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Volume XI, Number 259

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The House Judiciary Committee Takes on Big Tech

“Mark my words: Change is coming. Laws are coming.” That was the warning David Cicilline (D-RI) – the House Judiciary Antitrust, Commercial, and Administrative Law Subcommittee Chairman – gave on February 25th at the first in a series of hearings following the Subcommittee’s 16-month probe into Big Tech’s gatekeeping power. This one, titled Reviving Competition, Part 1: Proposals to Address Gatekeeper Power and Lower Barriers to Entry Online, focused on three proposed reforms: interoperability and data portability requirements, nondiscrimination rules, and structural separation. The majority of the hearing witnesses, ranging from the CEO of Mapbox to the Director the Competition Advocacy Program at the Global Antitrust Institute, were clear supporters for these proposed reforms. While none are new ideas, each, if passed, would be a significant sea change in competition law.  

Interoperability and Data Portability

Imposing interoperability and data portability is not a new idea. It already permeates our technological world. For example, telecommunications would not be possible without one user’s carrier networks interconnecting with other carrier networks. The Subcommittee’s proposal is to impose interoperability and data portability requirements. Applied to Big Tech, interoperability and data portability would require dominant platforms to make their services compatible with other networks, and make content and information portable between them. Snap Inc.’s 2019 Annual Report illustrates this concern: “[T]he vast majority of our computing [runs] on Google Cloud and AWS, and our systems are not fully redundant on the two platforms. Any transition of the cloud services currently provided by either Google Cloud or AWS to the other platform or to another cloud provider would be difficult to implement and will cause us to incur significant time and expense.” Witnesses testified that interoperability requirements should be tailored, requiring technical detail and frequent updates to address changing technology. There was also some support from witnesses for Congress to give an agency rulemaking authority to oversee interoperability for gatekeeping platforms. Congress may like the idea of interoperability, but implementation is another question. What will count as a “gatekeeping” platform? How much interoperability will be required? How will any such requirements balance a need for access without deflating the incentive to create market-changing platforms in the first place?

Nondiscrimination Requirements

The nondiscrimination requirements proposed by the Subcommittee are two-fold. First, dominant platforms would be prohibited from engaging in self-dealing. Second, dominant platforms would be required to offer equal terms for products and services that are equal. Apple, for example, can give preference to its owns apps in an app store that it also runs, to the detriment of third-party offerings. Nondiscrimination requirements is not a new idea either. They play important roles in facilitating transportation and communications. For example, the Federal Communications Commission’s Open Internet Order implemented nondiscrimination principles in prohibiting internet service providers from blocking or discriminating between lawful content on the internet. Advocates of a nondiscrimination regime also support a tribunal to police discrimination, which could require a recidivist discriminator to sell off a content arm of its business, and a private right of action to victims discriminated against by dominate platforms.

Structural Separation

Structural separation would prohibit certain dominant platforms from operating in an adjacent line of business. In other words, one could not be both a platform and own the content on the platform. By mandating separation, the idea is to remove perceived conflicts of interest between platforms competing with those that depend on them for access to customers. The Subcommittee also discussed using structural separation to introduce competition where a dominate platforms could both lock in users and keep competition out by tying products and service. Structural separation has also been imposed to restore competition in the past, namely in the railroad industry, under the Bank Holding Company Act of 1956, and with the breakup of AT&T’s Bell System.

© 2021 Proskauer Rose LLP. National Law Review, Volume XI, Number 68
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About this Author

Colin Kass, Antitrust LItigation Attorney, Proskauer Rose Law Firm
Partner

Colin Kass is a partner in the Litigation Department and vice-chair of the Antitrust Group. An experienced antitrust and commercial litigation lawyer, Colin has litigated cases before federal and state courts throughout the United States and before administrative agencies. His practice involves a wide range of industries and spans the full-range of antitrust and unfair competition-related litigation, including class actions, competitor suits, dealer/distributor termination suits, price discrimination cases, criminal price-fixing investigations, and merger injunctions.

202.416.6890
David A Munkittrick Litigation Attorney Proskauer Rose New York, NY
Senior Counsel

David Munkittrick is a litigator and trial attorney. His practice focuses on complex and large-scale antitrust, copyright and entertainment matters in all forms of dispute resolution and litigation, from complaint through appeal.

David has been involved in some of the most significant antitrust matters over the past few years, obtaining favorable results for Fortune 500 companies and other clients in bench and jury trials involving price discrimination and group boycott claims. His practice includes the full range of antitrust matters and disputes: from class actions to competitor...

212-969-3226
Nicollette R. Moser Litigation & Antitrust Proskauer Rose Washington, DC
Associate

Nicollette Moser is an associate in the Litigation Department and a member of the Antitrust Group.

Related Practices

  • Litigation
  • Antitrust

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