Antitrust

Anti-Tech Antitrust Bill Draws Criticism From All Sides

Plus: CBD could prevent COVID-19, gun owner privacy is at risk in California, and more...

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sipaphotostwelve796823 | Graeme Sloan/Sipa USA/Newscom
(Graeme Sloan/Sipa USA/Newscom)

A slapdash antitrust bill in the Senate has drawn criticism across the political spectrum. Unfortunately, it's also drawn support from both major parties, as Democrats and Republicans compete to see who can stick it to Big Tech more.

The American Innovation and Choice Online Act, which passed a Senate committee vote yesterday, is the brainchild of Sen. Amy Klobuchar (D–Minn.). And boy does she refuse to bother with any pretense of a plot other than punishing a few tech companies.

Historically, antitrust law—which theoretically prevents unfair and monopolistic business practices—has been concerned with particular actions (say, price fixing) and whether these actions harm consumers. This new bill ditched both planks.

Instead of covering all businesses that might engage in a prohibited behavior—in this case, giving preferential treatment to one's own products—it's targeted squarely at a few companies concentrated in one industry. Companies outside this realm (including big-box retailers like Walmart and Target) wouldn't have to play by the same rules.

The bill also rejects the idea that the point of antitrust law enforcement is to protect consumers. Myriad people have pointed out that the bill could cripple some products consumers love and get to use for free, or lead to higher prices on certain consumer goods. But supporters of the bill have balked at the idea that this is a problem—because their goal isn't protecting consumers, it's punishing a few disfavored companies.

See, for instance, onetime supporter of tort reform Sen. Ted Cruz (R–Texas) now championing a private right of action to sue tech companies if they preference their own products. See Amazon promoting its own brand of batteries? Make it a matter for federal courts! Sigh…

Or Sen. Josh Hawley (R–Mo.), who makes no bones about his desire to target Big Tech companies specifically.

To be clear, the bill doesn't actually name certain companies. But it's structured in such a way that it will only apply to a few major tech companies, and political rhetoric around it has been all about the dangers of Big Tech.

The targeted nature of this bill alone should be enough to make us all wary—no matter your feelings toward Google, Apple, etc., it's a slippery slope to let Congress write legislation specifically targeted at companies it doesn't like. But there are lots of other reasons to oppose the American Innovation and Choice Online Act, too.

I've written about some of the bill's flaws previously. More thorough rundowns and particular complaints can be found from Americans for Tax Reform, Free Press, R Street Institute, the Springboard Initiative, the U.S. Chamber of Commerce, American Action Forum, TechFreedom, the American Enterprise Institute, the Taxpayers Protection Alliance, and the Information Technology and Innovation Foundation.

At yesterday's markup, "15 senators, from both parties, expressed concerns about privacy, security, data transfers to China, the discretion afforded the FTC, and the effect on small business and consumers," notes Asheesh Agarwal, an advisor to the American Edge Project. "Many complained about a lack of a hearing as they tried to iron out concerns for the first time."

"The craziness of the internet works pretty well because things are integrated and smooth. …some of that important integration is self-preferencing. When I use Google search to find a restaurant, a map seamlessly pops up. That benefits me as a consumer. When I buy goods on Amazon, they will automatically pick the one that is eligible for Prime. That'd be illegal," noted Kennesaw State University professor Brian Albrecht.

One section of the bill "would make it difficult or impossible for covered companies to remove from their sites any biz that traffics in hateful or otherwise harmful content," tweeted Nora Benavidez, director of digital justice and civil rights at Free Press. "Ripe for abuse down the line and I worry about how state AGs or future FTC officials will respond."

The bill could easily "be weaponized against content moderation, especially by a highly politicized [Federal Trade Commission]," warn the folks at TechFreedom. "It opens the door to litigation over whether Daily Stormer, Breitbart, etc. should rank higher in newsfeeds," noted Stanford's Daphne Keller. 

At yesterday's Judiciary Committee markup of the bill—for which 107 amendments were filed—some senators complained about the lack of previous hearing on the bill and worried about the effect it would have on small businesses and user privacy, among other things.

The legislation "is specifically designed to target a small number of specific companies, most of which are headquartered in my home state," commented Sen. Dianne Feinstein (D–Calif.). "It's difficult to see the justification for a bill that regulates the behavior of only a handful of companies while allowing everyone else to continue engaging in that exact same behavior."

