WSJ and Bloomberg highlight weaknesses in DOJ case against Google

October 20, 2020

Wall Street Journal Google in the Antitrust Dock: Justice Will Need More Proof of Consumer Harm to Win its Lawsuit

Bloomberg Government Google Lawsuit Is A Case Of Antitrust Policy Run Amok: Editorial

The Editorial Boards of two of the largest publications in the country released articles highlighting their concerns with the Justice Department’s recently filed litigation against Google. The litigation is seen as the first in a series of lawsuits against big tech companies.

The lawsuit against Google is an antitrust suit and its culpability hinges on whether the company employs anticompetitive practices that harm consumers. Specifically, the lawsuit claims Google uses exclusionary practices similar to those the Government used to prove violations by Microsoft in the D.C. Circuit Court of Appeals ruling in U.S. v. Microsoft (2001), which held that Microsoft’s practice of bundling their web server and browser was monopolistic. And, that the agreements Google made with phone makers and wireless carriers to promote its search business were problematic.

Bloomberg said in its article that, “All the relevant agreements were the result of competitive bidding, users face only the slightest of hurdles if they wish to switch to other services, and even the world’s most ardent Bing enthusiasts must admit that Google has made a great product with immense consumer benefits.

While the Wall Street Journal Editorial Board cited facts showing that consumers can easily switch between search engines as a major difference that could lead the courts to a different decision in this case: “But consumers can easily download other browsers and search engines if they don’t like Google’s, unlike in the 1990s when they had to buy special software or jump through hoops to use an alternative to Microsoft’s. Now most general search engines and web browsers are free. Microsoft’s Bing even pays consumers rewards for using it. Where is the consumer harm?

The WSJ Editorial Board also laid out the complaint’s other weaknesses.

  • In 2005 Google accounted for about 35% of the general search market compared to 30% for Yahoo and 15% for Microsoft. Both of the latter had plenty of data and capital to invest in building better search products. Microsoft pre-loads every Windows PC with its Edge browser and Bing search. Amazon’s Fire operating system uses Bing as its default. Google doesn’t stop users from switching to other search engines.
  • “[C]onsumers consent to letting all sorts of companies, including supermarkets, collect data in return for a free service. Google also allows users to limit the data it collects. Most don’t.
  • “Google uses its general search function to hook people, but it makes money from selling ads on specialized queries. This broader advertising market includes Amazon, eBay, as well as websites like Yelp, OpenTable and Expedia. About 60% of Americans start product searches on Amazon.

Tech Policy and the 2020 Election: Antitrust and Big Tech

By: Jennifer Huddleston

Introduction

Is Big Tech too big, and do companies such as Facebook, Apple, Google, and Amazon need to be broken up via antitrust action? Have we moved into a new age of “cyber barons”? Criticism of large tech platforms and discussions of antitrust action have come from both the left and the right recently. Many of these criticisms do not reflect the underlying principles of antitrust law, but instead reflect other policy concerns such as data privacy and content moderation. Given the criticism from both sides of the aisle, it is not surprising that both presidential candidates have suggested that they would engage in further antitrust scrutiny of large tech platforms if elected.

Liberal Criticisms Regarding Existing Standards

Democratic criticisms of current antitrust largely suggest that enforcement is not aggressive enough and does not account for practices that harm workers and stifle competitors but are not seen in economic harm to consumers. For example, the Biden-Harris platform supports modifying antitrust laws and ties the need for such modifications to “empowering workers.” More generally, criticisms from the left argue that the current approach to antitrust law does not properly account for all the harms to a market by large firms’ behavior and that a more flexible, policy-based approach should be used for more zealous antitrust enforcement.

There are two main problems with such criticisms. First, a more flexible and broad policy-based approach to antitrust would create greater uncertainty for consumers, innovators, and competitors. The prior rule of reason approach stifled beneficial mergers or changes out of an unjustified concern. This approach also tends to focus on the impact on competitors rather than on consumers’ welfare and a properly functioning market.

