On November 5th, Senator Amy Klobuchar (Democrat - Minnesota) and Senator Tom Cotton (Republican - Arkansas), introduced bipartisan legislation that would "make it more difficult for dominant online platforms to make acquisitions that harm competition and eliminate consumer choice." Senator Klobuchar is the Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, and Tom Cotton is also a member of the subcommittee (which is part of the Senate Judiciary Committee). The bill is called The Platform Competition and Opportunity Act and targets large tech companies such as Amazon, Alphabet, and Google amongst others. The language of the bill, however, is very specific in regards to which companies it covers. It would apply only to acquirers with market capitalizations or net annual sales in excess of $600 billion, as calculated when the bill becomes law (via a 180-day trading average).
Sunday, November 14, 2021
Amy Klobuchar and Tom Cotton as Preference Outliers
What's interesting, is that this specific language excludes companies like Walmart and Target, which are headquartered in Minneapolis, MN, and Bentonville, AR, respectively. They are two of the fastest-growing e-commerce platforms in 2021 (26.4% growth and 12.5% growth respectively) and are two of the largest employers in each state (Walmart is the sole largest employer in AR). In this way, Senator Klobuchar and Senator Cotton are prime examples of "preference outliers" with regards to e-commerce platform regulation, as they are well-poised to reap the benefits of legislation that gives companies in their state a comparative advantage nationwide. It is also an example of assumption 1, that congresspeople represent politically responsive interests of their constituents, in this case, the companies that are massive employers in each state and likely spend money lobbying each candidate.
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Dani, I am so glad you have brought up issues of Tech Antitrust Policy. Having done PR for the Google Antitrust team this past year, there have been a variety of legislators singling out large tech companies for anti-competitive and exclusionary practices. While it’s important to address the political interests of Klobuchar (D) and Cotton (R), I don’t believe that the exclusion of Walmart and Target relates to the bill or their special interests for their constituents. Indeed, the Judiciary Subcommittee on Antitrust and Commerce Committee (consisting of legislators from all over the United States) specifically target internet corporations, rather than retail. The Platform Competition and Opportunity Act majorly competes against Big Tech acquisitions and mergers to combat tech monopolization. I would rather say that the members of this committee are serving the broader constituents of America rather than solely their own district constituents. Their goals lie with promoting tech competition in an environment where everyone relies on internet for communication and commerce.
Analyzing the participation of the Subcommittees members in relation to their constituents, political party plays a much bigger role in Antitrust policy than state relations. Democratic senators (and the President himself) align with Big Tech antitrust for the sake of intervention. The Democratic party believes in creating a fairer internet and promoting non-discrimination – values that their party constituents align with. On the other hand, Republicans support Big Tech antitrust policies in relation to censorship. Big Tech has played a role in controlling what constitutes as free speech and breaking up its monopoly power would minimize their chokehold. Therefore, the bipartisanship to reign in Big Tech showcases that this policy has a huge overlap between committee members and the majority of house members, improving the potential of policy durability in the future.
Link: https://time.com/6116953/antitrust-reform-big-tech-congress-biden/
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