Congress faces renewed pressure to “modernize our antitrust laws”


WASHINGTON – When the country’s antitrust laws were created over a century ago, they were aimed at attacking industries such as Big Oil.

But tech giants like Amazon, Facebook, Google, and Apple, which dominate e-commerce, social media, online advertising, and search, have made unforeseen progress through the laws. In recent decades, the courts have also interpreted the rules more restrictively.

On Monday, two rulings dismissing federal and state antitrust lawsuits against Facebook renewed the question of whether the laws were fit for the tech takeover. A federal judge dismissed the federal lawsuit because he said the Federal Trade Commission had failed to prove that Facebook had dominant market share and that states had waited too long to argue their case.

The rulings highlighted how cautious and conservative courts could slow down what has become an increasingly aggressive push by lawmakers, regulators and the White House to curtail tech companies, fueling calls in Congress to overhaul the rules. and provide regulators with more legal tools to take on tech companies.

For months, Congress debated the need for reform of monopoly laws. At a hearing in March, Representative David Cicilline, Democrat of Rhode Island, said the country needed a “massive overhaul of our antitrust laws and significant updates to our competition system” to control biggest tech companies.

Moments later, Rep. Ken Buck, a Republican from Colorado, agreed. He called on lawmakers to adapt antitrust laws to the business models of Silicon Valley companies.

This week’s rulings have now put pressure on lawmakers to pass a recently proposed set of laws that would rewrite key aspects of monopoly laws to make some of the tech giants’ business practices illegal.

“This will strengthen the case for legislation,” said Herbert Hovenkamp, ​​an antitrust expert at the University of Pennsylvania School of Law. “This seems to be proof that antitrust laws are not up to the challenge.”

The bill, consisting of six bills, was introduced this month and passed by the House Judiciary Committee last week. The bills would make it harder for big tech companies to buy nascent competitors, prioritize their own services on their platforms, and prohibit them from using their dominance in one company to gain the upper hand in another.

Bills are much broader than traditional antitrust doctrine. Under current standards, which have been solidified by decades of business-friendly court rulings, companies tend to be judged as having violated competition laws if their behavior has been detrimental to the welfare of consumers. The main measure of this harm was whether companies charged people higher prices.

But tech companies like Facebook and Google provide most of their services for free. (Rather, they’re paid by advertisers.) Many technical and legal experts – including Lina Khan, an academic President Biden appointed this month to lead the FTC – have argued that a broader definition of good- be consumers, beyond price, should be applied. The damage to consumers, they said, can also be evident in reduced product quality, such as Facebook users who experience a loss of privacy when their personal data is collected and used for targeted advertising.

In one of his decisions on Monday, Judge James E. Boasberg of the United States District Court for the District of Columbia said Facebook’s business model had made it particularly difficult for the government to meet the standard to go. forward with the case.

The government, Judge Boasberg said, had not presented enough evidence that Facebook held monopoly power. Among the difficulties he highlighted, Facebook did not charge its users to access its site, which meant that its market share could not be measured by income. The government has not found a good alternative to defend its cause, he said.

He also spoke out against another part of the FTC lawsuit, regarding how Facebook controls the use of data generated by its product, while citing the kind of conservative antitrust doctrine that critics say is out of step. with the business practices of the technology industry.

The FTC, which filed a federal antitrust lawsuit against Facebook in December, can file a new complaint that addresses the judge’s concerns within 30 days. State attorneys general can appeal Judge Boasberg’s second ruling dismissing a similar case.

Lindsay Kryzak, spokesperson for the FTC, said the agency “is looking closely at opinion and assessing the best option for the future.”

For Facebook, the decisions were another example of the company’s continued ability to escape the harshest consequences for its business. Although the social network was fined $ 5 billion by the FTC in 2019 for breach of privacy, few significant changes have been made to how the company’s products work. And Facebook continues to grow: more than 3.45 billion people use one or more of its apps, including WhatsApp, Instagram, or Messenger, every month.

Decisions were particularly deflated after actions to curb technological power in Washington gathered pace. Ms Khan’s appointment to the FTC this month followed that of Tim Wu, another lawyer who has criticized the industry, to the National Economic Council. Bruce Reed, the president’s deputy chief of staff, called for new privacy regulations.

Mr Biden has yet to name anyone to permanently head the Justice Department’s antitrust division, which last year filed a lawsuit arguing that Google had illegally protected its monopoly on online search.

The White House is also expected to issue an executive order this week aimed at consolidating companies in tech and other areas of the economy. A White House spokesperson did not respond to requests for comment on the executive order or Judge Boasberg’s rulings.

Campaigners and lawmakers said this week Congress shouldn’t wait to give regulators more tools, money and legal red lines to use against tech giants. Mr Cicillin, along with Representative Jerrold Nadler, chairman of the House Judiciary Committee, said in a statement that the judge’s decisions on Facebook show “the urgent need to modernize our antitrust laws to combat anti-competitive mergers and anti-competitive behavior. abuses in the digital economy. “

Senator Amy Klobuchar, a Democrat from Minnesota who chairs the antitrust subcommittee of the Senate Judiciary Committee, echoed their call.

“After decades of binding Supreme Court rulings that have weakened our antitrust policies, we cannot rely on our courts to keep our markets competitive, open and fair,” she said in a statement. “We urgently need to rejuvenate our antitrust laws to meet the challenges of the modern digital economy. “

But the six bills to update monopoly laws still have a long way to go. They have yet to pass the entire House, where they will likely face criticism from moderate Democrats and libertarian Republicans. Then they will have to survive in the Senate, where Republican support is needed for the proposals to overcome legislative obstruction.

The bills also might not go as far in amending antitrust laws as some hope. One of the bills was amended last week by the judiciary commission to raise the standard for consumer welfare.

Even so, Monday’s decisions gave the proposals a boost. Bill Baer, ​​who headed the Justice Department’s antitrust division during the Obama administration, said this “gives a huge boost to those in Congress who think the courts are too conservative to fight monopoly power “.

Facebook and tech platforms might like the judge’s rulings, he said. “But they might not like what’s going on in Congress.”

Mike isaac contributed reports.


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