December 1, 2020 — Experts recommended the incoming Biden administration take a trial-and-error approach to antitrust policy, during a Brookings Institute webinar on Tuesday.
The new administration should “use litigation as a tool for learning,” said Matt Perault, associate professor and director of the center on science and technology policy at Duke University.
The panelists urged President-elect Joe Biden to operate from a position of curiosity, and experiment with each of the tools at his disposal, utilizing everything from ‘regulatory sandboxes’ to executive orders.
Regulatory sandboxes, which provide controlled testing grounds for new legislative models, would supply the administration with an opportunity to gather data on the effects of measures taken, to ultimately inform future antitrust policy making. Executive orders would allow Biden to bypass what is sure to be a congested Congressional environment, as Republicans who are less thrilled about enforcing regulation, such as Senate Antitrust Subcommittee Chairman Mike Lee, R-Utah, remain in the assembly.
While the panelists held much advice for the Biden team, they agreed it was too early to tell how serious will be the administration’s stance on antitrust.
Does Biden have a mandate to act on antitrust issues?
“During the general campaign, except in areas related to labor, Biden did not mention antitrust,” said Leah Nylen, technology reporter for Politico Pro. Nylen said the first implications of the administration’s stance will be seen when the Federal Trade Commission chair and the assistant attorney general for antitrust are named.
“There has traditionally been drastic under enforcement of Section Two of the Sherman Act,” said Avery Gardiner, general counsel and senior fellow for competition, data, and power at the Center for Democracy and Technology
Since the Microsoft case in the 1990s, only one case has been brought under Section 2 of the Act, which focuses on how companies abuse market power in ways that hurt consumers. Gardiner called for the new administration to “breath new life into Section Two” and go beyond antitrust definitions to think about competition more broadly.
Specific ‘do’s and don’ts’ for companies to follow
The panelists called for the administration to focus on issues of transparency and data sharing.
Nylen suggested establishing a clear list of “do’s and don’ts” for companies to follow, and fining them when they fail to do so. “It is very important to make the people in charge of these company responsible,” she said. “It makes them care much more if the consequence of an action is a significant financial penalty.”
Gardiner further called for the practice of “closing remarks,” which has fallen out of favor at the FTC and the Department of Justice, to make a come back. “As a matter of increased transparency, we need that to come back,” she said. “If these agencies decide not to take an action, they must help the public understand why.”
Panelists further called for the creation of a White House Office on Competition Policy, which has been recommended by prominent Obama-era members of the FTC and the DOJ.
The White House Office could handle competition crises that fall outsider the jurisdiction of the FTC and the DOJ. For example, there is a need for more competition in the provision of broadband. “That’s not something the DOJ is going to handle,” said Gardiner, “that has to do with the Federal Communications Commission.”
Nicol Turner-Lee, director and senior fellow of governance studies at the Center for Technology Innovation, foresaw a drastic increase in the resources made available to the FTC and the DOJ, as they desperately need more funding for staffing. Turner-Lee also mentioned that Senator Kamala Harris may play a key role as the “dealmaker” between Silicon Valley companies and government officials.
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.
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.
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.
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
- Cambridge Local First
- Center for American Progress
- Center for Digital Democracy
- Center for Popular Democracy
- Committee to Support the Antitrust Laws
- Decode Democracy
- 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
- The Democratic Coalition
- Venice Resistance
- Warehouse workers for justice
FTC Commissioner Phillips Warns About Shifting Direction of Agency
Noah Phillips voiced concern about the scope and practices of the Biden administration’s FTC.
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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