Big Tech And Its Congressional Allies Kill Most — But Not All — Antitrust Legislation

Anti-monopolists are blaming Senate Majority Leader Chuck Schumer (D-N.Y.) for the demise of two bills aimed at limiting corporate power.
Senate Majority Leader Chuck Schumer (D-N.Y.) has been the target of pressure from Big Tech companies, which have spent massive sums on lobbying during the current Congress.
Senate Majority Leader Chuck Schumer (D-N.Y.) has been the target of pressure from Big Tech companies, which have spent massive sums on lobbying during the current Congress.
J. Scott Applewhite/Associated Press

The two biggest antitrust bills in more than 50 years are dead after they were not included in year-end congressional spending legislation released Tuesday, angering anti-monopolists who believe Senate Majority Leader Chuck Schumer (D-N.Y.) killed the best chance for this Congress to meaningfully limit corporate power.

While a pair of smaller provisions in the omnibus will help antitrust advocates take on the nation’s largest tech companies in the future, the death of the Open App Markets Act and the American Innovation and Choice Online Act — both of which had the necessary support to pass the Senate, advocates insist — amounts to a massive win for Big Tech’s well-funded lobbying and influence machine.

Antitrust advocates blame Schumer for promising Sen. Amy Klobuchar (D-Minn.) a vote on her American Innovation and Choice Online Act, postponing action for nearly a year, and then finally failing to deliver on his pledge by excluding it from the omnibus spending bill.

“Schumer has erased much of the goodwill he formed with the tech startup ecosystem during the net neutrality debates. He spent a full year running interference for the most powerful companies in the world and repeating the myth that this broadly bipartisan legislation ‘didn’t have the votes,’” Luther Lowe, the senior vice president for public policy at Yelp, told HuffPost.

“Thanks to him, Europe will lead the global rule-making for the internet indefinitely, and European consumers are enjoying better protections than U.S. consumers.”

The European Union adopted far-reaching antitrust legislation in March, against the wishes of Big Tech companies. The new law included provisions that died on the vine in the U.S. Senate, such as rules barring companies like Apple and Google from requiring smartphone owners to use their respective app stores for digital purchases.

David Segal, a co-founder of liberal advocacy organization Demand Progress, suggested that the demise of the antitrust bills could lead progressives to doubt future promises from Schumer, who worked throughout the past two years to keep the left satisfied on issues like student debt cancellation.

“Unfortunately, Schumer’s behavior made it clear that he was never serious about keeping this commitment,” Segal said. “Activists should be even warier of commitments he purports to make going forward.”

“They had bipartisan support and would’ve helped rein in an industry that in too many areas is out of control.”

- Sen. Elizabeth Warren (D-Mass.)

In a statement, Klobuchar touted the inclusion of two other bills she introduced.

One measure allows state attorneys general to keep antitrust cases in the state where they’re filed, which should prevent Big Tech from working to combine cases in a way that slow-walks the eventual decisions.

Another provision increases the filing fees that companies pay to antitrust agencies like the Federal Trade Commission when they merge, giving those regulators a funding boost.

“This is clearly the beginning of the fight and not the end,” she said. “I will continue to work across the aisle to protect consumers and strengthen competition.”

At least one prominent antitrust advocate concurred with Klobuchar, withholding criticism and praising the omnibus legislation’s smaller wins.

“Big Tech, Big Ag and Big Pharma spent extraordinary sums in an unprecedented effort to keep Congress from delivering on antitrust reform and undermine the ability of state and federal enforcers to uphold the law — and they lost,” said Sarah Miller, the executive director of the antitrust-focused American Economic Liberties Project. She noted that the filing fee hike would be the first congressional action to strengthen antitrust enforcement since 1976.

Even that provision, however, is weaker than it could be. The increased filing fees won’t go into effect for another two years, giving corporations time to kill them and depriving antitrust advocates in President Joe Biden’s administration — including FTC Chair Lina Khan and Jonathan Kanter, the assistant attorney general for antitrust enforcement at the Justice Department — of resources as they battle Google and Apple.

“Including Merger Filing Fees is an important step forward for Lina Khan and Jonathan Kanter’s ability to crack down on monopolies and fight for consumers – but the unnecessary two-year delay means we must hold onto the White House in 2024 to ensure this funding is used to enforce our antitrust laws,” said Emma Lydon, the managing director of P Street, the government relations arm of the Progressive Change Campaign Committee.

The watering-down of the merger fee legislation, some progressives argue, is real evidence Schumer is siding with Big Tech.

“He’s flat out an asset for Big Tech,” said one progressive who worked on the legislation. “It’s like Russia and Trump. Things don’t make sense unless you assume he’s just totally compromised.”

Other antitrust proponents had more mixed reactions, expressing disappointment in Democratic leaders in Congress without dismissing the new funding for enforcement.

Segal argued that the new revenue would help Khan and Kanter continue to “push the bounds within the existing jurisprudence in order to ensure that antimonopoly policy works for everyday people and our broader economy.”

