Silicon Valley’s best and brightest hatched the perfect plan. Donald Trump’s Justice Department had just filed suit against Google for abusing its monopoly in internet search, the first in a series of expected actions against Big Tech. Though House Democrats had led the charge against the tech platforms, perhaps a new administration could be nudged to go softer. It would just take the right official in the right place to keep Google and its compatriots free from accountability.
So those sharp-minded tech titans offered a name to the Biden transition. But here they might have gotten a little too obvious. They suggested Karen Dunn, a partner at Paul, Weiss, Rifkind, Wharton & Garrison, to become the assistant attorney general for antitrust, the division of the Justice Department managing the Google case and one of two key agencies for antitrust (the other being the Federal Trade Commission). Dunn, a former associate White House counsel under President Obama, has a long list of corporate clients, representing Uber, Apple, and Oracle. Most recently, she literally prepped Amazon CEO Jeff Bezos for his testimony before the House Antitrust Subcommittee.
The cynic’s assumption would be that Dunn immediately got fast-tracked for the job, amid howls of protests from the anti-monopoly movement. But that’s not what happened. According to three sources close to the matter, Dunn was quickly and summarily shot down by the Biden transition team.
A Biden administration will need to make critical decisions on antitrust policy early on.
For nearly 50 years, president-elect Biden has placed himself squarely at the center of the Democratic Party, and many of his early selections for cabinet and agency staff have reflected that. He could have chosen deficit hawk Bruce Reed to run the Office of Management and Budget; instead he chose Neera Tanden, notorious for tweeting entirely too much but not in the same league as Reed on austerity. (Tanden may not have much chance at being confirmed.) He could have chosen the phenomenal economist Lisa Cook to chair the Council of Economic Advisers, but instead went with the slightly more center-left Cecilia Rouse (two economists preferred by progressives, Jared Bernstein and Heather Boushey, will round out the CEA, and in general this is a good group). He could have chosen Tim Geithner ally Lael Brainard for treasury secretary, and instead went with Janet Yellen, an economist who has made tight labor markets her life’s work.
More concerning is the presence of the new vampire squid, BlackRock, in key policymaking roles. Brian Deese, a managing director at BlackRock with several roles in the Obama White House, is on track to be named director of the National Economic Council; and Adelwale Adeyemo, who served as a BlackRock adviser and CEO Larry Fink’s interim chief of staff in between Obama economic team jobs and president of the Obama foundation, will become deputy treasury secretary.
You might have noticed “Obama” in that preceding sentence a lot. Concerns have definitely emerged that Obama veterans are muscling out alternatives for top administration posts, returning a team to the pinnacles of policymaking with a questionable record of results, both economically and politically.
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This would be pretty expected; Biden practically ran under the name “Obama-Biden” during the primaries. He clearly values experience, and the last team in the White House has that. However, to suggest flatly (and, depending on your orientation, despairingly) that this is an Obama restoration neglects the full picture, and some shifts in the party since the Obama years.
The education secretary is not going to be a reformer in the Arne Duncan mold, as the post-Obama era saw wildcat teacher strikes and disfavor for the ed reform agenda within the party. The Biden team appears to be more energized by the international dimensions of the climate crisis, placing a former secretary of state as envoy at the National Security Council. And on corporate power, as reflected above, there are a couple promising signs.
The biggest involves not swallowing whatever BigLaw designee Silicon Valley tried to install in the key agencies. It’s unclear who will get to run the Antitrust Division of the Justice Department, but Karen Dunn won’t. This is already an improvement over the Obama years, where Google famously held a meeting every week on average with administration personnel throughout the two terms, and hundreds of officials moved back and forth between the company and the government.
To what do we owe this change? First of all, concentrated corporate power has become a greater concern within upper-echelon Democratic circles. The late Obama administration published several reports on the subject. New Brandeisians had influence in crafting the past two Democratic platforms. Even the aforementioned Bruce Reed, who was the top Biden tech-policy aide on the campaign, has been forcefully opposed to Big Tech, denouncing liability protections for platform companies for user-generated content and helping assemble the online privacy measure in California.
There is a consensus on Capitol Hill for action on antitrust, too. A bipartisan group in Congress is nearing agreement on a series of measures that includes restoring a market share threshold, so that any merger that would result in one company holding a certain percentage of the market would be presumed as monopolistic. The provision would also increase funding for the Justice Department and Federal Trade Commission, and allow consumers to move information from one tech platform to another, enabling new entrants to fight the entrenchment that helps make Facebook or Google ubiquitous. Even the relatively moderate Sen. Amy Klobuchar (D-MN), ranking Democrat on the Senate Antitrust Subcommittee, is openly talking about breaking up Google. The winds have shifted.
Even the usual suspects for a Biden antitrust staff aren’t saying the usual things. Bill Baer, who is part of the agency review team for the FTC, was Antitrust Division chief under President Obama, and he’s giving speeches about the need for stronger enforcement, citing growing concentration in “agriculture, telecom, wireless, travel, pharma and beer.”
A Biden administration will need to make critical decisions on antitrust policy early on. Getting someone to fill an expected vacancy at the FTC is critical to whether the agency will file suit against Facebook for undermining competition by buying out rivals. Amazon’s incredible pandemic hiring spree, and branching out into new industries like pharmacies, will merit a response as it centralizes unparalleled power. And there’s the Google case left to prosecute, and potentially combined with a second case from state attorneys general.
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This goes beyond the Big Four tech platforms. Similarly dominant Salesforce is about to announce a $17 billion purchase of Slack. PNC Bank is buying the U.S. arm of Spanish Bank BBVA, creating the fifth-largest commercial bank in America. Penguin Random House’s proposed purchase of Simon & Schuster would take us from five major book publishers to four, an obvious response to Amazon’s dominance as the leading bookseller. This “concentration creep,” when mergers in one side of a transaction lead to another, has been growing across numerous industries. Biden’s antitrust team will have to decide whether to wave all of this through, or stop it cold.
I don’t expect Biden to nationalize Amazon, or ban the type of surveillance-based advertising that has made Facebook and Google rich and necessitated concentration creep among digital media sites like Buzzfeed and HuffPost just to survive. But I do expect Biden to carry on the momentum that antimonopoly activists have garnered. Just look at what’s happened since the Google case was announced. The company rolled back its AMP format, which was seen as an enticement to get publishers to play by Google’s rules; Apple, wary of the same treatment as Google, cut its App Store fees in half; and the iPhone maker is developing an alternative to Google search, as scrutiny heightens on its lucrative multibillion-dollar deal with Google at issue in the antitrust case. The trial really has been a remedy in spurring possible competition and eliminating certain anticompetitive practices.
The lesson here is that Biden’s centrist proclivities are more hemmed in where the policy center of the Democratic Party has changed. There may be tons of Silicon Valley money flooding Democratic campaigns, but that’s been blunted by a years-long, successful effort to win the policy argument in Washington. It’s a useful model for advocates in other issue areas. Change what the party believes, and who the party will choose to carry out those beliefs will follow.
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A Bright Spot Amid Biden’s Middle-of-the-Road Approach - The American Prospect
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