Dallas and Washington, DC
TO UNDERSTAND how much technology behemoths’ standing in Washington, DC, has changed in the past four years, ask Barry Lynn, founder of the Open Markets Institute, an anti-monopoly group. In 2017 he was allegedly kicked out of the New America Foundation, a think-tank that hosted his team, for being too critical of big tech. At the time, Mr Lynn’s work decrying “platform monopolists” and advocating for breaking up tech giants was provocative but niche. He was like a protester with a megaphone, loud but mostly tuned out.
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Today, when Joe Biden talks about corporate “concentration”, he sounds a lot like Mr Lynn, and he has named Mr Lynn’s friends to top posts. Lina Khan, who worked at the Open Markets Institute for seven years, now chairs the Federal Trade Commission (FTC), an agency charged with protecting consumer privacy and enforcing antitrust law. Tim Wu, formerly on Mr Lynn’s advisory board, has a post advising the White House on competition and technology policy. Operating out of a WeWork space a short walk from the White House, Mr Lynn is part of the in-crowd. “For an itty-bitty think-tank, we have a lot of our people in the administration,” he says.
Beyond Mr Lynn’s colleagues, more tech-bashers hold passports to power. Jonathan Kanter, confirmed to lead antitrust efforts at the Department of Justice, is a staunch opponent of Google and is expected to bring enforcement actions against tech firms. Rohit Chopra, head of the Consumer Financial Protection Bureau, has asked tech titans to turn over records about their payments systems.
How did Mr Biden decide to go big on big tech? Unlike opponents in the Democratic primary, such as Elizabeth Warren, a Democratic senator who has urged breaking up tech monopolies, Mr Biden did not spend much time bashing tech. However, once Mr Biden was in office, Ms Warren had the most advanced tech plan and pushed for key positions for people such as Ms Khan, Mr Wu and Bharat Ramamurti, who headed economic policy for her campaign and now serves on the White House’s National Economic Council. “Biden’s tech policy is his nominees,” Ms Warren says. “He has put people in positions of power who understand tech at a whole new level and are deeply sceptical about many of the current practices,” she adds.
Many believe that Barack Obama’s administration, of which Mr Biden was a part, became too enamoured with large tech firms and failed to scrutinise mergers, like Facebook’s purchase of Instagram. This is Mr Biden’s chance at a do-over. The mood in Washington is “180” degrees different, according to Luther Lowe, who runs public policy for Yelp, an internet firm that has long been complaining about Google’s bullying of smaller rivals. “It’s a really exciting time if you are a complainant who’s hoping for government enforcement,” he says. Congressional staffers from both parties are now loth to take meetings with large tech companies, especially Meta (née Facebook), perceived to be the most toxic.
In July Mr Biden bared his trustbusting teeth when he issued a strongly worded executive order, written by Mr Wu, bemoaning corporate concentration. No previous president has issued such a detailed order on competition, says Paul Gallant of Cowen Washington Research, which tracks tech policy. Big tech was not an exclusive focus but a prominent one. Alphabet (Google’s parent), Amazon, Apple and Meta are among the country’s most valuable firms.
With Mr Biden’s troops now assembled, the focus will turn to which battles against large tech firms his administration can win. Break-ups and antitrust enforcement might get headlines, but those are longer-term plays with uncertain outcomes, given the pro-business bent of the courts. New laws targeting tech firms could have a faster impact. If that fails, the administration could rewrite the rules of business through newly empowered government agencies.
Take congressional action first. Just about the only issue on which Republicans and Democrats in Washington agree, besides China, is that tech firms have become too powerful. At least 14 tech-focused bills have been introduced in Congress this session. Many are bipartisan. One co-sponsored by Amy Klobuchar, a Democratic senator, and Tom Cotton, a Republican, targets tech companies with market values of $600bn or more, and proposes establishing a presumption against new acquisitions of smaller firms. “We’re not talking about destroying these companies; we’re talking about putting some reasonable rules in place, when they have said ‘trust us’, and no one does,” says Ms Klobuchar.
Mr Biden has not made passing tech legislation a priority, but he is expected to after the Senate decides the fate of his Build Back Better social-spending package. (Built into it is $500m in funding for the FTC to establish a new bureau to investigate privacy violations.) “Be on the lookout” for stronger involvement from the White House, predicts Ms Warren.
The most obvious place for bipartisan agreement is on a bill that further constrains online-data collection about children. But Mr Biden is likely to be more ambitious. He could press for a ban on the giants’ ability to ensure preferential treatment for their own services. While campaigning, he expressed support for doing away with “Section 230”, which offers legal immunity to platforms for hosting objectionable content. He could also push for a national privacy bill that would establish more consumer control over data.
