The Treacherous Turn on Antitrust Regulation of U.S. Tech Companies

By at 24 February, 2021, 10:13 pm


by Raymond J. Keating-

Since its inception in the late 19th century, antitrust regulation has rested more on the whims of progressive and populist politics rather than on sound economics. Indeed, that has remained the case now more than 130 years after the first major piece of antitrust legislation was signed into law, and for over two decades into the 21st century and our dynamic, entrepreneurial, high-technology economy.

The Benefits of Big Tech, Including COVID-19 Lifelines

Creativity, innovation and advancements in computer, telecommunications, digital and online technologies and services have transformed daily life, business and our economy in exciting, beneficial and previously unimaginable ways. Tech companies, and the tech economy, serve as another example of how entrepreneurs generate new and improved products, create and transform industries, and drive economic growth forward – which has been the history of free enterprise in the U.S. and around the globe.

When the COVID-19 pandemic hit, these technologies became more vital – serving as lifelines for individuals, families and businesses, including small businesses.

The toll of the coronavirus has been brutal. According to the Johns Hopkins Coronavirus Resource Center, as of February 22, 2021, global COVID-19 cases registered 111.7 million, with 2.47 million deaths. In the United States, the numbers of cases had reached 28.18 million, with the number of deaths exceeding 500,000.

In addition, millions of small business have closed (see a recent SBE Council analysis), either permanently or temporarily, and U.S. employment was down in January 2021 by 8 million to 10 million compared to pre-pandemic levels.

But even during a pandemic, with accompanying shutdowns and quarantines, people were able to ease the suffering somewhat thanks to staying in contact via social networks like Facebook, purchasing products via sites like or online from their local stores for pickup or delivery, and being engaged and entertained via an assortment of streaming services like Disney+, Netflix, Google’s YouTube, Amazon Prime, HBOMax, and more.

For millions of Americans, their small businesses and careers were able to survive, pivot, and/or even thrive by creating or seizing upon new opportunities thanks, again, in part, to advancements in the tech economy. Consider some key points from recent surveys:

Cloud Services. An SBE Council June 2020 small business survey found benefits for small businesses thanks to cloud services during COVID-19:

• “Saving time and money (89 percent) is the most widely perceived benefit of cloud services among small businesses, followed by improved employee productivity and collaboration (84 percent). Nearly eight in ten agree that cloud services have helped their business better communicate with or manage customers during COVID-19 (79 percent) and have been critical to the survival and operation of their business amid the outbreak (76 percent).”

Digital Investment. A Verizon survey noted the following about investments in digital technologies:

• “As these small businesses have faced challenges both in managing remote employees, rules and regulations surrounding opening and venue capacity, and the overall downturn in the economy, they’ve found and continue to investigate new ways to drive the bottom line. These pivots include:

-“43% plan on expanding their businesses through digital and related technology”

-“30% already added ways in which they deliver products and services digitally.”

Boosting Tech Preparedness. An October 2020 survey of businesses by Avaya reported the following findings on what amounts to enhancing technological preparedness:

• “83 percent of businesses responded that they thought their technology stack was prepared for remote working – however, many businesses did have to implement new technologies to improve their work-from-anywhere capabilities, including 65 percent adding video conference tools, 54 percent adding chat/messaging software and 53 percent adding project collaboration tools.”

• “85 percent of businesses reported they plan on making the new technologies they have adopted during this time a permanent addition to their tech stacks.”

• “71 percent of tech decision makers reported faster adoption of new technologies in their organization due to COVID-19.  Most companies also had a shift in technology priorities with 52 percent increasing investment in collaboration software, second only to spending on security, which nearly two-thirds of businesses increased.”

Accelerating Change. McKinsey and Company reported the following in October 2020 on accelerating adoption of digitization:

• “According to a new McKinsey Global Survey of executives, their companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years. And the share of digital or digitally enabled products in their portfolios has accelerated by a shocking seven years.”

