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Antitrust

Technology Groups Speak Out Against Proposed Antitrust Package

Tech execs have begun to speak out against a new package of proposed antitrust bills in Congress.

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David Cicilline, D-Rhode Island

June 15, 2021— The package of proposed antitrust bills proposed in Congress last Friday is drawing criticism from technology executives who claim the bills will have unintended consequences and destroy certain products that consumers love.

The five proposed bills follow an investigation concluded last year by the House Antitrust Subcommittee which accused Big Tech firms of harming consumer welfare and employing anti-competitive practices.

The bills aim to prevent companies from manipulating marketplaces to promote their own products. They make it harder for media platforms to buy and kill competitors. They mandate that platforms and firms collecting consumer data make it easier to leave and take the data to competitors. And they give the Department of Justice and the Federal Trade Commission extra resources to police monopoly power.

However, the bills have already drawn sharp criticism from technological executives, arguing that the bills would carry with them unintended consequences and damage American interest and harm consumer experience.

The bills’ unintended consequences

“As currently drafted, the package of antitrust bills introduced in the House Judiciary Committee would be a disaster for America innovators and consumers,” Gary Shapiro, CEO and president of Consumer Technology Association, said in a press release. “If signed into law, the bills would cause irreparable harm to small businesses and startups and put the US at a competitive disadvantage against China.”

Shapiro also claims the bills would restrict popular features currently enjoyed by millions of Americans. He says they would put an end to Amazon Prime free shipping, YouTube videos in Google search results, preinstalled iPhone apps, and many more.

The Consumer Technology Association is a trade organization that conducts research and lobbies for policy reform, representing technology companies such as Facebook, Amazon, Apple, and Microsoft.

Law360 reported last Friday that Adam Kovacevich, CEO of Chamber of Progress, a tech policy group sponsored by some large tech companies, said that the bills would ban things like Amazon Basics batteries, Apple’s Find my Phone feature, and Google Maps appearing in Google searches, which he said would “spark a consumer backlash.”

“And strangely, these bills could make it harder, not easier, for platforms to remove hate speech and disinformation,” Kovacevich said. “Instead of focusing on helping families, these proposals inexplicably target a bunch of technological conveniences that most people really like.”

Jessica Melugin, director of the Competitive Enterprise Institute’s Center for Technology and Innovation, called the proposals “regulation at its most economically depressing.”

“[The bills] reflect fundamental misunderstanding of how platforms create value for consumers, how market leaders compete with each other and the incentives necessary to keep innovative companies churning out useful new products and service for customers,” Melugin said.

“Taken together, these proposed regulations would compromise the U.S. as a global tech leader, strain an already struggling U.S. economy, and hurt American consumers.

Proponents of the bill maintain their position

Rep. David Cicilline, D-Rhode Island, chairman of the Subcommittee on Antitrust, Commercial and Administrative Law, said in a statement “unregulated tech monopolies have too much power over our economy.

“They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work,” Cicilline said. “Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us.”

In a letter sent to the leadership of the House Judiciary Committee, the Consumer Federation of America’s director of research, Mark Cooper, said, “The industry has taken the position that any constraint on its actions will end the digital revolution and dramatically increase costs for consumers. The Consumer Federation of America emphatically disagrees.

“The House Judiciary Committee and Antitrust Subcommittee is doing exactly what Congress should do to reboot needed oversight of the dominant incumbent digital platforms,” Cooper added in a press release. “The committees have identified general practices that must be reformed, given concrete recommendations, and provided increased resources for implementing these needed actions.”

Antitrust

‘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.’

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Photo of Harold Feld, senior vice president at Public Knowledge

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.

“The reality is that [Congress] can’t keep up,” said Welch. This comes at a time when antitrust action continues to pile up in Congress, sparking debate across all sides of the issue.

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Antitrust

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.

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Screenshot of Federal Trade Commissioner Noah Phillips

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.

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Antitrust

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.

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Photo of Amy Klobuchar from August 2019 by Gage Skidmore used with permission

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.

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