The two federal agencies charged with investigating Big Tech are jockeying over how to divide up their responsibilities, setting up a messy showdown that could undermine the government’s efforts to take on the Silicon Valley giants.
At a Senate hearing on Tuesday, Federal Trade Commission (FTC) Chairman Joe Simons and the Assistant Attorney General Makan Delrahim offered blunt assessments of the recent turf war between the FTC and the Department of Justice (DOJ)’s Antitrust Division over how to investigate the tech sector.
“I cannot deny that there are instances where Chairman Simons and my time is wasted on … squabbles,” Delrahim said, responding to a line of questioning from Sen. Mike Lee (R-Utah).
{mosads}The top antitrust enforcers in the country agreed the current system is inefficient.
The FTC and DOJ, which are both tasked with enforcing the country’s antitrust laws, have recently announced they are investigating some of the tech industry’s biggest companies for potentially abusing their dominant market position to squash competitors and take advantage of consumers.
Reports emerged over the summer that the FTC had agreed to take on Facebook and Amazon while the DOJ would look into Google and Apple.
But a DOJ announcement in July made it clear that the department is looking into all the top tech companies — not only Google and Apple. Without naming names, the department said it would be looking at the dominant players in “search, social media, and some retail services online,” a description that would likely sweep up both Facebook and Amazon.
On Monday, just ahead of the Senate oversight hearing, The Wall Street Journal reported the FTC and DOJ have been scuffling over which agency will take the lead on Facebook. Right now, it’s possible that the DOJ will investigate some potential antitrust violations by Facebook while the FTC could look at separate but related issues around the Menlo Park company.
“Is it even feasible for the two agencies, for you to split between yourselves what is in effect a single investigation?” Lee asked, noting that it’s difficult to conduct a “piecemeal” antitrust investigation into a single company.
“It’s not the normal thing to do, that’s for sure,” Simons replied.
Delrahim said it’s possible the agencies “would look at different conduct, perhaps of the same companies.”
Former FTC and DOJ officials told The Hill it’s not uncommon for the agencies to have disputes over the “clearance” process, during which they decide how to divide up what issues to cover. But they said it’s clear the FTC and DOJ’s relationship has frayed in recent years and that the latest turf issues could stall the investigations into Big Tech.
“The disagreements between FTC and DOJ are unprecedented,” David Balto, a former official at both agencies, told The Hill, calling it a “sign of government dysfunction at its worst.”
“I’ve worked at both agencies — when we had disagreements, the first commandment was, ‘You don’t bicker outside your home,’ ” Balto, a current antitrust lawyer, added. “When government enforcers take aim at each other, ultimately taxpayers lose.”
The tension between the two agencies has been most prominently on display in the FTC’s antitrust battle with the processing-chip supplier Qualcomm. The commission filed a lawsuit accusing the company of monopoly practices in the last days of the Obama administration, and the case has since exposed a rift between the two antitrust enforcers.
In May, the FTC won a landmark antitrust ruling against the chipmaking giant when a federal judge ruled that Qualcomm “strangled competition” with its monopoly power. After Qualcomm appealed, the DOJ took the unusual step of asking a federal appeals court to roll back the FTC’s victory, arguing in part that Qualcomm’s technology work is essential to U.S. national security.
“Your agencies are literally opposing each other in federal court,” Lee said to Delrahim and Simons on Tuesday.
The DOJ’s decision to take the dispute to the courts was unprecedented.
“They work together behind the scenes so that they don’t have disputes in public,” Alex Harman, a competition policy advocate for consumer rights group Public Citizen, told The Hill. “The idea of them having a dispute in public is crazy.”
The federal agencies often vie to pursue the flashiest antitrust investigations of the day, William Kovacic, a former FTC commissioner, told The Hill.
The Washington “techlash” has grabbed headlines over the past two years as lawmakers, government regulators and the public have questioned the dominance of Big Tech. The issues came to a head in 2016, when it was revealed that foreign actors were able to manipulate the top social media platforms in the U.S. to sow discord during the presidential elections.
Since then, the companies have faced a barrage of criticism over how they deal with issues including hate speech, extremism, political manipulation and whether they have too much power over their users and their competitors.
Over the summer, the House Judiciary Committee launched an investigation into competition in the digital marketplace and this month, nearly every state attorney general has announced they are looking at Google and Facebook for potential antitrust violations.
For regulators, how to handle Silicon Valley giants is the new challenge.
“There are all these camerapersons and all these bright lights that occur when you announce a case against a really big company,” Balto said. “Enforcement people who really are looking for their next job are very attracted to the bright lights and cameras.”
At the hearing, Lee raised some concerns that the FTC’s and DOJ’s efforts are duplicative and waste the money they receive from Congress. But so far, it does not appear his concerns have gained much traction among his colleagues.
Sen. Amy Klobuchar (D-Minn.), a presidential contender, argued for robust enforcement from both agencies.
During her opening remarks, she quoted Lee, who previously said he was worried the agencies were trying to get pieces of the same pie.
“I am more concerned that our consumers are going to get a big pie in their face if we don’t get something done about this,” she said.
Typically during investigations, the FTC and DOJ will check in with each other and share resources to ensure there is no duplication. But experts are warning their disagreements could make the process more difficult.
Kovacic cautioned that both agencies had an interest in resolving those tensions.
“These kinds of tensions … create an environment in which public officials begin to consider a basic restructuring of the U.S. system,” Kovacic said.
He said in that case, “Neither agency can be assured that it would be the survivor.”