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The Technology 202: Biden has stacked federal antitrust watchdogs with Big Tech critics

The Washington Post logo The Washington Post 7/21/2021 Cat Zakrzewski

with Aaron Schaffer

The tech industry’s relationship with the Democratic Party has been deteriorating for years. President Biden's decisions to stack key regulatory agencies with tech foes signal the party is ready to back up its criticism of Silicon Valley with action. 

President Biden plans to tap Jonathan Kanter, a lawyer who has long opposed the biggest tech companies, as assistant attorney general for antitrust, as my colleague Tyler Pager and I reported yesterday. 

The Biden administration for months has been building an increasingly aggressive posture toward Big Tech. First, it announced that Tim Wu, a major critic of the tech industry’s power, would serve on the National Economic Council. Then, Lina Khan, one of the most prominent challengers of Amazon, was named to helm the Federal Trade Commission. (Amazon founder Jeff Bezos owns The Washington Post.)

Advocates for greater antitrust enforcement are celebrating the moves. Sarah Miller, the executive director of the American Economic Liberties Project, said choosing Kanter is “further evidence that President Biden is committed to addressing concentrated power to build an economy that is more just, equitable, and secure.” 

Joe Biden wearing a suit and tie: U.S. President Joe Biden delivers remarks prior to signing an executive order on "promoting competition in the American economy" during an event at the White House. REUTERS/Evelyn Hockstein © Evelyn Hockstein/Reuters U.S. President Joe Biden delivers remarks prior to signing an executive order on "promoting competition in the American economy" during an event at the White House. REUTERS/Evelyn Hockstein

Yesterday’s announcement squashed any lingering questions about the future of antitrust enforcement under Biden.

Until the White House nomination, speculation persisted over whether Biden would choose a more big-business-friendly official to fill the key vacancy at the helm of the antitrust division. But in picking Kanter, Biden is elevating yet another hero of the growing movement to expand antitrust enforcement in the United States. For months, trustbusters have been carrying mugs with the text “Wu& Khan& Kanter.” around Capitol Hill, signifying their support for his nomination. 

The choice reflects a significant reversal in how Democrats approached tech regulation under former president Barack Obama. The administration did not pursue a major antitrust case against Google, and it was known for its cozy ties with top Silicon Valley companies. 

Throughout the 2020 election, it was unclear if a Biden administration would mean a repeat of the same strategy. Though Biden was critical of Facebook's handling of misinformation and Amazon's tax payments, as a presidential candidate he rarely singled out individual companies on competition issues. As candidates, he and then-Sen. Kamala Harris (D-Calif.) did not go as far as Sen. Elizabeth Warren (D-Mass.) in calling for a break up of Facebook, Google, Amazon and Apple. 

Industry-backed think tanks and trade groups also recognize a sea change is occurring. The Information Technology and Innovation Foundation, a think tank backed by Google and other tech giants, said Kanter's nomination signals federal agencies are about to “take a U-turn away from America’s longstanding approach to regulating competition.” 

ITIF warns a more aggressive approach to antitrust enforcement would potentially leave U.S. companies more vulnerable to international competitors. 

“Now, if policymakers don’t reconsider the decision to repeat old antitrust mistakes, the new winner will be China," Aurelien Portuese, director of ITIF’s Schumpeter Project on Competition Policy for the Innovation Economy, said in a statement. 

Kanter’s business ties to Big Tech’s rivals are also already drawing pushback from industry.

Kanter is known as an adversary of giant tech corporations, including Google and Apple. He has represented large companies like Microsoft, as well as smaller tech companies such as the Google critic Yelp. He is a partner at the Kanter Law Group, which describes itself as “an antitrust advocacy boutique.”

“Throughout his career, Kanter has also been a leading advocate and expert in the effort to promote strong and meaningful antitrust enforcement and competition policy,” the White House said in a news release.

