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Democrats Weigh Antitrust Effort Against Silicon Valley

Hillary Clinton is close to the tech set.

The US Democratic Party has adopted the strongest antitrust platform language in decades, laying the foundation for what some party leaders hope will be an aggressive effort to curb the growing power of Silicon Valley giants like Google, Apple and Amazon.

The inclusion of strong antitrust language in the Democratic party's platform, which was approved Monday at the Democratic National Convention, is remarkable because it's the first time since 1988 that an anti-monopoly plank has been included in the document.

"We support the historic purpose of the antitrust laws to protect competition, and against the sort of excessively consolidated economic and political power which can be corrosive to a healthy democracy," reads the platform's antitrust language. "We support reinvigorating DOJ and FTC enforcement of antitrust laws to prevent abusive behavior by dominant companies, and protecting the public interest against abusive, discriminatory, and unfair methods of commerce."

The language reflects an emerging consensus among many Democrats that years of corporate consolidation have created harmful concentrations of power in several major sectors of the economy, including the financial services, airline, telecom, technology, and healthcare industries. A growing body of academic literature suggests that the harms of such concentrations of power fall disproportionately on low-income people, exacerbating income inequality.

But the Democratic platform has also prompted a debate inside the party and among policy experts about the degree to which Hillary Clinton, if elected president, will have an appetite to take a more aggressive stance against Silicon Valley tech titans that have historically had a very close relationship with the Democratic Party, the Obama administration and Clinton herself.

Last month, Sen. Elizabeth Warren, the Massachusetts Democrat, delivered a blistering speech in which she declared that "competition is dying" in America. Warren specifically cited Google, Apple, and Amazon as companies that have grown so large that they have the power to "snuff out competition."

Warren is not the only influential Democratic figure to sound the alarm about the power of Silicon Valley tech titans. Earlier this year, Sen. Al Franken, the Minnesota Democrat, expressed concern during a Senate antitrust hearing about "internet giants that use their positions as dominant media platforms to stifle competition and inhibit the free flow of ideas."

And Robert Reich, who served as Secretary of Labor under former President Bill Clinton, has argued that "Big Tech's sweeping patents, standard platforms, fleets of lawyers to litigate against potential rivals and armies of lobbyists have created formidable barriers to new entrants."

The problem of highly concentrated market power in the broadband industry is front and center for federal regulators. In many local markets, consumers have only one option for high-speed internet access, creating little incentive for the dominant provider to lower prices and improve service. Nationwide, Comcast controls more than 50 percent of the broadband market, which is one reason why federal regulators last year blocked the cable giant's proposed merger with Time Warner Cable.

Silicon Valley titans, by contrast, have mostly escaped aggressive federal antitrust enforcement, according to Barry C. Lynn, Director of the Open Markets program at the New America Foundation. (The Justice Department's successful lawsuit against Apple for ebook price fixing was a notable exception.)

Lynn says the immense concentration of power in Silicon Valley is centered around five companies, which he calls "platform monopolies"—Google, Amazon, Facebook, Apple and Microsoft.

"Here in Washington, these companies have an immense amount of power within the administration and on Capitol Hill, and until recently they've pretty much gotten a free ride," Lynn told Motherboard in an interview, adding that until Warren called the tech titans out, "no one had spoken their names, with a few exceptions, so that was an important event."

In early 2013, Google narrowly avoided being hit with a major federal antitrust lawsuit over its internet search practices. For years, several of Google's competitors including Microsoft and Yelp had complained that the company unfairly leveraged its search market dominance to harm rivals, but the Federal Trade Commission allowed the search giant to make modest voluntary changes to its business practices in order to dodge the lawsuit.

Google's critics called the settlement a slap on the wrist, and have repeatedly called for the FTC to revisit its probe—something the agency is reportedly doing—especially after last year's accidental disclosure of a confidential FTC staff report that concluded that Google's conduct resulted in "real harm to consumers and to innovation in the online search and advertising markets."

In an interview, Luther Lowe, Yelp's vice president of public policy, said he was "impressed" to see the antitrust language in the proposed Democratic platform and added that he is "cautiously optimistic that Hillary Clinton is serious about taking on concentration inside the economy, including in the tech sector, where necessary."

A spokesperson for Google declined to comment on the possibility that a Democratic administration might take a more aggressive antitrust stance against it or other Silicon Valley giants. But the company has traditionally argued than many of the antitrust arguments levelled against it have originated from competitors unable to beat it in the marketplace.

There is certainly no guarantee that Clinton will move aggressively against Silicon Valley's titans—at least not right away. Google, Apple, and Amazon have given three times as much to Democrats as Republicans during this election cycle, according to Center for Responsive Politics data cited by Bloomberg. Silicon Valley continues to pour money into DC lobbying efforts, particularly Google, which spent $4.24 million on federal lobbying in the second quarter of 2016, according to disclosure filings.

"I think a Hillary Clinton administration will not rush out on its own volition and take on Silicon Valley platform monopolies," said Lynn. "It's unlikely, but I do think they are going to come under increasing pressure to do something about it, and that pressure's going to be coming out of the Senate, it's going to be coming out of state AG's, and it's going to be coming out of Europe. And at a certain point, they're not going to be able to entirely resist those pressures, and they're going to have to start reacting in a constructive way."