Amy Klobuchar is coming for the App Store tax

Photo Illustration by Grayson Blackmon / The Verge

The senator on the future of antitrust law

My guest today is Senator Amy Klobuchar, the Democrat from Minnesota who has taken up the role of antitrust enforcer in the Senate under the Biden administration. Her new book, Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age, is out today, April 27th. Klobuchar also serves as chair of the Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights. In that role, she held a hearing last week focused on the power and control Apple and Google — but especially Apple — wield with their app stores.

Last year, there was a similar set of hearings in the House chaired by Representative David Cicilline, the Democrat from Rhode Island; I interviewed him on The Vergecast about those hearings. But several things have changed since: One, Joe Biden was elected president, and he in turn has put some prominent critics of Big Tech in positions of power, most notably nominating Lina Khan to the Federal Trade Commission. Two, it appears there is far more bipartisan support for changing antitrust law than before — in particular, changing a key component of the law called the consumer welfare standard, which has been around since the ‘80s and basically says that anything goes unless regulators can prove consumer prices will go up.

That standard is basically impossible to meet, which is why most mergers get approved and why it’s been so hard to regulate the various platforms. In her book, Senator Klobuchar offers a sweeping review of antitrust history, starting from the American Revolution and the Boston Tea Party, all the way up to now. Her argument is that antitrust enforcement comes and goes in waves, but it is an essential check on a functional capitalist economy — and right now, it’s needed more than ever.

I asked her about all this and about where she thinks reform is actually headed: does she want the government to set the rates Apple charges developers in the App Store? That doesn’t seem workable. I also asked how she thinks antitrust enforcement will help to make better products, since it’s not like any of the big tech companies are sitting still. And I tried to push on where the limits of antitrust reform might be — and how the senator is thinking about future innovations, not just the products and markets we have today.

Alright. Senator Amy Klobuchar. Here we go.

This transcript has been lightly edited for clarity.

Sen. Amy Klobuchar, welcome to Decoder.

Thanks, Nilay. It is wonderful to be on.

It’s actually great timing. You have a new book called Antitrust: Taking On Monopoly Power From The Gilded Age to the Digital Age, which is coming out the day this interview goes out, so, excellent timing.

You also just had a very pointed hearing in the [Senate Judiciary Committee’s] antitrust subcommittee about the power that, mostly, Apple wields in its App Store. That’s a lot of antitrust action. Where do you think we are in the antitrust reform conversation right now?

Okay. We’re in a place of mounting political interest, which is where you want to be when you want to have momentum, but where we’re not is actually getting things done yet. And I thought the app hearing was such a perfect example because it was about Google and We found out that Google had called one of our witnesses — not him, himself, but his company, Match.com — the night before the hearing. And then, this doesn’t look like what you said in your report to your shareholders. That’s pretty interesting.

When that came out, we found out how Apple, they’ve been charging 30 percent to companies like Spotify, but not to Uber. And the reason given to [Sen.] Mike Lee was, “Well, that’s because that’s cars and rides.” So, I think there’s some real problems in this because of monopoly power. And the reason I wrote this book is because we have a serious competition problem in our economy right now, and you’ve got to look at it. I tried to make it really direct.

I take my own story, [from] my, grandpa working in the iron ore mines to support the Gilded Age robber barons and seeing that big house, and seeing the little house my grandma and grandpa lived in their whole life — they didn’t even have a shower or bathtub on the first floor. They had to have it in the basement. — to the work that I did representing MCI when AT&T, after they broke up, and what it’s like to try to get a competitive provider on the side of consumers, actually, to get in the market. It’s not easy. I have over a hundred cartoons, so even if you get bored of reading the book, you can look at the great cartoons that are pretty funny.

I personally enjoyed the cartoons.

Exactly. I used some antitrust humor, which is very hard to find. So I make the case that when you go through history, America’s always gotten its act together and taken on monopolies because it’s drowning out small competitors and better prices and innovation; hurts you on wages, non-compete agreements; make it so you can’t go places; especially. I mean, there’s just this unbelievable number of things that have been going on that have stacked the decks against regular people. And so, that means action. And as I said, throughout time we have acted. Farmers with the pitchforks, unions organizing in Chicago against monopolies. And it’s time to do it again.

