Biden Antitrust Executive Order Has Major Giveaway for Tech Giants
Order recommends restoring net neutrality, preventing tech mergers
President Joe Biden on Friday signed a sweeping executive order that targets big tech mergers but includes a provision favored by most tech giants.
The order instructs the Federal Trade Commission to more closely monitor merger attempts by "dominant internet platforms" and to restrict how tech companies can exploit users' personal information. But it also recommends that the Federal Communication Commission restore net neutrality rules, which prevent internet providers from making distinctions among users. Tech giants like Facebook and Amazon support net neutrality because it bars internet providers from charging platforms based on their broadband use.
The order signals the Biden administration's confused approach to big tech regulation. At the signing ceremony, the president called out big tech directly, describing the executive order as an effort to promote "fair competition," one of the administration's priorities. But Biden still has not nominated a nominee for assistant attorney general for antitrust, a major enforcement position. Congress is considering considers legislative proposals to regulate the biggest tech companies, but there is little consensus on what approach to take.
Politico reported that the executive order was shaped in part by Tim Wu, a professor now serving in the Biden administration as a special adviser on economic and tech policy. Wu and FTC chairwoman Lina Khan have been some of the administration's most aggressive voices in calling for increased scrutiny of major tech companies.
Wu is one of the most ardent proponents of net neutrality, a term he coined in 2003. The Trump administration rolled back net neutrality regulations in 2017 in an attempt to increase broadband competition. At the time, Democratic lawmakers and social media giants warned that the change would lead to providers restricting users' internet access and discriminating against certain content providers. Those concerns proved to be overblown, though Facebook and Twitter have recently come under fire for discriminating against conservative content.
One of the order's provisions seems aimed at Amazon. It calls for rules barring internet marketplaces from exploiting their power by copying the products of smaller sellers on their platforms. The order will likely increase regulatory scrutiny of Amazon's planned purchase of MGM Studios.
The order contains a variety of "suggestions" for independent agencies, which prompted accusations from industry groups and think tanks that the administration is pressuring agencies to fall in line. The Information Technology and Innovation Foundation, a think tank that takes funding from big tech companies, said, "The White House is attempting to meddle into the work of federal antitrust agencies."
The order also contains a variety of non-tech related provisions, including a request for the Department of Agriculture to issue additional rules to support small farmers and meatpackers. And it asks the FTC to issue rules banning "unnecessary occupational licensing restrictions," the practice of requiring employees to obtain a license before entering certain industries.
Trump Argues Big Tech Have Become Government Pawns in Censoring Conservatives
Former President Donald Trump has sued Twitter, Facebook, and Google for blacklisting him from their platforms on the grounds that their censorship violates the First Amendment.
At first glance, that seems like a stretch. The First Amendment protects people from actions by the federal and state governments, not private actors. It begins with the phrase, “Congress shall make no law” and then sets out what Congress cannot do: declare an official religion, prohibit the free exercise of religion, abridge the freedom of speech or press, or curtail the rights to peaceably assemble or petition the government for a redress of grievances.
Initially, those rules only applied to the federal government. But now the Fourteenth Amendment is understood as applying those rules to state governments also.
So most legal analysts’ initial reaction to a First Amendment suit against a private company is to simply dismiss it. They assume that the big tech platforms can regulate content as they see fit, including kicking Trump off their platforms or shadow-banning undesirable users because they are in the private sector. Harvard Law’s Noah Feldman recently described Trump’s lawsuits as “sure losers.”
But that might be too quick. There are a number of cases in which the Supreme Court has held that actions by private actors can violate constitutional provisions ordinarily thought only to apply to state actors.
In Norwood v. Harrison, the Supreme Court unanimously found that a Mississippi program that provided textbooks to private schools, even if the school engaged in discriminatory practices, was unconstitutional on the grounds that the state could not deputize private actors to carry out prohibited activities. The Supreme Court said that it is “axiomatic that a state may not induce, encourage or promote private persons to accomplish what it is constitutionally forbidden to accomplish.”
In Railway Emplooyeee’s Department v. Hanson, the Supreme Court found state action in an agreement between a union and a private employer requiring all employees to join the union. The reason: Congress had passed a law immunizing such agreements from liability under state law. In Skinner v. Railway Labor Executives Association, the Court held that drug tests for employees by a private company constituted state action because federal regulations made railroad companies that tested employees immune from liability.
In both cases, the government was requiring anything. But it was enough that the government encouraged the closed-shop agreements and drug testing by granting immunity.
If this rings a bell, it may be because, in Section 230 of the 1996 Communications Decency Act, Congress provided digital platforms with immunity to liability for content posted by their users. This is seen by critics as inviting censorship because it allows Facebook, Twitter, and the like to regulate the content on their platforms without incurring the liability that a publisher of a newspaper, for example, would incur.
Section 230 also has a so-called “Good Samaritan” provision that immunizes platforms from liability for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.” In other words, it protects Twitter or Facebook from being sued if they take down content they do not like.
Trump’s complaint against Twitter cites Norwood to argue that Section 320’s immunity means that it is a state actor when it censors content.
The complaint makes the further point that many left-wing Democrat lawmakers repeatedly urged social media platforms to kick Trump off. What is more, they often coupled these pleas with threats to strip the companies of their Section 320 immunity 0r impose new regulations if they did not comply.
“Look, let’s be honest, @realDonaldTrump’s Twitter account should be suspended,” Kamala Harris tweeted in September.
“But I do think that for the privilege of 230, there has to be a bigger sense of responsibility on it. And it is not out of the question that that could be removed,” Nancy Pelosi said in April 2019, according to the complaint.
The complaint cites over a dozen similar remarks from politicians and lawmakers.
The argument of the brief very closely follows that of Jed Rubenfeld, a professor at Yale Law School, and Vivek Ramaswamy in a Wall Street Journal op-ed from January.
“Google, Facebook and Twitter should be treated as state actors under existing legal doctrines,” they wrote. “Using a combination of statutory inducements and regulatory threats, Congress has co-opted Silicon Valley to do through the back door what government cannot directly accomplish under the Constitution.”
Trump will not be the first to attempt to hold Facebook and other technology companies liable under a state actor theory. Most of those were met with failure in the courts. The courts in those cases tended to rely on Manhattan Comm. Access Corp. v. Halleck for the proposition that a private entity can only be a state actor if it is performing a public function that is exclusively done by the government.
But that is not all that Halleck says. Exclusive public function is only one category in Halleck. The case cites two other categories: when the government compels a private company to take a particular action and when the government acts jointly with a private entity.
These could also be fruitful arguments for Trump to make given the arguments in the complaint that government actors coerced Twitter into kicking him off the platform by threatening to regulate or remove the Section 230 protections.
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