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Agency pledges tough action to buttress 'right to repair'

Agency pledges tough action to buttress 'right to repair'

WASHINGTON — Americans would be freer to repair their broken cellphones, computers, videogame consoles and even tractors themselves, or to use independent repair shops, under changes being eyed by federal regulators.The regulators maintain that restrictions have steered consumers into manufacturers’ and sellers’ repair networks or led them to replace products before the end of their useful lives.As the Federal Trade Commission and the Biden administration see it, that raises issues of anti-competitive conduct.The FTC is moving toward writing new rules targeting the restrictions. On Wednesday, the five FTC commissioners unanimously adopted a policy statement supporting the “right to repair” that pledges beefed-up enforcement efforts and could open the way to new regulations.“These types of (repair) restrictions can significantly raise costs for consumers, stifle innovation, close off business opportunity for independent repair shops, create unnecessary electronic waste, delay timely repairs and undermine resiliency,” FTC Chair Lina Khan said. “The FTC has a range of tools it can use to root out unlawful repair restrictions, and today’s policy statement would commit us to move forward on this issue with new vigor.”The policy statement commits the agency to prosecute repair restrictions that violate current antitrust or consumer protection laws. A 1975 law, for example, requires that if a product has a warranty — which is not mandatory — the warranty must avoid using disclaimers in an unfair or deceptive way. It also prohibits tying a warranty to the use of a specific service provider or product, unless the FTC has issued a waiver in that case.Unavailable parts, instruction manuals and diagnostic software and tools, product design restrictions and locks on software embedded in devices have made many consumer products harder to fix and maintain, regulators and industry critics say. Do-it-yourself repairs often require specialized tools, hard-to-obtain parts and access to diagnostic software that’s guarded by manufacturers.The repair restrictions often fall most heavily on minority and low-income consumers, the regulators say. An FTC report to Congress in May noted that many Black-owned small businesses make equipment repairs, and repair shops often are owned by entrepreneurs from poor communities.For minority and low-income consumers, the repair restrictions are especially acute for cellphones, the report says. Those consumers often have cellphones but no broadband access for computers at home, increasing their dependence on the phones.Industry critics say the coronavirus pandemic worsened the effects of repair restrictions for all consumers as computers became essential for working remotely, schooling children at home and visiting relatives on screens — while many large chain stores stopped offering on-site repairs.Allowing consumers to make their own repairs “saves money, and it keeps electronics in use and off the scrap heap,” says Nathan Proctor, a director of U.S. Public Interest Research Group’s right-to-repair campaign. “It helps farmers keep equipment in the field and out of the dealership,” Proctor said in a recent statement. “More repair choices will protect the environment by cutting down on the amount of new electronics we make and old stuff we toss.”Manufacturers, on the other hand, maintain that repair restrictions are needed to safeguard intellectual property, protect consumers from injuries that could result from fixing a product or using one that was improperly repaired, and guard against cybersecurity risks. Manufacturers say they could face liability or harm to their reputation if independent repair shops make faulty equipment repairs.New right-to-repair laws and regulations “would create innumerable harms and unintended consequences for consumers and manufacturers alike, including by limiting consumer choice, impeding innovation, threatening consumers’ safety and wellbeing, (and) opening the door to counterfeits,” the National Association of Manufacturers said in a prepared statement.Legislation to ease repair restrictions is active in about 25 states, and the European Community also is considering new right-to-repair regulations.The repair directive was included in President Joe Biden’s sweeping executive order issued earlier this month targeting what he labeled anti-competitive practices in tech, healthcare, banking and other key parts of the economy. The order has 72 actions and recommendations that Biden said would lower prices for families, increase wages for workers and promote innovation and faster economic growth. New regulations that agencies may write to translate his policy into rules could trigger epic legal battles, however.“Let me be clear: Capitalism without competition isn’t capitalism. It’s exploitation,” Biden said at a White House signing ceremony.The order includes calls for banning or limiting so-called noncompete agreements to help boost wages, allowing rule changes to pave the way for hearing aids to be sold over the counter at drugstores, and banning excessive early-termination fees by internet companies. It calls on the Transportation Department to consider requiring airlines to refund fees when baggage is delayed or in-flight services aren’t provided as advertised.—-Follow Marcy Gordon at https://twitter.com/mgordonap

