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Efforts to break up big tech expected to continue under Biden

Antitrust forces expect the Biden administration to pursue federal antitrust litigation and lawmaking. But Biden and Vice President-elect Kamala Harris have strong ties to big tech.

Amid a rising wave of federal antitrust lawsuits and other action on big tech vendors, Democratic President-elect Joe Biden is expected to push tighter regulation and even break up big tech.

Biden and Vice President-elect Kamala Harris are set to take office on Jan. 20, 2021, as bipartisan antitrust momentum in Congress, federal regulatory agencies, the states and the public builds steadily against Amazon, Apple, Facebook and Google.

"It's hard for me to see how the Biden administration is going to come in and ramp down antitrust enforcement against the tech industry," said Michael Kades, director of markets and competition policy at the antitrust group Washington Center for Equitable Growth.

Meanwhile, it's difficult to gauge the extent of Antitrust sentiment in the tech industry. Many executives don't want to talk about the tech giants and antitrust policy because their companies do business with those vendors, or they simply don't categorize the vendors as monopolies.

Among the vendors targeted by regulators and prosecutors, only Facebook responded to requests for comment about what it expects from the new administration.

"People and small businesses don't choose to use Facebook's free services and advertising because they have to, they use them because our apps and services deliver the most value," Facebook said in a prepared statement attributed to Jennifer Newstead, vice president and general counsel at the social network. "We are going to vigorously defend people's ability to continue making that choice."

Biden, Harris ties to big tech

Some signals indicate that the Biden administration won't take a dramatic stand on big tech.

Both Biden and Harris have been prolific fundraisers in Silicon Valley and reaped millions of dollars in campaign donations from tech figures such as LinkedIn co-founder Reid Hoffman. And big tech veterans such as Facebook co-founder, Dustin Moskovitz and former Google CEO Eric Schmidt dumped millions into their own super PAC to defeat President Donald Trump.

Photo of President-elect Joe Biden

Notably, neither Biden nor Harris supported the big tech breakup plan of Massachusetts Senator and Democratic Presidential primary candidate Elizabeth Warren.

Warren proposed peeling off Instagram and WhatsApp from Facebook, separating Whole Foods from Amazon and detaching search and marketplace operations from Google, among other moves.

In contrast, Biden and Harris both are seen as relatively pro-business Democrats with ties not only to Silicon Valley, but also to Wall Street. And Biden's transition teams contain more tech execs than prominent critics of big tech.

But a national consensus appears to have formed that the country needs to take some action against the giant tech vendors that many, including some of their supporters, see as too big, too powerful, and arrogant.

Ultimately, Biden is seen as friendly to appeals from antitrust activists and lawmakers, in part because the stage has been set for the incoming administration to push the broad-based antitrust agenda forward.

Antitrust lawsuits against big tech

The tumultuous election and its aftermath in the fall of 2020 saw a blistering fusillade of federal and state antitrust moves against big tech.

The Department of Justice (DOJ) sued Google, along with 11 state attorneys general. The Federal Trade Commission (FTC) sued Facebook, with 46 state attorneys general. Meanwhile, the federal agencies continue to pursue antitrust investigations of Amazon and Apple that launched in 2019.

It's hard for me to see how the Biden administration is going to come in and ramp down antitrust enforcement against the tech industry.
Michael KadesDirector of markets and competition policy, Washington Center for Equitable Growth

"On the tech stuff there's no reason to think they'll slow down," said Kades, a former top antitrust policy adviser to Minnesota Sen. Amy Klobuchar, referring to antitrust efforts by the federal agencies under the Biden administration. "The question is, might they be even more aggressive?"

House Democrats kicked off the antitrust campaign in October with a hard-hitting 450-page report characterizing the four tech vendors as predatory monopolies that gobble up and crush competitors, harm consumers by choking innovation and trample on data privacy rights. House Republicans issued their own antitrust report echoing many of the Democrats' allegations.

All these moves came under the Republican administration of President Donald Trump, which has had little in the way of a coherent policy on antitrust, whether for the tech companies or other sectors of the economy.

Indeed, Trump undermined antitrust enforcement activity by starving federal regulatory agencies of funding and trying to bend the DOJ, in particular, to his will, directing it to investigate political enemies and claims of election fraud.

Now, those trying to rein in big tech view Biden as a potent ally who can ratchet up regulatory legal action and scrutiny by dramatically increasing funding and staff for regulators and backing stiff antitrust laws in Congress -- even if Republicans retain control of the Senate.

A Nov. 19 report by antitrust expert and Biden transition team aide Bill Baer called for $600 million in increased annual funding each for antitrust enforcement by the DOJ and FTC, which would better prepare the agencies for protracted legal battles against big tech's armies of lobbyists and lawyers.

Some see antitrust action as misguided

In the meantime, as the tech world awaits the arrival of Biden and Harris, some pro-business observers maintain that not only are the tech giants not monopolies but also that weakening the vendors could hurt the U.S. economy.

Tech analyst Ray Wang, founder of Constellation Research, noted that Amazon, Facebook and Google clearly compete among themselves for billions of dollars in advertising revenue and provide popular free digital services that consumers don't have to use if they don't want to.

"Are they monopolies or are they dominant players?" Wang said, arguing that there is a clear difference, and that market dominance is a normal part of business. "It is completely correct that Facebook dominates social media, Amazon dominates commerce, and we see Google dominating search. Apple dominates the mobile OS [operating system] market."

As for Biden and Harris, Wang charged that they accept too much money from the tech industry and that could mitigate antitrust rhetoric and policy.

Biden pushed on antitrust

Antitrust activists, though, are optimistic about the prospects of a Biden administration clamping down on big tech -- an outcome they argue is long overdue, with decades of light enforcement of antitrust laws. They are pushing Biden toward aggressive antitrust policy.

Thirty-three antitrust, consumer and progressive groups in a letter on Nov. 30 urged Biden to reject the influence of big tech vendors and to exclude big tech executives, lobbyists, lawyers and consultants from his administration.

Prominent among the signatories was Public Citizen, the liberal consumer advocacy group that has called for Biden to triple the FTC's annual funding, from $400 million to $1.2 billion.

"At the front end we want these investigations to be pressed. There are supposed to be investigations of Amazon and Apple and we believe there are cases to be brought there," said Alex Harman, competition policy advocate at Public Citizen and former chief legal counsel to Sen. Mazie Hirono (D-Hawaii).

"It's a lot to bring big antitrust cases against multiple companies, and that requires resources," Harman said. "As a lawyer, I don't want to say 'Biden does this,' but we want results that structurally change these companies. We don't want quick resolutions and quick settlements."

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