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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.

Elijah Labby was a Reporter with Broadband Breakfast. He was born in Pittsburgh, Pennsylvania and now resides in Orlando, Florida. He studies political science at Seminole State College, and enjoys reading and writing fiction (but not for Broadband Breakfast).

Antitrust

Federal Trade Commission Will Likely Not Be Able to Implement Competition Rules, Panelists Say

Panelists at TechFreedom event said judiciary will prevent the FTC from developing proposed antitrust policies.

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Photo of Peter Wallison from C-SPAN

WASHINGTON, October 22, 2021 –The Federal Trade Commission’s attempts to use rulemaking authority to issue antitrust policy governing technology companies will be struck down in federal courts, said panelists participating in a TechFreedom event on Thursday.

Recently formed conservative majorities on the Supreme Court and other panels have expressed opposition to the idea that the FTC possesses such rulemaking authority, these panelists said.

Hence, unlike past supreme courts, they current bench is likely to strike down FTC-issued binding rules.

Panelists highlighted former President Donald Trump appointees Brett Kavanaugh and Neil Gorsuch as justices who have opposed legal reasoning often used to permit FTC rulemaking.

Indeed, some panelists said early 20th Century legislation governing the FTC makes the case that the agency was created as an investigative body rather than a regulatory one.

Peter Wallison, senior fellow emeritus at the American Enterprise Institute, said that between five and six Supreme Court justices would ultimately vote to weaken precedents that allow for FTC rulemaking.

The Judiciary Committee of the House of Representatives recently advanced six antitrust bills that attempt to regulate the tech industry and foster greater competition, including the Ending Platform Monopolies Act and the Platform Competition and Opportunity Act.

FTC rules have taken on increased importance in terms of economic regulation due to the frequent inability of Congress to pass major legislation due to partisan gridlock. The FTC has proposed new procedures to ensure competition since Lina Khan was appointed as chair.

However, NERA Economic Consulting on Wednesday concluded that legislative proposals to regulate competition would impose costs of around $300 billion while impacting 13 additional American companies in the near term and more than 100 companies in the next decade.

Study author Christian Dippon contends that the legislation would limit American startup growth and international competitiveness while at the same time increasing costs for Americans.

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Antitrust

Public Interest Groups Urge Passage of Six Antitrust Bills Targeting Big Tech

Nearly 60 public interest groups signed a letter to House leaders to call a vote on six antitrust bills.

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WASHINGTON, September 2, 2021 – Nearly 60 public interest groups signed a letter Thursday urging the House party leaders to push for a vote on six antirust bills that cleared the House judiciary committee in June.

The goal of the six bills is to rein in the power of Big Tech through new antirust liability provisions, including new merger and acquisition review, measures to prevent anticompetitive activity, and providing government enforcers more power to break-up or separate big businesses. They include American Choice and Innovation Online Act, H.R. 3816, Platform Competition and Opportunity Act, H.R. 3826, Ending Platform Monopolies Act, H.R. 3825, Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, H.R. 3849, Merger Filing Fee Modernization Act, H.R. 3843, and State Antitrust Enforcement Venue Act, H.R. 3460.

The letter, which was directed at House Speaker Nancy Pelosi, D-California, and House Minority Leader Kevin McCarthy, R-California, were promoting a package of six bills that were the result of a two-year bipartisan investigation that included 10 hearings, featuring the testimony of the CEOs of the major tech companies, 240 interviews, 1.3 million documents and a 450-page report, the letter notes.

“We believe that these bills will bring urgently needed change and accountability to these companies and an industry that most Americans agree is already doing great harm to our democracy,” the letter said. Public Citizen was the first of the 58 groups on the letter.

America has a monopoly problem. Monopoly power lowers wages, reduces innovation and entrepreneurship, exacerbates income and regional inequality, undermines the free press and access to information, and perpetuates toxic systems of racial, gender, and class dominance,” the letter alleged.

“Big Tech monopolies are at the center of many of these problems,” it continued. “Reining in these companies is an essential first step to reverse the damage of concentrated corporate power throughout our economy. The bills that passed out of the House Judiciary Committee, with bipartisan support, do just that and it is imperative that they move forward in the House.”