So, the book has this incredible historical sweep. I mean, it literally starts at the founding and the Boston Tea Party,

Yeah, they were mad they were buying from a monopoly tea company. Yeah.

And it runs up to now, and there’s a big focus on big tech and pharma in the modern context. That’s kind of where your book focuses on at the end. Those two sectors, to me, they have kind of different harms that are occurring. So in the pharma context, the drug makers buy each other, they find a drug that a lot of people need. There’s a drug that’s used to treat infants in your book, and the price goes up by 400 percent.

In the tech context, it’s something else that’s happening, right? Consumers are not seeing higher prices over and over and over again. Consumers actually see free to lower prices, and then it’s monetized in some other way. Can you solve both of those problems with the same kind of legislation?

I think you can, and you can do it a different way too. You could have special apps for legislation. This isn’t like one way, a monopoly way. We’re going to have to figure out what we can get done. But, when you take on exclusionary conduct, which is basically limiting others, predatory pricing, price gouging, like you see with pharma, or Facebook buying up companies. In the words of Mark Zuckerberg, these businesses are nascent, but the network’s established, the brands are already meaningful and if they go to a large scale, they could be very disruptive to us. He didn’t buy WhatsApp and Instagram just because he thought, “cool.” He bought them because he was afraid they were going to be disruptive to him. So, those are two different scenarios, you are right. But the end result is that they make one company bigger and bigger.

And I think the reason I did sweeping legislation to cover all, is because if you just do tech and you disregard what’s happening with pharma and ag and everything, it’s like whack-a-mole. You’re going to change where the problem is. And so, I’m open to doing special stuff on tech. I really am. But I think that the best way, if I could wave a wand, and I think if a lot of people that’s looked at this, consumer groups, could wave a wand, they would look at: let’s do something to make it easier to take on merger cases, because the courts have really messed that up. The conservative courts and the [Robert] Bork theories. If we just get to the simple way it was done before, we’d be better when they looked at mergers.

Let’s be more sophisticated about how we look back when we get into tech and other things, so that we basically have remedies which we already could use; they’ve used in the breakup of I think that’d be pretty big, but just basically figure out in each case, what do we have to stop them from doing, whether it’s self-preferencing on search engines, or directly competing with their own products, or making very clear that you can’t charge 30 percent to Spotify and Tile and to Match.com, when in fact, you don’t need that much to pay for the security in the internet. You’re just messing around with it.

Are you specifically thinking about setting rates? This is, I think, one of the bigger fears in the tech industry, that the government’s going to come in and actually set rates.

There’s two ways. One is passing legislation just to make the defined exclusionary conduct. So it’s easier for the government to do it. Two, government should be doing this now. They should be looking at app stores. They probably are looking at app stores. There are starting to be investigations in states and feds all across the place.

And then the third way is to, as you said, do legislation, but you could do it without actual numbers. You could do other things to say things they can’t do and keep the standards so that the government would then enforce the standard. So it has to be actual stuff that they’re paying for instead of just an arbitrary price, without putting the price on it yourself, which might be very hard to determine.

The reason I started with the difference between the harms consumers face from big tech and pharma is you mentioned the Bork theories. You went to the University of Chicago Law School. I was an undergrad at the University of Chicago.

The dominant theory in the law is law and economics. It still is to this day. That is very much from that university. That’s very much Robert Bork. And that is in the ’80s saying antitrust should be measured by the prices consumers pay. And that is called the consumer welfare standard. It is at the heart of this whole debate.

It is.

Do you think we should change the consumer welfare standard?

Well, yeah, I think my legislation helps to do that. So in the old days, during the Gilded Age, they just said basically antitrust, anti-competitive behavior; they used pretty straightforward standards. Eventually, with Teddy Roosevelt, who was the first successful case after making very clear that courts, they were in the hands of the monopolies for a while, so [then] things started moving.

