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Congress is taking a hard look at Big Tech through the lens of antitrust law—and Senator Amy Klobuchar (D-Minn.) is leading the fight.
Sen. Klobuchar, long an advocate of strengthening antitrust law to keep markets competitive, is the new chairwoman of the Senate Judiciary Committee’s antitrust subcommittee. In early February, she rolled out a major antitrust reform proposal, and on March 11 she gaveled in the first of many Senate hearings on her bill.
“We have gotten more interest in antitrust, and we are making antitrust cool again,” Klobuchar told Axios before her first hearing as chairwoman.
Antitrust law can be a pretty technical subject, but it plays an essential role in keeping markets functioning smoothly and supporting competition, with the goal of protecting consumers. Here’s what you need to know about Sen. Klobuchar’s antitrust bill.
Why Antitrust Reform? Why Now?
Antitrust law is the cornerstone of free markets.
In the U.S., three laws—the Sherman Antitrust Act, the Federal Trade Commission Act and the Clayton Antitrust Act—work in concert to prevent any one company from becoming powerful enough to block competition in its sector, industry or market. When markets stay competitive, businesses innovate to keep prices low and quality high, which benefits consumers.
Lawmakers like Sen. Klobuchar argue that over recent decades, court rulings and inaction by regulators have eroded the ability of antitrust law to protect the market and consumers from monopolies. There’s growing bipartisan agreement that more needs to be done to reign in Big Tech companies—specifically Facebook, Google and Amazon—which many argue have become too powerful.
In December 2020, Facebook was sued by the Federal Trade Commission (FTC) and 46 states for snapping up competitors Instagram and WhatsApp in mergers over the last decade. The FTC is aiming to unravel the acquisitions with its lawsuit. Facebook also has a long history of purchasing dozens of smaller companies that promise to become competitors if left free to grow.
“Why should any dominant corporation be able to merge with any other entity?” Sen. Josh Hawley (R-Mo.) said during the Thursday hearing. “Why should Google, for instance, or Facebook be able to buy anything else given their dominant size?”
Outside of acquisitions, Google is also facing scrutiny for other anticompetitive actions, including its $12 billion yearly deal to be the default search engine on Apple products, Safari and iPhone.
In addition, lawmakers have discussed how these platforms dominate online advertising revenue and the consequences on other industries. A big focus is also on mobile platforms banning certain apps from their stores, like Parler, or services like Twitter blocking people from using their service, as in the notorious case of former President Donald Trump.
Details on the Klobuchar Antitrust Bill
Sen. Klobuchar introduced her bill just after Facebook and Google were hit with antitrust lawsuits. Titled The Competition and Antitrust Law Enforcement Reform Act, her proposal aims to revamp antitrust laws and fund stronger enforcement.
Here are five key ways the bill would revamp antitrust laws:
- Increase enforcement budgets. Enforcement budgets at the Justice Department’s Antitrust Division and the FTC have not kept pace with the growth of the economy. The bill would allocate funds to increase both agencies’ annual budgets.
- Do more to prevent anticompetitive mergers. The Clayton Act, passed in 1914, has a specific section dedicated to preventing anticompetitive mergers. Sen. Klobuchar claims court decisions have eroded this rule over time. Her bill would update legal standards for allowed mergers, explicitly stating they can’t create monopolies, and would require companies to prove their potential mergers wouldn’t violate the law.
- Prevent anticompetitive actions by big companies. The bill would prohibit any conduct that disadvantages competitors or limits their ability to compete in the free market.
- Establish a new FTC division focused on antitrust issues. The new independent division would be dedicated to studying markets and reviewing potential mergers.
- Enhance antitrust enforcement. Civil fines for antitrust violations as well as analysis on the effect of past mergers and the strengthening of whistleblower protections would be implemented under Klobuchar’s bill.
Bill Baer, visiting fellow of governance studies at the Brookings Institute, a nonprofit public policy think tank, writes in a recent blog post that the bill is a step in the right direction. But he warns the road to antitrust law reform will be a long and arduous one, with many obstacles along the way.
Baer notes that Klobuchar’s bill, if signed into law, wouldn’t be retroactive—meaning some current companies currently under fire could be off the hook. Under current antitrust law, he writes, it’s unclear if Facebook’s mergers violate current antitrust law.
There’s also the necessity of bipartisan agreement for any new legislation to pass—and though both sides of the political aisle seem to be on board right now, there’s no guarantee they’ll agree on the nuts and bolts of an antitrust reform law in the near future. Regardless, Baer sees the bill as starting discussion—a crucial component to help regulators finally crack down on Big Tech.
“But what we have is an atmosphere that makes constructive dialogue possible,” Baer writes. “And that dialogue is long overdue.”