Big Tech’s Monopoly on Congress

Big Tech’s Monopoly on Congress

Lawmakers have tried to introduce legislation seeking to advance antitrust reform. Google, Amazon, and Meta have spent millions fighting it.

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As lawmakers in Washington act to shore up the rickety foundations of America’s formal democracy, via the pending update of the Electoral Count Act and the official report and criminal referrals of the January 6 select committee, Congress is also poised to sign off on some preliminary measures to rein in the top-heavy configuration of the country’s political economy. In the omnibus bill to fund the government next year, two pieces of legislation seek to reform the long-neglected strictures on antitrust in American law. One bill significantly boosts funding for antitrust enforcers in the Department of Justice and the Federal Trade Commission by imposing new fees on merger filings; the other greatly expands the jurisdiction of state attorneys general to pursue antitrust actions.

Both measures seem at first glance to be stodgy and procedural fare, focused on altering the behind-the-scenes legal playing field rather than mounting frontal assaults on the gargantuan tech, financial, and health monopolies choking off both market access for small-scale enterprises and consumer choice. But in the enforcement-challenged realm of antitrust, procedural reform counts for a lot—particularly at a moment when the Biden administration is mobilizing executive agencies like the FTC and the Consumer Financial Protection Bureau to target monopoly control of the economy. “It’s the most important antitrust reform since 1976—a huge deal,” says Matt Stoller, director of research for the Economic Liberties Project. “What we’re seeing is a revolution in antitrust enforcement.”

Stoller points to recent federal actions against oversize market players as signs of the shifting climate. Just this week, Epic Games, the makers of the video game Fortnite, agreed to a landmark settlement of more than half a billion dollars—half of which is devoted to consumer refunds—to resolve an FTC case against the company for deceptive marketing practices and other abuses in the game’s software. Meta CEO Mark Zuckerberg is embroiled in another FTC suit seeking to block the company’s acquisition of the virtual-reality fitness company Within Unlimited, giving testimony that unconvincingly downplays the platform’s ambitions to corner the VR market. Another FTC suit filed just last week is challenging Microsoft’s $68 billion deal to acquire the gaming company Activision Blizzard. And the CFPB won a record $3.7 billion settlement from Wells Fargo for company manipulation of auto loans, mortgages, and customer deposit accounts.

Still, for all this welcome new activity on the long-dormant battlefronts of antitrust, the package now before Congress is also noteworthy for two bills it doesn’t include, which specifically targeted the monopoly practices of Big Tech. Both bills—intended to prevent companies from giving preferential treatment to their own services and subsidiaries on their platforms and from strong-arming third-party market players to ensure unilateral platform control of the apps market—emerged out of extensive congressional hearings, and both were dropped from the omnibus at the behest of Senate majority leader Charles Schumer. Also left on the cutting-room floor was a third bill that would insulate local journalism outlets from the practices of Big Tech predation. “The reason that these bills didn’t pass is Chuck Schumer,” Stoller says. “He just lied about a lot of things. He said he’d allow a vote and then he didn’t.”

The structural causes behind the mothballing of the Big Tech bills go deeper than the shifty conduct of the majority leader. As the bills started to gain more traction, Google, Amazon, Meta, and other marquee tech monopolies spent more than $120 million on attack ads targeting them. It also bears noting that Schumer has two daughters employed by Big Tech—a brand of hardwired intrafamilial influence far more consequential than the celebrity nepotism that obsesses the navel-gazing media industry.

“We’ve developed not only a movement outside Congress, but a really good bipartisan coalition in the Congress on this issue,” says Rhode Island Democratic Representative David Cicilline, chair of the House Judiciary Committee’s antitrust subcommittee, which assembled a landmark congressional report on economic concentration in the tech sector. “If there’d been a vote, all these bills would have passed, would have been sent to the president’s desk. It’s important to recognize this was an unprecedented effort by Big Tech, part of a half-a-billion-dollar campaign devoted to spreading disinformation about the bills. And that’s the problem with monopoly—with concentrated economic power comes concentrated political power.”

