Opinion | Is This the Big Tech Breakup We’ve Been Waiting For?

I’m Kara Swisher, and you’re listening to “Sway.” My guest today is Congressman David Cicilline, the Rhode Island Democrat who chairs the House Antitrust Subcommittee. Last year, the committee concluded a 16-month investigation into the anti-competitive behavior of big tech companies. I think my favorite part of the 449 page report — and yes, I read every page — was the lawmaker’s realization that tech had transformed from scrappy startups into, quote, the kind of monopolies we last saw in the era of oil barons and railroad tycoons.

Based on their lengthy analysis, Cicilline has joined forces with Republican lawmakers on a bipartisan package of five bills. These bills grapple with the power of big tech and could build up to the breakup of some of these companies. So will it be enough? Or is it too little, too fragmented, and way too late?

Welcome to “Sway.”

Thank you for having me.

So we’ve talked many times before over these past few years, when you’ve really gotten deep into the regulation of tech, but they’ve been huge, powerful companies for many years. Why do you think you can rein them in now?

Well, I mean, you’re right. Congress really has not done its job over the last decade or more in the area of antitrust. And so there’s not a good explanation, other than I think what happened is these were American companies that were viewed as great innovators that were providing interesting goods and services. And I think the attitude was sort of leave them alone and just let them flourish.

And I don’t think there were a lot of policy makers, or people in government at least, who understood the implications of the kind of market power, the monopoly power that these companies were developing over time. And there’s no question they’re too big.

But in allowing that to take so long — because this is sort of in plain sight, the market valuations, these series of social and political crisis they’ve been in the center of, not the least of which led up to the insurrection on January 6th. I mean, I want to understand what goes into the idea. Is it just — it’s not lethargy or inertia. It’s the slowness of government in recognizing these issues fomented by the political pressure that’s happening right now.

Yeah, I think it’s a couple of things. I mean, I do think in the area of technology particularly, there was an absence of kind of deep understanding of this sector. You are aware of the Senate hearing where — I think it was sort of laughable about the kind of lack of understanding of these issues. And so we were committed to never let that happen again.

I think it was partly that Congress didn’t have a full understanding of all of the implications of this, because one of the challenges of this kind of concentration of economic power is it translates to significant political power. So when you fully appreciate the danger of the kind of market power that these large technology platforms have, it’s sort of difficult to understand how this was allowed to go on without government action up to this point.

Well, they had — they certainly had an opportunity. I mean, the Obama administration was just as slow. I had an interview with Gene Sperling, who admitted, like, oh, we didn’t do anything and we could have. And that was, I don’t know, 10 years ago.

No, I agree. And we didn’t have antitrust agencies that were sufficiently creative or enthusiastic about the work. We didn’t have a Congress that provided enough funding to those agencies. And we didn’t have a demand. I think what has changed, though, is people are beginning to experience and understand more directly what the consequences are. You mentioned the insurrection. And we heard from so many small businesses about the impact of these platforms on their ability to survive and compete.

And so there’s more pressure, hopefully, from constituents to do something about it. And so I think that’s driving some congressional action as well.

OK, what about public perception? Last week, ProPublica produced a report on secret IRS files, demonstrating how little relative to their wealth growth billionaires like Jeff Bezos and Elon Musk and Warren Buffett pay in income taxes. Do you think the needle is moving there?

Absolutely. Look, people may not understand all the terminology, but there is a growing awareness that this kind of economic concentration that we’re seeing in so many areas is one of the reasons the economy works not for everyone but always very well for people at the very top.

Right. OK, so five separate bills instead of one major antitrust bill. Tell me what the strategy of that is.

So the strategy is these first suite of bills — because there will be additional bills introduced — but this first suite of bills focuses specifically on technology. It’s the area where there’s the greatest amount of bipartisanship. And we understand that we’re battling against four of the largest and most powerful companies in the history of the world. And so I thought it was better to get champions of each of these five areas, Republicans and Democrats, to diffuse some of the attack rather than having everything in one single bill that all the opponents can point to.

And then it has a better chance of getting through, rather than one massive antitrust bill.

That’s right.

Cause the last one was —

Yeah, that’s right. A long time ago.