Congressional action is far from guaranteed: partisan politics may still get in the way. Among Republicans, there is “disagreement” about how strongly to intervene in markets, says Ken Buck, a Republican congressman from Colorado. The president’s critics could also oppose legislation they might otherwise support, just to kneecap him. “I don’t see eye-to-eye on anything with Joe Biden,” says Mr Buck, who has co-sponsored six bipartisan tech-focused bills with which Mr Biden would ostensibly agree. Democrats, too, could stymie legislation. Tech executives are big Democratic funders. Already some Californian Democrats in Congress have opposed several tech bills.
Even if Congress fails to act soon, Mr Biden’s tech agenda will not be halted. Under the 107-year-old FTC Act, Ms Khan has wide latitude when it comes to rule-making to address “conduct that is unfair or deceptive”. Mr Biden’s executive order on competition encouraged the FTC to set rules on “surveillance and the accumulation of data”, rules “barring unfair methods of competition on internet marketplaces” and rules against “anticompetitive restrictions on using independent repair shops” to fix cell phones and other devices.
For example, the FTC could try to outlaw certain conduct, such as platforms giving preferential treatment to their own services over others’. The commission could also move to minimise data-collection and sharing between apps, which would limit tech firms’ firepower to track users across the web and combine sources of consumer information, as Meta does through Facebook, Instagram and WhatsApp.
“Rule-making presents a bigger risk to the tech companies than traditional antitrust lawsuits, which get all the attention,” says Mr Gallant. Tech firms would surely fire back, suing both over whether the FTC has the right to set such sweeping rules and over the legality of specific measures.
Antitrust enforcement is the final front of Mr Biden’s campaign. This will involve scuttling proposed mergers and attacking firms for anticompetitive behaviour. Those running competition policy for Mr Biden believe that the scope of antitrust law has been artificially narrowed over the past 40 years. They argue that a focus on consumer welfare, popularised by Robert Bork, a conservative judge, from the late 1970s, fails to take into account other harms from increased concentration.
Mr Biden “grew up under antimonopoly enforcement regimes that were extremely aggressive” and is old enough to remember the world before Bork, says Mr Lynn. In 1987, as chair of the Senate Judiciary Committee, he oversaw the rejection of Mr Bork’s elevation to the Supreme Court.
Antitrust lawsuits have two downsides: they are always long and unpredictable. Mr Biden’s administration inherited lawsuits from Donald Trump’s: one filed by the Justice Department against Google, another by the FTC against Facebook. Such cases take longer than a single presidential term. A trial in the Google case is set for 2023, and a decision and appeal will add another year at least. Most expect Ms Khan and Mr Kanter to try to build an additional case against a tech giant, perhaps Amazon or Apple.
The first big test of Ms Khan’s agenda will come from whether the FTC will approve Amazon’s proposed $8.5bn acquisition of MGM, a Hollywood studio with the rights to James Bond. Some of Ms Khan’s supporters hope she blocks the deal, but doing so could be risky in court, given how diverse the media market is in America. So far the most high-profile deal to be blocked during the Biden administration is an old-media one: the Justice Department sued to stop two book companies, Penguin Random House and Simon & Schuster, from merging, arguing this would hurt authors’ abilities to gain advances.
Whether or not Mr Biden breaks up a large tech firm, the threat of trustbusting “is already changing the world”, says Ms Warren. Mr Biden’s impact can be seen “partly in deals that don’t get announced, and it’s also in the tech giants’ reviewing their own internal practices,” she says. Recently Apple announced it was going to make it easier to repair devices, which appears to be a direct response to Mr Biden’s executive order on competition.
In Silicon Valley, there is more optimism than a few years ago about startups being able to reach a larger scale without being stamped out by giants. Some believe that without the Biden administration’s reinvigoration of antitrust, sectors that are starting to see more competition, such as social media, would already be further consolidated. Knowing they could be scrutinised or sued, firms go on their best behaviour, as Mr Wu describes in his book, “The Curse of Bigness”, in which he argues for a revival of the big-case tradition of antitrust.
Several states are also taking aim at big tech with new laws and lawsuits. Mr Lynn relishes this swarm attack. “We may be Lilliputians,” he says, “but there are enough of us that we can drag these folks down.” ■
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This article appeared in the United States section of the print edition under the headline "In tech we don’t trust"
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