Trump Is Coming for Tech Companies
It looks like we can expect the antitrust assaults to continue.
President Joe Biden's administration has been horrible for tech companies. The incoming Trump administration may be just as bad.
That's disappointing, if not really surprising. During Donald Trump's first presidential term, he frequently railed against big tech companies via his social media accounts, called for European-style regulation of tech businesses, and set out to ban TikTok, while the Department of Justice (DOJ) sued Google and the Federal Trade Commission (FTC) sued Facebook. And incoming vice president J.D. Vance hasn't just been critical of major tech companies; he has praised current FTC head Lina Khan, who has aggressively pursued those companies using an expansionist concept of antitrust law.
Trump has occasionally deviated from this anti-tech stance, as when he criticized more recent efforts to ban TikTok. And many Republicans have been highly critical of Khan's FTC, kindling some small hope that the incoming Trump administration would do things differently.
But last week Trump smothered any hope that he had changed his stance when it comes to American tech companies. It looks like we can expect the aggressive attacks via antitrust law to continue.
"Make America Competitive Again"
In announcing Gail Slater as his pick to lead the DOJ's Antitrust Division, Trump opined that "Big Tech has run wild for years, stifling competition in our most innovative sector and, as we all know, using its market power to crack down on the rights of so many Americans, as well as those of Little Tech! I was proud to fight these abuses in my First Term, and our Department of Justice's antitrust team will continue that work under Gail's leadership." Slater, he continued, "will help ensure that our competition laws are enforced, both vigorously and FAIRLY, with clear rules that facilitate, rather than stifle, the ingenuity of our greatest companies. Congratulations Gail - Together, we will Make America Competitive Again!"
That might sound OK. Who doesn't like fair competition?
But under both Trump 1.0 and Biden, "competition" served as a euphemism for a marketplace in which the federal government decides which businesses win and lose.
Big tech companies—politically unpopular on both the right and the left, albeit often for differing reasons—have been branded by both sides as undeserving of their successes. Without legitimate criminal acts to go after or traditional antitrust violations to stop, politicians have taken to applying antitrust laws more expansively. This might mean slagging big tech companies for thwarting their competitors (which is kind of the whole point of business, no?) or suggesting that antitrust law means things it doesn't (like requiring tech companies to maintain some sort of speech neutrality).
While the Biden-era FTC has been most aggressive toward tech companies, it has applied its expansive antitrust agenda—one that no longer considers consumer harm as the lodestar of antitrust enforcement—to all sorts of businesses. It's unclear whether the Trump-Vance administration will continue down that path or if it will embrace a Khan-style agenda only in the tech industry.
Antitrust Hawks and 'Free Speech' Warriors
In his most recent column at Reason, Steven Greenhut suggests that there isn't "a dime's worth of difference between conservative populism and democratic socialism" when it comes to antitrust enforcement. Greenhut notes that several of the antitech antitrust cases pursued by the Biden administration were inherited from Trump. "It's my hope that the Trump administration takes a more market-oriented approach toward antitrust law, but it's unlikely given the origin of the cases," he writes.
It's not just Trump's words that don't inspire confidence in a change from Khan-era policies. His pick to head the DOJ antitrust division is an "antitrust hawk," according to New York Post business reporter Thomas Barrabi.
Matt Stoller, research director for the progressive American Economic Liberties Project, suggests that Slater will continue to carry out the Biden administration's antitrust agenda. "Whoever took over at the Antitrust Division would have inherited monopolization cases against Google, Apple, Ticketmaster, Visa, and RealPage, as well as an unusually aggressive merger program, and broad investigations into UnitedHealth Group, seed monopolists, Nvidia, and a whole set of other corporations," writes Stoller on his Substack:
The risk was that these cases would be settled on the cheap and the investigations shut down. The Slater pick makes that less likely; she's a competent, creative, and enforcement minded lawyer, with a background at Fox, Roku, and in the Federal Trade Commission. Right now, she's on the staff of Senator J.D. Vance, and likely shares his economically populist views, most notably his belief that big tech is too powerful and needs to be broken up.
