Barr’s growing power over tech antitrust probes

With help from Leah Nylen and John Hendel

Editor’s Note: Morning Tech is a free version of POLITICO Pro Technology’s morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.

— Barr’s power play: Changes at the Justice Department have boosted Attorney General William Barr’s sway over tech antitrust probes, a power shift likely to leave Silicon Valley giants under even heavier scrutiny.

— Pressure to push out Twitter CEO: A hedge fund’s bid threatens to dethrone Jack Dorsey at Twitter.

— MT scoop: Sen. Ed Markey and Rep. Anna Eshoo filed a brief today urging the Supreme Court to uphold a federal law that would, among other things, ban political groups from auto-dialing or auto-texting consumers without obtaining prior consent.

WHAT’S THE BEST ADJECTIVE TO DESCRIBE THE MONDAY BEFORE SUPER TUESDAY? WELCOME BACK TO MORNING TECH. I’m your host, Alexandra Levine. Just like that, it’s March. And just like that, the 2020 field lost two candidates — including Silicon Valley favorite Pete Buttigieg — over the course of one weekend. Who will become the Valley’s darling?

Got a news tip? Write Alex at alevine@politico.com or @Ali_Lev. An event for our calendar? Send details to techcalendar@politicopro.com. Anything else? Full team info below. And don’t forget: add @MorningTech and @PoliticoPro on Twitter.

BARR’S INFLUENCE OVER SILICON VALLEY PROBES GROWS — “Attorney General William Barr has spent months taking greater control of the Justice Department’s antitrust probes into the big tech companies, a development that could increase the peril for major players like Google and Facebook,” POLITICO’s Leah Nylen reports in a new dispatch breaking down the who’s who of Barr’s orb, and how recent changes and transfer of responsibilities across the Justice Department have only boosted Barr’s power.

Some Silicon Valley critics see cause for optimism in Barr’s increasing sway over the tech probes, noting that he has had a wealth of antitrust experience as an attorney for companies like Time Warner and Verizon — both major rivals of the dominant online platforms.”

PLUS: DOJ JUMPS IN ON CONNECTED CARS Continental Automotive’s antitrust claims against a patent pool backed by Ericsson, Nokia, Qualcomm, ZTE and others should be thrown out, the Justice Department told a Texas federal court. The filing marks the DOJ’s first foray into patent fights that are developing over technology necessary for connected cars.

Continental sued Avanci and three of its backers over patent licensing practices last year. The case was recently transferred to Dallas and Avanci is seeking to have it dismissed. Continental, a major supplier for German carmaker Daimler, makes the telematics control unit that connects a car’s systems to wireless networks and wants a license to Avanci’s patents. The patent pool, however, prefers to license carmakers themselves.

— One-stop SEP shop: Avanci, founded in 2016 by Ericsson’s former IP chief, is a one-stop shop for Internet of Things manufacturers to obtain licenses for essential patents that underlie 2G, 3G and 4G wireless technologies. The group represents 36 major companies and has reached deals with major European carmakers including Volkswagen, BMW and Volvo.

— DOJ position: In a statement of interest filed late Thursday, the DOJ said Continental’s allegations don’t point to any antitrust violations. Continental “does not allege that Defendants engaged in any behavior that could constitute unlawful exclusionary conduct,” the DOJ said. “The contract and patent laws adequately police the types of potentially problematic behavior (deception regarding contractual commitments and breaches of those commitments) alleged in the complaint.” The Justice Department’s arguments are similar to the ones it made in the FTC’s case against Qualcomm.

— The U.S. suit is part of a broader fight playing out between Daimler and Nokia in Europe over similar issues. Daimler and four suppliers, including Continental, have filed complaints with the European Commission over Nokia’s refusal to offer licenses to the suppliers. Nokia has a pending patent infringement suit against Daimler in Munich. The companies are in mediation to try to resolve the disputes.

