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Antitrust

Brookings Panelists Call For Breaking Up and Breaking Open Big Tech Powerhouses

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Screenshot of Oliver Darcy, senior media reporter with CNN, from the Brookings Institution webinar

August 4, 2020 — Panelists in a Tuesday Brookings Institution webinar discussed their takes on the historic House Judiciary Antitrust Subcommittee hearing on July 29.

The hearing brought the CEOs of four of Silicon Valley’s most affluent businesses — Facebook, Amazon, Apple and Google — together to testify before Congress about allegedly anticompetitive business practices.

The Brookings panelists, who shared concern over the power held by each of the tech firms, discussed what steps they thought were necessary to protect public interest going forward.

Kara Swisher, a tech columnist with the New York Times and founder and editor of Recode, proposed that going forward, it may be more strategic for the committee to handle each company individually.

“Each company requires a different solution,” she said.

Former Federal Communications Commission Chairman Tom Wheeler also doubted that the committee would be able to create a single legislative solution and resolve each of the cases in one report.

“These are four diverse companies, with diverse sets of activities,” he said. “How you resolve that all into one report will be interesting.”

Wheeler said he felt the questioning focused “too much on the effects of monopoly power, rather than the cause of that power.”

“The cause of their power is that they hold the asset of the 21st century, digital information or data,” Wheeler said, arguing big tech corporations are currently “hoarding assets the way Rockefeller hoarded oil” in the late 1800s.

While he did not call for breaking up big tech companies, Wheeler suggested breaking them open.

He cited a case in which the United Kingdom forced major platforms to open up the data banks they had on consumers.

“Once the data was made available to new parties, nearly 200 applications offering innovative ideas were created,” Wheeler said.

Wheeler called for regulation that would force platforms to open access to data, so that start-up businesses would have an opportunity to compete.

The panelists agreed that consumers should be able to take back some of the control that has been given to these companies.

Oliver Darcy, senior media reporter with CNN, called for a nuanced policy giving consumers a right to their own data.

“There should be options for consumers,” said Darcy, listing possibilities such as consumers controlling how their data is shared, or even choosing to sell it.

When moderator Dipayan Ghosh, leader of the Digital Platforms & Democracy Project at the Harvard Kennedy School, asked whether panelists believed these companies were natural monopolies, the panelists each answered that there was nothing natural about them.

“Facebook doesn’t have to own Instagram and WhatsApp,” said Darcy, arguing that there is an opportunity to convince consumers breaking up these companies is the answer.

“When you have to compete you have to differentiate,” Swisher said. “If you broke Amazon Web Services off of Amazon, you have the potential to create multiple really lucrative companies.”

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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