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House Judiciary Committee Debates Antitrust Legislation Aimed At Curbing Power Of Big Tech

UPDATE, 4:17 PM PT: What about Microsoft?

The House Judiciary Committee has focused on major platforms Facebook, Apple, Amazon and Google, first as part of an investigation that concluded last year, and then as lawmakers have talked about the need for antitrust legislation.

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But some Republicans on the committee, led by Rep. Thomas Massie (R-KY), contended that Microsoft escapes the provisions of the bills even though it has a market cap that recently passed $2 trillion.

The threshold for what companies are covered by the legislation is a $600 billion market cap, but some lawmakers also point to other criteria, including that a platform is a “critical trading partner,” or that they serve as a gatekeeper that controls access to a marketplace.

The argument came as lawmakers debated a bill that would require that large platforms make their user data portable, as well as their services interoperable with rivals.

Massie accused Microsoft of having “mysteriously avoided” scrutiny.

Rep. Darrell Issa (R-CA) questioned why the four tech giants were singled out and not others.

Rep. David Cicilline (R-RI), who leads the antitrust subcommittee, said that there are no exemptions for specific companies in the legislation, adding that it is “broadly applicable to firms that meet a definition for covered platforms.”

He also said that there was “no mystery” to the legislation, a version of which was introduced in the Senate two years ago.

Rep. Pramila Jayapal (D-WA) said that Microsoft would likely fall under the definition of a “critical trading platform” via its cloud services. Lawmakers also removed language that could have narrowed the scope of which companies were covered by the legislation. They amended the legislation to strike the word “mobile” from “mobile operating system.”

UPDATE, 12:22 PM PT: A bill that could give state attorneys general greater leverage in antitrust cases cleared the House Judiciary Committee, drawing a bipartisan group of supporters and detractors.

The committee voted 34-7 to advance the legislation, which would prevent cases filed by state attorneys general from being transferred to another jurisdiction, potentially to the advantage of a defendant.

Some Democrats opposed the legislation, including Rep. Zoe Lofgren (D-CA), whose district includes parts of Silicon Valley. She said that the legislation risks creating a parallel track of antitrust lawsuits.

UPDATE, 9:57 AM PT: The House Judiciary Committee advanced the first a half dozen bills aimed at big tech, approving a bill that would increase merger filing fees to give the government more money to enforce antitrust laws.

The bill was viewed as the most uncontroversial of the six being marked up on Wednesday, but lawmakers still debated over it for almost three hours, at times getting well beyond the issues at hand.

The committee voted 29-12 to advance the bill. Republicans Ken Buck, Chip Roy, Burgess Owens, Matt Gaetz and Victoria Spartz joined all Democrats in support.

Some Republicans objected to the bill by arguing that it should have placed more restrictions on the Federal Trade Commission and the Justice Department in how they use the money. But Republican backers like Spartz said that it was merely increasing fees, not restructuring the enforcement agencies. Buck noted that similar legislation passed in the Senate unanimously.

PREVIOUSLY: The House Judiciary Committee on Wednesday began a debate and markup of a series of antitrust bills designed to curb the power of major tech platforms like Amazon, Facebook, Google and Apple, even if that means forcing the companies to divest some of their holdings.

The legislation is aimed at so-called “dominant platforms,” or those with at least $600 billion in market cap or net annual sales or at least 50 million monthly active users.

Among the bills are one, the Ending Platform Monopolies Act, that would restrict tech giants from using their platforms to sell product lines that they own. That may force the breakup of companies, as they could not own businesses, like Amazon’s private label products, that pose a conflict of interest. Retailers on Amazon’s marketplace have accused the company of mining their data to undercut them.

In recent days the companies unleashed a flurry of statements, on their own and from industry trade groups, opposing the measures. Apple CEO Tim Cook called House Speaker Nancy Pelosi to warn about the legislation, according to a report in The New York Times.

But the legislation has drawn rare bipartisan among certain Democrats and Republicans on the Judiciary’s antitrust subcommittee, including its chairman, Rep. David Cicilline (D-RI) and its ranking member, Rep. Ken Buck (R-CO). Cicilline led an investigation of tech platforms which was made public in October, concluding that the companies were using gatekeeper or monopoly power to stifle competition.

“We are giving the department and the FTC the tools they need to restore the free markets,” Buck said, arguing that the bills were conservative and even had the support of Fox News host Tucker Carlson.

But Rep. Jim Jordan (R-OH), the ranking member of the Judiciary Committee, railed against the legislation, arguing that it would align big tech with big government, giving more power to the Federal Trade Commission. As he often does, he also chided platforms for alleged censorship against voices on the right. Another Republican on the committee, Rep. Chip Roy (R-TX) proposed an amendment that would prohibit antitrust enforcers from using increased funding to promote critical race theory.

“I think this is a distraction from what we are doing here,” said Rep. Jamie Raskin (D-MD). The amendment failed.

As some of his Republican colleagues complained of the legislation, Buck tweeted, “The House Judiciary Committee’s markup of my antitrust legislation is not rushed. The Antitrust Subcommittee’s investigation was 18 months long. Our bipartisan bills are the result of that investigation, and my colleagues have had the bills for over two weeks.”

TechNet, the industry trade group that includes some of the major platforms, called on the Judiciary Committee to slow down the process and hold hearings. “These bills would fundamentally alter the U.S. economy, stifle innovation, and weaken American competitiveness,” said the group’s president and CEO Linda Moore.

The bills include:

The Platform Competition and Opportunity Act: Prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms.

Facebook in particular has been taken to task for buying Instagram and other smaller rivals to maintain its social media dominance.

The Ending Platform Monopolies Act: Companies are prohibited from using their own tech platforms to sell product lines that they own and control. Companies like Amazon and Google would be prohibited from demanding that businesses purchase a product or service as a condition for access to the platform. The bill also prohibits platforms from owning an alternate businesses that pose a conflict of interest.

The American Innovation and Choice Online Act: Prohibits discriminatory conduct by dominant platforms, including a ban on self-preferencing “and picking winners and losers online.”

The Merger Filing Fee Modernization Act: Updates filing fees for mergers for the first time in two decades to give the Department of Justice and Federal Trade Commission more money for antitrust enforcement. It raises the fees for mergers valued at over $1 billion and lowers them for deals of under $500,000.

The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: The bill would require that large platforms make their user data portable, as well as their services interoperable with rivals. The legislation requires platforms to maintain “transparent, third-party-accessible” interfaces to enable the secure transfer of data to a user, or with user’s consent, to a business user at the direction of a user.

State Antitrust Enforcement Venue Act: Ensures that litigation filed by state attorneys general under federal antitrust laws remain in the court that they select, rather than having their cases moved to a court that is preferred by a defendant.

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