Facebook asks recusal of FTC head in antitrust case decision

Facebook asks recusal of FTC head in antitrust case decision

Facebook is asking that the new head of the Federal Trade Commission step away from decisions on whether to continue the agency’s antitrust case against the social network giantBy MARCY GORDON AP Business WriterJuly 14, 2021, 9:48 PM• 4 min readShare to FacebookShare to TwitterEmail this articleWASHINGTON — Facebook is asking that the new head of the Federal Trade Commission step away from decisions on whether to continue the agency’s antitrust case against the social network giant, asserting that past public criticism of the company’s market power makes it impossible for her to be impartial.Facebook Inc. petitioned the agency Wednesday to remove Chair Lina Khan from taking part in decisions on the FTC’s antitrust lawsuit against the company. A federal judge recently dismissed the suit by the FTC and one from a coalition of states, saying they didn’t provide enough evidence to prove that Facebook is a monopoly in the social networking market. The judge, however, allowed the FTC to revise its complaint and try again.Khan has been a persistent critic of Amazon, Google and Apple, as well as Facebook.FTC officials declined comment on Facebook’s motion, which came two weeks after Amazon requested that Khan be removed from taking part in antitrust investigations of that company. The agency could be expected to respond formally at some point. Khan has said she would seek the opinion of FTC ethics monitors if issues arose of potential conflict of interest.It’s not known how internal FTC rules on conflict of interest might be interpreted in this case. On the face of it, though, “the fact that (Khan) has a point of view and has expressed it forcefully is not a basis for recusal,” said Stephen Gillers, a law professor at New York University who is an expert on ethics.In its petition, Facebook cited a 1966 ruling by a federal court that it was a violation of due process for the FTC chair at the time to have participated in a proceeding against the defendant company because he had earlier investigated many of the same facts concerning the company as a congressional aide.As counsel to a House Judiciary antitrust panel in 2019 and 2020, Khan played a key role in an extensive bipartisan investigation of the market power of tech giants.The requests from Facebook and Amazon come as the four tech giants fall under extreme scrutiny and legislative pressure from the FTC, the Justice Department, European regulators, lawmakers in Washington, and, most recently, from an executive order from the White House.“When a new commissioner has already drawn factual and legal conclusions and deemed the target a lawbreaker, due process requires that individual to recuse herself from related matters when acting in the capacity of an FTC commissioner,” Facebook said in its petition. “Chair Khan has consistently made public statements not only accusing Facebook of conduct that merits disapproval, but specifically expressing her belief that the conduct meets the elements of an antitrust offense.”President Joe Biden recently installed Khan as one of five commissioners and head of the FTC, signaling a tough stance toward Big Tech and its market dominance. At 32, she is the youngest chair in the history of the agency, which polices competition and consumer protection in industry generally, as well as digital privacy.Facebook said it was making the request “to protect the fairness and impartiality” of the agency’s antitrust proceedings. “Chair Khan has consistently made well-documented statements about Facebook and antitrust matters that would lead any reasonable observer to conclude that she has prejudged the Facebook antitrust case brought by the FTC,” the company said in a statement.Biden’s sweeping executive order on competition in U.S. industries, issued Friday, includes a new policy of closer scrutiny by regulators of proposed mergers, especially by dominant internet companies. Giant tech companies have snapped up competitors in hundreds of mergers in recent years, waved through by antitrust enforcers in both Republican and Democratic administrations.The new order also asks the FTC to establish new rules on surveillance by tech giants and their accumulation of users’ data. In addition, the agency is requested to write rules barring unfair practices toward competitors in online marketplaces.Last month ambitious legislation that could curb the market power of Facebook, Google, Amazon and Apple, and force them to sever their dominant platforms from their other lines of business was approved by a key House committee and sent to the full U.S. House. Some lawmakers and others critical of Facebook have cited its popular Instagram and WhatsApp messaging services as likely candidates to be divested from the core platform.

Amazon asks for FTC head to step aside from antitrust probes

Amazon is asking that the new head of the Federal Trade Commission step aside from antitrust investigations into the e-commerce giantBy MARCY GORDON AP Business WriterJune 30, 2021, 6:25 PM• 2 min readShare to FacebookShare to TwitterEmail this articleWASHINGTON — Amazon is asking that the new head of the Federal Trade Commission step aside from antitrust investigations into the e-commerce giant, contending that her past public criticism of the company’s market power makes it impossible for her to be impartial.Amazon petitioned the agency Wednesday to remove Chair Lina Khan from taking part in current probes of the company’s market conduct. Khan has been a fierce critic of tech giants Facebook, Google and Apple, as well as Amazon. She arrived on the antitrust scene in 2017, writing an influential study titled “Amazon’s Antitrust Paradox” when she was a Yale law student.FTC officials declined comment on Amazon’s motion. The agency could be expected to respond formally at some point.As counsel to a House Judiciary antitrust panel in 2019 and 2020, Khan played a key role in a sweeping bipartisan investigation of the market power of the four tech giants.President Joe Biden recently installed Khan as one of five commissioners and head of the FTC, signaling a tough stance toward Big Tech and its market dominance. At 32, she is the youngest chair in the history of the agency, which polices competition and consumer protection in industry generally, as well as digital privacy.“Due process entitles all individuals and companies to fair consideration of the merits of any investigation or adjudication by impartial commissioners who have not — and, equally importantly, who do not appear to have — prejudged the issues against them,” Seattle-based Amazon said in the motion.

