Battle With Big Tech

"WASHINGTON -- President Biden's sweeping new competition order targets big tech companies in ways that could fundamentally alter how they do business.

But it will fall to government agencies to carry out the order, and they could take years to put its ideas into action. The Federal Trade Commission, which already has big tech companies in its sights, is likely to become a particular battleground.

A core thrust of the order is to encourage regulatory agencies such as the FTC to adopt new rules and policies to rein in the growing size and power of large tech platforms such as Amazon.com Inc., Alphabet Inc.'s Google and Facebook Inc. That could prove to be a tall order for the FTC, the principal federal regulator of internet commerce. Some observers say the agency -- which had its sails trimmed by Congress in the deregulatory era of the 1970s and 1980s -- has struggled to keep up with unfair practices online, particularly in the areas of user privacy, big data and tech mergers.

As the White House detailed its executive order, one Democratic FTC commissioner, Rebecca Kelly Slaughter, said in a tweet, "So excited about @POTUS's EO on competition; it is an ambitious agenda that will help our markets work better and create a more equitable economy for all people - esp workers, marginalized communities, entrepreneurs, small biz."

Gary Shapiro, chief executive of the Consumer Technology Association that counts Apple Inc., Facebook and Google among its members, defended the tech industry as competitive and vibrant and took issue with the White House's action.

"Elements of this executive order threaten our global leadership and hard-won success," he said, taking aim, in particular, at scrutiny of past mergers and acquisitions. "Prohibiting these acquisitions will dry up venture capital, harm entrepreneurs and small businesses and make our economy less competitive."

America's biggest tech companies, Microsoft Corp. Google, Amazon, Facebook and Apple, declined to comment or didn't respond to a request for comment. They have, in the past, defended their business practices and said they don't harm consumers.

One of the most far-reaching parts of the order encourages the FTC to establish new rules on online surveillance and the accumulation of users' data. That could have significant effects on all the big platform companies. A White House fact sheet says that "many of the large platforms' business models have depended on the accumulation of [extraordinary] amounts of sensitive personal information and related data."

The executive action also pushes the FTC to establish rules barring "unfair methods of competition on internet marketplaces."

The White House said companies that run retail marketplaces "can see how small businesses' products sell and then use the data to launch their own competing products," and can also "display their own copycat products more prominently than the small businesses' products."

The Biden administration also is taking aim at deal making by platforms it views as dominant and trying to fend off future competition. Over the past decade, the White House said, "the largest tech platforms have acquired hundreds of companies -- including alleged 'killer acquisitions' meant to shut down a potential competitive threat."

FTC Chair Lina Khan and the head of the Justice Department's antitrust division, Richard A. Powers, said in a joint statement: "We plan soon to jointly launch a review of our merger guidelines with the goal of updating them to reflect a rigorous analytical approach consistent with applicable law."

TechNet, a network of tech executives and investors, said in a statement that the order's provisions could discourage innovation and harm consumers. "They put at risk free services that consumers use to message and call loved ones, get directions, connect with healthcare professionals, consume online content -- including news and educational content -- and much more," said TechNet Senior Vice President Carl Holshouser." [1]

1. U.S. News: FTC to Play Central Role in Battle With Big Tech
McKinnon, John D; Bobrowsky, Meghan. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]12 July 2021: A.4.