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Tech regulators put to the test

Illustration of a hand with a magnifying glass over a computer being scrutinized by a larger magnifying glass
Illustration: Sarah Grillo/Axios

The backlash against giant tech companies is stressing the public institutions tasked with examining their power, as participants, observers and critics question whether regulators have the skill, will and authority to check corporate forces.

Why it matters: The machinery of antitrust regulation will process the broader conversation about tech's role in society through the mill of American politics and law — and some wonder whether it's up to the task.

Driving the news:

  • The Federal Trade Commission’s investigations into alleged privacy violations at Facebook and YouTube have raised questions about whether it has the authority it needs to police privacy in the era of aggressive online data collection. Some legislators and observers criticized the FTC’s proposed settlement with Facebook last month for multiple consumer privacy issues as weak, given the scale of Facebook’s revenues.
  • Broad reviews at the FTC and DOJ of the market power of major tech platforms like Facebook, Google, Amazon and Apple may put to the test the agencies’ ability to rein in alleged monopolies using decades-old legal doctrine and century-old laws.
  • The Department of Justice’s decision to approve T-Mobile’s merger with Sprint, as long as Dish created a fourth-major wireless carrier, was seen by critics as inadequate to protect competition in the wireless sector.

Context: Regulators are grappling with a moment where people across the political spectrum are increasingly distrustful of large tech corporations and the men and women they’ve turned into billionaires.

  • Presidential candidate Sen. Elizabeth Warren (D-Mass.) has risen in the polls attacking a corrupt culture in Washington that benefits megacorporations and the rich.
  • Even the right is no longer driven by purely deregulatory impulses. A vocal and influential part of President Trump’s base is more open to cracking down on large online platforms than the libertarians who have traditionally driven tech policy among conservatives in Washington.

Flashback: Earlier this month, a White House draft plan surfaced that would, per CNN, narrow the shield protecting platforms from liability for users’ content.

  • The plan would throw the Federal Communications Commission into a hot political debate over political bias online by asking it to serve as arbiter of the key legal protections for vast online platforms, although it's unclear if that would be within the agency's legal authority.

The big questions:

  1. Are these agencies up to the task of policing the industry?
  2. For those who believe they are not, what should Congress do about that?

What they’re saying: Some lawmakers have raised the prospect over the past year of either giving the regulators more power — or reorganizing the whole system.

  • “If we need to reassign jurisdiction away from the FTC and give it to an agency that’s better suited to enforcement, then maybe we should do that,” Sen. Josh Hawley (R-Mo.) said last month before the agency’s settlement with Facebook was announced. “You look at their history of frankly dilatory or non-enforcement, it makes me wonder if they are better suited to an oversight role and not very well suited to an antitrust enforcement role.”
  • Officials at the Federal Trade Commission have told Congress they would welcome a new national privacy law that gives them more power.
  • And activists have said that the predominant view in antitrust law that monopoly cases should hinge on whether consumers have been harmed, often in terms of a price increase — which can make it hard to go after a free service like Facebook or Google — is outdated.

Yes, but: The FTC has said it is doing the most it can do with the powers Congress has granted it, and the leader of the Department of Justice's antitrust division said last year that "there are serious risks to democracy in abandoning" the current standard.

What's next: The 2020 presidential election is likely to put corporate power — from tech to healthcare — in the spotlight.