How Big Tech fought antitrust reform — and won

Tech giants and their army of industry groups rallied together to stifle a multiyear congressional effort to overhaul antitrust laws, pouring millions into campaigns to block key bipartisan bills targeting the nation’s four largest tech firms. 

They appear to have prevailed over would-be reformers. Antitrust supporters pushed hard for major legislation to rein in the power of tech behemoths before the close of this year. But while a couple of antitrust reform proposals to give federal and state enforcers more resources and power were added to the $1.7 trillion government funding bill, two key bipartisan measures targeting internet giants failed to make it into end-of-the-year must pass bills, effectively killing their chances of passing this year. 

And with the GOP set to take control of the House in January, the best opportunity to push them through may now be in the rearview mirror.

“When we began this work, we knew we were taking on the largest economic powers in this country. These are gigantic monopolies. And one of the great challenges with monopolies is with tremendous concentrated economic power comes political power,” said Rep. David Cicilline (D-R.I.), chairman of the House Judiciary Committee’s antitrust subcommittee.

“We knew this was gonna be a tough haul, but it’s not going away. We’re gonna come right back at it,” he added. 

But when lawmakers return in January, they face an additional hurdle to passing the bills. House Republicans slated for leadership positions — including Rep. Jim Jordan (R-Ohio), who is set to chair the key Judiciary Committee — have not joined their colleagues in embracing the antitrust bills and have instead laid out a tech agenda centered on content moderation battles. 

Supporters said this Congress, with Democrats controlling the House, Senate and White House, represented the best chance to pass the proposals — especially the two bills at the center of the most significant lobbying battle, the American Innovation and Choice Online Act (AICOA) and the Open App Markets Act.

That time, pressure spurred an all-out blitz from the tech industry, which shoveled millions into expensive lobbying and advertising campaigns to stifle the legislation.

Tech giants and their allied trade associations spent $277 million on lobbying in the past two years, six times more than supporters of antitrust legislation, according to a report from Public Citizen citing data from nonpartisan group OpenSecrets.

Amazon alone spent $16 million on lobbying over the first nine months of 2022, its largest total through that period in any year on record and the most of any company. Apple also shattered its previous lobbying spending record. 

Both companies, as well as Meta and Google, would apparently be subject to the two key bills, which together aim to limit companies from preferencing their own products and services over rivals’ and add regulations in the app store marketplace.

“They like to call one another rivals, they like to play up the fact that they are competing with each other, but when it mattered, when there was actual reform, there was actual legislation that would have enhance competition between them and the small businesses they try to kill or squash, they banded together in order to prevent that from happening,” said Sacha Haworth, executive director of the Omidyar-funded Tech Oversight Project. 

The bills advanced with bipartisan support out of the House and Senate Judiciary Committees in the past two years, but neither Senate Majority Leader Charles Schumer (D-N.Y.) or House Speaker Nancy Pelosi (D-Calif.) called them for floor votes. A spokesperson for Schumer in August said he was working with Sen. Amy Klobuchar (D-Minn.), one of AICOA’s sponsors, to “gather the needed votes” on the legislation and bring it to a vote. 

But a vote was never called, and Schumer did not publicly address why the bills were not brought to the floor. The Hill reached out to a Schumer spokesperson for comment. 

Cicilline said the expectation was that the bills would go to the Senate floor first, before the House took action. 

Supporters of the bills remained steadfast that the votes were there to get the bills across the finish line, though even after they advanced out of the committee level, there were lingering concerns among Democrats that echoed tech positions.

“There’s no good reason for these bills not to have had a vote or been sent to the president’s desk. There’s no excuse,” Cicilline said. 

So how did tech companies and industry groups fight to ensure the bills didn’t reach President Biden? They leveraged big connections, and big money.

The tech industry leaned on armies of lobbyists — including ones with professional and personal ties to lawmakers — to urge opposition to the antitrust efforts.

Five former top aides to Senate Majority Leader Mitch McConnell (R-Ky.) lobbied against antitrust bills on behalf of tech giants, along with some of Pelosi’s longtime senior staffers. 

Schumer, meanwhile, faced calls from progressive groups to recuse himself from the bills because two of his daughters work for tech giants. Jessica Schumer is a registered lobbyist for Amazon in New York, while Alison Schumer is a product marketing manager at Meta.

Amazon alone deployed 20 lobbyists with ties to the House and Senate Judiciary Committees to oppose AICOA. And two months ago, Sonia Gill, Democrats’ senior counsel on the Senate Judiciary Committee who helped draft the antitrust bills, left to become Meta’s public policy manager.

Some companies also sent their top executives to Capitol Hill as the session drew to a close to speak with lawmakers, again letting the companies play to their individual strengths. Haworth said Apple CEO Tim Cook was on Capitol Hill “over and over” while Meta CEO Mark Zuckerberg was notably absent because “nobody likes Mark Zuckerberg.” 

Meanwhile, tech giants’ allies blanketed the airwaves with over $100 million on ads in swing states warning that Congress would “break” Amazon Prime, encourage cyber attacks against the U.S. and undermine data privacy. 

Cicilline said the tech industry arguments aimed to “distort and misrepresent” what the bills would do through “scare tactics and a lot of misinformation.” 

Some of the top targets of tech-funded ads — Sens. Maggie Hassan (D-N.H.), Mark Kelly (D-Ariz.) and Catherine Cortez Masto (D-Nev.) — expressed doubt about prioritizing tech legislation during their tightly contested midterm races, according to two lobbyists working on the issue. 

“We were simply outgunned,” said Lisa Gilbert, executive vice president at Public Citizen, which lobbied for AICOA. “They simply spent more money, had more lobbyists, and pushed as aggressively as they possibly could at the junctures when it really mattered.”

Those lobbying efforts only scratch the surface of the tech industry’s sprawling Washington strategy. Tech giants bankrolled dozens of trade associations and advocacy groups that pushed their message when it mattered most.

As Sen. Ted Cruz (R-Texas) considered whether to back antitrust bills, the Taxpayers Protection Alliance spent millions on ads in Texas warning that AICOA would empower China in the global technology race. Many senators faced targeted ads in their home states from tech-backed progressive and free market groups.

That came after former national security officials with tech ties — including former Defense Secretary Leon Panetta and former Director of National Intelligence Dan Coats — urged congressional leaders to delay AICOA over security concerns last year. 

Big Tech didn’t just defeat the antitrust bills — the top priority — but also online privacy bills and legislation to funnel ad revenue from digital platforms to news outlets. The industry pulled off a clean sweep as it successfully painted all of the measures with the same brush.

“It is evidence that Goliath won this round, but this is a marathon,” Haworth said. 

As tech giants continue to flex their political power, Haworth said the “motley crew” of antitrust supporters that banded together over the past couple of years have formed a permanent coalition that will be starting from a stronger position next Congress. 

Even though a couple of key proposals failed to make it across the finish line this year, supporters of antitrust efforts touted the inclusion of bills to raise merger filing fees for larger deals and allow state attorneys general to choose where antitrust cases are heard in the spending package as a win for their side. 

And although Republicans won control of the House, they have a narrow nine-member lead, which Cicilline said means the GOP will need to find opportunities to work with Democrats. 

“This is an area where they can do it,” he said.