From Biden to Congress, Big Tech is under mounting pressure

From Biden to Congress, Big Tech is under mounting pressure

WASHINGTON — Without speaking a word or scratching a pen across paper, President Joe Biden drove up the pressure on Big Tech companies already smarting under federal and congressional investigations, epic antitrust lawsuits and near-constant condemnation from politicians of both parties.Biden last week elevated a fierce critic of Big Tech, antitrust legal scholar Lina Khan, to head the powerful Federal Trade Commission. The surprise move was a clear signal of a tough stance toward tech giants Facebook, Google, Amazon and Apple and came as sweeping bipartisan legislation advanced in the House that could curb their market power and force them to sever their dominant platforms from their other lines of business.The House Judiciary Committee is digging into the legislation in a public drafting session Wednesday, an initial step in what promises to be a strenuous slog through Congress. Many Republican lawmakers denounce the market dominance of Big Tech but don’t support a wholesale revamp of the antitrust laws. Republicans have relentlessly hurled accusations of anti-conservative bias against the social media platforms and may demand targeted legislative sanctions in return for their support.The huge legislative package, led by industry critic Rep. David Cicilline, D-R.I., targets the companies’ structure and could point toward breaking them up, a dramatic step for Congress to take against a powerful industry whose products are woven into everyday life. If such steps were mandated, they could bring the biggest changes to the industry since the federal government’s landmark case against Microsoft some 20 years ago.“It will be a really heavy lift,” says Rebecca Allensworth, a professor of antitrust at Vanderbilt University Law School. The complex language that could eventually be laid down may invite fights in the courts by rewriting four decades of antitrust case law, she suggested.Lauded as engines of innovation, the Silicon Valley giants for decades enjoyed minimal regulation and star status in Washington, with a notable coziness during the Obama administration, when Biden was vice president. The industry’s fortunes abruptly reversed about two years ago, when the companies came under intense federal scrutiny, a searing congressional investigation, and growing public criticism over issues of competition, consumer privacy and hate speech.Biden said as a presidential candidate that dismantling the big tech companies should be considered. He also has said he wants to see changes to the social media companies’ long-held legal protections for speech on their platforms.The legislative proposals also would prohibit the tech giants from favoring their own products and services over competitors on their platforms. The legislation was informed by a 15-month Judiciary subcommittee antitrust investigation, led by Cicilline, that concluded the four tech giants have abused their market power by charging excessive fees, imposing tough contract terms and extracting valuable data from individuals and businesses that rely on them.The four companies deny abusing their dominant market position and have asserted that improper intervention in the market through legislation would hurt small businesses and consumers.The legislation also would make it tougher for the giant tech companies to snap up competitors in mergers, which they have completed by scores in recent years.And the legislation asks Congress to boost the budgets of regulators who police competition, such as the Federal Trade Commission and the antitrust division of the Justice Department. State attorneys general would get power over companies to choose which courts to prosecute tech antitrust cases in. Some expert observers view those as the less complicated and less controversial parts of the legislation that may stand a better chance of making it to congressional passage.Democrats control the House, but they would need to garner significant Republican support in the Senate for legislation to pass. The chamber is split 50-50 with the Democrats’ one-vote margin depending on Vice President Kamala Harris being the tiebreaker.The tech industry has known that major antitrust legislation would likely follow the House investigation. And it was known for months that Biden was naming Lina Khan as one of five members of the FTC. But Silicon Valley — and nearly everyone inside the Beltway — was blindsided by Biden’s lightning move elevating Khan to head the independent agency. She was sworn in just hours after the Senate confirmed her as one of five commissioners on a 69-28 vote.Khan, who has been a law professor at Columbia University, burst onto the antitrust scene with her weighty scholarly work in 2017 as a Yale law student, “Amazon’s Antitrust Paradox.” She helped lay the foundation for a new way of looking at antitrust law beyond the impact of big-company market dominance on consumer prices. As counsel to the Judiciary antitrust subcommittee, she played a key role in the 2019-20 investigation of the tech giants’ market power.At 32, Khan is believed to be the youngest chair in the history of the FTC, which polices competition and consumer protection in industry generally as well as digital privacy.Last October the Trump Justice Department, joined by about a dozen states, filed a ground-breaking antitrust lawsuit against Google, accusing the company of abusing its dominance in online search and advertising to stifle competition. That was followed in December by a big antitrust suit against Facebook, brought by the FTC and nearly every U.S. state. It seeks remedies that could include a forced spinoff of the popular Instagram and WhatsApp messaging services.European watchdogs, meanwhile, are stepping up their antitrust actions against the tech giants. In the latest move, word came Tuesday that European Union regulators have opened a new investigation into whether Google stifled competition in digital ad technology. The EU regulators have previously charged Apple with stifling competition in music streaming, and accused Amazon of using data from independent merchants to unfairly compete against them with its own products.EU and British regulators recently opened dual antitrust probes into whether Facebook distorts competition in the classified advertising market by using data to unfairly compete against rival services.———Follow Marcy Gordon at https://twitter.com/mgordonap.

