The spotlight on Capitol Hill shifts on Tuesday from big tech companies to the regulators that oversee them.
The federal government's top two antitrust officials — Federal Trade Commission Chairman Joseph Simons and Assistant Attorney General Makan Delrahim — will face a tough crowd when they testify before a Senate Judiciary subcommittee. Lawmakers on both sides of the aisle have proposed structural changes to the agencies and blasted their handling of major tech cases. Some critics are even calling for their powers to be consolidated or even transferred to a new authority.
"Part of the problem that we're experiencing here is the explosion of the internet, and computing has transformed markets so dramatically that traditional sectors are kind of disappearing," said Gene Kimmelman, a former Justice Department official and senior advisor to Public Knowledge, a consumer advocacy group. "I think there's going to be a need for government to reorganize itself."
In recent months, the FTC and DOJ have launched sweeping investigations into potential anti-competitive behavior among the tech giants: Facebook and Amazon are under scrutiny from the FTC, while Google and Apple are facing questions from the DOJ. The DOJ has announced a broad probe into market dominance in the tech industry that could include all those companies and more.
But lawmakers worry those efforts are too little, too late. An analysis by the American Antitrust Institute of the past 30 years of competition in tech found that just five firms made more than 700 acquisitions during that time. Google and Microsoft each accounted for about a third, with Apple following with 15 percent of mergers. Between 2001 and 2017, as deals reached record highs, regulators only challenged one in federal court.
"It's very weak merger enforcement," said Diana Moss, head of the American Antitrust Institute.
That is prompting lawmakers to propose rewriting the rules for regulating Big Tech. At Tuesday's hearing, Sen. Mike Lee, R-Utah, who heads the antitrust subcommittee, plans to press officials over the potential for overlap in their investigations and the risk of duplication, according to a spokesman. Lee is advocating for consolidating antitrust authority into one agency.
"Splitting antitrust investigations of these firms between two agencies is just analytically inefficient," he wrote in an op-ed in the Washington Examiner this summer.
The subcommittee's ranking Democrat, presidential hopeful Amy Klobuchar of Minnesota, has introduced several bills to expand regulators' powers. Last month, she proposed giving the FTC and DOJ the authority to impose civil monetary penalties worth up to 15 percent of a company's U.S. revenues or 30 percent of its revenues in affected markets. She has also called for higher fees for companies pursuing mergers and for shifting the burden onto businesses, rather than the government, to prove an acquisition would not harm competition.
"We have a major monopoly problem in this country," Klobuchar said in a statement in August. "So when federal enforcers uncover illegal monopolistic conduct, they need to act decisively to make sure it stops."
But some experts say a more sweeping overhaul will be necessary for regulators to keep up with a fast-changing industry. Senate Democrats have previously proposed the creation of a modern-day trust buster charged with analyzing markets, handling consumer complaints and flagging cases to the FTC and DOJ. Now, there are growing calls for a single agency that can juggle the broad swath of concerns about the tech industry — not only antitrust, but also privacy, data protection and disinformation.
"If you load up antitrust with the sole responsibility with addressing every problem of Big Tech, that's not going to work very well," Moss said. "Antitrust isn't built for all of that."
The University of Chicago this month released a report by a committee of tech experts and academics that outlined the contours of a new digital authority with the power to promulgate and impose industry standards and monitor misbehavior. Most importantly, the new authority would have the power to realign market forces that incentivize monopolies in the first place.
"It is unlikely that these problems will self-correct, meaning new and revised rules and incentives will be needed to prevent market power from entrenching a few dominant tech firms as economic and social gatekeepers," the report states.