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Antitrust

Experts Disagree Over Effectiveness of Amy Klobuchar’s Antitrust Bill

Legal and policy experts are split over how effective Klobuchar’s proposed antitrust legislation could be.

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Amy Klobuchar, D-Minnesota

June 15, 2021 — Legal experts and policy makers were split in opinion over an expansive antitrust bill introduced in February by Sen. Amy Klobuchar, D-Minnesota, at an online seminar hosted by the Federal Communications Bar Association.

Klobuchar’s proposed bill would modify the laws regulating mergers and acquisitions to block certain anticompetitive conduct by larger firms, shift the burden of proof from investigators to the businesses themselves to prove anticompetitive practices have not been undertaken, and authorizes an increase in funding for federal antitrust enforcement.

Some of the panelists called Klobuchar’s bill an “all out mistake.” Others endorsed it, while also arguing that antitrust legislation would not be the only tool necessary to check Big Tech’s power.

Charlotte Slaiman, the competition policy director at Public Knowledge, believes that the danger of Big Tech is not just in the power they can accumulate through unregulated business practices, but in the power tech firms hold by virtue of the industry’s ability. She endorses Klobuchar’s bill, but believes that antitrust legislation is not the only tool that should be employed to reign in Big Tech’s power.

Bilal Sayyed, director of the Office of Policy Planning at the Federal Trade Commission under the Trump Administration, says that Klobuchar’s bill targets specific companies, and primarily takes issue merely at the companies’ size, without focusing on the harmful practices they may or may not be employing.

Big Tech’s uniqueness calls for unique regulation

Slaiman says consumers usually help keep business practices in check because businesses are dependent on keeping their consumers happy in order to attract their business. She says that technology firms are similar in this way at their genesis, but this changes as the firms become more powerful. Eventually, “the customers need you [the tech firm] more than you need the customers,” she says. “The calculus completely changes.”

She said she believes the unique relationship of firms to customers in the big technology industry allows firms to employ practices that harm consumers, but in ways that antitrust laws won’t necessarily address.

In an interview with Harvard Kennedy School, Jason Furman, former chairman of the Council of Economic Advisers under the Obama administration, said “pro-competition regulation is not, however, the way to solve all of the social problems of Big Tech, of which the biggest is the contribution many believe they are making to spreading fake news and reinforcing politization. Additional approaches are needed to address those issues.”

Slaiman said, “We’re really concerned about the power itself. These companies should not be this powerful. And so it’s not just about relying on antitrust to address our problem. We need additional laws and rules on top of antitrust for Bit Tech.”

Big Tech’s size not the problem

Adam Kovacevich, founder and CEO of the Chamber of Progress, notes that while many take issue with the size of Big Tech, a company’s size is not enough to file antitrust complaints against them. He says that there can also be virtues associated with Big Tech’s size.

“There’s also an argument that their bigness allows them to do things that are pro-social, that are beneficial to consumers,” he says. “What you see is that everyone can agree—‘I have anxiety about their bigness’—but I think there’s not as much agreement as to whether they’re using their bigness to disadvantage people.”

Kovacevich says that while many people are concerned with the size of Amazon, many people relied on it as a “lifeline” for their groceries and other essential living utilities during the pandemic.

Kovacevich counters the argument that the massive quantity of data Big Tech has collected makes them a monopoly power by saying that innovation on the side of smaller firms would lead a collection of higher quality data, which would allow them to compete with Big Tech in new ways.

The future of antitrust

On Friday, a package of five new bills were introduced in Congress that aim to limit the power of Big Tech. The bills come as a response to the completion of a 16-month long investigation by the Antitrust Subcommittee completed last year, which scrutinized the business practices of Amazon, Apple, Google, and Facebook, which led to a report that accused the tech giants of harming consumer welfare and employing anti-competitive practices.

In October, the Department of Justice sued Google over anticompetitive practices used to preserve their alleged monopoly power, and in December, the Federal Trade Commission sued Facebook for similar reasons.

Reporter Tyler Perkins studied rhetoric and English literature, and also economics and mathematics, at the University of Utah. Although he grew up in and never left the West (both Oregon and Utah) until recently, he intends to study law and build a career on the East Coast. In his free time, he enjoys reading excellent literature and playing poor golf.

Antitrust

FTC Funding Request Harshly Criticized by Republican Lawmakers

The agency’s aggressive approach to antitrust under Chair Lina Khan has sparked controversy.

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Screenshot of FTC Chair Lina Khan courtesy of the House Energy and Commerce Committee

WASHINGTON, April 19, 2023 — House Republicans expressed skepticism about the Federal Trade Commission’s requested budget increase during a Tuesday hearing, accusing the agency of overstepping its jurisdiction in pursuit of a progressive enforcement agenda.

