Big tech is more essential than ever. That won't stop antitrust hawks.
Coronavirus has laid bare how powerful — and important — big tech is. Antitrust hawks are paying extremely close attention.
Google, Facebook, Apple and Amazon have come to the rescue in the coronavirus crisis, building testing tools, sharing data, delivering groceries and other supplies, and earning accolades along the way.
But if the tech giants think this will put an end to their antitrust woes, their critics have a different message: Think again.
"People have been asking, 'Is tech lash over?'" American Economic Liberties Project's Sarah Miller, one of the primary architects of the modern trustbusting movement, told Protocol. "A terrifying crisis is a great moment for the tech platforms to try to burnish their image."
To influential antitrust hawks, the crisis only underlines the arguments they have been making for years about the unmitigated power of big tech. And it's not just interest groups redoubling their efforts. Some of tech's primary antagonists on Capitol Hill told Protocol that they're watching closer than ever to see if Google, Facebook, Amazon and Apple abuse their dominant market positions to wipe out competition or exploit their reams of user data.
Republican Sen. Marsha Blackburn, the head of the Senate Judiciary Committee's tech task force, offered a call to arms: "This is a rare moment in our history where big tech companies can step up and do the right thing," Blackburn said. "Hopefully, Facebook and Alphabet don't use this as an opportunity to exponentially increase the prevalence of surveillance through their companies."
"None of big tech's actions during this crisis excuse a decade of anticompetitive misconduct and exploitation of consumer data," Democratic Sen. Richard Blumenthal said in a statement to Protocol. "Its failure to stop dangerous disinformation and exploitative marketing has been striking."
Lobbying pressure is ramping up
This week, "Freedom from Facebook," an influential coalition Miller co-chairs of progressive groups that has spent nearly two years channeling the left's rage at Facebook into direct confrontation, is expanding its mission to take on Google as well, Protocol has learned. What was once "Freedom from Facebook" will now be "Freedom from Facebook and Google," and the coalition is adding six new left-leaning groups into the mix.
In conjunction, the American Economic Liberties Project on Friday is publishing its first set of tech-specific antitrust policy recommendations, which focus on wrangling in Facebook and Google's digital ad dominance. The authors, including Miller, key antitrust thinker Matt Stoller, and former New York gubernatorial candidate Zephyr Teachout are planning to distribute the recommendations to policymakers, regulators and enforcers across the country.
"If anything," the group wrote of Facebook and Google in its formal announcement on Friday, "this crisis has revealed them to be even more dangerous to people and our democracy: The platforms are allowing deadly misinformation to flourish, profiting off of deceptive and opportunistic advertising for critical health supplies, and accelerating the collapse of local news, all while uncertainty around upcoming elections grows."
Rachel Bovard, a Capitol Hill veteran and senior adviser for the right-wing Internet Accountability Project (which is also partially funded by Oracle), said she's been speaking with a multitude of "members of Congress who have had questions" about how to think about big tech in a moment when the companies seem to be stepping up to the plate.
"Members and staff have been talking about it," she said, noting that she's been telling lawmakers that "nothing [the companies] are doing proves or disproves that we need antitrust."
"There's a lot about this crisis that's actually exposed the issues that have been at the core of why we need … lawmakers and antitrust enforcers to be looking at these companies with an eye towards what's necessary to make sure we have a truly open and competitive market," said Stacy Mitchell, the co-director of the Institute for Local Self-Reliance, an Amazon-antagonistic policy shop.
Mitchell said her organization has been in touch with lawmakers' offices about the "market abuses" they're noticing, and expect "to be doing more with allies in the coming days and weeks."
Meanwhile, another key group, the tech-funded Center for Democracy and Technology, published a new report on how regulators can discern when digital platforms begin abusing their market power. Avery Gardiner, CDT's senior fellow for competition issues, told Protocol that her team thought the report could be a "timely" contribution in a rapidly evolving situation, and she's been disseminating it to policymakers as well with an eye toward helping "antitrust thinkers and enforcers be on the lookout for the kinds of behavior that might be problematic."
The antitrust investigations are barreling ahead
The FTC, DOJ, state attorneys general and House antitrust subcommittee have all said that their separate investigations into the dominant tech firms are ongoing, if not somewhat delayed. And various tech and government sources confirmed that they have been in communication with the investigations over the past several weeks.
"DOJ is still doing their work, and things are proceeding as normal," said a source who has been actively working with multiple investigations.
