GiD Report#166 — Everything you need to know about the Big Tech antitrust bills

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GlobaliD

9 min readJun 29, 2021

Welcome to The GiD Report, a weekly newsletter that covers GlobaliD team and partner news, market perspectives, and industry analysis. You can check out last week’s report here.

First off, check out this great piece about community and crypto from our very own /pstav. (He would very much appreciate your feedback/thoughts/discussions/etc.)

This week:

Overview of the six antitrust bills that just passed the house subcommittee
What this means for antitrust and Big Tech
What people are saying
This week in antitrust
Chart of the week
Felix Salmon on Lina Khan
This week in crypto
This week in identity
Stuff happens

1. A quick overview of the six antitrust bills that just got approved by the House

Last week we talked about Lina Khan, the new 32 year-old chair of the FTC. This week, let’s get into some of the nitty gritty of the six bills written and passed by the Judiciary Committee.

First — this is a really big deal, as Matt Stoller points out:

This isn’t the end of the process, but it’s the first Congressional vote to actually restructure powerful firms since the 1996 Telecom Act, and the first real Congressional attack on concentrated corporate power since the Bank Holding Company Act Amendments of 1970. Congressman Mondaire Jones summed up the hearing where they voted to do so. “Unless we break these companies up,” he said, “they will continue to be above the law.’”

The first two bills are general antitrust ammunition for antitrust enforcers. One pads the accounts, increasing the FTC’s budget from $351 million to $418 million. The other prevents companies from opportunistically moving cases to friendlier jurisdictions — a go-to tactic.

Here’s Matt again on the significance:

These two bills might not seem like a big deal. However, if these two bills were all that passed, they would still comprise the single most important strengthening of Federal antitrust law in a generation. For decades, antitrust was just not important, and the Judiciary Committee didn’t bother to focus on it. So to have these markups, and pass these bills, is in itself meaningful.

The other four are specifically aimed at Big Tech — directly addressing many of the issues presented by the antitrust subcommittee’s report last year.

Overview, courtesy of Matt:

1) The ACCESS Act mandates that big tech firms have to make their systems open to competitors and business rivals, in the same way that AT&T customers can talk to T-Mobile customers, or users of different email systems can communicate with one another.
[We talked about the ACCESS Act last week — basically the portability and interoperability act.]
2) The merger bill makes it harder for big tech firms to buy rivals.
3) The nondiscrimination bill is intended to ban the ability to big tech firms to preference their own products, the way Google substitutes its own reviews for Yelp reviews, even if Yelp’s reviews are better.
4) The break-up bill is supposed to split apart big tech firms by prohibiting platforms from owning any line of business that uses that platform.

All six of those bills were passed by the committee!

For context, we bring back Matt:

What has been happening since the financial crisis of 2008, and what continues today, is nothing short of a revolution in the way Americans think about political economy and monopoly power. We haven’t had such ferment over these issues since the 1890s or 1930s, during the Gilded Age and New Deal. Any one of these bills put forward would be the biggest strengthening of Federal antitrust enforcement in at least fifty years, so that all six passed out of committee — especially the bill that breaks up these firms by statute — is remarkable.

2. What this means for the future of antitrust and Big Tech

To be clear, this is history making stuff. But it’s also just the first step with plenty of uncertainty ahead. Assuming these bills become law, there will still be wrangling over verbiage. Laws will be open to interpretation. Loopholes will be found. And we’re still going to rely on regulators and judges to enforce those laws.

It’s also unclear the ramifications of some of these laws — though well intentioned.

For instance, here’s standards expert Mark Nottingham:

This bill requires designated platforms (likely candidates would be Google, Facebook and Amazon) to conform to interoperability standards set by new a new committee run by the FTC. If it passes, the APIs that define the next layer of the Internet will not be based upon broad community input, review, or participation.
Instead, the FTC will hand-pick the participants at its pleasure, and will retain change control over the APIs.3. Even if the right mix of people gets onto the committee, its role is explicitly ‘advisory’.4 Documentation for those APIs is only supplied to ‘competing businesses or potential competing businesses.’5 There’s no guarantee they’ll be public.
To be clear, I’m super-happy that Lina Khan is now the FTC Chair. Some big platform heads need kicking, and her boots are laced. That said, technical standards defined to force interoperability on big tech will inevitably become the de facto standards for the industries that they’re established within, potentially lasting far longer than the companies they’re designed to hobble (if they do their jobs well). That effectively makes the FTC a new Internet governance institution.

