Our special series More than money: The cost of monopolies in America is a week-long exploration of the hidden power of monopolies in the U.S., and the evolution of antitrust law over the past 200 years.
The idea that monopolies may not be great for the United States has bipartisan cache right now, from Republican Sen. Chuck Grassley of Iowa, to Democratic Sen. Amy Klobuchar of Minnesota.
But does Congress have the political will to make major changes to antitrust law?
Sen. Amy Klobuchar is the chair of the Senate Subcommittee on Competition Policy, Antitrust and Consumer Rights. She’s also on the Judiciary Committee. Last month, the Judiciary Committee passed the American Innovation and Choice Online Act, an effort to target big tech companies for potential antitrust violations.
The bill proposes giving federal agencies the authority to issue civil penalties for anti-competitive activities in the tech sector.
CHAKRABARTI: Senator Klobuchar, welcome to On Point.
KLOBUCHAR: Well, thank you. It's wonderful to be on.
CHAKRABARTI: So, Senator, as you know, we've been taking a look all week at this question about whether the consumer welfare standard in terms of viewing the danger of monopolies is too narrow. And whether we need to broaden it to, you know, do monopolies harm democracies? First of all, I mean, how would you answer that basic question?
KLOBUCHAR: Well, I'd step back a little bit, because we, for a very long time in this country, have had laws on the books that have allowed us to rejuvenate capitalism, basically way back to the start of this country when people came to America because they wanted to have a freedom of religion, freedom of political beliefs, and, yes, freedom of entrepreneurship. ... So what happens? Fast forward, we get the Sherman Act, the Clayton Act, and about every 20 years some antitrust bill is passed to kind of get at the problems of the day.
And what has really gone wrong and gone awry is that at the same time, you're seeing mega consolidations and huge new industries like tech. You have really a Congress that's paralyzed when it comes to antitrust and you have, most importantly, a court that increasingly interpreted the laws as, you know, in a narrow, conservative way.
I don't believe for a second, if you look at the language from the Sherman Act, back when Senator Sherman of Ohio introduced it, that he would have ever thought that we would have a company like Google with over 90% of the market share, seemingly untouchable. And so, what is going on right now is really on several fronts.
One, I'm working with Senator Grassley and others to really up the budgets of these agencies and enforce the law. ... You cannot take on the biggest companies the world has ever known with Band-Aids and duct tape. Two, yes, changes to the law would be helpful. I would go into everything from changing the burden for the biggest mergers so that they have to show that, in fact, it doesn't hurt competition to putting rules of the road in place.
And then the third thing about this is just making sure that we have accountability when it comes to enforcing the laws and that we're actually doing things to help consumers, because it's not one size fits all. You can make major changes to the antitrust laws, but you can also ... patents and pharma products. Look at some specific things you can do. Don't put your own products at the top of your search engine. There's some specific things you can do in highly concentrated areas.
CHAKRABARTI: Right? We talked about beef at the beginning of this week, but I should note that, I mean, you wrote a bestselling book about this, right? It's called Antitrust. And perhaps without surprise, the very proposals that the Senate is considering that you just talk to us about are receiving a lot of pushbacks from particularly the tech sector.
And I think just this week you gave a speech kind of addressing some of that pushback, like the like the tech companies are saying, hey, look, you know, if federal regulation gets to be stronger and more precise in the tech sector, that it's going to be a threat to national security. Now, how do you respond to that?
This has been going on since the beginning of capitalism.
KLOBUCHAR: This has been going on since the beginning of capitalism, basically, when Adam Smith warned about the unbridled power of what he called the standing army of monopolies. And my favorite cartoon, I have a bunch of cartoons in the book to try to make this interesting, is one of these huge, bloated trusts. Back then it was Standard Oil and the sugar trusts, the rail trusts looking over the U.S. Senate, you know, like they owned them, which they did. But the senators weren't even elected back then.