NetChoice, a tech trade group whose members include Google, Amazon and Facebook, raised concerns about Kanter’s professional history.

“Given that Kanter is famous for representing Microsoft and Yelp and attacking Google, Kanter will raise questions about his ability to impartially enforce the law against tech businesses, just like FTC Chair Khan,” Carl Szabo, NetChoice vice president and general counsel, said in a statement.

Khan has recently faced petitions from Facebook and Amazon calling on her to recuse herself from antitrust cases involving their companies, given her past criticism of them in her academic writing and work on the congressional probe into Silicon Valley’s power. During her confirmation hearing, Khan said she had “none of the financial conflicts or personal ties that are the basis of recusal under federal ethics laws.”

Yet it’s possible Kanter could see support from both parties.

Khan’s nomination drew bipartisan support, and she was confirmed to the FTC on a 69-to-28 vote. Twenty-one Republicans joined 46 Democrats and two independents in supporting Khan.

Sen. Mike Lee (R-Utah), the top Republican on the Senate Judiciary Committee antitrust panel, said he was “encouraged” by Kanter’s track record on challenging tech giants.

“I look forward to learning more about his qualifications through the confirmation process,” he said in a statement.

Our top tabs

Government pressure is building on NSO Group as revelations about its Pegasus spyware mount.

a hand holding a cellphone in front of a building: NSO Group has disputed the reports. (Jack Guez/AFP/Getty Images) © Jack Guez/AFP/Getty Images NSO Group has disputed the reports. (Jack Guez/AFP/Getty Images)

The French government ordered investigations in the wake of reports by The Washington Post and 16 media partners that the phone numbers of President Emmanuel Macron and other world leaders were included on a list of 50,000 phone records that included targets of NSO Group’s Pegasus spyware, Drew Harwell and Michael Birnbaum report

“If the facts are confirmed, they are clearly very serious,” Macron’s office said in a statement. “All light will be shed on these press revelations. Certain French victims have already announced that they would take legal action, and therefore judicial inquiries will be launched.”

In all, the list included phone numbers of three presidents, 10 prime ministers and the king of Morocco, our colleagues report.

None of the officials offered their phones for analysis, so it’s impossible to tell if they were actually targeted or infected by Pegasus. 

NSO disputed the report, saying that Macron, King Mohammed VI and some other French and Belgian officials on the list “are not and never have been Pegasus targets.”

The company has denied that the list of phone numbers was a list of surveillance targets. “The data has many legitimate and entirely proper uses having nothing to do with surveillance or with NSO,” NSO attorney Tom Clare said.

Hong Kong’s legislature is debating an anti-doxxing law that U.S. tech giants have criticized.

a bridge over a river in a city: Opposition lawmakers resigned from the legislature last year after four were ousted. (Vincent Yu/AP) © Vincent Yu/AP Opposition lawmakers resigned from the legislature last year after four were ousted. (Vincent Yu/AP)

The law could pass quickly because Hong Kong’s legislature doesn’t have an official opposition, Reuters reports. The Asia Internet Coalition, whose members include Google, Facebook and Twitter, warned that tech companies could stop offering services in Hong Kong if authorities went ahead with the proposal, which the group said was “not aligned with global norms and trends.”

Hong Kong authorities say the law is necessary to stop doxing — the publishing of people’s personal information, which can lead to harassment. The practice was common during 2019 protests over Beijing’s tightening grip on the city, where it implemented sweeping new powers last year. But critics warn that the measures could be used to protect the powerful and target civil society. 

Amazon founder Jeff Bezos’s spaceflight portends a private space race.

a group of people standing next to a body of water: Blue Origin is one of several firms vying to be the premier private space company. (Joe Skipper/Reuters) © Joe Skipper/Reuters Blue Origin is one of several firms vying to be the premier private space company. (Joe Skipper/Reuters)

Bezos’s Blue Origin company is nearing $100 million in sales of future seats on flights to space and plans two more human spaceflights this year, Christian Davenport reports. Blue Origin is also working on a larger rocket and a spacecraft that would bring astronauts to the moon, but it faces stiff competition in the private space race.

