FTC Task Force: Will Tech Giants Face a Day of Reckoning on Antitrust?
Some antitrust lawyers are skeptical of the announcement last week that the U.S. Federal Trade Commission's Bureau of Competition is naming a 17-staff lawyer task force to examine antitrust issues around big tech — which could possibly include reviewing some past mergers such as Facebook's acquisition of WhatsApp and Instagram.
March 06, 2019 at 12:15 PM
6 minute read
Some antitrust lawyers are skeptical of the announcement last week that the U.S. Federal Trade Commission's Bureau of Competition is naming a 17-staff lawyer task force to examine antitrust issues around big tech — which could possibly include reviewing some past mergers such as Facebook's acquisition of WhatsApp and Instagram.
The task force announcement came even as Facebook was reported to be negotiating with the FTC over a multibillion-dollar fine for violating a 2011 consent decree in connection with the Cambridge Analytica privacy scandal. The company shared millions of users' data with an app developer in 2014 that in turn sold data to Cambridge Analytica.The FTC started a probe of the incident last March. Facebook also has come under fire from German antitrust regulators for its advertising business model.
FTC Chairman Joseph Simons, a Republican who was appointed to the role by President Donald Trump last year and who prior to that was partner and co-chair of the antitrust group at Paul, Weiss, Rifkind, Wharton & Garrison, said the task force would monitor competition in the tech industry and take enforcement actions when warranted.
Bureau of Competition Director Bruce Hoffman said: ”By centralizing our expertise and attention, the new task force will be able to focus on these markets exclusively – ensuring they are operating pursuant to the antitrust laws, and taking action where they are not.”
The announcement comes as public and legislative concern is rising in the United States and Europe about the masses of data the companies are accumulating on individuals, their growing intrusion into every aspect of individuals' lives and the power that is giving them economically and politically. For instance, Congressman David Cicilline, (D-R.I.) who is chairman of the House Judiciary Committee's antitrust subcommittee, has told the Financial Times he's considering proposing to break up the big tech companies based on their function and services, similar to the Glass-Steagall Act that divided the investment and commercial functions of banks in the Great Depression but was partly repealed in the late 1990s.
But some antitrust lawyers are saying the commission already has studied the issues and held earlier hearings, yet approved the mergers and acquisitions. They're wondering if the commission really intends to take substantive action.
Columbia University Law Professor Tim Wu, a prominent critic of technology and media concentration who was an adviser to the FTC from 2011 to 2012, tweeted “I'm hoping the new @FTC tech platform task force finds the courage to re-consider some of the anti-competitive tech mergers of the last 10 years; tech is in need of a genuine shakeup,” speaking of increasing consolidation among the tech titans including Facebook, Alphabet, Apple and Amazon.
Henry C. Su, an antitrust trial and appellate litigation partner at Constantine Cannon in Washington, D.C. and San Francisco, who formerly was a trial lawyer at the FTC from 2011 to 2017, part of that time in the competition bureau, said Friday that, “there has been a lot of pressure in particular from Democrats for the FTC to do more to investigate big tech. One could interpret this as Chairman Simon's way of responding to that and let them know the agency is listening.”
Su pointed out that the Clayton Act and the Sherman Act empower the commission to regulate antitrust, but data privacy is more the purview of the consumer protection bureau.
“The big question in my mind coming out of this task force is you are going to monitor and investigate, but is there going to be a report or are you just going to initiate enforcement when appropriate and if you are, what are the grounds, if you are challenging transactions that previously have undergone review?” He said: “How do you articulate a case of harm based on a transaction that you previously reviewed and cleared? How do you distinguish between what you knew then and what you know now and decide whether what you are concerned about now relates to the acquisition or to developments that have happened since the acquisition?” The task force, however, could also bring cases based on anticompetitive conduct that are unrelated to specific acquisitions or mergers, he said.
While much of the controversy around tech in the last few years has concerned data collection, protection and unauthorized sharing, “I have read a lot of what was said and written and I don't see a compelling theory of competitive harm built around issues of privacy and data accumulation,” Su said.
Meanwhile, Silicon Valley attorney Gary Reback, who is of counsel at Carr & Ferrell and has represented companies in antitrust complaints at the FTC against Google, said on Friday , “I don't know why you would announce something like this with great fanfare if you didn't plan to do something. But they had all these hearings early on and nothing came of them. The commission, I think, is operating under something of a credibility gap from the last administration.”
Reback said the privacy issues and competition issues are separate but related, because users who are dissatisfied with the privacy policies of a company like Facebook, can't choose alternatives such as WhatsApp or Instagram because Facebook has bought them.
“Instagram and Whatsapp were the two potential competitors but they are now part of Facebook, so are they [the FTC] going to look at that monopolistic behavior and unwind those mergers?” he said. Given the many hearings already held, Reback said advocates for greater competition had been expecting more from the FTC than further study.
One would think the next step would be to bring some cases, not to study it some more. They've studied it already,” he said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All'The Unheard of Superpower': How Women's Soft Skills Can Drive Success in Negotiations
Tales From the Trenches: What Outside Counsel Do That GCs Find Inexcusable
Venus Williams Tells WIPL Crowd: 'Living Your Dreams Should Be Easy'
The 2024 WIPL Awards: Law Firm Mentor and Mentee Collaboration
Trending Stories
- 1The Key Moves in the Reshuffling German Legal Market as 2025 Dawns
- 2Social Media Celebrities Clash in $100M Lawsuit
- 3Federal Judge Sets 2026 Admiralty Bench Trial in Baltimore Bridge Collapse Litigation
- 4Trump Media Accuses Purchaser Rep of Extortion, Harassment After Merger
- 5Judge Slashes $2M in Punitive Damages in Sober-Living Harassment Case
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250