So, let's fast forward. Where are we now, where we have so much big money coming in. $70 million spent by the tech industry on lobbying last year against my bill. I've got three lawyers, Meghna. All right, so it's kind of a David Goliath situation. $70 million. And yet we were still able to get it through the committee, the Judiciary Committee. So, I just look at this as, of course, we're going to see pushback. We're going to see a bunch of bogus arguments.
One of my favorites is Amazon. Keep claiming that after they've copied products of people that are advertising on their site, then go around and claim, Oh, if we do something about that, then, you know, we'd have to get rid of Amazon Prime, which is like saying you're going to get rid of apple pie. That just isn't true.
We made it very clear that subscription services are not affected by this. They know it's not true. One of their own lobbyists pretty much admitted it wasn't true to a news organization. So that's what we're dealing with.
And it really does make me pause and think we want these platforms to deal with misinformation when they're putting out misinformation on our bills. I have respect for these companies. I'm glad I have an iPhone. I've got a Fitbit. I am so glad we've got cool products and innovation.
We're employing people. But with history as a guide, it's our job in the federal government to sometimes address the rules of the road. And when we haven't even passed a competition bill since the advent of the Internet, that applies to tech.
You know, we have problems. And so that's why, as you can see, I'm revved up about it. I believe in capitalism. I do. And that's why I believe that you've got to make sure you have a truly competitive market.
And big monopolies, whether they're pharma, increasing prices or whether they are the tech companies, basically telling the news organization, sorry, we're not going to give you enough money for content like they did in Australia. And if you make us, we're going to leave.
With history as a guide, it's our job in the federal government to sometimes address the rules of the road.
Now, they ended up not doing that, but they literally threatened to leave an entire industrialized nation. That's what monopolies do and it's our job to put some rules of the road in place so they can't dominate all areas of our economy.
CHAKRABARTI: So I take your point on all of those fronts, and I'm also still interested in hearing a little bit more from you, if you could, Senator, about, you know, it's there's really not that much of a divide between our economy and our democracy.
The two are dependent on each other for the nation's overall well-being. So do you think the rise of all these recently in recent years, of these super consolidated sectors that we're seeing, is having a negative effect on American democracy?
KLOBUCHAR: I do. And one of the problems which you correctly identified at the beginning of the interview is when these courts interpret things so narrowly, you're not looking at other impacts from consolidation. Let's look at one and then I'll get to democracy, privacy, security.
We are never going to know what WhatsApp or Instagram could have developed for privacy and bells and whistles and things like that, because Facebook bought them, in the words of Mark Zuckerberg, I'm quoting him exactly from an email, 'I'd rather buy, then compete.'
Well, the same thing applies when it comes to democracy, when you have everything filtered through the profit-making desires of companies, so that they are giving algorithms more weight, they're literally putting more weight, multiple times more weight on angry emojis than they are on a simple thumbs up, like.
You're going to create problems in democracy, or when certain people aren't seeing other information, because it didn't fit the algorithms of how the companies want to make advertising money.
You hurt a democracy. And so that's why basically making this more transparent, figuring out what they're doing with algorithms, potentially having them be liable when not just for comments on the Internet, they're not liable for that, but when in fact, they are actually making money off of repeating and unprotected speech, violent speech, discriminatory speech. That's a whole [other] thing. So that's a piece of this.
The other piece of this, which I got at earlier, is it's better for our democracy when you have competition. It's better for wages because employees don't have to go to one big bad company to try to deal with them for what their wages should be. It's better for the exchange of information. And as I noted, it's better for the First Amendment.
It's better for our democracy when you have competition.
Because they are basically under paying content providers, as in journalists, and then using their stuff. And because they're monopolies, it's very hard for those news organizations to take them on, which is another bill that I have with another Republican.
