House Judiciary OKs Antitrust Bills Targeting Big Tech

Holding a hearing after introduction of the legislative package wasn't in consideration, Chairman Jerry Nadler, D-N.Y., told us. “It’s very bipartisan legislation,” he said. “It was studied carefully for two years.”

“We’ve had 10 hearings in total, three on remedies,” said House Antitrust Subcommittee Chairman David Cicilline, D-R.I. “This is an effort by the large technology companies to prevent any reforms, to keep in place an ecosystem that is allowing them to use their monopoly power to exclude rivals, to crush competitors, to disadvantage consumers, and they’ve gotten away with it too long.”

“They want to slow it down until it doesn’t happen this Congress,” said House Antitrust Subcommittee ranking member Ken Buck, R-Colo. “You’re going to hear the same arguments next Congress.” He called the markup a “starting point,” and said “I’m open to improvements on all” the bills. He expects the Senate to improve the legislation.

The committee passed the Merger Filing Fee Modernization Act 29-12. HR-3843 would increase fees for megadeals. Rep. Joe Neguse, D-Colo., introduced the bill with Rep. Victoria Spartz, R-Ind. Spartz and four Republicans voted for the bill, including Buck; Reps. Matt Gaetz, Fla.; Chip Roy, Texas; and Burgess Owens, Utah. The Senate included text of the companion S-228 in the U.S. Innovation and Competition Act (S-1260), which passed earlier this month (see 2106080074).

The bill would modernize the filing fee structure for the first time in 20 years, increasing the fees on substantial deals but lowering the fees for small businesses, said Neguse. He noted the bill previously passed the Senate unanimously with support from Sens. Ted Cruz, Texas, Mike Lee, Utah, lead sponsor Chuck Grassley, Iowa, and others. The other lead sponsor, Sen. Amy Klobuchar, D-Minn., said in a statement: “This mark-up continues to show important progress as we further our efforts to fund the antitrust enforcement agencies and update our competition laws.”

Rep. Darrell Issa, R-Calif., questioned whether companies, even small ones, need a reduction in fees set in 1985. The committee “didn’t get this right,” he said. He also argued the FTC should be expanded to a six-commissioner panel, so it’s “less of a political tool.” Rep. Sheila Jackson Lee, D-Texas, noted the bill will allow the antitrust enforcement agencies to collect an additional $135 million in merger filing fees in the first year.

Roy failed to attach an amendment that would have prohibited the FTC from using funds to promote critical race theory. Democrats blasted the amendment. Rep. Eric Swalwell, of Calif., called it a “pessimistic, cynical” attempt to divide.

HR-3843 would significantly increase fees for all types of businesses, not limited to the tech sector, said Rep. Steve Chabot, R-Ohio. Congress needs to reduce business costs, and it shouldn’t be giving unelected bureaucrats the power to regulate businesses and the economy, he said.

The committee passed Buck’s State Antitrust Enforcement Venue Act 34-7. HR-3460 would allow state attorneys general to “remain in the court they select rather than having their cases moved to a court the defendant prefers.” Gaetz said the bill would empower state AGs to hold tech companies accountable and stop the revolving door among the FTC, DOJ and Big Tech. “Overall, it’s trying to fix and do the most good for the greatest number of cases,” Rep. Louie Gohmert, R-Texas, told us. Voting no were Swalwell; Issa; Zoe Lofgren, D-Calif.; Lou Correa, D-Calif.; Thomas Massie, R-Ky.; Tom McClintock, R-Calif.; and Michelle Fischbach, R-Minn.

Nadler compared the current legislative effort to the Telecom Act, which he said was designed to promote competition and open new markets. During the hearing, he called that 1996 law a catalyst for the digital revolution of the past 25 years. It established nondiscrimination requirements, line of business restrictions and data interoperability mandates for dominant firms, all goals of the current legislative package, he said. But the Telecom Act failed to prevent the waves of consolidation, and legislators hope to avoid that with the current bills, he said.

The current legislation gives the FTC too much power over technical committees that would regulate the industry, said ranking member Jim Jordan, R-Ohio. He argued against the Augmenting Compatibility and Competition by Enabling Service Switching (Access) Act. He quoted Commissioner Rebecca Kelly Slaughter saying the agency has the right to use antitrust enforcement tools to “right the wrongs of systemic racism.” He cited Chair Lina Khan’s background with House Judiciary Committee Democrats, saying she wrote the bills moving through the House. The bills were written by subcommittee members in a bipartisan effort, not by Khan, said Cicilline.

Slaughter "understands that all enforcement decisions necessarily have an effect on market structure and will either perpetuate or breakdown structural racism," her office said in a statement. "She strongly believes that enforcement officials should be making those decisions with open eyes about their consequences. We cannot achieve markets that work for all people unless we recognize the inherent inequality of our current systems and the legacy of centuries of economic oppression.”

Senators are going to “watch” the House-side “food fight” over its antitrust bills and then aim for a “more nuanced” approach to its measures, Senate Consumer Protection Subcommittee ranking member Marsha Blackburn, R-Tenn., told a Wednesday FCBA virtual event (see 2106230067). She described the House’s antitrust approach as “very interesting” and thinks members are “really pushing it” by giving the FTC and DOJ so much antitrust power. Senators will try to make their bills “a bit more targeted” and “need to find productive ways to shape this discussion,” Blackburn said.