HIT THE ROAD, @JACK? — Elliott Management, an activist hedge fund with a significant (roughly $1 billion) stake in Twitter, nominated four people to the social media company’s board of directors and has plans to oust Dorsey as CEO, Bloomberg reported Friday. How likely is that scenario? Not entirely out of the question.

— Twitter “has given shareholders equal voting rights, making Dorsey, who owns only about 2 percent of the company, vulnerable to a challenge from an activist investor such as Elliott,” Reuters reports.

— Dorsey’s announcement in November that he intended to spend up to half of 2020 living in Africa has also raised questions among Twitter investors and execs about how the company would fare in his physical absence.

— And if Elliott’s activist track record is any indicator of what might happen here, pushing out Dorsey is certainly within the realm of possibility. “Elliott is known for battles with companies such as Arconic Inc. and AT&T Inc. and campaigns against Peru and Argentina, pressuring the countries to make payments on defaulted bonds,” WSJ reports, adding: “At Twitter, at least for now, [Elliott] appears to be trying to work with the company instead of waging a public campaign.”

— Twitter on Sunday declined to comment on how Twitter executives are approaching the issue or whether Jack plans to weigh in here in the near future.

FIRST IN MT: LATEST IN THE TCPA TUG-O-WAR — Ed Markey (D-Mass.) and Anna Eshoo (D-Calif.) are leading a bicameral group of lawmakers pushing to protect a federal law that effectively requires callers to get consent before placing a robocall. The Telephone Consumer Protection Act is up for dispute as the Supreme Court hears a case this spring over the constitutionality of the statute’s auto-dialing ban, which is being challenged by various political groups (including the American Association of Political Consultants and a polling firm). Markey and Eshoo led the filing of an amicus brief today pushing the Supreme Court to keep the TCPA intact.

— “By restricting calls made to cell phones using robocall technology, among other provisions, the TCPA prevents a countless number of unwanted robocalls … from intruding on Americans’ privacy, scamming their wallets, and overwhelming our confidence in the nation’s telephone networks,” the lawmakers wrote in the brief, adding that “if the TCPA were invalidated, leaving no restrictions on robocalling, … annual unwanted automated calls potentially numbering in the trillions” would lead to a “constant bombardment of our mobile devices [that] could render them effectively useless.”

BIPARTISAN IRE OVER FCC’S WIRELESS SMACKDOWN It was nearing 7 p.m. Friday when the FCC finally disclosed details of its proposed set of fines slapped on AT&T, Verizon, T-Mobile and Sprint and totaling $208 million, delivered in response to the commission’s probe into the carriers’ sharing of consumer location data without permission. The proposed fines offer evocative detail, noting for instance that T-Mobile’s customer location data ended up sold to 83 different entities.

A look into the commissioners’ written statements revealed a heavy dose of skepticism from not only Democrats Jessica Rosenworcel and Geoffrey Starks but also Republican Commissioner Mike O’Rielly, who voted to approve but with only the greatest of reluctance.

— “I am concerned that we do not have all the relevant facts before us,” O’Rielly warned, “and that we either haven’t heard or sufficiently considered counter arguments from AT&T, Sprint, T-Mobile, and Verizon.” He also called the FCC’s use of legal authority “a major stretch.”

Rosenworcel, meanwhile, dismissed the investigation as “a day late and a dollar short” and questioned the basis of the fines: “The FCC heavily discounts the fines the carriers potentially owe under the law and disregards the scope of the problem.” She criticized the commission for fining the carriers $40,000 per violation only on the first day, followed by a downgrade to $2,500 per day after, as well as a “thirty-day pass from this calculation,” which she said “is plucked from thin air.”

— Why this matters: The four big carriers will likely mount a fight against these proposed fines and could draw on any potential legal and process infirmities to make their case. And some private advocates still grouse that the proposed fines are too paltry. “While I am glad the FCC is finally proposing fines for this egregious behavior, it represents little more than the cost of doing business for these carriers,” said House Energy and Commerce Chairman Frank Frank Pallone (D-N.J.).

