Melissa Harris-Perry: This is The Takeaway. I'm Melissa Harris-Perry in for Tanzina Vega, and these are the unmistakable sounds of a family game night favorite.
Speaker 1: Six over here. One, two, three, four, five, six.
Speaker 2: Guys, Jake just landed on Boardwalk and Ty owns Boardwalk, and Park Place [crosstalk]--
Speaker 3: Ty is the winner.
Melissa: Now that's the YouTube crew, the Williams Family playing Monopoly. From Reading Railroad to St. Charles Place, Boardwalk to Park Place, the goal is to get it all, build it up big, and charge the highest prices. Bragging rights belong to the one who can amass a fortune while bankrupting the siblings.
Speaker 2: Oh yes, show off all your money. Okay, yo.
Melissa: A little monopoly with the family and friends is good, clean fun, but real monopolies are big, literally big problems. Back in the 1800s Americans faced four monopolies or trusts that controlled the entire supply of their product. Railroads, oil, steel, and sugar, and with no competition, they could charge high prices without worrying about quality. 19th-century lawmakers were not having it, and passed a series of antitrust laws to limit the size, scope, and reach of these monopolies.
Today, Americans are again facing another big four. This time, Amazon, Apple, Facebook, and Google. Some of today's antitrust concerns mirror those of the 19th century, like the problem of limiting competition and stifling innovation in the marketplace. Here's Congresswoman Pramila Jayapal of Washington, questioning Facebook CEO, Mark Zuckerberg last July.
Pramila Jayapal: Has Facebook ever taken steps to prevent competitors from getting footholds by copying competitors?
Melissa: Other concerns are a little more 21st century, like the unanswered questions about how these companies collect, analyze and deploy the data of individual users. Here's Congresswoman Val Demings of Florida questioning Google's CEO, during the same July-2020 hearing.
Val Demings: Alarm bells were raised about the access to data Google would have, specifically the ability to connect a user's personal identity with their browsing activity.
Melissa: More than a hundred years ago, the US Congress used the Sherman Act, the Clayton Act, and the Federal Trade Commission Act to break up monopolies, halt price-fixing, and monitor potential monopolists. Today, the US Congress has prepared six separate pieces of legislation, aimed at opening the tech marketplace to more competition and protecting consumers against these giants misusing our data. These are just bills not yet laws, but the measures do enjoy where bipartisan support, still it's not clear if the legislation can stand up to millions the big tech is spending to lobby against the measures. Last year, Amazon spent $4.4 million, and Google spent more than $1.9 million.
Speaker 2: Oh, yes. Show off all your money. Okay, yo.
Melissa: Joining me now to discuss the possibility of busting up big tech is Alfred Ng, reporter at The Markup. Nice to have you, Alfred.
Alfred Ng: Hi, thanks for having me.
Melissa: These bills came out of a 16-month investigation by the antitrust arm of the House Judiciary Committee. Why did they start the investigation in the first place?
Alfred Ng: Yes, the House Judiciary Committee announced this investigation in June 2019, with a focus on competition in the digital markets. There was a concern that a small number of platforms, Apple, Amazon, Facebook, and Google had too much power online, and were hurting competition.
Melissa: Talk to me about how they're able to do that with competition. Maybe talk a little bit about the Google Search page, or how Amazon is used data from independent sellers.
Alfred Ng: The results were published in this 400-plus-page report in October 2020, listing out all the ways that these four companies had hurt competition and have been using their power to stay dominant. The more important part of the report was how to fix it, but there were issues like Google giving themselves preference in their own search results, and a markup investigation actually found that about 40% of the search results on a mobile device, on that first page were all Google answers. If you were looking for flight tickets or something like that, instead of other competitors to Google, the first 40% of the page would most likely be Google's own results.
On Amazon, they had been accused many times and there had been a lot of companies who said that Amazon does this, where their products were being sold on Amazon doing very well on Amazon, and then all of a sudden Amazon comes out with its own product that was extremely similar to theirs. Amazon has denied many times that they use their own data that they collect as a platform for this, but it happens so many times that these companies are making a fuss about it. These laws that have been proposed, one of them has been written to address that exactly.
Melissa: Let's put this down where the goats can get it, we'll get to the bills in just one second. For the average user, if I am looking for flight tickets or information about a diagnosis that I've gotten recently on Google, or if I'm trying to find some product, and I'm going to Amazon first, what difference does all this make to me?