Second, even the supposed problems have not been shown to be truly harmful or even actually exist. Arguments about the use of data for house brands by Amazon is not that different from the behavior traditional retailers such as Target or Walmart have engaged in for decades. The idea of a “kill zone” (where big tech companies buy out small companies before they can challenge them) appears to be largely a myth and instead has provided more options for startups and investors as well as improved products for consumers. Concerns about market concentration often miss changes in market dynamics or differences in competition at a local versus national level.

Moving away from an objective standard of antitrust might not benefit the very consumers competition law was intended to protect and risks providing a dangerous way for political motives to intrude into an already competitive market. Such politicization could increase the abuse of antitrust law such as the Trump Administration Department of Justice’s alleged use of antitrust to review mergers in the cannabis industry based only on its dislike of the product.

Conservative Critiques of Antitrust

Calls to break up Big Tech have not only come from the left but also from policymakers on the right. Conservative criticisms often allege that the companies are abusing market power to silence conservative voices and argue that breaking these companies up would solve a litany of non-competition related policy concerns. The Department of Justice during the Trump Administration has been actively pursuing potential antitrust claims against the largest tech companies. The president himself has suggested more use of antitrust law against large tech companies, even applauding European Union fines against American tech companies. But as with the criticisms from the left, these proposed solutions might make the alleged problems even worse.

Breaking up “Big Tech” would not solve concerns about anti-conservative bias, content moderation, data privacy, or any of a litany of non-competition policy concerns. Such a policy motivation is not the appropriate use of antitrust and would be better addressed by more targeted policy reforms if needed. In fact, using antitrust to require a breakup might even make these problems worse. Smaller firms would have more limited resources to devote to tasks such as content moderation or data security and might find themselves engaging in more advertising or data usage without the efficiency of a large company. The result is far from a guarantee that these now separated companies would better respond to these policy concerns or be more friendly to conservatives. As former Senator Rick Santorum recently wrote, “Going back to the media of 25 years ago would not go well for the President or for conservatives…. As America wrestles with so many tough issues and prepares to select its leaders in a charged partisan atmosphere, social media matters. And social media matters more to the election prospects for conservatives than it does for progressives.”

Using antitrust for more political purposes not only risks undermining those purposes; it risks unnecessary government interference in a free and competitive market. The result again could easily be that consumers lose out on potential mergers or efficiencies that would have benefited them. In some cases involving technology, the result could even be an increase in costs for once zero-cost products.

Conclusion

The current approach to antitrust is principled and objective with a focus correctly on consumers. As a result, it is a tool to allow competitive markets to continue to flourish while providing a principled mode of correction when anti-competitive behavior arises. Such a standard is adaptable to fast-moving, innovative fields as well as more traditional markets. As conversations around antitrust and Big Tech are likely to continue under either a Trump or Biden Administration, proposed changes to antitrust would likely bring with them new problems as well as fail to cure existing ones.

Jennifer Huddleston is the Director of Technology and Innovation Policy at the American Action Forum.  @jrhuddles

Ugenti-Rita: Arizona Small Businesses Will Benefit from Tax Bill

Michelle Ugenti-RitaA little over a month ago, President Trump signed the Tax Cuts and Jobs Act into law, and Americans are already feeling better than ever about the state of our economy. In a recent poll from Quinnipiac University, 66 percent of Americans rated the nation’s economy as either “excellent” or “good”—a three percentage point jump since last month.

It’s difficult to not be excited about the impact the tax bill is having on Arizona and its small businesses. The relief could not have come sooner.

Arizona is home to nearly 500,000 small businesses that employ approximately one million people. For too long these entities have struggled under a burdensome tax code that has prevented growth. With the previous federal tax rate approaching 40 percent, small businesses saw much of their hard-earned revenue disappear into the pockets of Uncle Sam.

Fortunately, measures included in the new tax relief package will reduce this burden. The Tax Cuts and Jobs Act created a 20 percent standard deduction that applies to roughly 95 percent of small businesses and eliminates high tax brackets in favor of new, lower ones.

To put the standard deduction in layman’s terms, with the help of the new tax legislation, small businesses earning $200,000 a year are able to shield their first $40,000 of income from taxation. That extra cash can now be funneled into employee bonuses, wage increases, job creation, and business expansion. These measures will further bolster Arizona’s pro-business, pro-growth reputation.

