Tag: antitrust

Big Tech hearing gives clues on future of antitrust law

In the last of seven hearings to investigate concerns that Google parent Alphabet (GOOG, GOOGL), Facebook (FB), Amazon (AMZN) and Apple (AAPL) are operating as illegal monopolies, witnesses before the House Antitrust Subcommittee Thursday clashed on whether Congress should overhaul U.S. antitrust law.

Proposals from witnesses before the committee, including several antitrust experts, could be a clue to changes forthcoming from the committee. They ranged from introducing legislation that would break up Big Tech companies and overturn judicial precedent to increased funding for antitrust law enforcers to maintaining status quo. 

‘Quintessentially a congressional job’

Zephyr Teachout, associate professor of law at Fordham University School of Law, told the subcommittee on Thursday that Congress, not the Supreme Court, should regulate Big Tech. “It is quintessentially a congressional job to respond to this threat,” Teachout said, calling for “significant” new legislation.

NEW YORK, NY, UNITED STATES - 2018/09/13: Zephyr Teachout seen speaking on phone during her campaign for Attorney General. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)
NEW YORK, NY, UNITED STATES – 2018/09/13: Zephyr Teachout seen speaking on phone during her campaign for Attorney General. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)

Michael Kades, director of markets and competition policy for Washington Center for Equitable Growth, also called for legislative reform, arguing that the filing of one or two cases would fall short of addressing the current level of anticompetitive conduct.

“Unless Congress acts it is accepting…that antitrust laws have little power to stop or deter anticompetitive conduct,” Kades said.

When acting to regulate Big Tech, Teachout argued, Congress should limit certain large companies to a single line of business, preventing Amazon, for example, from controlling businesses for online commerce while also controlling shipping and fulfillment. The approach would similarly impact Google’s ability to control platforms that both serve and sell online advertisements.

“Amazon takes as much as 30% of every sale,” Teachout said about seller transactions on the marketplace. “This is essentially a form of private tax…and that’s really dangerous for democracy.”

University of Pennsylvania Carey Law School professor Christopher Yoo disagreed with this notion, arguing that restricting companies to a single line of business would cut against a central purpose of antitrust laws: to protect consumers. Dismantling the efficiencies of Amazon’s vertical integration, he said, would lead to higher consumer prices.

More modest proposals to change antitrust law

Meanwhile, William Baer, visiting fellow for governance studies at Brookings Institution, proposed “modest” changes to antitrust laws — including altering the legal standard of proof required for the government to prevail on antitrust actions. The standard, he said, is problematic because it often dissuades the Justice Department from challenging mergers or acquisitions, such as Google’s purchase of ad platform DoubleClick in 2007 and Facebook’s acquisition of photo-sharing site Instagram in 2012.

Amazon CEO Jeff Bezos testifies before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law during a hearing on "Online Platforms and Market Power" in the Rayburn House office Building on Capitol Hill, in Washington, U.S., July 29, 2020. Mandel Ngan/Pool via REUTERS
Amazon CEO Jeff Bezos testifies before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law during a hearing on “Online Platforms and Market Power” in the Rayburn House office Building on Capitol Hill, in Washington, U.S., July 29, 2020. Mandel Ngan/Pool via REUTERS

“Many courts demand a level of proof that is often unattainable that chills enforcement and limits our ability to

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House Democrats discuss tougher antitrust law, some Republicans agree

By Diane Bartz

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.

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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