Mar 23, 2021
A coalition of nearly 30 progressive advocacy groups on Tuesday urged President Joe Biden to take steps to ensure a decisive break from the "failed leadership" of the last Democratic administration on antitrust enforcement, pointing to a recent report exposing Obama-appointed regulators' refusal to stop Google's monopolistic takeover of the online search market.
"The federal government needs to strengthen its approach to combating anti-competitive practices," the groups wrote in a letter (pdf) to Biden and Attorney General Merrick Garland.
The progressive coalition--which includes Demand Progress, CodePink, People's Action, and dozens of other organizations--said Biden can start by appointing "strong advocates of antitrust enforcement" to key agencies like the Federal Trade Commission (FTC), a regulatory body tasked with shielding consumers from business abuses.
"As the administration considers nominees for vital antitrust positions, such as the post of Assistant Attorney General for the Antitrust Division or for appointments to the FTC, it is crucial that it elevates people with strong track records of standing up to big corporations and Big Tech," said the coalition, warning against the selection of any corporate lobbyists.
"The fact that many alumni of the FTC previously tasked with oversight of Big Tech have since joined the industry further stresses the need for a new approach to the personnel selection process," the groups added. "We need a break from past, failed leadership, and we need it now."
\u201cThe recent leak of @FTC Google files makes it clear that we need leadership at FTC & DOJ who will hold Big Tech accountable.\n\nProud to stand w/ @revolvingdoorDC @econliberties @DFAAction @Peoples_Action @BoldProgressive to call for a clean break from past, failed leadership.\u201d— Demand Progress (@Demand Progress) 1616506945
While heartened by Biden's nomination of scholar and "antitrust trailblazer" Lina Khan for an FTC seat, progressives have also voiced concerns over recent reporting indicating that corporate lawyers are lining up for key posts at the Justice Department, which is currently suing Google for antitrust violations--a case that was launched at the tail-end of the Trump administration.
The American Prospectreported last month that Garland, who was confirmed earlier this month, "looks to be drawing extensively on the ranks of BigLaw representatives to staff [DOJ's] most powerful and important posts."
"Garland's most concerning connection is Jamie Gorelick, who, despite being unlikely to get a formal role within the department, is positioning herself as a fixer with Washington's most direct line to Garland's office and unique power to influence the Biden DOJ," the Prospect noted. "Gorelick was hired to help Google beat a burgeoning antitrust case during the Obama years, successfully pressuring the White House and DOJ to put the brakes on a criminal investigation into the firm."
During his confirmation hearing last month, Garland defended the common practice of hiring lawyers with Big Tech ties for government roles, telling lawmakers that "fortunately or unfortunately, the best antitrust lawyers in the country have some involvement, one way or another," with the industry.
"We can't exclude every single good lawyer from being able to be in the division," Garland said, referring to the Justice Department's antitrust arm.
\u201cGarland said yesterday: "Fortunately or unfortunately, the best antitrust lawyers in the country have some involvement" in Big Tech. Lawyers in or likely to be in his DoJ certainly do:\n-Emily Loeb (Apple)\n-Susan Davies (Facebook)\n-Susan Dunn (Amazon)\nhttps://t.co/hllbqstOhb\u201d— David Dayen (@David Dayen) 1614100034
The Revolving Door Project, a government watchdog organization and one of the signatories of the new letter, said Tuesday that while "the nomination of antitrust enforcement advocates like Lina Khan is a welcome start... we strongly encourage President Biden and Attorney General Garland to make similar nominations when it comes to naming a permanent FTC chair and DOJ antitrust chief."
"With a new wave of Big Tech antitrust investigations today," the group added, "it's time to stop appointing industry allies to top regulatory jobs."
Read the full letter:
To President Joseph R. Biden, Jr. and Attorney General Merrick B. Garland:
We write to you as a broad coalition of organizations committed to ensuring that corporate giants engaging in anti-competitive behavior are held accountable by the federal government. As you know, recent reporting by Politico as part of a series titled the "Google Files" has shed light on the degree to which the business model of Google, a Big Tech giant currently the subject of multiple federal and state-level antitrust lawsuits,is rooted in anti-competitive practices and how the government has failed in the past to take on this behavior adequately.
