FTC Could Cast Antitrust Gaze on Big Tech

Majority of commission nominees signal willingness to take new look at edge provider market power
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A majority of the nominees for FTC commissioner told a Senate Commerce Committee panel Wednesday (Feb. 14) that they are willing to take a new look at Big Tech firms like Google and Facebook, and regulate them if necessary.

That came at a Senate Commerce Committee nomination hearing on President Donald Trump's four nominees for the Federal Trade Commission: Joseph Simons (Republican chair), Rohit Chopra (Democrat), Noah Joshua Phillips (Republican) and Christine S. Wilson (Republican)

Commerce Committee chair Sen. John Thune (R-S.D.) said he hoped to move the nominations quickly to the floor for a vote, and scheduled a vote for the committee's next markup.

The FTC has been at only two commissioners (there are supposed to be five) for many months.

Thune asked the nominees about antitrust enforcement and calls for more regulatory oversight of "Big Tech" firms like Facebook and Google.

Related: Edge Providers Push for Network Neutrality CRA

Those firms have been increasingly under scrutiny on the Hill and elsewhere both for their size and their business practices, driven in part by the scrutiny of social media in the wake of the Russian election meddling, fake news, and ongoing concerns about online sex trafficking.

Simons said that "at a high level," big is not necessarily either good or bad. He said oftentimes a company's success is because they offer a good service at a low price, and the government shouldn't mess with that. But, he said, if a company is using anticompetitive means to get big or stay big, "then we should be vigorously enforcing the antitrust laws and prohibiting that conduct." He did not say what category he thought either Google or Facebook fell into.

Wilson said she understood there had been investigations into companies in the past--Google, for one, has come under FTC scrutiny for its search practices. She said given the "elapse of time" since those and the changes in technology, "it may make sense to take another look at concerns that have been raised." She said there is no company beyond the reach of the law and that she would support Chairman Simons in looking into potentially unlawful conduct, "and following the facts where they lead."

Phillips called it "the big question." He said he experiences daily the "incredible impact" those companies have on his life and of others, including his children. He said the FCC has a "big role" in applying the law carefully and fairly, and keeping up with trends. He said he would help keep the agency abreast of those developments and, if there are violations of the law, no matter who was committing them, the FTC would enforce it.

Chopra did not appear ready to put the hammer down on Big Tech. He said that unlike most sectors, large tech companies are competing with several other verticals, healthcare, retail, and other sectors. Chopra said it has been a challenge to predict how market dynamics occur and that the FTC needed to engage in constant learning. He also said that it was an area to be humble" and continue to "learn the dynamics."

Ranking member Sen. Bill Nelson (D-Fla.) used the hearing to put in a plug for net neutrality, or more to the point, a knock on the FCC's deeding of net neutrality oversight primarily to the FTC when it reclassified broadband access as a Title I information service in the Dec. 14 Restoring Internet Freedom Order.

"Simply put, the FTC is not the agency for net neutrality." He said that despite the amazing things the FTC does, it "does not have the expertise, resources or authority to adopt forward-looking rules to protect broadband consumers," he said.

Nelson said to look out for a Senate vote on the Congressional Review Act resolution to nullify that Restoring Internet Freedom order and return the Title II-based rules. He said his support for the CRA is not inconsistent with his belief that there needs to be a bipartisan legislative long-term solution with real protections.

Thune added a "here, here" to that call for bipartisan solution, adding: "Hopefully, we will be able to get there in due time."

Sen. Ed Markey (D-Mass.), one of the biggest backers of the net neutrality rules the Ajit Pai FCC rolled back, also talked about the lack of FTC expertise on keeping networks open.

Chopra, a Democrat, said he shared many of Markey's concerns, and those of sitting FCC Democratic Commissioner Terrell McSweeny about overseeing the internet. For one, he cited an ongoing challenge by the FTC in the Ninth Circuit Court of Appeals of a lower court ruling raising the possibility that some players could be exempt from FTC internet oversight, while others are not.

Following up on that, Sen. Richard Blumenthal (D-Conn.) asked all the commissioners to continue to push the appeal of the court decision that a business owned by a common carrier, say Yahoo! owned by Verizon, would share that common carrier's exemption from FTC oversight, creating an enforcement gap over online privacy.

Related: Facebook to Prioritize Trusted News

Simons said he fully expected the Ninth Circuit to overturn that ruling and said it would be a "great idea" to get rid of the common carrier exemption altogether. The other nominees nodded their agreement.Simons said the FTC, if it gets back its authority in the internet space--the FCC rule rollback has not taken effect yet, and is eyeing challenged in court--it will be a vigorous enforcer. He said he did not what types of uncompetitive, unfair or deceptive practices would come up in terms of internet conduct, but if it did the FTC could reach it under statute, and if something came up that it could not reach, he would come talk to the committee.

Markey said the FTC lacked rulemaking authority to block blocking, throttling or paid prioritization, while the FCC had it. Simons said they both had rulemaking authority, just different types. Markey pressed him on the point, but Simons said he would want to talk to the General Counsel's office before saying it did not have rulemaking authority in those areas. "I'm not entirely clear."

Related: FTC Settles with Web Site Over Kids Data Collection

Simons tried to elaborate, but Markey cut him off to move to marketing to children, another of his signature issues. Each commissioner committed to "an active, pro-child, privacy protection policy." Markey said it was time to hold companies accountable.

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