Antitrust Reform Targets Big Tech

About the Author: Jill Crosby is a first-year law student at American University Washington College of Law. Jill is a graduate of Cornell University and hopes to pursue a career in technology law and policy.

 

Antitrust reform focuses on regulating competition within the market. Most recently, anticompetitive practices within the technology industry have been the target of many congressional bills. The growing influence of technology companies during the pandemic led to the passage of six antitrust bills in June 2021 by the House Judiciary Committee.[1] The following month, President Biden called for greater antitrust governance to combat market monopolies and specified a focus on certain industries, including technology, in his Executive Order on Promoting Competition in the American Economy.[2]

A monopoly exists within the technology industry that is commonly referred to as “Big Tech.” The Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights investigated Big Tech companies last year, and now legislation seeks to regulate their conduct.[3] Big Tech companies have been accused of gatekeeping small businesses to maintain their industry dominance. For example, Amazon allegedly used third-party data to create products and prioritize their brand in consumer searches, and Google also allegedly prioritized Google Maps and Flights in consumer searches.[4]

In October 2021, Senator Amy Klobuchar introduced the American Innovation and Choice Online Act.[5] The antitrust reformation could mitigate inequities exacerbated in the technology industry, but legislation is only focusing on reducing the anticompetitive practices present in favor of small businesses. If the introduced bill is passed, Big Tech companies such as Amazon, Apple, Facebook, and Google, would be prohibited from disadvantaging third party companies on their platforms by preferencing their products in users’ search results,[6] but Big Tech platforms deny the suggested misconduct.[7]

After the announcement of the Senate bill, technology groups warned this antitrust reform would devastate Google Maps and Amazon Basics.[8] Platforms can increase profits over competing companies by preferencing their products in search results,[9] but the outcome of the search algorithm has consumer benefits. Big Tech providing preference to their own products over third parties increases convenience for consumers rather than causing harm.[10] Consumers can quickly find what they are looking for with the help of algorithms which are currently suggested to display search engine results, yet legislation seeks to curtail the negative impact this preference has on market competition.

At the same time, companies such as Amazon sell private versions of products also sold by third-party companies online and decide placement on their sites, which is no different than the decades-long practices of traditional retailers.[11] The order in which search engine results are displayed to users can be compared to the placement of products on store shelves, but legislation only seeks to regulate this practice in the technology industry.

In addition to the American Innovation and Choice Online Act, Senator Amy Klobuchar has introduced the Platform Competition and Opportunity Act to limit Big Tech’s acquisitions of rival companies. She also introduced the Merger Filing Fee Modernization Act to increase FTC and DOJ Antitrust Division funding allocation.[12] Specifically, with the Platform Competition and Opportunity Act, technology platforms must demonstrate mergers are good for competition, which revises the current merger law that requires the government to establish a merger’s negative impact on competition.[13] Senator Amy Klobuchar’s work with antitrust reformation encompasses legislation similarly named and composed in comparison to the House Judiciary Committee’s June antitrust bills.

These antitrust acts can be amended to include components supporting racial equity. Specifically, lost opportunities to promote racial equity can be identified in the American Innovation and Choice Online Act where the bill could prohibit anticompetitive behaviors that inhibit civil rights and, in the Merger, Filing Fee Modernization Act which could have increased litigation when anticompetitive conduct harms marginalized groups and leads to algorithmic bias.[14]

On January 20, 2022, the American Innovation and Choice Online Act was advanced out of committee to have a pending vote on the Senate floor.[15] Despite concerns by Google and Apple about the bill’s negative impact on consumer privacy protection, the bill cleared the committee vote with both parties calling for amendments to the Act.[16]

Big Tech has become a target for antitrust reform this year with numerous proposed bills, and the American Innovation and Choice Online Act has the greatest support,[17] yet this bipartisan antitrust legislation will not face an easy passage. The bipartisan push to regulate technology platforms and reform antitrust stalled because there are approximately 320 lobbyists working for the technology industry, which has increased from 189 in 2011.[18]

 

[1] Martha C. White, Momentum is Building for Antitrust Reform. Here’s What That Means for Big Tech, TIME (Nov. 12, 2021, 12:55 PM),https://time.com/6116953/antitrust-reform-big-tech-congress-biden/.

[2] Noah Feldman Greene et al., Antitrust M&A Snapshot | Q3 2021, Nat’l L. Rev. (Nov. 1, 2021), https://www.natlawreview.com/article/antitrust-ma-snapshot-q3-2021.

[3] Michael W. Scarborough & M. Kevin Costello, Senate Zeros in on Big Tech with Latest Antitrust Reform Bill, Nat’l L. Rev. (Nov. 2, 2021),https://www.natlawreview.com/article/senate-zeros-big-tech-latest-antitrust-reform-bill.

[4] Chris Mills Rodrigo, Senators Preview Bill to Stop Tech Giants from Prioritizing Their Own Products, The Hill (Oct. 14, 2021, 12:57 PM),https://thehill.com/policy/technology/576777-senators-preview-bill-to-stop-tech-giants-from-prioritizing-their-own.

[5] S. 2992, 117th Cong. (2021-2022).

[6] Rodrigo, supra note 4.

[7] Lauren Feiner, Klobuchar, Grassley to Lead Antitrust Bill Barring Big Tech from Disadvantaging Rivals, CNBC (Oct. 14, 2021, 9:51 AM),https://www.cnbc.com/2021/10/14/new-antitrust-bill-aims-to-stop-big-tech-from-disadvantaging-rivals.html.

[8] Anna Edgerton & Rebecca Kern, Big Tech Faces New Bills on Liability and Competition in U.S., Bloomberg (Oct. 14, 2021),https://www.bloomberg.com/news/articles/2021-10-14/senate-bill-would-restrict-tech-firms-from-favoring-own-products.

[9] Feiner, supra note 7.

[10] Jessica Melugin, Can I Speak to a Manager?, Capital Matters (Oct. 25, 2021, 6:30 AM), https://www.nationalreview.com/2021/10/can-i-speak-o-a-manager/.

[11] Id.

[12] White, supra note 1; see also S. 3197, 117th Cong. (2021-2022); S. 228, 117th Cong. (2021-2022).

[13] Jonathan Rubin, Tech “Platforms” Would Have to Prove Acquisitions Are Good for Competition Under Proposed Bipartisan, Bicameral Laws, Nat’l L. Rev. (Nov. 10, 2021), https://www.natlawreview.com/article/tech-platforms-would-have-to-prove-acquisitions-are-good-competition-under-proposed.

[14] Nicol Turner Lee & Caitlin Chin, The Debate on Antitrust Reform Should Incorporate Racial Equity, Brookings (July 8, 2021),https://www.brookings.edu/blog/techtank/2021/07/08/the-debate-on-antitrust-reform-should-incorporate-racial-equity/.

[15] Cat Zakrzewski & Gerrit De Vynck, Senate advances antitrust legislation, despite reservations from California Democrats, The Washington Post (Jan. 20, 2022, 6:55 PM), https://www.washingtonpost.com/technology/2022/01/20/senate-advances-antitrust-bill/.

[16] Id.

[17] Scarborough & Costello, supra note 3.

[18] Caitlin Chin, Should Congress Close the Revolving Door in the Technology Industry, Brookings (Nov. 4, 2021),https://www.brookings.edu/blog/techtank/2021/11/04/should-congress-close-the-revolving-door-in-the-technology-industry/.

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