The hearing of the Innovation, Data and Commerce Subcommittee showcased sharp partisan tension over Chair Lina Khan’s aggressive approach to antitrust — heightened by the fact that both Republican seats on the five-member agency remain vacant.

Khan, alongside Democratic Commissioners Rebecca Slaughter and Alvaro Bedoya, argued that the $160 million budget increase was necessary for maintaining existing enforcement efforts as well as “activating additional authorities that Congress has given us.”

But Republican lawmakers seemed unwilling to grant the requested funds, which would bring the agency’s total annual budget to $590 million.

“You seem to be squandering away the resources that we currently give you in favor of pursuing unprecedented progressive legal theories,” said Subcommittee Chair Gus Bilirakis, R-Fla.

“What is clearly needed — before Congress considers any new authorities or funding — are reforms, more guardrails and increased transparency to ensure you are accountable to the American people,” said Rep. Cathy McMorris Rodgers, R-Wash., chair of the Energy and Commerce Committee.

Rep. Frank Pallone, D-N.J., ranking member of the full committee, defended the funding request by saying the FTC has “one of the broadest purviews of any federal agency: fighting deceptive and unfair business practices and anti-competitive conduct across the entire economy.”

“Managing this portfolio with less than fourteen hundred employees is no small feat,” Pallone said, noting that the FTC currently has fewer employees than it did 45 years ago.

FTC highlights potential AI threats, other tech developments

FTC staff and Democratic lawmakers have been flagging concerns about understaffing at the agency for years, arguing that rapid technological and market changes have increased the scope and complexity of the agency’s role.

“The same lawyers who ensure that social media companies have robust privacy and data security programs are making sure labels on bed linens are correct,” testified former Chief Technologist Ashkan Soltani at a Senate hearing in 2021.

In their written testimony, commissioners detailed several emerging priorities related to technological developments — such as combatting online harms to children and protecting sensitive consumer data shared with health websites — and emphasized the corresponding need for increased resources.

The agency is also preparing to pursue violations related to artificial intelligence technologies, Khan said, as the “turbocharging of fraud and scams that could be enabled by these tools are a serious concern.”

But several tech-focused trade groups, including the Computer & Communications Industry Association, have signaled opposition to FTC expansion.

“The FTC can best carry out its mission if it heeds the committee’s call to return its focus to consumer needs and consumer fraud — rather than pursuing cases rooted in novel theories against American companies,” CCIA President Matt Schruers said after the hearing.

The Consumer Technology Association urged lawmakers to reject the requested budget increase in a letter sent Friday.

“In 2022, agency data shows consumers reported losing almost $8.8 billion to scams… Despite this mounting caseload of fraud, identity theft and related cases, the FTC appears more interested in attacking U.S. tech companies, to the detriment of consumers who have benefitted from an unparalleled explosion of innovative, online-based products and services,” CTA President Gary Shapiro wrote.

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Antitrust

Google CEO Promotes AI Regulation, GOP Urges TikTok Ban for Congress Members, States Join DOJ Antitrust Suit

Widespread AI applications could lead to a dramatic uptick in online disinformation, Pichai warned.

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Photo of Google CEO Sundar Pichai by the World Economic Forum used with permission

April 18, 2023 — Google CEO Sundar Pichai on Sunday called for increased regulation of artificial intelligence, warning that the rapidly developing technology poses broad societal risks.

“The pace at which we can think and adapt as societal institutions compared to the pace at which the technology’s evolving — there seems to be a mismatch,” Pichai said in an interview with CBS News.

Watch Broadband Breakfast on April 26, 2023 – Should AI Be Regulated?
What are the risks associated with artificial intelligence deployment, and which concerns are just fearmongering?

Widespread AI applications could lead to a dramatic uptick in online disinformation, as it becomes increasingly easy to create and spread fake news, images and videos, Pichai warned.

Google recently released a series of recommendations for regulating AI, advocating for “a sectoral approach that builds on existing regulation” and cautioning against “over-reliance on human oversight as a solution to AI issues.”

But the directive also noted that “while self-regulation is vital, it is not enough.”

Pichai emphasized this point, calling for broad multisector collaboration to best determine the shape of AI regulation.

“The development of this needs to include not just engineers, but social scientists, ethicists, philosophers and so on,” he said. “And I think these are all things society needs to figure out as we move along — it’s not for a company to decide.”

Republicans call to ban members of Congress from personal TikTok use

A group of Republican lawmakers on Monday urged the House and Senate rules committees to ban members of Congress from using TikTok, citing national security risks and the need to “lead by example.”

Congress banned use of the app on government devices in late 2022, but several elected officials have maintained accounts on their personal devices.

In Monday’s letter, Republican lawmakers argued that the recent hearing featuring TikTok CEO Shou Zi Chew made it “blatantly clear to the public that the China-based app is mining data and potentially spying on American citizens.”

