Amid Tech Probes, DOJ's Antitrust Chief Huddles With Senate Subcommittee Leaders

DOJ Antitrust Division Chief Makan Delrahim met with Senate Antitrust Subcommittee leadership, aides told us Thursday. Delrahim originally was to testify before the panel with FTC Chairman Joe Simons on Tuesday, the same day DOJ announced a broad review of the tech industry (see 1907230057). The oversight hearing was postponed until September (see 1907220047).

Instead Tuesday, Delrahim met with Chairman Mike Lee, according to a Lee aide. The Utah Republican recently warned DOJ and the FTC against redundant antitrust efforts: “Their duplicative reviews will inevitably waste government resources and lead to the agencies taking contradictory positions on the same issues.” Ranking member Amy Klobuchar, D-Minn., also met with Delrahim, said an aide to Klobuchar, a tech critic who has urged enforcers to rein in Silicon Valley. Reached Tuesday on Capitol Hill, Delrahim told us he was meeting with various Senate offices. The agency didn’t comment Thursday.

Another aide told us Sen. Marsha Blackburn, R-Tenn., met with Delrahim on June 24. The discussion focused on promoting competition and innovation in various industries, including tech, music and health care, said the Blackburn aide. Blackburn chairs the Senate Judiciary Committee’s tech task force, which is examining industry antitrust and privacy issues (see 1907180046).

The FTC confirmed Wednesday it’s investigating Facebook on antitrust grounds, which the company announced in its Q2 report. The agency is constantly opening and closing competition probes, said Keith Klovers, an attorney adviser to Commissioner Christine Wilson. Speaking at an Internet Governance Forum USA event Thursday, Klovers said sometimes the public hears about the probes; sometimes it doesn’t. If an issue is demanding major media attention, the agency is likely examining, he said.

In a separate appearance, Wilson defended the consumer welfare standard guiding U.S. antitrust law. She hopes it weathers the current attack from tech critics. She defended her agency’s $5 billion settlement with Facebook, in response to lawmakers from both parties saying the deal didn’t go far enough (see 1907240042).

The fine isn’t “a slap on the wrist, and it’s not a parking ticket,” Wilson argued. She said $5 billion is about 9 percent of Facebook’s $55.8 billion in 2018 revenue. U.S. median income is $60,000, she said: “If I get a $5,500 parking ticket, I'm taking ride-share everywhere.” If Congress wants the agency to go further, lawmakers should enact privacy legislation, she said: “There’s a limit to how far we can go.”

The GOP commissioner also praised the settlement's structural remedies. The FTC shouldn’t be in the business of dictating corporate governance structures, she said. But in this instance, given the scope and magnitude of violations and a complete lack of a compliance culture at Facebook, this was a “necessary step," she said.

Antitrust announcements from the FTC and DOJ signal both agencies are taking these issues seriously, said Orrick partner Alex Okuliar. He defended existing antitrust regulations, saying the consumer welfare standard is working well. There should be real evidence of market and regulatory failure before policymakers establish new, prescriptive rules, he said.

Traditional antitrust regulations don’t properly account for modern market dynamics, like social media network effects, said Public Knowledge CEO Chris Lewis. Antitrust law should evolve as technology evolves, he said. Enforcers should consider exclusion metrics when examining network effects, he said: Sometimes, a platform becomes so inescapable that it harms consumers who don’t engage. Antitrust law can be applied to every industry, regardless of whether it’s online platforms, wireless carriers or broadcasters, Klovers said: The question is whether platforms are harming consumers, he said.

Acting Administrator Diane Rinaldo gave a rundown from comments on privacy to NTIA (see 1902260016). Comments suggest there’s “broad industry consensus that we can’t have a patchwork regulatory landscape” in the U.S., she said.