And then, the Bork theory comes up, as many corporations are getting tired of getting questioned about their mergers, and he develops this consumer welfare standard, which includes things like, about efficiency, and we’ve got to protect some corporations. It’s kind of crazy when you really look at it. And then now, it’s almost like we’ve gone full circle, where you’re starting to have some conservatives, some Republicans, even major, major companies that start to say, “This is a mess, man. These gatekeepers are basically making this hard for everyone.”

So you start having big companies and small companies question where the law has been. So, I just think that it is time to change the laws themselves, because if you think we can just wait, when you’ve got Gorsuch and Kavanaugh on the court— Kavanaugh did one decision that was with the liberals on a tech issue, but for the most part, their paths would lead you — and Gorsuch is already there — to the most conservative interpretations of the antitrust laws. We could wait literally 25 years. And meanwhile, we can’t have these gatekeepers making every decision and telling— my favorite one, whole governments, like Australia: “I’m sorry. You want us to pay for content? No way. We’re just going to leave. And then you will have no search engines since we’re 90 percent [of the industry].”

Now, world pressure, they backed off. But, that’s literally what monopolies do. So, I don’t think we can wait for the courts to change, so we must change the laws. We can also change the people enforcing the laws. Lina Khan getting on the FTC, that’s the nominated commissioner from the Biden administration. She’s very aggressive and smart on these issues. Tim Wu getting in the White House. There’s a bunch of things that the Biden administration can do outside of Congress to really up the stakes here.

The last time there was a set of hearings about tech antitrust, it was in the House. It was last year. That was Rep. [David] Cicilline, that was very bipartisan; your hearing was very bipartisan. One shift that I noticed though, the Republicans were very clear that they did not want to change the consumer welfare standard around the time of the House hearings.

And I watched these hearings and I saw Sen. Mike Lee, who’s the ranking Republican member, and he was like, “Yeah, maybe we should change it.” It was strikingly bipartisan in this hearing. He was just as frustrated with Apple as everybody else. At the same time, that’s very dicey. It’s not usually what the Republicans have been saying. Are you seeing movement there?

Yes. You see it in [Sen. Josh] Hawley’s bill and I have all kinds of issues with him in other ways, but you see it with that bill. You see it with [Sen.] Marsha Blackburn, who really is with me on the Grassley bill, the Klobuchar-Grassley adds tons of money to the two agencies by changing the way the fees are assessed.

By the way, it’s the most straightforward first thing we could do before we even change standards. And I think that what you’re seeing is [Sen. Chuck] Grassley really believes in small businesses. That’s what he has in Iowa, right? He is big-business present, but he’s got a lot of small farmers, a lot of small business, and he’s always been a maverick on those issues.

And so this is just crushing, what’s going on. And many of them see it beyond tech. And so, that’s why I think in our Senate hearing, which was like a model of how you can do a thing, people were actually asking real questions and were having fun doing it without being just complete jerks, I thought.

They were actually asking intellectual, smart questions. My favorite was when Mike Lee is trying to get to the bottom of why it’s different to order a car through Uber than getting music off of Spotify, and he’s trying to ask Apple, “I don’t understand why one gets charged and one doesn’t,” and they say, “Well, it’s a car.” And then he says, “Well, maybe I’m just a caveman.”

I thought, “Okay, that’s a very interesting description,” but I think that you’re seeing evolution as we speak. Now, let me not be a Pollyanna about this, because there are problems for me moving forward on this on both sides, right? I can’t even ever figure out where they’re coming from. At the end of last year, I almost got the Grassley-Klobuchar thing through to add $135 million to FTC and DOJ antitrust.

I got Mike Lee to agree with it with some minor changes. I got [then-Senate Majority Leader Mitch] McConnell, [Sen. Richard] Shelby, and then of course, our side. Then it floats over to the House who were going to put it in. [Former White House chief of staff Mark] Meadows was behind it, the White House. Why? They wanted to continue the legacy of the two suits they brought on Google and Facebook.