As of yet, it's unclear who Trump will pick to head the FTC. Current FTC commissioner Andrew Ferguson is one of those angling for the job. His pitch to run the agency suggests what already seems the most likely scenario under Trump: a rollback of some of Khan and Biden's most business-unfriendly policies but continued aggressive attempts to use antitrust law to proselytize against popular tech companies.
Ferguson pledges to "reverse" Khan's "anti-business agenda" while also "focus[ing] antitrust enforcement against Big Tech." This is sadly hilarious, considering that one of his planks is to "end Lina Khan's politically motivated investigations." If there's one thing I think we can guarantee, it's that the Trump administration will not end politically motivated antitrust and trade investigations; it will simply shift them in a direction most amenable to its agenda.
And if recent communications from current conservative commissioners at the FTC and the Federal Communications Commission (FCC) are any indication, this will include continuing to use an twisted conception of "free speech" that actually limits free speech.
"In a disturbing (if unsurprising) trend, Republican FCC and FTC commissioners are deliberately misusing 'free speech' rhetoric in an Orwellian attempt to justify government intervention to control and suppress online speech," writes Mike Masnick at Techdirt. "Last week, FCC Commissioner Brendan Carr pushed censorial policies in the name of 'free speech.' This week, GOP FTC Commissioners Melissa Holyoak and Andrew Ferguson followed the same playbook. Of course, the context here is that Holyoak and Ferguson are fighting to get into Trump's good graces to be named FTC chair, and he's apparently worried that the two of them will be 'soft' on his 'big tech' enemies. That resulted in them hijacking an unrelated enforcement action against e-commerce site GOAT to attack social media content moderation and advertiser boycotts."
As under Biden, it looks like we can expect some measure of free markets and free speech to be sacrificed in the political vendetta against the tech industry.
More Sex & Tech News
• TikTok ruling raises alarms: The U.S. Court of Appeals for the District of Columbia Circuit has greenlit the government's TikTok ultimatum. The court "ruled Friday that the federal government can tell a foreign-owned website that it must either sell itself to an American owner or be banned," notes Reason's Joe Lancaster.
This is bad for TikTok as a company and bad for U.S. users of TikTok, obviously. But it also sets a very bad precedent, both for further American crackdowns on foreign-owned businesses and for foreign companies to use against American tech companies operating abroad. And the slippery slope doesn't end there.
Techdirt's Mike Masnick has called the opinion "tortured and alarming":
The court ruled that while banning TikTok clearly impacts speech, the law somehow passes strict scrutiny, the highest level of First Amendment review. The court's reasoning that blocking potential Chinese government influence over TikTok's content moderation enhances free speech is deeply flawed. Banning an entire platform, and the speech of millions of Americans on it, does far more damage to the First Amendment than the speculative concern that China might try to influence content moderation decisions. Indeed, the ruling's dangerous language could be used to justify all sorts of future government censorship and control over online speech.
• Huh: The FBI now wants us to use encrypted messaging?
Followups
• Last Monday's Sex & Tech newsletter discussed a new Belgian sex work law that, among other things, allows sex workers to enter into formal employment contracts. I worried that doing so to the exclusion of other work arrangements could have some unintended consequences. I'm happy to report that the new law will not limit options in that way, according to a representative from the Belgian sex worker union, UTSOPI. A spokesperson for the group told me via email that under the new law, "sex workers who want to work as a self-employed sex worker, can do so. They can still rent a place, publish advertising, and work for an agency as a freelancer. In a brothel, they can pay for the use of the space, while other sex workers working at the same place might be working as a contractual worker….So yes, renting a space at a sex business will still be possible for a non-employee. As is the case for working as an independent worker for an escort agency."
• Last Wednesday's newsletter covered a new North Carolina law stating that "any person who solicits another for the purpose of prostitution is guilty of a Class I felony for a first offense," reporting that such a felony came with a minimum sentence four months in prison, up to a possible two years. I wanted to clarify that that's a presumptive minimum, not a mandatory minimum. A judge may impose a lesser sentence if the judge determines that there are mitigating circumstances.
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