President Biden Targets Tech Monolopies, Data Collection

US President Joe Biden has on Friday signed a sweeping executive order that seeks to promote competition in the American economy.

The executive order targets multiple industries, but tech giants and their market domination is addressed, as are Internet Service Providers, net neutrality, right to repair, surveillance and data collection among others.

The central thrust of the executive order is to break up what the Biden administration considers are monolopies not just in the tech sphere, but airlines, agriculture , labour markets, healthcare, shipping and many more.

Executive order

Biden’s executive order economy starts by pointing out the American economy is booming under President Biden’s leadership.

“The economy has gained more than three million jobs since the President took office – the most jobs created in the first five months of any presidency in modern history,” the order states.

“Today, the President is building on this economic momentum by signing an Executive Order to promote competition in the American economy, which will lower prices for families, increase wages for workers, and promote innovation and even faster economic growth.”

But it notes that for decades, corporate consolidation has been accelerating, and in over 75 percent of US industries, a smaller number of large companies now control more of the business than they did twenty years ago.

“That lack of competition drives up prices for consumers,” said the White House. “As fewer large players have controlled more of the market, mark-ups (charges over cost) have tripled. Families are paying higher prices for necessities—things like prescription drugs, hearing aids, and internet service.”

The executive order covers multiple industries, but Silicon UK has focused on the tech-related aspects of the order.

Internet Service

The Executive Order tackles four issues that limit competition, raise prices, and reduce choices for internet service, said the White House.

It cites a lack of competition among broadband providers, pointing out that more than 200 million US residents live in an area with only one or two reliable high-speed internet providers, leading to prices as much as five times higher in these markets than in markets with more options.

A related problem is landlords and internet service providers entering exclusivity deals or collusive arrangements that leave tenants with only one option.

“This impacts low-income and marginalized neighbourhoods, because landlord-ISP arrangements can effectively block out broadband infrastructure expansion by new providers,” said the White House.

In the Order, the President encourages the FCC to:

• Prevent ISPs from making deals with landlords that limit tenants’ choices.

Lack of price transparency: Even where consumers have options, comparison shopping is hard. According to the Federal Communications Commission (FCC), actual prices paid for broadband services can be 40% higher than advertised. During the Obama-Biden Administration, the FCC began developing a “Broadband Nutrition Label” – a simple label that provides basic information about the internet service offered so people can compare options. The Trump Administration FCC abandoned those plans.

In the Order, the President encourages the FCC to:

• Revive the “Broadband Nutrition Label” and require providers to report prices and subscription rates to the FCC.

High termination fees: If a consumer does find a better internet service deal, they may be unable to actually switch because of high early termination fees—on average nearly $200—charged by internet providers.

In the Order, the President encourages the FCC to:

• Limit excessive early termination fees.

In the Order, the President encourages the FCC to:

• Restore Net Neutrality rules undone by the prior administration.

Technology

The Executive Order tackles three areas in which dominant tech firms are undermining competition and reducing innovation.

The White House feels Big Tech platforms purchasing would-be competitors: Over the past ten years, the largest tech platforms have acquired hundreds of companies – including alleged “killer acquisitions” meant to shut down a potential competitive threat. Too often, federal agencies have not blocked, conditioned, or, in some cases, meaningfully examined these acquisitions.

In the Order, the President:

• Announces an Administration policy of greater scrutiny of mergers, especially by dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by “free” products, and the effect on user privacy.

Big Tech platforms gathering too much personal information: Many of the large platforms’ business models have depended on the accumulation of extraordinarily amounts of sensitive personal information and related data.

In the Order, the President:

• Encourages the FTC to establish rules on surveillance and the accumulation of data.

Big Tech platforms unfairly competing with small businesses: The large platforms’ power gives them unfair opportunities to get a leg up on the small businesses that rely on them to reach customers. For example, companies that run dominant online retail marketplaces can see how small businesses’ products sell and then use the data to launch their own competing products. Because they run the platform, they can also display their own copycat products more prominently than the small businesses’ products.

In the Order, the President:

• Encourages the FTC to establish rules barring unfair methods of competition on internet marketplaces.

Cell phone manufacturers and others blocking out independent repair shops: Tech and other companies impose restrictions on self and third-party repairs, making repairs more costly and time-consuming, such as by restricting the distribution of parts, diagnostics, and repair tools.

In the Order, the President:

• Encourages the FTC to issue rules against anticompetitive restrictions on using independent repair shops or doing DIY repairs of your own devices and equipment.