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Tech Antitrust Pressure Rises as Senators Vow ‘Dramatic Action’

Several key senators are negotiating tech-focused antitrust bills similar to House measures that companies say would force drastic changes in their business and destroy products enjoyed by consumers.

Senator Chuck Grassley, the top Republican on the Senate Judiciary Committee, said he’s working with Democrat Amy Klobuchar on an antitrust bill similar to some of the measures approved last month by the House Judiciary Committee, though he declined to say which ones.null

“There is so much wrong with these social media platforms,” Grassley of Iowa said in a brief interview Tuesday, citing what he described as bias against conservatives, a theme that’s attracting some Republican support for Democratic trust-busting moves aimed at a number of the biggest technology players. “We have to take some dramatic action.”null

Klobuchar of Minnesota, who chairs the judiciary panel’s antitrust subcommittee, said one bill under discussion will address tech companies discriminating against competitors who rely on their platforms, such as Amazon Inc. com offering its own version of products sold by merchants who depend on its website and logistics network to reach consumers. This is the issue at the heart of two of the House proposals.

Klobuchar said some of the upcoming Senate bills will “line up in different ways” with the House measures.

“I’m negotiating right now on one of them that I’m working with a Republican on, so stay tuned,” Klobuchar said Monday in a phone interview. “We’re working to get a number of them introduced.”

The Senate bills will open another front in Washington’s antitrust war that has companies including Amazon, Facebook Inc., Apple Inc.,and Alphabet Inc.’s Google on the defensive. Two weeks after the House Judiciary panel approved six antitrust bills with bipartisan backing, four of which target the tech giants, President Joe Biden signed a sweeping executive order urging federal agencies to take specific actions to encourage competition in technology as well as in industries including agriculture, air travel, shipping and banking.null

The two House measures that drew the most attention take different approaches to prevent what Klobuchar and others describe as discrimination by so-called gateway platforms against other companies that rely on them to reach users.

A bill from Rhode Island Democrat David Cicilline, who chairs the House antitrust subcommittee, would prohibit companies from giving preference to their own products, such as Google prioritizing Google Maps or Apple providing advantages to Apple Music. A bill from Democrat Pramila Jayapal of Washington state would force companies to divest certain lines of business entirely. For example, Amazon would be required to separate its online retail business from its logistics services.

During the House panel’s all-night session to debate the antitrust measures, California Democrat Zoe Lofgren, who represents part of Silicon Valley, said Jayapal’s bill was a “very extreme measure,” that would “take a grenade and just roll it into the tech economy and blow it up.”

Industry groups representing tech companies warned that the legislation would harm user privacy and security, disincentivize innovation and disadvantage U.S. companies.

The House Judiciary Committee approved all of the measures with bipartisan support, but they have yet to be scheduled for a vote on the House floor. Democratic Majority Leader Steny Hoyer, who sets the House schedule, said the bills need more work, and that Congress’s approach to encourage competition in tech should be “constructive, not destructive.”

Grassley said he’s interested in the measures by Cicilline and Jayapal and shares the concern about tech giants favoring their own products, but he declined to describe the details of the bill he’s negotiating with Klobuchar. He said she had wanted to introduce the bill earlier, but he’s still seeking some changes.

One of the other tech-focused House proposals is aimed at allowing consumers to move their data, such as photos and contacts, from one platform to another. This bill is modeled on a Senate measure introduced in the last Congress by Democratic senators Richard Blumenthal and Mark Warner and Republican Josh Hawley. Blumenthal said Tuesday he plans to discuss minor changes that could win more bipartisan support, and he’s planning to reintroduce it in this Congress.

“The misuse of market power in the tech industry has to be stifling innovation and choice,” Blumenthal of Connecticut said in an interview Tuesday. Pointing to signals from the Biden administration and bipartisan support in Congress, Blumenthal said, “We’re at a unique moment of opportunity for antitrust, so I think we should cast the net widely and be aggressive.”

Klobuchar said Blumenthal is also working on a bill to address anticompetitive behavior in app stores, which was the subject of an April hearing when the Senate antitrust subcommittee questioned representatives from Apple and Google. That session heard complaints from app developers including music streamer Spotify Technology SA and online dating company Match Group Inc. about store fees and restrictions on reaching customers.

Another House bill would make it harder for tech companies to buy competitors. Hawley of Missouri, who’s a member of the Senate antitrust subcommittee, said banning mergers for companies of a certain size was a key part of his broad antitrust bill, introduced in April, which doesn’t have any cosponsors.

“I thought the House bills directionally were very, very encouraging,” Hawley said Tuesday. He said he also supports breaking up tech companies that are in different lines of business, as the Jayapal bill would do. Comparing his own proposal to the House bills and a broad antitrust measure Klobuchar introduced in February, Hawley said there should be “enough overlap to actually get something done.”

Source: Bloomberg