Congress

Big Tech now squarely in the sights of antitrust forces

The effort could create a bipartisan political circus on privacy and disinformation

Rhode Island Rep. David Cicilline, who chairs the House Judiciary’s antitrust subcommittee, announced the bipartisan investigation of Big Tech earlier this week. (Tom Williams/CQ Roll Call file photo)

A bipartisan antitrust investigation of large technology companies announced by the House Judiciary Committee will offer lawmakers their latest opportunity to grill some of the industry’s most recognizable and controversial executives.

But it also could provide lawmakers a chance to hold accountable antitrust agencies and potentially to expand the scope of U.S. antitrust law in significant ways. Still, it remains unclear exactly what the committee can accomplish as it sets out.

Rewriting antitrust laws that have stood for more than a century to target companies such as Facebook and Google, which use behavioral advertising rather than user fees to turn a profit, would be a major undertaking. The committee’s investigation, announced on Monday by antitrust subcommittee Chairman David Cicilline of Rhode Island, could fall short and result in little more than high-profile hearings or suggestions for new regulations.

The effort could also lapse into a political circus where lawmakers from both sides of the aisle use the opportunity to chew out industry giants thought to consider themselves above the whims of Congress on issues such as privacy and disinformation.

“I’m not sure where the committee will go, but I think Facebook, in particular, needs a lot more regulation,” said Tennessee Democrat Steve Cohen, a senior Judiciary member. “I’m a big First Amendment, free speech person, but Facebook is irresponsible.”

Cohen said he believes the company’s policies and practices for content moderation raise significant questions within the realm of antitrust enforcement, including whether Facebook is in violation of the consumer welfare standard that has dominated antitrust legal philosophy for decades.

The consumer welfare standard typically identifies and assesses harm to competition by its potential effect on consumers, using prices as a proxy to make that judgment. Maurice Stucke, a professor at the University of Tennessee College of Law and a former Justice Department antitrust lawyer, has written that the consumer welfare standard fails to “define ‘welfare’ and ignores adverse effects on workers, suppliers, quality, and innovation.” 

Cohen added that consumer welfare could be applied potentially to Facebook “and the type of conduct they allow and publish and the effect of it, and the effect of it is that it destroys the entire concept of the truth. Usually, [antitrust] is a financial issue about control of a marketplace, but they have control of the marketplace of ideas … and it’s being bombarded with sick, ignorant, anonymous content.”

Executive branch prevails

Decisions on whether to challenge a company’s monopoly are entirely at the discretion of the executive branch and not with Congress, however. The Trump administration is currently working through multiple investigations, with the Justice Department probing Google and the Federal Trade Commission taking on Facebook, according to reports.

But lawmakers still see a benefit in Congress taking on its own inquiry.

“Our job in a lot of our hearings is to be detectives and turn up the heat on companies or individuals who could be involved in bad behavior,” New York Democratic Rep. Alexandria Ocasio-Cortez said.

Still, others are concerned the committee may use the investigation merely to score political points in an environment where partisans on both ends of the spectrum are incensed with Big Tech.

“We can’t have this become a political football,” said Democratic Rep. Ro Khanna, who represents parts of Silicon Valley. “We need sober minds to prevail and to hold tech accountable without forfeiting our innovation and entrepreneurial advantage.”

Khanna said the message he’s hearing back home is one in favor of new regulations and greater privacy protections, but not strict antitrust enforcement that could result in the government breaking up large technology companies.

“I think we need a nuanced view and well-crafted regulations, and what I’m hearing is, yes, we need stronger antitrust laws and yes, we need stronger privacy laws but it shouldn’t be about breaking up big companies,” he said.

Not all lawmakers are enthusiastic about the House investigation.

“Antitrust is a highly technical inquiry, not something that lends itself to easy generalizations or blanket condemnations,” said Utah Republican Mike Lee, who chairs the Senate Judiciary antitrust subcommittee. “This is why such investigations are best left to the antitrust agencies rather than Congress.”

Calls for stricter antitrust enforcement have ramped up since Massachusetts Sen. Elizabeth Warren, a Democratic presidential candidate, proposed a sweeping plan earlier this year to break up companies including Amazon, Facebook and Google.

In the meantime, Ocasio-Cortez says one area where Congress may be able to rewrite antitrust laws is clarifying that consumer welfare means companies must do more than keep prices low, especially in a world where the use of many technology platforms, such as Google and Facebook, is free.

“We need to start looking at market share and ways that folks are exerting power in the market,” she said. “There are so many ways that happens outside of price.”

If anything, the announcement of the committee’s investigation signals restlessness on the part of lawmakers who are skeptical of the executive branch’s ability — or willingness — to take on Big Tech. Some critics, such as Sen. Josh Hawley, are welcoming the Justice Department’s involvement.

“The FTC has been sitting on a whole bunch of jurisdiction for years now that has effectively prevented DOJ from taking any significant action, and they’re resolving … that in a way that clears the path for real investigations,” the Missouri Republican said. “I hope they’ll do that.”

The antitrust probes divided between DOJ and the FTC show that neither agency wants “to be shut out of this turf,” said Stucke, the Tennessee professor. “They want to preserve their options in a data-driven economy.”

FTC v. DOJ

Traditionally the two agencies have waged turf battles on which has the upper hand in headline-grabbing antitrust investigations, Stucke said, citing the U.S. prosecution of Microsoft in 1992.

That investigation, which marked the last time a major technology company was investigated for violation of antitrust laws, probed whether Microsoft abused its power in the personal computer market by bundling its Internet Explorer browser with its operating system. The inquiry ended in a 2-2 deadlock and the FTC closed its investigation, but later that year the Justice Department began its own probe.

The DOJ investigation ended in a settlement in 1994, and Microsoft agreed not to tie the sale of its Windows operating system to other products. The government later sued Microsoft for violating the agreement, and the company agreed to share its programming interfaces with third parties.

Despite that intervention, the Justice Department and the FTC have failed to adapt antitrust laws to the modern digital age, Stucke said.

The consumer welfare standard undergirding American antitrust law “is really thin and is coming under attack, and is not sustainable in a data driven-economy,” he said.

By holding public hearings, Stucke said, Congress can highlight the executive branch’s failure to effectively enforce antitrust laws.

Even by the consumer welfare standard, it’s obvious that there is increasing “wealth and income inequality, and increases in productivity without increases in salaries to the workforce,” he said.

“Why aren’t the markets working the way they’re supposed to?”

Get breaking news alerts and more from Roll Call on your iPhone.