Big Technology Podcast - Bonus: Senator Amy Klobuchar On How Congress Will Take On Big Tech

Episode Date: March 13, 2021

Senator Amy Klobuchar will be leading the charge in Congress as the legislature interrogates the power of big tech, and potentially takes action to restrain it. She's the new Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, so it's in her hands now. Klobuchar and I spoke this past week ahead of the first hearing she held to kick the off process. And rather than simply writing the conversation up, which I did on the Big Technology newsletter this week, I wanted to make it available for you to listen to, in full.

Just a quick note before we start, rating big technology podcast on Apple Podcasts helps increase our visibility, and it also takes less than 10 seconds on an iPhone. Would you be willing to tap a rating, maybe even while you listen? We're building some good momentum here, and it would be great to keep it up. Thank you. Okay, now before we start here with Senator Amy Klobuchar, here's a quick ad. MediaOcean is for people who like to be efficient, like listening to this podcast at 2X speed. So I'm talking slow to make sure this ad is super clear.

If you work in advertising, go to Mediaocean.com slash big tech to register for a big virtual event on March 23rd. That's Mediaocean.com slash big tech. Hello and welcome to the big technology podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. And welcome to a bonus episode with Senator Amy Klobuchar. Senator Klobuchar is the chairwoman of the Senate Judiciary Subcommittee on competition policy, antitrust, and consumer rights. and she'll be leading the charge in Congress as the legislature interrogates the power of big tech

and potentially takes action to restrain it. Klobuchar and I spoke this week ahead of the first hearing she held to kick off the process. And rather than simply writing the conversation up, which I did on big technology newsletter this week, I wanted to make it available to you to listen to in full. So here it is. Okay, a few things to look out for. First, and speaking with the senator, I try to figure out how President Biden is feeling about big tech antitrust, since I figured he and Senator Klobuchar have been speaking about it.

And it turns out they have. And then second, Senator Klobuchar recently introduced a bill that would strengthen the regulators and include stricter standards for mergers. So listen now for some hints of how the effort to build support for that bill and others like it are going. And then there's the elevator story we kick off with. So without further delay, here's my conversation with Senator Amy Klobuchar. I think the last time we spoke, I accidentally wandered into the senators only

elevator with you back when things were in person and you didn't yell at me. So I appreciate that. Did I tell you the story at the time of when I was a, I had been in the Senate for a full six months and a senator who's no longer with us who was standing outside the elevator, the door open and I was standing with my two staff members who were young, one of whom was, by the way, Jake Sullivan, who's now the national security advisor to Biden, standing on the elevator, the senator looks in and looks at me directly. There's only a hundred of us. I've been there for six months, says,

I'm sorry, this is a senator-only elevator. Oh, my God. And I pause, and Jake says, she is a senator, and the guy turns all red, and then I look at the guy, and I go, but who are you? And so then he just backs away

and the door's closed and he never gets on. He's so mortified. That happened. No one would make that mistake anymore. Yeah, exactly. We have a few minutes. The first thing I wanted to ask you about is that I'm here in Silicon Valley, and I know that a bunch of folks in big tech were rooting for a split Senate and House, and it seemed like they wanted more inaction for Congress. So how worried should they be

that Democrats swept the legislature and how you have both the House and Senate? You know, I think the answer is not worried, because the answer is, first of all, we are passing just this week a major, major package to help people get through this pandemic. all companies, including tech companies and Silicon Valley, wants us to get through this pandemic. They want us to pass immigration reform. That wasn't going to happen with a split Republican Democratic Senate. They want to see action on climate change. There's so much support in the valley for that. And that's how you're going to get there. So I see a net positive. I know that having worked with the tech companies on things like immigration reform and diversifying tech, I don't

I'm well aware of this incredible talent that we have in the tech area. And I am actually proud of the work that they've done. But I believe that part of capitalism is that you rejuvenate it, that you make sure that you've got checks and balances. And that's what anti-trust law has been about over the years from even some major Republican presidents like Teddy Roosevelt, who saw it as good for business in the end because you want to have the next great thing. You want to have, you know, the competition with Facebook could have been Instagram or WhatsApp, but that's not true because they decided to go out and buy them.

