Technology Industry Should Watch Closely as the Executive Branch and Lawmakers Set Their Sights on Antitrust
9 min read
Calls for changes to antitrust law, and how antitrust laws should be applied to the conduct of large technology companies, have been heating up in recent years. Now, the push for wide-scale changes to antitrust law has reached a boiling point. Indeed, President Biden’s sweeping July 9, 2021 Executive Order on competition policy and a bipartisan package of proposed Bills may signal that at least some degree of federal and/or legislative change is on the horizon.
On July 9, 2021, President Biden signed Executive Order 14036, Promoting Competition in the American Economy, which contains 72 initiatives seeking to coordinate the federal government’s response to what it sees as pressing competition issues and the threat of the rise of large corporations.1 With respect to the technology sector, the Executive Order focuses on "killer acquisitions," the accumulation of personal information and data, "unfair methods of competition" on internet marketplaces, and restrictions on independent repairs.2
The Executive Order focuses on policies of the administration and urges federal agencies to take certain actions with the goal of ramping up antitrust enforcement. We have begun to see resulting changes—on July 21, 2021, the FTC unanimously voted to heighten antitrust scrutiny of the repair market. The FTC vowed to restore consumers’ right to repair, including through enforcement of the Sherman Act and the use of the FTC’s power under the FTC Act’s prohibitions on unfair or deceptive trade practices to combat antitrust violations.3
Separately, federal lawmakers were already taking aim at similar “initiatives” through proposed legislation. On June 11, 2021, lawmakers from both parties in the House Judiciary Committee, led by Antitrust Subcommittee Chair David Cicilline (D-RI) and Ranking Member Ken Buck (R-CO), introduced five bills calling for substantial changes to existing antitrust law, such as:
- introducing new forms of prohibited conduct (i.e., self-preferencing);
- targeting acquisitions by technology companies that meet a defined size threshold;
- shifting burdens of proof; and
- mandating data portability and interoperability.
Each change could uniquely impact technology companies (particularly companies that meet the size threshold sometimes incorporated within the bills). While this is not the first package of proposed legislation to call for changes to antitrust law as it has been interpreted and applied by courts for the last 50 years, this package of bills has bipartisan support and, unlike previous efforts, has already passed House Judiciary Committee following a heated two-day debate.
Of course, it is difficult to say which bills stand a real chance of passing and in what form. However, understanding lawmakers’ focus now should provide helpful insight into what is to come. This is especially true where some of the proposals line up with President Biden’s recent Executive Order on competition policy.4
Below is a short overview of the five bills, where the proposed legislation stands now, and what might be coming next.
Key Takeaways from the Proposed Legislation
The new package of proposed antitrust legislation pushes for reform on a number of issues central to the ongoing debate on competition and technology. The legislation has aspects that specifically target technology companies by incorporating size-based thresholds and targeted definitions of “covered platforms.”
We outline key takeaways from each of the five bills below.
|Proposed Legislation||Key Takeaways|
|The American Choice and Innovation Online Act5||Would prohibit purportedly "discriminatory conduct" by covered platforms, including a ban on (i) self-preferencing (favoring its own products, services or lines of business over those of competitors); (ii) excluding or disadvantaging Would prohibit purportedly "discriminatory conduct" by covered platforms, including a ban on (i) self-preferencing (favoring its own products, services or lines of business over those of competitors); (ii) excluding or disadvantaging products, services or lines of business of competitors; and (iii) restricting competitors’ access to platform functions and features that are available to the covered platform operator’s own products, services or lines of business.|
|The Platform Competition and Opportunity Act6||Would impose a presumption of illegality for any merger or acquisition (and certain investments) by a covered platform, regardless of the size of the acquired entity or any competitive effects from the transaction. Would also shift the burden of proof to the acquiring entity to demonstrate that the proposed transaction will not undermine competition.|
|The Ending Platform Monopolies Act7||Would impose structural separations and prohibit the operator of a covered platform from owning, controlling or having a beneficial interest in a line of business that provides the platform with some incentive to advantage lines of business.|
|The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act8||
Would require covered platforms to maintain transparent third-party-accessible interfaces, including APIs, for portability and interoperability. Would also impose compliance with enumerated steps to facilitate portability and interoperability.