According to a report by BMO Financial Group, Arizona’s business environment is already strong. While most state economies are expected to grow by an average of 2.2 percent, Arizona anticipates 2.8 percent growth in 2018. The tax cuts package will only accelerate that advancement.

In fact, we are already seeing some positive results in the state. Arizona-based YAM Worldwide announced it will be giving out $1.3 million in bonuses to its employees. Furthermore, over 1,000 JPMorgan Chase employees in Arizona will receive wage hikes or bonuses as part of the companies nationwide $20 billion, five-year plan to invest back into the country.

In addition, a report from the nonpartisan Tax Foundation found the bill will create almost 6,500 jobs in the state.

These must be the “crumbs” Nancy Pelosi and the Democrats scoffed at while trying to explain away the benefits resulting from tax relief. For some, these “crumbs” represent eased rent worries, the ability to afford childcare or help with the skyrocketing costs of healthcare.

The examples chronicled above are only a small piece of the benefits the tax bill has induced. Imagine the impacts Arizona will feel a year from now.

Rep. Michelle Ugenti-Rita (R) is the Chair of the Arizona House Ways and Means Committee and represents the 23rd House District

Bob Stump: Why is Airbnb funding a group attacking Arizona Republicans?

All you Airbnb fans take heed! The company has decided to inject itself into Arizona politics by funneling dark money against Republicans. In this letter, former Arizona Corporation Commissioner Bob Stump hits back with an email to Arizona legislators.

Bob StumpDear Honorable Member:

It is rare for me to contact you as a private citizen and former colleague. I believe this issue is important enough to merit it.

An extremist far-left organization, Checks and Balances, is active again in Arizona. Yet again, it is attacking elected Republicans.

I fully expect Republican members of the House and Senate to be next.

Airbnb, which has enjoyed a friendly regulatory environment in Arizona thanks to you, is funding Checks and Balances. According to Penn State’s Daily Collegian, “Airbnb representative Nick Papas said Airbnb supports the work CBP does.”

What exactly is this “work”? Smearing, suing or harassing Arizona Republican officeholders such as Arizona Attorney General Mark Brnovich, members of the Arizona Corporation Commission — including four Commission chairs — and yours truly.

Consider the “work” of the group Airbnb supports financially:

In an act of pure malice, Checks and Balances published my mother’s private mobile number on the Internet.

At a cost of hundreds of thousands of taxpayer dollars and staff time, and with the help of Democratic activist Dan Barr, Checks and Balances sued the Arizona Corporation Commission in an attempt to break the chain of custody of my phone and publish private text messages to my family and friends. Despite Checks and Balances’ conspiratorial fantasies, I was vindicated in court: Two judges determined that nothing retrieved from my phone met the definition of a public document.

Undeterred by losing in court every single time, Checks and Balances has taken to the pages of the Arizona Capitol Times to attack Arizona Corporation Commission Chair Tom Forese and Commission legal counsel Tim LaSota, who defended me in court.

Until recently, SolarCity, the nation’s largest solar rooftop leasing company, sponsored Checks and Balances. SolarCity’s aim was to attack and sue sitting regulators nationwide, in an attempt to alter regulatory outcomes and thereby enhance SolarCity’s bottom line.

SolarCity was shamed into withdrawing their support for Checks and Balances.

It is past time for Airbnb to follow SolarCity’s lead and cease funding a mercenary band of character assassins which exists to intimidate citizens at the behest of its corporate sponsors.

Airbnb’s CEO, Brian Chesky, ignored my letter to him, written when I was a sitting member of the Arizona Corporation Commission. Perhaps he will be more responsive to you.

I would suggest you contact Mr. Chesky and his lobbying team and ask why Airbnb is funding an unsavory group that sues and smears Arizona Republicans.

Thank you for your attention to this matter. And thank you for your service to our great state.

