Court ruling sets up ever more bruising fight over tech

The nascent effort to rein in the power of America’s tech giants hit a snag this week, but the lawmakers behind the movement are not folding so easily.

Instead, a district court judge’s dismissal of two antitrust cases against Facebook is adding fuel to demands to revamp the laws enabling the government to tackle monopolies.

Some of the most vocal supporters of antitrust reform in Congress have called for the Federal Trade Commission to press onward with its case while at the same time arguing the dismissal shows how much current laws and court precedent favor Big Tech firms.

“This decision underscores the dire need to modernize our antitrust laws to address anticompetitive mergers and abusive conduct in the digital economy,” Reps. Jerrold Nadler (D-N.Y.) and David Cicilline (D-R.I.) said shortly after the ruling.

Those lawmakers, chairs of the House Judiciary committee and subcommittee on antitrust, ushered six antitrust bills targeting tech giants through marathon markup last week with the help of the top Republican on the subcommittee, Rep. Ken Buck (R-Colo.)

“Congress needs to provide additional tools and resources to our antitrust enforcers to go after Big Tech companies engaging in anticompetitive conduct,” Buck said after the ruling, highlighting some bipartisan consensus. 

The bills would provide a new set of standards for the FTC and its new chair Lina Khan to charge a handful of companies, including Facebook, with violating antitrust laws. The standards would only apply to platforms with sky high market capitalizations and monthly active user bases — essentially Facebook, Amazon, Apple and Google. 

“There would have been an entirely different regulatory framework in place, and it would circumvent lots of the issues that the judge found troubling,” former FTC chair William Kovacic told The Hill.

In dismissing the FTC’s complaint, Judge James E. Boasberg, an Obama-era nominee, argued the agency did not provide sufficient evidence to prove that Facebook controls over 60 percent of the market share as the complaint alleged. He wrote that it seemed like the agency almost “expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist.” 

“In his opinion, [Boasberg] recited so many themes and concepts that the [FTC] chair detests, and that advocates for transformation detest,” Kovacic said. 

The FTC — and a coalition of state attorney generals in a separate case that was more fully rejected — alleged that Facebook protected its monopoly in the social networking space by buying up nascent competitors and restricting interoperability with its platform. 

The bills seek to make that kind of behavior easier to penalize and reverse. One measure, sponsored by Reps. Hakeem Jeffries (D-N.Y.) and Buck, would prohibit dominant platforms from acquiring competitive threats. Another, spearheaded by Reps. Pramila Jayapal (D-Wash.) and Lance Gooden (R-Texas), would make it easier to break the tech giants up.

Although the bills have bipartisan support, they’re facing opposition from both sides of the aisle. 

Most Democrats on the committee voted in favor of the proposals, but California Reps. Zoe Lofgren, Eric Swalwell and Lou Correa voted against advancing nearly every bill. 

The pushback from the California Democrats, coupled with opposition from prominent Republicans, creates a difficult path forward for the proposals. 

A few days after the bills advanced, House Minority Leader Kevin McCarthy (R-Calif.) sent a letter to House Republicans about a “framework to stop Big Tech.” The letter bashed the antitrust proposals put forward by the Judiciary Committee, calling it a plan that “empowers a federal bureaucracy with no accountability.”

Opponents of the more substantial overhaul bills are cautioning colleagues against a knee-jerk reaction to the court’s decision.

A Lofgren staffer told The Hill Friday that calls to quickly advance the legislation in light of the ruling seem “completely disconnected” from the substance of Boasberg’s argument.

“It’s not enough to be like ‘we don’t like this case therefore, bills’,” they added, noting that the overall package does identify important deficits in antitrust enforcement even if its solutions may be an overcorrection.

Even if the proposals gain enough support to clear the House, they face a tougher challenge in the 50-50 Senate. The task is made even more difficult by the fact that the chair and ranking member of the upper chamber’s antitrust subcommittee are not as closely aligned as Cicilline and Buck.

Sen. Amy Klobuchar (D-Minn.) released a statement shortly after the ruling emphasizing the need to provide the FTC and the Justice Department’s antitrust department with “the resources and legal tools they need to fight these battles.”

Sen. Mike Lee (R-Utah) has introduced legislation that would strip the FTC of antitrust enforcement responsibilities and leave the DOJ as the sole regulator in the space.

One Senate source familiar with Republican thinking on antitrust told The Hill that a “primary disappointment” this week has been with how the FTC brought the case rather than the judge’s decision to send it back to the shop.

It is also unclear what companion antitrust legislation in the Senate would look like. Klobuchar introduced an omnibus antitrust bill earlier this session that would make anticompetitive mergers more difficult and create an independent competition advocate at the FTC.

Lee, along with Senate Judiciary ranking member Chuck Grassley (R-Iowa.), dropped a competing bill last month that includes the proposal to strip the FTC of authority — probably a nonstarter for Democrats — and would codify the consumer welfare standard for assessing anticompetitive conduct.

Despite those differences, the fact that more Senate Republican lawmakers have taken an interest in antitrust, per the source familiar, signals there could be a way forward.

Vocal tech critic Sen. Josh Hawley (R-Mo.), for example, called the judge’s ruling “deeply disappointing,” but stopped short of using it to voice support for the bills advanced by the House Judiciary Committee. 

“This is deeply disappointing from the court, which acknowledged [Facebook’s] massive market power but essentially shrugged its shoulders. Bad result for the American people,” he tweeted.

As Congress weighs bills to revamp antitrust laws, the FTC is already taking action to give the agency greater antitrust enforcement power. 

The Democratic-controlled commission, in its first meeting under Khan’s leadership, voted 3-2 along party lines to rescind an Obama-era policy statement that blocked the FTC from challenging “unfair methods of competition” that don’t violate existing antitrust laws. 

But antimonopoly groups say it will take congressional action reforming antitrust laws to take on tech giants. 

“As long as we have this consumer welfare standard and we’re deferring to judicial precedent and interpretation of antitrust law instead of congressional action and legislation that will reset antitrust law to meet the needs and the harms that are being conducted in the market, we won’t see the change and we won’t see Facebook’s monopoly power fully addressed,” said Morgan Harper, director of policy and advocacy at the Economic Liberties Project.