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Antitrust

House Democratic Report Proposes ‘Structural Separation’ of Big Tech, GOP Minority Report Wants to Gut Section 230

Jericho Casper

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Phot of subcommittee Ranking Member Jim Jordan, R-Ohio

October 11, 2020 — House Democrats on Tuesday proposed a massive overhaul of U.S. antitrust laws that could make it easier to break up giant tech companies.

If elements of the 449-page proposal are implemented in legislation, it could be a profound re-writing of the relationship between Big Tech and Washington. New rules would restrict the lines of business in which dominant multi-sided digital platforms could operate.

The report, by the House Judiciary Antitrust Subcommittee, is the culmination of a 16-month investigation into the practices of Facebook, Google, Apple and Amazon. It lays out a number of concrete antitrust policy recommendations.

In particular, the report says, Congress should force a “structural separations” of operations within the respective companies.

For example, among the proposals include a ban on tech platforms acquiring future startups or potential rivals. In the case of Amazon, the proposals would bar it from both owning and selling products on an e-commerce hub. Both of those proposals were made with only Democratic support.

Republicans did not support those proposals. Later on Tuesday, the Republican minority committee staff published a separate report entitled, “Reigning in Big Tech’s Censorship of Conservatives.”

In the GOP report, Judiciary Republicans called for revamping the liability protections that shield Facebook, Twitter and other internet companies, or Section 230 of the Communications Decency Act. The Republicans want to open Big Tech up to lawsuits from which they are currently immune.

But there was bipartisan support on the committee for providing new resources to federal antitrust enforcement. Republicans also favor making it easier for officials at the Justice Department and the Federal Trade Commission to “shift the burden of proof” on what makes up an anti-competitive acquisition.

One of the main suggestions calls for Congress to define a new standard for antitrust violations, and enact laws “designed to protect not just consumers, but also workers, entrepreneurs, independent businesses, open markets, a fair economy, and democratic ideals.”

Representative Jim Jordan, R-Ohio, the ranking Republican on the Judiciary committee, said: “Big tech is out to get conservatives. Unfortunately, the Democrats’ partisan report ignores this fundamental problem and potential solutions and instead advances radical proposals that would refashion antitrust law in the vision of the far left.”

Tech companies defended their business practices and touted the popularity of their services among consumers in statements in response to the committee’s reports.

Meanwhile, the Democratic report received praise from consumer advocates and representatives for companies and industries who say they have been harmed by Silicon Valley giants’ anti-competitive conduct.

The next step will be for legislators to turn the recommendations to legislation. Subcommittee Chairman David Cicilline, D-R.I., has discussed plans for action, and said, “In the coming weeks and months, we will have an opportunity to further explore these remedies.”

“I am hopeful that, with Joe Biden in the White House, we will finally end this monopoly moment and restore a free and open internet,” said Cicilline, indicating that the effort may require a Democratic win of the presidency in November to progress.

Antitrust

Former and Current FTC Commissioners Laud Efforts At Greater Resources For Antitrust Cases

Samuel Triginelli

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Screenshot of FTC Commissioner Noah Philips on C-SPAN in November 2018

March 17, 2021 – A new antitrust bill by Sen. Amy Klobuchar, D-Minn, is receiving high praise from current and former commissioners of the Federal Trade Commission for its focus on enhancing resources required to tackle competition issues.

“I think we could use more money still,” Noah Phillips, commissioner on the FTC, said at the Information Technology and Innovation Foundation conference on Tuesday. “The agencies could do more with more resources, and that goes without saying. There are hard decisions that we have to make with the limited resources that we have.”

William Kovacic, former FTC chairman, reacted to the bill by noting that the debate has effectively shifted from what agency should do the work to how they do it.

“The neglected questions of implementation are starting to receive the attention they deserve, and one of them is resources,” Kovacic said. “When I look at competition authorities around the world, there is an epidemic failure to match commitments with the means necessary to carry out the task in question.”

The FTC in the last year has brought more cases than it ever has since 2001, Phillips said.

“This is a bit of delusion that all of our countries engage in,” Kovacic said. “We have the highest aspirations, the boldest goals, but when it comes to paying for it, we don’t want to do that; we want to drive and take off the lot.”

