Antitrust

Big Tech Is Just the Beginning: House Dems Seek Major Changes to Antitrust Law

Enforcement is supposed to be about protecting "consumer welfare." Overturning that goal would be bad for all of us.

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Last week, Democrats on the House Subcommittee on Antitrust released their much-ballyhooed report on competition in tech to great fanfare. It's a beast of a crie de couer, clocking in at 449 meandering pages of disputations on the power (but not so much the efficacy) of big tech companies. To absolutely no one's surprise, antitrust hawks love it while antitrust doves (and the targeted companies) are picking it apart.

There was a minor subplot involving Republican subcommittee members splitting into two slightly differing dissenting reports, with ranking member Rep. Jim Jordan focusing on censorship against the outer party and Rep. Ken Buck offering a "third way" of marginal reforms (data portability, more merger scrutiny, more funding for regulators) that fall far short of the Democrats' proposed radical antitrust overhaul. But for the most part, the reports didn't break new ground (or really, much new news) beyond underscoring battle lines with a thick permanent marker.

Here's what the Democrats want: to remove "the narrow construction of 'consumer welfare' [e.g. effects on prices and quality] as the sole goal of antitrust laws" with legislation that would be designed to protect "workers, entrepreneurs, independent businesses, open markets, a fair economy, and democratic ideals" through a grab bag of new prohibitions on specific practices like mergers.

That might sound nice to many. The problem is that protecting workers can mean not protecting entrepreneurs (or vice versa) depending on the case and the judge. And what is a "fair economy"? What are "our democratic ideals"? "Open markets"—a term favored by both George Soros and Charles Koch (do they agree)? Would any two Supreme Court justices—let alone our army of lower court judges—come up with the same definitions?

A great strength of the consumer welfare standard is that it's, well, a standard. Some of us are workers, some of us are entrepreneurs, some of us own businesses, but we are all consumers. Setting the most inclusive group as the focus of attention removes the potential for inconsistently biasing exclusive groups.

You can measure economic changes. How do you measure democratic ideals? This is why critics say the Democrat plan would "politicize antitrust"—the proposed system introduces judicial subjectivity that could empower enforcers to effectuate social agendas through antitrust. Indeed, some antitrust hawks proudly admit this is the point.

Where the Democrats have been in lockstep, the Republicans have been a bit schizophrenic. It's easy to see why. On the one hand, Silicon Valley has no love for the GOP. Executives from the firms now under antitrust scrutiny had a bit of an open-door policy with the Obama administration (and vice versa). Needless to say, those chummy visits have stopped under the Trump administration.

On the other hand, the consumer welfare standard that is in the Democrats' crosshairs is arguably the greatest legal victory of movement conservatism. Republicans don't say it very forcefully, but departing from the consumer welfare standard would empower the courts with a broad grant of arbitrary power over the economy—much of which could be used to promote Democrat party priorities like climate change regulation, quotas, and income redistribution. It makes sense that Republicans would oppose this, even if they don't well articulate exactly why.

It's not as straightforward to see why the Democrats of all people are going after big tech in particular. Silicon Valley is a major Democrat support center. Their employees vote Democrat, they support other planks of the Democrat agenda, and many are personal friends of Democrat leaders. Why not go after another big business bogey—the healthcare industry (only slightly more Democrat leaning) or energy companies (mostly in the hole for Republicans)? What political sense does it make to "split up" or weaken the companies that reliably support your party?

Actually, the antitrust investigations against big technology companies are already snaking their way through the system. The Department of Justice could announce its big suit against Google any day now. Other cases against Amazon, Apple, and Facebook are in early stages among DOJ and the Federal Trade Commission (FTC). State attorneys general have their own legal efforts as well.

It is unlikely that the Supreme Court would overturn even one of the dozen or so precedents the Democrats singled out for axing before all of these cases have concluded, let alone that Congress could get its act together to pass major partisan legislation rendering those decisions moot in this climate. Will the election give Democrats more of an edge in the Senate (and perhaps the Supreme Court)? Maybe. But overturning the consumer welfare standard will have to be a longer-term play.