Get over [to the House], [House Minority Leader Kevin] McCarthy and [Rep. Jim] Jordan just stopped it in its tracks. And so, it always feels like every time we move on antitrust, someone stops it. And so, that leads to me one of the reasons I wrote this book, is just getting it all out there so the public — and I hope that at least parts of the book, the beginnings especially — that people see the history. Which is somewhat interesting with the muckrakers taking on Standard Oil, and you get to the present with some policy ideas, including things that people can do as individuals.

I tried to write it in that way because I need help I want people to start calling out electeds on this, basically. I want them, Democrats, Republicans, whatever, “What are you doing on antitrust?” Because just me trying to do it every day, it’s really hard because there’s so much under-lobbying money going out there from companies, it makes it really hard. And then, I also think that we’ve just got to capture this moment where there’s growing support for.

You mentioned Josh Hawley. There’s a razor-thin Democratic majority in the Senate. Hawley has proposed just a flurry of bills and ideas for regulating big tech companies. He’s also a character in the insurrection. Are you open to working with him?

I am. He’s on the committee. I listen to him. I’m looking at his bill right now, but I need to work for my bill, basically, is where it’s going. He has said that some of the things in my bill are good and that’s where it is.

I’ve got to be able to get support of everyone. [Sen.] Mark Warner is on my bill right now and he’s pretty much of a moderate and came out of business, so I’m just working on building support for my legislation, and I think that’s the best way to go. Democrats control the House and Senate, and one of my key allies is Cicilline, because they did this great work over there in the House, and we’re working together on it.

You talked about releasing the book to get the public on your side. Let me channel what I hear from my listeners and Verge readers, and I hear this a lot, actually. The tech companies are not sitting still, right? Facebook is terrified of TikTok and Clubhouse and they are racing to copy those features. Apple just released a whole flurry of new products. People like them, right? The average consumer of an Apple iPhone, they get new stuff all the time. They get features.

Monopolies are usually a lot lazier, right? The senator just waved an iPhone at me. The classic tech monopoly I think about is a cable company, right? Comcast, old AT&T, they provide you service, everybody hates them, but you’ve got nowhere else to go.

People write to me and they say, “Stop trying to ruin my Apple stuff. I want Apple to be in control of this ecosystem because I trust them and I pay a premium for it.”

Do you think that this kind of antitrust enforcement will harm that? Do you think it will help it? What is the mechanism by which it will actually make the products better?

I don’t think it’ll harm it one bit. You’re still holding them accountable for all kinds of things on the iPhone, in the product, to make sure it works. They’re making a lot of money off of other stuff and they’re always adding different things. Okay, that’s all good.

But the point is, that we have gotten to this point when they control this whole app market; So basically, you used to go to websites for everything. Everyone has a website, they mostly do now. But as the Match people described, the app stores have basically taken over the internet in a lot of ways. People are spending an average of four hours a day in the app stores. You could still have a successful Apple, but still demand more consumer protections to make it easier for people to compete.

You can still have successful companies, and I was in the private sector for 14 years, I think it’s great they’ve introduced these products. I think it’s great that they employ a lot of people, but there’s no reason they had to buy Instagram and WhatsApp because, in Mark Zuckerberg’s words, “They might be disruptive to us,” right?

Well, that’s what tech is supposed to do. They’re supposed to disrupt. That’s a good thing, and add new things. So my concern is, when you look back in time, Standard Oil’s in, of course everyone is glad they have gas for their cars and everything else. And then, all of a sudden we realize, wait a minute, there’s no competition. So they broke them up. They were still successful in their own ways, but it helped.

AT&T was successful. They broke them up; that actually led to the cell phone industry, it led to lower long distance rates. It didn’t mean that they didn’t do great things and that people liked them some. People liked Ma Bell — that was their name, Ma Bell — but people realized, we can still have them, but we can also have many “thems” or other “thems” that are going to develop new bells and whistles.

