House Antitrust Chair Floats Merger Moratorium as Google Pursues Fitbit

It’s worth Congress considering a merger moratorium, House Antitrust Subcommittee Chairman David Cicilline, D-R.I., told reporters after raising concerns about Google buying Fitbit at a hearing Wednesday (see 1911080062). Cicilline said FTC Chairman Joe Simons and DOJ Antitrust Division Chief Makan Delrahim were more supportive of the idea during testimony than he anticipated. A lot can be done short of a moratorium, Delrahim said, but it’s possible to explore burdens of proof for companies that control large market shares.

“I don’t necessarily disagree,” Delrahim said. He warned Cicilline that some combinations have pro-competitive benefits, so a moratorium could harm consumers. Cicilline said it might be possible to enact a qualified merger suspension that would allow pro-competitive deals. Simons noted the Competition Bureau is exploring consummated transactions as part of its enforcement mandate.

Cicilline doesn’t know if a moratorium would be possible, but it’s worth discussing. “It may be a sensible thing to think about,” he told reporters.

Cicilline hammered Simons because the FTC didn’t depose Facebook CEO Mark Zuckerberg or Chief Operating Officer Sheryl Sandberg in exchange for securing more consumer protections in the agency’s $5 billion privacy settlement. Simons argued the agency already knew Facebook violated a 2012 consent order, and a deposition turning up further violations wouldn’t have necessarily delivered a better result than the $5 billion settlement. Simons told Rep. Hank Johnson, D-Ga., the company's release from liability is the same it would have been if the FTC won litigation.

Asked about depositions in general after the hearing, Delrahim told reporters DOJ deposed then-Microsoft CEO Bill Gates during its antitrust case against the company in the late 1990s. Cicilline told reporters he’s “very concerned” the FTC would trade away a deposition that it has “every right to do” in exchange for additional compensation. You would think the agency would have interest in questioning the key decision-makers, he told reporters. It appears it was assumed that Gates’ deposition was “an essential part of the [DOJ] investigation.”

Simons and Delrahim testified their agencies are wary of privacy legislation like the EU’s general data protection regulation entrenching tech incumbents. DOJ's looking to see if GDPR is creating barriers to new entry, Delrahim said.

The House Judiciary Committee needs to avoid “punishing success” through its antitrust investigation of the tech industry, said ranking member Doug Collins, R-Ga. That echoed remarks from House Antitrust Subcommittee ranking member Jim Sensenbrenner, R-Wis. Congress and enforcers should be careful to not overextend antitrust in ways that harm success and damage innovation, Sensenbrenner said. Collins said the tech investigation is what Congress “needs to be doing.” It will have accomplished something important if it can determine whether laws need updating or if agencies need Congress’ help to ensure vigorous enforcement. He noted continued work on his data privacy bill.

It has been decades since the FTC or DOJ brought a significant monopolization case in the tech sector, said House Judiciary Committee Chairman Jerry Nadler, D-N.Y. He worried “lax” deal enforcement can lead to excessive levels of concentration.

Also Wednesday, consumer groups asked the FTC to block Google/Fitbit. They cited market concentration and data privacy concerns. Open Markets Institute, the Center for Digital Democracy, Public Citizen, Electronic Privacy Information Center and Campaign for a Commercial-Free Childhood signed.

Simons also warned privacy legislation could harm smaller entrants, citing opt-in consent requirements. That drew skepticism from Rep. Joe Neguse, D-Colo., who asked if the agency has any empirical evidence to support the claim. Simons said studies are available but not from the agency. He said it’s possible internet users might not grant the same automatic consent to lesser-known brands.

Delrahim offered an insight into calculating data in transaction decisions. If there’s a deal, and there’s two data sets, and it shows one company could have “too much data,” DOJ could force a company to sell off assets, he said: The agency should be careful about forcing a company to share data just because it’s developed a dominant position.