Header Ads

The hipsters of antitrust

Fully Charged
Bloomberg
Hey it's Josh.The main work of the Democratic Party's virtual convention is to officially choose its presidential nominee, but another part of the quadrennial festivities is to approve a party platform. A draft version of the document is already public, and it's an interesting testament to how much the party's thinking on tech has changed since the last time the Democrats went through this exercise in the waning days of the Obama administration. 
 
In short, the Democrats have become the party of hipster antitrust. For decades, antitrust enforcers have centered the consumer welfare standard, which defined price increases as the only valid focus of antitrust action. Over the last several years a new school of thought has taken hold, mostly in liberal circles, which takes a much dimmer view of market consolidation, and wants to update antitrust laws and enforce them in much more aggressive ways. 
 
The Democrats, in their 2020 platform, say an administration led by Joe Biden would instruct regulators to also "consider potential effects of future mergers on the labor market, on low-income and marginalized communities, and on racial equity." They say a new administration would review questionable deals the Trump administration has approved, and call on the federal government to consider breaking up companies that use their market power in anticompetitive ways.
 
This is a big swing against Big Tech, if not an entirely surprising one — a number of prominent Democrats have adopted these positions in recent years. The platform also shows an evolution on privacy. Four years ago, the section on privacy dealt primarily with government surveillance; this year the party makes specific proposals on privacy legislation aimed at curbing abuses by private businesses. There is also mention of the responsibility of social media companies to confront disinformation, a word which did not appear in the 2016 platform. 
 
There is, of course, nothing holding the Democrats to any of these proposals. Party platforms exist outside of the realities of governing, where much time is spent on emergencies, political opponents hold significant power to stymie any progress, and the default setting of Congress is paralysis. This is the perfect time to just go ahead and talk tough. 
 
There is an argument to be made that the Democratic platform could be the high-water point for the antitrust movement. The Democrats found religion on antitrust when they weren't in power. Neither Biden nor vice presidential nominee Kamala Harris led that charge (though both have had their moments.) If they do win in November, they'll be taking over at a time when resistance from the industry starts getting more serious. The new administration could inherit a federal antitrust lawsuit against Alphabet Inc.'s Google and whatever aggressive legislative agenda emerges from the congressional antitrust investigation led by Rhode Island Representative David Cicilline. Oh, and there's the coronavirus. It's easy to see Biden putting a bit less energy into this than, say, a President Elizabeth Warren would have. 
 
The hypothetical Biden administration has already begun to assemble people to advise it on policy matters, and the group has included both hawks and doves on antitrust and tech policy. The personnel choices a Biden administration makes will be more important than the policy priorities it has articulated in the platform, according to Sarah Miller of the Open Markets Institute, one of the leaders of the move towards a more aggressive approach to antitrust. But Miller, who has participated in the campaign's committee on the issue, also is confident it will be hard for a new Democratic administration to stop the momentum. "In the last four years I've been working on this, I keep thinking that it has hit its peak and will calm down," she says. "That's never been true." —Joshua Brustein
 

If you read one thing

SenseTime, a Chinese company blacklisted last year by the Trump administration, is doing just fine by focusing on its home country. Local governments are using its facial recognition software in their response to coronavirus, providing enough momentum that the company is considering an initial public offering. Its success is also an illustration of how Chinese companies benefit as the country embraces technologies that governments like the U.S. have resisted. 

And here's what you need to know in global technology news

Oracle's possible bid for popular video-sharing app TikTok makes a little more sense when you look beneath the surface.

SpaceX has raised $1.9 billion this month, capping off a busy stretch that has also included its first successful human spaceflight. 

Uber and Lyft may make big changes to their business model in California. Among the options: franchising their brands to local fleet operators. 

HQ2 may have failed, and many commentators are saying Covid-19 killed New York City and urban areas in general, but Amazon is planning for thousands of new employees in Manhattan and other cities. 

 

Like Fully Charged? | Get unlimited access to Bloomberg.com, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.

 

No comments