And I would say, not everything is great and cozy right now. It’s not great when we have all these privacy violations. And maybe if they wouldn’t have bought Instagram, maybe they could have developed some new privacy things that we would have liked. We’ll never know.

It’s not great that we have all this misinformation out there, that one-fourth of Americans said they’d refuse the vaccine, that 65 percent of Facebook and Twitter disinformation has been attributed to basically 12 individuals on different accounts, and that they’re still out there.

And I’ve been leading on that, and I’ve just got to say, there’s a lot of things that are causing trouble. When a guy in a cafe tells me his aging mother-in-law still will not get the vaccine because she read a thing on Facebook that she still believes that it would implant a microchip in her arm.

Right, but you could break up Facebook, sure. It’s not going to stop people from finding information on Facebook, right? Antitrust enforcement is just a means to an end, and the end is better competition, right? You’re going to break up the firms, you’re going to reduce the power in the market that’s concentrated in a handful of firms, but there’s all these other interrelated tech regulation issues.

There’s privacy, there’s misinformation, there’s whatever chaos is happening around Section 230 at any minute of the day, there’s the gig economy and unionization of Amazon. There’s this whole interrelated set of issues. Is antitrust just the hammer and you’ve got a lot of nails? Or does it have a limit to what it can accomplish?

Well, I think it’s one part of competition policy, but I would argue it’s a combo. We haven’t had any regulation on privacy, right? The states are starting to do it. Now, the companies are going, “Whoa, stop. We need a federal policy.” That’s true, but it better be a strong one.

So you can regulate things, but you can also at the same time hope that through capitalism consumers are offered new bells and whistles, and I know we get them on our phone all the time. For the record, I’m holding up my iPhone. We know we can, but what if you had more competition in, say, the social media platforms, like I said? Where a company had been able to develop better privacy policies or misinformation policies, and then pretty soon, because they had those, people were gravitating over there. Right?

We don’t know that because Facebook’s the only thing in town in a big, big way. People gravitate over there, then Facebook’s forced the competitive market to do something else. We just don’t have that right now. So it doesn’t mean that it’s bad they’ve developed this, it just means that we need a check and balance that’s been lacking, and that’s all.

I think if you believe in capitalism and you believe in tech, and you actually want to keep those small companies going and not just all be purchased and squashed out in some ways of their entrepreneurship, then you better apply the antitrust laws.

You mentioned that you thought this hearing went really well. I thought this hearing went really well. One of the reasons I thought this hearing went well is that you didn’t have Twitter and Facebook there. And just the presence of Zuckerberg and Dorsey tends to just send things.

Honestly, if you gave me the opportunity to generate a video clip of me yelling at Jack Dorsey, I would probably take the shot, right? And it seems like no one can refrain from taking the shot when they get it. But that’s a different set of problems.

Right.

Parler competing with Twitter does not rise to the level, in my mind, of an antitrust enforcement problem.

Okay.

It does feel related to, well, Parler got kicked off all the stores and they didn’t have a recourse.

Okay. So first of all, these hearings, in general, they’re like one-night sound bites, right, if they’re lucky, where people are throwing popcorn at the screen, at these CEOs.

I think they’re important, to hold them accountable, have them there, but I just don’t think that anything could really equal what happened at that app store hearing, where we actually were searching for answers. We had a lot of the testimony, we listened to people that were affected. There was one really good consumer advocate that spoke, but the rest were companies.

There was a back and forth, and then they had some expert people from Apple and Google, and Apple almost wasn’t going to send anyone until [Sen. Mike] Lee and I had to explain that they were claiming they couldn’t send anyone because of their lawsuit with Epic Games which was like, interesting, because the day that you told us you wouldn’t send anyone was the same day that Tim Cook was on Kara Swisher’s blog, podcast, and talking about this issue? That doesn’t really work for us. So then they did supply a witness, but we deliberately tried to get some subject matter experts on this because we felt it was important to have actually a back and forth.

