Mar 12, 2021

White House signals that antitrust enforcement is on its agenda

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Tim Wu was added to the National Economic Council, and Lina Khan is reportedly being considered for a seat at the FTC.

The White House last week added law professor Tim Wu to the National Economic Council to advise on technology and competition policy. Wu is an ardent antitrust scholar who’s called for breaking up Big Tech companies. And the White House is reportedly also vetting legal scholar Lina Khan for a seat at the Federal Trade Commission.

Khan published a paper back in 2017 titled “Amazon’s Antitrust Paradox,” which laid out the ways she saw the tech giant as anti-competitive. It’s a topic for “Quality Assurance,” where I take a second look at a big tech story. I spoke with Will Oremus, a senior writer at OneZero. He said Khan and Wu have both essentially argued that, legally speaking, being “too big” is reason enough to be regulated. The following is an edited transcript of our conversation.

A headshot of Will Oremus, a senior writer for OneZero.
Will Oremus (Photo courtesy of Oremus)

Will Oremus: That’s in contrast to the consumer welfare standard, which since the days of [legal scholar] Robert Bork has been the dominant paradigm in American antitrust law. It basically said that as long as consumers aren’t being harmed by goods and services being overpriced, then there’s probably not a big monopoly problem that we have to worry about a lot here. And what Khan and Wu and fellow travelers say is, that’s absolutely not correct. There are downstream effects on consumers when these big platforms get to unilaterally set the rules for entire subeconomies that operate within their platforms, and that eventually consumers will be hurt, whether it’s by a loss of innovation or in some other way, and that size in itself can be bad.

Molly Wood: It’s interesting because I think we are seeing the shift toward thinking of Big Tech companies as gatekeepers. And I wonder if some of that thinking was influenced by Lina Khan and then is influencing future policy in return?

Oremus: That’s right. It is now a mainstream view that owning a huge tech platform gives you a form of market power that may not be measured easily in prices for the consumer, for the end user, but that is a strong form of market power. It enables the platforms to push around any rivals who compete with them on those platforms. And I think the fact that people within Silicon Valley are crying for help from the government is a big turnaround from where we were, say, under the Obama administration, when self-regulation was sort of held up as the ideal for how to manage these rising powers.

Wood: I wonder if this idea that they are dangerous gatekeepers takes hold, maybe that is the unifying legal framework?

Oremus: I do think that there are people on both sides of the aisle who can unite around this idea that a few giant companies based in Silicon Valley, unilaterally getting to write the rules of the internet, is just not tenable. There’s not a level of accountability that we can feel comfortable with, no matter what you think of the policy decisions these tech companies have made so far. So I do think that that could be a unifying theme. Interestingly, we’ve not seen the big tech companies really cooperating here. And in fact, if anything, some of them are getting at each other’s throats as this pressure intensifies. They’re not presenting a very unified defense here.

Wood: This week, we saw Facebook essentially ask for the cases against it, at the federal and state level, to be dismissed. I have to assume, given all the signals we’ve gotten so far, that is just spitting in the wind.

Oremus: Yeah. I mean, it certainly is not looking like an administration that’s going to take it easy on these companies. And Facebook is interesting. They are in a position right now where they might feel like they have some leverage to make the case that they’re not a monopoly because we’re seeing this recent rise of new social media platforms. We’re seeing some competition in that space for the first time in a while. Each of these companies is different, and the cases will play out differently. There are multiple tracks here. There’s the antitrust investigations. There’s the lawsuits that have already been filed. And then there’s the possibility of legislation and what Lina Khan did in her role on Congress’ antitrust subcommittee, which issued a report last year, was [she] laid a blueprint for a legislative restructuring of competition law. I think that has the potential to maybe even have a greater impact long term than the enforcement actions, whatever enforcement actions may be taken by the [Department of Justice] and the FTC.

Related links: More insight from Molly Wood

It isn’t just the White House taking a harder line on antitrust questions. Congress is holding hearings this week with an eye specifically on Big Tech. Friday’s hearing will focus on journalism and competition from online platforms. That is, of course, in the wake of Australia’s law to force big tech platforms, mainly Facebook and Google, to pay news publishers when they link to their content. On Wednesday, actually, a bipartisan group of lawmakers introduced a bill called the Journalism Competition and Preservation Act that would let smaller news outlets bargain as a group for payments from big tech platforms.  

Here is more on this idea of gatekeepers and how companies are so big that they control and restrict access to apps, stores, information and user data and how that gatekeeper status allows them to unfairly protect their monopoly status.

Also, this week in antitrust news: You heard me mention that Facebook filed what is likely to be a Hail Mary motion, asking a federal judge to just toss the antitrust lawsuits against it by the FTC and most U.S. states. The company claims there is plenty of competition out there. The Verge points out that the FTC’s lawsuit does mostly rest on the competition question and less on the gatekeeping question, and so appears to be shakier than, say, the Department of Justice complaint against Google, which specifically calls the company a gatekeeping monopoly. Either way, you don’t have to be great at predicting the future to say, “Buckle up,” because it’s going to be a busy year for antitrust nerds — of which I am one. So, unlike Facebook and Google, I am stoked.

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