Other strategists within the anti-monopoly movement argue that the effort to create bipartisan support for the legislation suffered from overly narrow conceptual framing and strategizing. “What culminated in the failure of these two bills was failed bipartisan strategy, first and foremost,” says Marshall Steinbaum, an assistant professor of economics at the University of Utah who was involved in the early planning for the antimonopoly offensive in the Democratic Congress. “The named number of defendants”—i.e., the dominant platforms targeted in the bills—“is very small, and the things we do to those defendants in the legislation is very circumscribed. Even when we’ve got these guys in hand, to strike a blow for the little guy, we backed off…. I remember having conversations with Hill staffers in May 2021, when this package of bills was being lined up in the House Judiciary Committee. It was all very regimented, and it was clear that only a few people and organizations were going to have input into the process. The message was, ‘Your job is to sit down and shut up while the adults take charge.’”

One sign of this damn-the-torpedoes quest for bipartisan accord, Steinbaum says, was a largely symbolic bill that did make it into the omnibus, restricting access to TikTok—an app with porous privacy protocols and tight connections to the ruling regime in China—on government devices. “That was a subsidiary flaw of this whole strategy,” he says, “to raise up these nativist laws as an antitrust reform. The targeting of TikTok is directly antithetical to antitrust, since it’s a competitor to a monopoly platform. Congratulations—you just helped get Mark Zuckerberg’s agenda through…. It’s a bit of a stretch, but I’m thinking here of New York Democrats—Kathy Hochul, Hakeem Jeffries, and Eric Adams—all saying, ‘We have to be more anticrime and more pro-police than the other side is.’”

As for the provisions that did make it past Schumer’s corrupt gatekeeping, Steinbaum sees them as decidedly equivocal wins. What of the claim that this is the first significant antitrust overhaul in five decades? “That’s true,” he says. “But every time someone says something like this that’s affiliated with Democratic politics, my spider-sense goes off—there’s only so much of that that can be tolerable when you’ve got the raw material for political success on your side. Both bills succumbed to the Capitol Hill imperative of making this a bipartisan effort, the low ambition of making the policy conditioned on having a very small number of defendants. That’s exchanging the giant strength of public opinion on the issue for an insidery savviness.” The most telling weakness of this approach, Steinbaum says, was letting the whole package fall under Schumer’s sovereign direction in the first place: “If you don’t have another card to play than putting pressure on Chuck Schumer, you’ve already lost.”

Indeed, a collateral effect of Schumer’s underhanded horse-trading is that the Republican case against Big Tech monopoly is gaining early influence as the GOP is set to come into the majority in the next session of Congress. “All the stuff we got in the omnibus was written by Republicans,” Stoller says. “And the other stuff that’s written by Republicans, that’s stuff the Senate is going to consider. I think in the House, they’ve already said they’ll be looking at app stores.” But Stoller insists that having the GOP directing future antitrust legislation is not necessarily an obstacle to substantive progress: “It will be hard for what [incoming House Judiciary chairman] Jim Jordan was going to do; he was planning to punish the people who’d pushed for antitrust. But now he can’t, since the majority’s so narrow.” And with hostility to Big Tech serving as one of the few issues binding together an increasingly fragmenting conservative movement, Stoller sees the potential to build on the successful reforms that survived the omnibus culling. “The thing about the Republicans is that they’ll fight you, but when they say they’ll do something, they do it,” Stoller says “Schumer said he was going to allow a vote and just lied about it.

Cicilline also sees the opportunity for additional legislative breakthroughs ahead. “I think it’s always better for the Democrats to be in control, but the narrow majority can be an advantage. Republicans are going to be looking for things to actually move on, and get things done.” Meanwhile, Cicilline says the broader momentum behind the antitrust movement remains unchanged: “Public support is building. The support from both sides of the aisle in Congress is growing. It’s inevitable that we’re going to rein in Big Tech. As someone put it, they’re losing in slow motion.”

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