Silicon Valley Could Get Pass in Democrats’ Antitrust Crusade

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Democratic presidential candidate Hillary Clinton speaks at an American Federation of State, County and Municipal Employees convention on July 19, 2016, in Las Vegas.

Photographer: Ethan Miller/Getty Images
  • Antitrust appears in party’s platform for first time since ’88
  • Big Tech gives three times as much to Democrats as Republicans

Massachusetts Senator Elizabeth Warren had no problem naming names in her June 29 antitrust speech, calling out Silicon Valley giants Google, Apple and Amazon.com for inhibiting competition. 

But fellow Democrats might not be as forthright about biting the hand that feeds them, even in the party’s renewed quest to break up monopolies across U.S. markets.

Big Tech’s role as both lobbyist and Democratic donor makes it harder for the party to deliver on promises to preserve market competition, according to antitrust advocates. The industry’s political leaning has gained renewed attention: Democrats just included the check on big business in their party platform for the first time since 1988.

“High tech is a major political force now -- particularly Google, Apple, Amazon and Facebook, and Microsoft,” said Robert Reich, Labor Secretary during Bill Clinton’s presidency. “Both parties are drinking from the trough of very concentrated industries, and these industries don’t want antitrusters breathing down their necks.” 

Reich, now a public-policy professor at University of California Berkeley who campaigned for former Democratic presidential candidate Bernie Sanders, said he got a taste of this tension last year when he wrote a New York Times op-ed focused on the need for antitrust in the technology industry.

“I did hear indirectly -- not directly, indirectly -- from some members of Congress and some Democrats that I shouldn’t be blaming high tech,” Reich said.

If money talks, it’s saying a lot about why those lawmakers are skittish about laying blame on the doorstep of Silicon Valley. The language set to be approved at the Democratic convention next week also was provided to Bloomberg by Warren Gunnels, Sanders’s campaign policy director.

Campaign Donations

In this election cycle, Apple, Amazon.com and Google have all given three times as much to Democrats as Republicans, according to the Center for Responsive Politics, a campaign finance watchdog. That’s true of the industry as a whole. Since the 2012 presidential election cycle, Internet-based tech firms, including Facebook, Salesforce.com and eBay, gave 70 percent of their contributions, some $17.9 million, to Democrats.

Democrats’ relationship with Big Tech also runs deeper than money. Eric Schmidt, chairman of Google’s parent company Alphabet Inc., was recruited by the Democratic National Committee in 2014 to be part of a small group studying the party’s election losses that year.

Lina Khan, a fellow with the Open Markets Program at Washington-based New America, shared Reich’s disappointment particularly amid the platform-drafting process ahead of the Democrats’ July 25-28 presidential nominating convention in Philadelphia. She was one of several left-leaning and centrist grassroots organizers who proposed language on antitrust that included a pledge to scrutinize “the market power amassed through data and network consolidation by digital gatekeepers.”

While two paragraphs addressing antitrust are set for approval in the final platform, the reference to technology companies is glaringly absent, Khan said.

‘Taken Out’

“The ways in which data can be used in discriminatory ways was something we were emphasizing that needs to be addressed, and that was language that was entirely taken out,” she said. “Basically anything that was specifically identifying tech platforms as posing a particular threat and particular challenge was taken out.”

Warren sounded the same alarm in her speech last month, calling for more investigation into how three of the biggest tech giants are using their power and perhaps stifling start-ups.

“Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival,” Warren said. “But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out competition.”

The populist crusader then went on to cite Federal Trade Commission cases around the companies and how they affect their markets, which she argued deserved greater attention even as the firms “deserve to be highly profitable and successful.”

For now, Warren’s citation stands in contrast with her party’s 2016 platform. The omission of the technology industry was the most notable among cuts made to the antitrust language, Khan said.

Republicans also included antitrust in their platform this year, putting insurance companies on notice in a proposal to repeal 1945 legislation that protects them from litigation.

“It’s reasonable to assume that the tech industry’s influence over both parties, but especially the Democratic Party, may make officials more reluctant to identify their power as a threat,” she said.

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