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U.S. President Joe Biden delivers remarks prior to signing an executive order on “promoting competition in the American economy” during an event in the State Dining Room at the White House in Washington U.S., July 9, 2021.
Evelyn Hockstein | Reuters
Joe Biden has positioned himself as a pro-competition president, delighting progressives by installing their wish list of liberal antitrust enforcers early in his administration.
But this fall, his digital competition agenda will truly be put to the test, as the first of the government’s tech anti-monopoly cases is finally argued in federal court.
Tuesday marked a convergence of several long-awaited actions in competition policy and enforcement. First, the Federal Trade Commission announced its long-awaited antitrust suit against Amazon. Shortly after that, the Federal Communications Commission chair announced a proposal to reinstate net neutrality rules, which prohibit internet service providers from favoring certain websites over others.
At the same time, the Department of Justice has been litigating its own monopolization suit against Google in Washington, D.C. District Court, three years after the initial complaint was filed during the last administration. The Justice Department’s second antitrust challenge against Google is set to go to trial early next year.
During Biden’s presidency, plenty of ink has been spilled over his antitrust enforcers’ boundary-pushing approaches, particularly as they eyed deals and potential misconduct in the tech industry. But until this month, none of the federal tech monopoly trials had kicked off.
Before the swearing in of Democrat Anna Gomez this week, the FCC had been deadlocked, unable to move forward with any measures that couldn’t gain the support of at least one of its Republican commissioners.
Antitrust cases and government rulemaking are famous for their often long timelines. But with all of these actions now set in motion, Americans are one step closer to seeing how the Biden administration’s competition vision plays out.
Tim Wu, who previously served in the White House as a key architect of the Biden administration’s competition agenda, said in an interview that many of the seeds planted early in the administration, if not yet bearing fruit, are at least “sprouting.”
Wu said that in the early days of his time at the White House, the administration came up with what was called the “grand unified theory of antitrust revival.” It included appointing strong enforcers and starting the White House Competition Council.
Biden laid out his competition goals in an executive order issued in 2021, which urged the FCC to restore net neutrality rules and for the FTC to “challenge prior bad mergers,” among other things.
Since the time of the executive order, Hannah Garden-Monheit, director of Competition Council policy at the White House, said those principles have “built up a lot of momentum” and have “become embedded and institutionalized in the work of the government.”
Even as several prongs of competition policy take shape, the Biden administration is up against the clock. As the 2024 presidential election approaches, the administration faces the possibility of losing its chance to follow through on some of the actions it has spearheaded.
That timeline may be particularly concerning for the ability to implement and uphold net neutrality rules, given that the FCC didn’t have a Democratic majority able to advance the rulemaking until just this week. Wu and other net neutrality advocates have blamed the telecom industry for opposing Biden’s initial FCC nominee, Gigi Sohn, holding up her nomination for well over a year until she ultimately withdrew. (CNBC parent company NBCUniversal is owned by internet service provider Comcast.)
Gigi Sohn testifies during a Senate Commerce, Science, and Transportation Committee confirmation hearing examining her nomination to be appointed Commissioner of the Federal Communications Commission on February 9, 2022 in Washington, DC.
Peter Marovich | Getty Images
Biden’s unwillingness to pivot to another candidate earlier also meant the FCC remained deadlocked for the first half of his term as president.
Still, Wu said that backing down from a qualified candidate is “not Biden’s style.”
No matter when the administration changes hands, Wu said he’s confident that net neutrality can prevail. He called the repeal of the rules under Trump’s FCC an “outlier” and believes Republicans have nothing to gain at this point in pushing for repeal.
“I think about Republicans — they don’t like Google, Facebook doing censorship — and they really don’t like their cable company doing it either,” Wu said. “There’s no constituency right now for the repeal of net neutrality.”
At the FTC, Chair Lina Khan finally moved ahead in filing the agency’s antitrust suit against Amazon, accusing it of illegally maintaining a monopoly by punishing sellers that offer lower prices elsewhere and “effectively” requiring them to use Amazon’s fulfillment services. Amazon’s general counsel has called the suit “wrong on the facts and the law.”
Federal Trade Commission Chair Lina Khan testifies before a House Judiciary Committee hearing on Oversight of the Federal Trade Commission, on Capitol Hill in Washington, D.C., July 13, 2023.
Kevin Wurm | Reuters
“This complaint focused on behaviors that courts have in the past found clearly to be violations of the antitrust laws,” Bill Baer, who has served as the top antitrust official at both the FTC and DOJ in different Democratic administrations, said. “She didn’t need to include theories where the courts either haven’t reached or about which they’ve been more skeptical in the past.”
Wu said the more narrow approach didn’t surprise him, in part because Khan is “more restrained than people think she is.”
“Frankly, it’s not exotic at all,” Wu said of the Amazon complaint. “It’s plain vanilla, Main Street, what we would call a consumer welfare case.”
While Khan and Jonathan Kanter, her counterpart at the DOJ, have said they aim to bring cases that they can win, they have indicated they’re also willing to bring riskier complaints to push the boundaries of the law.
“They’re adopting more of a baseball approach than a perfectionist approach,” Wu said. “And if you have someone who’s batting .500, .700, that’s a pretty good hitter, especially if they’re swinging for home runs.”
“It is a critical moment in the courts deciding how the antitrust laws apply to Big Tech,” Baer said. “The results of these pending and future cases will tell us a lot about what the rules of the road are going forward.”
Advocates of reforming antitrust laws have said that it’s important for Congress to clarify the law, but antitrust reform has stalled in Congress after a major push last year fizzled out.
Wu said a key “uncompleted part” of the grand master plan in the White House was appointing more antitrust enforcement-minded judges.
In 10 years, Garden-Monheit said she thinks Americans will look back at this moment “as a real inflection point” where the president opted to turn the page on “40 years of laissez-faire, trickle-down economics, lax enforcement of antitrust laws.”
“I hope that’s the direction that we’ll continue to see for decades going forward, just like we’ve turned the page on decades of past failed approach,” Garden-Monheit said.
“Win or lose, we don’t know what will happen in any of these cases,” Wu said. “But I think we’ll look back at this and say that non-enforcement was just a blip.”
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