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Antitrust

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

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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.

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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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