“It is troublesome that some members continue to disregard these clear warnings and are even encouraging their constituents to use TikTok to interface with their elected representatives – especially since some of these users are minors,” the letter continued.

TikTok is facing hostility from the other side of the aisle as well. On Thursday, Rep. Frank Pallone, D-N.J., sent Chew a list of questions about the app’s privacy and safety practices that House Democrats claimed were left unanswered at the March hearing.

Meanwhile, Montana lawmakers voted Friday to ban TikTok on all personal devices, becoming the first state to pass such legislation. The bill now awaits the signature of Gov. Greg Gianforte — who was one of several state leaders last year to mimic Congress in banning TikTok from government devices.

Nine additional states join DOJ’s antitrust lawsuit against Google

The Justice Department announced on Monday that nine additional states joined its antitrust lawsuit over Google’s alleged abuse of the digital advertising market.

The Attorneys General of Arizona, Illinois, Michigan, Minnesota, Nebraska, New Hampshire, North Carolina, Washington and West Virginia joined the existing coalition of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia.

“We look forward to litigating this important case alongside our state law enforcement partners to end Google’s long-running monopoly in digital advertising technology markets,” said Doha Mekki, principal deputy assistant attorney general of the Justice Department’s Antitrust Division.

The lawsuit alleges that Google monopolizes digital advertising technologies used for both buying and selling ads, said Jonathan Kanter, assistant attorney general of the Justice Department’s Antitrust Division, when the suit was filed in January.

“Our complaint sets forth detailed allegations explaining how Google engaged in 15 years of sustained conduct that had — and continues to have — the effect of driving out rivals, diminishing competition, inflating advertising costs, reducing revenues for news publishers and content creators, snuffing out innovation, and harming the exchange of information and ideas in the public sphere,” Kanter said.

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Antitrust

Panel Disagrees on Antitrust Bills’ Promotion of Competition

Panelists disagree on the effects of two antitrust bills intended to promote competition.

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Photo of Adam Kovacevich of Chamber of Progress, Berin Szoka of TechFreedom, Cheyenne Hunt-Majer of Public Citizen, Sacha Haworth of Tech Oversight Project, Christine Bannan of Proton (left to right)

WASHINGTON, March 10, 2023 – In a fiery debate Thursday, panelists at Broadband Breakfast’s Big Tech and Speech Summit disagreed on the effect of bills intended to promote competition and innovation in the Big Tech platform space, particularly for search engines.  

One such innovation is new artificial intelligence technology being designed to pull everything a user searches for into a single page, said Cheyenne Hunt-Majer, big tech accountability advocate with Public Citizen. It is built to keep users on the site and will drastically change competition in the search engine space, she said, touting the advancement of two bills currently awaiting Senate vote.  

Photo of Adam Kovacevich of Chamber of Progress, Berin Szoka of TechFreedom, Cheyenne Hunt-Majer of Public Citizen, Sacha Haworth of Tech Oversight Project, Christine Bannan of Proton (left to right)

The first, the American Innovation and Choice Online Act, would prohibit tech companies from self-preferencing their own products on their platforms over third-party competition. The second, the Open App Markets Act, would prevent app stores from requiring private app developers to use the app stores’ in-app payment system. 

Hunt-Majer said she believes that the bills would benefit consumers by kindling more innovation in big tech. “Perfect should not be the enemy of change,” she said, claiming that Congress must start somewhere, even if the bills are not perfect. 

“We are seeing a jump ahead in a woefully unprepared system to face these issues and the issues it is going to pose for a healthy market of competition and innovation,” said Hunt-Majer. 

It is good for consumers to be able to find other ways to search that Google isn’t currently providing, agreed Christine Bannan, U.S. public policy manager at privacy-focused email service Proton. The fundamental goal of these bills is directly at odds with big companies, which suggests its importance to curb anti-competitive behavior, she said. 

No need to rewrite or draft new laws for competition

But while Berin Szoka, president of non-profit technology organization TechFreedom, said competition concerns are valid, the Federal Trade Commission is best equipped to deal with disputes without the need to rewrite or draft new laws. Congress must legislate carefully to avoid unintended consequences that fundamentally harm businesses and no legislation has done so to date, he said. 

Both bills have broad anti-discrimination provisions which will affect Big Tech partnerships, Szoka continued. 

Not all experts believe that AI will replace search engines, however. Google has already adopted specialized search results that directly answer search queries, such as math problems, instead of resulting in several links to related webpages, said Adam Kovacevich, CEO of Chamber of Progress, a center-left tech policy coalition.  

Kovacevich said he believes that some search queries demand direct answers while others demand a wide range of sources, answers, and opinions. He predicts that there will be a market for both AI and traditional search engines like Google. 

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