A top DOJ official just outlined why the agency has everything it needs to go after Big Tech - and Facebook, Google, and Amazon should be nervous
- The nation's antitrust laws provide enforcement officials with all the tools they need to promote competition in the tech industry, Assistant Attorney General Makan Delrahim said Tuesday.
- Delrahim made the comments as the Department of Justice and the Federal Trade Commission are beginning to scrutinize Apple, Alphabet, Facebook, and Amazon.
- He also defended the DOJ against the charge that it focuses too much on consumer prices in weighing the effects of companies' market power, acknowledging there can be other harms.
- Delrahim's comments come as his own role in the investigating the tech companies has come under scrutiny.
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Makan Delharim thinks the current legal code is more than sufficient to safeguard competition in the tech industry.
As federal enforcement officials begin to probe Alphabet, Apple, Facebook, and Amazon over potential antitrust violations, some policymakers and legal experts have questioned whether new laws are needed to rein in the companies. But in a speech at a conference in Tel Aviv Israel Tuesday, Makan, the top antitrust official in the Justice Department, made clear he's not among them.
"We already have in our possession the tools we need to enforce the antitrust laws in cases involving digital technologies," Makan, an assistant attorney general, said in the speech, which CNBC previously reported. "US antitrust law is flexible enough to be applied to markets old and new."
Pointing to the government's case 20 years ago against Microsoft and the nation's long history of challenging the power of dominant companies, he added: "Those who say we need new or amended antitrust laws to address monopoly concerns should look to history and take heart."
Debate has been growing over what, if anything, policymakers should do about the power wielded by the big-tech companies. Google parent Alphabet has already been fined by European regulators three times for anti-competitive actions. Apple just lost a decision at the US Supreme Court in an antitrust case and is the subject of a formal antitrust complaint in Europe made by Spotify. Facebook has drawn intense scrutiny for all the data it's collected on its billions of users and the ways in which its immense social network has been hijacked to widely spread propaganda.
Antitrust laws are old but adequate
Earlier this month, the Washington Post reported that the DOJ and the Federal Trade Commission have divvied up oversight over the four biggest tech companies, with the DOJ looking at Apple and Alphabet and the FTC taking on Amazon and Facebook.
But some antitrust experts and other policymakers have argued that new laws are needed to control the companies. Senator Elizabeth Warren, who is running for president, has called for legislation that would classify as "utilities" any tech company with more than $25 billion in revenue that runs a marketplace or has its own platform. It would also bar those tech utilities from owning companies that participate on their service.
The US has two major antitrust laws - the Sherman Antitrust Act and the Clayton Antitrust Act. Both are more than 100 years old and were written in an earlier era of monopolies, but in Delrahim's view, they are robust enough to handle any of today's problems.
"Through their general wording, and their focus on competitive process and consumer welfare, the antitrust laws allow US courts to continue to apply legal principles and sound economic reasoning to identify harmful practices that the antitrust laws should prevent," he said.
The DOJ is concerned with more than just prices
In recent years, many antitrust experts on the left have charged that the courts and enforcement regulators have paid too much attention to consumer prices when it comes to evaluating the impact of a company's dominance over a particular market or potential mergers. But Delrahim pushed back against that view.
The DOJ recognizes that monopolies sometimes lower prices and that limited competition can have harms other than just increased consumer costs, he said. Innovation and quality can also be hampered when companies have too much power or too few rivals to keep them honest.
"The Antitrust Division does not take a myopic view of competition," Delrahim said. "It is well-settled ... that competition has price and non-price dimensions," he continued.
But as the DOJ ramps of its probe of Alphabet and Apple, Delrahim himself is now facing criticism. Warren on Tuesday called for him to recuse himself from any investigations into the two companies, because of lobbying work he did for them. Delrahim lobbied on Google's behalf in 2007 for its acquisition of DoubleClick and on Apple's behalf in 2006 and 2007 on patent issues.
"Your past work as a lobbyist for two of the largest and most scrutinized tech companies in the world creates the appearance of conflict of interest," Warren said in a letter to Delrahim, which was previously reported by The Verge. "As the head of the antitrust division at the DOJ, you should not be supervising investigations into former clients who paid you tens of thousands of dollars to lobby the federal government."
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- Read more about the antitrust debate surrounding the tech giants:
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- Apple is taking on Facebook and Google by doubling down on privacy, but the plan could backfire in an epic way
- Elizabeth Warren's campaign posted a billboard calling for the breakup of Big Tech in the heart of the tech industry
- Facebook's former security chief says Mark Zuckerberg has too much power and needs to step down as CEO