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Oct. 10, 2020, 8:49 a.m. EDT

If the Democrats win the Senate, Big Tech better be ready for a bigger fight

Senators set to become leaders under a Democrat majority have sought to establish new antitrust law, break up tech companies

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By Jon Swartz


MarketWatch photo illustration/iStockphoto, Getty Images
Democratic senators such as Elizabeth Warren of Massachusetts have set their sights on Big Tech.

If the Democrats manage to win control of the Senate in the coming election, the pressure on Silicon Valley would only grow.

Democratic senators have signaled a willingness to make substantial changes to antitrust law and advocate breakups of the largest American tech companies, including campaigning for president on the issue. If the party can flip four seats, those same senators — such as Amy Klobuchar of Minnesota and Elizabeth Warren of Massachusetts — could be in position to act against some of their favorite targets, including Facebook Inc. /zigman2/quotes/205064656/composite FB -2.04%  and Google parent Alphabet Inc. /zigman2/quotes/202490156/composite GOOGL -1.34% /zigman2/quotes/205453964/composite GOOG -0.64%

/zigman2/quotes/205453964/composite GOOG -0.64% If Democrats wrest control of the U.S. Senate on Nov. 3 (or in the following days and weeks it takes to count ballots), it could lead to the first major changes in antitrust law in a generation, Joel Mitnick, a former Federal Trade Commission trial lawyer who specializes in antitrust issues, told MarketWatch.

A late July Congressional hearing, in which David Cicilline, a Democrat from Rhode Island, chairman of House Subcommittee on Antitrust, and other Democrats grilled three of the four companies under investigation, could offer a template on how a Democratic-controlled Senate would approach the Big Four. A report from Cicilline’s subcommittee, expected soon, reportedly recommends splitting up companies and limiting their future acquisitions.

Read more: House Democrats proposing to split big technology firms, reports say

Klobuchar is in line to chair the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights, where she is the ranking Democratic member, and has held hearings and proposed new antitrust law. A Senate Judiciary hearing last month offered the clearest “intent from Klobuchar and [Sen. Richard] Blumenthal [of Connecticut] to change the antitrust standards in ways that benefit prosecutors and claimants,” Carl Szabo, vice president and general counsel of NetChoice, a trade association with two dozen e-commerce members that include Google, Facebook, eBay Inc. /zigman2/quotes/204653455/composite EBAY -3.17% , and Airbnb told MarketWatch.

In March, Klobuchar introduced the Anticompetitive Exclusionary Conduct Prevention Act, which “prohibits anticompetitive exclusionary conduct that risks harm to the competitive process.” The bill — co-sponsored by Blumenthal and Sen. Cory Booker, D-N.J. in August — introduced the Monopolization Deterrence Act to crack down on monopolies that violate antitrust law. And in June, Klobuchar and Sen. Chuck Grassley, R-Iowa, introduced legislation to help prevent anticompetitive mergers, the Merger Filing Fee Modernization Act.

“They want to make more rules enforceable; make it easier to bring these actions,” Szabo said.

The Trump administration is reportedly investigating Google, Facebook, Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -0.07%  and Apple Inc. /zigman2/quotes/202934861/composite AAPL -1.01%  for antitrust issues, amid concurrent state inquiries and lawsuits from competitors. The Justice Department is reportedly seeking to file suit against Google in October, while the Federal Trade Commission hopes to take similar action against Facebook by the end of the year, according to multiple reports.

For more: Big Tech is turning on one another amid antitrust probes and litigation

The presidential candidates are not actually that far apart on their statements on tech companies, but the Democrats’ relationship with Big Tech has changed since the Obama administration’s policies that alternately promoted, permitted, or ignored the industry. Robert Kaminsky, an analyst at Capital Alpha Partners, expects a Biden-Harris administration would seek tech-focused legislation, but focus more on consumer data and platforms than antitrust law.

See: Here’s where Biden and Trump stand on antitrust, social media and other tech issues

“We see a Democrat Senate providing a Biden administration with a better chance of passing privacy legislation and making changes to Section 230 liability protections, but jurisdictional issues within Congress still present a challenge to finding consensus,” Kaminsky told MarketWatch.

“We don’t see antitrust as a huge White House focus in a Biden presidency,” financial analysts at Beltway political newsletter Height Commentary wrote, adding that they would expect Biden’s appointees at the Justice Department and FTC “to take a much more aggressive stance than past administrations.”

The X-factor could be Warren, who as a presidential candidate loudly advocated for the breakup of Facebook and Google. Whether as a member of a Biden administration, or in her current role in a Democratic-controlled Senate, Warren has shown no hesitancy in advocating drastic measures.

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