasis on privacy further entrenches Facebook and Google within the media market, he said.

Despite the differences between digital and print media, Kanter said, antitrust enforcement should prioritize market-based solutions over regulations.

Google’s advantage, Kanter noted, is that it has a large amount of information available in one place. New companies entering the market, he said, can make use of that information to overcome entry barriers, as government regulations have their own set of problems.

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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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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.

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