Lowe also acknowledged that the additional funding was a positive sign, noting that the Justice Department’s Antitrust Division will now get specific appropriations in congressional funding.

“I don’t see how as a Big Tech CEO you feel great about the broader trends across the globe in terms of greater enforcement of anti-competitive behavior,” he said.

Sen. Elizabeth Warren (D-Mass.), who proposed full-on breakups of major tech companies during her 2020 presidential run, avoided directly criticizing the majority leader but made clear that she thought the antitrust bills deserved stand-alone votes from the omnibus legislation.

“The ones that were omitted should’ve been included. We should’ve voted on them over the past several months,” Warren told HuffPost. “They had bipartisan support and would’ve helped rein in an industry that in too many areas is out of control.”

Warren was unsure about the effectiveness of the antitrust provisions that did survive. “We’re still reading the fine print,” she said. “The devil’s in the details.”

On the opposite end of the Democratic Party’s ideological spectrum, Sen. Joe Manchin (D-W. Va.) was similarly frustrated.

“There’s no excuse at all,” he said on CNN Tuesday afternoon. “Anyone trying to give you excuses, I can’t. It should have been. It’s something we all talked about, from redoing Section 230 on down.”

The pair of bipartisan bills that Schumer effectively killed would have provided Khan, Kanter and other antitrust enforcement officials with additional tools to curb the abuses of Big Tech.

Klobuchar’s American Innovation and Choice Online Act would have barred major platforms, such as Google and Amazon, from providing preferential treatment to their own products. The bill — which was backed by Sen. Chuck Grassley (R-Iowa), the ranking Republican on the Senate Judiciary Committee — advanced out of committee on a 16-6 vote in January.

Sens. Elizabeth Warren (D-Mass.), left, and Amy Klobuchar (D-Minn.) pushed for passage of more meaningful antitrust legislation.
Sens. Elizabeth Warren (D-Mass.), left, and Amy Klobuchar (D-Minn.) pushed for passage of more meaningful antitrust legislation.
JOSHUA LOTT/Getty Images

The Open App Markets Act, introduced by Sen. Richard Blumenthal (D-Conn.), would have prohibited companies like Apple and Google from engaging in restrictive contracts with app developers that, among other things, prevent them from selling their apps in competitors’ stores. That bill had even greater bipartisan support, advancing out of committee on a 20-2 vote in February.

However, a person familiar with the negotiations said Friday that the legislation was dead at the behest of Senate Minority Leader Mitch McConnell (R-Ky.)— an assertion viewed skeptically by progressives wary of Schumer. McConnell’s office did not immediately respond to an email seeking comment.

The powerful tech platforms Google, Apple, Facebook and Amazon — sometimes identified collectively by the acronym GAFA — argue that such bills restrict the organic growth that has enabled the United States to become a world leader in technological innovation. They compare Amazon giving preference to its own branded merchandise with supermarkets giving prominent placement to generic store brand goods alongside other products.

But anti-monopolists maintain that the opposite is true, contending that the kind of innovation seen in Silicon Valley during the 1980s and ’90s would likely not be possible today amid the barriers to competition that tech giants have erected to protect their profit streams.

For example, they point to Meta’s Facebook co-opting the original features of newer platforms like Snapchat and acquiring would-be competitors like Instagram and WhatsApp. Meanwhile, Amazon’s preferential treatment of its own products, they say, goes far beyond what supermarkets do — both because of the leverage that Amazon has over sellers on its platform and the information it culls from sellers in the interest of undercutting them. (Amazon’s particular tactics were the focus of an influential paper by Khan as a student at Yale Law School.)

“These guys are gatekeepers in the economy,” said Lowe, whose company, Yelp, has spent years battling what it sees as Google’s abuses. “They have a special ability to distort the entire market place and bend it to their own ends.”

As much as Schumer has courted those on the left in recent years, they’ve long been suspicious of his intentions around Big Tech companies. The businesses are a major source of campaign funding, and the electorally conscious Schumer would be wary of losing access to their cash or having the money turned against vulnerable Democratic incumbents.

In July, antitrust advocates aired a television ad targeting Schumer on cable channels in Washington, backed by a relatively small buy that further underscored the forces they were up against. The Big Four tech companies, or groups they fund, had spent $120 million on television ads attacking the proposed antitrust legislation and $95 million lobbying against it.

With Republicans about to take control of the House, the death of the two antitrust bills this week likely closes the door on them for at least another two years. House Republican Leader Kevin McCarthy of California has close ties to the technology industry and has expressed skepticism of efforts to rein in their power.

But Sen. Josh Hawley (R-Mo.), an antitrust proponent and co-sponsor of both bills, nonetheless urged the incoming GOP majority in the House to advance the legislation.

“Democrats don’t actually oppose the consolidation of corporate power,” Hawley said in a statement to HuffPost. “And why would they? More often than not, it is consolidated corporate power that does the Democrats’ bidding.”

“The Republican House next year has a huge opportunity to do something meaningful,” he added.

Arthur Delaney contributed reporting.

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