House antitrust bills take tight aim at tech giants
The sweeping antitrust bills House lawmakers introduced Friday don't just propose broad new principles of digital-age competition — they put giant bullseyes on the backs of Google, Facebook, Amazon and Apple.
Why it matters: Laws crafted now to tie the hands of today's dominant companies will still be on the books for years and decades to come, and critics are already flagging possible unintended consequences.
The big picture: The foundational U.S. antitrust laws were shaped over 100 years ago to bust monopolies like Standard Oil that dominated the economy.
- Lawmakers and critics fear their bundle of rules and precedents no longer protects competition in the digital era.
- The Microsoft antitrust battle 20 years ago showed how tough it was to apply these old laws to a world of software and platform competition.
Details: The new bills apply to companies that have a market capitalization of $600 billion or more and at least 50 million monthly active US users or 100,000 monthly active U.S. business users.
- That's most clearly Apple, Amazon, Facebook and Google. Some aspects of the bills could also apply to Microsoft.
- To be covered by these bills, companies also have to function as "critical trading partner for the sale or provision of any product or service offered on or directly related to the online platform." This would, for instance, include the roles Google and Apple play managing their app stores, or Amazon's relationship to its third-party sellers.
Yes, but: Today's definition of a "giant tech company" may become meaningless in short order.
- The term "monthly active users," which is of recent vintage and has varying definitions, could easily lose its usefulness as a measure of a service's popularity.
- Over time, the $600 billion market cap limit could also end up covering many more companies, thanks to inflation and the impact of future investment bubbles.
- Today's online platform model dominates the industry, but it's only a couple of decades old, and tech could evolve in a wildly different direction over the next two decades.
What they're saying: "It's OK for people to think that a certain kind of business practice is unethical, unfair, not currently illegal but should be illegal," Alec Stapp, director of tech policy at the Progressive Policy Institute, told Axios. "And that's obviously a perfectly reasonable debate to have. But it doesn't make sense to say it should only be an illegal business practice when an extremely large tech company does it."
The other side: "We are at a time now where individual big tech companies are actively harming our economy, democracy, small business and consumers," said Jane Chung, who works on big tech accountability at consumer rights group Public Citizen. "It's a threat Congress can't afford to ignore any longer."
- "There's plenty more we have to do to even the playing field, but I think it was really important to call out the most egregious behaviors, and egregious kind of impediments to a fair economy, right now," she said.
Our thought bubble: The House bills are backward-looking, aiming to solve problems created by the rise to dominance of today's industry's giants. By zeroing in narrowly on their specific targets, these proposals may lack the flexibility and breadth to handle new challenges to competition that the rapidly changing tech world will inevitably develop.
What's next: The introduction of these bills begins a long legislative process that could end in the enactment of some of their provisions in coming years. Given Congress' current deadlocks, they are just as likely to go nowhere.