For several years, Congress and regulatory agencies have warned that they may attempt to break Big Tech in the future. Over the past week, this threat has become more real.
On June 11, Congress presented a extensive set of five antitrust bills with notable levels of bipartisan support that targeted tech giants – Amazon, Apple, Facebook and Google – and which could potentially shatter their core businesses. On June 15, in a surprise move, the White House named Big Tech’s nemesis Lina Khan will not only be Commissioner of the Federal Trade Commission (FTC), but the President of the powerful federal agency that enforces antitrust laws.
“If I were running a big tech company, my pulse would go a lot faster today than it did 24 hours ago,” Bill Kovacic, who headed the FTC under President George W. Bush, told Recode the next day. of the news that Khan would chair the FTC.
So now, while the details are still unclear on what Khan or the antitrust bills might accomplish, supporters of the big tech companies are stepping up their defenses. And one of the main antitrust critiques that tech industry groups and lobbyists oppose is the idea that Big Tech is too big and needs to be brought under control.
These pro-tech groups argue that the current proposed legislation is overbreadth that could hurt the U.S. economy and make it harder for ordinary Americans to use popular technologies they are used to getting for free, such as email and social media. These proponents of the tech industry are trying to convince lawmakers that regulating Big Tech will have unintended consequences that will hurt consumers. And they’re particularly aimed at Khan, who has publicly advocated for the dismantling of tech companies like Amazon.
“These proposals will not stand up to public scrutiny,” said Adam Kovacevich, CEO of the center-left technology advocacy group Chamber of Progress – which is backed by Amazon, Facebook, Google and other tech companies. . “At the end of the day, what people want from Congress is to fix the problems that are broken, not to break the things that they think are already working.”
Why industry leaders are afraid of Lina Khan
Khan’s appointment to the FTC – which passed 62-28 with bipartisan backing – is considered one of the most serious regulatory threats to tech companies to date.
This is because the FTC has broad powers to prevent big tech companies from buying their competitors, as well as small upstart companies that may one day become major competitors. This means that the FTC could in the future prevent Facebook from buying, for example, the next Instagram. And the FTC could go even further, forcing tech companies to retroactively separate acquisitions and existing lines of business, such as preventing Amazon from selling Echo devices and Kindles on its website (although such an effort is difficult to achieve).
And Khan made a name for herself in 2016 when she released a academic document who presented a legal case for the Amazon breakdown. Since then she has been nicknamed the head of the hipster antitrust movement among young academics who wish to extend existing antitrust law to better target issues such as corporate concentration and income inequality. Khan has also garnered support from politicians of all ideological backgrounds, including Progressive Senator Elizabeth Warren and Republican Senator Josh Hawley.
The argument for separating certain lines of business from Big Tech is that some large tech companies are hurting consumer and competitor choice by managing their own markets and prioritizing their own products over those of their competitors. One example that has come to light in antitrust investigations is a report that showed Amazon employees used data from third-party sellers in the Amazon Marketplace to launch competing Amazon-branded products.
Under Khan, the FTC could start aggressively pursuing cases on these types of issues. And so, some proponents of the tech industry are attacking Khan’s past academic writings, which have criticized Amazon and the economic power of other big tech companies.
“Lina Khan becomes president creates an air of prejudice and bias in decisions made when it comes to technology companies,” said Carl Szabo, vice president and general counsel of NetChoice, an industry group whose funders include Google, Facebook and Amazon. Recode.
Szabo said he believes that because of his academic work, Khan should recuse himself from any cases involving the technology. He noted that in 1966 a pharmaceutical company called American Cyanamid successfully sued the FTC, forcing the then chairman of the committee to withdraw from a case because of his perceived bias against the company. Khan has previously rejected the idea that she should issue a blanket recusal of all technical cases, and said she would consult with the FTC ethics committee if questions arose on the challenge in a particular case. The FTC declined to comment on criticism of Khan’s past work.
At this point, there is no indication that a large tech company would consider taking legal action based on Khan’s perceived bias, but the fact that group heads in the tech industry are launching the idea shows how alarmed they are at his powerful new role.
Regulating technology is complicated even for experts
The challenges facing Big Tech extend beyond Khan and the FTC. Congress has introduced five sweeping pieces of legislation that could hurt these tech giants. Advocates of the pro-Big Tech industry are on the defensive, calling on lawmakers to explain why they should not support this wave of bills.
“There is an effort to educate lawmakers about the unintended and deleterious consequences of bills that we see in the House,” Szabo said.
Room of Progress sent a letter to Representative David Cicilline (D-RI), who leads Big Tech’s antitrust legislative efforts as chairman of the powerful House antitrust subcommittee. In the letter, the group outlined potential worst-case scenarios for consumers if the legislation were passed, including a future where Alexa users might not be able to order from Amazon, YouTube might have to allow users to download. porn and Apple iPhones could be sold. without any preinstalled app.
Bloomberg seemed to confirm at least one of those scenarios when he reported Wednesday that Cicillin said his bill would prevent Apple from installing its own apps on iPhones because it would put competing app makers at a disadvantage. Technical analysts, lobbyists and commentators at once critical that, poking fun at the idea that consumers are buying an iPhone that is essentially a blank slate, with no apps like Apple’s App Store needed for basic smartphone functionality.
“It is one thing to say that you are against discrimination. It’s another thing to say you’re against iMessage and FaceTime preinstalled on an iPhone, ”said Kovacevich of Chamber of Progress.
Cicillin spokesperson later wrote on Twitter that the congressman was misquoted and that the bill would not prevent Apple from accessing preinstalled apps, but instead force the company to let people uninstall or change Apple’s default apps. Currently, on newer iPhones, you can remove some (but not all) of the applications installed by Apple. You can already change the default apps for your email and web browser on newer iPhones, but not on older ones.
The back-and-forth over the details of the Cicillin Bill shows just how messy the battle becomes between Big Tech supporters and politicians trying to regulate the industry – especially when it comes to discussions. nuanced on the unintended consequences that could result from the regulation of popular consumers. technology like iPhones.
There is no denying that the existing antitrust laws were not designed for the Internet age. But there is also a open debate among members of Congress as to whether regulation could stifle innovation. It doesn’t help that some DC politicians have been notoriously slow to grasp the basics of how big tech companies operate, as public hearings have shown in recent years. And even for experts, the ramifications of adjusting widely used consumer technologies can be difficult to predict.
On the flip side, politicians like Cicillin who lead the charge of regulating technology argue that inaction could stifle innovation in a different way – preventing the rise of newcomers who might challenge the status quo. quo of the most powerful big tech companies.
It’s an ideological debate that plays out tactically, with each side appealing to lawmakers, especially Republican lawmakers that Democrats are likely to need to get these bills passed.
Kovacevich of the Progress House said his group would launch an advertising campaign specifically targeting members of Congress, to try to convince them not to support antitrust technology bills. It’s just another step in what will be a protracted fight.
“The question for the [Big Tech] the lobbying teams is – are you going to be able to stop this? Or have your opponents bypassed you? former FTC chief Kovacic said. “It’s a competition of ideas.