Calls for changes to antitrust laws and how antitrust laws should be applied to the conduct of big tech companies have grown in recent years. Today, the demand for large-scale antitrust changes has reached a boiling point. Indeed, President Biden’s broad July 9, 2021 executive order on competition policy and a bipartisan set 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 to coordinate the federal government’s response to what he considers to be pressing competition issues and to the threat of the rise of big business.1 Regarding the technology sector, the executive order focuses on “lethal acquisitions”, the accumulation of information and personal data, “methods of unfair competition” in Internet markets and restrictions on remedies independent.2
The executive order focuses on administration policies and urges federal agencies to take certain actions in an effort to strengthen antitrust enforcement. We’ve started to see the resulting changes – on July 21, 2021, the FTC voted unanimously to tighten antitrust oversight of the repair market. The FTC is committed to restoring consumers’ right to redress, including through enforcement of the Sherman Act and use of the FTC’s power under the FTC Act’s prohibitions on unfair or deceptive marketing practices to combat against violations of antitrust laws.3
Separately, federal lawmakers were already targeting similar “initiatives” through a bill. On June 11, 2021, bipartisan lawmakers on the House Judiciary Committee, led by Antitrust Subcommittee Chairman David Cicilline (D-RI) and Ranking Member Ken Buck (R-CO), introduced five bills calling for substantial changes to existing antitrust law. , such as:
- the introduction of new forms of prohibited conduct (ie self-preference);
- target acquisitions by technology companies that reach a defined size threshold;
- shifting the burden of proof; and
- making data portability and interoperability mandatory.
Each change could have a unique impact on technology companies (especially companies that reach the size threshold sometimes incorporated into invoices). While not the first set of legislative proposals calling for changes to antitrust law as it has been interpreted and applied by the courts over the past 50 years, this set of bills enjoys bipartisan support and, unlike previous efforts, has already been passed by the Judiciary. Commission after a heated two-day debate.
Of course, it is difficult to say which bills have a real chance of being adopted and in what form. However, understanding the direction of lawmakers now should provide some useful insight into what’s to come. This is especially true when some of the proposals align with President Biden’s recent executive order on competition policy.4
Below is a brief overview of the five bills, the current status of the proposed legislation, and what may come next.
Main lessons of the bill
The proposed new antitrust package pushes for reform on a number of issues central to the ongoing competition and technology debate. The legislation has aspects that specifically target tech companies by incorporating size-based thresholds and targeted definitions of “covered platforms.”
Below we outline the key takeaways from each of the five bills.
|Proposed legislation||Key points to remember|
|The US Online Choice and Innovation Act5||Prohibit allegedly “discriminatory” behavior by Covered Platforms, including prohibiting (i) self-preference (favoring one’s own products, services or industries over those of competitors); (ii) exclude or disadvantage Would prohibit allegedly “discriminatory” behavior on the part of Covered Platforms, including prohibiting (i) self-preference (favoring one’s own products, services or industries over those competitors) ; (ii) exclude or disadvantage competitors’ products, services or industries; and (iii) restrict Competitors’ access to Platform functions and features that are available for the Covered Platform Operator’s own products, services or lines of business.|
|Competition law and platform opportunities6||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 the competitive effects of the transaction. Would also shift the burden of proof to the acquiring entity to demonstrate that the proposed transaction will not harm competition.|
|Ending Platform Monopolies Actseven||Would impose structural separations and prohibit the operator of a covered platform from owning, controlling, or having a beneficial interest in any line of business that provides the platform with an incentive to benefit lines of business activity.|
|Enhancing Compatibility and Concurrency by Enabling Change of Service (ACCESS) Act8||
Would require covered platforms to maintain transparent interfaces accessible to third parties, including APIs, for portability and interoperability. Would also require compliance with the steps listed to facilitate portability and interoperability.
For a more detailed description analysis of this bill and its implications, click here.
|Merger Filing Fee Modernization Act9||Would reduce HSR deposit fees for small trades, but increase HSR deposit fees for all trades over $500 million. Would also authorize additional funding for the DOJ’s antitrust division and the FTC.|
Accelerated legislation or will the executive branch win the competition?
Although the proposed bills have made considerable progress in a short time, they still have a long way to go. To move forward in the legislative process, it is likely that significant changes to the bills will be required to gain bipartisan support.
Despite bipartisan interest, Democrats and Republicans disagree on many of the key proposals. There is a growing division within the Republican Party over whether the legislation goes too far in some places and not far enough in others. Critics argue the bills would undermine innovation, block mergers and acquisitions that are otherwise pro-competitive and beneficial to consumers, and give too much power to government without addressing the specific competition concerns that underlie calls for this legislation in the first place.ten Similarly, on July 7, 2021, Republicans on the House Judiciary Committee, led by Ranking Member Jim Jordan (R-OH), announced their own version of a “Big Tech” regulatory agenda, advancing some number of new proposals designed to speed up and strengthen antitrust enforcement while addressing concerns about censorship of conservative views.11
Despite this uncertainty, there is no doubt that the calls for changes to existing antitrust laws are the loudest in decades. We have already started to see movement from agencies in implementing the directives and recommendations of the executive order, and we may see more movement long before we see new legislation, but the effects may be similar due overlapping concerns addressed. and philosophies on how to address these concerns.
That said, aggressive proposals like these five bills and numerous executive order initiatives, which could upend decades of established antitrust law and potentially discourage or block significant innovation in the tech industry outright, need to be carefully analyzed and should not be rushed. White & Case’s Global Competition/Antitrust Group and Technology Industry Group are following 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 BACKGROUNDER: Executive Order on Promoting Competition in the U.S. Economy, White House, July 9, 2021.
3 FTC to Ramp Up Law Enforcement Against Illegal Repair Restrictions, Federal Trade Commission, July 21, 2021; Federal Trade Commission Policy Statement 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, HR3816, 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, HR3826, 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, HR3825, 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 Representative Mary Gay Scanlon (D-PA) and co-sponsored by Representative Burgess Owens (R-UT).
9 Merger Filing Fee Modernization Act of 2021, HR3843, 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.