WASHINGTON — David Cicilline was late getting into antitrust, at least for him.
Antitrust was never on the agenda at the school board meetings he started attending when he was 13, or the town council meetings he got his parents to drive him to a year later. (That would be getting Italian added to the high school’s foreign language options, and then resisting oceanfront condo development in Narragansett, Rhode Island, and both campaigns he won.)
Competition policy was never a plank for the College Democrats group he started at Brown University with John F. Kennedy Jr. Cicilline didn’t take any antitrust classes at Georgetown Law, and he doesn’t remember if it was even a topic on the bar exam. Antitrust didn’t come up during his mayorship in Providence, was a nonissue when he ran for Congress, and was the last of the House Judiciary subcommittees he wanted to join, let alone lead one day. “The truth is, I didn’t know anything about antitrust,” he said.
Ambition, and some friendly nudging to break out his comfort zone from the top Democrat on the Judiciary Committee, Jerrold Nadler, are what led Cicilline to where he is today: chairman of a subcommittee that seeks to do nothing less than replace a sleepy regulatory regime that’s prevailed with bipartisan support for the past half-century with an emergent consensus around aggressively trust-busting, starting with a suite of bills aimed at curbing Big Tech’s dominance of the marketplace.
Time is ticking. While Republican ranking member Ken Buck leads a sizable contingent of Republican antitrust allies, and there’s bipartisan support in the Senate led by Sens. Amy Klobuchar, D-Minn., and Charles E. Grassley, R-Iowa, most of the GOP seems uninterested in major reforms. If Democrats lose control of Congress in the midterms, as most election handicappers expect, there’s little hope any of the antitrust reforms will happen.
“This is definitely a moment,” said Cicilline. “It’s not just about a set of bills, it’s not just about one investigation, it’s about really taking on with renewed energy and creativity and urgency the responsibility of really enforcing good antitrust laws in this country.”
And while President Joe Biden appointed a team of aggressive antitrust regulators to top posts — including former Cicilline aide Lina Khan to chair the Federal Trade Commission — recent losses in the courtroom highlight the need to pass new legislation, argued Cicilline.
“In the end, the change of laws requires congressional action,” the Rhode Island Democrat said. “We’re battling some of the biggest, most powerful companies in the history of the world, and it’s going to require all of us to work together in a bipartisan way to get this done, particularly in Congress.”
‘A threat to democracy’
Cicilline spent two years as the subcommittee’s ranking member before taking over as chair after the 2018 elections. He used that time to bone up on the issue with the subcommittee’s chief counsel, Slade Bond, as his tutor.
“It became really clear to me that this was a much bigger issue than most people understand,” he said. “That it really did impact how the economy works, and how is it we kept seeing enormous concentrations of wealth at the very top.”
He came to see that concentration of economic power as anathema to a government for, of and by the people. “It’s a threat to democracy in a very fundamental way,” Cicilline said. “They are inconsistent. You can’t have both.”
“History shows us just the opposite,” he added. “It shows us the danger of concentrated economic power. And one of the dangers is it almost always leads to concentrated political power. That’s what makes this work so hard. We’ve waited too long. These companies have been allowed to grow and become so powerful. They behave as if they’re untouchable … and so far, they’ve been right. They’ve been able to do whatever they want. That’s over.”
As chairman, he decided to start with a formal investigation into the nation’s largest tech companies. “This was the first antitrust investigation Congress had done in more than 50 years. This was a big undertaking,” said Cicilline.
Along the way, Cicilline held hearings both in D.C. and across the country, highlighting how massive companies like Amazon use their size and power as both a retailer and a manufacturer to bully smaller companies. The investigation lasted close to 18 months and ended with a 450-page report.
Cicilline wasn’t the first lawmaker to focus on antitrust. Sen. Elizabeth Warren started drawing attention to competition policy in 2016, and Klobuchar wrote a book on antitrust that published in 2021. In 2017, Khan wrote a law review note that went viral while she was at Yale Law — as a student, not a professor. Biden picked her to lead the FTC in 2021; before that she spent some time on Cicilline’s subcommittee staff.
But Cicilline’s role in turning the antitrust tide cannot be diminished, said Barry Lynn, executive director of the Open Markets Institute.
