President Biden has chosen trustees to lead key agencies amid bipartisan calls to curb the power of the biggest Internet companies since taking office. The digital economy. But midway through his term, the movement’s losses have outweighed its wins, with key figures leaving and Republican control of the House taking bills that could hurt tech giants off the table.
Now the land has shifted from Congress to the courts. Last month, the Justice Department and eight states filed a lawsuit seeking to break up Google’s lucrative advertising business, which is set to go to trial later this year in a 2020 lawsuit under President Donald Trump seeking a monopoly on online search. Meanwhile, Federal Trade Commission Chairwoman Lena Khan, an antitrust crusader, is seeking to rewrite federal antitrust enforcement laws to break up Facebook parent Meta and block smaller firms like Microsoft from gathering. . And last week, the Supreme Court heard arguments against Gonzalez and Google, a case that could weaken Internet companies’ shield of honorable liability.
Antitrust reformers cheered on Biden as chairman of the FTC, Jonathan Canter to lead the Justice’s antitrust division, and Big Tech critic Tim Wu as White House special assistant. Despite his many setbacks, he says, his progress in running one of the world’s richest companies is still gaining traction. But the technology industry is willing to spend a lot to hold the ground. And Persuading courts to rethink decades of business-friendly precedent a Challenging as scary Pushing legislation through a divided Congress.
“A lot of people came into this administration fully confident that they knew how these industries should be run … and they presented an agenda of ‘we’re going to fix this,'” said Mark Jamieson, a right-wing non-resident. American Enterprise Institute. That agenda, he said, is now “scrambling.”
However, the agencies say they have only just begun to fight back.
The Google case is part of a series of antitrust lawsuits by Kanter’s Justice Department and Kanter’s FTC targeting some of the biggest players in everything from tech to pharmaceuticals to book publishing. In December, the FTC filed suit to block Microsoft’s $69 billion acquisition of gaming company Activision Blizzard, part of a new strategy to repeatedly bring long-term issues.
Such moves reflect the administration’s argument that competition policy, rooted for decades in the free-market ideals of the 1980s, must be rethought for the Internet age.
At Justice, Kanter created a new litigation team and hired about 20 lawyers to prepare for some of the biggest antitrust battles the department has taken on in decades.
But tech powers are digging into their pockets as they prepare for court battles that could shape the future of the digital economy. Google alone has hired at least five former Justice Department lawyers in-house, including Jack Mellin, who serves as the company’s strategy adviser. The company has retained the services of four foreign law firms, among them about 20 former trial lawyers.
“New entrants and innovations are driving competition and creating value for US consumers, publishers and merchants,” said Google spokeswoman Julie Tarallo McAllister. “We are proud of our service and look forward to presenting our case in court.”
Lawmakers who co-sponsored the antitrust law say the industry’s unprecedented lobbying blitz is a major obstacle to passage.
For years, the bipartisan antitrust package has been rewriting the rules of the online economy to prevent companies like Google, Apple, Amazon and Facebook from developing their own products or locking customers away from competing platforms. Led by Reps. David N. Siciliano (D-R.I.) and Ken Buck (R-Colo.), it has the support of mid-sized tech companies including Yelp and Sonos.
After the tech lobby raised concerns about the bills, Democratic leaders never brought them up for a vote, and House Republicans appear unlikely to take them up.
“It was a shame we didn’t even get a vote,” said Stacey Mitchell, associate executive director of the Environmental Self-Employment Institute, a nonprofit that fights corporate consolidation.
Wu has already resigned from the White House, and last week Cecilia announced that she would leave Congress after her current term.
It’s unclear whether the justices will rule out a new law that supports the new antitrust vanguard theories. At the beginning of this month A federal district court in California handed down a landmark ruling to the FTC, upholding Meta’s insider acquisition of a VR software developer. The agency has been seen as a test case for its tough new stance against firms seeking to dominate emerging sectors by buying up startups.
Judge Edward J. Davila welcomed the FTC’s theory of controversy, saying the deal could still stifle “potential competition” in the VR space — which some experts took as a sign that courts might be open to such arguments. But the FTC ruled that it failed to prove its case.