Remote Work. SBE Council also highlighted a Gallup poll released on February 12, 2021, with some findings on working remotely and attitudes toward doing so:

• “[W]hile coming down from the 70 percent level registered in April 2020, 56 percent of workers reported working remotely ‘sometimes’ or ‘always.’ The trend has shown a leveling off since September. This compares to 31 percent, according to a March 13-15, 2020 survey, just as the virus was starting to spread… Gallup asked about what workers would prefer post-pandemic in terms of work arrangements. Remote workers saying that they would prefer working remotely due to pandemic concerns declined notably, from about 35 percent in July, to 17 percent in January 2021. Those preferring to get back to an office moved up from 35 percent in September to 44 percent in January. Most interestingly, though, those saying that would preferto work remotely over heading to a workplace increased from 28 percent in July to 39 percent in January.”

• “Even as this pandemic recedes, many have been arguing that remote work would stick as one of the major shifts in how businesses operate and employees work. These numbers seem to bear that out. However, it is still important to point out that a good share of the workforce still prefers the traditional workplace setting.  Whether it’s remote all the time, sometimes, or occasionally, there is no doubt that technology and broadband have vastly increased our ability to work more dynamically. Today’s entrepreneurs perhaps understand this better than most.”

Given all of these findings and trends, assorted large tech companies offer a wide array of benefits for small businesses across industries, including during COVID-19. That includes various tools for communicating with, advertising to, delivering products to customers.

Small Businesses: Advertising, Customer Service, Operations and More. Highly targeted advertising is extremely cost effective and beneficial to small businesses, for example, such as through Facebook. That, obviously, has been a key positive for small firms. Consider some points from a Facebook report titled “Digital Tools in Crisis and Recovery: US Report” released in December 2020, based on survey and research from Deloitte:

• “The findings illustrate how SMBs [i.e., small and mid-sized businesses] have leveraged digital tools to overcome the challenges of the current crisis and have continued to reach consumers whose lives have been disrupted. The report illustrates how paid advertising, including targeted advertising on social media, has enabled SMBs to reach existing and new customers, both locally and farther afield. The report also looks at how direct online communications through social media and online messaging have allowed a personal and seamless customer experience, further nurturing digital-born discovery and converting it into digital sales.”

• “84% of SMBs reported that they had started using, or increased their usage of, digital tools throughout their businesses since the outbreak of COVID-19. That was particularly the case for social media and online messaging, which 62% of SMBs had started using, or increased their usage of, during the pandemic. Notably, usage of social media increased more than any other digital tool, including video calling (54%), which seeks to replicate face-to-face interaction.”

• “44% of SMBs surveyed said they started using, or increased their usage of, targeted advertisements on social media, more than for search engine advertising (37%) and display advertising (36%). Further analysis shows that SMBs that used targeted advertising on social media were nearly twice as likely to report that they increased their revenue compared to last year.”

Also, in February 2021, the Small Business Roundtable and Facebook released the “U.S. State of Small Business: 2020 – A Challenging Year for SMBs,” and among the findings were:

• “34% of businesses have increased their use of online or digital tools since the pandemic began, consistent with other research (Deloitte 2020).”

• “In addition, more businesses started selling online for the first time. The proportion making no sales through digital channels in the past 30 days fell from 35% before COVID-19 to 13% in the 30 days prior to the December survey, and the proportion making 100% of their sales online rose from 13% to 20%.”

• “Many businesses have also used digital channels to advertise. 57% of businesses reported that they use social media to advertise, second only to the number using word of mouth (59%).”

Meanwhile, serves as a partner to a wide array of small businesses. Being able to work with the largest online retailer serves as a major benefit for small businesses in terms of selling and delivering products. On February 3, 2021, reported:

• “[W]e are supporting the rapid growth of more than 1.7 million small and medium-sized businesses (SMBs) around the world that are selling their products in our store. SMBs now makeup close to 60% of the sales in our store, and they have created more than 2.2 million jobs globally as a result of selling on Amazon. In fact, SMBs from all 50 states that sell with Amazon are more than twice as likely to see 25-50% hiring growth compared to those that do not, according to researchby IDC.”

The benefits to consumers, to small businesses, and to the overall economy are manifest. Indeed, tech companies like Facebook,, Apple and Google achieved their growth, market valuation, profits and market share by serving customers well.

Indeed, in the marketplace, unless government steps in to interfere, it is the consumer who makes the final decision. Consumer sovereignty reigns.

Antitrust: A Breathtaking Disconnect from Economic Reality

Of course, tech companies like Facebook,, Apple, and Google came into the market as small startups. And as has been the case in the past, some of the truly great entrepreneurial successes gain praise from various corners and voices, including in the political world, at least for a stretch of time.