“The person who actually took it and made it a politically salient issue that started to really drive this in a way that would lead to, hopefully, actual legislation — that was Congressman Cicilline,” said Lynn.
Cicilline started off working closely with then-ranking member Jim Sensenbrenner, but after Sensenbrenner retired, Colorado’s Buck took over in 2021. When Cicilline’s investigation began, Buck — a Freedom Caucus conservative — was wary.
“I was really skeptical about the need for revision of the antitrust laws until I started seeing really how these companies abused their market dominance,” Buck said. “So, I started getting more interested. And Chairman Cicilline — a great leader in this area — really reached out, wanted these bills to be bipartisan and was open to a lot of discussion and a lot of thought in terms of how to make these bills something that both sides could agree to.”
“There’s probably not another issue that Ken and I agree on,” Cicilline said. The two make for quite the odd couple on the Hill: Cicilline is one of nine openly gay members of the House, while Buck condemned the Supreme Court’s decision that held same-sex couples have a constitutional right to marry; Cicilline was a manager for Trump’s second impeachment, while Buck signed an amicus brief in a lawsuit challenging the 2020 election results.
“We are really polar opposites on most issues,” Buck said. “Yet when it comes to this area, there’s a lot of overlap, and there was the ability to set differences aside and work.”
“That’s what impressed me the most about the chairman — is his willingness to find a middle ground,” Buck added. “Clearly, in some areas, we respectfully disagree. But he is really very talented at finding places where we can agree and trying to move bipartisan legislation. This won’t pass the Senate if it’s only got Democrat votes.”
The investigation “changed the language with which people were discussing this,” Lynn said. “It demonstrated how concentrated power was affecting journalism, how concentrated power was affecting entrepreneurs, how concentrated power was affecting free speech, etc.”
Cicilline is relying heavily on Buck to bring enough GOP votes to make up for the California Democrats who’ve indicated they’ll vote against the reforms over privacy concerns.
For Buck, it’s a chance for the growing populist wing of the GOP to figure out where the party stands on the question of government interference in the marketplace.
“For the most part, the Republican Party should be hands off. I think the Republican Party believes, and I certainly believe, that a freer market is a better market,” Buck said. “There are exceptions, and these four companies (Alphabet, Meta, Amazon and Apple) fall into that exception. And that’s where we don’t have a free market because of their monopoly status.”
That differs from Cicilline’s focus on creating a fair marketplace for smaller companies.
“I talked about these bills as a way of promoting competition,” Buck said. “David talks about the bills as a way of reining in these companies. And Republicans are wary of using government power to rein in a business but are very interested in promoting competition.”
Not everyone agrees with them. After a 29-hour markup session last June, the bills advanced on narrow margins, some by just a single vote.
Competition vs. consumer welfare
The existing antitrust system has plenty of defenders. Tad Lipsky, a professor at the Global Antitrust Institute at George Mason University’s Antonin Scalia Law School, notes that as the U.S. competition regime softened in the late ’70s, European regulators didn’t let up. The gross domestic products of the U.S. and the countries that would later form the European Union were both about $3 trillion in 1981, when the consumer-benefit approach to antitrust was firmly taking hold in the states, Lipsky said. Fast forward to just before COVID-19 hit in 2020, and, adjusting for inflation, the U.S. GDP was $21 trillion, compared to $15 trillion for the EU bloc.
“Basically, the U.S. economy was the most successful economy in history, and it was growing substantially faster than our most comparable competitor, which was Europe — about 30 percent faster,” Lipsky said, crediting U.S. antitrust policy for much of that difference.
The federal antitrust regime began during the fin de siècle with the Interstate Commerce Act in 1887 and the Sherman Antitrust Act in 1890, which were little used until the Progressive Era. Future Supreme Court Justice Louis Brandeis led the legal fight against the robber barons and their monopolies, which was picked up by President Woodrow Wilson and became a plank of the Democratic Party. Aggressive antitrust policies were embedded in New Deal legislation and dominated the landscape for decades to come.
At the heart of this view was that markets require robust competition. That is an echo of the assumption that underpins every Econ 101 lesson about the laws of supply and demand: The invisible hand’s ability to efficiently set prices and allocate resources relies on an assumption of perfect competition.