Sincerely yours,

Bob Stump

Former member and Health Committee Chair, Arizona House of Representatives (2002-2008)
Former Commissioner and Commission Chair, Arizona Corporation Commission (2008-2017)

Congressman Andy Biggs Submits Two Amendments for the REINS Act

Washington, DC (January 4) – Today, Congressman Andy Biggs (AZ-05) announced that he had submitted two amendments to the Regulations from the Executive in Need of Scrutiny Act of 2017 (REINS Act). The REINS Act seeks to restore oversight authority to Congress for any major federal regulation that could potentially cost the U.S. economy at least $100 million. Congressman Biggs also testified in front of the House Rules Committee on behalf of his two amendments this afternoon.

“I am pleased to have offered up two amendments to the REINS Act and to have defended the amendments in the Rules Committee,” Biggs said. “Many small businesses and individuals in my district have been negatively affected by the ripple effect caused by an out-of-control rules-making process by unelected and unaccountable federal bureaucrats. I promised my constituents that I would strongly support the REINS Act, and I have kept my promise. I will continue to push for the passage of the REINS Act to ensure that Congress takes back this very-important job of rule-making oversight.”

Watch Congressman Biggs’ testimony in front of the Rules Committee.

Congressman Biggs offered the following two amendments to the REINS Act:

Amendment #4: Defines all rules promulgated by the Environmental Protection Agency as “major.”

Amendment #5: Lowers the annual economic effect threshold for a major rule from $100,000,000 to $50,000,000.

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Congressman Andy Biggs is a first-term Representative from Arizona’s Fifth Congressional District, representing parts of Chandler, Gilbert, Mesa, Sun Lakes, and Queen Creek. He lives with his wife Cindy in Gilbert.

Christine Jones – Conservative Business Leader For Congress

When you want problems in government fixed, you send a businessperson to do the job. This has been the successful solution since the Founding Fathers set our country in motion and it’s still a successful strategy today.

Individuals from the business community know best how to balance budgets, deal with government regulations and most important, how to create jobs and prosperity.

Government does not create prosperity. Government sucks resources out of the economy, creates deadweight losses and does a horrible job of providing services that the private sector can provide much more efficiently. With the exception of certain public goods such as defense, law enforcement, justice, etc., government is a drag on the economy and a burden on the lives of free individuals.

Here in Arizona, we’ve seen an example of great leadership coming out of the private sector business community.

Governor Doug Ducey started his service in executive leadership in 2011 as Arizona State Treasurer. Prior to that, he started out as a successful entrepreneur and CEO who grew a small ice cream shop from the ground up into a nationwide franchise. Since elected as Governor, Doug Ducey has been successful reforming, consolidating and downsizing government and getting it out of the way of small businesses like Uber and Air BnB. Having a successful businessman in leadership is great for the economy, creating jobs and expanding technology.

Christine Jones for CongressNow the voters of Arizona’s Fifth Congressional District have the opportunity to elect a very successful conservative businesswoman to Congress.

Christine Jones has scored success wherever she has served. As the Executive Vice President and General Counsel for Go Daddy, she helped take the company from a small internet company to a giant corporation whose servers now touch one-third of all internet traffic. When she first began at GoDaddy, the company only had a few dozen employees. During her watch, she helped grow the company to over 4,000 employees – that’s over 4,000 private sector jobs contributing to the economy. And that doesn’t include the 10 million entrepreneurs and small businesses that have grown and prospered through GoDaddy’s products and services.

After leaving GoDaddy, Jones next went on to lead another Arizona success story when she accepted the position of Interim CEO of Great Hearts Academies. There, she oversaw the tremendous accomplishments of thousands of students on the road to college and successful careers.  This role also testifies to her strong understanding and commitment to education and how a quality education is inherently linked to jobs and the economy.

Christine Jones is no stranger to success. Unlike her opponents, who have spent their careers being assimilated into government and politics, Christine Jones possesses a healthy resistance to growing government and becoming another career politician.

This election year, the voters should take the opportunity to send another real Arizona success story to Congress. Christine Jones is a conservative business leader who has proven she knows how to grow small business, create thousands of jobs, control the growth of government and get government spending under control.

This August the voters have a real choice between a handful of career politicians or a successful private sector businesswoman in Christine Jones. Let’s hope they choose the latter.