Eventually, some of those businesses become what effectively is “too successful,” that is, companies reach a size that generates the ire of progressives and populists. Such anger tends not to emanate from the consumer, though. Instead, it finds its roots in one or a mix of the following: causes:

Government: Political fears, distrust, anger, misunderstandings, and/or calculations of elected officials and/or political groups;

Competitors: Failing or faltering competitors in the market who partake in rent-seeking (that is, when an entity uses government to redistribute income, directly or indirectly, to itself);

All of the above: A combination of parts or even all of the first two causes.

The antitrust legislation passed in the late 1800s and early 1900s was not about protecting consumers, as commonly asserted. Instead, antitrust legislation emerged from complaints by competitors, and from anti-big-business ideologies within both the progressive and populist movements.

It’s not exactly shocking that businesses who fell short in the marketplace would turn to government for protection. Or, that political movements rooted in more government action would push for, well, more government interference and dictates.

That is what is occurring now, on a bipartisan basis, in Congress regarding four of the largest U.S. technology companies – specifically, the already-mentioned Facebook,, Apple, and Google (or Alphabet, which is Google’s parent company).

The Democratic majority in the House Subcommittee on Antitrust, Commercial and Administrative Law of the Committee on the Judiciary produced a massive report on these four businesses, with the Republican minority offering a shorter report.

Before getting into these proposals, it is worth taking a moment to quickly review the key problems with antitrust law and regulation as it currently stands.

Politics Over Economics. The problem with antitrust, again, since antitrust legislation was passed in the late 19th and early 20th centuries, has everything to do with politics, and little to do with actual economics.

The Sherman Act (1890), the Clayton Act (1914), and the Federal Trade Commission Act (1914), in effect, granted the federal government the power to break up monopolies, prevent monopolies and cartels, and stop mergers that could substantially reduce competition.

The political focus at the time were “trusts.” But just like today, politicians then often got their economics wrong. In his book Capitalism: A Treatise on Economics, George Reisman noted that due to limits in corporate law at the time, trusts emerged as a way to facilitate mergers. Reisman pointed out that “the trusts played a major role in improving the efficiency of the economic system, and thus in raising the general standard of living… In every case, the rise of the trusts was associated with a vast increase in production and improvement in the quality of products.  The era of the trusts was the era of America’s most rapid economic progress and the transformation of the country into the world’s foremost industrial producer and economic power.”

But what about the dreaded Standard Oil? Surely, the U.S. Supreme Court was right to break up that monopoly in its 1911 decision? In his book The Myth of the Robber Barons, historian Burton W. Folsom, Jr. reported:

“The decision was puzzling to [John D.] Rockefeller and his supporters.  The Sherman Act was supposed to prevent monopolies and those companies ‘in restraint of trade.’ Yet Standard Oil had no monopoly and certainly was not restraining trade. The Russians, with the help of their government, had been gaining ground on Standard in the international oil trade. In America, competition in the oil industry was more intense than ever.  Over one hundred oil companies – from Gulf Oil in Texas to Associated Oil in California – competed with Standard.  Standard’s share of the United States and world markets had been steadily declining from 1900 to 1910.”

For good measure, unfortunately, these laws are vague, and not only assume that politicians and their appointees can figure out how industries operate, but also how industries will develop and change, and what new ideas, products and services entrepreneurs will offer. Given that very few people working in particular industries can see clearly how their own industry will develop and change, especially how entrepreneurs with new products and ideas could transform or overturn the entire industry, it is hard to grasp how politicians or their appointees might do so.

What is a Monopoly? On another fundamental matter, given that antitrust regulation is directed at monopolies – or at least, it is supposed to be – it would seem essential to understand what a monopoly actually is. Properly understood, a monopoly means that a market is served by only one seller. Also, there must be no close substitutes for the product and high barriers to enter the market must exist. When was the last time this definition was given serious consideration in antitrust matters? And if it hasn’t, then, once more, antitrust law and regulation amounts to matters of politics rather than markets and economics.

In fact, economics and economic history make clear that monopolies in private, competitive markets rarely, if ever, occur, and firms that do gain significant market share can only do so by better serving consumers. Instead, true monopolies occur when government acts to create, grant or protect a monopoly. That lines up with the traditional meaning of a monopoly being a government grant of exclusivity.