Why are we doing this hearing? Clearly, some antitrust subcommittee hearings might not get all this attention. Why did I write this book on antitrust? Because I believe we need to get to solutions. That’s why I ended my book with 25 ideas for solutions. That’s why Mike Lee and I came out of that saying, okay, we can do a sweeping thing. We can maybe do [the] app store thing. States can do it, but we’ve got to start moving. So out of that comes action. We’re not just going to have these hearings just to have hearings.

I want to ask a more expansive question. One of the products that I dream about all the time, and the industry is actively and energetically trying to make, is augmented reality glasses. The reason I think about it is every now and again, I talk to someone like you, and I’m like, I should run for office.

Then I realize I am horrible at faces and names and that is just definitely a blocker to running for office. So if I have these glasses from Apple or Facebook and I could walk into a room, I could just see everybody’s name, maybe I could achieve my dream.

Here on your glasses, is what you’re talking about?

Yeah. You’d wear the AR glasses and they would just put people’s names on it. People are trying to make this, today. I know they are. We hear about it all the time. Then I think about the technology that you would have to invent and supply to make that work. You’d have to build a lot of facial recognition. You would have to have a database of faces and names. You would have to know where everybody is all the time.

Then I think about, well, you would literally be augmenting reality. So if you have the Facebook AR glasses, what happens when you look at the Capitol building, right? Then you need this massive investment into content moderation. So Facebook is not literally augmenting the reality of the Capitol building.

They’re definitely building these glasses. Facebook has a division that is actively building it. I’ve interviewed their executives. Apple is rumored to be building it. Some of their schematics have leaked. When you think about writing this legislation, and you think about competition and what tech should do, are you thinking to the next turn?

Because I think about those glasses as, there’s so much demand for them. That is the next breakthrough product in the world. If we get the legislation right, those glasses would be an enormous benefit to society in a real way. If we get them wrong, maybe it’s all over.

Privacy disaster. Yeah.

Do you think to that level, to that term?

Yeah. If you actually get the glasses and what you’re talking about is as much a privacy issue as an antitrust issue, actually, and I’ve done some work in the health data issue with Fitbit. Again, here I am [pointing out her Fitbit], so I’m not some Neanderthal about these things.

You’re not in the Apple ecosystem. You’ve got an Apple phone, you got a Google Fitbit.

Yeah. The other product, the Amazon product. When I think about those, we don’t have rules of the road in place to govern that. That’s why [Sen.] Lisa Murkowski and I came up with a bill to say, it’s got to be your own private info. You’ve got to have a way that actually [works with] the HHS, because that’s health data, right? Can you imagine if you walked in and it said everyone’s health problems, too, and somehow got into what their records were? That’s a clear, what we call, a HIPAA violation. It could be.

So that’s something that has not been done, crying out for help. Then you add what you’re talking about, additional privacy problems. So for me, it’s always a problem with legislation. You have to write things in a broad way that encompasses what might happen in the future. The best way, I think, to do that is to allow agencies to write rules and change rules instead of just dotting every I and crossing every T. Like you asked about the rates with app stores in the legislation and that it is better to put the broad stroke, what the rules should be, and have the agency do it because they can be more facile to change with the times and have experts look at it. That’s how I look at it.

And that’s why I say the Biden administration can do so much, some on their own. In a lot of places, our laws have not been updated, as you know, on privacy or on antitrust for so long, they were created long before, whoever it was, Vinton Cerf or Al Gore, whatever, invented the internet, and long before any of this. So we have to update the laws to make it easier for the administrative branch to implement them and anticipating what you’re talking about, which is a whole lot of new stuff coming our way.

Well, you talked about capitalism and one of the features of American capitalism is you don’t need permission from the government to introduce new products. This is a product category that it is, I mean, it’s so close. It feels like this is one where it gets introduced, but if it doesn’t have a set of rules, then very bad things can quickly happen. But you also don’t want Apple and Facebook to come to you, hat in hand, saying, can we introduce a new product?

