Republicans and Democrats have grown increasingly concerned about the power and influence of Big Tech. While both parties have been spurred to advance legislative remedies, their motivations for doing so are much different. Democrats, for example, are concerned about the market concentration enjoyed by dominant online platforms. Republicans, on the other hand, have accused online platforms of using their market dominance to suppress conservative speech online.
Thus far, the House Judiciary Subcommittee on Antitrust, Commercial and Administration Law has largely driven the antitrust discussion on Capitol Hill. Over a 16-month period, the subcommittee, which is led by Rep. David Cicilline (D-RI), held seven hearings, reviewed 1.3 million documents and interviewed more than 240 market participants. The effort culminated in a 450-page report entitled “Investigation of Competition in Digital Markets,” which was released in October 2020. The report detailed the subcommittee’s investigation into the market dominance of Amazon, Apple, Google and Facebook and proposed potential remedies to anticompetitive conduct. (The report also cited some of the work of Allen Grunes.)
Rep. Cicilline has largely won over the support of his Republican counterpart on the Antitrust Subcommittee, Rep. Ken Buck (R-CO). In response to Cicilline’s work, Buck released his own antitrust report entitled “The Third Way: Antitrust Enforcement in Big Tech.” Although there are certainly notable differences in their approaches to antitrust reform, Buck’s 19-page report in many cases aligned with Cicilline’s thinking.
This alert provides a summary of the antitrust discussion in Washington by:
- Describing recent congressional action to update antitrust laws
- Providing an overview of the primary bills under consideration by lawmakers
- Mapping the various parties and antitrust positions
- Looking ahead to potential legislative action
Recent Antitrust Action
On Wednesday, June 23 and Thursday, June 24, the House Judiciary Committee marked up six bills directed at altering antitrust rules and enforcement that affect big technology companies. The following bills were under consideration:
- Merger Filing Fee Modernization Act (H.R.3843): This bill would increase the fees that merging companies pay to the U.S. antitrust agencies who review their deals. The measure, considered the least controversial of the six bills, still took several hours to move forward as Democrats fended off several Republican-backed amendments to limit how the increased funding might be used. Before advancing the bill, the panel voted to accept one amendment from Rep. Victoria Spartz (R-IN) that would require the Department of Justice and the Federal Trade Commission to report more information on the fees collected as part of an existing annual report to Congress. The Senate passed a similar version of the bill as part of the Endless Frontier Act (S.126) earlier this month. The bill advanced 29-12.
- State Antitrust Enforcement Venue Act (H.R.3460): This bill, which would bar companies from moving antitrust suits brought by state attorneys general to friendlier venues, was reported favorably by a vote of 34-7. Under current law, the Judicial Panel on Multidistrict Litigation cannot move antitrust suits filed by the Department of Justice and Federal Trade Commission, while suits by state attorneys general can be moved and consolidated. One concern that was voiced about the bill was the possibility of multiple suits being filed by multiple state attorneys general. The bill advanced 34-7.
- Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act (H.R.3849): This bill would require covered platforms to insure data portability and to implement interoperability standards, allowing consumers to easily transfer their personal information between digital services. Similar legislation was introduced by a bipartisan group of senators last Congress as the ACCESS Act of 2019 (S.2658). The bill advanced 25-19.
- Platform Competition and Opportunity Act (H.R.3826): This bill would shift the burden onto the largest tech companies to prove they do not compete with potential rivals they are seeking to acquire. During the markup, lawmakers consistently pointed to Google, Facebook, Apple and Amazon and their efforts to acquire companies that could pose a competitive threat. The bill advanced 24-17-1.
- American Choice and Innovation Online Act (H.R.3816): This bill would bar covered platforms from favoring their own products over that of their rivals, also known as self-preferencing. The legislation would also empower federal and state regulators to sue companies engaged in discriminatory practices. The bill advanced 24-20.
- Ending Platform Monopolies Act (H.R.3825): This bill would prevent dominant platforms from operating as both an operator and user of online platforms. Proponents argued it would guard against the ability of the actors to prioritize their own products and thwart competition. As a result, the bill purportedly ensures additional options will be available for consumers in online platforms. The bill advanced 21-20.
Markup Discussion
As Congress continues to debate several antitrust measures in both the House and Senate, clear fault lines have emerged, potentially imperiling any chance for significant legislation to pass. Congress continues to struggle with balancing concerns about the growing dominance of Big Tech companies. In the most recent display of these tensions, the House Judiciary Committee held a nearly 30-hour markup of the six antitrust bills discussed above, which it ultimately sent to the full House. All six drew bipartisan support even though critics, including industry trade groups, warned the measures would destroy popular services like Google Maps, Amazon Prime and iMessage.