The only way that antitrust enforcers can create “monopolies” – especially in dynamic technology markets – is by so narrowly defining the relevant market as to come up with one seller, and effectively wishing away the additional requirements for a monopoly, that is, there being no close substitutes for the product and high barriers to entry existing.

Indeed, even those businesses earning large market shares must be aware of emerging and future competitors. Hence, we do not see the expected outcome of a monopoly operating in the marketplace, that is, reduced supply, significant price increases, and a diminishment in innovation and quality. The economic reality of markets is that companies that have gained significant market share are competing against current, emerging and future competitors. Markets are dynamic, not static.

To drive home this point about the dynamism of the market, AEI scholar Mark Perry regularly updates an analysis whereby he compares the Fortune 500 list from decades past to a more recent listing. The dramatic changes make clear how any assumption that the big, dominant companies of today will be the big, dominant companies of tomorrow always turns out to be dead wrong, thanks to a dynamic, entrepreneurial economy. Perry recently explained:

“Comparing the 1955 Fortune 500 companies to the 2019 Fortune 500, there are only 52 companies that appear in both lists and have remained on the list since it started (see graphic above). In other words, only 10.4% of the Fortune 500 companies in 1955 have remained on the list during the 64 years since in 2019, and more than 89% of the companies from 1955 have either gone bankrupt, merged with (or were acquired by) another firm, or they still exist but have fallen from the top Fortune 500 companies (ranked by total revenues) in one year or more. For example, Avon Products was in the Fortune 500 last year, but it dropped to No. 501 this year — the cutoff to make the Fortune 500 this year was $5.575 billion in sales, and Avon’s sales were $5.571 billion. Many of the companies on the list in 1955 are unrecognizable, forgotten companies today (e.g., Armstrong Rubber, Cone Mills, Hines Lumber, Pacific Vegetable Oil, and Riegel Textile).

“Economic Lessons: The fact that nearly nine of every 10 Fortune 500 companies in 1955 are gone, merged, reorganized, or  contracted demonstrates that there’s been a lot of market disruption, churning, and Schumpeterian creative destruction over the last six decades. It’s reasonable to assume that when the Fortune 500 list is released 60 years from now in 2079, almost all of today’s Fortune 500 companies will no longer exist as currently configured, having been replaced by new companies in new, emerging industries, and for that we should be extremely thankful. The constant turnover in the Fortune 500 is a positive sign of the dynamism and innovation that characterizes a vibrant consumer-oriented market economy, and that dynamic turnover is speeding up in today’s hyper-competitive global economy.”

Insurmountable Challenges. From the perspectives of economics and market realities, antitrust law and regulation suffer from two challenges that are insurmountable. First, a static picture of the market currently is just that, i.e., static, and therefore, stands ignorant of the realities of market dynamism. Second, if elected officials, antitrust regulators and the courts were to recognize market dynamism, and also somehow guide antitrust enforcement by such dynamism, this would amount to nothing more than wild speculation about the future of existing and future industries. Each case would be dangerously disconnected from economic reality.

As opposed to seeing current and future markets with near-perfect clarity, elected officials and their appointees often ignore economics, the true definition of a monopoly, and assorted market realities. After all, the antitrust legislation passed in the late 1800s and early 1900s emerged from complaints by competitors, not consumers, and from anti-big-business ideologies within both the progressive and populist movements. That remains the case today.

All of this raises serious questions as to how antitrust enforcement can be managed in any reasonable way.

Pro-Consumer or Anti-Consumer? Over time, the most essential change in the application of vague antitrust laws was to focus on the consumer. That is, after decades of uncertainty, the courts began to focus on a standard of consumer welfare. While problems certainly remain with antitrust law and regulation, the consumer welfare standard at least has brought some focus and a degree of reasonableness to antitrust.

Unfortunately, that does not mean that antitrust enforcement has been consistently on board with the consumer welfare standard of the courts. In fact, antitrust activity over the years has swung sometimes wildly from one presidential administration to another. At times, antitrust actions seemed to rest on “reasoning” that amounted to little more than “big is bad” – and even then on an inconsistent basis. So, while the courts, starting in the 1970s, turned to a consumer welfare standard – that is, were or will consumers be harmed? – that does not mean that presidential administrations did the same.

