Congress is on the verge of passing major bipartisan antitrust and privacy legislation to rein in the power of tech giants. But they are running out of time.
Why it matters
The antitrust and privacy laws, which have received support from politicians on the right, left and center in both parties, would change the way big tech companies do business. But the coalition could fall apart if the vote does not take place before the summer break in the mid-term election year.
Congress is set to pass long-awaited federal privacy legislation and antitrust reform that could help change the way tech giants like Amazon, Apple, Google and Meta do business.
Congress is considering a series of bills on the privacy and antitrust fronts, which could result in regulation for the first time for large Internet technology companies in the US. But while there is bipartisan support for the legislation in the House and Senate, the bills still face uphill battles in their last-ditch effort. While negotiations are underway, time is running out as Democrats risk losing control of both the House and Senate in November’s midterm elections. Although the bill could be considered in the next Congress, experts fear that legislative priorities are likely to change and that further delay would likely result in the elimination of key aspects of both antitrust and privacy laws.
The next six weeks before Congress’s summer break are “vitally important,” said Bill Kovacic, a former chairman of the Federal Trade Commission and now a professor at George Washington University Law School.
“The danger is that you will come out of this year with nothing,” he said. “They could try again in the next Congress, but that’s much more of a gamble. The prospects for strong privacy legislation or for regulation of digital platforms are greatly reduced.”
All this comes after nearly five years of lawmakers from both parties 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 have targeted how these companies harm consumers by allegedly stifling 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 back.
Antitrust: Waiting for Chuck Schumer
Two pieces of antitrust legislation have been prepared for a vote in the Senate. If passed and signed into law, the bill would mark the most meaningful change to antitrust law in decades. The stakes are high Rep. David Cicilline, Democrat of Rhode Island, who chairs the House Judiciary Subcommittee on Antitrust, said during an antitrust webinar Thursday. Big tech companies have already proven that they will behave badly without changes to the law and strict antitrust enforcement, he argues.
“If we fail to ban the most pernicious behavior of these companies, they will be emboldened,” he said. “Their behavior is going to deteriorate,” which, he added, will “crush innovation” and leave less competition and less choice for consumers.
The American Online Innovation and Choice Act, introduced last October by Sens. Amy Klobuchar, Democrat of Minnesota, and Chuck Grassley, Republican of Iowa, would prohibit companies from favoring their products on their platforms over those of their competitors. It would, for example, end Google’s practice of featuring its products in search results over its competitors’ sites and services. It would also prohibit Amazon from listing its products on its e-commerce website at the top of its page before third-party competitors’ products are sold.
The Open App Markets Act, introduced in February by Sens. Richard Blumenthal, Democrat of Connecticut, and Marsha Blackburn, Republican of Tennessee, would prohibit companies such as Apple or Google from requiring app developers to pay app store commissions when their customers make an in-app purchase. Currently, Apple and Google, which essentially control the app market, require all apps that allow in-app purchases to use their payment processors and pay a sales commission.
Both laws were adopted by the House on a bipartisan basis. The bill also passed the committee earlier this year with strong bipartisan support, but senators from both parties say they still have concerns that need to be addressed before a vote.
Despite Klobuchar’s assurances that the bill has the necessary votes, Senate Majority Leader Chuck Schumer of New York has yet to schedule a vote on the bill, as comedian John Oliver pointed out earlier this month on a segment of 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 showing that 17 members of Congress have children who currently work or have worked at major 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 law and that he is working with Klobučar to get votes for its adoption.
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 of major tech companies have also contacted members of Congress directly to urge them to oppose the bill. Google CEO Sundar Pichai reportedly spoke with Schumer last week during a visit to Washington. Amazon CEO Andy Jassy also extended calls to Schumer and other lawmakers, Politico reports. Apple CEO Tim Cook also visited Washington in June.
“We regularly engage with lawmakers from both sides of the aisle on a range of issues, including economic growth, support for small businesses, immigration reform and cybersecurity,” Google spokesman Jose Castañeda said in a statement to CNET ahead of Pichai’s visit to Washington. “We will continue to address issues relevant to the people and companies that use our products.”
An Amazon spokesman also said its CEO is “meeting with policymakers on both sides of the aisle regarding policy issues that could affect our customers.” Apple did not immediately respond to a request for comment.
The legislation is the culmination of a bipartisan congressional investigation into the practices of America’s largest technology companies, which resulted in the release of a 450-page report by the House Judiciary Antitrust Subcommittee in 2020. That report concluded that Amazon, Apple, Google and Facebook (which has since been renamed Meta) are using their monopoly power to stifle competition.
Privacy: Key attempts in the Senate could kill him.
For decades, Congress has tried and failed to pass comprehensive consumer data privacy legislation. Then, in early June, there was a major breakthrough in the impasse, as a bipartisan group of leaders in the House and Senate released a draft of the US Privacy and Data Protection Act. This bill would provide a national standard for what data companies can collect from individuals and how they can use it.
But the bill, which passed the House Energy and Commerce Subcommittee last week, is expected to face an uphill battle in the Senate, where Senate Commerce Chairwoman Maria Cantwell, D-Washington, whose committee must approve any privacy bill that senate, she has already said she won’t support it, citing concerns that the bill has “huge enforcement holes” and is too weak to override state laws, such as 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 argue that patching up laws across the country would make them harder to enforce. Democrats and Republicans have also argued over the right of consumers to sue companies directly. Although the bill would have allowed consumers to file privacy lawsuits against companies, those lawsuits could not be filed for another four years.
Kovačić, the GWU law professor, acknowledges that antitrust and privacy laws aren’t perfect, but said the lack of action on privacy is particularly frustrating.
“We have to approach this with a willingness to abandon perfection for good enough,” he said. “There was an obvious need to establish a comprehensive national regime. And for the better part of a decade, the only thing we did as a nation to address it was talk about it.”