By obtaining 312 pages of internal memos circulated within the Federal Trade Commission (FTC) during its investigation of Google in 2012, Politico has helped reveal the extent to which the FTC lacked leadership in that era and failed to grasp the threat to open markets posed by the company. The FTC reneged on its duty to hold the company accountable for its anti-competitive behavior, and nearly a decade later both consumers and smaller competitors alike have paid the price. These revelations further stress the need for strong antitrust enforcement at both the FTC and other federal bodies, namely the Antitrust Division of the Department of Justice.
Page 14 of the Google Files further corroborates what has long been alleged by anti-monopoly advocates: that one of the ways Google is able to retain its monopoly position in the search engine market is through anti-competitive contracts preventing the installation of rival search engines. Indeed, the documents found that Google had likely aspired to engage in similar anti-competitive practices to protect the company's search advertising business as early as 2012.Per the documents, Andrew E. (Andy) Rubin, then atop Google executive, openly boasted about the company's practice of entering into anti-competitive exclusivity agreements, stating in plain terms that it allows for the company to "own the U.S. market."
Furthermore, the leaked documents confirm widely-held suspicions that Google's practice of reprogramming its search engine has been done to unfairly elevate Google products at the expense of competitors and consumers, rather than to tailor search results more effectively to consumers as the company has long claimed. According to the documents, "Google initially sought to demote all comparison shopping sites" through reformulating its algorithm in 2007. The corporate giant would seek further reformulation of its algorithm to the detriment of competitors over following years. One change to its algorithm in 2011 had consequences so drastic and detrimental to merchants that fellow corporate giant Amazon reported a 35% loss in traffic from comparison-shopping websites, according to information it provided to the FTC.
Per the documents, both Amazon and fellow Big Tech company Facebook privately complained to the FTC that Google's anti-competitive business model hurt their own bottom line. As Politico reported, "Amazon was already the most successful online retailer in 2012, though it posted a loss of $39 million for the year because of heavy investments to help launch its new Kindle Fire tablet. Facebook went public in 2012 and was emerging as a key challenger to Google in online advertising." Representatives from Facebook privately shared their concern with FTC officials that Google would enter into anti-competitive contracts with mobile carriers to mandate the installation of social media service Google+ on their platforms. Given that the company has effectively forced carriers to enter into similar clauses to elevate other Google products, this fear was clearly warranted.
Through the Google Files, competition advocates have been further vindicated in their long-standing belief that Big Tech companies like Google have engaged brazenly in activities detrimental to open markets. Perhaps more importantly, however, the Google Files have shown the degree to which many federal officials were unprepared to meet the challenge of holding anti-competitive corporate giants accountable. Leaked internal memos displayed poor judgement by these officials, who wrongly predicted that Google's targeted advertising policies showed only "little potential for growth," something that has been proven false in the decade since.
FTC officials additionally argued that search consumption would remain mostly conducted on computers, thereby dismissing the need to stop Google's from mandating its search engine on mobile devices. As noted by Politico, "[t]oday, about 62 percent of those queries take place on mobile phones and tablets, nearly all of which use Google's search engine as the default." Furthermore, these documents show that FTC officials wrongfully anticipated competition to Google in the smartphone software market in addition to generally underestimating Google's market share. It's clear that the ability of Big Tech giants like Google to acquire monopoly power has been abetted by the leadership deficit at top enforcement agencies such as the FTC.
Consumers and smaller technology companies alike have borne the brunt of the failure of FTC leadership to hold Google accountable in 2012. As such, the federal government needs to strengthen its approach to combating anti-competitive practices, and this necessitates a clean break from past leadership of agencies like the FTC in favor of strong advocates of antitrust enforcement. As the Administration considers nominees for vital antitrust positions, such as the post of Assistant Attorney General for the Antitrust Division or for appointments to the FTC, it is crucial that it elevates people with strong track records of standing up to big corporations and Big Tech. This means eschewing individuals with backgrounds like former FTC Chair Jonathan D. (Jon) Leibowitz, who served as a corporate lobbyist prior to his appointment and has pushed for relaxing internet privacy laws since leaving the agency. The fact that many alumni of the FTC previously tasked with oversight of Big Tech have since joined the industry further stresses the need for a new approach to the personnel selection process. We need a break from past, failed leadership, and we need it now.
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