US: Antitrust issues discussed at 15th annual State of the Net conference

Antitrust issues were a hot topic at the 15th annual State of the New conference held in Washington, DC on Tuesday, January 29.

House Antitrust chairman David Cicilline (Dem-Rhode Island) opened the program with strong words about Google’s perceived anti-competitive behavior, both as a gatekeeper and for its buying splurge in which it has gobbled up smaller firms. This “concentration of power” creates “pernicious impacts on a free and diverse press,” Cicilline said, especially “in the absence of a competitive marketplace.” He cited reports on Google’s ability to manipulate traffic on its ad networks as well as with its readers and users. All of this affects “legacy news companies and digital publishers alike,” Cicilline said. “The free and open internet … is incompatible with this trend toward centralization online.”

“It’s vital that the House Antitrust Subcommittee takes up these matters in a top-to-bottom investigation [to determine] whether use of market power harms the competitive process online,” he said. “We cannot have a democracy without a free and diverse press”….one that gives publishers “a level playing field to negotiate with dominant platforms.”

Cicilline announced that he is reintroducing the “Journalism Competition and Preservation Act,” which he had submitted last year. The bill would create a safe harbor for news publishers to negotiate business arrangements collectively with Google, Facebook, and other platforms. Cicilline said his subcommittee’s hearings will “build a record to document anti-competitive behavior to develop a deep understanding of these markets in exploring every tool for preventing” abuses by platform operators.

Federal Trade Commission commissioner Rebecca Kelly Slaughter used her time in the spotlight to refute the “prevailing belief” of recent years that vertical mergers are good. “We have to look skeptically at all the claimed benefits of vertical mergers,” she said. Federal review of merger plans should make “parties substantiate the benefits… and we should bring enforcement actions if we believe” actual performance does not match the promises.

Assistant Attorney General Makan Delrahim, who heads the Justice Department’s antitrust activities, also acknowledged the need for new ways to evaluate mergers. He cited recent Google acquisitions, especially those involving advertising programs. Delrahim sought to align it with the current Department of Justice evaluation of broadcasting mergers, and how they may affect advertising operations.

Delrahim indicated that future examinations could assess online and broadcast advertising within a local market as direct competitors, despite the platform differences. He said, “New entrants are important” and emphasized that “light regulation” is vital, although, “We have to be very careful” about each. In response to a question about “How did tech get so big?” the antitrust chief replied, “Big isn’t necessarily bad” — especially if it creates a product that consumers want, he said.

Delrahim also opened the discussion of privacy, cautioning that his “biggest concern” about privacy legislation is that the legacy companies will be able to shape the discussion and eventual policy-making. Based on his experience with their skills, they could create barriers that will impede start-ups and maintain privacy regulations from which the existing companies will benefit.