Policy

The next tech antitrust era is beginning in earnest

House lawmakers are looking to remake competition in tech, as one of the foremost antitrust enforcers is headed to the FTC.

A graphic of a gavel being brought down on a computer mouse

Lawmakers are unveiling a slate of bills to remake antitrust in the tech space and are poised to put in place a reformer at the FTC.

Image: Sinchen.Lin/Marco Verch/Protocol

For years, politicians have demanded for someone, anyone, to do something about antitrust and Big Tech. Now, a whole lot is suddenly poised to begin.

Lawmakers in the House unveiled a dramatic proposed expansion of the antitrust laws on Friday. At the same time, the Senate appears to be gearing up to officially vote on Lina Khan, President Joe Biden's nominee to the Federal Trade Commission, for a post enforcing U.S. antitrust laws. Khan has long pushed for strong antitrust enforcement and reform, particularly when it comes to major tech firms such as Amazon.

The action in both chambers is the culmination of years of dimming views of Big Tech on both sides of the aisle — not only over competition, but also in how companies approach privacy, work with China or affect elections — following a long period when Apple, Amazon, Facebook and Google could rely on Washington to view them as the height of benevolent innovation.

House lawmakers released five bills, each bipartisan, that arise from years of allegations that companies such as Amazon, Apple, Facebook and Google blocked rivals, wrung unfair concessions from partners or bought out challengers. The proposals could forever alter the digital economy with measures that strike at the heart of what lawmakers identified in a blockbuster report as anticompetitive or concerning practices by the four companies.

Perhaps the most controversial bill would allow the federal government to seek to force big digital platforms to spin off business lines when "conflicts of interest" exist with its main business, such as when Google features search results from advertisers.

Even before that, though, a bill from the panel's chairman, Rep. David Cicilline, would stop large platforms from giving preference to their own offerings or partners, in an attempt to address concerns that Google boosts its own results over competitors like Yelp or that Amazon makes it harder for third-party sellers who choose not to use its logistics operation to reach consumers. Other provisions would also theoretically touch on complaints about Apple's pre-loading of its own apps.

The CEOs of all four companies testified before the House as part of the investigation that led to the report. All insisted that, far from standing in violation of antitrust laws, they face robust competition and make business decisions only to please users.

Remaking industry

A third bill would all but ban acquisitions by major tech companies unless they could prove "by clear and convincing evidence" that the target isn't a competitive threat to any business line. Giant tech companies have routinely grown by buying up smaller firms, and such deals rarely face much scrutiny. The fourth would require major platforms to allow users to bring their data over to other services and potentially have them message one another. Proponents say the ideas, known as data portability and interoperability, could make it easier for upstart companies to challenge big digital players, especially Facebook.

The final bill would raise the fees that companies pay to register big deals. A companion bill led by Sen. Amy Klobuchar has already passed the Senate. Indeed, recent Senate bills, some from lawmakers with longstanding interest in antitrust and some from Republicans who see competition as a way to punish companies for alleged liberal views, have also signaled that lawmakers were genuine about wanting to put pen to paper in an epoch of revamped antitrust.

The pushback from industry was swift at the consideration of bills that would so drastically remake the competitive rules for Big Tech.

"If passed into law, these bills will result in higher prices, fewer choices and less innovation for Americans," Carl Szabo, vice president of the tech trade group NetChoice, which counts Amazon, Facebook and Google as members, said when reports of the bills emerged. Adam Kovacevich, a former Google official who now runs a left-leaning pro-tech group, said the proposals could result in "banning conveniences like Amazon Basics brand batteries, Apple's Find my Phone tool or Google Maps appearing in Google search results."

Although each bill has a Democratic and Republican co-sponsor, others in the GOP might balk at increasing the ability of government to go after powerful companies. Without Republican support, the bills could stall in the Senate.

Revamping antitrust

When it comes to Khan, who worked as a lawyer during the panel's probe into competition in the tech space and its report, opponents of Big Tech have been practically giddy at the possibility that she would be joining the FTC, which is suing Facebook, investigating Amazon and overall serving as the nation's de facto tech regulator.

Khan made a blockbuster appearance on the antitrust scene while still a law student with her 2017 article on Amazon in the Yale Law Journal. She is now closely identified with the idea that competition enforcers lost sight of their original purpose in the late 1970s and let digital giants grow unchecked. Her views have become representative of the key beliefs of the new era.

"President Biden's choice to nominate Lina Khan demonstrated that Democrats understand the imperative of turning the page on a failed era of antitrust enforcement," said Sarah Miller, executive director of the American Economic Liberties Project, which pushes for antitrust reform and stepped-up enforcement, and a former colleague of Khan's.

Giving Khan a vote on the five-member commission, particularly when it's looking into the very company whose practices she has most criticized, has struck opponents of tech power as the beginning of the end in what they see as the commission's long deference to industry. (Khan especially focused on Amazon's relationship to third-party sellers on its platform, which has been a subject of the probe.) Those backing Khan would like to see tougher litigation strategy, more stringent settlements and expanded use of the agency's limited regulatory powers as part of a long-term project to curb the power of the largest digital platforms.

In many cases, what Khan stands for has bipartisan resonance, and her nomination already cleared the committee that oversees FTC posts with support from both Democrats and some Republicans. It's expected she can at least squeak by the rest of the Democratic Senate in a vote, likely early in the week.

"Lina Khan is, in short, an out-of-the-box thinker, a pioneer in competition policy," Klobuchar said when introducing Khan at her confirmation hearing in April. "Her deep understanding of how markets influence our lives and how the law should function is exactly what we need at the FTC."

In addition to Khan, Biden is due another pick to the agency. He also has yet to make a pick for antitrust chief at the Justice Department. It shares responsibility for antitrust laws with the FTC — and is pursuing a massive case against Google.

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