Klobuchar, Cotton Competition Bill Latest To Pretend 'Big Tech' Is The Only Industry With Problems

Overhype

from the myopia-is-very-fashionable dept

So we’ve noted a few times that the recent Congressional fixation on “big tech monopolies” is weirdly myopic. As in, the United States is absolutely jam-packed with heavily monopolized sectors including banking, telecom, energy, and air travel that simply aren’t seeing anywhere near the same level of hyperventilation. While it’s true that giants like Facebook, Google, and Amazon are engaged in dodgy behavior at unprecedented scale, most of the “solutions” bandied about so far are oddly selective, sometimes harmful, and routinely performative.

For example, back in June we noted how the big “antitrust reform” bills being proposed in the Senate ignored entire industries and had major carve outs that didn’t make much sense. Several of the bills, for example, applied only to companies that made more than 50 million monthly active U.S. users and have a market cap of over $600 billion. They effectively ignored that countless other companies (Visa, Walmart) or industries (telecom) even exist, which is…odd.

Amy Klobuchar and Tom Cotton formally introduced their Platform Competition and Opportunity Act (the counterpart to a similar bill proposed in the House) last Friday. The bill, purportedly, helps thwart companies that capture and kill their competitors via acquisition:

“Big tech firms have bought up rivals to crush their competition, expand their market share, and to harm working Americans,” said Cotton in a statement. “Sen. Amy Klobuchar and I have a bipartisan bill to block these killer acquisitions.”

Existing antitrust standards require that regulators prove that a deal is anticompetitive if they want to block it. Given our fairly broken court system, significant corruption, and steadily eroded antitrust standards, that’s often ridiculously difficult even in obvious cases of harm. This bill would require that tech giants (and only tech giants) have to prove a merger helps competition before it will be approved. But there are a few problems with such a narrow focus. This aggressive destruction of competitors is how countless U.S. business sectors operate, but nobody is doing a damn thing about most of those.

The bill’s definition is so narrow it won’t even apply to sectors like telecom, where crushing competition via acquisition has been a 30 year favored pastime. Or companies like Target or Walmart, despite the fact they compete via the, you know, internet. The bill only applies to companies that as of the bill’s signing have a market cap of $600 billion, meaning that non “big tech” companies who grow overlarge later wouldn’t be covered. Which is, again, a weird thing to include if you’re genuinely concerned about corporate and monopoly power:

“Two companies that are currently under the $600 billion line and thus exempt from the bill are mega-retailers Target and Walmart. These companies are both worth hundreds of billions of dollars, and their e-commerce platforms are growing at a faster rate than Amazon’s. But under the Klobuchar/Cotton law, it wouldn’t matter if Target and Walmart overtake Amazon?they would be immune from this new antitrust action, as long as they are small enough on the day the bill is signed.”

Target is headquartered in Klobuchar’s home state (Minneapolis, Minnesota). Walmart is headquartered in Cotton’s home state (Bentonville, Arkansas). Surely that’s a coincidence, though.

So why are these proposals so weirdly narrow? In part because the only “monopolies” the discourse cares about right now are of the “big tech” variety. The few Democrats who do care about monopolization see an opportunity to leverage GOP outrage to push some fairly narrow bills under the idea that narrow and weird progress is better than no progress at all. The problem? The GOP’s beliefs on “antitrust reform” are hugely performative, and they historically never show up when it’s time to vote for actual reform.

The press and much of the discourse can’t admit it, but the GOP doesn’t genuinely care about monopolization or unchecked corporate power. There are 40 years of documented evidence showing how a primary party platform has been to enable and protect monopolies in the telecom, banking, and energy sectors.

That’s not to say that a lot of what Google and Facebook have been doing isn’t hugely problematic. The recent revelations of Google paying both wireless carriers and smartphone vendors not to compete in the app store space is pretty cut and dry. And the recently unredacted portions of the AG lawsuit against Google (oddly ignored under the din of Facebook news) also shows a company that was clearly and aggressively anticompetitive on the ad front. But again, most of these are behaviors the entirety of Congress are perfectly ok with across numerous other industries. We’ve done virtually nothing about, say, Comcast, for example.

But I’m not entirely sure that corrupt and gridlocked Congress, at least this incarnation of it, is actually capable of fixing any of these these problems in big tech or elsewhere. The bills we’ve seen so far offer some inconsistent help, but even here I’m doubtful that GOP and centrist Democratic policymakers have the stomach to support even piecemeal reform. I think we’ll see several years of posturing on “big tech,” followed by very few if any competent solutions out of Congress. Any change that arrives will likely come via lawsuit, the Lina Khan FTC, or in response to bad press. And given the limitations of all of those avenues, that’s probably not going to be enough.

Filed Under: amy klobuchar, antitrust, big tech, tom cotton