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Antitrust

FTC Divided Over Increasing Agency Jurisdiction at Congressional Hearing

FTC commissioners were split at a Congressional hearing on Wednesday at the prospects of increasing FTC jurisdiction.

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Rep. Jan Schakowsky, D-Illinois.

July 29, 2021—Commissioners of the Federal Trade Commission were divided Wednesday on whether to increase the enforcement authority of the agency to better regulate big technology companies.

The commissioners appeared at a hearing of the Subcommittee on Consumer Protection and Commerce, which is studying 16 proposed bills facing Congress that aim to alter the FTC’s jurisdiction.

“The American people deserve a twenty-first century consumer protection agency that meets twenty-first century threats,” said Rep. Jan Schakowsky, D-Illinois.

The 16 bills, targeted at increasing the FTC’s ability to regulate technology companies, expands its jurisdiction over what and how it is allowed to enforce the law.

Advocates of Increased FTC Authority

FTC Chairwoman Lina Khan said that reports of fraud increased by 20 percent last year, alleging certain business models have promoted this and for which businesses are able to claim immunity under the law. She did not mention which businesses she was referring, or which laws provided immunity, but commissioner Rohit Chopra said Section 230 of the Communications Decency Act was an impediment to the FTC’s mission of protecting consumers online.

Section 230 provides online platforms immunity for third-party content posted on their website, which means companies like Facebook, Instagram, and Twitter cannot be held accountable for fraudulent activity that takes place on their platforms.

Commissioner Rebecca Slaughter alleges that Section 230 protects online firms’ illegal conduct. Democratic commissioners prodded Congress to pass legislation that would increase the FTC’s jurisdiction to better police activity that harms consumers, such as online fraudulent activity.

“Bills that would end special protections for select industries would also strengthen our law enforcement,” Khan said. “For example, the Online Consumer Protection Act would clarify that platforms cannot claim special privileges when facing an FTC enforcement action. Meanwhile, the Protecting Consumers and Commerce Act and Removing Nonprofit Exemption Act would allow the FTC to challenge abuses by common carriers and nonprofit entities.”

Critics of Expanding FTC Authority

Earlier this month, the FTC held an open meeting of which Commissioner Noah Phillips was a critic. The FTC voted on several measures, including rescinding a rule that limited the agency’s enforcement powers, and allowed time for public comment after the vote had been taken. Phillips said he believes that allowing the public to comment after the vote has signaled a departure from public accountability.

“On July 1, without input from the public, we adopted rules to enable us to promulgate regulations with less objectivity, less oversight, and less public input,” Phillips said. “The Commission majority is reducing what it calls red-tape on the commission to impose more red-tape on American businesses—large and small.”

He added that regulating big technology companies, such as Facebook and Google, is work best suited for Congress, not an independent government agency with less democratic accountability.

“Well-crafted regulation can help consumers and businesses, but poor regulatory design can raise prices, stifle innovation, and reduce consumer choice,” Phillips said.

Phillips’ Republican counterpart on the Commission, Christine Wilson, joined in his critique, fearing that increasing the FTC’s jurisdiction could lead to FTC overreach in the future.

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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