Internal Consolidation Like Facebook's Doesn’t Trigger Antitrust Concerns, Delrahim Says
Internal consolidation doesn’t trigger antitrust concerns, DOJ Antitrust Division Chief Makan Delrahim said Tuesday at the State of the Net conference. He was asked about Facebook’s plan to integrate messaging services for Messenger, WhatsApp and Instagram (see 1901250046). However, if the consolidation allows anticompetitive behavior, that’s worth attention, he said. The division is “working as fast” as it can on reviewing T-Mobile's proposed buy of Sprint, Delrahim also said (see 1901290040).
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The FTC shouldn’t be afraid to break up previously approved deals that prove harmful to competition, Commissioner Rebecca Kelly Slaughter said, supporting retrospective analysis of anticompetitive cases. Retrospective analysis is useful, but enforcers must be mindful of pro-competitive benefits of combinations, Delrahim said. Would YouTube be offering the same level of service without Google’s backing, he asked, arguing issues arise when transactions prevent competition.
Antitrust scrutiny against IBM in the 1970s and '80s kept the market competitive, said House Antitrust Subcommittee Chairman David Cicilline, D-R.I. It allowed Microsoft and Apple to enter the market, he argued. Enforcement action against Microsoft in the late-'90s allowed the likes of Facebook and Google to develop, he said. It’s important there’s a record of anticompetitive behavior, or “gatekeeper power” and “thuggish tactics,” moving forward, he said: “Today’s monopolies are yesterday’s startups.”
It’s good that antitrust law has gotten bipartisan congressional scrutiny, Delrahim said, noting traditional laws can be improved on “the margins.” Traditional antitrust law can also be applied to “free” products like social media, which is driven by an advertising-based model similar to broadcast TV, Delrahim said. Ad rates are examined knowing the viewer or user is part of the product, he said.
There's no timeline for concluding review of ASCAP and BMI consent decrees (see 1901170037), Delrahim told us. “We’re still looking systematically at all the 1,300” total decrees DOJ-wide. Asked whether the decrees have outlived their usefulness, Delrahim said, “We’ll wait to see the public comments we get and what their investigation reveals.”
Privacy is an important factor in antitrust issues because it “dovetails” with data concerns, Delrahim said. The biggest concern about potential privacy legislation is that it might strengthen incumbents’ market position, making it harder for entrants to compete, he said.
A uniform, national privacy standard would be the best outcome, said former acting FTC Chairman Maureen Ohlhausen, now a Baker Botts attorney. Former Commissioner Terrell McSweeny, now at Covington and Burling, said the challenge of a uniform standard at the federal level is that states like California shouldn’t have to give up potentially stronger privacy laws for a weaker U.S. law. Deputy U.S. Chief Technology Officer Michael Kratsios warned against job-killing regulation that causes American innovators to develop technology overseas. The key privacy issue now is that platforms place “too much burden” on the individual, said Center for Democracy & Technology Vice President-Policy Chris Calabrese.
The FTC needs more resources, Slaughter said, claiming the agency had 50 percent more employees at the start of the Reagan administration. “That doesn’t make much sense,” she said, given the growth of the economy. Slaughter declined to address the Facebook investigation but said the recent shutdown slowed down all agency operations.
Cicilline plans to reintroduce the Journalism Competition and Preservation Act letting news publishers collectively negotiate with platforms on public access to news sources. News Media Alliance CEO David Chavern applauded Cicilline’s bill, saying, “Fair compensation for use of news content -- from which the tech platforms benefit financially -- will allow news publishers to continue to reinvest in quality journalism.”