October 12, 2020 – Because the network effects of digital platforms makes it hard to prove harm to consumers, it is difficult to rein in the monopoly power of big tech companies.
That was the message at Georgetown Law Center event on Tuesday included as part of the 14th Annual Global Antitrust Enforcement Symposium.
“Determining which transactions are pro-competitive and which are anti-competitive is not so easy,” said Fiona Morton, professor of economics at Yale University.
Network effects mean that as the total number of users on the platform increase, benefits to users rise. And that makes it hard to prove the consumer harm that is required for traditional antitrust analysis.
Panelists detailed the impact that the 2018 Supreme Court ruling in Ohio v. American Express Co. has had upon the future of competition law for multi-sided digital platforms.
In the case, the Supreme Court ruled that American Express did not break federal laws by prohibiting merchants from steering consumers to alternative payment methods, which is central to the AmEx business model.
AmEx defended its practice by arguing that the anti-steering policies benefited its cardholders, as the higher transaction fees help maintain member services.
While the Department of Justice and several states prevailed during a district court trial in 2015 because it harmed merchants, the appeals court reversed. It ruled that plaintiffs had not shown harm to both sides of the two-sided market.
The Supreme Court’s June 2018 decision affirming the appeals court.
In upholding the appeals court’s decision, the Supreme Court gave a powerful antitrust defense to the big tech planforms for the frequent situation in which two-sided and multi-sided markets are deployed.
‘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.’
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.
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.
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.
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.
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.
- FCC Spectrum Authority Expires on September 30, Agency Seeks Renewal
- NTCA Smart Rural Communities, International Telecommunications Union Conference, Carr on TikTok
- Kirsten Compitello: The Need for a Digital Equity Focus on Broadband Mapping
- Reason 4 to Attend Broadband Mapping Masterclass: Measuring Actual Speeds
- Senate Indian Affairs Committee Chair Takes FCC to Task for Communication With Tribes
- Dianne Crocker: Recession Fears Have Real Estate Market Forecasters Hitting the Reset Button
Signup for Broadband Breakfast
Broadband Roundup4 weeks ago
Comcast and Charter’s State Grants, AT&T Fiber in Arizona, New US Cellular Lobbyist
Broadband Roundup3 weeks ago
AT&T Sues T-Mobile Over Ad, Nokia Partners with Ready, LightPath Expanding
Broadband Roundup3 weeks ago
Promoting Affordable Connectivity Program, Google Bars Truth Social, T-Mobile Wins 2.5 GHz Auction
#broadbandlive3 weeks ago
Broadband Breakfast on September 21, 2022 – Broadband Mapping and Data
Fiber3 weeks ago
Missouri City Utility to Complete Fiber Build Using Utility Lease Model
#broadbandlive3 weeks ago
Broadband Breakfast on September 14, 2022 – How Can Cities Take Advantage of Federal Broadband Funding?
Rural4 weeks ago
FCC Commits Additional $800 Million From Rural Digital Opportunity Fund
#broadbandlive3 weeks ago
Broadband Breakfast on September 7, 2022 – Assessing the NTIA’s Middle Mile Grant Application Process