In the 1970s, though, some economists and lawyers — many affiliated with the University of Chicago — began to question the Brandeisian way of doing things, arguing that larger firms could produce efficiencies of scale and pass down those benefits to customers. In 1978, Robert Bork published “The Antitrust Paradox,” which argued that mergers and acquisitions should be judged primarily on whether they would benefit the consumer by leading to lower prices. That argument swept through the judiciary, the FTC and the Department of Justice’s antitrust division.
Without a single legislative act, Lipsky said the U.S. competition regime went from treating mergers as presumptively illegal, to allowing some firms, to promoting consolidation in nearly every industry.
“Once this consensus emerged to use and apply empirically based economics, everything kind of gradually fell into place,” he said, crediting that for advances in innovation.
But Cicilline and his supporters point to the rise of the consumer welfare standard in antitrust law as where things went off the rails for the U.S. economy. That change coincided with stagnating wage growth, growing inequality and the long decline of U.S. manufacturing.
The goal is “basically restoring antitrust policy back to where it was, and the original intention of Congress when we passed really strong antitrust provisions,” Cicilline said.
Like Brandeis, Cicilline argues that monopolistic conditions actually stifle innovation. He doesn’t buy the argument that breaking up Big Tech would punish the companies for beating their competitors or increase prices.
“That’s exactly the argument that Standard Oil made,” he said. “That’s the argument that every monopolist makes.”
“I want to create space for more technology, for more companies, more entrepreneurs, more startups, better quality, more choices,” Cicilline added. “You can’t do that in the absence of competition.”
Lipsky begrudgingly credits Cicilline for the way he’s gone about pushing for these reforms — building a theory for change with the investigations and reports and courting bipartisan support — even as he hopes he fails. And he agreed they would be transformative.
“The changes being proposed in the aggregate are tremendous,” Lipsky said. “They’re radical.”
Running out of time
This fight could be more consequential than anything else Congress does this term. The spending bills and infrastructure bills and COVID-19 relief packages may total trillions, but this is about setting the rules for how the $21 trillion U.S. economy operates. We tend to fixate on the big numbers — how many billions in subsidies or tax breaks in a bill — but the rules of the marketplace might matter more.
It’s also, in Cicilline’s eyes, an electoral boon for his party, a way of convincing America’s little guys that government is on their side.
“Good policy is good politics,” said Cicilline. “If you do the right thing, the politics take care of itself.”
Whether that’s true will depend on whether voters notice — assuming the bills actually pass. The rules of the marketplace are like the air we breathe; we don’t notice them until something goes horrifically wrong. Democrats are having a hard enough time getting voters to credit them for what they have done recently, like the $1.9 trillion American Rescue Plan and the $1.2 trillion infrastructure deal. The connection between those programs and how they affect voters is much more direct — the stimulus checks and expanded child tax credits immediately put cash in their bank accounts — than antitrust policy.
Even if the laws succeed in upending the marketplace, the primary beneficiaries — small business owners and startups trying to compete with the likes of Amazon and Apple — are more apt to credit their own hard work and ingenuity than legislative changes and FTC lawsuits.
To the extent consumers notice, the short-term effects might be negative. Opponents are running ads claiming Klobuchar and Grassley’s bill would force Amazon to end its popular next-day delivery service, Prime. Scaremongering or not, it’d take a while for the benefits from increased competition to trickle down to customers.
That’s assuming Cicilline and Buck can get their bills through the floor, and that their allies in the Senate can do the same. According to OpenSecrets, telecom and internet firms spent more than $200 million lobbying Congress in 2021.
Buck recently told Time that he expects a floor vote on the bills this summer, hoping they’ll end up on Biden’s desk by the August recess. After that, there’s little hope of anything of consequence passing Congress so shortly before the midterm elections.
This is the fight Cicilline signed up for, though. “We had no delusions about how difficult it was going to be,” he said. “We knew that we would be taking on some of the biggest economic powers in this country, who had run companies that generated profits never seen in the history of the world.”
Cicilline says there were naysayers the entire time, people questioning whether the investigation would be serious, whether it would lead to bills, whether those bills could get bipartisan support, whether they’d ever get a markup, whether they’d ever get out of committee.
“At every step of the way, we’ve proven them wrong, and we intend to do it with the last step as well.”