And Bovard from IAP said she spoke to Louisiana Attorney General Jeff Landry about the tech investigations last week, and has been in touch with Texas Attorney General Ken Paxton about the Google probe he's leading.
"They're staying vigilant on the issue," Bovard said. "They're not saying, 'tech is great therefore our investigations are over.'"
"The Facebook probe is still ongoing," said a spokesperson for New York Attorney General Letitia James. "Our priorities haven't changed."
A spokesperson for Paxton said, "We do not anticipate that this health event will affect our ability to pursue the investigation as planned."
In Congress, the House Judiciary antitrust subcommittee staff have continued to make document requests and sift through its findings, albeit at a slower pace. Though the investigation was supposed to wrap up by the end of March, that timeline has been extended.
Sally Hubbard, the director of enforcement strategy at Open Markets Institute, said she's been working on a set of policy recommendations requested by the House Judiciary antitrust subcommittee. The deadline was recently pushed by a few weeks, she said, but the committee appears to be actively continuing to solicit input and work toward its goal of putting together a final report on its findings from the investigation.
Gardiner from CDT said she's spoken in recent weeks with House Judiciary antitrust subcommittee staff about her own recommendations.
The office of Rhode Island Rep. David Cicilline declined to comment on the timeline for the investigation, but directed Protocol to a statement released last month that said, "The subcommittee will get this investigation done the right way, and if that means taking longer than we planned, that's what we'll do."
But a GOP aide close to the investigation said the shifting dynamics around tech, and the influential work the largest companies are doing with the government, have been recalibrating some thinking on the Republican side of the committee.
"On the one hand, they've never seemed more important — companies of the size of the Big Four are the ones that can be most effective at helping in the response in a really meaningful, helpful way," the aide said. "On the other hand, it has further highlighted how powerful the companies are, for better or for worse."
The aide pointed out that the companies, as they try to help build a public health surveillance network hand-in-hand with the government and disseminate resources including ventilators and face masks, have highlighted deficiencies in government. "The federal government is incapable of what the companies are doing," the aide said. "That's certainly an important factor."
But the Republicans, under the newly appointed House Judiciary ranking member and faithful Trump ally Jim Jordan are still participating in the fact-finding part of the bipartisan investigation. And, according to two sources familiar with the investigation, Google in particular has been lobbying Jordan aggressively since he came into the new position.
"My understanding was it was a very bipartisan investigation," said one source familiar with the investigation. "Google's trying to throw a wrench in that." Google's PAC donated the maximum amount allowed per election — $5,000 — to Jordan's reelection campaign about a week after he assumed the top spot in February. (Google also maxed out to Jordan's campaigns in 2016 and 2018.)
A GOP aide said, "Nobody's lobbying on this issue is going to affect the way that ranking member Jordan approaches the antitrust landscape."
What comes next? Escalation
Antitrust hawks said this week that they will be on the lookout for concerning behavior from the dominant tech platforms as the economic situation becomes more and more dire, and they plan to escalate their advocacy in the coming weeks and months.
The platforms aren't completely immune from the coming economic fallout, which could be the worst since the Great Depression. As the digital ad market takes a hit, Facebook and Google in particular could lose over $44 billion, according to some analysts. But many of Facebook, Google and Amazon's lucrative products and services have become more relevant than ever, leaving them in a position to profit from a changing world.
Roger McNamee, an early Facebook investor and venture capitalist who has pushed for sweeping changes in Silicon Valley, told Protocol, "Quite clearly, the damage to the fiscal economy is going to increase the market share of internet platforms, whether it's Amazon, Google or Facebook."
He said it's not top of mind for many policymakers yet, but "the real question is, when will that change and what will happen when that changes?"
Gardiner from CDT said she anticipates an "acquisitions spree" as startups begin to fail. "A lot of small companies or startups are going to find themselves really struggling and perhaps desperate and might become acquisitions for big tech," she said. The FTC is currently investigating a decade of acquisitions by the largest tech companies.
And Miller said her new group, and the expanded progressive coalition that she chairs, is mulling new initiatives that will continue to beat the drum.
"When this pandemic is over, urgent questions about big tech's conduct and unmet obligations to the public interest will remain," said Blumenthal, a key member of the Senate Judiciary Committee.
Correction on 4/10/2020 at 3:45p.m. PT: An earlier version of this story misstated where the Campaign for Accountability gets some funding. The group no longer receives funding from any corporations.
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