Feds Look Into Big Tech Firms For Anti-Competitive Behavior

Jun 5, 2019
Originally published on June 7, 2019 12:56 am
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NOEL KING, HOST:

For years, some of the biggest tech companies in the U.S. have operated without very much government oversight. Now the Federal Government is looking into these companies for possible anticompetitive behavior. Officials at the Department of Justice and the Federal Trade Commission are getting ready to review how Facebook, Google, Amazon and Apple deal with the competition. The House Judiciary Committee is also carrying out an investigation of its own. The question on all of this is why now? Bruce Hoffman is director of the Bureau of Competition at the U.S. Federal Trade Commission. He's on the line from New York.

Good morning, Mr. Hoffman.

BRUCE HOFFMAN: Good morning.

KING: So before we get to the why now, what is the FTC doing exactly? It's been reported that you're increasing scrutiny of these companies. You've set up a task force. What does this mean on the ground?

HOFFMAN: Well, let me first of all say that I don't want to comment on any specific pending investigation. But I think what we've been doing has been fairly visible. It's really so far been in two major directions. One is we've been conducting a series of hearings on competition policy, consumer protection policy, and that has touched a lot of the digital space on technology companies.

And second, as you noted, we set up recently a Technology Task Force, which was a new division inside the Bureau of Competition at the FTC, with a group of antitrust lawyers supported by some economists who are focused on this area, to try to better understand it, to develop our knowledge and be able to approach the area in a sophisticated and complete way.

KING: What are technology companies doing, or what is the set of circumstances that has concerned the FTC so much that it's ready to investigate?

HOFFMAN: Well, again, without talking about specific conduct that we might be looking at...

KING: Sure.

HOFFMAN: What I would say is there's obviously been a lot of public discussion about, No. 1, the size of the technology companies, or at least of some of them, and the fact that they've been large for a long time. Now, that in and of itself is not inherently an antitrust problem.

What I would say is there's obviously been a lot of public discussion about, No. 1, the size of the technology companies, or at least of some of them, and the fact that they've been large for a long time. Now, that in and of itself is not inherently an antitrust problem.

KING: Right.

HOFFMAN: You can be a big, successful company because you're really good at what you do. But there've been a lot of claims of anticompetitive behavior, whether acquiring firms that could have been your competitors or engaging in conduct that would be aimed at squelching competition, like favoring your own services. Now, again, that might or might not be an antitrust problem in and of itself, but it's the sort of thing that you might want to look into.

KING: But there have been concerns about this for years, the things that you just laid out. This is nothing new. Why didn't you do something earlier?

HOFFMAN: Well, I think - you know, first of all, in terms of earlier, this in - what we've been looking at recently is the last couple of years, and this area was a big priority for Chairman Simons - Joe Simons, who is currently the chair of the FTC - when he came to the commission. That's only a year ago now.

KING: OK.

HOFFMAN: So from that period to present, there's a certain amount of developmental time that goes into anything we do. One of the hallmarks of the FTC, and this is true of the Department of Justice as well, is that we like to really have our facts straight. We do a lot of investigating, we do a lot of background work to make sure that when we actually engage in enforcement action, we're doing so on a sound, factual basis. So there's an awful lot of work that goes into this.

Now having said that, we have been bringing cases involving digital platforms and technology, but they've been cases that have been triggered by specific investigations. So we currently have a litigation filed against a digital platform in the e-prescribing space called Surescripts. We had a merger challenge last year involving digital platforms actually in the auto dealership business called CDK-Auto/Mate, where we sued actually to block a merger, and the merger was abandoned in the face of our lawsuit. So we've been doing things in this space, but in terms of the larger issues, there's a lot of development that goes into bringing cases.

KING: The dynamic here, at least from the outside, appears to be that regulators have really struggled to keep up with innovators. And I wonder - you said you do have to get your facts right, you do have to do a lot of research. Is that the reason that it seems the government is always a couple steps behind the big tech companies?

HOFFMAN: I don't think we're behind the big tech companies. I will say, I've been doing antitrust enforcement now for longer than I want to admit.

KING: (Laughter).

HOFFMAN: But this is actually a theme that recurs over and over again. So in the late 1990s, there was a great deal of public angst over the government's inability to do antitrust in what was then the tech space - you know, the dot-com world, the Microsoft world.

KING: Yeah.

HOFFMAN: And it turned out to be overblown, right? The Microsoft case proceeded. A lot of people have argued that the result of that case is what opened the door for today's tech companies. So - and by the way, if you go back through the history of antitrust, all the way back to the early 20th century, you find this constant issue, where every 10 years or every 15 years some new technology arises, the public gets all overwrought about it, saying, well, we've got - antitrust can't possibly keep up with this. You can't keep up with automobiles. You can't keep up with computers. You can't keep up with, you know, whatever the current technology is.

But ultimately, antitrust has proven able to adapt and to, I think, engage in good, sensible enforcement.

KING: And just quickly, tech companies have said, look - you come after us, dismantle us, foreign tech firms will fill the void. Does that worry you, or is it not your job to be worried about that?

HOFFMAN: So we focus on competition policy, and we don't view it as our - you know, within our expertise or within our mandate to worry about industrial policy or anything like that or trade policy. There are other parts of the government that do that. We look at competition, and our goal is to protect U.S. consumers, American consumers from anticompetitive harm, and so if we find that harm, we will take action.

KING: Bruce Hoffman is director of the Bureau of Competition at the U.S. Federal Trade Commission.

Thank you, sir, for your time.

HOFFMAN: Thank you. Transcript provided by NPR, Copyright NPR.