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Why the five antitrust bills aimed at big tech is necessary

In this article:
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Charlotte Slaiman, Public Knowledge Competition Policy Director, joins Yahoo Finance to discuss lawmakers taking aim at big tech.

Video Transcript

ALEXIS CHRISTOFOROUS: Switching now to politics and Big Tech, looks like lawmakers are definitely taking aim at Big Tech, a bipartisan group of House lawmakers. Introduced five bills last week, targeting Amazon, Facebook, Google, and Apple. Here to talk about it is Charlotte Slaiman, policy director at Public Knowledge Competition. Charlotte, thanks for being here. So before we really delve in, why don't we just break down for people who don't know and don't read the ledger the legislation on the books what those five bills, if they do indeed become law, what might they do to those Big Tech companies? How might they regulate them or restrict what they can do?

CHARLOTTE SLAIMAN: Great. Yeah. So the first bill is just giving more funding to the antitrust enforcement agencies, the FTC and DOJ. Next, it's going to require that they offer interoperability. So it's not something they have to stop doing. They have to start offering interoperability to their competitors and potential competitors. They will have to stop anti-competitive discrimination against competitors and potential competitors. And they'll be very limited in the types of acquisition that they do.

The last is a tool for the antitrust enforcement agencies to put line of business restrictions when there is a conflict of interest, so that a company can't own two businesses where there's a conflict of interest.

- Now, the FTC and other regulatory agencies have been fairly toothless, I should say, in the past in terms of regulating some of these Big Tech companies and then punishing them if they do decide that they have overstepped. How much do these bills really go to give those agencies the power to effectively regulate some of these Big Tech companies? And what more power do you think that they might need going forward?

CHARLOTTE SLAIMAN: Yes. This will make a big difference for the antitrust agencies' ability to address the problems that we're concerned about with these companies. I think there have been serious limitations to how antitrust law can address the power of these companies because of particular ways that platform markets operate. It's been really difficult for antitrust enforcers to identify what are the potential competitors that are going to really pose an issue here.

And so some mergers have been left through. Some conduct has been allowed that I think would have been really difficult to stop in the courts given current law. So having these new laws that are focused just on these companies will really allow the agencies to open up these markets for competition, which I think is what we absolutely need.

ALEXIS CHRISTOFOROUS: Do you think that down the road and possibly even on President Biden's watch, we could see one of those Big Tech companies actually get broken up?

CHARLOTTE SLAIMAN: Yes, it could happen. There are these other tools that I think enforcers would probably use first. But I think there absolutely may be situations where non-discrimination is not sufficient, and those conflicts of interest are really pernicious, and a company may need to be broken up. So this legislation would give enforcers that tool.

- Now, Charlotte, just as a historical lesson, some of the antitrust bills that were aimed back at Microsoft back in the '90s actually enabled some of the companies that we're talking about right now to really rise, and grow, and become as huge as they are. Are there any concerns at all about the broader impact, especially decades from now, that some of these bills might have?

CHARLOTTE SLAIMAN: So I think your example is a great one, right? It shows the power that pro-competition laws can have. If these laws are successful, I really think in the future, we'll see more competition, more innovation. And hopefully, we'll see some different companies bringing a great idea to market that today is too difficult because of the powerful position of these platforms.

ALEXIS CHRISTOFOROUS: How comprehensive though do you think these five bills are? Are there areas that they are just not touching on, that they are ignoring, things that you would have liked to see included in these bills?

CHARLOTTE SLAIMAN: Well, they are quite comprehensive. But I do think the next step will be to create a new agency that is focused on dominant digital platforms. That can take care of some of the other concerns that we have. Privacy, in particular, comes to mind. An area that we've been really hoping that Congress will legislate. I think that competition can really help with some of those problems, but that we are also going to need additional legislation, something focused on privacy. And also having a new agency that can more comprehensively regulate these firms. Those are sort of the next steps that we're looking forward to after this legislation.

- Let's talk some of the criticisms of these bills, namely from the companies, particularly ones like Amazon, for example. They keep saying that these bills are essentially going to negatively impact consumers. That we're going to see prices rise on platforms, for example, like Amazon. What do you say to some of those criticisms that these bills are actually, in the long run, going to negatively harm folks like you, myself, Alexis, and others that are going shopping online or using Facebook to connect with family and friends?

CHARLOTTE SLAIMAN: Right. I don't think that's right at all. I think what we are seeing right now is an environment where there is very little competition against these companies. And so they are able to do what is best for them, instead of what is best for consumers. What these bills are really targeted at is opening up competition, so that consumers will have a choice. And if you see a better price somewhere else, that there would be an alternative for you to go to.

Or more importantly, if you're unhappy with the policies that the company is using. If you're not happy with how Facebook is treating your privacy, or if you're not happy with how Facebook is treating misinformation, you can choose an alternative. You would have an alternative that you could go to without the difficulties, what we call barriers to entry, that companies are facing right now with trying to get started in these really difficult markets.

ALEXIS CHRISTOFOROUS: I want to go back to the notion of one of those or more of those tech giants being broken up. Who do you think we might see that happen to? Remember Microsoft, the government tried to break up Microsoft years ago. And that really went nowhere. So is it feasible, and if so, for which company?

CHARLOTTE SLAIMAN: Right, so that's why we need new laws, right? I think the Microsoft example again is a great example. Another one that we think about is the breakup of the Bell System and AT&T much longer ago. It required a lot of action from an agency. It required action from Congress to really make that happen. And so that's the first step of I think what's happening here.

In terms of which company may be broken up, I think it really remains to be seen, right? There are these other tools that are also being given to the agencies that they're going to start with and see how that goes. See if non-discrimination is able to address these problems. When we find out the areas that are not being sufficiently addressed by the new laws, I think that's really the place where one of these break-ups would be necessary.

- I want to just quickly ask you before we let you go, what you estimate is really the likelihood right now. And I know there's been some bipartisan support for some of these bills. But the actual likelihood that the full slate of bills is actually going to get passed?

CHARLOTTE SLAIMAN: Well, it's always difficult to pass legislation. So let's start with that. But really, in the sort of scheme of what might pass through Congress, the fact that these are bipartisan bills and the fact that they come from the chairman and a ranking member of the relevant subcommittee, the antitrust subcommittee, is a really good sign for their ability to pass. So I think people really need to take this seriously. There is a good chance that they could pass. And it's really going to change the conversation moving forward, that these ideas have so much bipartisan support from such serious members of Congress.

ALEXIS CHRISTOFOROUS: All right, we're going to leave it, there to be continued for sure. Charlotte Slaiman of Public Knowledge Competition, thank you.