For a more detailed analysis of this bill and its implications, click here.
|Merger Filing Fee Modernization Act9||Would decrease HSR filing fees for smaller transactions but raise HSR filing fees for all transactions that are more than $500 million. Would also authorize additional funding for the DOJ Antitrust Division and FTC.|
Legislation on a Fast Track or Will the Executive Branch Win the Competition?
While the proposed bills have made considerable progress in short order, they still have a long way to go. To advance through the legislative process, it is likely that significant changes to the bills will be necessary to garner bipartisan support.
Despite the bipartisan interest, Democrats and Republicans disagree on many of the key proposals. There is a growing divide within the Republican party about whether the legislation goes too far in some places and not far enough in others. Detractors are arguing that the bills would undermine innovation, block mergers and acquisitions that are otherwise procompetitive and beneficial for consumers, and place too much power in the hands of government without addressing the specific competition concerns underlying the calls for this legislation in the first place.10 Relatedly, on July 7, 2021, the House Judiciary Committee Republicans, led by Ranking Member Jim Jordan (R-OH), announced their own version of a "Big Tech" regulation agenda, advancing a number of new proposals designed to speed up and strengthen antitrust enforcement while at the same time addressing concerns about censorship of conservative views.11
Despite this uncertainty, there is little doubt that calls for changes to existing antitrust laws are the loudest they have been in decades. We have already begun to see movement from the Agencies in implementing the directives and recommendations in the Executive Order, and we may see more movement well before we see new law—but the effects may be similar due to the overlapping nature of the concerns being addressed and philosophies on how to address those concerns.
That said, aggressive proposals like these five bills and many of the Executive Order’s initiatives, which could upend decades of established antitrust law and possibly discourage or outright block important innovation in the tech industry, must be analyzed closely and should not be rushed. White & Case's Global Competition/Antitrust Group and Technology Industry Group are tracking these developments closely.
1 Exec. Order No. 14036,§ 5(g), 86 FR 36987 (2021); FACT SHEET: Executive Order on Promoting Competition in the American Economy, White House, July 9, 2021. For more information on the Executive Order, click here
2 FACT SHEET: Executive Order on Promoting Competition in the American Economy, White House, July 9, 2021.
3 FTC to Ramp Up Law Enforcement Against Illegal Repair Restrictions, Federal Trade Commission, July 21, 2021; Policy Statement of the Federal Trade Commission on Repair Restrictions Imposed by Manufacturers and Sellers, Federal Trade Commission, July 21, 2021.
4 Mark Gidley et al., Sweeping US Order on “Promoting Competition”, White & Case, July 12, 2021.
5 American Choice and Innovation Online Act, H.R.3816, 117th Congress (2021-2022). Sponsored by David Cicilline (D-RI) and co-sponsored by Rep. Lance Gooden (R-TX).
6 Platform Competition and Opportunity Act of 2021, H.R.3826, 117th Congress (2021-2022). Sponsored by Rep. Hakeem Jeffries (D-NY) and co-sponsored by House Antitrust Subcommittee Ranking Member Ken Buck (R-CO).
7 Ending Platform Monopolies Act, H.R.3825, 117th Congress (2021-2022). Sponsored by Rep. Pramila Jayapal (D-WA) and co-sponsored by Rep. Lance Gooden (R-TX).
8 ACCESS Act of 2019, S.2658, 116th Congress (2019-2020). Sponsored by Rep. Mary Gay Scanlon (D-PA) and co-sponsored by Rep. Burgess Owens (R-UT).
9 Merger Filing Fee Modernization Act of 2021, H.R.3843, 117th Congress (2021-2022). Sponsored by Rep. Joe Neguse (D-CO) and co-sponsored by Rep. Victoria Spartz (R-IN).
10 Christopher Cole, House Panel Advances Antitrust Overhaul As GOP Splinters, Law 360, June 23, 2021.
11 CPI, House Republicans Release Their Big Tech Antitrust Agenda, Competition Policy International, July 7, 2021.
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