Slow Burn
Beneath the political froth, efforts to remake America’s antitrust rules for the digital age are moving forward at a steady pace. Though it’s not exactly a gripping drama, this endeavor does have the potential for transformative impact. It traces, in part, to a major report issued last fall by the US House of Representatives that accused this country’s largest tech companies of dangerous monopolistic practices that need to be addressed urgently through federal intervention. At the time, Seattle Congresswoman Pramila Jayapal, a Democrat who sits on the House committee that produced the report, told Wild West that years of “meager” federal enforcement of antitrust laws had led Amazon, Google, Apple, and Facebook to the conclusion that they were “beyond democratic oversight.”
That lackluster enforcement traces to insufficient funding for regulators at the Justice Department and Federal Trade Commission, according to Jayapal and other leading Democrats, as well as to court rulings that have narrowed the scope of existing antitrust laws over recent decades.
“Everything was left to self-regulation,” Jayapal lamented in October. “And that came at a big cost to small businesses, and innovation, and creativity… to the free press, to democracy over all.”
The solution Jayapal offered last fall: Democrats getting more power in DC. “I mean, literally, our democracy is at stake,” she said then. “And there’s no question that moving forward on this antitrust roadmap is going to be a heck of a lot easier if we have Democrats controlling the White House, the Senate, and the House.”
Now, after a rocky journey through twin runoff elections in Georgia and an insurrection at the US Capitol, that exact political alignment has come to pass. Wasting little time, Democratic Senator Amy Klobuchar of Minnesota last week introduced major legislation to change the government’s approach to taking on monopolists.
A frequent critic of Big Tech, a former presidential candidate, and now the top Democrat on Senate’s antitrust subcommittee, Klobuchar has clearly read the House report and appears to be folding many of its recommendations into her proposed legislative action. With a new book about “taking on monopoly power” due out in April, she’s sounding ready to rumble on this issue.
“We have a major monopoly and competition problem,” Klobuchar recently told The New York Times. “People have just finally had it.”
Klobuchar’s legislation would give $300 million more each year to the Justice Department and Federal Trade Commission for antitrust enforcement. In addition, her bill would provide new protections and “financial rewards” for whistleblowers whose information leads to government fines. It would create an “Office of the Competition Advocate” within the FTC that would be tasked with providing warnings about anticompetitive dangers, offering recommendations on how to foster real competition, and publishing data to help the public make sense of it all.
Perhaps most significantly, the Klobuchar proposal would tighten government scrutiny of mergers. Last year’s House report flagged Facebook’s acquisition of Instagram, which was approved in 2012 by federal regulators, as an example of a deal that should have received more consumer-oriented antitrust scrutiny. To prevent similar deals from sailing through federal review in the future, the House report recommended changing antitrust law so that companies seeking to merge bear the burden of proving their deals won’t harm competition. (Rather than the government bearing the burden.) That’s exactly what Klobuchar proposes, along with other tweaks to existing law.
“We can no longer sweep this issue under the rug,” she said in a statement as her new legislation was released last week, calling passage of her proposals a necessary “first step.”
We’ll see if Congress actually takes this step. It certainly won’t happen this week, and probably won’t occur on any timescale that could be described as speedy. But as Jayapal explained back in October, the odds look a lot better with Democrats in control of all three branches of government.
Two other updates from the realm of the slow burn.
The first comes on the heels of the Dominion vs. Giuliani defamation lawsuit, which Wild West explored last week. On Thursday, a second voting machine company, Smartmatic, filed its own defamation suit against Giuliani.
Also named as defendants in the Smartmatic lawsuit: Fox Corporation, Fox News, and its on-air personalities Lou Dobbs, Maria Bartiromo, and Jeanine Pirro.
Smartmatic says Fox, Giuliani, and the other defendants are responsible for casting Smartmatic as a “villain” in a false story they concocted about the presidential election being stolen. The suit is broadly similar to Dominion’s, and its arrival means both of the voting machine companies blamed for Trump’s loss in right-wing echo chambers are now in court trying to clear their names and win huge damages.
What’s different about the Smartmatic action is that it’s targeted at a media company, Fox, which says it plans to “vigorously” defend itself and claims, more broadly, that “Fox News Media is committed to providing the full context of every story with in-depth reporting and clear opinion.” If Fox’s arguments fail to win out in court, the $2.7 billion penalty Smartmatic is seeking could be a big hit to the conservative network; Fox Corporation’s pre-tax profits last year were reportedly $3 billion.
Just as the Dominion lawsuit stands to turn, in part, on whether Giuliani is “a pretty good investigator” who should have known an obvious election falsehood when he saw one, the Smartmatic lawsuit aims to prove that Fox ignored basic journalistic standards and neglected to make even minimal reporting inquiries that would have led to the “full context” around the Smartmatic claims being known to its hosts and its audience (the full context being that the claims are obviously false).
For example, Smartmatic machines were used in only one place in the last election: Los Angeles County. Therefore, they could not have been part of some vast vote-rigging conspiracy affecting swing states. “Defendants either ignored this information,” the Smartmatic lawsuit says, “and thereby acted with reckless disregard, or published their false statements knowing they were false.”
That’s quite a choice: Either Fox was reckless or it lied. Most likely, the company will come forward with an answer that involves not having to pick from either of those options. An early indication of what might lie ahead came on Friday, when Fox cancelled “Lou Dobbs Tonight,” its highest rated show, but described the move as a “planned” change.
A trial that picks through the network’s long-criticized reporting methods seems destined to force additional reckonings.
Finally, a scholarly take on the never-ending claim from conservatives that they’re being singled out for censorship by the country’s most popular digital platforms. This claim has been noted just about everywhere, including in this newsletter. What do researchers at New York University make of it?
This accusation—that social media platforms suppress conservatives— riles a Republican base that has long distrusted the mainstream media and is prone to seeing public events as being shaped by murky liberal plots. On a policy level, the bias claim serves as a basis for Republican attacks on Section 230 of the Communications Decency Act, the federal law that protects platforms from liability associated with user posts and content moderation decisions.
But the claim of anti-conservative animus is itself a form of disinformation: a falsehood with no reliable evidence to support it. No trustworthy large-scale studies have determined that conservative content is being removed for ideological reasons or that searches are being manipulated to favor liberal interests.
Even anecdotal evidence of supposed bias tends to crumble under close examination.
We’re not even two months into 2021. A lot has happened, much of it not exactly soothing. But if there’s anything to draw from these updates, it’s the possibility that we might see some long-awaited trends slowly emerge this year: actual systemic change, accountability for dangerous liars, and the arrival of hard evidence in areas where it’s been lacking for far too long.
Some of the stories I’ve been reading this week:
• Bezos’s “brain double” — An interesting look at Andy Jassy, who became Amazon’s new CEO after Bezos decided he should take the role of Executive Chairman.
• A Trump stake in Parler? — Buzzfeed reports on documents showing that Parler, before it was booted off the Amazon cloud, “offered the Trump Organization a 40% stake in the company” if Trump were to join the social media platform.
• Claiming censorship again — When Parler was kicked off Amazon its CEO, John Matze, suggested his platform was being wrongly silenced. And when Parler later fired Matze? “These people just want to censor me,” he reportedly said of his former bosses.
• Front-seat driver — Amazon plans to install an AI monitor in delivery vehicles that will watch and record driver behavior while also verbally warning drivers when they’re driving too fast or riding too close behind another vehicle.
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