As for the economics, while under the best case scenario antitrust actions are supposed to be about consumers, that is, consumer welfare, it must be recognized that complaints of monopoly abuses rarely, if ever, spring from consumers. After all, in the market, businesses gain market share only by serving consumers well. So, while there is a great deal of talk about the consumer in antitrust circles, the reality has always been that antitrust regulation is about protecting competitors. That is, companies that fail to compete turn to government for protection (the previously mentioned rent-seeking). Politicians and their appointees often prove more than willing to impose their own preferences over the decisions of consumers. They overrule consumers. In this sense, antitrust is distinctively anti-consumer.

Nonetheless, in the end, the consumer welfare standard is, by far, the best we have in terms of some consistency and reasonableness in applying vague antitrust laws.

Antitrust and Congress: A Bad System May Become Far Worse

Given the formidable shortcomings of antitrust law and regulation, one would hope that if Congress was going to consider reform or updating, the effort would be focused on at least trying to somehow better connect the law and enforcement with economic realities and how markets actually function.

That is not the case with the reports presented by Democrats and Republicans in the House Subcommittee on Antitrust, Commercial and Administrative Law of the Committee on the Judiciary. In fact, each report, and largely the Democrats’ analysis, serves up recommendations that would create far greater distance between how markets work and antitrust regulation.

Let’s be perfectly clear: Neither report offers recommendations that will improve antitrust law and enforcement. Most of the proposals labor under mistaken assumptions; and would actually inject more politics and uncertainty into the antitrust equation, while moving antitrust law, regulation and enforcement further away from sound economics.

The Democrats’ majority report is intent on a vast expansion of antitrust regulation and enforcement, including tossing out the consumer welfare standard in favor of, effectively, more politics over economics; while the Republican report also argues for expanded regulation and enforcement, but more tentatively so at least in terms of the language used.

The overwhelming tendency in the Democrats’ report is to make sweeping declarations about increased and inevitable monopolization (such as: “Over the past decade, the digital economy has become highly concentrated and prone to monopolization.”), along with “weakened innovation and entrepreneurship,” that ignore the dynamism of the tech economy, the enormous benefits derived by consumers, actual consumer decisions, and the definition of a monopoly.

As for the Republican report, it is willing to go along with the Democrats on a number of proposals, raises questions about others, and rejects some. As stated, “We prefer a targeted approach, the scalpel of antitrust, rather than the chainsaw of regulation.”

As it turns out, though, the Republican “scalpel” is far from targeted.  The report expresses political disagreements with the firms involved (for example: “Most notably, the report does not address how Big Tech has used its monopolistic position in the marketplace to censor speech. This censorship is experienced by groups and ideologies on all wings of the political spectrum but is most notably realized through tech platforms exerting overt bias against conservative outlets and personalities.”)

Consider some key proposals from the Democrats’ report and our responses.

• Proposal:  “Reasserting the anti-monopoly goals of the antitrust laws and their centrality to ensuring a healthy and vibrant democracy.” – “[T]he Subcommittee recommends that Congress consider reasserting the original intent and broad goals of the antitrust laws by clarifying that they are designed to protect not just consumers, but also workers, entrepreneurs, independent businesses, open markets, a fair economy, and democratic ideals.”

Response: This proposal would toss out the consumer welfare standard, and replace it with a broad basis for undermining businesses that have earned considerable market share. Antitrust actions would return to a period in which politics, special interest influences, rent-seekers, and uncertainty held even greater sway over the realm of antitrust – even more so than it does today. By effectively giving more control over business decisions and models to a political class that often fails to understand current business and market conditions, never mind where industries and markets are headed in the future, there inevitably will be losses in terms of innovation, investment, efficiency, and growth.

• Proposal: “Structural separations and prohibitions of certain dominant platforms from operating in adjacent lines of business.” – “Structural separations prohibit a dominant intermediary from operating in markets that place the intermediary in competition with the firms dependent on its infrastructure. Line of business restrictions, meanwhile, generally limit the markets in which a dominant firm can engage.”

Response: Again, having government determine and dictate business decisions, rather than having decisions made by businesses and entrepreneurs subject to market competition and consumer sovereignty would mean lost innovation, productivity and consumer benefits.

