The Cronyism Underlying Attacks On ‘Big Tech’ Must Be Brought to Light

This was originally published in RealClear Markets on February 21st, 2023.

The most worthwhile and often successful political fights carry real emotional weight to them. They involve overcoming long odds to do genuine good for millions of Americans, often at great cost to the lawmakers involved. The recent antitrust push on Capitol Hill taps into this formula with a wonderful origin myth. As its proponents would tell it, they are fighting against big tech companies (the biggest in the nation and the world) to give consumers more choice and stick up for small businesses’ chance to compete.

Sen. Amy Klobuchar (D-Minn.) – the primary sponsor of the American Innovation and Choice Online (AICO) Act and figurehead of this anti-tech antitrust push – tried to tap into this sentiment last summer, saying, “Big Tech is spending millions of dollars fighting my fair competition bill. Why? Because they know it will lead to a better, more competitive marketplace for consumers. They want to rig the game, and we want to stop them. It’s as simple as that.”

While this is a lovely story in a vacuum, it is far from reality. The antitrust push embodied by legislation like AICO or the similar Open App Markets Act (OAMA) is not characterized by a desire to preserve the integrity of market competition, nor is it about consumer welfare. It is also very much not about limiting the influence of big tech companies on the economy and the political process. In fact, on the last point, the opposite is true.

While Klobuchar bemoans the influence of “Big Tech” in opposing her antitrust bills, there is plenty of money flowing in on the other side. Epic Games, the creator of Fortnite is a company worth roughly $35 billion. Epic has poured hundreds of thousands of dollars trying to get her bills across the finish line. Epic’s CEO Tim Sweeney – a multi-billionaire – has bolstered these efforts with near-unrelenting support of the antitrust effort on social media.

Epic is hardly a disinterested party in this fight. Epic is currently involved in a massive lawsuit against Google, arguing that the commissions Google requires in its Google Play Store are anticompetitive. The company has similarly sued Apple as well. The passage of AICO and OAMA would make lawsuits like this far easier to win for Epic and would save them from having to share profits with companies like Google or Apple – who provide the platform to deliver their games to millions across the country.

Speaking of Epic’s legal history, the company just settled a case with the Federal Trade Commission (FTC) for $520 million. Epic was found to have violated the Children’s Online Privacy Protection Act (COPPA). They were found responsible for having used design tricks to get millions of players – mostly children – to make unintentional in-app purchases.

AICO and OAMA would make commission sharing – as well as certain parental controls on mobile apps – presumptively anticompetitive. So, while Epic sues tech companies to protect their business model of tricking kids into unintended purchases, they are also lobbying heavily in favor of legislation that will make these “dark patterns” easier to pull off and more profitable for themselves. This is hardly the competitive altruism heralded by AICO and OAMA bill sponsors.

This is far from the only hint of cronyism in the antitrust fight. For example, Jonathan Kanter is currently the Assistant U.S. Attorney General for the Antitrust Division. He, as recently as last month, launched a Department of Justice (DOJ) lawsuit against Google. He is expected to try the same with Apple in the near future.

If this sounds familiar to astute political observers, it should. In 2015, Spotify sued Apple over its app store practices – especially as it related to Apple’s commission requirements and its new music streaming service at the time. Spotify’s lawyers argued many of the same things lawmakers like Klobuchar are now alleging, that companies like Apple use their market size to hurt competitors. One of the top legal advisors for Spotify in that case was none other than Kanter himself.

Further, it was reported in 2020 that DuckDuckGo – one of Google’s main search engine competitors – was consulting with the DOJ about impending antitrust suits against Google. Now, just this month, it was announced that DuckDuckGo’s Public Policy Manager will become the new chief counsel for the House Judiciary Antitrust Subcommittee.

Antitrust proponents like Sen. Klobuchar can claim that the only reason their legislation has not gotten off the ground is because of corporate opposition. However, there is ample evidence that efforts like this only have sufficient support within the halls of government in the first place because many high-ranking staffers working on antitrust issues have personal bones to pick with companies like Google and Apple. There is also evidence that there is no shortage of corporate money flowing in to support these efforts.

Origin myths may be fun in advertisements, rousing speeches, or for convenient sound bites. However, when the public policy rubber meets the road, the real story is very rarely so black and white. Unfortunately, antipathy towards the handful of companies that have become collectively known as “Big Tech” has blinded so many to the very real cronyism that undergirds the recent groundswell of support for antitrust harassment of these companies. It’s time that be brought to light and rooted out.

Daniel Savickas is Government Affairs Manager for Taxpayers Protection Alliance.