After the decision, FTC executives were optimistic. “To advance the law and protect competition, we have to bring serious cases like this,” said Holly Vedova, director of the agency’s Office of Competition. “There are some concerns, but that’s what Congress has ordered us to do.” In the end, Vedova concluded, “It was worth it.”
William Kovacic, a law professor at George Washington University, said the FTC doesn’t have to win every case to move the needle on antitrust enforcement — but it does have to win some.
“If we’re asking how do you create lasting policy reform, reform that lasts? I think part of the answer is you win cases, you win cases that prove your point,” Kovacic said. “Until you do that, I’m not really going to move the enforcement perimeter.”
The agency took the courage to bring up the dangerous issue at a time when resources were tight. The FTC’s budget increased to $430 million in fiscal year 2023, compared to $376 million a year ago, but that’s all it has, he said. Two-thirds of the workforce in 1980.
“In any case, we will argue, there are more than a dozen of our lawyers and economists,” said Vedova. “We may have more law firms working on larger investigations and litigation than our individual lawyers.”
Yet some longtime antitrust activists, who led the movement that propelled Kahn, Canter and Wu into the Biden administration, see signs of progress. They say the push to revamp antitrust enforcement and competition policy in the United States is a long-term shift that they expect will take years.
Provisions included in last year’s spending bill increased the antitrust enforcement fund and made it easier for states. It represents “the first significant antitrust legislation in 50 years” to prosecute antitrust cases, Mitchell said. She added that the FTC’s November policy statement on unfair competition practices could provide a basis for regulating some of the behavior that prompted the antitrust bills. And an ongoing project to overhaul federal merger rules could be a “fundamental overhaul of the government’s stance on big business.”
Barry Lynn, executive director of the antitrust Open Markets Institute, said the Justice Department’s successful lawsuit to block a major merger in the publishing industry could have implications for Big Tech. After decades of focusing on consumer prices as the so-called antitrust benchmark, judges say they are beginning to reconsider the idea that corporate power can harm retailers, small businesses and even democracy.
But Kovacic said the window for such gains may be limited, as Republicans begin to chafe at the agencies’ aggressive approach before the 2024 elections, when both Congress and the White House are likely to be contested.
“The theme they’re developing is that the FTC is operating without effective limits … it’s an unregulated agency,” he said of Republican leaders. “I think it’s a novel, but it’s a narrative you want to build.”
Meanwhile, Herbert Hovenkamp, a professor at the University of Pennsylvania who studies antitrust, said changes in the market could dampen the appetite of tech giants to break up. He argued that TikTok’s rise would erode Meta’s growth and that Microsoft’s use of AI to challenge Google in search shows that those markets are still competitive.
“There’s a very powerful line of thought … major companies come and go,” Hovenkamp said. “And all the attacks in technology are too small, too early, because competition outdoes itself.
In an interview, Cicilline said that Congress’s failure to pass antitrust laws during his previous term was not a reason for his resignation. “I have no doubt that this antitrust agenda will continue vigorously and bipartisanly as I go,” he said. Cicilline and Buck, the former Republican chairman of the House Judiciary Antitrust Subcommittee, are in the process of forming a new, bipartisan Congressional Antitrust Caucus.
He acknowledged there are obstacles in the Republican-controlled House. The new chairman of the Judiciary Committee, Rep. Jim Jordan (R-Ohio), opposed the antitrust bills introduced in the last Congress. And Buck was passed over as chairman of the antitrust subcommittee, replacing Cecile in favor of Thomas Massey (R-Ky.), who is seen as friendly to big business.
“You think he represents Silicon Valley,” Cicilline said of Jordan. He has become “America’s greatest patron of Big Tech.”
Sicilian warned that the longer it takes for Congress to pass legislation, the more difficult it will be. “Unfortunately, their power is only growing,” he said.
In a speech on antitrust earlier this month, Sen. Elizabeth Warren (D-Mass.) struck a more hopeful note. It was Warren’s call to “dismantle Big Tech” — seen by some at the time as extreme — that helped bring his rallying cry to the political mainstream in the 2020 Democratic primary.
“Of course, in a David-vs. Goliath battle to break up monopolies and give competition a chance to thrive, the betting money will still be on Goliath,” Warren said. But David sling stones, and the giants began to sweat. We can feel it: change is coming.