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Sen. Klobuchar Calls for Higher Antitrust Enforcement of Big Tech Companies

January 29, 2021 by Victoria Turner
U.S. Senator Amy Klobuchar (D-MN) makes a speech to the people who caucused for her during her caucus night party at the downtown Marriott Hotel on Feb. 3, 2020 in Des Moines. (Jack Kurtz/ZUMA Wire/TNS)

Big Tech is only “growing stronger” due to the pandemic and federal antitrust agencies need to “get serious about enforcement in the tech sector,” said Sen. Amy Klobuchar, D-Minn., during this week’s State of the Net Conference.

“We need that new pro-competition movement now because it’s competition between companies that gives consumers lower prices and forces manufacturers to constantly innovate, to improve their products,” she said as well as fair working wages and conditions.

Despite the positives of technological advancements, like the ability to work remotely or virtual medical consults during the global health crisis, the “downside” is that these technologies are “controlled by a handful of companies that have amassed unprecedented power,” she said, with these “gateways to personal data” raising concerns over personal data privacy, election security, and mass spread of disinformation.

A few companies are controlling the information people get and it’s on [the government] to make sure that it strengthens our democracy and not weakens it,” Klobuchar said, noting that the power these companies have allows for market domination, buying out their current or potential competitors, or take part in exclusionary conduct of their competitors.

With more consolidation on the rise, there’s a high risk of even higher post-pandemic market concentration and a lessening of competition, she said.

It’s a problem that threatens the strength and dynamism of our economy and it’s, without a doubt, a problem that plagues our tech markets,” Klobuchar said, noting that “Apple, Amazon, Microsoft, Google and Facebook have completed more than 700 acquisitions since 1987” despite many of these “[raising] significant concerns.”

While there has been an increase in antitrust enforcement against Big Tech in recent years, with the Department of Justice, Federal Trade Commission and a number of state coalitions bringing cases against Google and Facebook, enforcers are “not as sophisticated as the companies that we should be regulating.”

Antitrust law, the “primary tool for protecting competition,” has not been updated in the last decade, she said. With a new administration and a Democratic majority in both congressional chambers, the government is finally “well-positioned to make competition policy a priority.”

It is no secret that our increasingly conservative federal judiciary has become more antagonistic to antitrust enforcement, raising the procedural and evidentiary bar for government and private enforcement,” Klobuchar said, pointing to Supreme Court decisions like Ohio v American Express that could “cripple the effectiveness of the current antitrust laws to protect competition in digital platform markets.”

If we are going to wait 100 years for the court to fix it, that’s probably how long it will take,” she said, leading to her introduction of a number of bills seeking to bolster enforcement. Her package of bills aims to increase funding for antitrust agencies by increasing merger filing fees for deals worth more than $5 billion, in order to bring in the staff necessary to maintain enforcement activity, and “to update antitrust laws to help stop harmful consolidation.”

The bills she introduced are: the Merger Filing Fee Modernization Act, the Consolidation Prevention and Competition Promotion Act, the Monopolization Deterrence Act, and the Anticompetitive Exclusionary Conduct Prevention Act.

If we want our enforcers to be able to go toe-to-toe with the largest, most sophisticated trillion-dollar companies in the world, we shouldn’t force them to operate on a shoestring,” Klobuchar said, as neither agency is a “shadow of its former self” with the “jarring” enforcement staff reductions throughout the years.

The second bill aims to update the legal standard of the Clayton Antitrust Act, which prohibits anticompetitive mergers and conduct. The Clayton Act’s language has often been seen as vague, stating that acquisitions would be prohibited if the effect “may be substantially to lessen competition.”

Klobuchar’s bill would change “substantially” to “materially” and, for these “megamergers,” it would shift the burden of proof from the government to the merging parties. The update also prohibits monopsony-creating mergers, she said, which give the “company power to suppress prices it pays or wages it offers due to a lack of competition.” The bill would also require companies who entered into consent decrees – agreements of conditional approval between the government and merging parties – to provide enforcers with retrospective maker data to see the “actual competitive effects of the merger,” she said.

The monopolization determent bill would allow enforcers to seek civil fines. The latter capability is also included in the exclusionary conduct bill, which aims to prevent dominant firms from this anticompetitive conduct by having to “prove their exclusionary conduct doesn’t risk harming competition,” said Klobuchar, who will now be chairing the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.

I’m looking forward to finally having the gavel to be able to mark-up bills to be able to send them to the floor,” she said.

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