A long time ago. So I want to talk to each bill and talk about how they look in practice, starting with the American Innovation And Choice Online Act. That’s the first one. This is sponsored by you, but it’s a bipartisan bill. Your co-sponsors include Republicans like Ken Buck of Colorado, Lance Gooden from Texas, and of course, Madison Cawthorn, the 25-year-old Republican Congressman from North Carolina.

This bill would prohibit platforms from giving advantage to their own services or products over other businesses’ services or products, and essentially says these platforms can’t pick winners and losers — say Apple Music or Amazon selling stuff on its platform that copies directly — batteries, or whatever it happens to do. So let’s use Amazon as the example. How would this affect Amazon?

So Amazon is a good example where they are a marketplace and they have their own products. They have a private label. And so they roll out their own Amazon products that compete directly with people who are selling in the marketplace. And then they do a variety of things that favor their own products and services that consumers don’t know about. And so this would prohibit —

Oh, I think it’s dead obvious what they’re doing.

Yes.

It’s like — Hello. You don’t want those Duracell.

Right, you want out. And people believe there’s some sort of objective examination that has been done that says this is the best value. That’s just not true. It is a result of a business relationship with a company or their own products. And so this would prohibit companies from favoring their own products and services in instances where they have both a marketplace and sell goods and services.

This is one of the bigger arguments I had with Jeff Bezos many years ago. I kept telling him he had end caps, which is what they use in grocery stores — people pay to be on the end of a grocery, whatever, an aisle, so they sell better. And he was, we never would do that. We never do that. I said, oh, you’re in the end cap business. And we didn’t talk for years after that.

So this feels related to the other bills — the Ending Platform Monopolies Act, which would impact whether companies can own another line of business that’s in conflict of interest. So it could hugely impact the way Amazon does business, could also impact Apple and their App Store. Explain what the goal is here and how it differs from the first bill.

Yes, so this bill would actually prohibit certain designated companies or designated platforms. They would have to meet three requirements, by number of users, by value of the company, and being what is determined to be a critical trading partner — basically, someone that you kind of can’t survive without.

They would be prohibited from both controlling the marketplace and selling goods and services, because of their market dominance, because of the size, because they’re gatekeepers, and they’re controlling and setting all the rules of the marketplace. It essentially says you can either be a marketplace or you can be a seller of goods and services. Because of the inherent conflicts, you can’t do both.

OK, so I interviewed Lina Khan, the antitrust lawyer who Biden nominated as an FTC commissioner and who you hired as counsel to the Antitrust Subcommittee. She called Amazon’s marketplace the company’s, quote, Petri dish for products. So would Amazon have to spin off into two different websites, one for their products and one for everybody else?

Yes.

— or shut down its own brand.

Or sell off that part of the company. I mean, they wouldn’t necessarily get to keep it in just a separate business. I mean, I’m assuming an agency would conclude that it has to be authentically separated, and it’s hard to imagine how they would do that.

So the impact on consumers— a lot of people like Amazon Basics, say you like their batteries, or — they sell everything.

I mean, the point of competition is to create space for other competitors to batteries other than Amazon. So by having a competitive marketplace, you bring more products to market to give consumers more choices and better prices.

So Apple couldn’t be in Apple music, for example — correct? Or they have to separate it somehow?

Yeah, I mean, that would obviously be a determination made by the enforcement agencies. But if they met the three requirements and there was an inherent conflict because they were selling their own goods and services, they would have to not do that, they would have to separate out that business.

OK, third bill, the Platform Competition And Opportunity Act — I don’t know why we come up with these names. This provides platforms from acquiring competitors that could expand or entrench the platform’s market power. We’ve seen this behavior pretty clearly with Facebook’s acquisitions of Instagram and WhatsApp. So would this make Facebook sell off these acquisitions? And again, this is co-sponsored. Hakeem Jeffries is one side, Buck, Cawthorn, Gooden — Matt Gaetz is even here.

So this prohibits platforms from making acquisitions that would pose a competitive threat. And that’s described in the legislation. The question about whether or not that would be applied retroactively and require some transactions to be unwound, as you know, there is already authority to do that in the law. But surely, they would not be permitted to acquire competitors that would further entrench their incredibly powerful market dominance already. So it’s intended to be serious merger reform.

