Big Tech beware?
Deputy Senate Majority Leader Mike Gianaris has introduced a bill (S.8700-A) called the “21st Century Antitrust Act,” which a press release describes as a “powerful new tool to fight monopolies.”
The bill comes a week after contentious antitrust hearings in Congress which featured what many considered to be unsatisfying testimony from the CEOs of Apple, Google, Amazon and Facebook.
Gianaris’ bill does three things:
- It adds “Attempt to Monopolize” to the crimes that can be tried under New York antitrust laws
- It allows for private class action lawsuits to enforce antitrust laws in New York state
- It changes the standard which governs what’s legal and what’s not when it comes to monopolization, to a broader, “European standard”
Gianaris says the bill is supposed to update the state’s “antiquated antitrust laws” that were “written a century ago for a radically different economy.”
That view is supported by an article on the bill published in The Guardian last week, which stated that, if passed, Gianaris’ bill would “make it easier to sue big tech companies for alleged abuses of their monopoly powers.”
But a consultant for Google told Spectrum News he believes parts of the bill may not be constitutional.
Stephen Houck was the chief of the New York State Antitrust Bureau within the Attorney General’s Office when it sued Microsoft back in the 1990s. Houck also held the position of chair of the Antitrust Section of the New York State Bar Association.
“I think there are a bunch of problems with it,” said Houck, referring to the last element of the bill. “Our marketplace here is much more free; it encourages risk taking. In Europe, there’s a lot more regulation. I think our economy is working well, so I don’t think he needs to do that.”
Houck explained that in the U.S., the offense for grabbing too much market power has always been monopolization. In Europe, the standard is less exact.
“In Europe the standard is ‘abuse of dominance,’ which is less specific,” said Houck.
“I think this (the portion of Gianaris’ bill that changes the standard) is going to be unconstitutional because the statute’s so vague. You can’t tell if what you’re doing violates the law or not unless some court tells you,” Houck explained. “There would be no criminal intent here because you can’t tell what’s illegal and what’s not.”
Gianaris strongly disagrees with Houck’s assessment.
“Google’s assertion that ‘our economy is working well’ is exactly the kind of thinking that makes it clear we need to further regulate the market dominance of Big Tech,” Senator Gianaris told Spectrum News.
“It’s not working well for consumers deprived of choices as smaller players get driven out of the market,” the senator continued. “It’s not working well for competing businesses treated unfairly by an industry that increasingly controls access to their products. And it’s not working well for a nation ceding not just economic but also political power to fewer and fewer players who are primarily concerned with their own profits.”
“Perhaps that’s why Mr. Houck’s former colleagues at the New York Attorney General’s Office are in strong support of my proposal,” Gianaris added.
But Houck also argues that Gianaris’ bill “doesn’t really add any powers to the office of the attorney general,” which can bring antitrust cases in federal court.
“The piece (of the bill) that is the least problematic is that [Gianaris] wants to allow class actions. I think that’s a good thing for consumers and for class action attorneys,” Houck said.
State courts aren’t equipped to do anti-trust cases, according to Houck.
“Antitrust cases are usually complex, complicated cases involving economics, and state court judges don’t have that kind of training or background,” Houck explained. “These cases can be difficult even for federal courts.”
“We never brought a case in state court,” Houck said of his tenure at the New York State Attorney General’s Office.
Ultimately, Houck’s opinion of Gianaris’ bill is split.
“The class action thing is OK,” said Houck. “[Gianaris] updates some of the penalties, which is fair. But I don’t think it’s fair to criminalize all this conduct that he wants to criminalize. And I think it’s a mistake to import these European standards which are totally different American standards. I think that’s going to inhibit innovation, it’s going to make companies less willing to take risks.”