Biden elevates energetic critic of Big Tech as top regulator

Biden elevates energetic critic of Big Tech as top regulator

WASHINGTON — President Joe Biden on Tuesday installed an energetic critic of Big Tech as a top federal regulator at a time when the industry is under intense pressure from Congress, regulators and state attorneys general.The selection of legal scholar Lina Khan to head the Federal Trade Commission is seen as signaling a tough stance toward tech giants Facebook, Google, Amazon and Apple. Khan was sworn in as FTC chair just hours after the Senate confirmed her as one of five members of the commission on a 69-28 vote.Khan has been a professor at Columbia University Law School and burst onto the antitrust scene with her massive scholarly work in 2017 as a Yale law student, “Amazon’s Antitrust Paradox.” She helped lay the foundation for a new way of looking at antitrust law beyond the impact of big-company market dominance on consumer prices. As counsel to a House Judiciary antitrust panel in 2019 and 2020, she played a key role in a sweeping bipartisan investigation of the market power of the tech giants.At 32, she is believed to be the youngest chair in the history of the FTC, which polices competition and consumer protection in industry generally as well as digital privacy.“Lina brings deep knowledge and expertise to this role and will be a fearless champion for consumers,” Sen. Elizabeth Warren, D-Mass., who has called for tech industry breakups, said in a statement. “Giant tech companies deserve the growing scrutiny they are facing, and consolidation is choking off competition across American industries. With Chair Khan at the helm, we have a huge opportunity to make big, structural change by reviving antitrust enforcement and fighting monopolies that threaten our economy, our society and our democracy.”Khan also was a legal adviser to Rohit Chopra, an FTC commissioner, and was previously legal director of the Open Markets Institute, an organization that advocates against corporate concentration.“It is a tremendous honor to have been selected by President Biden to lead the Federal Trade Commission,” Khan said in a statement. “I look forward to working with my colleagues to protect the public from corporate abuse.”Biden said as a presidential candidate that dismantling the big tech companies should be considered. He also has said he wants to see quickly crimped the social media companies’ long-held legal protections for speech on their platforms.Biden in March appointed Tim Wu, also an academic expert on antitrust and industry critic, as a special assistant to the president for technology and competition policy within the National Economic Council. Wu, like Khan a Columbia law professor, has been a senior adviser to the FTC and a senior enforcement attorney in the New York attorney general’s office.The tech industry, once lionized by lawmakers and presidents as an engine of innovation and jobs, has seen its political fortunes eroded in recent years. Calls have been rising to break up the Silicon Valley giants.Lawmakers of both parties champion stronger oversight of the tech industry, arguing that its massive market power is out of control, crushing smaller competitors and endangering consumers’ privacy. They say the companies hide behind a legal shield to allow false information to flourish on their social media networks or to entrench bias.Last fall the Trump Justice Department, joined by states, filed a ground-breaking antitrust lawsuit against Google, accusing the search giant of abusing its market dominance to stifle competition. That was followed in December by another big antitrust suit, brought by the FTC and an array of states.Amazon and Apple are under scrutiny by antitrust enforcers at the Justice Department, now in Biden’s purview, and the independent, bipartisan FTC. Twitter has joined Facebook and Google in facing frequent run-ins with lawmakers over its policies for moderating content on its platform.A bipartisan group of House lawmakers, animated by the results of the Judiciary panel investigation of Facebook, Google, Amazon and Apple, proposed sweeping legislation Friday to rein in Big Tech, possibly forcing the giants to break up their businesses while making it harder for them to acquire others. Those kinds of mandated breakups through a legislative overhaul would be a radical step for Congress to take and could be a bridge too far for some Republican lawmakers.Some Republican lawmakers have denounced the new school of antitrust thought, championed by Khan and Wu and gaining currency among Democrats, that looks beyond the impact of big-company market dominance on consumer prices to its broader effects on industries, employees and communities.The school is called “hipster antitrust” by its detractors. With this approach, Democrats are seeking to use antitrust law not to promote competition but to advance social or environmental goals, the Republicans contend.