Donna Faye Imadi ‘22
Current Events Editor
In the early 20th century, the responsibility of the government to prevent “private power from destroying democratic government” prevailed over the power of industrial titans. Today, whose hands influence the trajectory of democratic governance? On July 29, 2020, this was answered when the House Antitrust Subcommittee held an investigatory hearing examining the “Dominance of Amazon, Apple, Facebook, and Google.” The nearly five-and-a-half-hour testimony of the respective CEOs demarcated the progress of a nearly year-long investigation spearheaded by Chairman Cicilline (D-RI). He began by reflecting on how being “too big” might be a problem weighed against the benefits created by Big Tech, emphasizing consequences of the abuse of these platforms’ market-power (exacerbated by COVID-19), especially in eCommerce, social media, and other essential platforms. Over a million investigative documents were gathered through this Congressional action, which may provide the FTC and DOJ Antitrust Division significant amounts of data to spur potential proceedings.
The hearing was refreshingly bipartisan in nature. Though many concerns were shared across the aisle, conservatives largely focused on political censorship of social media platforms, freedom of speech issues, and international security concerns about China’s increasing technological influence (e.g. TikTok, Huawei, and the use of Chinese Uighur concentration camps in tech manufacturing). Alternatively, Democrats focused on the stifling of competition. They emphasized how eCommerce platforms were so powerful that they risked becoming “bottlenecks,” extracting rents from competitors, harming small businesses, stifling innovation, and abusing their market power to self-preference their own products.
“We would not submit to an emperor; we should not submit to an autocrat of trade . . . with the power to prevent competition,” Senator Sherman declared in the early 20th century, substantiating the free competition principles of our nation’s market economy. Beyond stifling competition, these platforms have the power to regulate speech, mold our understanding of reality, and provide information on elections. Are our 21st century laws sufficient for this era characterized by heightened economic and social power held by Big Tech?
The diffusion or mere regulation of such power speaks to the heart of what role the legislature versus the administrative agencies harbor in antitrust law. Traditionally, the government’s natural role in a system of “free private enterprise” was that of a patrolman policing the highway of commerce. Yet, although legislation exists against monopolies and restraints of trade, the enforceability of such legislation is highly debated.
This issue was at the root of contention between Chairman Cicilline and Ranking Member Sensenbrenner (R-WI). Chairman Cicilline emphasized the need for not only the increased enforcement of antitrust laws but also for new legislation to police technology platforms, which Representative Jerry Nadler (D-NY) likened to “modern-day railroads,” harkening back to the break-up of railroads, big steel, and big oil.
Conversely, Representative Sensenbrenner argued that although greater antitrust scrutiny of tech platforms is a necessity, current antitrust laws are sufficient to meet the challenge. His approach reflected strong consideration for the role of antitrust law in promoting innovation, and that current law was sufficient in balancing the need to promote competition and incentivize innovation. Rather than the law itself, his view indicates that the underenforcement of the law is the challenge. The current law has led to great innovations and advancements which need not be stifled by new regulations in the future.
Illustrating this point, Representative Sensenbrenner alluded to the Obama Administration’s approach to antitrust, wherein Facebook gained approval for the acquisition of Instagram. This approval is being looked at with suspicion in today’s shifting view. Representative Sensenbrenner advanced that the law itself was not the issue at the time of the approval, as the outcome of acquisition could have just as likely gone the other way. This concern reflects a broader debate which casts front-and-center the effect of the “Bork revolution” on antitrust enforcement standards, where the “consumer welfare standard” shifted antitrust enforcement standards to not regard “big” as inherently “bad” if dominance is to the benefit of consumers. This alternative, more rigorous enforcement standard under the “Brandeis” movement, which is more focused on protecting the ability for competitors to enter the market, could change the trajectory. Depending on the dominant “standard” viewed, the outcome for enforcement action could differ without additional Congressional legislation.
Philosophizing aside, there is critical agreement that antitrust enforcement of digital platform operations is necessary. Whether the buck-stops-there will be a key feature of our time. Some legislators advocate that digital eCommerce platforms (such as Amazon’s Marketplace) should be regulated by a likened version to the § 230 of the Communications Decency Act, where eCommerce platforms would need to treat third-party sellers on their site with greater fairness. This would create the responsibility (or burden) for sites like Amazon to police its platform to comply with new regulations. Yet it may speak to “fairness” principles, benefiting smaller businesses’ ability to compete in rankings on these online-sites.
Where power must be exercised, “It should be located in the government, not in private hands,” it has been said. Yet, with the growing polarization in and decreased efficacy of public institutions, do Americans trust the government to be honest stewards of such power? With tech platforms playing a key role in the manipulation of information and the facilitation of our civil and political discourse, are their private incentives any better? Can a well-educated “We The People” determine such things when efficacy in the news and media itself reflects that 78 percent of Americans recognize the spread of misinformation online is “a major problem.”[1]
In next week’s article, we’ll assess how the rise of illiberal democracies may affect our view of regulation of these Big Tech platforms. Is American-owned Big Tech the only alternative or might a cure worse than the disease emerge if BigTech in the U.S is replaced by Big Tech in a illiberal nation with a less-transparent governing regime?
As for TikTok . . . we’ll explore that in a week’s time!
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dfi3un@virginia.edu
[1]https://knightfoundation.org/wp-content/uploads/2020/08/American-Views-2020-Trust-Media-and-Democracy.pdf