Opinion | In a House subcommittee’s report, a strong step toward an antitrust revival

The subcommittee revived a key function of Congress: the power to investigate, report and set the stage for legislation. The report itself may become a keystone in a long-overdue dawning of progressive tech reforms.

Since the mid-1970s, Congress has celebrated the rise of new technology and tech businesses. Both political parties, for different reasons, dismissed antitrust concerns as a relic of a bygone age. For Democrats, globalization and technology seemed to guarantee competition. When antitrust was excised from the party platform in 1992, it had been there since the Gilded Age. For Republicans, markets cured themselves; antitrust was simply another form of regulatory abuse.

Into the vacuum between these positions came the rapacious Big Four. The subcommittee report details how they came to operate at unprecedented scale and reach. The companies’ combined valuation is more than $5 trillion. Add in Microsoft ($1.5 trillion) and Tesla ($275 billion), and the collective value is nearly equal to that of the NASDAQ 100.

The Big Four have enormous influence given their hold on communications infrastructure (Facebook, Google), e-commerce (Amazon), and start-ups and entrepreneurs (Apple). They directly compete with businesses that use their markets. The report tracked how they have gouged suppliers and imitated, acquired or eliminated competitors. It showed how their profits allow them to enter into new lines of business, where they repeat their predatory strategies.

As the subcommittee detailed, the Big Four have acquired hundreds of companies, often to eliminate potential competitors, in what are known as “killer acquisitions.” Meanwhile, antitrust regulators are underfunded — or possibly compromised by lobbying — and seldom are their powers exercised under antitrust laws to block mergers. Of nearly 100 Facebook acquisitions, the Federal Trade Commission extensively investigated only its 2012 purchase of Instagram (over which the FTC took no action).

When monopolies have unlimited power to buy up or kill off competitors, they turn perverse. History shows how, in a variety of sectors, monopolies led to prices going up, quality and innovation declining, and wages and working conditions worsening. Inevitably, concentrated economic power becomes a political issue. The Big Tech monopolies illustrate the cycle. They control more and more parts of society. They employ legions of lobbyists to consolidate their control. Big-money politics expands their influence. They have grown further during the pandemic, as more economic and social activity has moved online.

The subcommittee report includes recommendations for action, including divestment of different lines of business — such as forcing Facebook to split off Instagram and WhatsApp — and preventing platforms such as Amazon from giving preference to its own services or products. (Amazon founder and chief executive Jeff Bezos owns The Post.) It calls for increasing the budgets and authority of the Federal Trade Commission and the Justice Department Antitrust Division.

Although the subcommittee investigation proceeded with bipartisan support, that fell apart when it came to remedies. Rep. Jim Jordan (R-Ohio), the right-wing disrupter, assumed minority leadership of the subcommittee midway through the investigation and focused his attention on the canard that the

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House Democrats propose antitrust overhaul to rein in big tech

But partisan disagreements over next steps may blunt the report’s immediate impact, despite a widespread desire to rein in Silicon Valley titans among both conservative and liberal lawmakers. Several of the committee’s Republicans, led by Rep. Ken Buck of Colorado, endorsed some Democrat-backed proposals in a separate report unveiled Tuesday while warning that the majority’s more aggressive recommendations are “non-starters for conservatives.”

The investigation: The subcommittee issued Tuesday’s recommendations in a report that assailed the business practices of Silicon Valley’s most powerful companies, who lawmakers said have unfairly stifled competitors to the detriment of consumers. As part of the probe, lawmakers and staff have collected over a million documents, interviewed hundreds of witnesses and hauled in the companies’ CEOs to testify this summer.

Among other allegations, the panel investigated complaints that tech titans have trampled competitors by acquiring up-and-coming rivals and favoring their own products on the online storefronts they operate, such as Amazon’s Marketplace and Apple’s App Store.

“To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” Judiciary Chair Jerry Nadler (D-N.Y.) and subcommittee Chair David Cicilline (D-R.I.) said in the report. “Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price.”

The proposals: The report calls for an array of changes, some of which boast bipartisan support while others have only Democratic backing.

Among them are Democratic proposals to ban major tech platforms from acquiring future startups or potential rivals and barring them from both owning marketplaces — such as Amazon’s sprawling e-commerce hub — and selling competing products on them.

The report also calls on Congress to grant federal antitrust enforcers new resources to police possible abuses by the major firms, despite decades of “institutional failure” where the agencies “failed to block monopolists from establishing or maintaining their dominance.” Recommendation include increasing budgets, allowing the Federal Trade Commission to seek civil penalties for violations and imposing stricter prohibitions on senior staff from the agencies doing work for the companies after their tenure.

Democratic subcommittee member Pramila Jayapal of Washington state said Tuesday that she expects lawmakers will quickly look to turn the policy recommendations into actionable legislation once Congress returns in 2021 — if not sooner.

“I do hope that we will have legislation introduced early in the session and we can ideally in a year move significant pieces of legislation,” she said in an interview.

