Big Tech Under Mounting Pressure 06/23 06:01

Big Tech Under Mounting Pressure       06/23 06:01

   Without speaking a word or scratching a pen across paper, President Joe 
Biden drove up the pressure on Big Tech companies already smarting under 
federal and congressional investigations, epic antitrust lawsuits and 
near-constant condemnation from politicians of both parties.

   WASHINGTON (AP) -- Without speaking a word or scratching a pen across paper, 
President Joe Biden drove up the pressure on Big Tech companies already 
smarting under federal and congressional investigations, epic antitrust 
lawsuits and near-constant condemnation from politicians of both parties.

   Biden last week elevated a fierce critic of Big Tech, antitrust legal 
scholar Lina Khan, to head the powerful Federal Trade Commission. The surprise 
move was a clear signal of a tough stance toward tech giants Facebook, Google, 
Amazon and Apple and came as sweeping bipartisan legislation advanced in the 
House that could curb their market power and force them to sever their dominant 
platforms from their other lines of business.

   The House Judiciary Committee is digging into the legislation in a public 
drafting session Wednesday, an initial step in what promises to be a strenuous 
slog through Congress. Many Republican lawmakers denounce the market dominance 
of Big Tech but don't support a wholesale revamp of the antitrust laws. 
Republicans have relentlessly hurled accusations of anti-conservative bias 
against the social media platforms and may demand targeted legislative 
sanctions in return for their support.

   The huge legislative package, led by industry critic Rep. David Cicilline, 
D-R.I., targets the companies' structure and could point toward breaking them 
up, a dramatic step for Congress to take against a powerful industry whose 
products are woven into everyday life. If such steps were mandated, they could 
bring the biggest changes to the industry since the federal government's 
landmark case against Microsoft some 20 years ago.

   "It will be a really heavy lift," says Rebecca Allensworth, a professor of 
antitrust at Vanderbilt University Law School. The complex language that could 
eventually be laid down may invite fights in the courts by rewriting four 
decades of antitrust case law, she suggested.

   Lauded as engines of innovation, the Silicon Valley giants for decades 
enjoyed minimal regulation and star status in Washington, with a notable 
coziness during the Obama administration, when Biden was vice president. The 
industry's fortunes abruptly reversed about two years ago, when the companies 
came under intense federal scrutiny, a searing congressional investigation, and 
growing public criticism over issues of competition, consumer privacy and hate 

   Biden said as a presidential candidate that dismantling the big tech 
companies should be considered. He also has said he wants to see changes to the 
social media companies' long-held legal protections for speech on their 

   The legislative proposals also would prohibit the tech giants from favoring 
their own products and services over competitors on their platforms. The 
legislation was informed by a 15-month Judiciary subcommittee antitrust 
investigation, led by Cicilline, that concluded the four tech giants have 
abused their market power by charging excessive fees, imposing tough contract 
terms and extracting valuable data from individuals and businesses that rely on 

   The four companies deny abusing their dominant market position and have 
asserted that improper intervention in the market through legislation would 
hurt small businesses and consumers.

   The legislation also would make it tougher for the giant tech companies to 
snap up competitors in mergers, which they have completed by scores in recent 

   And the legislation asks Congress to boost the budgets of regulators who 
police competition, such as the Federal Trade Commission and the antitrust 
division of the Justice Department. State attorneys general would get power 
over companies to choose which courts to prosecute tech antitrust cases in. 
Some expert observers view those as the less complicated and less controversial 
parts of the legislation that may stand a better chance of making it to 
congressional passage.

   Democrats control the House, but they would need to garner significant 
Republican support in the Senate for legislation to pass. The chamber is split 
50-50 with the Democrats' one-vote margin depending on Vice President Kamala 
Harris being the tiebreaker.

   The tech industry has known that major antitrust legislation would likely 
follow the House investigation. And it was known for months that Biden was 
naming Lina Khan as one of five members of the FTC. But Silicon Valley -- and 
nearly everyone inside the Beltway -- was blindsided by Biden's lightning move 
elevating Khan to head the independent agency. She was sworn in just hours 
after the Senate confirmed her as one of five commissioners on a 69-28 vote.

   Khan, who has been a law professor at Columbia University, burst onto the 
antitrust scene with her weighty scholarly work in 2017 as a Yale law student, 
"Amazon's Antitrust Paradox." She helped lay the foundation for a new way of 
looking at antitrust law beyond the impact of big-company market dominance on 
consumer prices. As counsel to the Judiciary antitrust subcommittee, she played 
a key role in the 2019-20 investigation of the tech giants' market power.

   At 32, Khan is believed to be the youngest chair in the history of the FTC, 
which polices competition and consumer protection in industry generally as well 
as digital privacy.

   Last October the Trump Justice Department, joined by about a dozen states, 
filed a ground-breaking antitrust lawsuit against Google, accusing the company 
of abusing its dominance in online search and advertising to stifle 
competition. That was followed in December by a big antitrust suit against 
Facebook, brought by the FTC and nearly every U.S. state. It seeks remedies 
that could include a forced spinoff of the popular Instagram and WhatsApp 
messaging services.

   European watchdogs, meanwhile, are stepping up their antitrust actions 
against the tech giants. In the latest move, word came Tuesday that European 
Union regulators have opened a new investigation into whether Google stifled 
competition in digital ad technology. The EU regulators have previously charged 
Apple with stifling competition in music streaming, and accused Amazon of using 
data from independent merchants to unfairly compete against them with its own 

   EU and British regulators recently opened dual antitrust probes into whether 
Facebook distorts competition in the classified advertising market by using 
data to unfairly compete against rival services.

© 2021 CHS Inc.