Lofgren Statement Ahead of Judiciary Committee Markup of Tech Antitrust Bills

June 23, 2021
Press Release

“The bills, as drafted, will create more harm than good for American consumers & the U.S. economy.”
 

“Congress must calibrate regulatory & antitrust laws deliberately & carefully.”
 

WASHINGTON, DC – Ahead of today’s markup in the House Judiciary Committee on recently-introduced legislation, Congresswoman Zoe Lofgren (CA-19) issued the below statement on her concerns with some of the bills included in the so-called “stronger online economy” agenda, including H.R. 3816, the American Choice and Innovation Online Act; H.R. 3825, the Ending Platform Monopolies Act; H.R. 3849, the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act of 2021; and H.R. 3826, the Platform Competition and Opportunity Act of 2021.

“While I share the desire to reform digital markets and increase competition, as drafted, the bills fall short and will create more harm than good for American consumers and the U.S. economy.

“Although it may not be possible to correct all the deficiencies in a single-day Committee markup, I plan to offer several amendments that would prevent harmful unintended consequences. I am particularly focused on protecting platforms’ good-faith efforts to uphold users’ privacy and security interests, as well as allowing reasonable and necessary content and disinformation moderation.

“Congress must calibrate regulatory and antitrust laws deliberately and carefully. In fact, as I have previously asserted, enforcement agencies and the courts are far better suited than a Congressional Committee to conduct full adjudications to reach definitive conclusions about whether anticompetitive conduct has in fact occurred in specific cases. However, given the Committee bill text before us today, I urge that any new regulatory authority or adjustments to existing antitrust laws should focus not only on the dominant firms themselves, but on the larger ecosystems that their platforms enable, and from which they derive most of their power.

“During the ten-day-window most Members were given to review the sweeping legislative text that makes up these proposals, I have heard from and spoken to constituents and legal experts who are both supportive and critical of the bills. I hope my colleagues in the Committee can come together to discuss reform of our nation’s digital markets in an apolitical, collaborative, and meaningful way.”

Recent, Relevant Lofgren Actions & Comments


Lofgren is no stranger to proposing responsible regulation on the technology industry, Silicon Valley company leaders, and/or “Big Tech.”

  • In November 2019, Lofgren, along with fellow Silicon Valley Congresswoman Anna Eshoo, introduced the Online Privacy Act, legislation that creates user rights, places obligations on companies to protect users’ data, establishes a new federal agency to enforce privacy protections, and strengthens enforcement of privacy law violations.
    • Of the privacy bills introduced in the House and Senate, the Electronic Privacy Information Center ranked the Online Privacy Act the strongest bill and gave the bill its only ‘A’ rating.
       
  • In September 2020, during an appearance during TechCrunch Disrupt 2020, Lofgren was highly-critical of Facebook.
    • Discussing content moderation, she said, “[Facebook talks] a good game, but they have failed to really implement effective strategies. I know it’s not 100%, but their actions have been deficient, and they should be held accountable for it.”

Some of Lofgren’s current concerns about the bills being marked up by the House Judiciary Committee reflect her clear warnings that were incorporated as part of the recent Committee Report. In April 2021, Lofgren voted to approve the report from the Subcommittee on Antitrust, Commercial, and Administrative Law on digital markets and offered Additional Views to be included as part of the report.

Possible Practical Implications


Below are examples of products, services, and integrations that may need to be discontinued, companies that may need to be broken up, and lawsuits that would be probable if two of the proposed bills were to become law.


H.R. 3816, The American Choice and Innovation Online Act


Practical Implication: Many platform products, services, and useful integrations would presumptively be “unlawful.”

  • Examples:
    • Amazon Prime free shipping would be eliminated– because it “advantages” certain products over non-Prime products and also “discriminates” the latter.
    • Google would no longer be able to display Google Maps, YouTube results, and information boxes (including on wellness topics like COVID-19 or common conveniences like song lyrics) in search results pages – because it “disadvantages” third-party websites who want users to click search links instead.
    • Facebook would not be able to provide it’s “mark safe during a disaster” or voter registration tools – because they “advantage” these tools at the top of users’ new feeds to encourage safety information or civic participation.
    • Apple would be blocked from pre-installing its “Find My Phone” in Apple’s iOS – because a pre-installation “advantages” an Apple product and “discriminates” against non-Apple apps.
  • Where you’ll find this in the bill:
    • Under Sec. 2(a)(1) and (2), it is “unlawful” for a platform to “advantage” its own products and services and/or “disadvantage” those of another “business user” on the platform – regardless of whether there’s been harm.
    • Under Sec. 2(b), it is also “unlawful” for a platform to “discriminate among similarly situated business users” – even if the platform is not boosting any of its own products or services.

Practical Implication: Extremist outlets and disinformation sites could sue platforms for blocking them.

  • Example:
    • Infowars may sue Apple for being kicked out of the app store, while other conservative political outlets are left up. (Same is possible for Parler, Gab, and 4Chan.)
  • Where you’ll find this in the bill:
    • Sec. 2(a) makes it unlawful to “discriminate among similarly situated business users.”

Practical Implication: Allows foreign sellers to demand broad “interoperation” and “access” to a U.S. platform’s systems and data.

  • Example:
    • If an Amazon user buys a product from a third-party seller based in China, the seller can threaten a lawsuit unless Amazon allows it to “access” user data generated through that sale.
  • Where you’ll find this in the bill:
    • Sec. 2(b)(1): prohibits a platform from “restricting or impeding the capacity of a business user to access or interoperate…” and Sec. 2(b)(4): prohibits a platform from “restricting or impeding a business user from accessing data generated on the covered platform by the activities of the business user.”

In all of the cases above, platforms will bear the burden of disproving, by clear and convincing evidence, that they did not “harm the competitive process” – a vague and novel standard that would require months or years of litigation before it can ever be won as an affirmative defense.


H.R. 3825, The Ending Platform Monopolies Act


Practical Implication: Gives the government unfettered discretion to break up the major platforms in dozens of different ways – even based on a theoretical “conflict of interest” with no real-world harm.

  • Example:
    • Possibly breaking up Apple into separate companies for iPhone hardware, iPhone operating systems, iPhone/iOS apps, Apple Music, iCloud, Mac hardware, Mac operating systems, Mac apps, etc.
  • Where you’ll find this in the bill:
    • Sec. 2(a)(3) prohibits a platform from owning any other “line of business” which gives “rise to a conflict of interest.”
    • No further definition about what qualifies as a separate “line of business.”
    • Under Sec. 2(b)(3), a “conflict of interest” can be found based merely upon a platform having “the incentive and ability” to advantage its own products and services or “disadvantage” competitors – without requiring that the platform actually did this in the real world.

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