Where the parties differ: Republican lawmakers said in a separate report Tuesday that they support boosting funding and staffing levels for regulators and some more modest proposals to change U.S. antitrust laws, but they balked at Democrats’ more aggressive proposals. They include what Cicilline has described as a Glass-Steagall law for technology platforms, a reference to the Depression-era law that split up commercial and investment

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House Democrats discuss tougher antitrust law, some Republicans agree

WASHINGTON (Reuters) – The U.S. House of Representatives Judiciary Committee’s antitrust panel discussed ways to tighten antitrust laws on Thursday, with two Republicans on the Democrat-dominated panel indicating potential support for some changes.

FILE PHOTO: The chamber of the House of Representatives stands at the U.S. Capitol Building in Washington December 17, 2012. REUTERS/Joshua Roberts

The antitrust subcommittee, chaired by Representative David Cicilline, is expected to release a much-anticipated report into the four big tech companies — Amazon.com Inc AMZN.O, Facebook Inc FB.O, Apple APPL.O and Alphabet’s Google GOOGL.O — as soon as Monday.

In the hearing, Cicilline said the tech companies used strategies such as self-preferencing and predatory pricing to grow. “These once-scrappy, underdog startups have grown into the kinds of monopolies we last saw more than a century ago,” he said.

One witness, Bill Baer, who headed the Justice Department Antitrust Division during the Obama administration, argued to the committee that successive court rulings over the years have made it harder to block a merger.

“If courts are unwilling to step back from this overreach, legislation may well be needed to re-set the boundaries,” he said.

Representative Ken Buck, a Republican, appeared swayed by calls for tougher antitrust law, including giving more funding to the Justice Department and Federal Trade Commission.

“We also need to seriously consider increasing scrutiny on big tech companies, including shifting the burden of proof required for a market dominant company to prove that a merger is not anti-competitive,” he said.

Representative Kelly Armstrong, a Republican, said he agreed with Buck on the need for “more money, more resources, (and) more enforcement.” He indicated he would be interested in discussing “tweaks” to antitrust law.

Rep. Jim Jordan, the top Republican on the Judiciary Committee, repeated his concern that Big Tech firms were “out to get conservatives.”

The Justice Department is also probing the big four tech platforms, and is expected to file a lawsuit against Google next week.

Facebook and Amazon also face inquiries by the FTC, while U.S. state attorneys general are looking at Facebook and Google.

Reporting by Diane Bartz; Additional reporting by Nandita Bose; editing by Richard Pullin

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House Antitrust Chair Says Big Tech Abuses Gatekeeper Power

(Bloomberg) — Alphabet Inc.’s Google, Amazon.com Inc., Apple Inc. and Facebook Inc. abuse their power as gatekeepers of the internet, said the head of a House antitrust panel who’s poised to propose legislative changes to rein in the technology giants.

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“Each platform uses their gatekeeper position to protect their own power,” said Representative David Cicilline, who chairs a House antitrust panel that’s spent more than a year probing the dominance of the internet platforms. “By controlling the infrastructure of the digital age, they have surveilled other businesses to identify potential rivals — and ultimately bought out, copied, or cut off their competitive threats.”

Cicilline, who spoke Thursday during a hearing with experts on competition law, is preparing a final report recommending changes to the legislative and regulatory framework. That report is expected to be released as early as next week, according to people familiar with the matter.

Sundar Pichai, Jeff Bezos, Tim Cook and Mark Zuckerberg testified voluntarily in July before the subcommittee. Cicilline criticized their testimony as being evasive and non-responsive and said “they raised new questions about whether they believe their companies are beyond oversight.”

Representatives from Amazon, Apple, Facebook and Google didn’t immediately respond to requests for comment on Cicilline’s remarks.

Among the recommendations that Cicilline has floated is a prohibition against running a platform and competing on it at the same time. That would potentially bar Google from bidding in the online ad exchanges it operates or stop Amazon from providing a marketplace for independent merchants while selling its own products.

Cicilline has said he wants bipartisan support for his ideas, but hasn’t revealed whether he has Republican support for his proposals.

The GOP typically views changes to antitrust law skeptically. Although some of the committee’s Republicans have been critical of some of the technology companies’ practices, not all agree that new legislation is necessary.

“We ultimately disagree on the future of antitrust laws,” said Representative Jim Sensenbrenner, who is the top Republican on the subcommittee. He suggested he wants to see improved enforcement of existing laws, but is opposed to changes that would prompt break-ups of the companies.

For decades, the internet giants have enjoyed laissez-faire regulation in the U.S., including scant antitrust enforcement of mergers. Still, they are coming under increasing attack in Washington over a range of issues including misinformation, hate speech, election meddling, and what Republicans decry as anti-conservative bias.

In addition to Cicilline’s investigation, federal and state antitrust enforcers are poised to file a historic monopolization lawsuit against Google, and additional cases could be in the pipeline, Bloomberg has reported. The U.S. Federal Trade Commission is also preparing a possible case against Facebook. Amazon and Apple are also facing inquiries by federal antitrust authorities.

Witnesses at the hearing included Bill Baer, a former Justice Department antitrust chief under President Obama; Zephyr Teachout, a law professor at Fordham University known for progressive views on antitrust; and Rachel Bovard of the conservative-allied Internet Accountability Project.

