House Antitrust Chair Says Big Tech Abuses Gatekeeper Power

(Bloomberg) -- Alphabet Inc.'s Google, Amazon.com Inc., Apple Inc. and Facebook Inc. abuse their power as gatekeepers of the internet, said the head of a House antitrust panel who's poised to propose legislative changes to rein in the technology giants.

“Each platform uses their gatekeeper position to protect their own power,” said Representative David Cicilline, who chairs a House antitrust panel that's spent more than a year probing the dominance of the internet platforms. “By controlling the infrastructure of the digital age, they have surveilled other businesses to identify potential rivals -- and ultimately bought out, copied, or cut off their competitive threats.”

Cicilline, who spoke Thursday during a hearing with experts on competition law, is preparing a final report recommending changes to the legislative and regulatory framework. That report is expected to be released next week.

Republican Representative Ken Buck of Colorado, who has worked closely with Cicilline on the probe, told Bloomberg TV on Thursday that he expects the committee's report next week.

“We've got to make sure that we keep high tech competitive so that smaller, innovative companies can compete,” said Buck, noting that that the report could be bipartisan but he had not yet read it.

Sundar Pichai, Jeff Bezos, Tim Cook and Mark Zuckerberg testified voluntarily in July before the subcommittee. Cicilline criticized their testimony as being evasive and non-responsive and said “they raised new questions about whether they believe their companies are beyond oversight.”

Representatives from Apple, Facebook and Google didn't respond to requests for comment on Cicilline's remarks. Amazon declined to comment.

Among the recommendations that Cicilline has floated is a prohibition against running a platform and competing on it at the same time. That would potentially bar Google from bidding in the online ad exchanges it operates or stop Amazon from providing a marketplace for independent merchants while selling its own products.

Cicilline has said he wants bipartisan support for his ideas, but hasn't revealed whether he has Republican support for his proposals.

The GOP typically views changes to antitrust law skeptically. Although some of the committee's Republicans have been critical of some of the technology companies' practices, not all agree that new legislation is necessary.

“We ultimately disagree on the future of antitrust laws,” said Representative Jim Sensenbrenner, who is the top Republican on the subcommittee. He suggested he wants to see improved enforcement of existing laws, but is opposed to changes that would prompt break-ups of the companies.

For decades, the internet giants have enjoyed laissez-faire regulation in the U.S., including scant antitrust enforcement of mergers. Still, they are coming under increasing attack in Washington over a range of issues including misinformation, hate speech, election meddling, and what Republicans decry as anti-conservative bias.

In addition to Cicilline's investigation, federal and state antitrust enforcers are poised to file a historic monopolization lawsuit against Google, and additional cases could be in the pipeline, Bloomberg has reported. The U.S. Federal Trade Commission is also preparing a possible case against Facebook. Amazon and Apple are also facing inquiries by federal antitrust authorities.

Witnesses at the hearing included Bill Baer, a former Justice Department antitrust chief under President Obama; Zephyr Teachout, a law professor at Fordham University known for progressive views on antitrust; and Rachel Bovard of the conservative-allied Internet Accountability Project.

Baer called for Congress to pass legislation to make it easier for enforcers to stop mergers because past court rulings have made it too hard for the government to win cases. It's “nearly impossible” to stop dominant companies from buying smaller rivals that could become future competitors, like Facebook's acquisitions of Instagram and WhatsApp, he said.

“When you look at Instagram or WhatsApp and you look at some of the documents that were revealed in this subcommittee's most recent hearing, these were companies that potentially either on their own or in combination with other companies had potential to be rivals,” he said. “Current law does not allow the FTC or my old place the antitrust division to challenge those transactions.”

During the hearing, Representative Jim Jordan, a close ally of President Donald Trump who is the top Republican on the House Judiciary Committee that includes the antitrust panel, sidestepped competition and reiterated his allegations that the companies systematically silence against conservatives.

He outlined a bill that would remove liability protections for the tech companies as an effort to curb the alleged political bias, which the companies deny. Conservatives have ramped up their attacks on the legal shield, known as Section 230 of the Communications Decency Act, which allows the companies to avoid lawsuits over users' content.

Jordan's bill seeks to narrow the broad discretion digital platoforms have to remove content under the law -- a provision that conservatives say enables the companies to silence them. The bill would let companies remove only content defined as violent extremism, harassment, self-harm, obscenity and other categories.

Tech allies have said that similar measures would further pollute the online environment by making it more difficult to take down content. The bill has overlaps with a Senate bill led by Commerce Committee Chairman Roger Wicker and Judiciary Chairman Lindsey Graham.

“Under the new law, platforms would be required to have publicly available terms of service that state plainly how content moderation decisions are being made,” Jordan said during his remarks. He said if a platform does take down content, it has to give the user notice to explain why it is removing the content and give the user an opportunity to respond.

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