by Matt Stoller at BIG by Matt Stoller
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It’s been an extraordinary week. On Monday, the Supreme Court ruled against the NCAA for abusing its monopoly over the terms and wages of student athletes. Yesterday, the House Judiciary Committee, which is the body that has jurisdiction over antitrust law, wrote and voted on legislation to break up big tech firms Apple, Google, Amazon, and Facebook. There are problems with the bills, and I’ll get into them. But the underlying content is less important than the political message, which is that breaking up big tech is looking increasingly inevitable.
Meanwhile, the new Federal Trade Commission Chair Lina Khan has taken full control of the agency. She’s hired acting directors to run the bureaus, and announced that the FTC will be holding open commission meetings where the public can watch the commissioners vote and debate things. Open meetings haven’t happened in decades, so this is something of a shock to the agency. There’s even a period where the public gets to talk back to the commissioners. Imagine that. The underlying agenda is pretty aggressive (though in the administrative weeds), and starts with finalizing a rule against lying about Made in USA labels. (If you want to sign up to speak, you can do so here.)
And now to the good, bad, and meaning of the break-up votes. Here’s Jerry Nadler, the Chair of the Judiciary Committee.
The Good
The Judiciary Committee wrote and passed six different bills, two of them being general purpose antitrust acts and four being big tech-specific ones. These bills are an outgrowth of the 16-month investigation into Apple, Google, Amazon, and Facebook, with an analysis of millions of documents and hundreds of witnesses.
This isn’t the end of the process, but it’s the first Congressional vote to actually restructure powerful firms since the 1996 Telecom Act, and the first real Congressional attack on concentrated corporate power since the Bank Holding Company Act Amendments of 1970. Congressman Mondaire Jones summed up the hearing where they voted to do so. “Unless we break these companies up,” he said, “they will continue to be above the law.’”
So what do these bills do?
The first two are relatively simple. The first increases the amount of money that our antitrust enforcers can use to bring cases and regulate markets. (The FTC’s budget is $351 million, this would boost it to $418 million, while the Department of Justice Antitrust Division would go from $188 million to $252 million.) I wasn’t so keen on this one for a long time, because the Federal Trade Commission and the Antitrust Division are terrible and asking for more resources was an excuse for bad legal strategy. But with Lina Khan at the FTC, I’m more optimistic that she can restore the agency’s legitimacy. Or at least, now I know there’s someone there who recognizes the task at hand.
The second is a bill that is very procedural, but antitrust is a weedy area, and it matters. One of the techniques that monopolists use to avoid scrutiny is to move cases brought by state attorneys general to courts that are friendlier to big corporations. California, for instance, is well-known for tech-friendly judges – Google tried to move one key antitrust case on adtech to its home state. But big pharma does it too. In 2016, 40 state attorneys general filed suit in Connecticut against 18 pharmaceutical companies alleging price-fixing and market allocation of 15 generic drugs. The pharmaceutical companies, most of which were headquartered in the Philadelphia-area, successfully transferred the case to the Eastern District of Pennsylvania. It still hasn’t gone to trial. The second bill stops this nonsense, and lets state AGs keep the cases in the district they choose to bring suit. (Jurisdictional fights have always been a problem – in my book I profiled a 1937 suit over the monopolist Alcoa, in which the firm got the suit moved to its home town of Pittsburgh, and Congress in response nearly passed a law making it easier to remove judges.)
These two bills might not seem like a big deal. However, if these two bills were all that passed, they would still comprise the single most important strengthening of Federal antitrust law in a generation. For decades, antitrust was just not important, and the Judiciary Committee didn’t bother to focus on it. So to have these markups, and pass these bills, is in itself meaningful.
The other four bills solved for problems specific to Google, Apple, Amazon, and Facebook, problems ostensibly laid out in the big tech report by the subcommittee last year. Here are the four bills and what they did.
1) The ACCESS Act mandates that big tech firms have to make their systems open to competitors and business rivals, in the same way that AT&T customers can talk to T-Mobile customers, or users of different email systems can communicate with one another.
2) The merger bill makes it harder for big tech firms to buy rivals.
3) The nondiscrimination bill is intended to ban the ability to big tech firms to preference their own products, the way Google substitutes its own reviews for Yelp reviews, even if Yelp’s reviews are better.
4) The break-up bill is supposed to split apart big tech firms by prohibiting platforms from owning any line of business that uses that platform.
All four passed the committee, which is extraordinary and unexpected. And not only did they pass, but they passed with both Republicans and Democrats working on them.
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