Proposal: “Interoperability and data portability, requiring dominant platforms to make their services compatible with various networks and to make content and information easily portable between them.”

Response: Investments in engineering and information often are the lifeblood of businesses in the digital economy. It’s how they provide added value to customers. To have government impose assorted mandates on the use and availability of such investments inevitably will reduce and/or redirect such investments, with consumers, again, suffering.

Proposal: “Presumptive prohibition against future mergers and acquisitions by the dominant platforms.” – “Under this change, any acquisition by a dominant platform would be presumed anticompetitive unless the merging parties could show that the transaction was necessary for serving the public interest and that similar benefits could not be achieved through internal growth and expansion.” – “[T]he Subcommittee recommends that Members consider codifying bright-line rules for merger enforcement, including structural presumptions. Under a structural presumption, mergers resulting in a single firm controlling an outsized market share, or resulting in a significant increase in concentration, would be presumptively prohibited…”

Response: The basis for justifying such random impositions on mergers certainly does not rest with sound economics, nor with how the market works, including that any mergers ultimately will be put to the test of competition and consumer decision-making in the marketplace. Instead, this is simply about a political preference or bias against mergers and “bigness” per se.

• Proposal: “To strengthen the law relating to potential rivals and nascent competitors, Subcommittee staff recommends strengthening the Clayton Act to prohibit acquisitions of potential rivals and nascent competitors.” – “Since startups can be an important source of potential and nascent competition, the antitrust laws should also look unfavorably upon incumbents purchasing innovative startups. One way that Congress could do so is by codifying a presumption against acquisitions of startups by dominant firms, particularly those that serve as direct competitors, as well as those operating in adjacent or related markets.”

Response: A surefire way to cripple startups is to reduce or disincentivize investment in such ventures. This proposal seems designed specifically to undermine entrepreneurship. It is rather commonplace in an assortment of industries for a certain portion of startups to eventually be purchased and merged into larger businesses. Indeed, that possibility or option provides incentives for investing in such enterprises.

• Proposal: “Clarifying that market definition is not required for proving an antitrust violation, especially in the presence of direct evidence of market power” and “Clarifying that ‘false positives’—or erroneous enforcement—are not more costly than ‘false negatives’—or erroneous non-enforcement—and that, in relation to conduct or mergers involving dominant firms, ‘false negatives’ are costlier.”

Response: These measures are simply meant to make it easier to impose politically-driven antitrust regulation or actions against businesses. After all, why bother with defining the market or even considering “false positives” when one is so sure that large businesses and mergers are inherently evil – again, despite the fact that large businesses gained their notable market share by serving consumers well?

• Proposal: “Restoring the federal antitrust agencies to full strength, by triggering civil penalties and other relief for ‘unfair methods of competition’ rules, requiring the Federal Trade Commission to engage in regular data collection on concentration, enhancing public transparency and accountability of the agencies, requiring regular merger retrospectives, codifying stricter prohibitions on the revolving door, and increasing the budgets of the FTC and the Antitrust Division.”

Response: The assumption with these proposals is that antitrust agencies are not doing everything that this Democratic report seeks to do at least in part due to a lack of power, dollars and/or staff. The fact that some administrations might see matters differently, and have a dissimilar antitrust philosophy, seems to be ignored. Also, the number of rather absurd antitrust cases brought by such agencies belies the lack-of-power and/or lack-of-funding assumptions. Consider for example, the FTC suing to stop Edgewell Personal Care Co., maker of Schick razors, from buying razor rival Harry’s Inc., or the FTC challenging Post Holdings, Inc.’s proposed acquisition of TreeHouse Foods, Inc.’s “private label ready-to-eat cereal business.” Private label products are made by one company and offered for sale by a different firm under its brand, and the FTC argued for government action to stop a merger in a small portion of the breakfast foods market. Also, there don’t seem to be high barriers to entry in the razor market. In each case, government antitrust action led to the mergers being called off – after all, challenging a federal agency’s antitrust intrusion gets quite pricey. So much for federal antitrust agencies lacking power and resources.

• Proposal: “Strengthening private enforcement through elimination of obstacles such as forced arbitration clauses, limits on class action formation, judicially created standards constraining what constitutes an antitrust injury, and unduly high pleading standards.”