Looking at the bigger picture, this antitrust push is probably not only about "big tech." These tech companies just happen to provide a good excuse to make changes to antitrust that the left has wanted for a long time.

Some of the companies under scrutiny don't actually charge prices to users. They do charge prices to advertisers, and there is a good deal of competition there, but this kind of two-sided market does require new considerations about how to consistently apply the consumer welfare standard. If you don't like the antitrust jurisprudence in general, this is a great pretext to say "it doesn't work, away with it all!" and push through a more precautionary antitrust regime.

It's unfortunate that tech companies are the camel's nose being used to promote an unraveling of U.S. antitrust law. It may ultimately end up disappointing even those who think big tech should be reined in but otherwise desire a strong U.S. economy. For instance, these particular tech companies could end up far short of being "broken up" (and still quite left-leaning) while everyone else still becomes subject to the expanded prohibitions and punishments of the Democrats' proposed antitrust regime.

Take a look at the FTC's list of competition enforcement actions. You probably don't recognize many of the companies involved. Big companies' cases get a lot of media airtime, but competition law applies to everyone—under an expanded antitrust regime, a lot more company names will be on that list. Empowering government agents to preemptively determine what a "fair economy" (or whatever) looks like and punish random companies who violate those subjective norms does not bode well for economic vitality.

This is the whole reason that the consumer welfare standard emerged in the first place: before it, you had judges going after Utahn frozen pie makers for selling cheaper lemon meringue than the former market leader. Consider our hyperpolitically charged atmosphere. Returning to the unfocused antitrust environment that produced such bizarre old pie-jinks would today come with the bonus of contemporary hot-button social issues. Does this sound like a great environment in which to live and do business?

The House Democrats pose as FDR-style populists, holding power to account on behalf of the forgotten man. They often quote Justice Louis Brandeis: "We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both." Because we all know that the Democrats are famously hostile to moneyed interests. This is why you see decidedly non-moneyed interests like the senior chairman of Goldman Sachs enthusiastically endorsing the House report on CNBC. Republican populists would do well to point these things out.

NEXT: No Preliminary Injunctions Against Libel

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  1. Republicans don’t say it very forcefully, but departing from the consumer welfare standard would empower the courts with a broad grant of arbitrary power over the economy—much of which could be used to promote Democrat party priorities like climate change regulation, quotas, and income redistribution. It makes sense that Republicans would oppose this, even if they don’t well articulate exactly why.

    It makes sense intrinsically that Republicans would oppose it not just confrontationally, but on prinicple. Still, for good measure they say they’re going to oppose it anyway and, when they do, Sullivan and Reason, the ramrod-straight backers of all things free-minded and fiscally principled will stand and yell back at them “I can’t hear you!”

    GTFO out of here with your ‘Republicans aren’t opposing this loudly enough’ bullshit. You held your elections yesterday, Biden won. Your team is pushing the reforms and you’re chastising the opposition for not working hard enough to stop you.

    1. Likewise he mentions the current DoJ actions against anti-trust. From what I’ve read these investigations are fairly normal form an anti-trust standpoint, focusing on anti competitive actions such as the practice of SV collusion to keep out competitors (when SV companies collude to deny services to disfavored political entities as an example), buy and kills, unconscionability with their ToS, etc. These are all normal avenues for anti-trust actions.

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    2. Republicans don’t say it “forcefully enough” like that means anything. It is just fucking pathetic.

      1. Trump is too blunt and bombastic with his forceful rhetoric. Republicans are too timid with their lack of forceful rhetoric.

        It’s almost as if libertarianism is nothing but Marxism and always has been.

        1. No, I think I know what they mean. They’re saying Republican politicians don’t sound like eggheads talking down to their constituents telling them what’s good for them.

