Since July 2019, the U.S. Department of Justice, the Federal Communications Commission (FTC) and multi-state attorneys generals have launched antitrust investigations against Silicon Valley giants such as Facebook, Google, Amazon and Apple on the grounds of “obstructing market competition” and “suspected monopolies”.
As a result of a phased investigation, on December 10, 2020, the Federal Trade Commission and the “48 State Attorney Generals’ Union” respectively filed an antitrust lawsuit against Facebook, arguing that Facebook has long maintained its social empire status through anti-competitive behavior, demanding that Facebook spin off its 2012 and 2014, respectively. Instagram and WhatsApp acquired annually and hope to suspend Facebook’s $10 million+ mergers and acquisitions during the prosecution period.
It is worth noting that current US President Trump and several Republicans have repeatedly criticized social media such as Facebook for “differential treatment” of conservative speech, believing that social media has too much power to delete or decide whether to determine whether to say it is true or false.
And as Trump is about to step down, the case will inevitably be postponed until President-elect Biden takes office. Will Facebook’s “social media empire” collapse during Biden’s presidency?
Internet Regulation: The Political Show of All Forces
Theoretically, the anti-monopoly work of the U.S. government can be carried out at the federal and state levels: the main departments at the federal level are the Department of Justice and the Federal Trade Commission, and the state attorneys generals at the state level have the power to investigate and prosecute suspected monopoly matters within the state.
However, throughout the limited antitrust practice in American history, the federal government usually dominates the core antitrust agenda, while the states only do more peripheral cooperation and have limited role-playing.
At the federal level, in order to avoid antitrust jurisdiction conflicts between the responsible departments, as early as 1948, the Department of Justice and the Federal Trade Commission reached a memorandum and decided to coordinate the actions of the two parties with “mutual notice in advance”. Since then, in practice, each side has managed a stall, and the pattern has taken shape.
The former is responsible for the communication, electronics, steel and finance industries, while the latter is responsible for the biopharmaceuticals, oil and gas, computer hardware manufacturing and retail food industries.
In recent years, with the hotter of Internet supervision, the two departments have frequently fought for territory. In July 2019, after consultation, the two sides decided that the Federal Trade Commission would be responsible for Amazon and Facebook, and the Ministry of Justice would be responsible for Apple and Google.
In October 2020, the Justice Department and 11 state Republican attorneys generals launched an antitrust lawsuit against Google, while the Federal Trade Commission was not involved. However, in the Facebook case, this division of labor pattern was broken.
Facebook was prosecuted by two systems, both the federal and state levels, as well as the Federal Trade Commission and the judiciary (48 state attorney generals’s’ alliance). The two forces that were originally “grabbing territory” actually “formed a united front”. Interestingly, this “combination prosecution” seems to be fierce, but in fact, the form is greater than the content.
First of all, the Federal Trade Commission’s lawsuit against Facebook is very interesting. Before the antitrust investigation opened in July 2019, the committee had launched an investigation into Facebook’s improper user data protection due to the Cambridge Analytica incident, and finally settled it with a $5 billion fine. At the end of the vote, two of the five Democrats opposed it, citing that the $5 billion penalty was “not strong enough”, while three Republican members voted in favor of the settlement.
The two Democratic committee members voted in the anti-monopoly lawsuit, but two of the three Republican committee members opposed it. ( Editor’s note: Cambridge Analytica, a political consulting firm in London, England, is accused of using data from about 50 million users on social media Facebook to influence the Brexit referendum in 2016, the United States 2016 general election.)
The five commissioners of the Federal Trade Commission were appointed by Trump in 2018, including three Republicans and two Democrats. If Trump and the Republican Party are determined to sue Facebook in the name of suspected monopoly, the lawsuit should have happened long ago, and it is more difficult for Republicans to oppose it.
The results of two 3:2 votes proved that unlike the Trump administration and the Justice Department under Attorney General Barr’s rapid “action” against Google, the Republican Party was not motivated to sue Facebook’s monopoly.
Secondly, the prosecution of the state attorney general coalition is more of a political statement. Unlike federal prosecutor appointments that reflect the will of the president and the party in which the president is located, state prosecutors are mostly elected (state attorney general usually run for senators or even vice president, and the next vice president Harris is the attorney general of California before he is a senator of California in 2017), which means justice.
The antitrust actions of the Ministry are often reflected in the will of the president and the party, while the antitrust actions of the state attorneys general’ coalition are not clearly pointed. The so-called “48-state Attorney General Alliance” suing Facebook is more likely to be a collective show of the group of attorneys general: regulating Silicon Valley for political capital, while garnering Silicon Valley’s support for its own campaign.
In general, both the federal and state, the Federal Trade Commission and the judiciary want to gain a greater regulatory voice for themselves through the Facebook Antitrust Show. Among them are mostly partisan interests and politicians’ personal interests.
With Trump leaving office on January 20, 2021 and the replacement of attorneys general, if the Justice Department under the Biden administration does not join the prosecution against Facebook, the prosecution of the so-called prosecutorial coalition will likely decline. In this case, the heavy responsibility of suing Facebook will fall on the Federal Trade Commission.
