House passes watered-down bill aimed at Big Tech dominance

The House of Representatives on Thursday passed sharply watered-down legislation targeting the dominance of big tech companies, giving states more power in antitrust cases and increasing money for federal regulators.

The bipartisan measure, which passed by a vote of 242 to 184, does not compare to a more ambitious package aimed at controlling Meta, Google, Amazon and Apple, which was approved by key House and Senate committees. That proposal languished for months, giving companies time to mount vigorous lobbying campaigns against it.

The more limited bill would give states an advantage over companies in choosing where courts decide federal antitrust cases. Advocates say the change would avoid the “home court advantage” that big tech companies enjoy in federal court in Northern California, where many cases are tried and where many companies are headquartered.

Many state attorneys general have filed antitrust lawsuits against the industry, and many states joined the Justice Department and the Federal Trade Commission in their landmark lawsuits against Google and Meta (then called Facebook) in late 2020.

The bill would also increase the fees companies pay to federal agencies for all proposed mergers worth $500 million or more, reducing fees for small and medium-sized transactions. The goal is to increase revenue for federal enforcement efforts.

Under the bill, companies seeking merger approval would have to disclose subsidies received from countries deemed to pose a strategic or economic risk to the United States — particularly China.

“We’re in a monopoly moment as a state,” Rep. Lori Trahan, D-Mass., said ahead of the vote. “Multi-billion corporations have become giants, eliminating any real competition in their industries and using their dominance to hurt small businesses and consumers. Meta’s monopoly power allowed her to harm women, children, and people of all ages without recourse. Amazon used its domain to copy competitors’ products and start small businesses.”

The Biden administration, which has pushed for antitrust legislation aimed at big tech, backed the bill this week.

Even in its watered-down form, the bill drew strong opposition from conservative Republicans who split from their fellow Republicans who supported the bill. Conservatives have opposed the proposed increase in revenue for antitrust regulators, arguing that under Biden there has been an apparent overreach by the FTC.

Rep. Tom McClintock, R-Calif., described FTC chief Lina Khan as a “radical leftist who seeks to replace consumer decisions with her own.”

Another California Republican, Rep. Darrell Issa, told his colleagues, “If you want to stifle innovation, vote for it.”

If Republicans gain control of the House or Senate in November’s elections, they will surely try to clamp down on the FTC’s activism and challenge its broader interpretation of its statutory authority.

A broader antitrust package would restrict powerful tech companies from favoring their own products and services over competitors on their platforms and could even lead to mandatory divestitures separating the companies’ dominant platforms from their other businesses. That could, for example, prevent Amazon from steering consumers toward its own brands and away from competitors’ products on its massive e-commerce platform.

The drafting of the bill marked a new milestone in Congress’s efforts to curb the dominance of tech giants and anti-competitive practices that critics say have hurt consumers, small businesses and innovation. But the proposal is complex and has drawn objections to some provisions from lawmakers on both sides of the aisle, even as they all condemn the behavior of the tech giants.

Lawmakers face a delicate task as they try to rein in a powerful industry whose services, mostly free or nearly free, are popular with consumers and embedded in everyday life.

So, as time to act runs out as the November election approaches in about six weeks, lawmakers have pulled less controversial provisions on antitrust court locations and merger fees into a new bill that has been approved.

Lawmakers added a provision targeting foreign subsidies to American companies. Republicans have particularly criticized China’s ownership of the popular video platform TikTok.

In the Senate, Republican senators Mike Lee of Utah, Tom Cotton of Arkansas and Chuck Grassley of Iowa this week supported the new House bill. However, there was no public debate on a similar bill in the Senate.