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  2. “Protecting democratic ideals” generally means protecting Democrat politicians and their narrative from scepticism and dissent. Which Big Tech has largely obliged, such as quashing reports on scientific research that dissents from the CDC and WHO lines on COVID.

    1. Which Big Tech has largely obliged, such as quashing reports on scientific research that dissents from the CDC and WHO lines on COVID... socialized medicine, vaping, flu shots, AGW, CRT, transgender mutilation hokum, dietary fats…

  3. I would be much more comfortable with the upcoming democrat-controlled government if they didn’t have a vendetta against every successful person based on the assumption that success itself is unfair and evil.

    1. The Democrats are going to lose this election. There won’t be a democrat-controlled government for the next four years at least.

  4. “…That might sound nice to many…”

    The “many” who have never read any history of the 20th century, and, sadly, it seems that is “many”.

  5. A great strength of the consumer welfare standard is that it’s, well, a standard.

    No, it’s not. It has acquired a patina of “standard”, only because everyone has been so brainwashed by stare decisis that they’ve forgotten how that non-standard was twisted from nothingness and vagueness into the uncommon law of today.

    Legislators and prosecutors and propagandists made “consumer” and “welfare” mean whatever they wanted it to mean, depending entirely on whose ox they wanted to gore and how friendly the oxen were to the party and faction in power. There are no natural monopolies; all actual monopolies are the result of government intervention in markets. Favoritism creates monopolies, and unfavoritism destroys whatever it wants to deem a monopoly, usually leaving real government-created monopolies in place while devastating their competitors, because once created, monopolies are a reliable source of campaign funds and appreciative unions telling their workers how to vote.

  6. What’s the libertarian rationale for anti-trust law in the first place?

    1. But on a much more serious note, it allows you to uninstall Internet Explorer 4.0 from Windows 95.

    2. What makes you think there is?

      What’s the libertarian rationale for …. zoning, occupational licensing, minimum wage laws, rent control, any other economic meddling?

      1. I know, right?

        So focusing on the food fight between Team Red and Team Blue over who can use anti-trust law the best for grandstanding seems to miss the point here.

        1. Now let’s hear you piss and moan about how we need net neutrality because Comcast is a monopoly you utterly mendacious piece of fucking shit.

        2. Perfection is the enemy of good enough.

          Are you proposing we not keep in touch with what the evil ones are doing?

          Are you proposing we not push for any changes because none are perfect?

    3. Perhaps as a rarely used corrective to the natural inclination for big money and politicians to reach into each other’s pockets.

      It can be true that no monopoly can naturally exist without government assistance and that monopolies will always form where ever politicians need money and businesses with money have a need for government manipulations.

      Anti-trust may be the balance and check on that inclination.

    4. Monopolies and oligopolies are usually realized as a result of regulatory capture or direct designation by the state, and they harm consumers and society by exploiting a privileged position obtained by force, fraud, and/or rent-seeking.

      Did you have any other utterly retarded questions to ask you Marxist bootlicking authoritarian fuckstain?

      1. It’s obviously nap time for you again.

        1. Yes, I know that I snapped your idiotic faux-argument off in your asshole and you have absolutely no retort. Thank you for confirming this publicly. Please continue to do so.

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  8. the proposed system introduces judicial subjectivity that could empower enforcers to effectuate social agendas through antitrust.

    “The left want the same thing everywhere, and in the same order.” –Douglas Murray

  9. Big tech is the constant integration and combination of data from different, disparate system. It’s much more difficult to do such a thing when every data source and system is owned by a different entity. Ending big tech in this manner would mean an end to the efficiency and integration of things that we have enjoyed for the last 15 years.

    1. Similarly, I doubt we’d ever have completed the transcontinental railroad without a monopoly to buy and be able to macro manage a giant project and all the little things that have to collude to that end goal.

  10. Antitrust law has never been enforced for the good of consumers and even if it were, it could never serve the good of consumers. No such law ever could.
    All antitrust law should be repealed immediately.

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