Biden Sets Stage for Tech Crackdown With White House Adviser Wu

(Bloomberg) -- Timothy Wu, a Columbia University law professor and outspoken advocate for aggressive antitrust enforcement against U.S. technology giants, is joining the White House an adviser, signaling that the Biden administration is preparing to square off against the industry’s biggest companies.

Wu will join the National Economic Council as a special assistant on technology and competition policy, the White House said Friday.

Wu’s appointment elevates to a senior position in the administration a leading antitrust expert, favored by progressives, who has assailed the power of dominant tech companies like Alphabet Inc.’s Google and Facebook Inc. Both companies were sued by U.S. antitrust enforcers last year for allegedly abusing their monopoly power.

White House Press Secretary Jen Psaki said Wu would help advance Biden’s agenda of addressing the “economic and social challenges” posed by tech platforms, tackling monopoly power, and expanding access to broadband service for low-income and rural communities.

“The president has been clear on the campaign, probably more recently, that he stands up to the abuse of power and that includes the abuse of power from big technology companies and their executives,” she said.

After the Federal Trade Commission and state attorneys general sued Facebook in December, Wu wrote a column in the New York Times comparing Facebook’s strategy of buying competitors to Standard Oil’s tactics in the 19th century.

“What the federal government and states are doing is reasserting a fundamental rule for all American business: You cannot simply buy your way out of competition,” Wu wrote. “Facebook, led by its chief executive, Mark Zuckerberg, has taken that strategy to a smirking and egregious extreme, acquiring multiple companies to stifle the competitive threat they pose.”

Wu joins the Biden administration as tech giants are grappling with a reckoning in Washington that could transform the industry. The Facebook lawsuit could lead to the breakup of the company, while the Justice Department’s complaint against Google targets the heart of its business -- internet search. Antitrust enforcers have also opened investigations of Apple Inc. and Amazon.com Inc.

On Capitol Hill, Democratic lawmakers are working on legislation that could place new restrictions on how the companies operate and make it harder for the companies to continue their spree of acquisitions. Republicans and Democrats also want to change the law that protects tech platforms from lawsuits over what users post online and which is at the center of a debate on content moderation and free speech.

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Beyond tech, many competition policy experts are calling for a broad rethinking of how antitrust enforcers police mergers and conduct by dominant firms across the economy. They point to evidence that increasing concentration across industries is contributing to broader economic woes like reduced innovation and stagnant wages for workers.

Senator Amy Klobuchar of Minnesota, who chairs the Senate Judiciary Committee’s antitrust panel and is pushing a legislative overhaul of competition laws, praised Wu’s hiring.

“America has a major monopoly problem that must be urgently addressed,” she said. Wu’s appointment makes “clear this administration is serious about promoting competition in the United States.”

The tech industry criticized the move. Carl Szabo, vice president and general counsel of NetChoice, which represents Facebook, Amazon, Google and other companies, said creating an antitrust position in a political office like the White House is “a recipe for weaponization of antitrust law for political purposes.”“I worry he will not search for evidence but will start with a conclusion and try to prove it,” Szabo said about Wu. “I also worry that he has a fundamental opinion that success should be disallowed.”

Wu argued in his book, “The Curse of Bigness: Antitrust in the New Gilded Age,” that rising concentration across the economy has led to concentrated wealth and power as well as radicalized politics that threatens American democracy. Wu, who coined the term “net neutrality,” previously served as senior enforcement counsel to the New York attorney general and as a senior adviser at the Federal Trade Commission.

Wu’s hiring still leaves key antitrust positions unfilled. Biden has yet to nominate a chief of the Justice Department’s antitrust division or a permanent chairman for the FTC. Progressives are pressuring the administration to appoint nominees without ties to the tech industry. They say a revolving door between the antitrust agencies and lawyers who have represented tech companies has led to lax enforcement.

The American Economic Liberties Project, an anti-monopoly group that has joined other organizations in calling for Biden to reject nominees with ties to Silicon Valley, applauded Wu’s appointment and called for similar choices for other positions. Sarah Miller, the group’s executive director, credited Wu with reviving the idea that antitrust and competition policy is a tool for “decentralizing corporate power for the benefit of working people.”

“The Biden administration has a once-in-a-generation opportunity to turn this idea into action -- and Tim, hopefully in concert with additional appointments who bring similar intellect and vision to this work, is an outstanding choice to lead the way,” Miller said.

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