Klobuchar says industry ‘at every cocktail party’ in Washington, while Lee argues Big Tech runs on ‘addiction business model’
Members of a Senate antitrust subcommittee on March 7 voiced frustration over failed attempts by Democrats and Republicans alike to regulate tech giants like Google and Apple, as expert witnesses and lawmakers debated legislation that didn’t get a full vote last Congress.
“Neither the judiciary nor the executive branch can solve these problems alone—Congress must act,” said Sen. Mike Lee (R-Utah), ranking member of the antitrust subcommittee of the Senate Judiciary Committee.
“At the same time, we also have a duty to ensure that the cure isn’t something that turns out to be worse than the disease,” he said, voicing concerns over legislation that could entrench new federal bureaucratic power and even additional consolidation in the sector.
Sen. Amy Klobuchar (D-Minn.), who chairs the subcommittee, began the hearing with talk of Big Tech’s successful publicity campaigns against Congress’s previous attempts to regulate the industry.
Klobuchar said tech’s lobbying targets have included her bipartisan Open App Markets Act, which would keep Google, Apple, and other app marketplaces from forcing app developers to use their proprietary payment systems.
That bill advanced through the Senate Judiciary Committee in Feb. 2022, with 20 Senators voting for it and just 2 voting against it.
“Probably over $200 million was spent against this bill in states all over the country, with ads that had nothing to do with each other, for red states and blue states,” she said, adding that she didn’t have precise numbers.
Klobuchar offered a similar story on another bipartisan tech bill that passed through the same committee last year, the American Innovation and Choice Online Act, which she initially cosponsored with her Judiciary colleague Sen. Chuck Grassley (R-Iowa).
Despite making it to the Senate floor, neither bill received a vote last Congress—an outcome Klobuchar attributed to Big Tech’s sustained lobbying activities.
Both of the bills Klobuchar mentioned became a major focus of March 7’s hearing.
“They are in every corner of this town, at every cocktail party, and all over this building,” she told her colleagues.
She also drew attention to changes under Republicans in the House. The ranking member of that body’s antitrust subcommittee in the previous Congress, prominent Big Tech critic Rep. Ken Buck (R-Colo.), isn’t leading the body. Libertarian engineer Rep. Thomas Massie (R-Ky.) has taken the helm—a change that Klobuchar seemed to characterize as problematic as Congress confronts the giants of Silicon Valley.
She said she had communicated with Buck earlier in the day.
“To just close our eyes and do nothing and let another two years go by is a huge mistake,” she said.
In addition to facing headwinds from some Republicans, would-be tech regulators have dealt with skepticism and scrutiny from Democrats in California, where Silicon Valley and many tech giants are headquartered.
Lee Warns of ‘Addiction Business Model’
Lee, a Twitter power user, expressed frustration too.
“If it seems like we’ve had this hearing several times before, well, it’s because we have,” he said.
Lee argued that Big Tech presented a unique challenge in the United States’ long history of antitrust.
“Never before have we seen just a handful of trillion-dollar corporate bureaucracies exercising such pervasive control over how we stay in touch with friends and loved ones, how we shop to provide for our families, obtain news and other information [and] exercise our First Amendment rights, influence public debate, and even how we turn on our air conditioning and lock or unlock our doors,” he said.
“Big Tech’s business plans are built on an addiction business model, and our children are uniquely vulnerable.”
Lee drew attention to the tech sector’s coordination with the state in recent years to dictate Americans’ access to information and assist in monitoring citizens.
Yet, he stressed his opposition to bills that would empower the Federal Trade Commission, saying the agency had a “radical agenda” under President Joe Biden.
Lee introduced his own bipartisan tech bill, the Competition and Transparency in Digital Advertising Act, in May 2022.
Experts and Senators Debate Bills
The experts who testified offered divergent perspectives on the legislation Congress has considered so far.
Professor Daniel Francis, of New York University School of Law, voiced opposition to Klobuchar’s American Innovation and Choice Online Act.
He argued it would make certain common practices presumptively illegal and disincentivize consumer protection by tech companies. He also warned that its core concept, “harm to competition,” lacks a clear definition in the bill.
“It’s gonna drown in complaints the very same agencies that today barely have the resources to cover their antitrust docket,” Francis said.
He said Klobuchar’s app payments bill, was “a much more promising basis for discussion,” but cautioned the legislation’s language on third-party app stores could endanger Americans.
“The whole cybersecurity world, from the NSA [National Security Agency] and FBI to the FTC, tell consumers and users to stay away from third-party app stores,” he said.
Klobuchar asked Professor Fiona Morton, of the Yale School of Management, to address some of the arguments Francis made against her bill.
“I think the parade of horribles that was listed by Professor Francis really can’t happen if there’s a requirement to find injury to competition,” Morton said.
“The notion that courts will suddenly eliminate quality products because they have to evaluate a harm to competition is, I think, misplaced.”
She argued that the “harm to competition” concept was vital to making the bill work.
“The fact that new words are being used in this legislation is exactly to ensure that we get a new outcome. We can’t use the same terminology and imagine that courts won’t understand it the way they always have,” Morton said. “So, to get a different outcome, we have to use a new word, and say, ‘Look, we’re worried about harm to competition.’”