No. But you do that with safety things, right? The medical device, those kinds of things, pharma, they do have to go, “This is outside of antitrust.” They have to get permission for new products. So you could look at some framework if it starts invading privacy or things like that. There’s all those issues with drones and where they can be used with the FAA. So they’ve had to clarify that based on privacy and those are, a few years back, new things. So that happens all the time. But these guys have said, basically, “It’s the internet. It’s okay.” It’s not being like that. So we have to have some framework in place that they can’t just throw this out there and then afterwards we’re going, “oh my God, what just happened?”

You brought up, this is all the internet. There’s still huge monopolies on wires in the ground, on broadband in this country, on telecom. You’ve talked a lot about big tech; when we talk about big tech, we almost always talk about the consumer companies at the edge.

It feels like the internet providers, which are monopolies for most people, are not receiving this level of scrutiny. You used to be a telecom lawyer, you worked for MCI. Do you think that scrutiny is coming for the Comcasts and the AT&Ts and Spectrum Cables of the world as well?

I think that you have seen with Comcast, when you look at the cable rates, they’ve gone up every year after year after year. Now we finally, especially during the pandemic, are starting to see more streaming, it’s coming alive as a concept in a big way. There is some competition, but they still dominated. They’re the textbook case of years of dominating what’s happened. So again, that’s why I just keep going to putting the right people in place, demanding more of elected officials, and making changes to the law that aren’t just about tech.

With broadband in particular, it would be very costly to put more fiber in the ground and run a competitor, a Comcast or whatever, in Chicago. So instead, at least on the Democratic side, the approach has been net neutrality. We’re going to just regulate what Comcast can do with its network.

That feels like what Facebook would like, too. Just let us be in a monopoly and everyone can yell and scream about 230 and we’ll implement your moderation rules to make one side of the aisle happy, and we’ll just be the regulated monopoly for social media in America.

It’s either the regulated, broadband monopoly direction that we’re going in with net neutrality or it’s the, we’re going to break you up and make you compete.

I think it’s both. I think that you’ve got to look at each policy. The problem right now is we’re just stymied.We have to be able to do both and figure out, it’s not one size fits all about the new rules for things like privacy, as well as doing something with more competition. So that’s why I’m able to work with Republicans on this and agree that we need to do something when it comes to regulatory enforcement.

If you could wave the magic wand and make sweeping changes to the structure of the tech industry, what would be the first three things you do?

Okay, well, first I would pass my bill.

No, you have to tell me what you would actually do.

No, you said wave a magic wand. It does. No, it really does. It gets the money to the agencies, big money, including the change to the fee structure that we need so they can take on the cases. It’s not me taking on the cases. It says that big, fat mega-mergers, they’ve got to really show they don’t hurt competition. And that you’ve got to be able to examine some of the exclusionary conduct with the wind behind your sails in terms of what the standard is. I think that would be really, really key. And then that would help the private sector to start doing some cool new things for the consumers.

Then I would look at privacy rules. I think that would be very important because we really don’t have those in place on a federal basis. Then the third thing I’d do is more specialized things in different areas that we just talked about, health data. I’m looking at some changes to 230 when it comes to liability of the bill that I have with [Sen.] Mazie Hirono — just passed that really important Asian hate crimes bill — and look at certain types of conduct under Section 230 to lift immunity, like civil rights and stalking and things like that.

Notably, on your list is not “break up Facebook.”

No.

It’s not, “split up Google and YouTube.”

So unfair.

Yeah.

Because if you pass my law, I can tell you right now, with the government already looking at that as a remedy in the FTC case that they have brought, that that would be right on the table and to me. I don’t mean break it into little pieces so it doesn’t exist. I mean, just as we did with the AT&T breakup take-off, which happens all the time. Oh, when companies merge, a lot of times they divest something. It isn’t radical.

Oh, so you want me to just be like, wave the magic wand and just cut everyone in half. I want the tools to be in place so that when the government regulators, because I still do have faith in government, when they look at this, when Merrick Garland looks at this, he is super smart. And when the FTC looks at this, they say, “Well, this thing is really a problem. And this thing isn’t.” Right? I don’t want to just wave the magic wand when I don’t really have the data to do that. But I so badly want it to happen. Yes.

