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Senate advances antitrust legislation, despite reservations from California Democrats

The bill, seen as a bellwether of Congress’s ability to hem in Big Tech, faces an uphill battle amid an industry lobbying blitz

Sen. Amy Klobuchar, a Democrat from Minnesota and chair of the Senate Judiciary antitrust panel, speaks during a hearing in Washington. She is a co-sponsor of the antitrust bill targeting tech companies. Photographer: Tom Williams/CQ Roll Call/Bloomberg (Tom Williams/Bloomberg)
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correction

An earlier version of this story misidentified Sen. Charles E. Grassley (R-Iowa) as chair of the Judiciary Committee. He is the ranking member. This version has been corrected.

A Senate committee voted Thursday to advance antitrust legislation targeting the tech industry, following a debate that exposed fault lines within the Democratic Party over the future of tech regulation.

The American Innovation and Choice Online Act cleared the Senate Judiciary Committee on a 16-to-6 vote, with lawmakers from both parties calling for future amendments to the bill. The at-times heated deliberation over the legislation followed an aggressive lobbying blitz from tech giants and their surrogates, which appeared to resonate with California’s senators.

Senators aim to block tech giants from prioritizing their own products over rivals’

The bill, which would prevent Amazon, Facebook and other large tech companies from boosting their own products and services over their rivals’, is widely seen as a test of Congress’s ability to pass regulations targeting the influence of a handful of tech giants. Its bipartisan sponsors position it as a long overdue check on the power and influence of Silicon Valley titans. (Amazon founder Jeff Bezos owns The Washington Post.)

But Sens. Dianne Feinstein and Alex Padilla, both California Democrats, revealed serious reservations about the effect the bill would have on companies and consumers in their home state. Feinstein, who initially said she intended to oppose the bill, warned that it unfairly targeted a handful of companies and said it could introduce new privacy risks to consumers.

“It’s difficult to see the justification for a bill that regulates the behavior of only a handful of companies, while allowing everyone else to continue engaging in that exact same behavior,” she said.

Feinstein raised concerns the legislation that could advantage tech companies’ global rivals, a prospect she called “very dangerous,” and warned of “very significant security concerns” in the bill. She suggested the bill would prevent Apple from ensuring apps were safe before consumers download them. Apple warned the committee of such trade-offs earlier this week, according to a letter from a company executive to senators viewed by The Post.

Padilla, Sen. Christopher A. Coons (D-Del.) and Sen. Patrick J. Leahy (D-Vt.) expressed similar concerns. But ultimately all Democrats on the committee voted to move the legislation forward.

The debate highlighted continued divisions as Democrats attempt to follow through on their long-running promise to rein in the tech industry through updates to antitrust law. The clock is ticking on these efforts as the 2022 midterm elections approach, and it becomes increasingly uncertain that they will be able to maintain their control of both chambers of Congress. The California delegation in the House has raised similar concerns about a package of antitrust bills that advanced to the floor last year.

The biggest threat to lawmakers’ Big Tech antitrust agenda: Time

Sen. Amy Klobuchar (D-Minn.), co-sponsor of the legislation, said in an interview following the debate that she expected the opposition from the California senators, and that’s why she’s sought bipartisan support for the legislation. Five Republican lawmakers voted to advance the bill out of committee, including Sen. Charles E. Grassley (Iowa), the top Republican on the Senate Judiciary Committee.

Many of the concerns raised by her colleagues about the bill, Klobuchar said, including about the national security and privacy risks it introduces, could be addressed by better explaining the work she and Grassley already did to shore up the bill.

“There’s a lot of misinformation going out there,” she said. “At some point we can’t allow false claims by companies to be used when we believe the national security will be protected.”

Tech giants, which are among the top lobbying spenders in Washington, and the trade groups that represent them have been running extensive campaigns against the bill, using many of the same points echoed by lawmakers. Both Google and Apple warned that the bill could hobble privacy protections of their products. Sen. Ted Cruz (R-Tex.) said during the session that Apple CEO Tim Cook appealed to him directly with his privacy concerns in a 40-minute phone call.

Apple holds an iron grip over the kinds of apps that people can download onto its phones, forcing them to go through its own app store instead of downloading them directly from the Internet, a practice known as “sideloading.” That allows the company to run security checks on its apps, which it says makes its platform much safer from hacks and scams, though some scams do still find their way through. It also allows Apple to make it easier for iPhone users to control the amount of data they share with app providers.

Apple spokesman Fred Sainz referred to a June 2021 presentation from the company that said it has 500 experts reviewing apps and that it rejected over 1 million apps in 2020 for being spam or endangering privacy. Phones running Google’s Android operating system do allow sideloading, but pop-ups warn consumers that downloads haven’t been vetted.

Google argues cutting the links between its products, like Gmail and YouTube, would hurt its ability to notice attempted hacks and block them across its entire empire. But the proposed law wouldn’t stop the companies from investing more in security and stepping up monitoring of threats on their products, said Richard Stiennon, chief research analyst at cybersecurity firm IT-Harvest.

“Google’s arguments that regulation will hurt security are spurious. Google can continue to block phishing attacks from Gmail and scan apps submitted to Google Play. Those are required responsibilities of any company that hosts email or an app store,” Stiennon said. “If they did not do that, their services would be useless.”

Besides, the companies don’t immediately share security threats they notice with their competitors, he said. “Are they going to argue that, you know, Congress should legislate that they integrate their security with each other? They’re not.”

In a Tuesday blog post, Google’s president of global affairs and chief legal officer Kent Walker argued the section of the bill that blocks tech companies from favoring their own products over those of their competitors could mean the company wouldn’t be able to build in its own security tools to protect the users of Gmail, its Chrome browser and other products.

“We might be prevented from automatically including our SafeBrowsing service and spam filters in Chrome and Gmail to block pop-ups, viruses, scams and malware,” Walker said.

Other tech-funded groups raised concerns that the legislation would give a boost to Chinese tech companies. American Edge, which Facebook helped launch, ran a video ad that warned anti-tech bills could weaken American competitiveness with Chinese companies and increase the risk of cyberattacks. “Who will build the future?” a voice-over in the video ad asks, while images of Chinese President Xi Jinping and Tiananmen Square play in the background.

“The privacy and national security objections we heard today were primarily the result of effective lobbying by the tech companies,” said Paul Gallant, a tech policy analyst at Cowen, an investment banking company. “Those are hot-button issues that, on the surface, no member wants to accidentally harm national security.”

The argument that new regulations will hamper American companies’ ability to compete with Chinese ones and damage the country’s long-term national security isn’t a new one. In September, a group of prominent former national security officials wrote a letter to Congress expressing concern that new antitrust laws that limit the power of large tech companies could hand an advantage to Chinese firms.

Tech's allies say antitrust reform would help China. Critics say it's a cheap ploy.

Other national security experts have pushed back on that idea. Instead of doing nothing, U.S. leaders should enact a robust set of rules for how the Internet works that reflects democratic norms, instead of letting more authoritarian approaches take hold worldwide, said Rose Jackson, director of the Democracy & Tech Initiative at the Atlantic Council. “China and Russia and a number of other authoritarian and undemocratic countries have an incentive that the democratic world is divided on these questions of how to govern the Internet,” Jackson said.

Apple and Google argue that opening up their platforms to other players will make it harder to keep out security threats, but that’s a false choice, Jackson said. “I don’t think scale does equal security,” she said. “The solution is not further walling off more information into fewer places that I have even less control over.”

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