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Antitrust Bill Called ‘Grenade’ to Tech Advances in House (2)

June 24, 2021, 9:07 PM

The House Judiciary Committee approved an antitrust bill that would force large technology companies like Amazon.com Inc. to exit certain businesses, a signature proposal within a package of measures aimed at reining in the companies and spurring competition in digital markets.

The bill, which advanced Thursday on a bipartisan vote of 21-20, is one of six pieces of legislation moved forward by the committee over a marathon two-day session that would force Amazon, Apple Inc., Facebook Inc. and Alphabet Inc.’s Google to radically change their business models.

Taken together, the bills represent the beginnings of an effort in Congress to reinvigorate antitrust enforcement against tech platforms by giving competition officials at the Justice Department and Federal Trade Commission more tools to challenge conduct by the companies.

The most far-reaching proposal that advanced Thursday, HR 3825, would prohibit the tech firms from running a business that competes with others on their platform or one that offers a service that businesses must buy to get access to the platform. It would require Amazon, for example, to shed its valuable logistics business, Representative Pramila Jayapal of Washington, one of the sponsors, has said.

“This is a very extreme measure,” said Democrat Zoe Lofgren, who represents part of Silicon Valley and voted against the proposal. The bill “would take a grenade and just roll it into the tech economy and blow it up,” she said.

Jayapal likened the tech platforms’ control of multiple lines of businesses to a person who “sets the rules of the game, calls all the plays on the field, while also playing on one of the teams.”

“The dominant platforms’ dual ownership creates a clear conflict of interest, an irresistible urge if you will, for platforms to preference their own business lines over competitors,” she said.

Earlier: All-Night Antitrust Debate Moves Big Tech Bills Forward

Advocates for more aggressive antitrust enforcement praised the measure after it was approved.

“This is truly a watershed moment,” Accountable Tech co-founder Jesse Lehrich said in a statement. “Even a few years ago, the prospect of such bold structural reforms to rein in the unchecked power of big tech was anathema.”

But tech-funded organizations warned the proposals would harm technology that consumers enjoy and depend on and threaten innovation.

“Even after a mark-up highlighting the legislative flaws, the bill package will still ruin our global competitive edge, remove choices on digital shelves, and increase the amount consumers pay at check out,” said Carl Szabo, general counsel of NetChoice, whose members include Amazon, Google and Facebook.

In addition to Lofgren, three Democrats voted against Jayapal’s bill: Lou Correa and Eric Swalwell, both from California, and Greg Stanton from Arizona. Colorado’s Ken Buck and Matt Gaetz from Florida were the only Republicans to support it. Gaetz said he agreed with Lofgren’s grenade metaphor -- which he said is why he voted for it.

“This is the kind of deliberation and serious work that our constituents have come to expect,” said Representative David Cicilline, who chairs the antitrust subcommittee. “It’s going to make a real difference in the lives of small businesses, entrepreneurs, our economy more broadly, and I couldn’t be prouder to be a member of this committee.”

Earlier: Klobuchar Says ‘Small But Mighty’ Group Is Out to Bust Trusts

Thursday’s vote on the Jayapal bill capped a session that began Wednesday morning on six bills that would toughen merger reviews for tech companies, restrict how they treat other businesses that depend on their platforms and require them to let other companies connect to their networks.

House Speaker Nancy Pelosi said at a news conference after the vote that the proposals were aimed at the consolidated power of tech companies.

“This legislation is an attempt to address that, in the interest of fairness and the interest of competition and the interest of meeting the needs of people whose privacy, whose data and all the rest, is at the mercy of these tech companies,” she said.

The criteria for a “covered platform” in four of the bills are based on market capitalization, monthly users and whether other businesses depend on the company’s services. Much of Wednesday’s debate was over whether the bills would apply to Microsoft Corp. and whether they unfairly targeted only Amazon, Apple, Facebook and Google.

The proposals grew out of a 16-month investigation of the companies led by Cicilline’s subcommittee that culminated with a report that accused the platforms of abusing their gatekeeper power in the digital economy to harm competition.

Although the bills made it through the Judiciary Committee, it’s not clear that all of them could pass the House. And the Senate presents an even bigger hurdle because most legislation needs at least 10 Republicans to become law.

Two of the bills considered on Wednesday represent modest measures to support antitrust enforcers, including one that would generate more revenue for the FTC and the Justice Department’s antitrust division by raising filing fees for the biggest mergers. Those two have companion bills in the Senate, which gives them a clearer path to become law.

A White House official said President Joe Biden is encouraged by the bipartisan work to address problems created by big tech platforms and looks forward to working with Congress to continue developing these ideas, indicating that the administration may want to suggest improvements.

(Updates with reaction in eighth through 11th paragraphs)

To contact the reporters on this story:
David McLaughlin in Washington at dmclaughlin9@bloomberg.net;
Anna Edgerton in Washington at aedgerton@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Larry Liebert

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

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