You want to have the next competition to Google, but there goes double-click. You want to have the next competition to Google Maps, but then they go by ways. So, you know, at some point, you've got to rejuvenate the competitive marketplace and you can do it without destroying a sector you actually help the sector and best example at t and t breakup i was head a front road of that i represented mci over the years and saw how the for like 15 years and i saw how that breakup one led to incredible innovations with cell phones when it started out they were like big things you couldn't even gordon gecko you know can't fit in a briefcase i saw how the long-distance rates went down, and I saw how AT&T actually emerged strong. Their own

chairman at one point said they were a stronger company. So I think that is a great lesson from history about how you can have major laws or major litigation and decide antitrust laws means this industry is way, way too consolidated. But everyone can go on to fight another day and actually be our economy stronger as a result of it. Right. But when it comes to antitrust, regulation in particular. How resolved are the Democrats to actually pushing forward meaningful action? I'd say resolved. We've gone so long, first of all, without privacy rules in place. We need to do that. There's misinformation issues. But when it comes to antitrust, you've seen more and more interest in this. I know. Our bill now on antitrust has, of course,

Dick Blumenthal and Cory Booker, who've always been there with me. But, you know, you've got people on it now like Mark Warner and others that are getting more and more interested in this, the bill to up the agency funding so that they are not the shadow of their former self that they are right now. That's a bill I'm doing with Chuck Grassley. So I think there is a lot of interest and it's not just about tech. It's also about ag and cable and pharmaceuticals and areas where you've just seen so much consolidation. And now one interesting thing that we've seen is that people have expected President Biden to be a moderate on this. Obviously, it was in the Obama administration. They didn't do much to big tech. But he's appointed Lena Cowr seems to be ready to appoint Lena Con to the

FTC's hired Tim Wu. So he's obviously taking a stance that he's actually into the whole big tech regulation thing. What does he say to you about regulating big tech? And I'm sure you've had conversations about it. How interested is he in pushing this forward? Well, yeah, I think you see in the president and, you know, he's a moderate. I'm a moderate. But I think what you're see is if you believe in capitalism and you believe in fostering small businesses and the like, and that to me is a lot of Joe Biden. He believes in being able to pull yourself up by your bootstraps, then you can't have all power consolidated in monopolies because that makes that really hard to do, especially for women-owned businesses, minority-owned businesses. There's a whole

history here with when monopolies come in, it's harder for small to start. And so I see it as actually reflective of his philosophy. I have talked to him about this. He gets it. The people around him get it. I'm not surprised that he put in aggressive, fresh thinkers when it comes to this. But he's not going to advocate for just completely getting rid of a sector. That's crazy. What he wants to do is to make it more competitive and to make it better for our country. And so I actually think this is very exciting that he's taking this on. And I'm excited to have the gavel, we're having our first hearing this week, and I've introduced this comprehensive bill, working with the House, of course, and I just think it's time to get something done.

Instead of just, you know, pretending we're at a movie theater, throwing popcorn at CEOs when they come before us. You know, that's been helpful, right? There's been some good hearings, but to me, you actually have to get something done. Yeah, do you get the sense that President Biden will sign your bill if it passes? Well, I haven't gone through every detail with it, but I think he would generally be supportive. I think the other exciting thing is Merrick Garland's appointment. Merrick Garland taught antitrust. Merrick Garland is someone that understands the cases, and he just became our attorney general today.

So I think that's good. I've asked about it at every hearing, and there's just generally acknowledgement that something has to be done when it comes to antitrust. And one of the things I'm working on right now is working with Republicans to break down pieces of my bill. Just like I have a major piece of it, I have sponsored with Center Grassley. I'm looking at others to work with. So just stay tuned to how we get this done, but something has to happen. And it may not be all at once. Right.

And let's talk about that. So you said that you have some bipartisan support on funding the FTC and DOJ. Can you tell me a little bit more about like the support that that's getting from full And do you think that's something that could be fast-tracked? I mean, it does seem like those agencies need the funding desperately. You know, we were so close, Alex, to getting this done at the end of the year. My little secret fact for you, I actually talked to Mark Meadows about this bill, the White House Chief of Staff under Donald Trump.

Yeah, he was for it. I had the whole Senate lined up for it. We had taken care of any objections, and it was going to be part of the end of the year deal. And then Representative Jordan and some of the House Republicans, opposed it. But that makes it very clear that we can get this done because there wasn't objections from Democrats and there was also support. And Chuck Grassley is into this idea. He knows that we haven't updated the way these fees are structured since Hart Scott Redino passed. He's ready to go. He could tell you everything about this in the year. He's excited. So, you know, that's different

than just having someone as your co-author who just put their name on something. So I feel really good about our possibilities of doing this, because we were so close at the end of the year. And that would put $130 million into FTC and DOJ antitrust. Remember, we're competing here and trying to get these cases moving against the biggest companies the world has ever known. And you can't do it with duct tape and band-aids.

