DOJ backs bills that could kneecap Big Tech
The Justice Department endorsed House and Senate bills Monday that would keep the biggest digital platforms like Meta, Google, Apple and Amazon from giving preferential treatment to their own products.
Why it matters: Support from the Biden Administration's DOJ gives the bipartisan bills a boost, and shows that the department thinks they can be enforced and help boost tech competition in the U.S.
The big picture: "The fact that the DOJ’s regulatory goals are consistent with the Hill show the seriousness of the DOJ’s antitrust concerns in the technology sector," Jeffrey Jacobovitz, senior counsel at law firm Arnall Golden Gregory LLP and former Federal Trade Commission attorney, told Axios.
Driving the news: The Senate Judiciary Committee approved its bill, the American Competition and Innovation Act, in January. A companion bill awaits full House approval.
- News of the DOJ letter was first reported by the Wall Street Journal.
Yes, but: The bills still have to pass the full Senate and House, and face a packed congressional agenda along with bitter partisanship.
- “It’s always helpful to know where the DOJ stands on competition legislation, but it’s not obvious that this letter will change the legislative dynamics in Congress around the bill," Daniel Francis, former deputy director of the FTC competition bureau and a lecturer at Harvard Law School, told Axios.
What they're saying: "The Department views the rise of dominant platforms as presenting a threat to open markets and competition, with risks for consumers, business, innovation, resiliency, global competitiveness, and our democracy," the letter, signed by acting assistant attorney general Peter Hyun, reads.
- "If enacted, we believe that this legislation has the potential to have a positive effect on dynamism in markets going forward," Hyun writes, and that the DOJ "looks forward to working with Congress to ensure that the final legislation enacted meets these goals."
The other side: Tech companies and their defenders have called the bills discriminatory and argued that they would hurt privacy and security, along with taking away services consumers enjoy.
- "With the midterms looming, we know that voters aren't pining for Democrats to break Amazon Prime or Google's search results," Adam Kovacevich, CEO of pro-tech group Chamber of Progress, told Axios.
Meanwhile: Last week, Europe pushed ahead with a proposal, the Digital Markets Act, that would ban many of the Big Tech behaviors outlined in the U.S. bills.
- Tech lobbied hard against the Digital Markets Act, but was ultimately unsuccessful.