Yeah, they were calling these killer acquisitions in Silicon Valley, because they killed them off. Were you surprised by Mark Zuckerberg’s email, where he was talking about essentially copy, kill, acquire strategy, the landgrab strategy.

No. I mean, look, these are companies and CEOs that have been allowed to do whatever they want. They’ve engaged in business practices that have been completely unregulated. They’ve been allowed to acquire competitors, destroy competitors, favor their own goods and services, engage in very anti-competitive conduct without any consequence. And so it didn’t surprise me that some of that arrogance would be reflected in emails.

OK. I was surprised he typed the word neutralized. It’s a good word. It’s a bad word, but a good word. Fourth bill, the Augmenting Compatibility and Competition by Enabling Service Switching Act, which luckily has the handy acronym ACCESS. This is trying to lower barriers to entry by letting consumers take their own data from one platform and bring it to another. This will theoretically make it less annoying for consumers to switch platforms.

What does it mean for a Facebook user, for example — not that there’s many social networks besides Facebook.

No, that’s right. I mean, we looked for a competition based solution that would say, look, if you had a marketplace that was working properly, and new entrants that provided platforms — you have to make it easier for folks to kind of vote with their feet and say I’m going to move to another platform. Facebook currently makes that almost impossible to do. And so this would require platforms to ensure that you can move easily. That would interoperable, portable — that you can move in, that you take your social graph with you. So you can have competitors entering the market and, say, if you don’t like what this company is doing with respect to your data, or your privacy, or how they’re using it, come to us. And you can do that switch easily.

But there’s not a lot of choices for them to go to.

Right, but part of it is if there’s not — if people don’t have the ability to come to your platform, it creates a disincentive to create that platform. So hopefully, once that ACCESS Act passes, it will create some opportunity for others to create new platforms that people then can move to.

Yeah, I interviewed Ben Horowitz from Andreessen Horowitz. And I said, what wouldn’t you invest in? He said social media. He was very adamant. He’s like — because I can’t win, essentially. And then I was, like, well then those companies will never get creative, but he was absolutely correct. OK, the last bill, the Merger Filing Fee Modernization Act, which is a pretty self-explanatory name. This would update filing fees for the first time since 2001, which is incredible, and is estimated to bring around an additional $135 million in revenue in its first year. It would reduce fees for smaller proposed mergers, under 500,000, but increase the fee for larger ones, above a billion. This one feels mostly uncontroversial. And actually, there’s Klobuchar and Grassley in the Senate, it’s a companion bill to that.

Passed on voice vote out of committee already on the Senate side. This is to ensure, though, that our antitrust enforcers also have the resources they need to do this enforcement work. These are expensive cases to bring, even more expensive cases to litigate. And this will help ensure that we have the resources necessary to do the work.

Explain the outmatched-ness of it, in terms of the power that these companies have.

Oh, I mean, you look at the size of these companies, and the interest that they have in defending an ecosystem that has brought them the greatest wealth. And they’re competing against a government agency that has very, very limited resources.

Which is incredible to say, the US government has limited resources.

The US government — I mean, and it’s because we’ve devoted so little to it. So this will begin to correct that, but we need to be sure that the antitrust enforcers, the agencies are led by outstanding people who understand the danger of inaction, that are smart and creative and aggressive. But then they also have a staff and budgets that are sufficient to actually win the cases.

I think I called the Facebook fine a $5 billion parking ticket. One of the staffers at the FTC told me the reason they settled was because they couldn’t fight it. They were, like, we couldn’t necessarily win. We didn’t have the resources to push them further to a $50 billion fine.

Which is appalling, but we have a responsibility to make sure that excuse is never used again, by providing the resources that are necessary.

Yeah, all right, so why are the bill so narrow in terms of the companies they’d affect? Some of the bills have parameters that the companies have 50 million or more monthly US users, $600 billion in market capitalization, must be, quote, critical trading partners, as you just said. Currently, the only companies that fall under these parameters are Amazon, Apple, Facebook, Google, and potentially Microsoft. So they can make an argument that you’re targeting them.

Well, the investigation that we conducted was specifically on the digital marketplace, these kind of large technology companies. These companies have monopoly power over significant sectors of the economy. They’re engaged in very anti-competitive behavior, which is bad for innovation, bad for consumers, bad for our economy. And so there will be a second suite of bills that address antitrust more broadly.

