President Biden’s Executive Order Opens New Front in Battle With Big Tech

Business

The Wall Street Journal 10 July, 2021 - 04:30am 32 views

But it will fall to government agencies to carry out the order, and they could take years to put its ideas into action. The Federal Trade Commission that already has Big Tech companies in its sights is likely to become a particular battleground.

A core thrust of the order is to encourage regulatory agencies such as the FTC to adopt new rules and policies to rein in the growing size and power of large tech platforms such as Amazon.com Inc., Alphabet Inc.’s Google and Facebook Inc. That could prove to be a tall order for the FTC, the principal federal regulator of internet commerce. Some observers say the agency—which had its sails trimmed by Congress in the deregulatory era of the 1970s and 1980s—has struggled to keep up with unfair practices online, particularly in the areas of user privacy, big data and tech mergers.

As the White House detailed its executive order, one Democratic FTC commissioner, Rebecca Kelly Slaughter, said in a tweet, “So excited about @POTUS’s EO on competition; it is an ambitious agenda that will help our markets work better and create a more equitable economy for all people - esp workers, marginalized communities, entrepreneurs, small biz.”

Gary Shapiro, chief executive of the Consumer Technology Association that counts Apple Inc., Facebook and Google among its members, defended the tech industry as competitive and vibrant and took issue with the White House’s action.

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President Biden Delivers Remarks and Signs an Executive Order

The White House 10 July, 2021 - 07:00am

Biden Vows 'Robust Competition' to Curb Tech, Drug and Ag Prices

Bloomberg Quicktake: Now 10 July, 2021 - 07:00am

Biden signs executive order aimed at promoting competition across the economy

Yahoo Finance 10 July, 2021 - 07:00am

"The heart of American capitalism is a simple idea: open and fair competition," said Biden before signing the order. "Capitalism without competition isn't capitalism. It's exploitation. Without healthy competition big players can change and charge whatever they want, and treat you however they want — and for too many Americans that means accepting a bad deal for things you can't go without." 

The order contains 72 initiatives by more than a dozen federal agencies and establishes a White House Competition Council to monitor the agencies' progress. 

Biden is calling on the Federal Trade Commission to ban or limit non-compete agreements, which keep workers from leaving their employer for positions at rival firms. Critics argue the agreements reduce wages by taking away workers' employment options. 

Biden "believes that if someone offers you a better job, you should be able to take it. It makes sense,” said White House Press Secretary Jen Psaki earlier this week. 

The order will also encourage the FTC to ban "unnecessary" job licensing requirements, that "impede economic mobility." Biden is also asking the FTC and Department of Justice to strengthen antitrust guidance to keep employers from collaborating to suppress wages or reduce benefits. 

The administration argues these actions will help raise wages and make it easier for workers to change jobs. 

The U.S. Chamber of Commerce blasted the executive order in a statement, saying the order is "built on the flawed belief that our economy is over concentrated, stagnant, and fails to generate private investment needed to spur innovation." 

"Our economy needs both large and small businesses to thrive — not centralized government dictates. In many industries, size and scale are important not only to compete, but also to justify massive levels of investment. Larger businesses are also strong partners that rely on and facilitate the growth of smaller businesses," added Neil Bradley, the Chamber's executive vice president and chief policy officer. 

The White House aims to crack down on big tech companies, arguing that they gather too much information on consumers, purchase potential competitors and unfairly compete with small businesses. 

"Over the past 10 years, the largest tech platforms have acquired hundreds of companies—including alleged “killer acquisitions” meant to shut down a potential competitive threat. Too often, federal agencies have not blocked, conditioned, or, in some cases, meaningfully examined these acquisitions," the White House wrote in a factsheet.

The executive order calls for greater scrutiny of mergers, new FTC rules to curb data collection and surveillance and rules to bar unfair competition on internet marketplaces. 

"The large platforms’ power gives them unfair opportunities to get a leg up on the small businesses that rely on them to reach customers," said the factsheet. 