Alfred Ng: It makes a big difference, because it really limits the choices that you're seeing. A lot of the antitrust laws that were written decades ago were about competition and choices for consumers. The way that they were structured was always around price and quality, and that's not really something you get now and that's why these laws are written differently. In the sense that it's more about choice than it is about price. You're not paying every time you search on Google, you're not paying anytime you search on Amazon, but now it's more about quality and choices.
if I'm looking for something, now all of a sudden becomes ads on Amazon or ads on Google that are the top results, rather than something that could potentially be the best choice available for you. It's hurting you in that sense, and then it's also potentially hurting you by if Google and Amazon are always this top search results, these competitors that exist, might not exist in the long run and that hurts competition. Quality over time can dwindle because of that.
Melissa: Okay, let's go through these bills a bit. Three of the six bills, in other words half of them are planning to tackle the issue around competition directly. How do they do that?
Alfred Ng: There's three bills that are targeted directly towards mergers and acquisitions. A big part of the report found that there had been hundreds of acquisitions in the last 10 years by these four companies, and many of them went unchallenged. These bills are trying to change that. One of them is the Platform Competition and Opportunity Act that shifts the burden of proving that a merger wouldn't hurt competition to tech giants.
The way that it works right now, if there's a merger that's happening, the Department of Justice or the Federal Trade Commission has to challenge these mergers and then they have to go to court and say, "Hey, this harms competition," and if they can't prove it, the merger can go through. This bill would flip it the other way around, where these companies now if they want to buy a company, have to go to court and say, "No, the reason why this doesn't hurt competition is X, Y, & Z," and that's a much bigger hurdle for them than it would be for the DOJ to go and prove otherwise.
Melissa: It's like voter preclearance. The voting rules change preclearance that the dive in the Supreme Court under Shelby v. Holder, it puts the burden of proof on those who are making that change.
Alfred Ng: Yes, exactly. The thing is, with the Department of Justice, and the Federal Trade Commission, when it comes to regulating the tech companies is that their resources are very slim. This is a complaint that I've heard many times from the FTC that they don't have the same amount of resources to go after big tech that organizations and the European Union might have.
That's also why the Merger Filing Fee Modernization Act is very important. Along with changing the fees that are associated with mergers, it also gives a lot more funding to the Department of Justice and the FTC. This bill really takes a look at the fees that are associated with mergers and acquisitions that haven't been updated in more than a decade.
Melissa: I want to do one more beat here on the FTC and on this asymmetry of resources, because there's a new FTC chair in our new administration and boy, some dollars have been spent going after her already. Can you say a few words about that?
Alfred Ng: Yes. The new FTC Chair is Lina Khan, who is a very vocal antitrust figure. She is now the Head of the FTC, but before that, she was also a big part in this report against these major tech companies. Yes, these companies have really been coming out to get her away from all of this. Amazon and Facebook have both asked that she be taken off of any of the FTC's antitrust measures saying that she can't be trusted to be unbiased on this topic, because she was so vocal about antitrust in the past.
Melissa: Now, there are two more bills that go after big data. How do they do that?
Alfred Ng: There's the American Choice and Innovation Online Act, which prevents big companies like Amazon from using the data it gets from third parties, that are using its platform for their own market research purposes. For example, Amazon has been accused many times of taking the data that it gets as a marketplace and using that data as a products company. For example, let's say a camera bag is doing really. well on Amazon. Amazon can see this. They see that it's surging to the top of sales. They see that it's in very high demand and now-- They get that data as a platform and they can turn around and say, "Well, we're also making this camera bag now." Then all of a sudden, they can also use their own power to put their own camera bag above this one that was doing really well organically, because they own the marketplace as well.
That's also what the American Choice and Innovation Online Act does. Where not only can you not use your advantage as a data platform to figure out what's going to sell, you also can't give preference to your own products on your own marketplace.
Melissa: Now, one last bill, and it has to do with court shopping. What is court shopping and how does the bill make it harder?
Alfred: Court shopping is basically whenever a company says, "Hey, we don't want this trial in this state. Can we do it in another state because it would be a lot more convenient for us?" You can actually see a real example of that with Google's case against Texas and a group of other states in a antitrust case. It was based in Texas, or it started in Texas and Google, for months had been arguing, "No, we should move this to California. We have more people in California. There's other antitrust cases against us in California. It would be a lot more convenient for everyone if it were in California."
Now, the reason why this hurts antitrust cases is because it delays them, it raises the cost, and it can also move a trial away to a state that favors the tech companies more. In federal antitrust cases by agencies, like the FTC or the Justice Department, they actually can't do that. Wherever it's filed, that's where it's supposed to stay, but State Attorney Generals don't enjoy the same privilege. The State Antitrust Enforcement Venue Act basically tries to give them the same rights that the FTC and the Justice Department have, where the trial can't be moved and they can't even ask for it to be moved.
Melissa: Alfred Ng is a reporter with The Markup. Thank you so much for joining us this morning.
Alfred: Thanks for having me.
Melissa: Just to note, The Markup is a nonprofit website and I serve on its board in a volunteer capacity.
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