I think that will be — at least initially may not have the same bipartisan support. My hope is that by doing the technology ones first, which really grew directly out of the report, we’ll build some momentum and understanding with my colleagues to support the second suite of bills.

So essentially, everybody doesn’t like tech, so why not?

Everyone’s motivated. Everyone understands — it’s not a question of not liking them. We love tech. You can love the companies, just don’t like their business practices.

Which is difficult, I think, for a lot of consumers. I mean, that’s one of the things you’re facing. These are really useful and have been useful in the pandemic. Correct — one of their pluses?

Yeah. It’s interesting —

They’ve also gotten richer than ever and more powerful.

Richer than ever in the pandemic. And also, I mean, look, there’s good polling data that I saw recently. People understand these companies are too powerful. So you know, we’re trying to make space for more innovation, for more companies to be in the space. And that’s the idea of competition. It’s not that you’re against a particular company, but it’s just that competition brings innovation. It brings better quality. It brings more choices. It brings down prices.

So competition is a good thing. There’s a reason that we’ve always had policies which support competition. These platforms essentially don’t have it.

But one of the things — they are going to make this argument, I’ve already heard it — about this winners and losers idea in your statement, where the big tech companies are in a unique position of picking them. They’re going to make the argument that the bills are just government picking winners and losers instead.

No, not at all. I mean, we picked companies or platforms of a particular size, who have such enduring market power and such dominance. And they’re using that to grow their market power based on the number of users, the size of the company, and being a critical trading partner.

So it’s because that size is particularly damaging to innovation, to competition, to choice, to quality, so any company that meets that standard would be subjected to these limitations, not just the four that currently do, or five that currently do.

But when your answer to that is you’re just bigger — I mean, because this idea from market based principles, they came from nothing. I met them when they had nothing. And then they created these things. I think the biggest pushback — for example, I just heard, like, look what they’re doing to Jack Ma in China. They’re picking winners and losers. They’re stripping him of some of his businesses. I mean, that’s the most aggressive version of antitrust. I don’t even know if that’s the word for what they’re doing.

Well, that would be — that’s the central government. That’s not what we have in this country. We want America to lead again in the area of ensuring competitive markets. And you know, no one quarrels with anyone being a success or a big company, but we do quarrel with monopoly power.

And when you think about what the harm to consumers is — is if consumers love these products and are using them in record levels, giving up their privacy, even, what is the harm? I have so many people coming up to me saying, I don’t care, I have nothing to keep secret.

Yeah, I mean, look. The harm to consumers is they are being denied access to a variety of other businesses who sell products and services. So there’s a degrading of quality. When you’re the only one doing something, you don’t feel the pressure to do anything particularly well or to safeguard the quality of products that you either produce or sell. So it might feel like it’s all swell, but there’s real harm that is being caused.

And you look at also the impacts, like the impact on retail, and the importance of Main Streets in cities and towns, and your first job, and all the loss of that kind of experience as a result of this incredible market consolidation on Amazon, just as an example. So I think there are harms obviously on the collection of data. And you’re right. I think some people think, oh, who cares, until there’s some other misuse of their data.

We’re also being harmed by the grotesque dissemination of false misinformation with these platforms that lead to things like an insurrection. So there’s real harm to our democracy because of the easy spread of misinformation.

We’ll be back in a minute.

If you like this interview and want to hear others, follow us on your favorite podcast app. You’ll be able to catch up on Sway episodes you may have missed, like my conversation with Lina Khan. And you’ll get new ones delivered directly to you. More with Congressman David Cicilline after the break.

So I want to talk through bipartisanship. Republicans, Democrats have not been able to agree on much. I don’t think you can agree on lunch anymore — not infrastructure, not voting rights, not Trump. Why is tech regulation going to be different?

I think in part it’s the individuals who serve on this subcommittee. Ken Buck, the ranking member, and the Republican members of the committee, and of course, the Democratic members of this committee took this work really seriously. There’s definitely some members of the Republican caucus that are very focused on their belief that these technology companies are unfair to conservatives.

I don’t think there’s any evidence to support that.

It’s evidence-free at this moment.

