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Antitrust

Justice Department Antitrust Division Sues Google, FCC Calls for Changes to Media Regulations, AT&T on Spectrum Sharing

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The Justice Department’s antitrust division plans to sue Google today for engaging in anticompetitive conduct to preserve monopolies in search and search advertising, senior Justice officials said today.

When officials began investigating Google last September, the case was focused on Google’s advertising. It has since expanded to include not only Google’s search capabilities, but also the extent to which Google is reinforcing their presence through the Android smartphone system, which often includes Google predownloaded on its devices, according to the Wall Street Journal.

The move has the makings of the most aggressive U.S. antitrust case against a big technology company in two decades. Almost all state attorneys general are also investigating Google separately. However, on Tuesday the Washington Post reported that only Republican state attorneys general are expected to sign on to the Justice Department lawsuit.

Last year, Makan Delrahim, the Justice Department’s current antitrust chief, negotiated with the FTC for jurisdiction to investigate Google, but later recused himself because of work with Google prior to joining the Justice Department.

According to news reports, Justice Department staff attorneys are skeptical of Attorney General William Barr’s efforts to rush the litigation, fearing that they might lose a hastily-constructed case.

“It cannot escape notice that this suit was hurried out on the eve of an election where the Administration has aggressively pressured tech companies to take actions in its favor,” said Computer and Communications Industry Association President Matt Schruers. “Antitrust law should be driven by consumers’ interests, not political imperatives.  We look forward to a court’s review of the facts and the evidence.”

The House Judiciary Antitrust Subcommittee recently released a report recommending all four tech giants, including Google, face congressional action. “It’s Google’s business model that is the problem,” said Chairman David Cicilline, D., R.I. “Google evolved from a turnstile to the rest of the web to a walled garden that increasingly keeps users within its sights.”

Commissioner Brendan Carr calls for changes in FCC media regulations

FCC media ownership regulations have been frustrating efforts to promote investment in local content, said Commissioner Brendan Carr at the Free Speech America Gala on Wednesday.

He cited Powell, Wyoming, where a single laptop pumping music from the nearest big city constituted their entire broadcasting system. The next town over had entertainment programming that was attuned he needs of their local listeners.

This town wanted to invest in Powell to originate live and local programming for their underserved community, but because of FCC regulations—that are supposed to promote competition, a diversity of viewpoints, and localism—Powell is stuck with their single laptop.

Carr also praised the upgrades happening in 5G and ATSC 3.0. The latter, which is a new standard

allowing broadcasters to transmit in Internet Protocol, or IP, will transform broadcast television, including transmitting Ultra HD video and allowing content to be personalized to a household, said Carr.

The broad coverage that ATSC 3.0 has many applications such as telemedicine applications, IoT, and smart ag, as well as giving households another option for high speed downloads using the same spectrum, they used for over-the-air TV.

AT&T criticizes 12 GigaHertz spectrum sharing

Dish Network and RS Access are trying to increase the value of their licenses at the expense of their fellow incumbents by arguing that 5G and incumbent direct broadcast satellite services can share the 12 GigaHertz (GHz) band, according to an AT&T filing.

There’s been a lot of effort going toward preventing interference in the C-Band from adjacent bands, and neither Dish nor RSA have explained how to combat those issues in the 12 GHz band, which has notably more earth stations occupying it than the C-Band, said AT&T.

Jeffrey Blum, Dish executive vice president of external and legislative affairs said Dish, along with other companies and many public interest groups, sees it in the public interest to have a neutral Federal Communications Commission rule-making on 12 GHz band. It would be a missed opportunity to overlook 500 megahertz of centimeter wave spectrum.

The 12 GHz petition would come “at a cost of severe interference to the latest generation of satellite broadband networks that are a year out or less from providing full service,” according to small government interest groups, unlike their support for expanded access to spectrum for 5G.

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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