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Big Tech will dodge Congress’s sharpest arrows

3 minute read

The U.S. Capitol building exterior is seen at sunset in Washington, January 21, 2020. REUTERS/Sarah Silbiger.

WASHINGTON, June 14 (Reuters Breakingviews) - A committee of the U.S. Congress has proposed no fewer than five bills designed to rein in big technology companies. Even though they are bipartisan efforts, the three most disruptive bills may languish because of political disagreements, while the two less onerous ones have a shot at passage. They would leave watchdogs with limited weapons to curb Amazon.com (AMZN.O) and others.

The legislation unveiled on Friday follows recommendations made by the House Judiciary Committee as part of a scathing 2020 report on the anti-competitive practices of Amazon, Apple (AAPL.O), Facebook (FB.O), and Alphabet (GOOGL.O) unit Google.

But the toughest plans probably lack adequate support. There are enough free-market moderate Republicans, particularly in the Senate, who would frown upon a ban on acquisitions by big tech firms of nascent rivals, as envisaged in one of the bills. Barring online platforms from owning subsidiaries that conduct business on those same platforms, or at least from giving their own units special treatment, could be similarly controversial.

If they did pass, such measures could hurt, say, Amazon in myriad ways. Jeff Bezos’s firm sells products that compete against third-party sellers on its e-commerce site. The House report noted that rivals like Target (TGT.N) use Amazon’s cloud services, sparking worries about access to competitive data.

The two less painful bills for tech firms are more likely to attract political consensus. One would require interoperability so that users could easily transfer their data to a competing site. Another would increase government filing fees for big merger reviews. A version of the latter already passed in the Senate earlier this month.

Such incremental reforms would still leave big antitrust questions unresolved. As of now, federal enforcers would have to take their legal chances, with support from U.S. states. The Justice Department has sued Google over its dominance in online search. Separately, the Federal Trade Commission has filed a lawsuit against Facebook, arguing that the company’s acquisitions have stifled competition.

Some of Congress's tougher measures could change outcomes in future big cases by updating how antitrust law frames markets and competition. By offering lawmakers five degrees of freedom, though, the committee may have guaranteed that won't happen.

Follow @GinaChon on Twitter


- The U.S. House Judiciary Committee on June 11 introduced five bipartisan bills aimed at curbing big technology firms.

- One would prohibit acquisitions of rivals or assets that enhance a buyer’s market power. Another would bar an online platform from owning subsidiaries that sell products or conduct other kinds of business on that platform, with a fine of 30% of total average daily U.S. revenue for executives found to be liable for violations. A third related plan would ban a platform from providing advantages to its own businesses over others using its services, violations of which could lead to forced divestments.

- Another bill would require companies to allow users to transfer their data to a competing site more easily, while the final one would increase fees charged by federal agencies for big mergers to ensure they have the resources to review them.

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