IN CASE YOU STILL HAD FAITH IN OUR BROADBAND MAPS The National Association of Counties is out this week with a new report on its TestIT mobile app, created along with other organizations to test mobile broadband coverage throughout the country. The report’s dire assessment: “Through the app, we discovered that over half of our nation’s counties — on average — are experiencing Internet speeds below 25 megabytes per second (mbps) which is the federal definition of minimum broadband standards. Additionally, 65 percent of counties are experiencing service levels below what has been reported by the industry.” Local officials are in town this week for NACo’s legislative conference.

— The FCC still relies on these industry-reported broadband figures for some of its ongoing efforts, which is a point of contention in Washington now. Sen. Joe Manchin (D-W.Va.) asked the FCC to postpone its timeline for doling out its billions of dollars in Rural Digital Opportunity Fund subsidies this year (the FCC says the data correctly shows the fully unserved territories without issue). Manchin has sent hundreds of speed tests to the FCC to argue the current data is bogus, sending 183 on Friday alone. FCC commissioners also sparred over those concerns at Friday’s meeting as commissioners voted to advance some of these subsidy auction procedures.

SPEAKING OF BROADBAND: A NEW BILL — Sen. Chris Van Hollen (D-Md.) unveiled his Homework Gap Trust Fund Act at the end of last week that would create a fund of $2 billion to $4 billion devoted to helping students’ internet connectivity, pulled from the revenue of the FCC’s upcoming auction of 5G-friendly C-band airwaves. John had the full rundown for Pros on how the FCC’s party-line vote to set up the C-band auction went on Friday.

FTC Deputy General Counsel Heather Hippsley retired from the commission after more than 35 years of service. … Pallavi Guniganti is joining FTC Commissioner Christine Wilson’s office as an attorney adviser. … Keith Klovers, an attorney advisor to Wilson, is leaving the agency for the law firm Wilson, Sonsini, Goodrich & Rosati. … Brian Fletcher, a former director of government affairs for Symantec, joined BSA | The Software Alliance as director of policy for the APAC region, based in Singapore.

Coronavirus hits gig economy: Gig workers for companies like Uber, Lyft, DoorDash and InstaCart have no safety net — like sick leave or health care benefits — as the illness spreads, WaPo reports.

And cancellations continue: Another recent coronavirus casualty? San Francisco’s Game Developers Conference, the LA Times reports.

Misinfo monitor: “Roughly 2 million tweets peddled conspiracy theories about the coronavirus over the three-week period when the outbreak began to spread outside China, according to an unreleased report from an arm of the State Department,” WaPo reports, “raising fresh fears about Silicon Valley’s preparedness to combat a surge of dangerous disinformation online.”

WFH: The coronavirus is kicking employees’ work-from-home into high gear, a trend that may extend even once the sickness has passed, WSJ reports.

In profile: The manager of President Donald Trump’s reelection campaign, via The New Yorker: “Brad Parscale Used Social Media to Sway the 2016 Election. He’s Poised to Do It Again.”

Also in profile: Bob Iger, who stepped down last week as CEO of Disney, via WSJ.

Tips, comments, suggestions? Send them along via email to our team: Bob King (bking@politico.com, @bkingdc), Mike Farrell (mfarrell@politico.com, @mikebfarrell), Nancy Scola (nscola@politico.com, @nancyscola), Steven Overly (soverly@politico.com, @stevenoverly), John Hendel (jhendel@politico.com, @JohnHendel), Cristiano Lima (clima@politico.com, @viaCristiano), Alexandra S. Levine (alevine@politico.com, @Ali_Lev), and Leah Nylen (lnylen@politico.com, @leah_nylen).

TTYL.

Leave a Comment

Your email address will not be published. Required fields are marked *