Chamber of Commerce says Biden administration broke rules over Big Tech, requests federal probe

The U.S. Chamber of Commerce is urging federal watchdogs to investigate the Biden administration over concerns the Federal Trade Commission and Justice Department broke rules in their efforts to crack down on Big Tech.

The Chamber asked inspectors general on Wednesday to probe the two agencies over their conduct surrounding legal cases against companies such as Amazon, Google, Meta and Microsoft. 

The urgent request for a federal investigation from the world’s largest business lobbying group spotlights the feud boiling over between businesses and Biden administration regulators. The Chamber sought to make inroads with President Biden’s team at the start of his tenure but now is pushing back against the administration. 

Chamber Senior Vice President Sean Heather told inspectors general for the FTC and Justice Department on Wednesday that those agencies ignored obligations to seek settlements before filing lawsuits against companies and failed to address bias concerns. Mr. Heather also urged investigators to dig into whether the FTC has impermissibly leaked confidential information to advance its agenda. 

The FTC violated Executive Order 12988 in its cases against Amazon, Meta and Microsoft, according to the Chamber. That order directs federal agencies to try to settle civil litigation before filing a complaint, but the Chamber said public reporting revealed the FTC made no effort to settle with the Big Tech companies before filing lawsuits. 

“Unfortunately, it appears that the FTC has been violating the letter and spirit of this executive order,” Mr. Heather wrote to the FTC inspector general. “In case after case, the FTC has filed suit without presenting settlement offers itself and, even worse, ignoring or affirmatively rejecting settlement overtures from the companies.”

SEE ALSO: Washington heavyweights lining up against embattled FTC Chair Lina Khan

The Justice Department violated the same order in its pursuit of Google, Mr. Heather wrote to the department’s inspector general.

FTC spokesman Douglas Farrar said the Chamber misunderstands its policies. 

“The chamber’s false and intellectually lazy argument about EO 12988 demonstrates one thing: They don’t have a basic grasp of how the FTC has worked for over a century,” Mr. Farrar said in an email.  

Assistant Attorney General Jonathan Kanter and FTC Chairwoman Lina Khan are two of Mr. Biden’s appointees whose conduct is in the crosshairs of the Chamber. 

Mr. Kanter’s work on the Justice Department’s case against Google despite previous work for the company’s competitors and Ms. Khan’s refusal to recuse herself from cases against companies she has publicly criticized provoked the Chamber’s ire. 

Mr. Heather told The Washington Times he doesn’t know whether the federal watchdogs will take up his request but he thinks investigations are necessary to ensure proper oversight of the federal government’s antitrust officers. 

SEE ALSO: FTC’s Lina Khan charging forward on a mission to beef up antitrust laws

“It’s part of good government,” Mr. Heather said of the Chamber’s request. “It doesn’t stop the agencies from trying to bring aggressive antitrust cases … but it requires them to articulate what it is that the government wants to achieve by bringing these cases and do so upfront, which should be in the taxpayers’ best interest.”

The battle between the business lobby and the Biden administration has escalated dramatically. After initial overtures to woo the new administration rankled conservatives, the Chamber sued the FTC in 2022 for access to records following Ms. Khan’s takeover. 

Ms. Khan’s conduct has drawn the wrath of Capitol Hill as well, where three House committees are investigating her work. 

The mounting oversight from federal lawmakers and scrutiny from the business community come as Ms. Khan and Mr. Kanter are working to cement Mr. Biden’s push to overhaul merger rules. 

The administration has proposed to change rules regarding the framework used by antitrust regulators to analyze business transactions, and litigators expect the new process may be implemented as soon as the summer of 2024, according to law firm Mayer Brown. 

Ms. Khan and Mr. Kanter rallied liberal groups at an American Economic Liberties Project event in support of the proposed overhaul in August. Mr. Kanter said then that the Biden administration does not intend to kill all business transactions but wants to make clearer guidelines. 

“We are not blocking every merger; we can’t,” Mr. Kanter said alongside Ms. Khan at the event. “We only block the ones that violate the law.”

Tech merger and acquisition activity has already hit a halt. Tech merger and acquisition deal volume hit its lowest level in 2023’s second quarter than at any time since 2020 — during the height of the COVID-19 pandemic — according to a report published last month from business analytics firm CB Insights.  

Targets of Biden administration regulators such as Google, Meta and Microsoft made zero acquisitions in the second quarter, leading CB Insights to conclude the Big Tech titans were “scared” of making deals, given the regulatory environment. 

The Justice Department did not immediately respond to requests for comment Wednesday.

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