Senate Democrats, Republicans Target Big Tech Favoritism

Google and Apple are using their app store monopolies to favor themselves, resulting in lower quality for consumers, Senate Antitrust Subcommittee Democrats and Republicans agreed during a hearing Wednesday.

Ranking member Mike Lee, R-Utah, likened some of Big Tech’s dominance to a stock exchange owner participating as a broker in the same market. Chair Amy Klobuchar, D-Minn., plugged her Open App Markets Act (see 2108110055). Sens. Richard Blumenthal, D-Conn., and Marsha Blackburn, R-Tenn., introduced the legislation with Klobuchar. Lee isn’t a sponsor, but the bill has support from Sens. Lindsey Graham, R-S.C., Marco Rubio, R-Fla., and Cynthia Lummis, R-Wyo.

Congress must act now to protect American innovation and competition, said Klobuchar. She urged support for her bills with Sen. Tom Cotton, R-Ark., and Senate Judiciary Committee ranking member Chuck Grassley, R-Iowa. She introduced the Competition and Antitrust Law Enforcement Reform Act (see 2111050044) with Cotton and the Merger Filing Fee Modernization Act with Grassley (see 2012070059).

There’s no regulatory context to deal with the online display advertising market, said Notre Dame law professor Roger Alford, who consulted for Texas in its antitrust lawsuit against Google. Antitrust law is “doing all the work” now, said Alford. One possible solution is imposing conflict of interest restraints like those in financial markets, he said: For example, a company can’t own the New York Stock Exchange and be a monopoly player on the exchange as a broker.

The breakup of AT&T was the most significant antitrust action in the past few decades, said Senate Judiciary Committee Chairman Dick Durbin, D-Ill. Seven subcommittee hearings on antitrust show the importance of protecting competition, which leads to innovation and lower prices, he said.

Limitations put on competition by large tech platforms are reminiscent of AT&T, said Eric Migicovsky, founder of the messaging app Beeper. He cited Apple’s and Google’s app store control. The best founders start their companies to beat the tech giants, not to be bought out, said Migicovsky, who also founded Pebble, a smartwatch company. That company was sold because it “ran out of money,” not because it was the goal to sell to a giant competitor, he said. The app store legislation would go far in leveling the playing field for startups to compete, he said.

Apple and Google have “total control” over what apps consumers can buy and download, said Blumenthal. He raised concerns about the two caving to authoritarian regimes like China, noting Apple removed The New York Times app after critical stories against the Chinese government, calling that “abhorrent” to U.S. values. Congress should target discriminatory conduct through legislation to ensure it’s looking at all potential companies that could grow into behemoths in the next three to five years, said American Antitrust Institute President Diana Moss.

Big tech companies are using their monopoly power to favor themselves, which harms small businesses, said Grassley. The Iowa Republican also claimed Silicon Valley is silencing “conservative voices.”