Despite warning from big tech, antitrust bill passes in NY Senate

The 21st Century Antitrust Act, which would allow for the state to sue big tech companies, passed in the State Senate on Monday, June 7, 2021. File AP photo by Thibault Camus

By Jacob Kaye

With only a week left in the State Senate and Assembly’s legislative session, advocates and lawmakers are pushing for the passage of a bill that would expand the state’s power to take big tech to court.

The 21st Century Antitrust Act passed in the Senate Monday and is expected to pass in the Assembly at some point this week. The bill, introduced by Sen. Michael Gianaris, would make it easier for the state to sue companies like Google or Apple for engaging in monopolistic or anti-competitive practices if passed into law. 

“We have a problem in this country – we have a problem that there is tremendous market power in very few hands,” Gianaris said. “This bill would create an economy where there are many voices that are able to compete with each other.”

The legislation is the first of its kind in the U.S. – as the Senate passed the bill Monday, France’s antitrust watchdog fined Google $268 million dollars for its dominant position in online advertising. The U.S.’s antitrust laws, which are federally enforced, were written over 100 years ago and the bill’s advocates say an update to match the economic landscape created by the big tech companies over the past several decades is long overdue.

“This bill is epic,” said Zephyr Teachout, a law professor at Fordham University and a former candidate for governor. “We’re facing a real monopoly crisis, which is hurting workers and has been hurting small businesses for a long time, but especially with the double squeeze of the pandemic.”

“This bill is a major moment for small businesses and workers and the state of New York taking back power and giving tools to stop these abusive practices,” she added.

But as the state moves toward the bill’s passage, the tech industry has voiced staunch opposition to what the bill hopes to accomplish. Tech industry boosters say the bill would unfairly redefine what a monopoly is, put start-ups in danger and attack a problem that’s not really there.

“I think this would represent a pretty significant departure by New York from the rest of the country,” said Adam Kovacevich, the founder and CEO of Chamber of Progress, a tech trade group that counts Google, Facebook and Amazon among its corporate supporters. “If the law dramatically lowers the [monopoly] threshold, then that could give future attorneys general tools to go after smaller companies as well.”

Currently, companies are considered monopolies when they dominate 70 percent or more of the market. Sen. Gianaris’ legislation would make it so companies could be considered monopolies if they take up 40 percent or more of the market. 

In addition to granting the State Attorney General power to sue tech companies, the legislation also opens up the possibility for individuals to bring class action lawsuits against the tech giants.  

Chris Gilrein, the executive director of TechNet Northeast, said the bill’s language isn’t specific enough to stop bad actors from suing smaller tech companies in an effort to make a quick buck. 

“There are no guardrails in place that would protect smaller or medium sized companies from being victims of litigation under this bill,” Gilrein said. “This is a wide open invitation for frivolous litigation against companies for doing things that are good for the consumer.”

But companies like Yelp and Genius, a website for song lyrics, say they are already victims and their bully is big tech. 

“We commend the Senate for taking up this important legislation and working to level the playing field for small and medium sized businesses in New York,” said Luther Lowe, the senior vice president of Public Policy for Yelp. “It's important that enforcers have a wide array of tools to confront companies like Google, which abuses its dominance by self-dealing while throttling smaller competitors at the expense of consumers.”

But Gilrein worries that if passed into law, the bill will create an unwelcome space for innovation and new smaller tech businesses in New York. 

“If I were a founder, or a potential founder or a potential investor in a company right now this would scare me away from New York,” he said. 

If the bill doesn’t pass in the Assembly before the end of the legislative session this week, Gianaris said he’d work to get it passed in January 2022, when the legislators return.