It’s evidence-free But as I said to them, even if that were true, it would only be true because of their monopoly power. If they had real competitors, that couldn’t happen. And so they saw the harm to small businesses. I think that had a real impact on the Republican members of the subcommittee.

They understood — you know, they’ve heard from probably hundreds, maybe thousands of people who have had an experience with online platforms, which is unfair, which either put their business at a disadvantage, crushed their business to the point of going out of business. I mean, people are much more aware of this because of their constituents reaching out to them about it. So —

Sure, the businesses — that’s your best argument, is local businesses getting — they have unfair advantage over small businesses. And they certainly do. The GOP has been the party of free market and antitrust skepticism. Do you think it’s changed enough, however they get convinced, to vote for these bills?

Yeah, I mean, it’s kind of interesting to me, because they always present themselves as the pro-business party. And you can’t be pro-business and anti-competition, or pro-business and pro-monopoly. You just can’t.

But Republicans have been coupling tech regulation with this allegation of being censored by big tech, specifically social media platforms like Twitter, which gets a lot of the attention — although it’s not the biggest — and obviously Facebook. And even the co-sponsor of these bills, Republican Congressman Ken Buck, emphasized these allegations. My whole thing is if you’re worried about that, you should be worried about power.

Power is really the problem. But how are you going to get over that divide — because they can’t seem to stop wrapping themselves around this particular axle.

Yeah, I mean, interestingly enough, the top 10 sites kind of regularly, nine of them are very conservative.

Yeah, it’s interesting. My colleague, Kevin Roose, has a Twitter account that tracks the top performing link posts on Facebook in the past 24 hours. And here’s one recent top 10 list — Sean Hannity, Ben Shapiro, Ben Shapiro, Ben Shapiro, Dan Bongino — I think that’s how to pronounce it — Dan Rather, Ben Shapiro, Ben Shapiro, Ben Shapiro, Dan Bongino.

Right. And that’s pretty regularly what that list is. So if they’re biased against conservative views, they’re doing a really lousy job. But set that aside. If that is the belief of my Republican colleagues, then they should strongly support all five of these bills. Because you’re right, it’s about their power, their market dominance, their ability to grow that market dominance and preserve it.

So it may be that they’re coming at it from a kind of different place, and a place that I don’t necessarily think there’s a lot of evidence to support, but it has caused them to understand we have got to restore competition in the digital marketplace. So the good news is it has brought them to a place where they understand these are good and necessary reforms.

What do you say to them when Jim Jordan does that?

Every time he does I say that’s just not true. And I read the list of that day. Like, it’s just not true.

And his response?

And by the way, if you think that’s true, then you should support restoring competition in the marketplace. Like, that’s what’s hard to wrap your head around. If you actually believe that, if you’re Jim Jordan, he should be an enthusiastic supporter of all of these bills.

Yeah, well, I think he’d like to control them. And of course, these companies have rights themselves to be able to regulate whatever they want on their platforms. One of my issues is even if you agreed with deplatforming President Trump, which I did because of the rule breaking, you can’t agree that two people got to make that decision, essentially, or one or two people.

I think that’s very worrisome.

Well, some of the other solutions though are more troublesome — Governor DeSantis going after platforms who remove politicians. The DeSantis bill, do you have a point of view on it?

Yeah, I mean, look. I think this is a problem that platforms, because they have immunity from liability, their attitude at least up to now is we can’t in any way be responsible for what our platforms are being used for and what people are saying. Now they’re starting to say, well actually, no, we have some responsibly, I guess, when people die and really bad things happen. That’s a beginning.

But I do think we have to arrive at a place where there actually is greater responsibility for the harms that come from the use of the platform and some — you know, we do it in other areas, using libel and slander laws. You do it in a newspaper, you get sued — or on television.

Right.

Now, that’s harder to apply to digital markets for all the obvious reasons. But I do think we have to figure out how to ensure that these platforms are not being used to facilitate the widespread dissemination of completely false information that can lead and has led to violence and other horrible things,

Did you support the deplatforming of former President Trump?

Yes, because I think he clearly broke the rules. And it led to significant violence and even the insurrection that resulted in five people dying. But that’s an easy case. I think this is the other kind of challenge. Do you want a private company essentially deciding who billions of people will hear from? That’s an enormous amount of power that a private citizen or a set of private citizens have. That ought to alarm all of us. That’s — we’re in this place because they have so much power and they’re so big and they have no competitors.