Feinstein also was concerned that "requiring companies to take down protections that are in place today and instead allow hackers and those looking to steal personal data to access the devices." (More on security concerns here.)

Sen. Mike Lee (R–Utah) said the bill would wreak too much "collateral damage" and "may actually entrench the very four companies at which it is aimed by creating a strong incentive to simply cease doing any business with third parties. This could crush thousands of small businesses, and it could actually worsen the state of competition in online markets."

But despite strong skepticism from some committee members, the bill passed out of the Senate Judiciary Committee in a 16–6 vote—with Feinstein ultimately voting for it. Lee voted against it, along with Sens. John Cornyn (R–Texas), Ben Sasse (R-Neb.), Tom Cotton (R–Ark.), Thom Tillis (R–N.C.), and Marsha Blackburn (R–Tenn.).

Several amendments to the bill were made, including stipulations that would ensnare TikTok and WeChat along with popular American tech companies.

It will now go to the full Senate.

FREE MINDS

"CBD has the potential to prevent [COVID-19] infections," according to the author of a new study on COVID-19 and cannabidiol (CBD), the nonpsychoactive compound in cannabis. More from Vice:

As detailed in a paper published Thursday in the peer-reviewed journal Science Advances by a team of 33 researchers at the University of Chicago and University of Louisville, a survey of 1,212 U.S. patients taking prescribed CBD found that people taking 100 milligrams-per-milliliter oral doses of CBD returned positive COVID-19 tests at much lower rates than control groups with similar medical backgrounds who did not take CBD.

According to the study, all of the patients were people who had seizure-related conditions, which CBD is often prescribed to treat. Of this group, 6.2 percent returned positive COVID-19 tests or a diagnosis, compared to 8.9 percent in the control group. Among a smaller subset of patients who were likely taking CBD on the dates of their first COVID-19 test, the effect was even more pronounced: Only 4.9 percent of people taking CBD became infected with COVID-19, compared to 9 percent in the control group.

You can find the whole study here.

FREE MARKETS

Gun owner privacy is threatened in California. Courthouse News Service reports:

Finding there was no "emergency" to warrant restraining California from sharing millions of gun owners' personal information with gun violence researchers, a federal judge Wednesday declined to block the state's enactment of Assembly Bill 173.

U.S. District Judge Larry Alan Burns heard from attorneys for Jane and John Does and Attorney General Rob Bonta regarding a constitutional challenge to Assembly Bill 173, a law which amended California firearms laws to authorize the attorney general to disclose gun owners' personal information to the California Firearm Violence Research Center at UC Davis and any other "bona fide research institution" meeting certain requirements.

Gun owners' personal information — including their name, address and age — is collected with every firearms sale in California and entered into the "Automated Firearms System" database.

Reason's Brian Doherty wrote about this issue back in September, when Gov. Gavin Newsom signed A.B. 173 into law.

QUICK HITS

• "Biden gets a D Minus on Arming Authoritarians in The Middle East," notes Spencer Ackerman:

A year after Biden's inauguration, the Forum on the Arms Trade has graded his administration's record on arms exports and related select weapons-trade issues. A grade of C, for instance, means "no net change to pre-existing policy that was middle of the road." A grade of D is a "net decline to pre-existing middle-of-the-road policy or failure to improve dangerous pre-existing policy."

Biden also got bad grades on other measures, such as land mine policy and arms sales to risky countries.

• An interesting academic freedom case out of Texas:

• "Founders and investors—including tech CEOs, crypto billionaires, bloggers, economists, celebrities, and scientists—are coming together to address stasis with experimentation," reports The Atlantic's Derek Thompson. "They're building a fleet of new scientific labs to speed progress in understanding complex disease, extending healthy lifespans, and uncovering nature's secrets in long-ignored organisms. In the process, they're making research funding one of the hottest spaces in Silicon Valley."

• The Federal Reserve "released its highly anticipated report on the prospect of minting a central bank digital currency, or CBDC," notes Forbes. It "stopp[ed] short of taking a position on its implementation without the help of lawmakers."

• Trumpism on the decline?

• Austrian lawmakers approved a vaccine mandate for all adults.