While there is general agreement that tech giants Amazon, Apple, Facebook, and Google wield too much market power, there is no consensus opinion yet on whether to break up the companies, overhaul the nation’s antitrust laws, or how to best address the online marketplace.
The House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law held its seventh and final hearing on October 1 in connection with its bipartisan investigation into concerns over online competition. The investigation kicked off in June 2019. At the hearing, which included remarks from eight antitrust experts, including former top agency officials, there was a general agreement that Amazon, Apple, Facebook, and Google wield significant market power, but there was no clear consensus opinion on whether to break up the tech companies, to overhaul the nation’s antitrust laws, or how to best address the changing digital marketplace. A report based on the investigation’s findings is anticipated soon.
Before each of the scheduled witnesses presented their prepared remarks, introductory remarks were provided by Rep. David Cicilline (D., R.I.), Judiciary Committee Chairman Jerrold Nadler (D., N.Y.), Subcommittee Ranking Member James Sensenbrenner (R., Wis.), and House Judiciary Committee Ranking Member Jim Jordan (R., Ohio).
Too large; too much power. Cicilline emphasized that, based on the investigation of the major technology companies, including testimony in August 2020 by the companies’ top executives, the companies have grown too large and are abusing their market power. Moreover, the executives’ answers "were evasive," he said. "They were non-responsive. And they raised new questions about whether their companies were beyond oversight." Nadler shared Cicilline’s concerns about the size and power of the technology companies, saying that he has significant concerns about consolidation and its effects. "Each of the major companies that were a part of this investigation, in its own way, exerts dominant control in the digital marketplace that is cause for great concern."
Moreover, Cicilline noted that the evidence gathered by the subcommittee shows that each of the companies serves as a "gatekeeper" over various distribution lines. "By controlling access to markets, these giants are able to pick winners and losers throughout our economy," he said. Further, the companies also are using their positions to "protect their own power" by buying, copying, or trying to cut off access to competitive threats. "To put it simply, these once scrappy underdog start-ups have grown up to be the kinds of monopolies we last saw more than a century ago during the time of oil barons and railroad tycoons." "We stand at a crossroads, there is no doubt about that," he added.
Enhancing laws, enforcement. Following up on Cicilline’s comment that the giant tech companies have "simply become too large for current law to regulate," Nadler indicated that the investigation has confirmed his belief that "we must modernize and reinvigorate enforcement of the antitrust laws," including bolstering the ability of the Department of Justice and FTC to step up their antitrust enforcement efforts to protect consumers and promote competition. Further, antitrust laws need to be changed "to meet the challenges of our modern economy," he said.
Similarly, Rep. Ken Buck (R., Colo.) recommended some changes to the antitrust laws to address a "breakdown occurring in the digital economy" in which a "small number of tech titans are using anticompetitive means to grow their marketplace dominance and control the channels of distribution." According to Buck, the nation’s antitrust agencies "can't keep pace" with the growth of these technology companies. At the same time, he did not endorse the suggestion of creating a separate agency to oversee the digital economy, saying that would "only benefit big tech firms and harm innovation."
Break up the companies? In connection with the suggested remedy by some to break up the large technology companies, James Sensenbrenner remarked, "I remain skeptical of proposals to break up these companies, create a one-size-fits-all data standard or create a government-run public option. It appears to me that this would ultimately stifle innovation and be more harmful to consumers." According to Sensenbrenner, "the American people have been well-served by our antitrust framework for decades. By contrast, I don't think that overly burdensome regulations, to break up these companies, or having the government insert itself in their operations is the right course of action. What we need to see is improvement in enforcement."
Censorship concerns. Meanwhile, Jim Jordan directed many of his comments toward the contention that the large technology companies are attempting to "censor conservatives" on their platforms. "Big tech is out to get conservatives," he maintained. "That's not a suspicion. That's not a hunch. It's a fact." Jordan also criticized Democrats for repeatedly refusing requests from Republicans for a deeper examination of how the "platforms are censoring" users’ speech.
Persons testifying. During the October 1st hearing, the subcommittee heard testimony from Mr. William Baer (Visiting Fellow, Brookings Institute), Ms. Rachel Bovard (Senior Director of Policy, Conservative Partnership Institute), Ms. Sally Hubbard (Director of Enforcement Strategy, Open Markets Institute), Mr. Michael Kades (Director of Markets and Competition Policy, Washington Center for Equitable Growth), Mr. Tad Lipsky (Assistant Professor, Antonin Scalia Law School), Mr. Sabeel Rahman (President, Demos), Ms. Zephyr Teachout (Associate Professor, Fordham University School of Law), and Mr. Christopher Yoo (John H. Chestnut Professor of Law, Communication, and Information Science, University of Pennsylvania Carey Law School).
Antitrust cases. Baer, a former head of the Justice Department’s Antitrust Division, testified that while in "many cases, our antitrust laws have been successful and forces for good," the court system has "fallen short and failed to protect consumers and competition as much as it can and as it should." According to Baer, many courts have held antitrust enforcement to a standard of proof that is unrealistic and inconsistent with the plain language of the antitrust laws. "If the courts are unwilling to step back from this overreach, legislation may well be needed to reset the balance," he said.
In contrast, Tad Lipsky, also a former antitrust official, supported leaving antitrust laws unchanged. "I think things are very well positioned, and I would caution aggressively against any extensive intervention in our common-law system of interpreting the mandate of our basic antitrust laws," he said. Meanwhile Sally Hubbard urged Congress to take action to strengthen antitrust laws and enforcement.
Companies: Alphabet, Inc.; Amazon, Inc.; Apple, Inc.; Facebook, Inc.; Google, LLC
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