An ambitious package of antitrust legislation passed the U.S. House Judiciary Committee last week, advancing the battle to rein in big tech. The six bills — including one sponsored by U.S. Rep. Mary Gay Scanlon (D., Pa.) — aim to weaken the market dominance of Amazon, Apple, Facebook, and Google. Supporters say the proposals, like banning tech platforms from acquiring potential rivals, will break up harmful monopolies. But in line with big tech lobbying against the package, opponents counter it will punish innovation and harm services valued by consumers. Joining what would be the biggest expansion of the federal government’s antitrust powers in generations, Scanlon’s proposal focuses on enabling users to move data like photos and contacts from one platform to another, making it easier to switch services.
To tap into this debate, The Inquirer turned to an attorney and cybersecurity expert and a tech industry advocate to debate: Should Congress pass this package?
Yes: The Big Four has too much power and other companies can fill gaps.
Technology increasingly dominates our lives, and a few massive companies monopolize tech. Amazon, Apple, Facebook, and Google, collectively known as the Big Four, wield disproportionate control over web content, what users can do online, and what happens to users’ personal data.
The combined market cap for these corporations, including Google’s parent company Alphabet, exceeds $8 trillion, reflecting their dominance. The tricks they employ to limit competition are as old as robber barons. They buy up competitors, use their money and influence to crowd out alternatives, and lower their prices to put others out of business. Instagram, Waze, and hundreds of others have been assimilated or, like Toys R Us and Borders, destroyed at least in part by the Big Four.
Innovation should thrive in today’s tech world, but it does not. Because the Big Four engage in predatory “copycat” behavior of startups who hit on promising new ideas — witness Microsoft introducing Teams years after Slack showed success — former Harvard Business School professor Thales Teixeira writes that some venture capitalists may be reluctant to invest in startups. Competitors don’t stand a chance — and small businesses and consumers are the other victims.
Amazon handles nearly half of all e-commerce. Sites owned or operated by Google or Facebook are estimated to manage over 70% of internet referrals. We cannot avoid them. If you’re looking for locally made hand sanitizer, you’ll have to know to search on Etsy.
When the government allows monopolies, it is complicit in their power grabs. But the complicity can also be unwitting. Antitrust laws have often lagged behind the unfair business practices that they attempt to regulate. Enforcement declined from the late-1970s until the mid-2010s due to Reagan era laissez-faire economics and few antitrust prosecutions, including challenges to mergers, were brought.
Passing the full package of legislation will help end Big Tech’s dominance. The Platform Competition and Opportunity Act, for example, can deter unlawful mergers by shifting the burden of proof to dominant platforms to show they will not harm competitors. The ACCESS Act gives the FTC new authority and enforcement tools to enact pro-competitive rules so consumers can switch platforms and take their data.
Some say these bills will harm consumers, but they miss the point. Consumers may lose some Google or Apple products but will gain far more with a truly competitive marketplace. One reason AT&T had to divest its Bell Systems was because it was impeding innovators, including MCI’s Bill McGowan who offered to deliver less expensive long-distance service. Many new and upcoming digital innovators with breakthrough or promising ideas are waiting to make it to the marketplace. Let them in.
Many new and upcoming digital innovators with promising ideas are waiting to make it to the marketplace. Let them in.
And these laws are just the first step. As professor Herbert Hovenkamp from the University of Pennsylvania Law School wrote, government antitrust cases often fall apart in the remedy stage when a complaint is brought. Antitrust laws, he says, aren’t instructive on what remedies to impose. In the case of the Big Four, some of his suggestions are: injunctions against competitively harmful conduct; selling off subsidiary business interests to undo mergers; court orders governing commercial decision processes; and mandatory interoperability so that, for example, users can move their personal data from one service to another.
Critics of these bills don’t give us — as consumers and creators — enough credit. If we prevent the Big Four from engaging in practices to ensure dominance — anticompetitive mergers, price dumping, backroom deals, and the like — then other businesses will fill the gap and give consumers what they need and want.
Heidi Boghosian is an attorney and author of “‘I Have Nothing to Hide’ and 20 Other Myths About Surveillance and Privacy.”
No: Some of the bills disregard Americans who rely on tech services.
Two of the bills currently being considered by Congress as part of a tech regulation package could ban Amazon from offering low-cost AmazonBasics products and Google from showing you a map of the top-ranked cheesesteak places nearby. They could forbid iPhones from coming with Siri, or Facebook from including Messenger as part of the Facebook app. Thank goodness Congress is focused on the big problems facing the country.
Under the guise of antitrust reform, The “American Innovation and Choice Online Act,” authored by Rep. David Cicilline, and the “Ending Platform Monopolies Act,” authored by Rep. Pramila Jayapal, substitute government mandate for consumer choice. It’s an approach that ignores the very real benefits of online services and disregards the millions of Americans who value these services.
The Jayapal bill’s prohibition on any potential “conflict of interest” would force Google to sell off products like Gmail, YouTube, and Google Maps — putting these free services at risk and eliminating a variety of helpful integrations. Cicilline’s bill, while narrower, would ban so-called “discriminatory conduct,” preventing Amazon from providing free two-day shipping on its own Prime products.
They couldn’t have picked a worse time to offer these changes. The pandemic laid bare how important low-cost or free conveniences offered by tech services are to Pennsylvanians. We were able to see distant loved ones, for free, thanks to Zoom, FaceTime, and Facebook. Amazon helped keep our pantries stocked when we had to stay socially distant. Google Search and Maps connected small businesses with overwhelmingly supportive local communities. And social media platforms helped government officials provide timely, accurate health information to the public.
These bills would force the removal of many of these providers’ helpful features, along with many more from Amazon, Apple, Facebook, Google, and Microsoft.
If these bills are passed, simple conveniences such as Amazon Basics underwear, or seeing the full lyrics of a song appearing when you do a Google search, would be banned. New iPhones couldn’t include preinstalled versions of Apple’s “Find My Phone” app, forcing customers to hunt for the right app themselves in the App Store.
“It’s hard to see how any of these changes help consumers. Let alone make our lives better.”
It’s hard to see how any of these changes help consumers. Let alone make our lives better.
To be clear, there’s room for improvement in the tech sector. We should increase competition in markets by making it easier to switch between services through new data portability laws, like the proposal authored by Rep. Mary Gay Scanlon. And regulators should have the funding and resources to effectively do their jobs and enforce the laws already on the books.
But the changes offered by Reps. David Cicilline and Pramila Jayapal do nothing to address these problems or the very real issues faced by Pennsylvanians today. Instead, they take away low- or no-cost digital services relied upon by our communities.
Policymakers should be working to help us recover from the pandemic, not kneecapping the services that helped us get through it. Congress should be focused on the very real issues facing our country, not using its power to ban or break helpful tools and products.
Adam Kovacevich is CEO of the Chamber of Progress, a center-left tech industry policy coalition promoting technology’s progressive future. Apple, Amazon, Facebook, and Google are among its partner companies. He has worked at the intersection of tech and politics for 20 years, leading public policy at Google and Lime and serving as a Democratic Hill aide.