The order comes shortly after the House Judiciary Committee passed six antitrust bills aimed at spurring more Big Tech competition.

The president is directing federal agencies to take steps toward reducing drug prices for consumers. The order urges the agencies to work with states and tribes to import prescription drugs from Canada and increase support for generics. 

The Department of Health and Human Services must issue a plan within 45 days to fight high prices and price gouging. Within 120 days, HHS should issue proposed rules to allow hearing aids to be sold over- the-counter. The agency is also tasked with standardizing plan options in the National Health Insurance Marketplace to make comparison shopping easier. 

The administration notes that hospital consolidation has left many rural communities without options for convenient health care. Biden is calling on the Justice Department and the FTC to review its merger guidelines.

The White House argues "inadequate competition" has reduced incentives for airlines to provide good service. In response, the president is directing the Department of Transportation to issue rules requiring airlines to refund consumer fees when their bags are late or when the plane's WiFi doesn't work. DOT estimates airlines were late in delivering at least 2.3 million checked bags in 2019. 

The DOT is also tasked with issuing rules requiring fees to be clearly disclosed to customers.  

Agencies will also crack down on railroads and ocean shipping to reduce the costs of transporting goods. 

"A lot of American companies rely on railroads to ship their goods domestically and ocean carriers to ship their goods internationally. Both of these industries have grown more concentrated over time," said Psaki on Thursday. "That concentration has contributed to a spike in shipping costs and fees during the pandemic. For example, the index price to ship one container has gone up eightfold." 

The executive order directs the USDA to take steps to empower farmers, helping them access markets and compete with large corporations.  

"The markets for seeds, equipment, feed, and fertilizer are now dominated by just a few large companies, meaning family farmers and ranchers now have to pay more for these inputs. For example, just four companies control most of the world’s seeds, and corn seed prices have gone up as much as 30% annually. Consolidation also limits farmers’ and ranchers’ options for selling their products," said the factsheet. 

The order also encourages the FTC to keep big equipment manufacturers from blocking farmers' ability to fix their own tractors. 

Biden is encouraging the Federal Communications Commission to take action in an effort to reduce the cost of internet service and give consumers more options. 

The order calls on the FCC to: 

Prevent ISPs from making deals with landlords that limit tenants’ choices.

Revive the “Broadband Nutrition Label” and require providers to report prices and subscription rates to the FCC.

Restore Net Neutrality rules undone by the prior administration.

The White House is calling for greater scrutiny of banking mergers, urging the DOJ and financial regulators to update their guidelines. 

"Excessive consolidation raises costs for consumers, restricts credit for small businesses, and harms low-income communities. Branch closures can reduce the amount of small business lending by about 10% and leads to higher interest rates," said the factsheet. "Even where a customer has multiple options, it is hard to switch banks partly because customers cannot easily take their financial transaction history data to a new bank." 

The order encourages the CFPB to issue rules allowing customers to download their banking data and take it elsewhere.

Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C.

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Biden signs order pushing for scrutiny of tech giants, right to repair and more

CNET 10 July, 2021 - 07:00am

Biden's "Promoting Competition in the American Economy" executive order consists of 72 directives for federal agencies. Regarding the tech industry, the president ordered the Federal Trade Commission to establish rules on surveillance and on the accumulation of data, to bar unfair methods of competition on internet marketplaces and to prevent restrictions on allowing independent repair shops and DIY repairs on people's own equipment, also known as right-to-repair. In addition, Biden announced a policy for greater scrutiny of mergers, singling out "dominant internet platforms."  

"No more tolerance for abusive actions by monopolies," Biden said in Friday's press conference. "Capitalism without competition isn't capitalism. It's exploitation." 

Stay in the know. Get the latest tech stories from CNET News every weekday.