Arizona small business owners applaud Governor Ducey’s balanced budget plan

NFIBforweb

Farrell Quinlan, Arizona state director for the National Federation of Independent Business, issued the following statement this afternoon on the release of Gov. Doug Ducey’s proposed state budget.

“Arizona small-business owners appreciate the courage and care Gov. Doug Ducey has shown in crafting his bold balanced budget plan. It’s refreshing that we have a governor willing to make the tough decisions that reflect the priorities of regular Arizonans rather than special interests.

“Governor Ducey’s plan eliminates the current budget deficit and re-establishes a structurally-balanced budget by Fiscal Year 2016-2017. And he accomplishes this seemingly impossible goal with no tax increases while also sustaining classroom spending. Amazing.

“Governor Ducey has rejected bogus budgeting that looks balanced in the hazy florescence of bureaucratic custom only to be revealed in the sunlight as being written in red ink. He has made the kind of tough choices that most small-business owners had to make during the Great Recession in order to survive, including a hiring freeze, reducing administrative expenses and consolidating operations.

“Coupled with his bold regulatory reform agenda announced in his State of the State address, Governor Ducey’s balance budget plan further demonstrates to small-business owners and entrepreneurs that they can trust that the state of Arizona is clearly on the side of economic growth and job creation rather than entrenched bureaucracies and special interests.”

With 350,000 dues-paying members nationwide, including more than 6,000 in Arizona, the National Federation of Independent Business is America’s largest and leading small-business association.

Arizona Small Businesses “Thrilled, Inspired” by Governor Ducey’s Regulatory Proposals

NFIBforwebPHOENIX, Ariz., January 12, 2015 — The following is a statement from Farrell Quinlan, Arizona state director for the National Federation of Independent Business (NFIB), reacting to Arizona Governor Doug Ducey’s first State of the State Address:

“Arizona small business owners are thrilled and inspired by Governor Doug Ducey’s bold initiative to make Arizona the best place in America to work and do business.

“Governor Ducey’s new regulatory moratorium and top-to-bottom review of regulations throughout state government are exactly what an all-too-often beleaguered small business community has been counting on him to pursue and deliver.

“In his State of the State Address today, Governor Ducey again demonstrated that he grasps how burdensome and job-killing over-regulation can be for small business’ ability to survive, let alone grow and prosper. Adding a small business owner to his Regulatory Review Council will help ensure his commitment to reducing timeframes for permits and licenses are accomplished.

“Small business owners work very hard to comply with the mountain of regulations federal, state and local jurisdictions impose on them. It’s spectacular to hear Governor Ducey commit to eliminating bureaucratic entanglements that are outdated, irrational, unfair or destructive to free and honest enterprise in Arizona.

“NFIB is making regulatory reform and government efficiency our top 2015 legislative priority including Governor Ducey’s initiatives outlined in his State of the State, a law ensuring small business owners are made aware of their due process rights during the regulatory process as well as reforming the ‘corporate culture’ within the state bureaucracy from one that metes out harsh penalties to one that assists our small business job creators with regulatory compliance.”

# # #

For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB annually surveys its members on state and federal issues vital to their survival as America’s economic engine and biggest creator of jobs. NFIB’s educational mission is to remind policymakers that small businesses are not smaller versions of bigger businesses; they have very different challenges and priorities.

Small Business Backs Wendy Rogers for Congress

Small Business Choice NFIB Sign-Topper2011_0621_wendy-rogers

Entrepreneurial experience, pioneering career make her Main Street’s choice

The political action arm for America’s voice of small business today announced its endorsement of entrepreneur and pioneer Wendy Rogers for Congress over incumbent Kyrsten Sinema.

“Wendy Rogers knows first-hand the rewards of building a successful enterprise, the duty of making payroll, the challenge of government regulatory compliance and the profound responsibility for the economic fates of as many as 100 employees and independent contractors affiliated with her small business,” said Farrell Quinlan, Arizona state director for the National Federation of Independent Business.

“The same pioneering spirit she exhibited as one of the first 100 women pilots in the U.S. Air Force showed up again in her willingness to work as hard as any candidate I have ever seen, knocking on thousands of doors in neighborhoods across her district in 100-plus degree Arizona temperatures.”