Historically, compared with the Department of Justice, the enforcement power of the Federal Trade Commission has limited, such as its lack of power to initiate criminal proceedings. Most of the Commission’s cases are settled only by settlements and fines, and its main goal is not to win the case, but to protect the rights and interests of consumers through more flexible means such as fines. .
Given the “flexibility” of the committee and the tolerance of Facebook by Republican members of the committee, there is a greater probability that the two sides will move towards reconciliation – just like the Cambridge Analytica case in July 2019.
The two parties are not ready for Internet anti-monopoly.
During the eight-year administration of former President Obama, the White House has close relations with Silicon Valley and frequent personnel exchanges. Meanwhile, although Facebook’s acquisition of Instagram and WhatsApp has also triggered an antitrust investigation by the Federal Trade Commission, and even Google has been criticized for “acquiring a company almost one day”, the recovery of the United States in the post-financial crisis era urgently needs a big step forward in the Internet economy.
The rise of U.S. stocks is also supported by technology stocks. The realization of U.S. diplomatic interests requires Hillary-style Internet freedom as a precursor. Because of this, even though giants such as Google, Apple and Facebook had raised monopoly doubts not only in the United States at that time, but also under increasing antitrust pressure in the European Union, none of these have prevented the giants from moving towards oligarchs step by step.
The weak regulation of Silicon Valley by the previous Democratic administration and the good relationship between the United States and Europe under Obama have partly masked the dilemma that regulation lags behind business development.
For Democrats, the move is in a sense of “raising tigers”. It was the “Cambridge Analytica” in the 2016 U.S. election that the power of the Internet platform represented by social networks was faced by the U.S. government and opposition for the first time and made Democrats feel “painful”.
Subsequently, in order to regulate and regulate this power, Washington’s political elite, represented by Democrats in Congress, offered a three axes, including privacy protection, platform responsibility and antitrust.
In response to the first two axes, relevant proposals have emerged in the Senate and the House of Representatives, and policy goals have been partially implemented and achieved – for example, California passed the Consumer Privacy Protection Act, Facebook, Twitter and other platforms have strengthened the review of false statements in the 2020 election season – only for the third board axe, the public So far, the two houses have failed to come up with sufficiently mature proposals.
The anti-monopoly amendment has been only a “storm in the teacup” for a long time: although it has circulated among political elite groups, it has not formed strong public opinion.
At the beginning of 2019, with the opening of the Democratic primary in the 2020 election, a group of progressive Democrats, including Warren and Sanders, seized on the fact that the middle class of the United States has been increasingly marginalized in the process of capital globalization of finance and technology over the past 30 years and embarked on a “Trump-style” Mobilization Path – This group of Democrats compared Internet oligarchs to traditional biopharmaceutical and military-industrial consortiums, proposing to “split Facebook” and impose a “rich tax” on Silicon Valley oligarchs, making it seem that Silicon Valley antitrust has the possibility of landing for a while.
In October 2019, Warren’s party qualifying momentum was in full swing. Facebook President Zuckerberg said sadly in an internal meeting that if Warren was elected, Facebook would take up legal weapons to fight against the government’s anti-monopoly split.
Similar to the 2011 Occupy Wall Street movement, the antitrust backing as an electoral mobilization tool is also seriously insufficient; as Warren fades out and Biden’s qualifying, “split Facebook” disappears from the Democratic campaign platform, and industry antitrust is blurred as “the pursuit of a fairer distribution” .”
Almost at the same time, the Federal Trade Commission and the Department of Justice under the Trump administration began an antitrust investigation against Silicon Valley in the second half of 2019.
However, as described in the first part of this article, the Trump administration has no real interest in antitrust: for Trump, the antitrust issue is only to prevent Democrats or members of Congress from monopolizing the issue; if antitrust can be used as a weapon to retaliate against Google’s “discrimination conservatism” and bind Silicon Valley. It can’t be better if it comes to the track that suits your own campaign interests.
Progressive Democrats withdrew from the Democratic primary, marking the decline of the antitrust wave of the Internet in the United States. At the level of congressional investigation, although several committees of the Senate and the House of Representatives held one after another antitrust hearings, and in October 2020, the House of Representatives also released a 449-page report attacking the technology giants for gaining unfair market advantages through monopolies and recommending the introduction of new laws to strictly regulate or even split them, The relevant investigation report did not give specific splitting recommendations or an effective legislative road map.
Many of the above examples show that although the anti-monopoly wave in the United States seems to be thunderous, neither party is prepared at the administrative law enforcement level or the more fundamental legislative level.
In fact, before and after the 2020 election, Congress intensively launched anti-monopoly investigation reports, and the Ministry of Justice and the Federal Trade Commission intensively launched anti-monopoly lawsuits, which at best only a summary of the preliminary work, that is, all parties first serve the election in the form of “results report”, and then sit down on the monopoly in Silicon Valley and sit down in the lawsuit. Litigation and other means are the layout of Internet regulation in the post-Trump era.
