Biden’s pro-competition agenda put to the test as net neutrality, tech trials take shape
U.S. President Joe Biden delivers remarks prior to signing an executive order on “promoting competition in the American economy” during an event in the State Dining Room at the White House in Washington U.S., July 9, 2021.
Evelyn Hockstein | Reuters
Joe Biden has positioned himself as a pro-competition president, delighting progressives by installing their wish list of liberal antitrust enforcers early in his administration.
But this fall, his digital competition agenda will truly be put to the test, as the first of the government’s tech anti-monopoly cases is finally argued in federal court.
Tuesday marked a convergence of several long-awaited actions in competition policy and enforcement. First, the Federal Trade Commission announced its long-awaited antitrust suit against Amazon. Shortly after that, the Federal Communications Commission chair announced a proposal to reinstate net neutrality rules, which prohibit internet service providers from favoring certain websites over others.
At the same time, the Department of Justice has been litigating its own monopolization suit against Google in Washington, D.C. District Court, three years after the initial complaint was filed during the last administration. The Justice Department’s second antitrust challenge against Google is set to go to trial early next year.
During Biden’s presidency, plenty of ink has been spilled over his antitrust enforcers’ boundary-pushing approaches, particularly as they eyed deals and potential misconduct in the tech industry. But until this month, none of the federal tech monopoly trials had kicked off.
Before the swearing in of Democrat Anna Gomez this week, the FCC had been deadlocked, unable to move forward with any measures that couldn’t gain the support of at least one of its Republican commissioners.
Antitrust cases and government rulemaking are famous for their often long timelines. But with all of these actions now set in motion, Americans are one step closer to seeing how the Biden administration’s competition vision plays out.
Tim Wu, who previously served in the White House as a key architect of the Biden administration’s competition agenda, said in an interview that many of the seeds planted early in the administration, if not yet bearing fruit, are at least “sprouting.”
Wu said that in the early days of his time at the White House, the administration came up with what was called the “grand unified theory of antitrust revival.” It included appointing strong enforcers and starting the White House Competition Council.
Biden laid out his competition goals in an executive order issued in 2021, which urged the FCC to restore net neutrality rules and for the FTC to “challenge prior bad mergers,” among other things.
Since the time of the executive order, Hannah Garden-Monheit, director of Competition Council policy at the White House, said those principles have “built up a lot of momentum” and have “become embedded and institutionalized in the work of the government.”
Even as several prongs of competition policy take shape, the Biden administration is up against the clock. As the 2024 presidential election approaches, the administration faces the possibility of losing its chance to follow through on some of the actions it has spearheaded.
That timeline may be particularly concerning for the ability to implement and uphold net neutrality rules, given that the FCC didn’t have a Democratic majority able to advance the rulemaking until just this week. Wu and other net neutrality advocates have blamed the telecom industry for opposing Biden’s initial FCC nominee, Gigi Sohn, holding up her nomination for well over a year until she ultimately withdrew. (CNBC parent company NBCUniversal is owned by internet service provider Comcast.)
Gigi Sohn testifies during a Senate Commerce, Science, and Transportation Committee confirmation hearing examining her nomination to be appointed Commissioner of the Federal Communications Commission on February 9, 2022 in Washington, DC.
Peter Marovich | Getty Images
Biden’s unwillingness to pivot to another candidate earlier also meant the FCC remained deadlocked for the first half of his term as president.
Still, Wu said that backing down from a qualified candidate is “not Biden’s style.”
No matter when the administration changes hands, Wu said he’s confident that net neutrality can prevail. He called the repeal of the rules under Trump’s FCC an “outlier” and believes Republicans have nothing to gain at this point in pushing for repeal.
“I think about Republicans — they don’t like Google, Facebook doing censorship — and they really don’t like their cable company doing it either,” Wu said. “There’s no constituency right now for the repeal of net neutrality.”
At the FTC, Chair Lina Khan finally moved ahead in filing the agency’s antitrust suit against Amazon, accusing it of illegally maintaining a monopoly by punishing sellers that offer lower prices elsewhere and “effectively” requiring them to use Amazon’s fulfillment services. Amazon’s general counsel has called the suit “wrong on the facts and the law.”
Federal Trade Commission Chair Lina Khan testifies before a House Judiciary Committee hearing on Oversight of the Federal Trade Commission, on Capitol Hill in Washington, D.C., July 13, 2023.
Kevin Wurm | Reuters
“This complaint focused on behaviors that courts have in the past found clearly to be violations of the antitrust laws,” Bill Baer, who has served as the top antitrust official at both the FTC and DOJ in different Democratic administrations, said. “She didn’t need to include theories where the courts either haven’t reached or about which they’ve been more skeptical in the past.”