You mentioned the Epic-Apple lawsuit. That’s obviously happening. It’s starting, the trial is starting very soon. But that’s obviously happening in the background of this. That is a private cause of action, right? That’s just one company suing another.

Yes.

Do you think that is a rich vein of actual reform and change?

Well actually, throughout time there have been a huge number of these private lawsuits. But they’ve gotten really slapped around by the Supreme Court in a bad way. It’s become very hard to win there. Tech is probably a new opening, if you look at Kavanaugh siding with the liberals, although that was before Coney Barrett came on.

I think that, of course, you want to have a plaintiff’s lawsuit. But they become very hard to bring because of the court rulings. At the same time, you want the government to be able to do it, and you come through there.

I think it was Bill Baer, who was head of antitrust under Obama, who said there are deals coming to them that never should have gotten out of the boardroom because they’re so clearly anti-competitive. So you do it on both grounds and certainly suits on exclusionary conduct and the like are really important. When I heard those witnesses at our hearing, Spotify, Tile, and Match, just talking about how they’ve been pushed around every time they try to do stuff and threatened to be pulled off the app store, it’s just classic monopoly conduct.

For people who are paying attention to this, a lot of tech executives, policy people listen to the show, what should they be looking for next? What’s the next turn?

I think they should start…Oh here, what, should I become a psychiatrist?

“Look inside yourself. You should just break off YouTube on your own, Sundar.”

Realize what’s coming here. Well, maybe they can adjust their app store terms.

Would that stop it? This is a real thing. People say even the threat of regulation causes better conduct. Would that stop it if Apple said, it’s 15 percent?

I would just like to point out — they’ve been super arrogant about some of this stuff. Right? You can see it in the emails, you can see it in how they treat companies. They’re calling them the night before a hearing. Like, come on!

And so, I think that they should start looking at making some changes themself, not just, as you point out, they’ve been doing some things on misinformation and content and the like. But they should really look at some of the fiscal terms and what they’re doing. So that’s what I would suggest.

And then secondly, take it seriously here. Maybe you think you can hire every lobbyist and you can beat people up and try to go after them for whatever you do by hiring Definers, which they did a while back against those of us working—

This is Facebook.

The lobbying firm, to take us on personally. They can keep doing that or maybe think, that’s just making us madder. And do not rule out or refuse to give a witness and then Mike Lee and I spend three days learning all about this, because we’ve got to write a letter to Tim Cook. That didn’t work very well for them.

So maybe — and this isn’t vindictiveness, this is just people — they’re banking that we’re not going to learn enough to be able to do this. And I think if you saw that subcommittee, they’re learning a lot. I think that I would get ahead of this by actually doing stuff instead of trying to go after the people and maybe some of their companies and customers that they think are taking them on. That’s what I would do.

And then I would imagine that the administration is going to be really serious. They’re going to put some serious thinkers in, that Joe Biden and Merrick Garland aren’t just going to let this go. And take it seriously. And don’t just do surface things that sound good. Start making some major changes to how you deal with the world and that’ll make a big difference.

All right. Well, Sen. Klobuchar, you’ve given me more than you promised me, which is great. I really appreciate it. Thanks so much for being on Decoder. Tell people where they can get your book.

Well, you can get my book online anywhere from your nearest monopoly. You can get my book in stores. But mostly I hope you get my book. It’s called Antitrust. And I like to tease Pete Buttigieg, who, even though we were rivals on the debate stage, we’re actually friends, that in the fall, he came out with his book called Trust and my book is called Antitrust, so our rivalries continue.

But if you care about this issue at all, I think you’ll have fun looking at the cartoons at the least. But you’ll really enjoy reading the history and seeing where we are and also seeing solutions. That’s what this book is about.

Author: Nilay Patel

Source: Nilay Patel.” Amy Klobuchar is coming for the App Store tax”. Retrieved From https://www.theverge.com/2021/4/27/22404493/amy-klobuchar-interview-antitrust-book-hearings-big-tech

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