As Mark points out, that’s not how current standards bodies like the W3C are set up:

These bodies are set up for voluntary, not mandatory standards, and the spectre of mandatory implementation for some parties has a huge distorting effect. As someone who’s been involved in Internet and Web standardisation for more than twenty years, I’m not sure how it would go, and there are a lot of hard questions that would need to be answered.

That doesn’t mean we won’t see a world where the W3C works closely with the FTC. Let’s hope they’re up to the challenge.

3. What people are saying

Ina Fried, Axios:

Moderate Democrats raised questions about the breadth of the bills and their impact on innovation, even as the measures were largely propelled by Democratic support.
Meanwhile, a handful of Republicans joined Democrats in backing the proposals, while most GOP members said they failed to address the party’s biggest beef with tech — its alleged censorship of conservatives’ speech.
Between the lines: The Democrats’ split was especially notable in the California delegation, whose members represent three of the four targeted companies.
The intrigue: Lawmakers expressed concern that the bills would only apply to Apple, Amazon, Facebook and Google and not other large companies like Microsoft, or even Walmart.com.
What’s next: These bills have moved quickly and decisively so far. But the California delegation’s hesitation to fully support them may foretell some trouble for them in the full House, and their future in the Senate is likely to be even rockier.

The Information:

The technology industry lobbied against the package, which includes the American Choice and Innovation Online Act. That bill, which advanced in a 24–20 vote, would, among other things, bar platforms from favoring their own products or services over those of others, keep them from restricting the interoperability of products or services and ban their use of customer or other businesses’s data to to help the platform’s own business interests.
Prior to the vote, Google and Amazon had asked the committee to slow its work on the package of bills, arguing that the changes would force them to degrade the quality of their products and services and harm consumers and small businesses.

NYTimes:

“We think it’s an uphill climb for the toughest bills,” said Paul Gallant, a research analyst at Cowen and Company. “The Senate filibuster is always the highest hurdle, and I suspect it will hold back the toughest of these bills. But the House is going faster and farther against tech than anyone expected.”

WSJ:

Many Republicans also voiced concern that the package was overreaching by handing too much new power to government agencies, while a few tech-friendly Democrats raised concerns that the legislation had not been adequately refined.
Rep. Jim Jordan (R., Ohio), a vocal critic of the legislation, said it represented a worrisome instance of big tech and big government “now marrying up and working together.” He complained that it would give unprecedented power to the FTC to set industrial policy and even impose its own political agenda on the affected companies.
…
The battle is likely to intensify in coming weeks. While antitrust legislation remains one of the bigger vulnerabilities in Congress this year for the big tech companies, several of the committee’s more far-reaching bills face uphill fights to become law in their current form.

4. This week in antitrust

5. Chart of the week:

6. Lina Khan, storyteller

Felxi Salmon on Lina:

Between the lines: Storytelling ability — which Khan has in spades — has had outsized financial rewards of late. But it could turn out to be even more influential with regard to changes in the way that regulators, jurists, and lawmakers think about foundational issues.
Where it stands: For the time being, Robert Bork’s vision of antitrust dominates the jurisprudential arena. That vision came not from any particular judicial ruling but rather from a book he wrote in 1978.
Khan’s compelling rebuttal of that vision put her on the map. Her job now is to use her bully pulpit — and her ability to hire and fire at the FTC — to start expanding the circle of people who embrace her approach.
The bottom line: What Khan wants is an almost total reimagining of the way in which antitrust is conceptualized. That’s not going to come from, say, her agency’s investigation into Amazon’s acquisition of MGM Studios. It’s going to take many years, and it’s not something that financial analysts can even begin to start quantifying.

7. This week in crypto

8. This week in identity

/vs: “Colleagues, be smart about protecting your identity. Your information is most likely already out there”