Experts See Partisan Divide Over House Judiciary Tech Probe

The House Antitrust Subcommittee’s hearing with Big Tech CEOs showed a glaring partisan divide, so it’s unlikely the Judiciary Committee will deliver a bipartisan report, antitrust attorneys told us. Public Knowledge is more hopeful: Policy Counsel Alex Petros said both parties delivered well-researched claims against the industry at the hearing (see 2007290063). Attorneys said the evidence focused more on harm to competitors, rather than consumers, which doesn’t make a strong case.

It went “as well as possible” for the CEOs, said International Center for Law & Economics Competition Policy Director Sam Bowman. A bipartisan report would be very damaging to industry, but ranking member Jim Jordan, R-Ohio, and House Antitrust Subcommittee ranking member Jim Sensenbrenner, R-Wis., signaled a lack of overlapping interest with Democrats, he added.

Having four high-profile witnesses diluted the subcommittee’s ability to probe deeply, said Labaton Sucharow's Jay Himes: The panel wound up with a high overview of the industry, a suboptimal result. He stopped short of calling it a win for the CEOs but said it wasn’t a loss. The report could be far more damaging, he said, though he would be surprised if there’s a plan of action from both political parties. The investigation got support from both sides of the aisle initially because fact-finding isn’t controversial, Himes said: How Republicans approach the matter will depend on how much pressure President Donald Trump puts on Congress.

Antitrust Subcommittee Chairman David Cicilline, D-R.I.; Rep. Pramila Jayapal, D-Wash.; and Rep. Mary Gay Scanlon, D-Pa., demonstrated a good grasp of antitrust issues, Petros said. Jayapal made a point that many members don’t seem to grasp, Bowman said: That the goal of antitrust law is to ensure there are more Apples, Amazons and Facebooks to compete. There wasn’t much hard evidence of consumer harm, which is the basis for U.S. antitrust law driven by the consumer welfare standard, said antitrust attorney David Balto.

Petros noted that Reps. Kelly Armstrong, N.D., and Matt Gaetz, Fla., offered some antitrust claims while other Republicans focused on bias. Jordan is clearly hostile toward the industry, but he showed zero interest in working with Democrats on their antitrust issues, said Bowman: “That’s positive for the tech companies.”

The hearing was historic, said Hausfeld's Scott Martin: Four corporate chiefs and $5 trillion in combined market value brought together before Congress. “There's no hearing to compare,” he said. He agreed a legislative effort to adjust antitrust laws is more likely than a wide-reaching antitrust case from the U.S. government. He also noted claims were more focused on competitors than consumer harm.

There’s a degree of ambiguity about whether consumers are harmed and whether there’s an antitrust solution, said Balto. Google chief Sundar Pichai and Amazon's Jeff Bezos did a good job arguing consumers weren't harmed in any of the instances lawmakers cited, he said. The claims against Apple’s App Store are more debatable because there’s a direct impact on price, he argued.

Balto expects Republicans and Democrats to offer two different reports, the former focusing on claims of bias, the latter on competitive harm. Lawmakers did a credible job presenting their evidence, but enforcers probably reviewed all the information presented at the hearing previously, he argued. All the claims are already well-known within antitrust circles, said Himes.

The investigation shows Congress is getting serious about the issues, Petros said. Congress wants the U.S. to step up and follow the lead of antitrust enforcers globally, Himes agreed. There have been three European Commission cases against Google, an ongoing German case against Facebook, and an Australian push to challenge Google’s scraping of news content, he noted. The U.S. has mostly been silent aside from this investigation, Himes said.