I have no problem tooting my own horn here. I called it. The US House of Representatives tipped its hand this week and revealed that they have absolutely no interest in giving us, the users of products and services from the big tech companies, what we really need. That would be measured, steadily implemented regulatory changes to restrain legitimate abuse of power by those companies. Instead, the five bills that were revealed this week are exactly what I expected to see from contemporary American politicians- a fair amount of grandstanding and political theater.
These bills will likely morph, hopefully dramatically, during the committee process on their way toward eventual votes. However, here is a basic rundown of the five and the overreaches that three of them include.
First off, the Ending Platform Monopolies Act seeks to give the Justice Department and the FTC the power to break up companies of a certain size at will. Handing this kind of broad authority to appointed bureaucrats rather than duly elected officials is pretty ridiculous. Just to be clear, we’re not talking about the DOJ and AG’s of several states filing suit to do this, as happened to Microsoft in the 1990s. This would be handing these departments the direct authority to break up companies as they see fit, and leaving it to the companies to file suit to defend themselves in court. This is the literal definition of overreach of authority.
This tactic is likely to be useless as anything more than a bargaining tactic, because the current Supreme Court will likely shoot down all but a handful of the largest potential break-ups, if not invalidate the legislation outright. Their track record is pretty clear, so this bill is probably more saber-rattling than anything else. Considering that the mechanism to break up complies deemed to be monopolies already exists, this feels like a Hail Mary attempt to make up for Congress sitting on its ass for over a decade and doing nothing to effectively regulate tech companies.
A second bill, the American Innovation and Choice Online Act, would prevent companies from advantaging their own products and/or services over competitors. There are ways that Congress can act here to legitimately help keep the existing digital ecosystems in check and prevent abuse. However, it sounds more like the legislators involved and their staff members are struggling to grasp exactly what they are proposing with this bill. This resulted in a lot of confusion when news of these House bills first leaked and the media was told that this one would force Apple and Google to ship their phones with few to no apps pre-installed.
This was later walked back to forcing Apple and Google to allow all of their stock apps to be removed or replaced. Ok…but what good is this today? Do we really need a bill to mandate something as mundane as how apps are delivered when Google has always allowed this and Apple already allows some of its apps to be deleted, most others to be hidden, and allows users to now select alternative apps as their primary email client and web browser? Maybe this part is Congress just fishing for Apple to allow replacements for all default apps.
Congress needs to forget the app window dressing and focus on more important matters here. How about the way Google advantages its own products in search, or the way Apple advertises its services inside of iOS when third parties can’t? Those are legitimate ways to curb some of the power of big tech in a way that could balance the scales a bit. However, that doesn’t also mean that companies like Apple, Google and Amazon should be prevented from selling their own wares and services on their platforms when this is an accepted practice in all kinds of other businesses. This bill needs a LOT of work and would be a lot better if it was implemented in smaller steps, rather than all at once.
Then we come to enforcement. Again, Congress wants to hand the DOJ, the FTC and state AGs what looks like the unchecked ability to enforce this law with the freedom to levy fines as they see fit. All the ruling political party has to do to strong arm tech companies with this law is to pack the agencies with their cronies after an election and squeeze. It happens all the time.
Another of the five bills, the Platform Competition and Opportunity Act, would prevent the big tech companies from attempting mergers pretty much across the board. According to the bill, if the company being acquired competes with the company making the bid, it would be blocked. I am not completely opposed to this rule, as long as the companies in question have a mechanism to challenge rulings and make a case as to why a proposed merger should be allowed. However, I also think people should consider the fact that mechanisms to prevent mergers already exist. Why do we need legislation to prevent certain types of businesses of a certain size from merging with other companies? Why don’t Congress focus on improving the process that’s already in place?
We all automatically think about the Facebook-Instagram merger when discussing something like this, but how about much smaller acquihire-type mergers that all of the big tech companies engage in? Small startups are often founded to develop and grow a product or service with an eye toward a merger or selling the business to a larger tech firm. Should Congress enact a law that will invalidate something that’s been a huge part of the growth of the US tech economy? This law really needs to be solidly defined to prevent it from doing as much harm as good.
The fourth bill of five actually makes good sense. The Merger Filing Fee Modernization Act would simply increase the filing fees that large companies pay in the process of a merger. Adding a little bit of friction to the merger process wouldn’t be a bad thing, in my opinion. Out of the five bills, this one seems to have the best odds of passing exactly as it stands. There is already a companion bill in the works in the Senate.
The last bill, the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, is another that is likely to pass pretty much as-is, and actually sounds like a good idea. It would force companies to make the data that they collect interoperable and freely available to customers so they can move it to competing services. The only issue here is how exactly this would be implemented across very different kinds of companies and exactly what data would be covered. The concept is solid, though.
So two of the five bills proposed in the US House of Representatives are fairly modest proposals that make sense and are the kinds of small, incremental changes that can restrain large tech companies from abusing their power without causing massive ripple effects and unintended consequences. what we need are more small, targeted bills like these as a real start down a new path of tech regulation.
The bills blocking mergers out of hand and to prevent companies from advantaging their own products are VERY broad and would be a lot easier to implement properly and without problems that can’t be foreseen if broken into smaller pieces and implemented over time. Unfortunately, they are overly broad and there’s no guarantee that Congress will come to its senses.
Then you have the Ending Platform Monopolies Act, which would hand a nuclear button to the FTC or DOJ and is ridiculously unbalanced. I have absolutely nothing positive to say about this one.
I would be pleasantly surprised if Congress was looking to pass the two slam dunk proposals and taking its time on the rest. If the DOJ was prepping to go after some of the biggest tech mergers, such as Facebook-Instagram, in court using existing means, I would be all for it. Just the threat of regulation over the last year has forced a few small changes across the tech industry and the beginning of larger steps like these would certainly bring even more.
However, that’s not what we are getting with the other three of these five bills. At best, this is a negotiating ploy to force wider industry concessions and changes in exchange for watering down or killing two or three of them. At worst, it’s too much, too soon and Congress will press ahead for a pound of flesh, even though this entire mess is really on them for their many years of inaction. Honestly, this part really galls me more than anything. Congress is looking for a way to unring the bell that they either stood by and what swing, or even helped to swing, themselves.
Hopefully enough Congressmen and women will come to their senses and realize that their constituents, the people who use these tech products and services, aren’t looking for them to make our lives more difficult or cause prices to go up by removing services. Big Tech, Apple included, doesn’t deserve a free pass like some might advocate for, but we as their users deserve an approach from government that enhances competition without unintended consequences from overreach or unnecessarily moving too fast for show.