(Bezos owns The Washington Post.)

The company is battling with Elon Musk’s SpaceX for a major NASA contract to fly astronauts to the moon. The Government Accountability Office is expected to rule on a Blue Origin protest in response to NASA’s decision by Aug. 4. Billionaire Richard Branson beat Bezos to space this month, intensifying the rivalry between Branson’s Virgin Galactic and Blue Origin.

Rant and rave

Bezos’s choice of hat was the source of jokes and memes on Twitter. Michael Pielocik, the head writer of “Desus & Mero”:

Washingtonian assistant editor Daniella Byck:

Hill happenings

Five Democratic senators called on federal regulators to review Verizon’s proposed $6.9 billion acquisition of TracFone.

The lawmakers warned that the purchase “could result in increases in costs, reductions in competition, or diminished service offerings for consumers,” and would endanger the Federal Communications Commissions Lifeline program, which provides discounted phone service to low-income consumers. They also encouraged the FCC to “thoroughly review” the proposal and its effects on consumers. Sens. Richard Blumenthal (D-Conn.), Sheldon Whitehouse (D-R.I.), Dianne Feinstein (D-Calif.), Ron Wyden (D-Ore.) and Edward J. Markey (D-Mass.) signed the letter, which was addressed to acting FCC chairwoman Jessica Rosenworcel. 

“The proposed TracFone acquisition will bring value and benefits to value-conscious consumers in a myriad of ways,” Verizon spokesman Rich Young said. “As we continue to work through the regulatory review process, Verizon looks forward to providing current and potential TracFone customers with more choices, better plans at flexible prices, and access to our 5G network, all while we expand our offerings to value-conscious and low-income consumers. Lifeline is foundational to the acquisition, and in response to calls for time commitments, Verizon has committed to the Lifeline program for at least three years.” TracFone did not respond to a request for comment.

Inside the industry

Facebook tightens up and clarifies policies on promotion of prescription drugs (Adweek)

Social media companies’ political ad bans around the 2020 election had little impact on misinformation, a Duke University study found.

a man holding a sign: A poll worker wearing an American flag themed protective mask sanitizes a voting booth at a polling location in Louisville, Kentucky. Photographer: Luke Sharrett/Bloomberg © Luke Sharrett/Bloomberg A poll worker wearing an American flag themed protective mask sanitizes a voting booth at a polling location in Louisville, Kentucky. Photographer: Luke Sharrett/Bloomberg

Researchers concluded in a new study that bans around the 2020 election likely hurt poorer campaigns more than wealthier ones. They also said the bans likely hurt Democrats more than Republicans, because Democrats have tended to rely more heavily on Facebook ads than Republicans for small-dollar donations and other mobilization efforts. 

The study’s authors, J. Scott Babwah Brennen and Matt Perault, studied Facebook’s decision to stop accepting new ads in the last week of the general election, as well as the political and social issue bans on Google and Facebook that began Nov. 4 and continued through mid-December. 

They recommend that tech companies accept political ads for the 2022 midterms, and they called on the companies to provide campaigns and political advertisers with more time to navigate policy changes. They also said that political ads should be subject to “at least” the same content moderation standards as organic content. They called on Congress to criminalize the dissemination of information with the intent to suppress voters. 

Trending

Teens around the world are lonelier than a decade ago. The reason may be smartphones. (Tara Bahrampour)

Daybook

  • The Computer and Communications Industry Association hosts an event on the 10th anniversary of the America Invents Act on Thursday at 1 p.m.
  • Twitter discusses its second-quarter earnings on a call on Thursday at 6 p.m.
  • Rep. Suzan DelBene (D-Wash.) speaks at a Brookings Institution event on cross-border data transfers on Friday at 12:30 p.m.

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