Two of the measures advanced out of the committee match similar bills in the Senate, giving them a fighting chance to be enacted. One of those proposals would update filing fees for mergers, giving more resources to enforcement agencies. The other would let antitrust cases from state attorneys general remain in the states where they were initially brought, giving them greater control of forum selection. However, the fate of the four bills focused specifically on Amazon, Apple, Facebook and Google is more uncertain. In the run-up to the markup, tech industry groups urged the committee to slow down and hear from experts on how the measures would affect consumers. A statement from the California delegation said the legislative package as debated is not close to ready for a floor vote in the House.
Bipartisan opposition within the committee questioned the criteria to establish which platforms would be targeted, the impact that changing tech business practices could have on user privacy and why Congress would pass rules to constrain U.S. companies, but not their foreign competitors. The initiative was Congress’ first attempt to grapple with the lack of regulation over the technology sector and reverse two decades of lax antitrust enforcement. It was momentous in many ways and opened a path to legislation that could make significant changes in the way the companies operate.
The markup was rife with charges about the tech titans wielding power over the digital economy to crush competition, but also included complaints from Republicans accusing tech companies of censoring right-wing voices, and criticism from Democrats about the spread of misinformation online. Still others were concerned that certain interoperability requirements would create the potential for foreign entities to steal American consumer data, or the potential for foreign companies to gain an unfair competitive advantage over their American counterparts.
Despite shared skepticism about Big Tech, lawmakers could not reach a clear consensus as to whether antitrust legislation, and particularly the bills before the committee, is the right tool to address the problem. Many questions still remain about defining the scope of the legislation, including defining the meaning of “data” and establishing which countries are considered foreign adversaries, what makes a business a “critical trading partner” and what platforms are considered “online platforms.” Many of these definitions will be subject to the Federal Trade Commission and Department of Justice, through rulemaking or other means—a delegation of power of concern to some members on the panel.
Key Antitrust Players
House
Naturally, given their committee positions, Reps. Cicilline (D-RI) and Buck (R-CO) are thought leaders, and their positions will be noteworthy going forward. Cicilline has garnered the support of most committee Democrats. However, there are some factions that are starkly opposed to his efforts.
One vocal group is the California delegation—both Republicans and Democrats—who represent Silicon Valley and the surrounding areas. For example, a bipartisan group of five California members on the House Judiciary Committee—Reps. Zoe Lofgren (D-CA), Darrell Issa (R-CA), Eric Swalwell (D-CA), Tom McClintock (R-CA) and Lou Correa (D-CA)—issued a press release that warned of antitrust legislation recently approved by the committee. In its statement, the group said the markup “featured several bills that would radically change America’s leading tech companies and made crystal clear that the bill text as debated is not close to ready for Floor consideration.” Other California members have also weighed in, such as Silicon Valley Rep. Ro Khanna (D-CA), who said the bills were “poorly drafted … by people who I think don’t understand technology.” Rep. Ted Lieu (D-CA) complained that hearings had not been held on the bills and said members do not fully understand these issues, which he characterized as complex.
Another California member, House Minority Leader Kevin McCarthy (R-CA), has raised his own concerns, saying the legislation recently considered by the House Judiciary Committee does not adequately address Section 230 protections—the liability shield Republicans accuse online platforms of leveraging to discriminate against conservative voices. McCarthy will oppose the package of bills and is planning to release his own legislation. He is working with House Judiciary Committee Ranking Member Jim Jordan (R-OH), who revealed the forthcoming legislation would repeal Section 230, on legislation that would allow users to sue over alleged censorship and expedite the legal process to break up dominant technology companies.
In late June, McCarthy sent a letter to House Republicans outlining his plans to formulate a “Framework to Stop the Bias and Check Big Tech.” The framework proposes to review antitrust law to bring “long-overdue antitrust scrutiny to Big Tech.”
McCarthy has also announced the formation of a task force on Big Tech Censorship and Data, which he designated House Energy and Commerce Committee Ranking Member Cathy McMorris Rodgers (R-WA) to lead. According to the release, the task force will be focused squarely on Section 230, which the website accuses Big Tech of “abusing those protections and choosing to censor Americans with different political views.” It explicitly says “it is time to scrap Section 230 and start over.”
