- - Monday, August 12, 2019

ANALYSIS/OPINION:

On Aug. 1,, news reports showed that the Federal Trade Commission is examining whether Facebook acquired other social media giants, including Instagram and WhatsApp, for anti-competitive reasons. 

Indeed, Facebook has been said to have swallowed 90 companies for the sole purpose of calcifying the industry. However, if the events that have transpired over the last two weeks are any indication, Congress should not rely on the FTC alone to make this determination. To adequately protect consumers, it is going to have to have an intervention of its own. 

Nothing underscored the need for a stronger congressional presence over antitrust policy better than the slap on the wrist granted by the FTC to Facebook for its privacy violations on July 25.

Just 16 months after opening an investigation into the tech giant’s violation of a federal antitrust consent-decree order, it gave Facebook a fine that roughly equated to just a single month of revenue. In fact, the valuation of Mark Zuckerberg’s Facebook stake increased by $1 billion once the FTC announced the penalty.

Republicans and Democrats alike expressed disappointment with the FTC, which reportedly planned to fine the company tens of billions but stood down instead due to lobbying pressure.



Sen. Richard Blumenthal, Connecticut Democrat, said that “The terrible message sent by this tap on the wrist is that enforcement of privacy protections is a hollow paper tiger in our nation.” Sen. Josh Hawley, Missouri Republican, echoed that sentiment, saying that the $5 billion fine is “an unserious number” that it “communicates a lack of seriousness on the FTC’s part.” 

It is not that the FTC has not succeeded in promoting consumer protection and eliminating anti-competitive business practices in the century since Congress created it. It has. Oftentimes, these regulating bodies just need guidance from the chamber that created it to be effective, particularly when it comes to antitrust.  

As the FTC moves its investigation into Facebook’s acquisitions forward, Mr. Blumenthal and Mr. Hawley can shine by using their influence on the Senate Antirust Subcommittee. In fact, history already has proven the effectiveness of members overseeing antitrust authorities’ investigative efforts.  

In just one example, the subcommittee in 2015 helped steer the Department of Justice away from the influence of lobbyists. It did so by ensuring that it keep two antitrust consent decrees, which protect consumers and businesses from unfair pricing in the music industry, in place without modification. 

Two licensing companies, the ASCAP and BMI, capitalized on government-created intellectual property laws to create a monopoly for themselves, cornering 90 percent of the music licensing market. 

The DOJ restored order by creating consent-decree settlement agreements, akin to those the FTC oversees on Facebook. The decrees ensure that the ASCAP and BMI do not use their market power to artificially create windfall profits for themselves at the expense of everyone else in the industry.  

The antitrust orders have been effective in creating freer, fairer markets within the music industry. However, as is the case with Facebook’s antitrust orders, that has not stopped the monopolies tasked with complying to lobby for the relaxation of their restraints from time to time. 

The difference with this example is that the Senate Antitrust Subcommittee — led by Sens. Mike Lee, Utah Republican, and Amy Klobuchar, Minnesota Democrat, — got involved. It held a hearing that helped to uncover how the ASCAP and BMI remained as anti-competitive as ever, as evidenced by how it continues to control 90 percent of the market, even after the passage of seven decades.  

Thanks in large part to the subcommittee’s leadership, the DOJ ultimately decided to remain unmoved by the lobbying pressure, keeping the music consent decrees as is. The subcommittee’s success seems to be why, in the Music Modernization Act, Congress included language to ensure it remains involved on all future DOJ reviews.   

Republicans and Democrats alike are not pleased with how the FTC handled punishment for Facebook’s violation of consent decrees, and rightfully so. But if the Antitrust Subcommittee’s past handling of the ASCAP and BMI decrees taught Congress anything, it’s that individual representatives are without question in a position to change how the FTC approaches its new investigations.

On Sept. 17, the Senate Antitrust Subcommittee is scheduled to hold an oversight hearing. If Mr. Blumenthal, Mr. Hawley, and other members want to ensure that the FTC handles Facebook’s anti-competitive acquisitions more forcefully than their privacy violations, they should use this forum as a vehicle for furthering the debate and holding the FTC’s feet to the fire.

That is the precise reason why the subcommittee was created. Speaking up has worked in past antitrust case studies and it will work here, too.  

The antitrust subcommittee is comprised of smart, thoughtful members who bring out the best in Washington. They can hold Facebook accountable if they choose to act. Here’s hoping they recognize as much. 

• Mark Anthony, a former Silicon Valley executive with Forrester Research Inc., is the host of the nationally syndicated radio program “The Patriot and The Preacher Show.” Find out more at patriotandpreachershow.com. 

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