Response: The objectives here not only include an expansion of antitrust actions and special interest interference, but clearly, serving the interests of trial lawyers.

And, the list goes on. As noted already, the two reports do not make recommendations that would improve antitrust law and regulation.

As for the Republican report, while the language is more tentative in expanding antitrust regulation, and does not go as far as the Democrats, the effort in effect would ramp up antitrust regulation, which would lay the groundwork for political allies and opponents to use this as a stepping stone to greater antitrust interference. Most striking from the Republican report was where they clearly went beyond the idea of using a “scalpel” to improve antitrust enforcement. Consider the following for example:

“The Clayton, Sherman, and Federal Trade Commission Acts were all written with broad interpretations to ensure antitrust regulators would not be hamstrung by future market developments. However, antitrust enforcers have boxed themselves in by relying on judicial interpretations instead of statutory language and Congressional intent. The report accurately describes how these changes have hamstrung true oversight efforts, granting Big Tech a de facto immunity from antitrust scrutiny…

• “By reinforcing presumptions that certain behaviors are likely to reduce competition, lowering evidentiary burdens in litigated cases, and emphasizing that anticompetitive effects are not limited to price effects and include innovation competition, quality, output, and consumer choice, Congress can make a meaningful difference.”

• “We also agree with a number of the majority’s other legislative recommendations, including proposals to shift the burden of proof for companies pursuing mergers and acquisitions and empowering consumers to take control of their user data through data portability and interoperability standards.”

• “The report makes a good case for the need to strengthen our nation’s antitrust agencies with regard to resources. We agree wholeheartedly with this recommendation. We need to give our nation’s antitrust enforcers the resources needed to succeed in litigation against Big Tech.”

Response: Recommendations to expand the powers and discretion of regulators; to increase unnecessary and burdensome regulatory requirements; to reduce checks and balances on regulatory undertakings; and to increase the budget for regulators, all in order to increase regulation of U.S. technology firms seems otherworldly. Missing is a healthy skepticism of governmental power and regulation.

And then there is the willingness to use antitrust action to engage in political disagreements with private companies, as noted earlier. For example:

• “Google used its dominant advertising technology product to demonetize conservative media outlets, including The Federalist. YouTube, a Google subsidiary, blocked videos from Republican politicians and media groups. Amazon censored conservative organizations, including the Family Research Council and the Alliance Defending Freedom by blocking Americans’ ability to donate to these groups through the AmazonSmile tool. Facebook’s algorithms, advertising policies, and content moderation rules have all combined to discriminate against conservative viewpoints, shadow ban conservative organizations and individuals, and suppress political speech… Unfortunately, the majority missed an opportunity to fully scrutinize Big Tech’s use of monopoly power to silence Americans’ First Amendment right to free speech. It is difficult to consider the subcommittee’s investigation into platform behaviors and anticompetitive behavior complete without a robust discussion about platforms using their monopoly power to engage in editorial decisions that silence free speech.”

Response: While one can agree or disagree with particular decisions being made by private companies, they are private companies. And bringing governmental power down upon such decision-making should always be deeply troubling. For good measure, this certainly is not an area for antitrust regulation.

On the more positive aspects of their recommendations, Republicans were unwilling to go along with their Democratic colleagues in other areas. For example:

• “However, the majority also offers policy prescriptions that are non-starters for conservatives. These proposals include eliminating arbitration clauses and further opening companies up to class action lawsuits. Similarly, the majority’s desire to institute Glass-Steagall for America’s tech sector and modeling the majority’s equal terms for equal services recommendation on President Obama’s net neutrality rule will not garner support from Republicans.”

• “The majority report also includes a recommended presumption that any vertical merger by a dominant platform is unlawful. We are concerned that the presumption against vertical mergers, in particular, will chill venture capital investment in a way that will further harm innovative startups and reduce their ability to get their product to market.”

As far as these criticisms of the majority report go, they generally are on target. However, the overall friendliness of the minority report, or response to the Democrats’ majority report, is troubling, and would help to lay the groundwork for a potential vast expansion in antitrust regulation that, in the end, will undermine investment, innovation, dynamism and entrepreneurship in the economy, which, of course, would harm consumers.

The last thing that U.S. entrepreneurship, business, innovation, investment and growth need is bipartisan support for expanding regulatory burdens, including in the arena of antitrust.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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