On July 7, House Judiciary Committee Ranking Member Jordan released a framework on behalf of committee Republicans, outlining the principles guiding forthcoming antitrust legislation. According to the framework, the legislation will primarily be directed at combatting what Republicans view as online censorship of conservative speech by Big Tech. To expedite and strengthen antitrust enforcement, hold Big Tech accountable for the alleged censorship and increase transparency around Big Tech decisions, the framework proposes the following legislative remedies:
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Speed: Expedite trial court consideration; direct appeal to the Supreme Court; empower state attorneys general
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Accountability: A cause of action to empower Americans; overhaul Section 230; consolidate DOJ and FTC antitrust enforcement authority
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Transparency: Require content moderation decisions and censorship be listed on a publicly available website
Senate
Sen. Amy Klobuchar (D-MN), who chairs the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights, leads the antitrust effort in the Senate. Since taking the gavel this year, Sen. Klobuchar has held multiple antitrust hearings, including:
Klobuchar has also introduced the Competition and Antitrust Law Enforcement Act (S.225), her sweeping legislation to amend the federal antitrust laws. The legislation, in short, would provide federal enforcers additional resources, strengthen prohibitions on anticompetitive conduct and mergers and make additional enforcement reforms. A section-by-section summary of the bill can be accessed here.
Klobuchar has been working on antitrust issues with a “small but mighty group” that includes “both Democrats and Republicans.” Although it’s not clear if he is part of this mighty group, Klobuchar has a close working relationship with her Republican subcommittee counterpart, Sen. Mike Lee (R-UT).
Lee is very active on antitrust issues. For instance, he has already introduced the following bills this session:
- Tougher Enforcement Against Monopolists (TEAM) Act (S.2039): This bill would consolidate antitrust enforcement agencies into one and strengthen antitrust laws by codifying the consumer welfare standard, increase Hart-Scott-Rodino Act fees for larger transactions and employing a market share-based merger presumption.
- State Antitrust Enforcement Venue Act (S.1787): This bill, introduced alongside Klobuchar in the Senate and authored by Buck in the House, would ensure state attorneys general are able to remain in the court they select rather than having their cases moved to a court the defendant prefers.
- One Agency Act (S.633): Like the TEAM Act, this bill would consolidate antitrust enforcement authority within the Department of Justice.
Looking Ahead
House leadership has sent mixed signals about future floor action on the bills. While Speaker Nancy Pelosi (D-CA) has told concerned tech companies to participate in the bill writing process, she has also said that Silicon Valley’s interests would not change the trajectory of the legislation, noting that lawmakers from both parties have grown troubled by Silicon Valley’s power. While she has not specifically indicated whether she would place the bills on the House floor, Pelosi has lent her support for the effort, saying “there has been concern on both sides of the aisle about the consolidation of power of the tech companies, and this legislation is an attempt to address that. We are not going to ignore the consolidation that has happened and the concern that exists on both sides of the aisle.”
Meanwhile, House Majority Leader Steny Hoyer (D-MD) recently expressed doubt about the chances for the bills to make it to the House floor, stating that more discussions need to take place before the bills can be ready for floor consideration. He specifically said, “Right now, [the bills] are not ready for the floor, and I don’t want to make a prediction as to when they’re going to be ready.” Leader Hoyer has also stated that he would like more input from the Senate on what changes would be needed for the legislation to pass both chambers, which might significantly curtail the bills.
The Senate will play a key role in negotiating a final package. “A lot of these concepts are very popular, and Mike Lee and Amy Klobuchar are working hard on the language and I think that’s going to be really important,” Rep. Ken Buck (R-CO) said in an interview after the markup, adding that, “there’s a strong possibility that a number of these bills will get through the Senate and become law.”
Klobuchar and Lee have both said they plan to introduce companion bills to the House legislation. Klobuchar has particularly expressed interest in producing a companion bill to the American Choice and Innovation Online Act (H.R.3816), which bars companies from giving an edge to their own products. The Senate versions will not be identical to the House versions, and the burden for passage is higher since the Senate’s cloture rules require 60 votes to proceed to the consideration of legislation or to end debate.
In addition to the Klobuchar-Lee bills, Lee and Sen. Chuck Grassley (R-IA) introduced separate legislation, the TEAM Act (S.2039), to move all antitrust enforcement to the Department of Justice and ban any merger that results in a market share of more than 66% unless needed to prevent “serious harm” to the U.S. economy.
How these efforts come together remains an open question. Some measures, like increases to merger filing fees and state choice of venue, clearly have strong bipartisan support and will likely be enacted on their own or by hitching a ride to other legislation working through both chambers. Other more controversial measures do not currently have a clear path forward.