'Dangerous for democracy': Big Tech hearing gives clues on future of antitrust law

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In the last of seven hearings to investigate concerns that Google parent Alphabet (GOOG, GOOGL), Facebook (FB), Amazon (AMZN) and Apple (AAPL) are operating as illegal monopolies, witnesses before the House Antitrust Subcommittee Thursday clashed on whether Congress should overhaul U.S. antitrust law.

Proposals from witnesses before the committee, including several antitrust experts, could be a clue to changes forthcoming from the committee. They ranged from introducing legislation that would break up Big Tech companies and overturn judicial precedent to increased funding for antitrust law enforcers to maintaining status quo.

‘Quintessentially a congressional job’

Zephyr Teachout, associate professor of law at Fordham University School of Law, told the subcommittee on Thursday that Congress, not the Supreme Court, should regulate Big Tech. “It is quintessentially a congressional job to respond to this threat,” Teachout said, calling for “significant” new legislation.

NEW YORK, NY, UNITED STATES - 2018/09/13: Zephyr Teachout seen speaking on phone during her campaign. Zephyr Teachout campaigning for the Democratic Party nomination for Attorney General of New York State on Primary Day near the West Side High School located on the Upper West Side of New York City. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)
NEW YORK, NY, UNITED STATES - 2018/09/13: Zephyr Teachout seen speaking on phone during her campaign for Attorney General. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)

Michael Kades, director of markets and competition policy for Washington Center for Equitable Growth, also called for legislative reform, arguing that the filing of one or two cases would fall short of addressing the current level of anticompetitive conduct.

“Unless Congress acts it is accepting...that antitrust laws have little power to stop or deter anticompetitive conduct,” Kades said.

When acting to regulate Big Tech, Teachout argued, Congress should limit certain large companies to a single line of business, preventing Amazon, for example, from controlling businesses for online commerce while also controlling shipping and fulfillment. The approach would similarly impact Google’s ability to control platforms that both serve and sell online advertisements.

“Amazon takes as much as 30% of every sale,” Teachout said about seller transactions on the marketplace. “This is essentially a form of private tax...and that's really dangerous for democracy.”

University of Pennsylvania Carey Law School professor Christopher Yoo disagreed with this notion, arguing that restricting companies to a single line of business would cut against a central purpose of antitrust laws: to protect consumers. Dismantling the efficiencies of Amazon’s vertical integration, he said, would lead to higher consumer prices.

More modest proposals to change antitrust law

Meanwhile, William Baer, visiting fellow for governance studies at Brookings Institution, proposed “modest” changes to antitrust laws — including altering the legal standard of proof required for the government to prevail on antitrust actions. The standard, he said, is problematic because it often dissuades the Justice Department from challenging mergers or acquisitions, such as Google’s purchase of ad platform DoubleClick in 2007 and Facebook’s acquisition of photo-sharing site Instagram in 2012.