Big Tech's anti-antitrust argument: Break us up and you’ll lose our services
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In today's edition: Antitrust legislation keeps stalling out, the FTC is facing a challenge to its entire structure in the Supreme Court, and states are busy introducing their own bills.
The antitrust bill isn’t ‘whittled down to nothing.’ Yet.
Big Tech and its lobbyists have developed a simple message to combat the first major push toward real antitrust legislation: If you break us up, Americans will lose the services they’ve come to take for granted.
- Amazon claimedthe American Innovation and Choice Online Act threatened Prime’s two-day shipping guarantee and its ability to host third-party sellers.
- Google set up a website to warn small businesses that if the bill were to pass, their business listings could disappear from Google Search, Google Ads could become less effective and the company's suite of workplace products might get split up.
- And Apple lobbyist Timothy Powderly sent a letter to Senate committee leaders warning that the bill might force Apple to share user data with bad actors and allow sideloading.
But not everyone buys it. Sen. Amy Klobuchar, who drafted the bill alongside Sen. Chuck Grassley, accused Big Tech of spreading “misinformation and outright lies” to “keep their positions as monopoly gatekeepers.”
- Again and again during the markup session last Thursday, Klobuchar insisted the bill already had provisions to address her colleagues’ concerns: It wasn’t going to kill Prime, it wouldn’t force Apple to give user data to CCP-affiliated businesses, etc.
- Regardless, the committee started by passing a Klobuchar-backed amendment that narrowed the language of the bill by zeroing in on allowances for subscription services and pro-privacy moves. Later, she got behind changes to address national security concerns.
- But that’s where Klobuchar wanted to draw the line. The senator later directly called out this watering-down process, saying an amendment introduced later in the session “would create a loophole in the bill to allow platforms to justify a wider array of anticompetitive conduct in the name of protecting cybersecurity.”
- The bill wasn’t “whittled down to nothing,” Klobuchar said in an interview with Politico late last week. That may be true, but there are still plenty of whittling opportunities to come.
- Sen. Thom Tillis, for instance, didn’t vote to pass the bill through the committee but said he hoped “to work to get a yes.” How much work exactly? A lot, it seems, judging by Tillis’ 82 amendment requests in the committee.
- On the other side of the aisle, Sen. Dianne Feinstein voted yes but signaled she wasn’t happy with the bill as it stood, saying, “It’s specifically designed to target a small number of specific companies, most of which are headquartered in my home state.”
- And given the split Senate and narrow Democratic majority in the House, it won’t take much for a small group of holdouts to block the bill or amend it into oblivion.
There are two ways to read this likely outcome, which I’ll call the battle and the war:
- Everyone wins the battle. Americans say they want to crack down on Big Tech, but when the rubber meets the road, they are afraid of giving up Amazon Prime, iMessage and limitless content at the YouTube trough. (Whether those fears are warranted may be beside the point, to the credit of lobbyists and PR teams.) Congress gets to make a big to-do about having reined in Big Tech, even if their bill doesn’t really do anything. Big Tech retains market dominance. Mid-sized tech companies such as Sonos and DuckDuckGo are the Big Losers but none of the other stakeholders ever really care about them in the first place.
- Nothing has been done to address the war. The conditions underlying the techlash haven’t been addressed. The passing of a hollow bill further erodes the public’s faith in a political solution. Tech companies will be forced to take on more legal overhead to comply with the bill and fend off any related court battles with those mid-sized competitors. Nevertheless, there will continue to be a culling of those small- and mid-sized competitors.
In the states
Illinois legislators introduced an app store bill, the Freedom to Subscribe Directly Act, directly aimed at Apple and Google. The bill would prevent either mobile giant from requiring app developers to use “a particular in-app payment system.” Similar bills have been introduced in several other states, and Apple is also facing legal pressure over in-app payments.
Former Apple employee Cher Scarlett and former Googler Chelsey Glasson testified in support of a Washington state bill similar to California's Silenced No More Act. The Washington bill would prohibit employers from using NDAs to force workers to stay silent about illegal activity.
Also in Washington state, lawmakers introduced a bill limiting Amazon's warehouse productivity quotas by requiring employers to put quotas in writing and giving employees new rights to fight back against exploitative quotas.
A MESSAGE FROM HONEYWELL
Emerging technologies and changing needs of consumers and commercial organizations are creating significant challenges and opportunities for all enterprises. These challenges and opportunities will require companies to act quickly, creatively and with an appetite and a push for rapid adoption of new technologies.
Changes to antitrust action, privacy laws and more will influence the tech industry and affect some of the world’s most powerful companies. Our expert panel will discuss what lawmakers hope to achieve, how tech companies are already responding to possible regulation and what the whole situation might look like a few years from now.
Sign up here to join our free, online event including speakers Justin Brookman, Julie Brill, Samir Jain and Linda Moore, moderated by Protocol Senior Reporter Ben Brody, on Jan. 26 at 10:30 a.m. PT/1:30 p.m. ET.
In the courts
In Axon v. FTC, a maker of police body cameras that sought to acquire a rival is challenging the entire structure of the federal agency that acts as a de facto U.S. tech regulator on privacy and competition matters. The Supreme Court announced Monday it would review the case. The heart of the matter is the FTC's enforcement process, which goes not through the federal court system but to the FTC office of administrative law judges.
Washington, D.C., attorney general Karl Racine on Monday announced a lawsuit against Google over "bold misrepresentations" about the way it tracks Android users' locations. Attorneys general for Texas, Indiana and Washington are also filing similar suits against Google in their own state courts.
By the numbers
Amazon and Meta, two of the giants of modern federal lobbying, spent just shy of $39.4 million trying to bend federal laws and regulations in 2021, according to our analysis of newest filings with Congress. (And that doesn't even include some Amazon subsidiaries like AWS.) The two companies both set in-house records for quarterly spending in the last three months of the year, with Meta alone putting down more than $5.4 million. Given the general feeling about Meta — in Washington and elsewhere — that number's likely to keep going up. Way up.
Thanks for reading — see you Wednesday.