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How Congress could take on 'monopoly power' in Big Tech

Lawmakers told Apple, Google, Facebook and Amazon their clout could be illegal. What can Washington do about it?

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Facebook CEO Mark Zuckerberg testifies remotely in Wednesday's hearing about antitrust law and the tech industry.

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The CEOs of Amazon, Apple, Facebook and Google may have been in the comfort of their own homes (or bland corporate offices) Wednesday, but they faced uncomfortable questions from lawmakers on both sides of the aisle. The grilling came as part of a hearing on potential antitrust law violations, held by members of Congress in the House Subcommittee on Antitrust, Commercial, and Administrative Law.

Lawmakers paraded examples of potentially anticompetitive behavior from the tech giants, leaving the chief executives to scramble for generalized responses in which they usually didn't admit knowledge of the activity or disputed its characterization. "I disagree with your premise" was an oft-repeated refrain. 

There was also a fair amount of posturing over issues that split along party lines. Lawmakers accused Facebook, for example, of either silencing conservative media outlets or abetting Russian election manipulation. As Rep. Jim Jordan was repeatedly instructed to stop talking out of turn and put his mask back on, the Ohio Republican shouted about issues as far afield as the treatment of former national security adviser Michael Flynn.

Still, big questions about fairness in the tech industry -- whether the giants are too big, and if they should be broken up -- remained in focus at the hearing.

"These companies as they exist today have monopoly power," Rep. David Cicilline, a Democrat from Rhode Island, said at the end of the hearing. "Some need to be broken up, all need to be properly regulated and held accountable. We need to ensure the antitrust laws, first written more than a century ago, work in the digital age."

How Congress will turn its concerns into action, of course, is another question entirely. Here's why lawmakers are so concerned and what they might be able do about it.

What was the point of the hearing?

Lawmakers dug into whether giant tech companies have too much control over the industry as a whole. With that power, tech giants can shut down competitors or warp markets. Lawmakers worry that such power could let Big Tech stifle innovation and reduce consumer choice, which could push up prices. 

That's what we typically call monopoly power, and it isn't just a board game in which one person slowly grinds everyone else to dust by charging rent on Broadway. Monopoly power can harm regular people by making goods and services cost more, keeping wages stagnant and stopping new products from reaching the market. 

It's also illegal to pursue or maintain a monopoly with nefarious means under federal antitrust law, including the Sherman Antitrust Act and others. 

What's the Sherman Antitrust Act?

The Sherman Antitrust Act was passed to stop companies from taking improper steps to either become or persevere as monopolies. That includes striking backroom deals or entering into conspiracies to fix prices or wages.

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The cornerstone of US antitrust legislation, the law dates back to 1890, when the federal government was breaking up the industrial giants of the late 19th century, also known as the Gilded Age. Huge "trusts" monopolized the steel, meat and, most famously, oil industries. 

The trusts controlled every aspect of how these products were brought to market and found ways to give themselves unfair advantages over competitors to preserve their status, federal investigations found. Journalist Ida Tarbell documented how Standard Oil, for example, leveraged its power to pay less to ship its products by rail than competitors did.

What are some of the things Big Tech has reportedly done?

Lawmakers came with evidence on Wednesday, describing examples of potentially anticompetitive behavior from each of the tech companies represented at the hearing.

The examples included Amazon's purchase and destruction of competitor Diapers.com. There was also Facebook's power to acquire competitors like Instagram and WhatsApp, or to force them to compete with similar products from the deep-pocketed social network. Lawmakers zeroed in on Google, especially the company's ability to dominate competitors in the world of online advertising because it also owns an advertising platform. 

Finally, Apple didn't escape without questions about its control of the company's App Store, which gives it the ability to squeeze out apps that compete with its own services.

Can Congress break up a tech company?

Lawmakers pondered whether the tech giants should be split up into smaller companies to improve competition. 

What would that look like? Instead of Google being an advertising powerhouse that also displays a huge proportion of online ads through its search engine, for example, it could hypothetically be split into one company that sells ad space and another company that places ads.

Congress can't take this step on its own. The Sherman Act and other antitrust laws are enforced by the US Department of Justice, which can investigate companies, fine them and take them to court. In 1998, the government initiated a long-running case that restricted Microsoft's activities in the tech industry for years. But lawmakers can still take action to make enforcement more likely.

OK, but can Congress really do bipartisan?

It's unclear if Congress can enact bipartisan legislation now, at a time when cooperation is in short supply between the Democrats and Republicans. But there are signs lawmakers really could take action. Members of Congress on both sides of the aisle took the issue of Big Tech's power seriously on Wednesday and left no doubt that they were concerned.

What would bipartisan action look like? Congress could write new laws that strengthen antitrust laws and tailor them to an online economy. Lawmakers could also come up with new ways to fund regulators, devoting more resources to keeping companies accountable when they're in violation of current laws.

If they don't do anything, someone else might. US President Donald Trump has also called for action. In a Wednesday morning tweet, he said Congress needs to take action against Big Tech, though he didn't specify what that action should look like. If lawmakers don't do something, Trump tweeted, "I will do it myself with Executive Orders."