A Blog by Jonathan Low


Nov 12, 2019

The Reason Conservatives and Libertarians Are Fighting Big Tech Anti-Trust

Free market ideologues philosophically opposed to government regard reform of anti-trust laws, especially as it impacts big tech, appear to have based their resistance to change on a position often sarcastically attributed to the French: 'that (reducing big tech's dominance) is fine in reality, but it will never work in theory.' JL

David McCabe reports in the New York Times:

The rising movement in the United States to consider charging the country’s biggest tech companies with violating antitrust laws is running into powerful, well-funded conservatives and libertarians.  At the center of the debate is a legal standard used to decide antitrust cases for decades. Judges and regulators often ask whether a dominant company is harming consumers, and usually hang their analysis on whether prices have gone up or down. Proponents of tough action say Congress should institute a new test for monopoly cases, like the effect  a company’s dominance has on workers or competitors.
Thomas Lambert, a professor at the University of Missouri’s law school, gave his former colleague Josh Hawley a warning before Mr. Hawley became a senator in January.
Mr. Lambert had been wary of Mr. Hawley’s decision in 2017, as Missouri’s attorney general, to open an antitrust investigation into Google, saying he didn’t see the state’s logic for the case. While he wished Mr. Hawley well in Congress, and said he was glad they were friends, Mr. Lambert also noted that he would continue to speak out when he disagreed with the senator’s policy positions.
“And he said, ‘I assume you mean on things like tech,’” Mr. Lambert recalled recently. “And I said, ‘Well, mainly.’”
Their interaction highlights a deepening divide in Washington and around the country. The rising movement in the United States to consider charging the country’s biggest tech companies with violating antitrust laws is running headlong into powerful and well-funded conservatives and libertarians committed to pushing back on those efforts. They include academics like Mr. Lambert; lawmakers like Senator Mike Lee, Republican of Utah; and groups like the Koch political network and others that are connected to the tech companies themselves.
These conservatives have largely dominated antitrust law for decades, leading to few breakups of big companies or blocked mergers. Although their ranks have dwindled somewhat in the last year, as anti-tech arguments have become more bipartisan, they still occupy positions stretching from Capitol Hill to campuses around the country.
But their power and influence have never been tested like this. The House Judiciary Committee, the Federal Trade Commission, the Justice Department and almost every state attorney general’s office is investigating at least one of Silicon Valley’s giants. Senator Elizabeth Warren, Democrat of Massachusetts, has made breaking up the tech giants and other corporate behemoths a prominent part of her presidential campaign.
Mr. Hawley, a Republican who was on the faculty at the University of Missouri’s law school with Mr. Lambert, has helped lead the efforts in Congress to rethink how the government handles the big tech companies. He recently told Facebook’s chief executive that he should voluntarily spin off two of his company’s most valuable services.
“I firmly believe that antitrust scrutiny is warranted,” Mr. Hawley said.
His actions have pushed Mr. Lambert to deliver on his earlier warning, which Mr. Hawley says he does not remember.
“This thinking is dangerous for conservatives,” Mr. Lambert recently tweeted after Mr. Hawley brushed off his libertarian foes. He has also repeatedly pushed back on Big Tech’s critics, recently denouncing their “snobbery and know-betterism.”
At the center of the debate is a legal standard used to decide antitrust cases for decades. Judges and regulators often ask whether a dominant company is harming consumers, and usually hang their analysis on whether prices have gone up or down.
Some proponents of looking aggressively at the tech companies argue that existing laws are adequate, and that the government just needs to enforce them correctly. At least one major regulator appears sympathetic to that argument.
“I think the antitrust laws are flexible,” Makan Delrahim, the top antitrust official at the Justice Department, said recently at a conference hosted by The Wall Street Journal. He added that it was important for the laws to be “vigorously enforced.”
Other proponents of tough action say Congress should modify existing laws to institute a new test for monopoly cases, like factoring in the effect that a company’s dominance has on workers or competitors. Still others see a solution somewhere in between.
“What has happened is the spectrum has stretched a bit,” said Diana Moss, the president of the American Antitrust Institute, a group that favors strong enforcement of the traditional approach to antitrust. The organization has received funding from some tech companies.
Some of the conservatives resisting the push for antitrust action say many problems with large Silicon Valley companies have nothing to do with competition. They point, for example, to concerns about privacy and accuse Big Tech’s critics of applying antitrust laws to solve a problem better suited to new data regulations.
Others say efforts to change how the government polices competition are moving too fast. Daniel Crane, a professor at the University of Michigan Law School, has written a draft paper arguing that the movement to change the law “has emerged out of virtually nowhere to claim a position at the bargaining table over antitrust reform and the future of the antitrust enterprise.” Thibault Schrepel, a professor at the Utrecht University School of Law, has said human flourishing “should be enhanced by applying reason to antitrust law; not fears, not feelings, not sentiments, not intuitions.”
The tech giants back many similar arguments. Both Facebook and Google have financed a slate of groups that support current antitrust law.
Mr. Lambert and Mr. Schrepel are both affiliated with the International Center for Law & Economics, a research nonprofit that has received financing from Google, Amazon and Facebook, among other major companies. Geoffrey Manne, the center’s leader, said that its affiliates were not paid but that some “have received honoraria for conferences or travel assistance, or grants to support their work, as have some nonaffiliates.” Mr. Lambert also sits on the organization’s board — a position for which, he says, he is not paid.
On Capitol Hill, Senator Lee has led the defense of existing antitrust law.
As chairman of the Senate Judiciary Committee’s antitrust subcommittee, Mr. Lee has held a series of hearings over the last two years where he or his witnesses have questioned the calls to rethink antitrust law. He was also quick to question the purpose of the House Judiciary Committee’s inquiry into the market power of Google, Facebook, Apple and Amazon, accusing the panel of trying to perform a role best left to law enforcement agencies.
Mr. Lee has been accused of letting money influence his views on the subject. The Google Transparency Project, a nonprofit that tracks the tech giant’s connections to government, recently raised questions about whether he was influenced by donations from Google and its allies.
Mr. Lee dismissed those accusations as “paranoid fantasy.” (The Google Transparency Project has itself received funding from Oracle, a Google competitor.)
Recently, the antitrust holdouts have found a new ally in the industrialist Charles Koch. The Koch-affiliated Americans for Prosperity ran digital ads this year urging senators and attorneys general to stick to the current approach to antitrust.
Still, many of those arguing to keep the legal status quo acknowledge that the debate has shifted, with their opponents’ position becoming rapidly more mainstream.
Mr. Lee said last month that the pushback was “not necessarily going to get you a lot of favorable publicity.”
The debate can take on a heated and personal tone. At a conference this spring, the soft-spoken legal academic Tim Wu responded to doubts raised by Tyler Cowen, an economist, about whether America has dangerous levels of corporate concentration by saying it was like arguing with someone who believes the earth is flat. Another speaker at the same event compared one critic of the antimonopoly position to a climate change denier.
The enmity goes both ways. Some conservatives have applied a dismissive nickname to the efforts to rethink the existing laws: hipster antitrust.
The holdouts may have one long-term advantage: For now, they say, federal judges are likely to agree with them. Antitrust doctrine is largely settled in court, and judges largely support it. Mr. Crane, the Michigan professor, noted that those judges could take a long time to change their ways.
Mr. Lee is biding his time.
“Over the last two or three years, there has been something of a shift,” he said. “Only time will tell whether it proves to be a momentary fad or something more significant.”


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