Biden has no strong push for the Internet antitrust momentum
However, even in the Biden era, there may not be substantial progress in the antitrust of the Internet. This round of Internet antitrust ideologies in the United States originated under the Obama administration, flourished in the Democratic primary in 2019, and will probably go silent in the future after the Biden administration officially functions. Generally speaking, it is neither possible nor necessary for the Biden administration to force the Internet to fight monopolies.
First of all, the theoretical basis of Internet antitrust is insufficient, and the effective realization path is insufficient:
First, the U.S. government and opposition have not yet reached a consensus on the antitrust of the Internet. When applying the anti-monopoly law, the court still adheres to the principle that enterprises only constitute monopolies if they achieve “absolute market power” and “exclusive market behavior”. “product price” and “consumer welfare” are the core indicators.
Unless the concept that “any innovation conducive to the well-being of consumers should not be interfered with by antitrust agencies” is completely subverted, it will be difficult for both prosecutors and judges to break away from the traditional framework of antitrust doctrines.
Second, although Democrats entered the White House, the Senate and the House of Congress are still divided, and the Republicans who control the Senate are not active in antitrust, which reduces the possibility of antitrust through amendment.
In this case, even if Biden, as president, bypasses legislation by issuing executive orders similar to restrict mergers and acquisitions and investment, it is likely to be sued, and the White House is more likely to lose the lawsuit without legislative support.
Third, if the Department of Justice or the Federal Trade Commission pushes the split through litigation, the lawsuit will definitely reach the Supreme Court. In recent years, the Supreme Court has been cautious about “interpretation” and usually “refusal to stand in line” on issues related to the overall situation. At present, Republicans who prefer the big market have a majority in the Supreme Court, which will more or less dispel the idea of the Democratic government taking the initiative to sue.
Secondly, the Biden administration’s willingness to take the initiative to promote technology antitrust is weak:
First, the Democratic Party’s dissatisfaction with Silicon Valley originated from the Cambridge Analytica incident in 2016. After more than four years of game, the Democratic Party is gradually regaining control of Silicon Valley. Antitrust is only a means, not an end.
Second, the Internet is not the core issue of Biden’s campaign, nor does it belong to Biden’s current four priority agenda. Even in the Internet issue, Biden is more concerned about data privacy and platform responsibilities than antitrust: In 2019, in an interview with the Associated Press, he only said that he would “may see it”. In a 2020 interview with The New York Times, Biden said bluntly that “there is no concern about the concentration of platform power, but privacy” and “Article 230 should be revoked”. ( Editor’s Note: This refers to Section 230 of the Communications Code, a 1996 law passed that allows network companies not to be held accountable for content published by users on their platforms, while also removing legitimate but objectionable content.)
Third, the concentration of power in Silicon Valley is taking place under Obama and Biden, and antitrust is the core demand of progressive Democrats at present. Against the background that a group of “Calians” and “Obama’s old team” have entered Biden’s transition team, forcibly splitting not only means “self-denial”, but also attracts democracy. The rebellion of the party moderates and their own team.
Finally, it is difficult for the Biden administration to “cut itself” in terms of industrial competition and big game. Objectively speaking, Facebook has paid the price of abuse of user privacy by using the Federal Trade Commission’s $5 billion fine as the threshold.
In order to get rid of its dependence on the single advertising business, Facebook has been trying new formats, including electronic currency Libra, since last year. WhatsApp is an important carrier for Libra’s landing, and Instagram has become the only moat for Facebook to face Tiktok competition. The division of Instagram and WhatsApp is tantamount to blocking the way of Facebook’s reform. A landmark trend in this regard is that the federal government has recently revealed a signal to release Libra.
It is worth noting that Microsoft was the world’s leading software company when the federal government v. Microsoft at the turn of the century. Now the American Internet is facing fierce competition from China at the market level, and at the regulatory level, it faces great pressure from the European Union, and data governance and privacy protection at the grassroots level of the industry. There are many challenges such as protection and Internet sovereignty claims.
For the Biden administration, if the regulatoryly shaped Silicon Valley can effectively serve industrial competition, improve domestic employment, improve ally relations, and benefit the Democratic election, it should be the best policy. I’m afraid that it is to jump into Trump to force antitrust in order to take into account the demands of the Democratic progressives and pursue so-called absolute equality. The “anti-monopoly pit” dug by the government is not wise.
On the other hand: Although allowing TikTok to operate in the United States can achieve all anti-monopoly goals, the Trump administration spares no effort to suppress and expel it. Although both parties believe that social platforms are biased towards each other, it still does not easily delete clause 230, and the Trump administration embeds it in foreign trade. In the agreement. All of this proves that the American Internet industry has entered the era of protectionism.
If viewed from a broad perspective, the antitrust investigation launched at the federal and state levels of the United States seems fierce, but it is still only the fallout of the continuous turmoil in Silicon Valley since Cambridge Analytica in 2016.
During Biden’s tenure, Silicon Valley giants will continue to be subject to strict regulation, including antitrust censorship, but considering that the consensus between the two parties on privacy protection and platform responsibilities is much greater than antitrust, the two parties may have made little success in promoting federal data legislation and amending Article 230, but Facebook may be difficult to encounter. Break up.
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