First, a little table-setting: Bedoya’s nomination was considered along with three others – Jessica Rosenworcel for FCC Chair and two nominees for the Department of Commerce. The hearing was well-attended by Committee members, who directed the majority of their questions to Rosenworcel. (Yes, net neutrality, broadband access, and the “homework gap” all got more attention than privacy.) All four current FTC Commissioners attended the hearing in person, in a bipartisan show of support for Bedoya, though Bedoya attended remotely due to a recent exposure to COVID.

Here are some takeaways from Bedoya’s portion of the hearing.

• He appears likely to be confirmed, even if largely along party lines. Although Senator Wicker made a reference to Bedoya’s “strident” views and Senators Lee, Cruz, and Sullivan slammed his “extremist” tweets (see below), most of the questions (from 18 Senators!) related to Bedoya’s area of expertise (privacy), where there is more alignment between the parties than in other areas. He handled the questions well, and repeatedly expressed support for collaboration and bipartisanship (e.g., specifically mentioning that he wants to work closely with Commissioner Wilson on privacy). Democrats have the votes (in the Committee and on the Senate floor), even if they ultimately have to call in V.P. Harris to break a tie.
• He spoke about his nomination and the issues in personal and emotional terms. Bedoya highlighted that he and his family were welcomed into this country 34 years ago. He talked about his experience as a Senate staffer, learning about the terror and harm caused by stalking apps from a shelter for battered women. He realized then and believes now that “privacy is not just about data, it’s about people.” His goal as a Commissioner would be to make sure the FTC protects people, and to help both consumers and businesses manage the multiple crises facing the country – a COVID crisis, a privacy crisis, and a small business crisis.
• He appears likely to vote with the majority on many (or most) issues. No big surprise here, but when asked his views about various issues, he consistently supported positions that Khan, Slaughter, and (his predecessor) Chopra have supported – federal privacy legislation, Magnuson-Moss privacy rulemaking if Congress doesn’t act, pushing back against the “unprecedented consolidation” that is forcing small businesses to close, streamlining the FTC’s rulemaking and subpoena processes, reducing the power of the platforms, and reining in tracking technologies like facial recognition. As to the latter, he said he would not support banning facial recognition technologies altogether, since some applications assist with benefits like public safety and healthcare. However, he would support banning facial recognition technologies that are hidden, that lack consent, or that collect, use, and share data without limits.
• He’s a real-live privacy expert. He clearly has the credentials, starting with his work as a Senate staffer and continuing through his years at Georgetown Law as a professor and head of a privacy think tank. But he also quickly and confidently answered all questions related to privacy – from the need for privacy legislation generally, to his views on Senator Schatz’s “duty of loyalty” and Senator Markey’s proposal to amend COPPA, to the lines he would draw on facial recognition (see above).
• He wrote some controversial tweets, and a number of Republicans seem poised to vote “no” on his confirmation. Senator Sullivan cited a tweet from Bedoya calling the 2016 Republican convention a “White Supremacist rally.” Cruz cited tweets about ICE as a “domestic surveillance agency” and a retweet involving critical race theory and white supremacy. He also called Bedoya a “left wing activist, bomb thrower, extremist, and provocateur.” Lee ran through a series of supposedly “yes or no” questions in rapid succession, and accused Bedoya of being evasive when he tried to qualify his responses. And Wicker referred to Bedoya’s “strident” views, as noted above. As to the tweets, Bedoya apologized, saying that it was “rhetoric” and that he would put aside any partisan views if he became Commissioner. However, these Senators (and perhaps other Republicans) seem poised to vote “no” on Bedoya’s confirmation, and some have said they plan to place a “hold” on the process, which could slow it down.
• If confirmed, he could help reduce tensions at the Commission. With acrimony among the Commissioners currently at unprecedented levels (see our recent post here), adding Bedoya to the mix could help reduce the tensions (despite the tweets). He’s known to be collegial, he worked across the aisle as a Senate staffer, he repeatedly invoked bipartisanship at the hearing, and all of the sitting Commissioners (Democrats and Republicans) showed up at the hearing to support him. That augurs well for the dynamics at the Commission, even if the votes remain split along party lines.

We will continue to monitor progress on Bedoya’s nomination and post updates as they occur.

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Virtually unanimous was the sentiment to increase funding for the Federal Trade Commission and the Antitrust Division at the Department of Justice. So was the desire to accelerate antitrust litigation and the idea of easing the burden on the government to stop mergers. Consensus seemed close as well on making data more portable for consumers who switch vendors and products and on improving the interoperability of apps and devices. Proposals to create a new federal agency to regulate Big Data met with less favor, and arguments to break up large firms did not capture the day. The Commission emerged as the agency most likely to see an expansion of authority.

The hearing was the first of a series planned to develop legislation based on the extensive investigation of competition in Big Tech that the subcommittee had conducted in the last Congress. Chairman Cicilline opened with a warning that dominant companies have too much power and it needs to be curbed. “Mark my words, change is coming. Laws are coming.” He cited dominant firms’ acquisitions of nascent competitors, contractual conditions that platforms impose on other vendors, disadvantaged news media, and measures that other countries have taken to rein in the companies. Perhaps most importantly, he concluded by noting the agreement of Ranking Member Buck on many of the proposals.