He related antitrust enforcement’s strength to the net amount of resources that have to be increased to perform existing functions capably. “It is not simply competition,” Kovacic added. “If you benchmark the FTC resources devoted to data protection privacy, we have a decidedly inadequate allocation,” and that is not the FTC’s doing but those are legislative choices, he said.

Screenshot from ITIF event on Tuesday

For the FTC to be a genuinely full-fledged national data protection regulator for privacy, it would have to be double-to-three times the agency’s resources right now, he said.

More resources will enable the agency to carry out its mandate in a more capable way, he said. The essence of success in so many matters is maintaining continuity of staff at a high-level with high-quality.

Phillips, for his part, said part of the funding will go to hiring economists, experts and increasing salaries.

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Antitrust

House Committee Hears of Big Tech’s Alleged Anticompetitive Behavior in New Hearing

Samuel Triginelli

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Photo of House Antitrust Subcommittee Chairman David Cicilline at the Thursday hearing

WASHINGTON, March 2, 2021 – A House committee on Thursday heard of the need for strengthened antitrust measures to stem the influence of big technology companies, which are alleged to have increased its stranglehold on data on the internet.

The committee heard of Google’s and Facebook’s overwhelming control of the digital ad market; Amazon’s alleged anticompetitive practice of demanding small businesses that sell on its platform provide its proprietary information so it can make its own products; and Apple using its position as one of two app store platforms to extract taxes from competitors like Spotify and other news apps.

This is the first in a series of hearings held by the House Judiciary Antitrust Subcommittee to consider legislative proposals to address the rise and abuse of market power online and to modernize the antitrust laws.

On Thursday, the committee played host to antitrust experts and affected businesses for the hearing titled “Reviving Competition,” which was intended to address market power and big tech’s role as gatekeeper online.

The committee also heard about recent actions by the tech giants to silence speech online. Since early October 2020, according to the testimony, Google’s YouTube platform has been deleting numerous conservative channels; Facebook and Twitter have been shutting down pages, including former President Donald Trump’s; and Amazon kicked the controversial social media app Parler off its web hosting service.

Google and Apple blocked the app from their app stores.

Witnesses recommended the government strengthen enforcement agencies so they have more teeth and reform how merger cases are viewed.

Antitrust gatekeepers work to promote competition between powerful and smaller digital companies, and innovative connectivity competitors should be able to compete at the same level with big tech, said Charlotte Slaiman, competition policy director at Public Knowledge.

That would involve creating a level playing field where larger players cannot leverage their own platform to one-up competitors, said Hal Singer, managing director of Econ One.

Sharing those concerns, Eric Gunderson, chief executive officer of Mapbox, said that American competitiveness and innovation are at risk with these giants controlling the sector. Antitrust reform needs to be focused on allowing other companies to be able to compete in a level playing field.

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Media Ownership

Pandemic Isn’t Death Knell Of Theaters, Says Lionsgate Vice Chairman

Derek Shumway

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Screenshot from the webinar

February 24, 2021 – Lionsgate Vice Chairman Michael Burns said Tuesday he thinks theaters will be packed again once the pandemic ends, speaking at a New America event on the future of entertainment.

Suggesting the pandemic will not impair traditional theaters amid the rise in streaming adoption at home, Burns said the growing portfolio of films to feature in theaters under his studio will ensure traditional movie viewing doesn’t go away.

He noted that Lionsgate is associated with about 20 Tyler Perry movies, which will attract people to theaters. He also said a new program based on the The New York Times’ telling of America’s history with slavery, called 1619, will also draw viewers back.

Burns expressed optimism in a returning moviegoing population and cited that in the past, African Americans made up 5 percent of the movie going population. African Americans also make up 13 percent of the U.S. population. But over the last few years and before the pandemic began, they have made up about 20 percent of the movie going population, he said. This trend is in line with Hispanics, he said, and it gives hope to the entire industry that not even the pandemic can unseat the traditional movie theater.

He said he also hopes the older generation is ready to head back to the theaters, especially as people, young and old, develop pandemic fatigue and especially as vaccines continue rolling out.

Burns turned away doubt about his prediction by pointing to China’s recent New Year’s holiday box office performance the previous weekend, which enjoyed record-breaking box office revenues of $1.206 billion, demonstrating that the country’s film market has recovered from the COVID-19 pandemic.

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