Citizen Cartwright

After Facebook legal win, new impetus to change the law

A federal judge’s dismissal on Monday of federal and state antitrust lawsuits against Facebook is putting pressure on lawmakers to rewrite key aspects of monopoly laws, reports The New York Times. 

 

While President Biden is expected to sign an executive order next week targeting corporate consolidation in tech and other areas of the economy, officials say presidential powers are limited without congressional action.

 

The House Judiciary Committee approved six bills last week that would make it harder for the major tech companies to buy upcoming competitors and to give preference to their own services on their platforms, and ban them from using their dominance in one business to gain the upper hand in another.

Judiciary Committee Chairman Jerrold Nadler, D-N.Y., and Antitrust Subcommittee Chairman David Cicilline, D-R.I., issued a joint statement after the Facebook suit dismissal saying, “This decision underscores the dire need to modernize our antitrust laws to address anticompetitive mergers and abusive conduct in the digital economy.”

 

Meanwhile, as antitrust lawsuits continue — Google faces a “cascade” of them, according to the Times — it’s a boom time for lawyers, says a separate Times article.

 

Top partners at a large firm often bill as much as $2,000 an hour, says the Times.

 

"The cost is minimal for the giant tech companies,” says the Times. "But it has widened the divide in resources between regulators and the companies they police, making it harder for the government to recruit and keep talent to take on the industry. It also has raised fresh concerns about Washington’s revolving door, since many of the lawyers used by the tech companies recently worked for the government.”

 

Rebecca Slaughter, a Democratic commissioner at the Federal Trade Commission, says antitrust cases are among the agency's most expensive. The cost for one expert witness to speak on behalf of the agency exceeds the witness costs for all other cases pursued by the agency in a given year, the Times says.

“The demand for antitrust enforcement has gone up dramatically over the last decade and has really skyrocketed in the last year,” Slaughter says. “The costs involved in bringing large and complex cases and reviewing the tsunami of proposed mergers are huge, especially for a small agency like ours.”

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Federal judge dismisses 2 antitrust cases against Facebook

The ruling is a significant blow to regulators’ efforts to rein in Big Tech, and lawmakers say the decisions are proof that century-old antitrust laws need updating for the internet sector, The New York Times reports.

 

The judge "eviscerated" one of the federal government’s core arguments, that Facebook has a monopoly over social networking, according to the Times, saying prosecutors failed to provide enough facts to back up that claim. He said the Federal Trade Commission could try again within 30 days with more detail but suggested that the agency faced steep challenges.

 

He said the states had waited too long to bring their case, which focused on deals made in 2012 and 2014.

 

“This really stings,” says William Kovacic, a former chairman of the Federal Trade Commission. “This is a reminder to those who have wanted a dramatic, sweeping litigation campaign to take on Big Tech that there’s nothing easy about it, because the courts have a different view of the antitrust system.”

 

President Biden has put critics of Big Tech in key regulatory roles, including Lina Khan as chair of the FTC, and he's expected to issue broad mandates this week for federal agencies to address corporate concentration across the economy, the Times says. Khan’s first major task as chair will be to rewrite the Facebook lawsuit to address the judge’s criticisms.

 

The news of the ruling pushed Facebook’s stock up 4.2 percent, and the company passed $1 trillion in market capitalization for the first time — one of just half a dozen companies to reach such a valuation.

Last week, the House Judiciary Committee advanced six bills to overhaul antitrust laws, with the goal of weakening the dominance of Big Tech.

My thanks to the reader who sent me this analysis of the bills as introduced, by independent analyst Benedict Evans.

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Efforts in at least 20 states to restrict the discussion of “divisive concepts” in public education clearly are intended to "suppress teaching and learning about the role of racism in the history of the United States,” according to a recent statement signed by 119 historical and educational organizations.

"The ideal of informed citizenship necessitates an educated public,” the statement says. "Politicians in a democratic society should not manipulate public school curricula to advance partisan or ideological aims.”

The statement was jointly written by the American Association of University Professors, the American Historical Association, the Association of American Colleges & Universities, and PEN America.

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The bipartisan infrastructure deal reached by Biden, senators

The president, flanked by Democrats and Republicans, announced at the White House on Thursday a $1.2 trillion infrastructure package.

 

“Like a dream sequence from a previous decade, senators from both parties dutifully spoke about the virtues of not getting all you want and trying to reach something that has been highly elusive in Washington for more than a decade: consensus,” says an Associated Press analysis.

 

The agreement includes some existing infrastructure programs but also would provide $579 billion in new money over eight years to repair highways and bridges, speed rail traffic and more equitably spread high-speed internet access.

And the plan would provide billions of dollars for waterways and for coastlines washing away as sea levels rise, as well as $7.5 billion to finance a half-million electric vehicle charging stations. 

 

The spending would be paid for in part by collecting $140 billion in unpaid taxes (requiring a $40 billion increase in the IRS enforcement budget), as well as by repurposing unspent coronavirus relief funds, according to an outline provided by the White House.

 

But almost immediately after reaching the breakthrough, Biden and top Democrats said the compromise, which composes only a small fraction of the $4 trillion economic agenda Biden has proposed, could advance only together with a far larger bill that would spend trillions more on healthcare, child care, higher education access and climate change programs. 

 

“If this is the only thing that comes to me, I’m not signing it,” Biden said of the infrastructure piece. “It’s in tandem.”

 

It will be an "enormous challenge” to persuade at least 60 senators to back the traditional infrastructure plan and keep Democrats united on the larger bill, says The New York Times. Five Republicans signed on to the infrastructure compromise announced Thursday.

 

The second measure would have to pass via budget reconciliation, allowing it to bypass a Republican filibuster but requiring the votes all 50 Democratic and independent senators.

 

Senate Minority Leader Mitch McConnell, R-Ky., said Biden’s demand that the compromise move in tandem with a Democrats-only economic package undermined his stated commitment to bipartisanship.

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The president said in a White House speech Wednesday that states can draw from $350 billion in federal stimulus money to shore up police departments and vowed to crack down on gun dealers who fail to run background checks and on gun traffickers.

 

While overall crime was down last year, according to FBI data, the murder rate rose about 25 percent and violent crime about 3 percent. Officials have offered many reasons for the increase, including huge numbers of gun sales over the past year and the stress from the pandemic, says The Washington Post.

 

Democrats regularly have been painted as soft on crime, media note. And "Republicans and their media allies are already making the case, having struggled to get traction against Biden on other issues," says The Hill.

 

Biden said in his speech he's directing the Bureau of Alcohol, Tobacco, Firearms and Explosives to revoke the licenses of gun dealers “the first time that they violate federal law” by failing to run background checks.

Sellers often have received repeated warnings before their licenses were pulled, says The New York Times. And in some cases, the ATF has been accused of overruling recommendations from their own inspectors and allowing sellers to keep their licenses, the Times says.

 

Biden also called for Congress to pass legislation to close background check loopholes, restrict assault weapons and repeal gun manufacturers’ immunity from lawsuits.

“Folks, this shouldn’t be a red or blue issue,” Biden said. “It’s an American issue. We’re not changing the Constitution; we’re enforcing it.”

 

The Biden administration also announced this week that the Justice Department will start five “strike forces” addressing gun trafficking corridors that fuel violence in New York, Chicago, Los Angeles, the San Francisco Bay Area, and Washington, D.C., as well as in cities and towns along the way.

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