List of signatories:

  • Public Citizen
  • Accountable Tech
  • Action Center on Race & the Economy
  • ALIGN: The Alliance for a Greater New York
  • Alliance for Pharmacy Compounding
  • American Booksellers Association
  • American Family Voices
  • American Independent Business Alliance
  • American Specialty Toy Retailing Association
  • Artist Rights Alliance
  • Athena
  • Cambridge Local First
  • Center for American Progress
  • Center for Digital Democracy
  • Center for Popular Democracy
  • Committee to Support the Antitrust Laws
  • Decode Democracy
  • Demos
  • Electronic Frontier Foundation
  • Friends of the Earth
  • Future of Music Coalition
  • Gig Workers Rising
  • Global Exchange
  • Indivisible Georgia Coalition
  • Indivisible Hawaii
  • Indivisible Ulster/NY19
  • Institute for Local Self-Reliance
  • International Brotherhood of Teamsters
  • Jobs With Justice
  • Kairos Action
  • Local First Arizona
  • Louisville Independent Business Alliance
  • Main Street Alliance
  • Mainers for Accountable Leadership
  • Media Alliance
  • Metropolitan Washington Council, AFL-CIO
  • National Employment Law Project
  • New York Communities For Change
  • New York Communities for Change
  • North American Hardware and Paint Association
  • Open Markets Institute
  • Our Revolution
  • PowerSwitch Action
  • Public Knowledge
  • Running Industry Association
  • Secure Elections Network
  • Service Employees International Union
  • Shop Local Raleigh/Greater Raleigh Merchants Association
  • SIMBA (Spokane Independent Metro Business Alliance)
  • Small Business Rising
  • Stand Up Nashville
  • StayLocal, an initiative of Urban Conservancy
  • Strategic Organizing Center
  • SumOfUs
  • The Democratic Coalition
  • UltraViolet
  • Venice Resistance
  • Warehouse workers for justice

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Antitrust

FTC Commissioner Phillips Warns About Shifting Direction of Agency

Noah Phillips voiced concern about the scope and practices of the Biden administration’s FTC.

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FTC Commissioner Noah Phillips

WASHINGTON, September 2, 2021 — Federal Trade Commissioner Noah Phillips said at a Hudson Institute webinar on Monday that he’s concerned about the direction the competition watchdog is moving toward considering recent events.

Phillips said the left-leaning voices in Washington and the appointment of Lina Khan to chair the agency has left him wondering about the legacy of the last 40 years of competition regulation in America – which have been hallmarked by the Hart-Scott-Rodino Antitrust Improvements Act of 1976. That legislation effectively gave the FTC the ability to review mergers and acquisitions before they were finalized, rather than afterward, which governed pre-legislation.

Under Biden-appointee Lina Khan, Phillips described how the FTC has done away with the process of early termination. In the past, this process made it unnecessary for every single company to provide advanced notice and advanced approval for mergers. “Historically, parties have been able to come to the agencies and say, ‘You’re not interested in this, can we just go ahead and finish our deal,’ and the agencies have said ‘yes.’”

He said this is no longer the case, and that every single merger must provide advanced notice and approval. “What we’re introducing is an inefficiency in the market for transactions that we have no interest in pursuing, just for the sake of it. I think that’s a problem,” he continued. “My concern is that it is making merger enforcement less effective, less efficient, and less fair.”

Phillips pointed to left-of-center and leftist voices in Congress, such as Rep. David Cicilline, D-New York, Sen. Elizabeth Warren, D-Massachusetts, and Rep. Alexandria Ocasio-Cortez, D-New York, who, at the outset of the pandemic, wanted to ban all acquisitions and mergers—regardless of their merit. He described this view as falling outside of mainstream perspectives, but noteworthy nonetheless.

“I don’t think that is what most people believe,” Phillips remarked. “I don’t think that is what Hart-Scott-Rodino envisions.”

This webinar took place only a couple of weeks after Phillips spoke at the Technology Policy Institute’s 2021 Aspen Forum, where he voiced similar concerns, stating that he feared that this new direction would make it more difficult for the FTC to hear cases that it should, and defended the commission’s record against critics who said it was lax under the Trump Administration.

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