DOJ Concluding Probe of Search Algorithm Price-Fixing Scheme
DOJ will soon conclude a criminal case against companies using search algorithms to effectuate price fixing, creating an anticompetitive effect, Assistant Attorney General Makan Delrahim told lawmakers Wednesday. Calling the case “the first of its kind,” he declined to name the companies involved, during a hearing on tech platform antitrust concerns. “We actually have a case, a criminal case, that’s going to be coming to a conclusion in the next two weeks,” he told the Senate Antitrust Subcommittee. Delrahim answered questions about various investigations of Google throughout the discussion.
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Chairman Joe Simons hinted the FTC is closely scrutinizing Facebook’s recent hack. “If there is news about data security or a data breach in the news, it’s public already. Then we are concerned about it, and we are looking at it,” he said, responding to questions about Facebook. He testified the U.S. should pursue privacy legislation in a way that “doesn’t reduce competition.”
Ranking member Amy Klobuchar, D-Minn., asked Delrahim what Justice learned from AT&T buying Time Warner (see 1809280001). Declining to address a specific case, he said there's broad agreement that vertical mergers don’t pose the same competition concerns as horizontal mergers.
Simons repeated a point he made during his Senate confirmation. He told the panel that the place to look for antitrust conduct is where there is potential for significant market power, “so that description would describe some of these online platforms. Those are the places you would look.” It’s a commission priority, he said.
Chairman Mike Lee, R-Utah, said the meaning of antitrust laws should be fleshed out, warning against doing so through administrative rulemakings. FTC Commissioner Rohit Chopra recently called for a rulemaking to define unfair methods of competition (see 1809070042).
Big by itself isn't necessarily bad, said Klobuchar, but when big leads to a lack of innovation and higher consumer prices, there’s a problem. Given rapid advancement of technological change, concentrating power into a handful of companies, the U.S. needs to examine whether antitrust laws are keeping pace with the digital economy, she said, asking Delrahim how DOJ is examining the impact of tech platforms on competition. Attorney General Jeff Sessions expressed interest in this issue, Delrahim said, evidenced by the recent gathering with state attorneys general (see 1809250033). “We continue to study it,” Delrahim said.
Sen. Orrin Hatch, R-Utah, asked Delrahim if DOJ is willing to work with Congress before terminating the ASCAP and BMI consent decrees (see 1810010031), as outlined in the recent Music Modernization Act. The department is “happy to” continue briefing the committee throughout the review process, Delrahim said, saying there will be advanced notice and public comment before termination, and a proper transition period. There are no intentions to disrupt the industry, Delrahim said, claiming DOJ will abide by the Music Modernization Act.
The agency's review of the ASCAP and BMI consent decrees is an effort to incorporate “standard provisions in all settlements to make consent decrees more enforceable and less regulatory,” said Delrahim. The consent decrees have been on the books for more than 75 years, he said, and he recognizes their importance to the industries that rely on them.
Hatch told Simons he heard complaints the FTC’s ongoing policy hearings (see 1810020061) have favored progressive views for altering antitrust law. Simons told Hatch he’s almost encouraged by that because he has heard complaints from the other side, signaling the hearings are incorporating various views.