Baer called for Congress to pass

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U.S. House Judiciary antitrust report likely to come out as soon as Monday Oct. 5 – source

FILE PHOTO: The logos of Amazon, Apple, Facebook and Google in a combination photo from Reuters files/File Photo

WASHINGTON (Reuters) – The U.S. House of Representatives Judiciary Committee’s antitrust subcommittee is expected to release a much-anticipated report into antitrust allegations against four of America’s largest tech companies as soon as Monday, according to a source with direct knowledge of the matter.

The chief executives of four of the world’s largest tech companies, Amazon.com Inc, Facebook Inc, Apple and Alphabet’s Google, testified before the panel in July.

During the hearing, the four CEOs parried a range of accusations that they crippled smaller rivals in their quest for market share. The four companies have a combined market value of about $5 trillion.

The House antitrust subcommittee plans to hold a hearing on Friday on proposals to strengthen antitrust laws and restore online competition as it nears the release of this long-awaited report on Big Tech.

The date of release of the report can still be moved, the source said.

The U.S. Justice Department is also probing the big four tech platforms. Facebook and Amazon are also facing inquiries by the Federal Trade Commission, while U.S. states attorneys general are looking at Facebook and Google.

Reporting by Nandita Bose; Editing by Sandra Maler and Leslie Adler

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U.S. House Judiciary antitrust report likely to come out as soon as Monday October 5: source

FILE PHOTO: The logos of Amazon, Apple, Facebook and Google in a combination photo from Reuters files

WASHINGTON (Reuters) – The U.S. House of Representatives Judiciary Committee’s antitrust subcommittee is expected to release a much-anticipated report into antitrust allegations against four of America’s largest tech companies as soon as Monday, according to a source with direct knowledge of the matter.

The chief executives of four of the world’s largest tech companies, Amazon.com Inc, Facebook Inc, Apple and Alphabet’s Google, testified before the panel in July.

During the hearing, the four CEOs parried a range of accusations that they crippled smaller rivals in their quest for market share. The four companies have a combined market value of about $5 trillion.

The House antitrust subcommittee plans to hold a hearing on Friday on proposals to strengthen antitrust laws and restore online competition as it nears the release of this long-awaited report on Big Tech.

The date of release of the report can still be moved, the source said.

The U.S. Justice Department is also probing the big four tech platforms. Facebook and Amazon are also facing inquiries by the Federal Trade Commission, while U.S. states attorneys general are looking at Facebook and Google.

Reporting by Nandita Bose; Editing by Sandra Maler and Leslie Adler

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White House eyes veteran antitrust lawyer for chief FTC post

Mark Meadows, Trump’s chief of staff, spoke with Arquit about the FTC role, both people said. They spoke anonymously to speak candidly about the private interview process. White House officials have also spoken to Gail Slater, a lawyer for Fox Corp. who previously worked at both the FTC and the White House as an adviser on tech, telecom and cyber policy.

The White House would not comment on the record, but a senior administration official told POLITICO in a statement: “There are no ongoing interviews for FTC chairman.”

Despite the Trump administration’s ongoing investigations into Silicon Valley companies, Arquit has previously cautioned against some of the rhetoric around breaking up tech giants, singling out the primary campaign calls from Sen. Elizabeth Warren (D-Mass.) last year.

“This is really an assault on our free enterprise system,” the longtime antitrust lawyer said in a Bloomberg TV interview last year. “To me, this proposal, it’s anti-worker, it’s anti-community and it’s also anti-consumer.”

These government probes create a significant “cloud” over the tech companies, he told CNBC in the summer of 2019, calling the scrutiny an “elephant in the room” chilling their behavior. Months later during another conversation, he described the FTC investigation into Amazon’s practices as “broad” and “proactive.” In these TV appearances, he has also defended the case behind T-Mobile’s merger with Sprint, a game-changing transaction in the U.S. wireless market that officially closed this year.

Arquit served as the FTC’s general counsel and top competition staffer during the Ronald Reagan and George H.W. Bush administrations. In private practice, he has represented dozens of companies in mergers and civil antitrust matters including DirecTV in its merger with AT&T, Office Depot in its tie-up with Office Max and Pilgrim’s Pride in antitrust suits over alleged price-fixing of broiler chickens.

Arquit’s law firm colleague, Marc Kasowitz, served as Trump’s personal lawyer for more than 15 years and ran the president’s legal strategy for a brief time in 2017 as he was in the early stages of the Russia investigation. The legal strategy then was taken over by Ty Cobb, a White House lawyer at the time, and Washington attorney John Dowd.

Earlier this year, Arquit served as the arbitrator in the Justice Department’s first ever arbitration over the proposed merger of Novelis, the world’s largest aluminum recycler, and rival aluminum company Aleris. Arquit sided with the DOJ, and Novelis — the largest U.S. producer of aluminum used in cars — agreed to sell off a plant in Kentucky to finalize the deal.

Arquit didn’t respond to calls and e-mails for comment.

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