“Instead of using antitrust policy to diffuse the huge market power of big tech, the antitrust division, captured by big tech interests, is rushing through antitrust policies that increase the already enormous power of big tech. . “
Historically an esoteric area of law, in recent years antitrust policy has gained wider attention as a tool to curb the exercise of monopoly market power, especially by the big tech behemoths. Congress reports on both Democratic and Republican sides of the aisle, multiple legislative initiatives to reform U.S. antitrust law and a recent delivered by Senator Amy Klobuchar (D-MN), Chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights, are some indicators of this trend. In this sense, a public outcry has erupted over rumors of appointments to the head of the Department of Justice’s (DOJ) antitrust division of candidates representing big tech interests, such as Karen Dunn (Apple, Amazon), Renata Hesse (Google, Amazon), Susan Davies (Facebook), and against Deputy Attorney General Lisa Monaco (Apple, Google) involvet in deliberations on the appointment of a Deputy DOJ Attorney General (AAG) for antitrust.
A parallel bipartisan trend recognizes the key importance of ensuring western leadership in cutting-edge technologies such as 5G and artificial intelligence (AI) to U.S. interests and national security. The technology is protected by intellectual property (IP) rights. Thus, the National Security Commission on Artificial Intelligence (NSCAI) of March 2021 report stressed the United States’ lack of “comprehensive intellectual property policies to incentivize investment and protect the creation of [AI] and other emerging technologies. The report notes that China is on the verge of “filling the void” left by weakening United States intellectual property protections, especially for patents, as the United States has lost its “comparative advantage in guarantee of stable and effective property rights in new technological innovations…. [a] political asymmetry [that] has multiple important national and international implications for the United States ”.
President Biden fully understands the key importance of technological leadership to American interests. For example, in a word last month he noted:
“You know, we invested more in research and development than any other country in the world and China was number eight – or, sorry, number nine. We are now number eight and China is number one. I can’t let this go on. The future will be determined by the best minds in the world, by those who cross new barriers. “
Join the dots
It is difficult to reconcile the above two trends with recent developments in the DOJ’s antitrust division. Let me connect the dots for you:
- Since the iPhone’s launch in 2007, big tech has spent a lot of money lobbying fiercely for policies that devalue high tech like LTE and 5G (these are protected by standard essential patents – or SEP). Why? Because they prefer to enjoy a cheap ride (or better yet, a free ride) while benefiting from valuable technology developed by others. Some of the powerful participants in this well-funded advocacy effort include Apple, Google, Cisco, Intel, Microsoft, Samsung and the many trade associations they fund and operate, such as the ACT App Association and the House of Progress launched by the “former” chief lobbyist for Google.
- As indicated, for example, in the Miter report, China uses several support and subsidy mechanisms to support Chinese companies’ investments in telecommunications R&D and the development of standards such as 5G. Non-Chinese companies that wish to stay in this race do not benefit from such subsidies – many of them depend on SEP licenses to continue the investment cycle. Therefore, policies that devalue SEPs directly weaken US leadership in 5G.
- The Antitrust Division does not yet have a political leadership in place – an Antitrust AGA has yet to be appointed, authorized or confirmed by the Senate as part of the normal US political process. Nonetheless, the antitrust division appears to be forging ahead with proactive policy positions that support big tech financial interests while undermining efforts to maintain non-Chinese leadership in 5G. Such moves will block future Antitrust AAG even before its first day on the job.
For example, in mid-April, Acting AAG Powers told reporters that the division was reclassifying its IEEE 2020 Case Review Letter by moving it to the comments section of its website (where it cannot be found). The 2020 letter corrected false statements from an earlier DOJ letter that were used by the Chinese government to facilitate the theft of American technology. This chain of events raised serious bipartisan concerns by Senators Coons (D-DE) and Tillis (R-NC) as well as by a bipartisan group of former democratic and republican Head of DOJ, FTC and USPTO.
Then, on June 3, Acting AAG Powers reportedly said the division would “soon” be releasing reviews of policies that cut across competition and intellectual property law, alluding to those involving SEPs. The implications of this comment are likely to be new policies that devalue PES.
All of these announcements came out of nowhere, without public debate.
- Who is behind all these policies that compromise the interests of America’s tech leadership while the lights of the AAG antitrust office are still out? The answer is clear. While public outcry against big tech advocates may keep them from getting an AGA antitrust appointment (or not – we’ll see), in the meantime, they’re working hard to set up irreversible political issues without oversight. Senate or public debate. Apple lawyer Karen Dunn is a close friend of AG Garland (she helped him prepare for his Senate confirmation). Google and Amazon lawyer Renata Hesse, who wrote the 2015 IEEE policy statement misused by the chinese government, is the former boss of the rumored-AAG-nominated Jon Sallet. And, a long-time Special Advisor to the Antitrust Division for Intellectual Property, Françoise Marshal, joined Apple last year and has now worked with colleagues and friends in the division for decades to advance political positions that benefit Apple’s bank account.
Instead of using antitrust policy to diffuse the huge market power of big tech, the antitrust division, captured by big tech interests, is rushing through antitrust policies that augment the already enormous power of big tech.
Big Tech shouldn’t be pulling the strings
These dynamics are unacceptable. They are detrimental to American interests vis-à-vis China. They mislead voters who have relied on election promises to limit the power of big tech, by providing financial support from the U.S. government to companies that are the strongest in the world (and already doing very well for them- even without federal government assistance).
Finally, and even worse, these dynamics are undemocratic and remind us of the regimes and administrations that the current administration despises. Antitrust policy should be developed by Senate-confirmed antitrust GAAs, ideally after open public debate (of the type conducted by former GAAs from all jurisdictions). The mad rush to put political issues in place before leadership is in place without open debate suggests that big tech and their lawyers are well aware that what they are doing is wrong. Of all the administrations, it is hard to believe that the Biden administration allows such settlers “Oklahoma earlier“Exercise to take place. Equally surprising and ironic is the sight of an antitrust agency proactively engaging in blow of a cannon.
David Cohen was admitted to practice in New York in 1999. He is also admitted to practice in New Jersey, the District of Columbia and before the USPTO. His experience includes strategic litigation planning; global project management; monetization of patents; FRAND license; development and management of the legal and intellectual property department; licensing and patent negotiations; global antitrust; development and acquisition of a portfolio of strategic patents; and IT strategy and design.
For more information or to contact David, please visit his Company Profile Page.