Large tech companies have been under greater scrutiny from politicians and government agencies for buying rivals instead of competing with them. Facebook's acquisitions of photo app Instagram and messaging app WhatsApp, for instance, have been the focus of antitrust complaints against the company. Last week, a federal judge dismissed lawsuits filed by the Federal Trade Commission and a group of state attorneys general that accused the social media giant of engaging in anticompetitive practices. The FTC can file an amended complaint. 

Biden's executive order also goes after how tech companies gather a trove of personal data as part of their business. That's been an issue for Facebook and Google, among others.

The order also calls for regulation of companies that operate "dominant online retail marketplaces" that sell their own products as well as those of other businesses, encouraging the Federal Trade Commission to apply laws that bar unfair competition on such platforms. This kind of enforcement would likely focus on Amazon, where about 44% of e-commerce in the US took place in 2020. The FTC's new chair, Lina Khan, mapped out a legal theory for regulating Amazon while a student at Yale Law School. Amazon has asked the FTC to require Khan to be recused from investigations into the company, arguing she wouldn't bring objectivity to the process.

Federal lawmakers have also singled out web retailers that run a marketplace where they sell goods alongside other businesses. Of a slate of five proposed antitrust laws, one seeks to make it illegal for a company to compete on its own platform.

Facebook and Amazon didn't immediately respond to a request for comment. 

Biden's new executive order could let you fix your iPhone

MSNBC 10 July, 2021 - 07:00am

That last one in particular may change soon, thanks to a new executive order that President Joe Biden signed Friday afternoon. There’s a lot of room for debate about what regulations the government can and should issue when it comes to how businesses operate — but this seems like such a no-brainer of a policy move that it’s wild it hasn’t happened sooner.

Yet, for example, if your iPhone’s camera is cracked, that’s exactly what happens. The company restricts access to spare parts and diagnostics that would allow an independent repair shop to easily make that fix. Even the stores that are “authorized” to do repairs are still limited to a few basic tasks. Anything more complicated than a broken screen or dead battery still requires the store to ship that product back to Apple, Vice reported in 2017.

It’s not like Moen (or whatever manufacturer) made it so that only its trained technicians can open up your sink to swap out specialty pipes that only it makes that are compatible with your faucet.

Which brings us back to Biden’s new order, which is focused broadly on promoting competition between businesses, a much-needed initiative given how a few giant companies dominate their sectors of the economy. Among its 72 provisions is one that finds “tech and other companies impose restrictions on self and third-party repairs, making repairs more costly and time-consuming, such as by restricting the distribution of parts, diagnostics, and repair tools.”

Biden goes on to encourage the Federal Trade Commission to “issue rules against anticompetitive restrictions on using independent repair shops or doing DIY repairs of your own devices and equipment.”

As chance would have it, the FTC is already deeply invested in this issue. Earlier this year, the commission published a 54-page report to Congress that found that changes in the tech market have allowed companies to skirt a law that prohibits companies from making warranties void if repaired with “any article or service which is identified by brand name unless the article or service is provided for free.”

Instead, companies have “steered consumers into manufacturers’ repair networks or to replace products before the end of their useful lives,” the report continued. (The latter includes, for example, making the iPhone 6 unusable thanks to new software updates). In the end, the FTC found “there is scant evidence to support manufacturers’ justifications for repair restrictions.”

Even Steve Wozniak, the co-founder of Apple, thinks the current restrictions are bogus — and said if they’d existed in the 1970s, they probably would have smothered the company at birth.

"We wouldn't have had an Apple had I not grown up in a very open technology world," Woz said in a 9 1/2-minute Cameo video requested by a right-to-repair advocate.

"I didn't have to afford something I could never afford," he said. "I wasn't restricted from anything that kept me from building that computer and showing the world that the future of personal computers is going to be a keyboard and a TV. That all came from being able to repair things and modify them and tap into them yourself."

There’s no telling how long it will take the FTC to write its new rules — it’s not like federal bureaucracy is known for its lightning speed. But with the White House’s backing in place, there’s a better chance than ever that we might see a world where if your Macbook’s power port fries, you can just order the parts needed to do the repair yourself.

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