One thing we haven't noted is this stuff is very bipartisan. Samantha Bee called my exclusivity bill, the Ocean's 11 of co-sponsors. Because it ranges from Chuck Grassley to Dick Durbin to Cory Booker to Mark Warner to Senator Daines to Cynthia Lummis to Josh Hawley, to Mazie Hirono. And so, we have a broad spectrum of people who don't always agree on a lot of stuff, but they do believe in a competitive market.
CHAKRABARTI: So two more quick questions and then I'll let you go. You know, the focus on tech, not just in this conversation, but more broadly right now is warranted. For all the reasons that you emphasized just now, Senator, I'm also thinking more broadly about when what monopolies do to communities, because we started this week talking with ranchers in various parts of the West.
And, you know, they were saying that because of the choke hold that those meatpackers have in the middle of the beef market, that it's actually like shutting down entire small communities. So I just wanted to make that quick point.
KLOBUCHAR: It is. And actually, a big magnifying glass was put on it during the pandemic because then you could see that if one closed down, there was no market for them to go to. No place for them to go. And so that's why a broader approach to antitrust, as well as specific market things like AG I mentioned earlier, is good.
That's what I would really like to do if I could wave a magic wand is to make generic changes to our antitrust laws that basically say, look, if it's a big merger, no matter what sector you're in, you have a bigger burden to meet to prove that it doesn't hurt competition.
And let's make it easier to go after discriminatory conduct against competitors. Those kinds of things would have the most impact. But I haven't you know, I have authors. I have co-sponsors, but we're not yet ready to go there bipartisan. So I've got to be practical and look at what I can actually get done.
CHAKRABARTI: So last question for you, Senator, and I'm going to sort of try and lean on both what you wrote in the book and what's currently happening with your bills and what's actually gotten through Judiciary as well. Because what made a difference a century ago, as you well know, was that the courts were very active in pushing back against monopolies in the United States.
I wonder if you see that possibility existing at all now? Because I predict that, you know, if these bills, any one of them get signed into law, we already know. I mean, Mark Zuckerberg has said internally at Facebook that he will go to the mat and fight to the death against any kind of really strong federal action on Facebook.
And right now on the Supreme Court, I don't know if the makeup is conducive to vigorous antitrust defense of antitrust regulation, because Justice Gorsuch, even before he ascended to the court, I mean, he kind of announced himself as a foe of the administrative state. So what do you think?
KLOBUCHAR: Look, I am the one senator that asked every single nominee about antitrust, and I am very well aware, especially in the case of Kavanaugh and Gorsuch, of their views. Although Kavanaugh, on one case, before the court, actually sided with the people, like at the time Justice Breyer and Kagan and others that are more in favor of, I believe, the original intent of the Sherman and Clayton Act.
So but overall, they are so conservative in antitrust, they literally said, raise our hand. Look how we embraced the Bork Doctrine. And so pick us for the court. And that's what happened, one of many reasons.
And so when I look at this, I actually think the opposite. I think we need new laws, because if we just go with the current laws and we don't go with the times and the changes we need to make, we're just going to let them keep interpreting these laws in a more and more ridiculously narrow basis.
As Bill Baer, the former head of antitrust under Barack Obama, once said, deals were coming to him, getting out of the boardroom, which never even should have gotten out because they could see what was happening. It's hard to even bring a case for a plaintiff or the government if you actually see what these Supreme Court rulings are.
And so that's why I think our only hope is to put some new laws in place, to show where Congress is coming from, to show that this is clearly bipartisan to the court. And as long as we're smart about these laws and we have worked on them extensively for a long, long time, they will stand up in court because they're simply new laws that Congress has every right to pass.
Our only hope is to put some new laws in place, to show where Congress is coming from, to show that this is clearly bipartisan to the court.
And remember, the antitrust, the body of antitrust law since early on, the founders said, look, we care about this a lot, but let's let Congress do it, has always been statutory in nature.
So we have every right to change the statute when in fact the antitrust laws are a shadow of their former selves right now because of the court interpretations. That's why I feel positive about things being held up in court if we actually would get our act together and pass something.
This segment aired on February 18, 2022.