Congress puts Big Tech in regulatory crosshairs

U.S. lawmakers unveiled five sweeping anti-trust bills that would transform Big Tech and perhaps break up companies like Facebook and Google.

What it means: The quintet of anti-trust bills don’t specifically name any company but directly target Amazon, Google, Facebook, and Apple for anti-competitive behavior. They have a long way to go before any company is actually cleaved, but if made law, the measures would be the largest shift to how the U.S. regulates monopolies since the advent of the Internet.

Wait, why: U.S. House lawmakers believe that Amazon, Google, Facebook, and Apple are simply too dominant in their respective markets. That dominance, they argue, allows them to squash competition through anti-competitive mergers, manipulate prices, and unfairly exploit their marketplaces to benefit their products or services.

“Right now, unregulated tech monopolies have too much power over our economy. They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us.” —Rep. David Cicilline

What would change: The bills would make it more difficult for anticompetitive mergers and acquisitions as well as give the Feds more power to break up monopolies. They’d also target conflicts of interest within companies’ marketplaces, and beef up Federal Trade Commission and Justice Department’s antitrust enforcement resources. I’ll get into the bills’ details below.

That’s wild: The horse industry competed with cars the last time the U.S. meaningfully approached anti-competitive behavior. The United States’ two major anti-trust laws are the Sherman Act (1890) and Clayton Act (1914).

Critiques: Big Tech trade groups say that the bills would stifle innovation and make it harder for consumers to reap the benefits of the companies' integrated services and products. For example, the International Center for Law & Economics argues that the bills would limit the value of integrated products like Google Calendar and Gmail. Or they could inhibit quality control on Apple’s App Store.

Crushing consumer favorites: Adam Kovacevich, CEO of the Chamber of Progress, released a list of 15 tech conveniences that the “bills would effectively ban.” Among the list are Amazon Prime’s free shipping, Google Maps in Google search results, and Apple’s App Store recommendations.

Big government: Other critics say that the bills would pervert the incentive structure of innovation in the U.S. For example, many founders are motivated to build new technology by the prospect of being acquired, and the bills would hobble a key reward to startup innovation.

"The House bills would put the government in charge of industrial organization. They disregard the principles that have governed the US market economy and would stop successful tech companies from providing consumers with the products and services that improve their lives." —Matthew Schruers, the president of Computer & Communications Industry Association

The bills

• The American Innovation and Choice Online Act would prohibit discriminatory conduct by dominant platforms, including a ban on self-preferencing. Self-preferencing is when platforms like Amazon Marketplace — which connect competing services to potential customers — also offer and prioritize their own products and services

• The Platform Competition and Opportunity Act bans anti-competitive acquisitions by dominant platforms, that expand or entrench the market power of online platforms.

• The Ending Platform Monopolies Act eliminates the ability of dominant platforms to leverage their control across multiple business lines to self-preference and disadvantage competitors.

• The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act aims to boost competition by lowering barriers to entry and switching costs for businesses and consumers.

• The Merger Filing Fee Modernization Act increases filing fees for mergers to provide more enforcement resources for the Department of Justice and Federal Trade Commission.

What do you think of these bills? Does the U.S. need an update to its anti-trust laws? Share your thoughts below.