Forty-three state attorneys general sent a letter to the Federal Trade Commission (FTC), urging it to take action on big tech privacy and competition.
By Sean Moran
Forty-three attorneys general (AGs) sent a letter, obtained by Breitbart News, to the FTC ahead of its Wednesday hearing on competition and consumer protection, which will include many prominent attorneys general such as Louisiana AG Jeff Landry, asking that the agency make reforms to protect consumers, consumer privacy, and competition in technology markets.
The AGs also suggested that the FTC should cooperate more with the state attorneys general on competition and technology platform issues.
The AGs said that the FTC “should require prior approval and/or prior notice for future acquisitions as part of more consent decrees in technology platform markets.”
They contended in the letter that “prior notice” or “prior approval” served as part of the FTC’s injunctive toolkit, which would give the FTC more power when delivering consent decrees.
However, the AGs said that the FTC, as well as the Department of Justice (DOJ), have not used prior notice or prior approval in any technology platform markets, such as Facebook, Google, or Amazon.
The AGs noted that Facebook, Google, and Amazon might often acquire upstart competitors to them and often are not subject to Hart-Scott-Rodino (HSR) antitrust reporting requirements.
The state lawyers noted that these “technology platform markets where network effects are pronounced — are particularly susceptible to acquisitions of nascent competition which may be anticompetitive but which are not subject to HSR reporting requirements.”
The AGs said that these agencies should consider utilizing prior notice and/or prior approval when the acquisition involves a technology platform.
“With dominant technology platforms likely to continue their practice of acquiring small market players before they have the opportunity to develop into serious challengers, this is a relatively low-cost method to ensure appropriate antitrust oversight,” the lawyers wrote to the FTC.
Big tech’s acquisition of entry competitors raises questions over whether their purchases might run afoul of antitrust practices or engage in anticompetitive behavior.
For instance, in 2018, when Facebook CEO Mark Zuckerberg was accused
of having a monopoly, he claimed that the average American has eight other online social apps to communicate with, not just his platform. According to App Annie, however, Zuckerberg’s company owns three of the top ten apps in the United States. Further, Facebook acquired messaging competitor WhatsApp and rival social media platform Instagram.
The state attorneys general wrote that the HSR filing requirements could be amended to “encompass dominant firms’ acquisition of nascent competition.”
The AGs’ call for an expanded HSR requirement could open big tech’s acquisition of smaller competitors to more scrutiny by the FTC.
“Today, if Amazon were to acquire a startup with less than $18 million in sales or assets, that transaction would avoid current HSR filing requirements. Under this modification, if the startup has existed for fewer than five years, the filing requirement would be triggered,” the AGs wrote, citing a potential example.
The attorneys general then turned to privacy, contending that increased market power, especially on technology platforms, might reduce Americans’ privacy online.
“Enhanced market power in the data context provides greater opportunities to exploit consumer data and create greater switching costs for consumers,” the AGs wrote.
“If a merger between firms holding consumer data results in a reduction of privacy, that can mean a reduction in product quality,” they added.
The AGs then wrote that there should be greater transparency in the technology market surrounding Americans’ privacy, which would allow citizens to make more informed choices about “free” services and “may incentivize companies to compete on privacy.”
The attorneys general then cited at 2014 FTC report which stated that Congress should consider legislation that would enable Americans to access the information held by data and technology companies and opt out of the collection of the data if need be.
The ability to opt-out of technology data mining has been proposed
by Sen. Marsha Blackburn (R-TN), through her Browser Act, which would require that Americans have to “opt-in” into a technology company’s data mining service and the company cannot deny a user from accessing the platform if they do not consent to the data mining.
The lawyers contended that this legislation could fix many of the problems surrounding the large bulk collection of private data that tech companies do when Americans use their services. They even cited that Apple CEO Tim Cook endorsed a proposal for a data broker clearinghouse, which would give Americans more control over their privacy.
“This could address the asymmetrical loss of privacy that occurs when consumers are subject to increasingly extensive monitoring without increased public awareness or oversight,” the AGs wrote.
Sean Moran is a congressional reporter for Breitbart News. Follow him on Twitter @SeanMoran3.