Wu said the more narrow approach didn’t surprise him, in part because Khan is “more restrained than people think she is.”
“Frankly, it’s not exotic at all,” Wu said of the Amazon complaint. “It’s plain vanilla, Main Street, what we would call a consumer welfare case.”
While Khan and Jonathan Kanter, her counterpart at the DOJ, have said they aim to bring cases that they can win, they have indicated they’re also willing to bring riskier complaints to push the boundaries of the law.
“They’re adopting more of a baseball approach than a perfectionist approach,” Wu said. “And if you have someone who’s batting .500, .700, that’s a pretty good hitter, especially if they’re swinging for home runs.”
“It is a critical moment in the courts deciding how the antitrust laws apply to Big Tech,” Baer said. “The results of these pending and future cases will tell us a lot about what the rules of the road are going forward.”
Advocates of reforming antitrust laws have said that it’s important for Congress to clarify the law, but antitrust reform has stalled in Congress after a major push last year fizzled out.
Wu said a key “uncompleted part” of the grand master plan in the White House was appointing more antitrust enforcement-minded judges.
In 10 years, Garden-Monheit said she thinks Americans will look back at this moment “as a real inflection point” where the president opted to turn the page on “40 years of laissez-faire, trickle-down economics, lax enforcement of antitrust laws.”
“I hope that’s the direction that we’ll continue to see for decades going forward, just like we’ve turned the page on decades of past failed approach,” Garden-Monheit said.
“Win or lose, we don’t know what will happen in any of these cases,” Wu said. “But I think we’ll look back at this and say that non-enforcement was just a blip.”
WATCH: FTC files lawsuit against Amazon. Here’s how to play the stock
SpaceX’s mega rocket Starship booster returns to the launch pad during a test flight from Starbase in Boca Chica, Texas, Thursday, Jan. 16, 2025.
Eric Gay | AP
As SpaceX awaits the results of a critical election that would turn the location of its Starbase launch site into an incorporated Texas city, lawmakers have declined to give Elon Musk’s aerospace company greater control over a main highway and public beach.
Starbase, where the Musk-led company builds and launches its rockets, is located in Boca Chica, Texas, on the Gulf Coast. Residents of the area are voting on whether to turn the small community into a city, with the election scheduled to conclude on Saturday.
On Monday, the Texas House State Affairs Committee voted against a bill that would have given SpaceX greater control over a highway and public beach access in the likely event the company is victorious in its effort to make Starbase into Texas’ newest city. Around 500 people live in the community today, including SpaceX employees and about 120 children, according to the Texas Tribune.
SpaceX has historically needed to close roads and beaches around Starbase in order to conduct test flights and launches, including for its massive Starship rockets, which Musk sees as a prelude to an eventual Mars mission. Closing off access to beaches in the area has required SpaceX to inform and attain permission from authorities in Cameron County, the southernmost county in Texas.
The frequent closures have contributed to legal complaints against SpaceX, and have drawn protests from local residents and activists, including the Carrizo Comecrudo Tribe of Texas, the South Texas Environmental Justice Network and Border Workers United.
Activists in the Rio Grande Valley area, where Starbase is located, protested and formally lobbied against the bills for weeks. Related proposals could be introduced before the legislature meets again next month.
As CNBC has previously reported, SpaceX has conducted test flights or launches that have resulted in fires and harm to sensitive habitat essential to some endangered species in the area.
In one example, SpaceX was fined by the Environmental Protection Agency for polluting waters in Texas in violation of the Clean Water Act. After those fines, Musk threatened to sue the FAA for “regulatory overreach” but never filed a complaint.
Following a front-page New York Times story in July about the damages to local wildlife, including bird habitat, caused by SpaceX, Musk wrote in a post on his social media site X, “To make up for this heinous crime, I will refrain from having omelette for a week.”
That was a week before Musk formally endorsed Donald Trump for president after an assassination attempt on the then-presumptive Republican nominee at a rally in Pennsylvania. Musk then went on to spend nearly $300 million to propel Trump back the White House, and now serves as an advisor to the president with influence over spaceflight and environmental regulations.
In leading the Department of Government Efficiency, Musk has helped gut the ranks of both the Environmental Protection Agency and the Federal Aviation Administration. Under Trump’s EPA, the U.S. has promised to “reconsider” or target dozens of rules for elimination that currently limit air pollution and wastewater from energy, autos and manufacturing sectors.
Tim Hughes, SpaceX’s head of government affairs, didn’t respond to a request for comment, nor did the offices of Republican State Representatives Gina Hinojosa and Janie Lopez, who introduced the bills to give SpaceX local beach control.
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