Congress is on the verge of passing major bipartisan antitrust and privacy legislation to rein in the power of tech giants. But they’re running out of time.
Why it matters
The antitrust and privacy laws, which have gotten support from right, left and center politicians on both sides of the aisle, would change how big tech companies do business. But the coalition could fall apart if a vote does not happen before the summer recess in a midterm election year.
It’s getting down to the wire for Congress to pass a long-awaited federal privacy law and antitrust reform that could help change how Big Tech companies like Amazon, Apple, Google and Meta do business.
Congress is considering a slate of bills on both the privacy and antitrust fronts, which could result in, for the first time, regulation for major internet technology companies in the US. But even though there is bipartisan support for the legislation in the House and Senate, these bills still face uphill battles in their final push. While negotiations are ongoing, time is running out as Democrats risk losing control of both the House and Senate come the midterm elections in November. While the legislation could be taken up in the next Congress, experts fear that legislative priorities are likely to shift and further delay would likely result in a chipping away of key aspects of both antitrust and privacy legislation.
The next six weeks before the summer recess of Congress are “vital,” said Bill Kovacic, former chair of the Federal Trade Commission and now a professor at George Washington University School of Law.
“The danger is that you’re coming out of this year with nothing,” he said. “They could try again in the next Congress, but it’s much more of a gamble. The prospects for robust legislation for privacy or for the regulation of digital platforms diminishes greatly.”
This all comes after nearly five years of lawmakers on both sides of the aisle promising to rein in the power and influence of Big Tech with very little to show for their efforts so far. Increasingly alarmed by the power that giants like Amazon, Apple, Google, Meta and Twitter wield, they’ve targeted how these companies harm consumers by allegedly choking competition from smaller players, exploiting personal data for profit or controlling what is shared and consumed online.
Here’s a quick look at the bills Congress is considering and what’s holding them up.
Antitrust: Waiting on Chuck Schumer
Two pieces of antitrust legislation are up for Senate votes. If passed and signed into law, the legislation would mark the most meaningful change to antitrust law in decades. The stakes are high Rep. David Cicilline, a Democrat from Rhode Island, who chairs the House Judiciary Subcommittee on Antitrust said during a webinar on antitrust Thursday. The big tech companies have already proven that they will behave badly without changes to the law and strict antitrust law enforcement, he contends.
“If we aren’t successful in prohibiting the most pernicious behavior of these companies, they’re going to be emboldened,” he said. “Their conduct is going to get worse,” which he added will “crush innovation” and leave less competition and fewer choices for consumers.
The American Innovation and Choice Online Act, which was introduced last October by Sens. Amy Klobuchar, a Democrat from Minnesota, and Chuck Grassley, a Republican from Iowa, would ban companies from preferring their own products on their platforms over those of their competitors. It would end, for instance, Google’s practice of highlighting its own products in search results over its competitors’ sites and services. It would also prohibit Amazon from listing its own products on its e-commerce site at the top of its page before products sold from third-party competitors.
The Open App Markets Act, introduced in February by Sens. Richard Blumenthal, a Democrat from Connecticut, and Marsha Blackburn, a Republican from Tennessee, would prohibit companies, namely Apple or Google, from requiring app developers to pay app store commissions when their customers make in-app purchases. Currently, Apple and Google, which essentially control the app market, require all apps that allow in-app purchases to use their payment processors and to pay a commission on sales.
Both bills have been passed by the House on a bipartisan basis. The legislation also passed through committee earlier this year with strong bipartisan support, but senators from both parties say they still have concerns to be hammered out before a floor vote.
In spite of assurances from Klobuchar that the bills have the votes needed, Senate Majority Leader Chuck Schumer of New York has yet to schedule a vote on the legislation, a fact that comedian John Oliver highlighted earlier this month in a segment for his HBO show Last Week Tonight. Oliver, who is known for bringing attention to complex issues, like net neutrality, focused on Schumer and referenced media reports that have shown that 17 members of Congress have children who either currently work for or have worked at large tech companies. This includes Schumer’s daughters who work as a marketing manager at Meta and a registered lobbyist for Amazon.
Schumer has repeatedly stated that he supports the legislation and is working with Klobuchar to get the votes to pass it.
Meanwhile, groups representing the biggest names in tech, including Amazon, Facebook and Google, have spent at least $36.4 million since January 2021 on an advertising campaign to oppose antitrust legislation, according to The Wall Street Journal.
CEOs from the big tech companies have also been contacting members of Congress directly to urge them to oppose the legislation. Google CEO Sundar Pichai reportedly talked to Schumer last week during a visit to Washington. Amazon CEO Andy Jassy has also made calls to Schumer and other lawmakers, Politico reported. Apple CEO Tim Cook also visited Washington in June.
“We regularly engage with lawmakers on both sides of the aisle on a range of issues including economic growth, small business support, immigration reform and cybersecurity,” Google spokesperson Jose Castañeda said in a statement to CNET ahead of Pichai’s visit to Washington. “We’ll continue to engage on issues relevant to people and businesses using our products.”
An Amazon spokesperson also said that its CEO, “meets with policymakers on both sides of the aisle regarding policy issues that could affect our customers.” Apple did not previously respond to a request for comment.
The legislation is the culmination of a bipartisan congressional investigation into the practices of the biggest US tech companies, which resulted in the 2020 publication of a 450-page report on antitrust by the House Judiciary subcommittee. That report concluded that Amazon, Apple, Google and Facebook (which since rebranded to Meta) use their monopoly power to stifle competition.
Privacy: Key senate hold outs could kill it.
For decades, Congress has tried and failed to pass a comprehensive consumer data privacy law. Then in early June there was a major breakthrough in the deadlock, as a bipartisan group of leaders in the House and Senate released a draft of the American Data Privacy and Protection Act. This bill would provide a national standard on what data companies can gather from individuals and how they can use it.
But the bill, which made it out of a House Energy and Commerce subcommittee last week, is expected to face an uphill climb in the Senate where Senate Commerce Chair Maria Cantwell, a Democrat from Washington, whose committee must approve any privacy bill that the senate considers, has already said she won’t support it, citing concerns that the bill has “major enforcement holes” and is too weak, because it would override state laws, like California’s heralded Consumer Privacy Act, the Washington Post reported.
The issue of so-called state preemption has been a stumbling block in negotiations for years, as Republicans have argued that a patchwork of laws nationwide would make compliance difficult. Democrats and Republicans have also argued over consumers’ right to sue companies directly. While the bill would allow consumers to bring privacy lawsuits against companies, those lawsuits could not be brought for another four years.
Kovacic, the GWU law professor, acknowledges that the antitrust and privacy bills aren’t perfect, but he said the inaction on privacy has been particularly frustrating.
“We have to approach this with a willingness to abandon perfection for the good enough,” he said. “It’s been an obvious need to establish an overarching national regime. And for the better part of a decade, the only thing we’ve done as a nation to address it is to talk about it.”