A fight is brewing in Congress over antitrust funding

A fight is brewing in Congress over antitrust funding

Lawmakers are gearing up for a battle over whether to give antitrust enforcers added funds in a series of upcoming government spending bills, the outcome of which could have significant implications for regulators’ clashes with Silicon Valley giants.

The House Appropriations Committee earlier this month released and marked up legislation that would trim dedicated funding for the Justice Department’s antitrust division as Republicans prepare for a broader showdown with the White House and Democrats over government spending. 

Now, left-leaning consumer advocacy groups are sounding the alarm on what they call fresh Republican attempts to kneecap key competition enforcers. 

On Monday, the Clean Budget Coalition — a collection of over 200 advocacy groups tracking the spending talks — criticized what they described as efforts to tuck “poison pill” provisions into the spending bills, including proposals to:

• Block funding for updating the federal guidelines for vetting mergers, a new draft of which the Justice Department and Federal Trade Commission released last week.
• Restrict the antitrust division’s ability to hire new staff without congressional approval.
• Block funding for federal initiatives that could support the European Union’s sweeping new competition rules, known as the Digital Markets Act.

Lisa Gilbert, executive vice president at the advocacy group Public Citizen, called the proposals “disastrously overreaching.”

“If passed into the law, the impacts of these riders would be devastating, including limited or halting much needed work at the agency level to grapple with the threats of Big Tech,” she said.

Spokespeople for House Appropriations Chairwoman Kay Granger (R-Tex.) did not return a request for comment. The FTC and Justice Department declined to comment.

House Republican leaders have expressed skepticism in recent months about granting enforcers’ requests for more funding, a dispute that could emerge as a flash point in negotiations as officials look to avert a government shutdown.

Last week, a group of 22 GOP lawmakers, including House Judiciary Chairman Jim Jordan (R-Ohio), urged the FTC to drop its challenge against Microsoft’s planned acquisition of video gaming giant Activision Blizzard, calling into question the agency’s resource management.

“We cannot help but wonder if the FTC would need increased resources were it not wasting time and money on challenges such as the one it has brought against Microsoft’s acquisition of Activision,” wrote the group, led by Rep. Kelly Armstrong (R-N.D.).

Republicans have also pushed back on the notion of giving antitrust enforcers more funds during FTC Chair Lina Khan’s recent congressional outings. 

“What is clearly needed before Congress considers any new authorities or funding are reforms, more guardrails and increased transparency to ensure you are accountable to the American people,” House Energy and Commerce Chairwoman Cathy McMorris Rodgers (R-Wash.) told Khan at an April hearing.

Tech trade groups representing giants like Meta, Amazon and Google — who are locked in numerous antitrust battles with the FTC and Justice Department — have also ratcheted up their attacks against the push for greater funding in recent months.

Amazon founder Jeff Bezos owns The Washington Post. Interim CEO Patty Stonesifer sits on Amazon’s board.

Meanwhile, the broader standoff over government spending is escalating. 

The White House on Monday threatened that President Biden would veto Republican-backed defense, agriculture and spending bills. Republicans are dialing up consideration of the bills ahead of the planned August congressional recess.

White House spokesman Michael Kikukawa pushed back on the antitrust provisions in the House spending legislation.

“Part of the reason working families have seen costs go up for decades is that too many in Congress have carried water for huge corporations who seek to eliminate fair competition … If House Republicans want to stand with big businesses that are exploiting consumers and workers, we will happily stand with the American people,” Kikukawa said in a statement to The Technology 202.

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Khan defends antitrust record amid setbacks in Microsoft-Activision challenge

FTC Chair Lina Khan defended her agency’s record in court after it unsuccessfully challenged Microsoft’s planned purchase of Activision Blizzard, Leah Nylen and Teresa Xie report for Bloomberg News.

“In federal court, we have lost two merger cases. We have brought somewhere between 13 and 20, depending on how you count,” Khan said at an event Monday event at the Economic Club of New York. “In the scheme of our merger enforcement program, losing two is okay.”

