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Antitrust

Big Tech Must Be Broken Up, says House Antitrust Subcommittee Chairman

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Photos at House Judiciary Antitrust Subcommittee hearing by Elijah Labby

July 30, 2020 – Several of the companies featured in Wednesday’s blockbuster big tech hearing need to be broken up, House Judiciary Antitrust Subcommittee Chairman David Cicilline, D-R.I., said at the conclusion of the nearly six-hour hearing.

“This hearing has made one fact clear to me: These companies as they exist today have monopoly power,” he said, speaking of Amazon, Apple, Facebook and Google. “Some need to be broken up. This must end.”

And – even if breakup of any of these four companies is a way off, or ultimately unlikely to happen – regulation of areas of data usage and privacy appears much more likely.

The long-awaited meeting had no shortage of loaded questions, contentiousness, and fiery theatrics.

The hearing remotely brought together CEOs from four of the world’s most powerful internet companies. Representatives grilled the executives on alleged anti-competitive practices.

Yet the Judiciary Committee hearing room was largely empty, save for around a dozen reporters following social distancing guidelines. Yet from the earliest moments of the hearing, it was clear that the CEOs were in for an impassioned interrogation.

Chairman Cicilline began by noting that a conflict exists between Google’s mission to provide relevant information to those searching for it and its interest in keeping users on its platform and affiliated sites for as long as possible.

Similar lines of questioning ran throughout the day, spanning topics from the development requirements of Apple’s App Store to Amazon’s prioritization of so-called “essential products.”

At times, the lines of questioning gained a greater urgency.

Human rights in China, and in America

Rep. Ken Buck, R-Colo., mentioned several times the plight of the Uighur Muslims in China’s Xinjiang region, drawing ties between Google’s activities in China and the human rights abuses found there. Rep. Matt Gaetz, R-Florida, similarly hit Google for such alleged misdeeds. Rep. Jordan said that the World Health Organization “obviously shills for China.”

Their comments contribute to an increasingly contentious governmental relationship with China.

“Cultural war” issues in America also factored into the discussion.

Rep. Kelly Armstrong noted that law enforcement requests for “geofence warrants” – which compel tech companies to hand over individuals’ private data to police bodies – had risen exponentially. Such policies have been objects of concern in the wake of increased protests surrounding the death of George Floyd.

The CEOs attempted to downplay the roles their companies play in the global technology arena. They did just that.

Steve Cook of Apple said that Apple did not control a majority of the market share in any of their product categories, Mark Zuckerberg of Facebook said that Apple had a more widely-used messaging service, and Jeff Bezos of Amazon said that Amazon did not do several of its services as well as the other companies featured.

However, if their goal was to convince the congressmen that their companies were not sufficiently powerful to perform the misdeeds of which they were accused, the representatives did not seem convinced.

Are changes to the antitrust laws necessary?

No member of Congress made a clear case that changes were necessary to the United States’ antitrust laws. Indeed, Rep. James Sensenbrenner, R-Wisconsin, said that there is no need for change in that area.

Sensenbrenner instead endorsed utilizing the laws on the books. Still, member of Congress criticized the Federal Trade Commission’s past merger approvals.

With no innovative legislative solutions resulting from Congress and no real admittance of anti-competitive practices from big tech CEOs, their appearance before lawmakers turned out to be less promising than many viewers may have hoped.

The hearing failed to produce any legislative proposal to break up tech monopolies, failed to fully address the impacts these businesses have on consumers, and got sidetracked over concerns on content moderation, foreign influence, and free speech.

Members of Congress were prepared with legitimate evidence of anti-competitive business practices, but failed to offer a solution to creating more competitive environments.

Election interference claims against Google

Reps. Jim Jordan and Greg Steube said that they were concerned about electoral interference and alleged anti-conservative bias at Google and Facebook.

Jordan inquired of Google’s Sundar Pichai whether he and his company would conspire to sway the election in favor of Joe Biden. Steube said that he heard multiple reports of his congressional office’s emails getting lost in the spam folders of those in his district that had long expressed interest in supporting him.

However, there was inter-representative conflict as well.

When Jordan raised concerns of electoral interference at Google, Rep. Mary Gay Scanlon, D-Penn. said he was dealing in “fringe conspiracy theories.”

This exchange devolved into Cicilline shouting and attempting to gavel Jordan back into order, with Jordan shouting back and Rep. Jamie Raskin yelling at Jordan to “Put on your mask!”

But while the hearing was long on drama, it was relatively short on commitments from the executives. The CEOs pledged to further ethnic inclusion and equity in their companies, but said that they would follow up with the individual representatives’ offices about matters that may have proven too risky to speak about publicly.

Editor’s Note: Reporter Jericho Casper contributed to this story.

See additional story on CEO comments.

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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