Big Tech Antitrust Efforts
Take a Step Forward
Technology Policy Brief # 56
By: Scout Burchill | July 26, 2021
Header photo taken from: Market Watch
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Photo taken from: The Verge
The world of antitrust and Big Tech regulation has been brimming with developments lately, and all signs point to a transformational shift underway in Washington. Last month, in a rare show of bipartisanship, the Senate voted overwhelmingly to approve Lina Khan’s nomination to the Federal Trade Commission. A young, progressive antitrust scholar, Khan’s appointment at the FTC, along with the recent nomination of Jonathan Kanter to head the antitrust division at the Department of Justice, signifies a sea change in institutional attitudes towards Big Tech and Big Business.
Furthermore, late last month a bipartisan House Judiciary Committee approved a collection of six bills aimed at modernizing century-old antitrust laws in an effort to better equip the government to take on the anticompetitive practices of Big Tech companies. Shortly after these six bills passed their first hurdle in the House, the necessity of updating existing legal frameworks was put on full display as a federal judge handed Facebook a major legal win by dismissing two antitrust complaints against the company. Facebook’s legal woes are far from over, but the ruling still sent the company’s shares up 4%, and for the first time ever Facebook reached a market capitalization of $1 trillion.
Finally, on July 9th, President Biden signed a sweeping 72 point Executive Order aimed at curbing the power of corporations and delivered a remarkable speech condemning the past forty years of antitrust enforcement and policy. Channeling his role model Franklin D. Roosevelt, Biden bluntly asserted that, “capitalism without competition isn’t capitalism; it’s exploitation.” After signing the Executive Orders he handed his pen over to Lina Khan, a symbolic passing of the mantle intended to signify the beginning of a new era of governance in which reigning in the excesses of Big Tech are high on the agenda.
While Facebook may have parried away a major legal challenge, the developments of the past few weeks signal that the battle against Big Tech behemoths and Big Business giants is just ramping up.
A new consensus is taking shape in Washington with the potential to dramatically redefine the government’s role in regulating corporate power and safeguarding the interests of workers, individuals, small businesses, and competitors.
For starters, the appointment of Lina Khan to the FTC speaks volumes about how the Big Tech backlash is beginning to be reflected in American institutions.
Khan has become somewhat of a hero in progressive circles for her aggressive, straightforward stance on the necessity of curbing the dominance of Big Tech companies.
Photo taken from: The Seattle Times
However, her appeal extends beyond the left, as a number of Republicans have warmed to her hawkish approach.
In fact, Josh Hawley, the fist-pumping purveyor of election lies, was among the first to jump to Khan’s defense in response to a number of hit pieces published by the Wall Street Journal, her number one critic so far.
As Khan’s reign at the helm of the FTC portends to usher in a new era of antitrust regulation and enforcement, the Judiciary Committee’s six new bills attempting to modernize and update our current antitrust framework would add wind to her sails. The first two bills are relatively straightforward and are expected to receive the least amount of pushback.
The first would increase the FTC’s budget and resources by raising premerger filing fees on companies. The second would forbid companies from routinely moving cases to courts friendly to their interests. The remaining four bills specifically target Big Tech companies. They crack down on mergers, non-competitive behavior restricting interoperability between systems, the self-preferencing of a company’s products over those of competitors, and finally there is a bill that would allow Big Tech companies to be broken up if they own a business that presents a conflict of interest.
These laws would allow the government to crack down on some of the anti-competitive business practices of Big Tech that do not easily fit into the consumer welfare framework.
Photo taken from: Reuters
Although these bills will surely face an uphill battle in the legislative process to come, they are significant because they represent one of the most ambitious attempts in over forty years to modernize our current antitrust legal framework. They are in lockstep with the burgeoning movement taking shape in Washington to revitalize antitrust laws and update the existing consumer welfare framework, and most importantly, they would equip Khan’s FTC and Kanter’s antitrust division at the DOJ with the tools to take on the Big Tech behemoths.
You may wonder what this new antitrust era will look like, and the answer is that it is still too early to say. Our current legal framework is so entrenched in decades of rulings founded on the old consumer welfare framework. In his speech and sweeping 72 point executive order, Biden intentionally harkens back to FDR’s vision of an economy that prioritizes the power of workers, small businesses and competition over that of corporate greed.
In an effort to rebuild the American economy, the Biden Administration is attempting to position itself as both a spiritual successor to FDR’s New Deal politics and a repudiation of the past 40 years of neoliberal Reaganomics. Antitrust policy is quickly becoming one of the areas in which this radical rethinking may prove most successful, thanks in large part to the bipartisan nature of the Big Tech backlash. If history is to repeat itself, Big Tech may eventually succumb to the same fate as Rockefeller’s Standard Oil and other titans of the Gilded Age.
While Big Tech may represent only the tip of the iceberg when it comes to the odious influence of concentrated corporate power over our economy and society, it really is no surprise that these companies in particular have come to epitomize all that is wrong in our current antitrust framework. They control vast swaths of the economy and exert immense influence over our society with little to no accountability or oversight, they vigorously stifle competition and exploit labor laws, they have decimated local industries like journalism, and their influence and culpability is global in scope.
While a revolution in antitrust enforcement and philosophy can help guide the way to a more competitive and dynamic marketplace in all sectors of the economy, it surely seems the case that Silicon Valley, for better or worse, will bear the brunt of this new crusade. Even though they are far from alone in amassing tremendous power and wealth through unscrupulous and exploitative business practices, in the minds of lawmakers and the public they certainly appear to be worthy successors to the robber barons of the Gilded Age.
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Jonathan Kanter’s Nomination