The report adds: “But she acknowledged that the nature of the Microsoft deal — the company doesn’t compete directly with Activision, the maker of popular video game titles played on Microsoft’s Xbox and rival consoles — made the legal challenge difficult.” The agency last week paused its in-house trial that challenged the $69 billion Microsoft-Activision deal, bringing the purchase one step closer to completion.

“There’s no question that vertical mergers are tougher to litigate,” she said in reference to transactions between companies that work at different levels of a supply chain but do not compete directly. 

Over 1,500 U.K. app developers allege excessive Apple app store fees

Apple is facing a $1 billion lawsuit from over 1,500 app developers in the U.K. that alleges the consumer electronics giant charges excessive commissions in its App Store, Foo Yun Chee reports for Reuters.

The 15 to 30 percent commissions charged by Apple for some app makers to use the company’s in-app payment system has been criticized “by apps developers and targeted by antitrust regulators in several countries,” the report notes.

It adds: “The UK lawsuit at the Competition Appeal Tribunal is being brought by Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia and a former economist at the OECD, on behalf of 1,566 app developers.” Apple has previously said most of its developers do not pay any commission, Yun Chee adds. 

In the United States, Apple faces a related antitrust matter from “Fortnite” maker Epic Games that could force the company to change its App Store payment practices. The App Store is also subject to new digital rules set to take effect in the E.U. next month due to its large user base.

Top senator urges White House to stay engaged on AI regulation

Senate Intelligence Committee Chair Mark R. Warner (D-Va.) on Monday advised the Biden administration to stay on top of artificial intelligence regulations, following news that the White House last week secured voluntary AI safety commitments from major tech companies.

In a letter to President Biden, Warner said that the commitments can help shape AI development norms, but “even less capable models are susceptible to misuse, security compromise, and proliferation risks,” it said.

The letter advised the Biden administration to continue engaging with AI companies to extend the commitments — which include “watermarking” content to show it is AI-generated — toward models that don’t perform as strongly as more robust AI systems on the market.

Warner also suggested the development of “lightweight consumer-facing commitments” aimed at preventing the most serious forms of abuse that users could face. Those include commitments to standard AI development practices, licensing terms and processes to monitor the behavior of models after they are deployed for use.

Rant and rave

Twitter unveils its “X” rebrand. Author Jessica Adams:

Bloomberg News AI reporter Rachel Metz:

Rolling Stone editor in chief Noah Shachtman:

Duolingo’s official account:

Hill happenings

House panel considers holding Zuckerberg in contempt (Punchbowl News)

Inside the industry

Job applicants are battling AI résumé filters with a hack (Danielle Abril)

Indian politicians embrace influencers ahead of 2024 elections (Rest of World)

Pressure grows on OpenAI to respond to Meta’s challenge (The Information)

Competition watch

Google owes $338.7 mln in Chromecast patent case, US jury says (Reuters)

Privacy monitor

Effort to curb police use of Google data stalls as California lawmakers struggle to shield abortion seekers (Los Angeles Times)

Workforce report

Cleaning up ChatGPT takes heavy toll on human workers (Wall Street Journal)

Trending

Twitter is turning into X. Analysts don’t see the treasure map. (Joseph Menn)

Oppenheimer’s story offers a warning about AI (Bloomberg News)

Daybook

• FCC Chair Jessica Rosenworcel speaks at a Center for Strategic and International Studies event on 5G spectrum security at 2 p.m.
• The Senate Judiciary Committee holds a hearing on AI regulation principles at 3 p.m.
• The Senate Homeland Security Committee considers a bill to create AI staffing positions in the federal government tomorrow at 9 a.m.
• The Atlantic Council holds an event on AI governance tomorrow at 10 a.m.
• Georgetown University’s Center for Business and Public Policy holds a discussion on draft merger guidelines tomorrow at 11 a.m.
• Commerce Secretary Gina Raimondo speaks at an American Enterprise Institute event on semiconductor policy tomorrow at 2 p.m.
• The Hudson Institute holds an event on U.S. space and national security tomorrow at 2 p.m.

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