For his part, Mr. Buck recounted examples of conduct attributed to Big Tech during the investigation last year, including allegations of collusion, unfair competition against vendors on platforms, markups added to competitors’ products and actions to silence political speech. He then expanded on the remedies he proposed. First, he advocated data portability and recalled that one of the most popular laws Congress ever passed was the Telecommunications Act of 1996, which allowed consumers to keep their phone numbers when they switched carriers. Second, he extolled interoperability – allowing “competing technologies to speak to one another” – so consumers are not locked into one choice. Third, he supported more robust enforcement of the antitrust laws, although he cautioned against a Glass-Steagall Act for the internet (referring to proposals to prevent platforms from competing with vendors on them).

Witnesses representing a cross section of the political spectrum offered testimony ranging from a defense of modern antitrust doctrine to a proposal that Congress create a regulator like the bodies that once controlled railroad and telecom. The majority of the Committee was clearly between maintaining the status quo and replacing antitrust enforcement. Ranking Member Buck said, “the key is to make sure that we do not take a chainsaw to the whole economy, but rather we should implement a scalpel-like approach for Big Tech.” The odds of some sort of surgery loom large.

Background

Both the Chairman and the Ranking member issued reports in late 2020. The Majority Staff Report, Investigation of Competition in Digital Markets,[2] summarized more than a year of investigation that spanned seven hearings and amassed 1.3 million documents, “the most significant congressional antitrust investigation in more than a generation,” said Chairman Nadler at yesterday’s hearing. In over 400 pages the Report reviewed market structure, entry conditions, innovation, privacy, press, and economic liberty in light of modern technology and the large firms that have become identified as its leaders. Although focused on Big Tech, the recommendations could affect competition and consumer protection throughout the economy. The Staff Report advocated measures such as these:

a. Restoring Competition in the Digital Economy

• Structural separations and prohibitions of certain dominant platforms from operating in adjacent lines of business;
• Nondiscrimination requirements, prohibiting dominant platforms from engaging in self-preferencing, and requiring them to offer equal terms for equal products and services;
• Interoperability and data portability, requiring dominant platforms to make their services compatible with various networks and to make content and information easily portable between them;
• Presumptive prohibition against future mergers and acquisitions by the dominant platforms;
• Prohibitions on abuses of superior bargaining power [and] due process protections for individuals and businesses dependent on the dominant platforms.

• Strengthening Section 7 of the Clayton Act, including through restoring presumptions and bright-line rules, restoring the incipiency standard and protecting nascent competitors, and strengthening the law on vertical mergers;
• Strengthening Section 2 of the Sherman Act, including by introducing a prohibition on abuse of dominance and clarifying prohibitions on monopoly leveraging, predatory pricing, denial of essential facilities, refusals to deal, tying, and anticompetitive self-preferencing and product design; and
• Taking additional measures to strengthen overall enforcement, including through overriding problematic precedents in the case law.

• Restoring the federal antitrust agencies to full strength, by triggering civil penalties and other relief for “unfair methods of competition” rules, requiring the Federal Trade Commission to engage in regular data collection on concentration…; and
• Strengthening private enforcement through elimination of obstacles such as forced arbitration clauses, limits on class action formation, judicially created standards constraining what constitutes an antitrust injury, and unduly high pleading standards.

• More Resources for Antitrust Agencies - The report makes a good case for the need to strengthen our nation’s antitrust agencies with regard to resources.
• Data Portability - Conservatives should consider supporting very limited legislative changes to provide consumers with a data portability standard that is similar to transferring cell phone numbers, as mentioned above. However, the language must be exact to prevent regulators from stretching Congressional intent to regulate Internet data companies as public utilities under Title II of the Communications Act of 1934, similar to net neutrality.
• Reforming the Burden of Proof in Merger Cases – The evidentiary burden of proof that antitrust agencies must meet in many merger cases has become insurmountable. As a result, our nation’s antitrust enforcement agencies have built a wall, making it nearly impossible to bring an enforcement case on potential competition grounds in digital markets, granting near-total immunity for Big Tech. …. Congress should reaffirm to the antitrust enforcement agencies that the standard given to the agencies by Congress under the Clayton Act Section 7 allows them to challenge a merger when “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.” The standard does not specify price change as our enforcers’ only way to review cases where harms to innovation and potential competition exist, and neither does it raise the evidentiary bar on potential completion versus actual competition. In other words, the antitrust agencies raised the bar on themselves, with help from the courts, in the years since Congress adopted the Clayton Act.

However, instead of issuing new bright line rules and creating a large regulatory framework to govern these behaviors, we believe the solution is to offer a thoughtful plan that ensures our nation’s antitrust enforcers are following Congress’ original intent regarding the burden of proof needed to bring and win cases involving these theories of harm.

The agreements and disagreements in last year’s reports were on display in yesterday’s hearing. The agreements could well signal the most significant changes to antitrust laws in decades. Whether the majority and minority can come together on the open issues remains less likely.

[1] Hearing video available at https://judiciary.house.gov/calendar/eventsingle.aspx?EventID=4382.

[2] Available at https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf?utm_campaign=4493-519.

[3] Joined by Doug Collins, Matt Goetz and Andy Biggs, Available at https://buck.house.gov/sites/buck.house.gov/files/wysiwyg_uploaded/Buck%20Report.pdf.

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