Yeah, it does have to do with power. You’ve been a leader of tech regulation movement in the House. And I actually like talking to you, because you’re not — you know what you’re talking about. But frankly, some of the past congressional hearings, as you said, had been embarrassing for some of your colleagues. I do think there is an educational uplift of recent years.

How does it get more sophisticated, though? Is it getting young elected officials or staffers? How do we get Congress feeling comfortable legislating companies like this?

I would say first, getting Congress to actually understand, like, this is an important sector of the economy, pay attention to it. So making certain, again, that people are on the committees of jurisdiction that are interested in these areas, and then having staff that is well equipped to facilitate the work.

But I think this is an industry or sector that is rapidly changing. And so even having young, smart people, you have to keep up with it a lot and understand that this is a sector that is — there’s a lot of things happening and just be committed to paying attention to that.

They can also hire your staffers for enormous amounts of money. OK, I have one more question about another moving story. We’re seeing the revelations of the Trump — because it’s sort of related to the Trump Administration’s Justice Department going after the communications, records of individual journalists, Democrats, and even people within the White House. Apple revealed that it was subpoenaed by the DOJ for data on Democrats Adam Schiff and Eric Swalwell and many others, as well as the account information of White House counsel at the time, Don McGahn II. What do you think is going to come out of these revelations?

Yeah, I mean. I think it is a shock. And even for the ex-president, it’s still a shock. But you know, I think anyone who was involved in this whole matter needs to be held accountable and terminated and thrown out of whatever office they’re in. I think it’s appalling.

But to your earlier point, it does underscore this underlying problem that is the enormous collection of data by these large technology platforms that reveal so much about the holder of that data, and a more fundamental question about how do we actually protect your right as the creator of that data to control who uses it, who gets it, how it’s used, et cetera.

Some Democrats are calling on former Attorney General William Barr and Jeff Sessions to testify. They seemed to say they didn’t agree to it. What do you think will happen here? Someone will get fired or —

They absolutely should be required to come before the Judiciary Committee in the House and I assume in the Senate as well to share everything they know. There ought to be, as there will be, a complete investigation by the Inspector General. And anyone who authorized this or assisted in any way should be held accountable and ought not remain in their positions, period.

The idea that the executive branch would have authorized what I consider spying on members of the legislative branch is intolerable. This is conduct you would expect of a despot or a dictator, not of a democratically elected President of the United States. But we can’t accept this. No one should think like, oh, this always happens. This is appalling. It’s an aberration. We should make certain it never happens again.

What would Apple do in this case? They didn’t have much choice, did they?

Yeah, I mean, I think Apple, if you’re the subject of a subpoena, you know, despite Trump’s best efforts, we still are a country of laws. And we still have the rule of law, you have to follow it. But the question is do they contest that, did they have a responsibility to contest on behalf of their users? That’s the problem of a company having this much power, this much data. And did they bother to contest or object in any way, or look closer, or did they just do it to facilitate what they knew the president’s administration wanted?

In the future, they may be more skeptical. Should Tim Cook come and testify, or Microsoft, or others who were asked for this?

Well, I mean, I would presume they have some view on whether or not they ought to have been required to do it. So I think it would be very helpful to hear from them.

OK, I’ll be watching for that. I really appreciate you talking to me. Thanks so much.

My pleasure.

“Sway” is a production of New York Times opinion. It’s produced by Nayeema Raza, Blakeney Schick, Heba Elorbany, Matt Kwong, and Daphne Chen, edited by Nayeema Raza and Paula Szuchman, with original music by Isaac Jones, mixing by Erick Gomez, and fact checking by Kate Sinclair. Special thanks to Shannon Busta, Kristen Lin, and Liriel Higa.

If you’re in a podcast app already, you know how to get your podcasts, so follow this one. If you’re listening on The Times website and want to get each new episode of “Sway” delivered to, along with Amazon’s knockoff of my podcast, “Wave,” hosted by Lara Lisher, download any podcast app, then search for “Sway” and follow the show. We release every Monday and Thursday. Thanks for listening.