Rogers is the owner of a home inspection business, and is an NFIB member. The endorsement of Rogers (9th District) was made by NFIB’s SAFE (Save America’s Free Enterprise) Trust, the association’s political action committee. NFIB has 350,000 dues-paying members across the nation, including 7,000 in Arizona.

“Congresswoman Sinema earned only a 30 percent voting record on 10 issues vital to Main Street in the 113th Congress,” said Lisa Goeas, NFIB’s vice president for political and grassroots. “That is not a way to treat the people who employ more working Americans than big business, big labor or big government ever will. The engine of our economy will run much smoother with Wendy Rogers in Congress.”

Brief, single-pages of bulleted information on the power of the small-business vote, what a small business is and the distinctions it has from a big business can be found here.

“Small businesses significantly impact Arizona’s economy,” reports the Office of Advocacy at the U.S. Small Business Administration. “They represent 97.1 percent of all employers and employ 44.8 percent of the private-sector labor force. Small businesses are crucial to the fiscal condition of the state and numbered 495,227 in 2010. Most of Arizona’s small businesses have fewer than 20 employees.”

For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB annually surveys its members on state and federal issues vital to their survival as America’s economic engine and biggest creator of jobs. NFIB’s educational mission is to remind policymakers that small businesses are not smaller versions of bigger businesses; they have very different challenges and priorities.

NFIB Endorses Andy Tobin for Congress

Small Business Choice NFIB Sign-TopperAndy Tobin

His pro-small-business record in Legislature made him the clear choice

Calling his eight years in the Legislature “the high-water mark for pro-small-business policy advances,” the nation’s largest and leading small-business association today endorsed Andy Tobin for Congress over incumbent Ann Kirkpatrick.

“Andy Tobin’s four-terms in the Arizona House of Representatives represented this generation’s high-water mark for pro-small business policy advances,” said Farrell Quinlan, Arizona state director for the National Federation of Independent Business. “He justifiably deserves a fair amount of credit for those victories, because for most of those years, he was in the House majority leadership, including three years as the House Speaker. Historic cuts to personal and corporate income tax rates, trimming of the commercial and industrial property tax burden, doubling of the exemption on equipment and machinery taxes, simplification of sales tax administration, capital gains tax reduction and faster accelerated depreciation are only the top pro-free market tax policies that became law under Andy Tobin’s tenure in leadership. Regulatory reform, employment law improvements and modest advances in curbing lawsuit abuse were also hallmarks of his record. And all this occurred during one of the deepest and most persistent economic recessions in Arizona history.”

During Tobin’s eight years in the Arizona House, he earned a 96 percent voting record with NFIB, siding with Main Street job creators on 43 of 45 issues. The endorsement of Tobin (1st District) was made by NFIB’s SAFE (Save America’s Free Enterprise) Trust, the association’s political action committee. NFIB has 350,000 dues-paying members across the nation, including 7,000 in Arizona.

“For every session of Congress, we make it vividly clear what bills will be helpful or harmful to the nation’s small businesses,” said Lisa Goeas, NFIB’s vice president for political and grassroots, “and every representative and senator knows we are keeping a scorecard. Congresswoman Kirkpatrick earned only a 30 percent voting record on 10 issues vital to Main Street in the 113th Congress. That is no way to treat the people who employ more working Americans than big business, big labor or big government ever will. The engine of our economy will run much smoother with Andy Tobin in Congress.”

Brief, single-pages of bulleted information on the power of the small-business vote, what a small business is and the distinctions it has from a big business can be found here.

“Small businesses significantly impact Arizona’s economy,” reports the Office of Advocacy at the U.S. Small Business Administration. “They represent 97.1 percent of all employers and employ 44.8 percent of the private-sector labor force. Small businesses are crucial to the fiscal condition of the state and numbered 495,227 in 2010. Most of Arizona’s small businesses have fewer than 20 employees.”

For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB annually surveys its members on state and federal issues vital to their survival as America’s economic engine and biggest creator of jobs. NFIB’s educational mission is to remind policymakers that small businesses are not smaller versions of bigger businesses; they have very different challenges and priorities.