Connect with us

Antitrust

House Judiciary Committee Clears Six Antitrust Bills Targeting Big Tech Companies

An inside look at the package of antitrust bills marked up this week by the House Judiciary Committee.

Published

on

Photo of Rep. David Cicilline, D-Rhode Island, in 2017, used with permission.

June 25, 2021— Some of the votes were exceedingly close, but in a grueling markup Wednesday and Thursday, the House Judiciary Committee cleared six bills each designed to target the biggest tech companies by limiting what they can do.

The goal of the Democratic-led agenda? To rein in the power of Big Tech through new antitrust liability.

The package follows a 16-month investigation by Judiciary’s Antitrust Subcommittee, completed last year and scrutinizing the business practices of Amazon, Apple, Google, and Facebook. The final report accused the firms of charging high prices to competitors, forcing small customers into low-quality contracts, and acquiring smaller companies that posed a competitive threat.

While some of the measures have gained traction on both sides of the political spectrum, they have also divided both the Republican and Democratic members of the Judiciary Committee. The controversy will continue as the measure goes to the House floor, and – if passed – on to the Senate.

Broadband Breakfast examined each of the six measures voted on by the committee, and some ways that they might impact Big Tech’s business practices.

American Choice and Innovation Online Act, H.R. 3816

The American Choice and Innovation Online Act, H.R. 3816, introduced by subcommittee Chairman David Cicilline, D-Rhode Island, is in some ways the core of a five-bill package introduced by Democrats on June 11.

Referred in short-hand as the “non-discrimination” measure, it aims to limit how online marketplace arbiters operate their platforms by making it illegal for operators to favor their own products over those of competitors in the market that they operate.

Cicilline’s bill would bar designated platforms from sponsoring their own products, and nor could they discriminate against either the pricing of or access to competing services offered on the same marketplace.

The bill applies only to companies with more than 50 million users, 100,000 business users, or a market capitalization of more than $600 billion.

This would make it so that Apple, for example, could not favor their own applications over that of their competitor Google on their own App Store, and visa-versa on Google’s search engine.

Some experts believe this bill would put an end to pre-installed iPhone apps, YouTube results in Google searches, and would bar Google from displaying their own Google map’s service in Google searches.

The committee vote for the measure was 24 to 20.

Platform Competition and Opportunity Act, H.R. 3826 

The Platform Competition and Opportunity Act, H.R. 3826, introduced by Rep. Hakeem Jeffries, D-New York, restricts mergers and acquisitions facilitated by “covered platforms” under the same designations as Cicilline’s non-discrimination measure.

The bill prevents designated Big Tech companies from acquiring or merging with other firms unless the firm can prove:

  • The acquired assets don’t compete with the buying platform’s business.
  • The acquisition does not cover a company that poses a potential competitor, presently or in the future.
  • It doesn’t enhance the company’s market position.
  • It doesn’t enhance the company’s ability to maintain its current market position.

The bill explicitly states that both consumer attention and collected data count as assets and must be considered when completing a merger of acquisition.

The committee vote for the measure was 23-18, with one Republican, Rep. Burgess Owens, voting “present.”

Ending Platform Monopolies Act, H.R. 3825

The Ending Platform Monopolies Act, H.R. 3825, introduced by Rep. Pramila Jayapal, D-Washington, is similar to Cicilline’s non-discrimination bill, except that instead of prohibiting online marketplace arbiters from promoting their products, it makes it illegal to sell their own product on a market they operate.

The most controversial of the package, this would allow federal regulators to sue to break up companies that both operate a dominant platform and sell their own goods or services on it, if the arrangement poses an “irreconcilable conflict of interest.”

This could potentially target company-branded products sold by Amazon, as well as making it easier to breakup Google and Facebook.

It also explicitly states that covered platforms cannot offer a product that users may purchase to receive “preferred status” on the platform’s marketplace. Consumer Technology Association CEO Gary Shaprio said that the package could put an end to Amazon Prime services.

Also weighing in was Computer and Communications Industry Association President Matt Schruers, who said, “These bills unreasonably target leading U.S. tech companies that have improved users’ experience with innovation, efficiency, and low-cost or free-to-the-user services. These bills would harm consumers and thousands of smaller businesses that use digital services to reach worldwide markets.”

The final of the six measures voted on, the committee vote for the measure was 21-20. Three representatives present for the markup did not vote, and were recorded as neither “aye,” “no” or “present”: Rep. Lucy McGath, D-Ga., Rep. Deborah Ross, D-N.C., and Owens.

Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, H.R. 3849

The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, H.R. 3849, introduced by Rep. Mary Gay Scanlon, D-Pennsylvania, aims to promote competition amidst platforms by making it easier for consumers to leave the platform and take their data to competitors.

Currently, the massive amounts of data that platforms collect help secure user attention for longer periods of time is believed to make advertisers more likely to purchase advertising space on the platform. Because users interact with the content for longer periods, there is a greater chance they will interact with advertised products. Because younger, smaller firms don’t have access to the quantity of data big platforms do, it makes it difficult for them to compete at scale.

The ACCESS Act of 2021 would mandate that all covered platforms maintain a set of “transparent, third-party-accessible” interfaces that enables a secure transfer of data to another business at the user’s request.

The ACCESS Act would prohibit companies from altering the transfer interface without consent of the Federal Trade Commission unless a threat to a user’s security was imminent.

The committee vote for the measure was 25-19.

Merger Filing Fee Modernization Act, H.R. 3843

The Merger Filing Fee Modernization Act, H.R. 3843, introduced by Rep. Joe Neguse, D-Colorado, offers additional resources to the FTC and Department of Justice to police monopoly power, at no additional cost to taxpayers.

The bill amends Section 605 of Public Law 101-162, granting additional funding to the departments. It also increases funding year to year beginning in 2022, based upon the consumer price index and inflation rate.

The bill also increases the cost of pre-filing merger fees and slates it to increase year by year based on the inflation rate.

Although seen as the least controversial of the package, this first measure for the committee resulted in a spirited debate between committee Ranking Member Jim Jordan, R-Ohio, about whether Democrats were writing a blank check to the Biden White House on antitrust enforcement.

The committee vote for the measure was 29-12.

State Antitrust Enforcement Venue Act, H.R. 3460

A sixth antitrust measure also voted on in the markup had been previously introduced by subcommittee Ranking Member Ken Buck, R-Colorado. Buck’s two-page measure was introduced in May.

It would give state attorneys general control over which courts hear antitrust cases. It emerged after Google attempted to move a multistate antitrust suit against it from Texas federal court to a venue in its home state of California.

The committee vote for the measure was 34-7.

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

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.

Published

on

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.

Continue Reading

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.

Published

on

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

Continue Reading

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.

Published

on

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.

Continue Reading

Recent

Signup for Broadband Breakfast

Get twice-weekly Breakfast Media news alerts.
* = required field

Trending