Yeah. Now, what do you think the House of Democrats or the Democrats in general have learned from the Obama era in terms of the way to approach these companies? Timu said that, you know, maybe we sometimes sometimes we had an overly rosy view of big tech. So what do the lessons learned been from that? Yeah, I actually saw Gene Sperling, who of course, you know, worked in both Clinton Obama administration. He did an interview with Shwisher and he said, you know, basically said if we had to do it all over again,

I would look at it differently. You learn new things. I think a lot of people involved back then feel the same way. And there were a lot of deals that were allowed to go through, notably the WhatsApp and Instagram purchases, they were allowed to go through, and now people have realized, and maybe Mark Zuckerberg's email says it all, that people have realized that when these companies go out that have huge monopoly power, when they go out and they buy what we call nascent competitors, it's not just all for altruistic reason. What he once said in his email was these businesses are nascent, but the net networks established. The brands are already meaningful. And if they grow to a large scale, they could be very disruptive to us. Last time I checked tech was all about disruption.

Like, you're supposed to want to disrupt. And this means you're trying to contain all the competitive disruption. And so I view a lot of the work that I'm doing right now is just push and reply to his email. That's all. Someone's got to respond here. Yeah. So and broadly, You're the subcommittee chair for antitrust. What can people expect from you? Because I know you mentioned you don't want the people throwing popcorn out of screen anymore. But I think there's a broad view that the government just isn't going to do anything to

big tech. And you already have a bill here. So what are these hearings also trying to accomplish? Well, the hearings set the stage for the bills. And I say bills because there's a number of bills and they could be split up. They could go together. There'll be bills coming out of the house. So it's just a first hearing.

We're going to have hearings, because I can now call the hearings, on a number of topics with tech, with ag, with consolidation we've seen in things like online travel. I mean, it's everything from cat food to caskets. So we're going to have a series of hearings, and this is just the beginning. At the same time, we'll be developing the bills, reaching out to people to get sponsors, just like you're supposed to do when you want to get legislation. passed. But one of my highest priorities is make sure that the administration can pursue these cases because, like I said, it's not cheap to do. Okay, so these are like support building measures and it's also going to give some more ammunition to the regulators. That's exactly right. But remember, actually giving them direct resources is very important. Right. The money is, I mean, I've spoken

with people who are inside those agencies who've just complained they have no raises. They don't have money for expert witnesses and when they heard that you were, you know, interested in potentially, you know, increasing the funding, they were jumping up and down. Yeah. Well, and you look at the numbers, actually, the FTC numbers, the DOJ, they are not even where they were during Reagan. You can't, you know, to take on AT&T, it wasn't just bringing the case. And I do appreciate the work that the chairman Simon did at the FTC and bring on the Facebook

case. and that Macon Delraheim and the career people did in both agencies and bringing on the Google case. And the AGs across the country. That's great. But to actually follow it through, you need even more resources. And let me tell you, the companies are totally aware of the lack of resources. So I think we've got to at least give them a fighting chance,

the government to be able to make their case. Another way you do that, with changes to the merger standard, changes to who has the burden for the big deals. That's all in my bill, looking at prejudgment interest because these cases tend to go on for years. And then that hurts the little guys. And at the same time, doing what Joe Biden's doing. I just wrote a book that's coming out in April and laid out what Congress can do. It's called it's really innovative name, Alex.

It's called Antitra. What I also enjoy about it is that my friend Pete Buttigieg, who is my rival on the debate stage, we were laughing about this. Pete has a book called Trust. and I have a book called antitrust. So it continues, but one of the things that I lay out at the end is just what an administration can do, what Congress can do, and what regular people can do. And I think that one of the things that Joe Biden can do,

he's already doing in putting some really smart people that know the competitive markets in place. Yeah. Okay. Well, were you surprised? A lack of competitive markets. Were you surprised to see, you know, President Biden put Lena Khan and Tim Wu in there, or is that something?

Not really. Having read all their stuff, you know, I think you actually, I think it's shaking things up a bit is can be a good thing, you know, does, yeah, I don't know if he agrees with everything they've ever said. You'd have to ask him, but to me, shaking it up and having people with different perspectives in place when we're trying to do such big things is really important. I know that our task is large. You've got, you know, I've got to find Republicans here.

I'm getting more and more interest. I really am because there's all kinds of small businesses that are interested in my bill and the work that I'm doing. And then I also have to convince a bunch of Democrats. This isn't easy. So having voices out there that know what they're doing and can make the case in a really strong way helps me and helps anyone that's trying to do this work. Great.

Well, I know you have to go vote, so I won't keep you and make you miss that. But I appreciate the time. Hope we can keep talking. We definitely love to speak again when you're on the book tour. All right. Thanks, Alex. I'm looking forward to coming out in person. Okay. One of my biggest fun things is I got the endorsement of the Palo Alto Mayor for

hopefully he's still there. Yeah, that's right. That's right. Okay, great. We'll have a good one. See you. Goodbye. Have fun. Okay, bye.