Senator Chuck Schumer takes on the demise of two major antitrust laws

The two largest antitrust laws in more than 50 years are dead after not being included in congressional legislation released last Tuesday before the end of the year, angering anti-monopolists who believe the majority leader in the senate Chuck Schumer (DN.Y.) killed the best chance for this Congress to meaningfully limit corporate power.

While a few smaller provisions in the omnibus will help antitrust lawyers take on the country’s biggest tech companies in the future, the death of the Open App Markets Act and the US Innovation and Choice Online Act – both of which had the backing needed to pass the Senate, proponents insist — amounts to a huge victory for Big Tech’s well-funded lobbying and influence machine.

Antitrust advocates blame Schumer for promising Sen. Amy Klobuchar (D-Minn.) a vote on her American Innovation and Choice Online Act, delaying action for nearly a year, and ultimately breaking through on his promise by excluding it from the omnibus expenditure account.

“Schumer erased much of the goodwill he built with the tech startup ecosystem during the net neutrality debates. He spent an entire year meddling for the world’s most powerful companies and repeating the myth that this largely bipartisan legislation “didn’t have the votes,” Luther Lowe, Yelp’s senior vice president of public policy, told HuffPost. .

“Thanks to him, Europe will indefinitely lead the global regulation of the internet and European consumers will enjoy better protection than US consumers.”

The European Union took far-reaching measures antitrust law in March, against the wishes of Big Tech companies. The new law included provisions that have died on the vine in the US Senate, such as rules barring companies like Apple and Google from requiring smartphone owners to use their respective app stores for digital purchases.

David Segal, a co-founder of the liberal advocacy group Demand Progress, suggested the demise of the antitrust laws could lead progressives to question future promises from Schumer, who has worked for the past two years to keep the left happy on things like parole. of student debt.

“Unfortunately, Schumer’s behavior made it clear that he was never serious about fulfilling this promise,” Segal said. “Activists should be even more wary of any commitments he claims to make in the future.”

“They had bipartisan support and would have helped rein in an industry that is spiraling out of control in too many areas.”

– Sen. Elizabeth Warren (D-Mass.)

At least one prominent antitrust lawyer withdrew criticism and praised the smaller victories of the omnibus legislation. One measure allows attorneys general to keep antitrust cases in the state where they are filed, which should prevent Big Tech from working to combine cases in a way that delays final decisions.

Another provision increases the filing fees companies pay to antitrust agencies like the Federal Trade Commission when they merge, giving those regulators a funding incentive.

“Big Tech, Big Ag and Big Pharma spent extraordinary amounts of money in an unprecedented effort to block Congress from passing antitrust reform and undermining the ability of state and federal enforcers to enforce the law – and they lost.” said Sarah Miller, executive director of the antitrust-focused American Economic Liberties Project. She noted that the filing fee increase would be the first congressional action to strengthen antitrust enforcement since 1976.

But even that provision is weaker than it could be. The increased filing fees don’t take effect for another two years, giving companies time to kill them and robbing antitrust lawyers in President Joe Biden’s administration — including FTC Chair Lina Khan and Jonathan Kanter, the assistant attorney general for antitrust enforcement at the Justice Department – from sources as they battle Google and Apple.

“Including merger filing fees is an important step forward for Lina Khan and Jonathan Kanter’s ability to fight monopolies and fight for consumers — but the unnecessary two-year delay means we have to face the White House in 2024. to ensure that this funding is used to enforce our antitrust laws,” said Emma Lydon, the general manager of the progressive group P Street.

Other antitrust advocates had more mixed reactions, expressing disappointment with Democratic leaders in Congress without rejecting the new enforcement funding.

Segal argued that the new revenue would help Khan and Kanter “continue to push the boundaries within existing jurisprudence to ensure that anti-monopoly policies work for ordinary people and our wider economy.”

Lowe also acknowledged that the additional funding was a positive sign, noting that the Justice Department’s antitrust division is now receiving specific credits in the form of congressional funding.

“I don’t see how as a Big Tech CEO you feel good about the broader trends around the world in terms of more enforcement of anti-competitive behavior,” he said.

Senator Elizabeth Warren (D-Mass.), who during her 2020 presidential run proposed a complete breakup of major tech companies, avoided direct criticism of the majority leader, but made it clear that she felt the antitrust laws should separate votes from the omnibus deserved legislation.

“Those that were left out should have been included. We should have voted for it in the last few months,” Warren told HuffPost. “They had bipartisan support and would have helped rein in an industry that is spiraling out of control in too many areas.”

Warren was unsure about the effectiveness of the antitrust provisions that did hold. “We’re still reading the fine print,” she said. “The devil is in the details.”

The pair of bipartisan bills that Schumer effectively killed would have given Khan, Kanter and other antitrust enforcers additional tools to curb Big Tech abuses.

Klobuchar’s US Innovation and Choice Online Act would have prevented major platforms, such as Google and Amazon, from giving their own products preferential treatment. The bill — which was supported by Sen. Chuck Grassley (R-Iowa), the leading Republican on the Senate Judiciary Committee — passed the committee 16 to 6 in January.

Sens. Elizabeth Warren (D-Mass.), left, and Amy Klobuchar (D-Minn.) pushed for more meaningful antitrust legislation to be passed.

The Open App Markets Act, introduced by Senator Richard Blumenthal (D-Conn.), would have prohibited companies like Apple and Google from entering into restrictive contracts with app developers that, among other things, prevent them from selling their apps in competitors’ markets . stores. That bill received even more bipartisan support and passed the committee by 20 to 2 in February.

However, a person familiar with the negotiations said on Friday that the legislation was dead at the behest of Senate Minority Leader Mitch McConnell (R-Ky.) — a claim viewed skeptically by progressives wary of Schumer. McConnell’s office did not immediately respond to an email requesting comment.

The powerful technology platforms Google, Apple, Facebook and Amazon — sometimes referred to collectively by the acronym GAFA — claim that such accounts are limiting the organic growth that has enabled the United States to become a global leader in technology innovation. They compare Amazon favoring its own branded items to supermarkets prominently displaying generic store brand items alongside other products.

But anti-monopolists argue the opposite is true, arguing that the kind of innovation seen in Silicon Valley in the 1980s and 1990s probably wouldn’t be possible today amid the barriers to competition that tech giants have erected to keep their protect profit streams.

For example, they point out that Meta’s Facebook is taking the original features of newer platforms like Snapchat and taking over potential competitors like Instagram and WhatsApp. Meanwhile, Amazon’s preferential treatment of its own products goes far beyond what supermarkets do — both because of the leverage Amazon has over sellers on its platform and the information it extracts from sellers to undermine them. (Amazon’s specific tactics were the focus of an influential article by Khan as a student at Yale Law School.)

“These guys are gatekeepers to the economy,” says Lowe, whose company, Yelp, has been battling what it sees as Google abuse for years. “They have a special ability to distort the entire market and bend it to their own liking.”

As much as Schumer has courted the left in recent years, they have long been suspicious of his intentions with Big Tech companies. The companies are a major source of campaign finance, and the electorally conscious Schumer would be wary of losing access to their money or turning the money against vulnerable Democratic incumbents.

In July, antitrust advocates aired a television ad targeting Schumer on Washington cable channels, buoyed by a relatively small purchase that underlined the forces they opposed. The Big Four tech companies, or groups that fund them, had spent $120 million on television advertising to attack the proposed antitrust law and $95 million to lobby against it.

Arthur Delaney contributed reporting.

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