Democrats and Republicans form odd alliances as party fractures show during tech antitrust debate

Cracking down on Big Tech is a rare bipartisan desire, but a roughly 19-hour debate session in the House that stretched into Thursday morning showed there’s vast disagreement over how that should happen.

The rifts were visible within each party just as much as between them. The result at the House Judiciary Committee markup of six sweeping antitrust bills was a display of odd alliances between Democrats and Republicans, while fractures showed within each side of the aisle.

Ultimately, the committee voted to report favorably to the House five of the bills, with the last, the Ending Platform Monopolies Act, set to be debated when the committee returns from recess at 11 a.m. ET Thursday.

Even after passing out of the committee, the fate of the bills — which would make it harder and more expensive for Big Tech to complete mergers, prevent them from discriminating against other businesses on their services, mandate data portability and make it easier for state attorneys general to choose where to bring antitrust cases — remains far from secure. Several lawmakers made clear their support in the committee wouldn’t hold if further reflection and changes weren’t considered.

A key point of tension arose around whether Microsoft would be subject to the bills, and if it had any influence in their alteration.

Here’s what you need to know about the debate.

At one point during the hearing, Judiciary Committee Chairman Jerrold Nadler, D-N.Y., turned to Rep. Matt Gaetz, R-Fla., and said, “I find myself in rare agreement with the gentleman.”

“Let’s not make it common, Mr. Chairman,” Gaetz responded.

Within the scope of the debate, however, such odd couples were common. On the same side of the debate with broad support of the bills were antitrust subcommittee Chairman David Cicilline, D-R.I., and Ranking Member Ken Buck, R-Colo., leaders of the subcommittee who have remained close allies throughout the investigation their panel ran into Amazon, Apple, Facebook and Google.

On the other side were pairings like Reps. Zoe Lofgren, D-Calif., and Darrell Issa, R-Calif., who aligned on amendments regarding data portability.

Then there were the divides.

While conservatives like Judiciary Committee Ranking Member Jim Jordan, R-Ohio, worried the bills didn’t do enough to address concerns the platforms censor conservative voices, other members of their party like Buck and Gaetz stood strongly behind them, arguing they are effective pieces of legislation based on a 16-month investigation by the House panel.

Meanwhile, California Democrats including Lofgren, Reps. Ted Lieu and Eric Swalwell expressed deep skepticism on how several of the bills were written, while others, like Cicilline, and subcommittee Vice Chair Pramila Jayapal, D-Calif., supported many of the measures more fully.

All committee members agreed on the need for some types of reform to address the vast power of the tech platforms.

But members on both sides said the process felt rushed, with the bills going from introduction to markup in less than two weeks. Cicilline countered that his subcommittee had spent more than a year investigating the tech companies from which the bills were inspired and held several hearings after that to help craft the bills.

Several of the Democrats who offered the most pointed critiques of the bills were from California, the home state of several of the Big Tech companies.

Lofgren, Lieu and Swalwell each expressed concern about potential privacy and security implications of the ACCESS Act, a bill mandating data portability standards. Swalwell feared the bill could allow American companies to transfer data to those in China.

Rep. Lou Correa, D-Calif., joined Lofgren and Swalwell in opposing the ACCESS Act as amended in a vote to advance it out of the committee.

At least two California Democrats made clear that their votes on some of the bills should not be taken as carte blanch to move forward toward a floor vote.

Rep. Karen Bass, D-Calif., said she would have preferred to have a hearing ahead of the markup to better understand their potential implications and that more work should be done after their passage by the committee.

Lieu also agreed to vote yes on a bill dealing with state AG’s ability to choose their venue in antitrust cases, but said he was doing so mainly to advance the discussion. He said he didn’t yet know how he’d vote on the bill once it goes to the floor, saying, “I don’t actually know who to trust on this bill,” having not heard expert testimony on it.

In an interview Wednesday, Rep. Ro Khanna, D-Calif., who is not a member of the Judiciary Committee but represents the district encompassing Silicon Valley, shared similar critiques as his California colleagues. Khanna fears one of the bills introduced by antitrust subcommittee Chairman David Cicilline, D-R.I., which would prevent companies from discriminating against services that compete with their own, would limit platforms from removing services they deem harmful. He gave the example of a platform removing Parler in the wake of the Jan. 6 insurrection, as several tech companies did, as something that could be prohibited under the bill.

In response to an amendment from Lofgren that seemed aimed at addressing this type of concern, Cicilline said during the markup that he didn’t think it was necessary because nothing in the bill prevents platforms from enforcing their terms of service evenly.

Khanna, a member of the Congressional Antitrust Caucus who has been critical of tech companies and supported proposals that would rein in their power, rejected the notion that he sought to defend his constituents by opposing elements of the antitrust bills. He said he supported the principles of his colleagues’ bills but felt they had unintended consequences.

“It’s a setback to the antitrust movement,” Khanna said. “I don’t want that.”

Some Republicans feared the expansion of government under the bills or said they didn’t do enough to address the alleged censorship of conservatives by the platforms.

Proponents of the bills like antitrust subcommittee Buck and Gaetz appealed directly to those concerns in their remarks on Wednesday.

“These bills are conservative,” Buck stated bluntly in his opening statement.

In a discussion over a bill that would raise merger filing fees on dominant platforms to help fund enforcement agencies like the Federal Trade Commission and Department of Justice, Rep. Victoria Spartz, R-Ind., said she was sensitive to her colleague’s concerns about inflating the government, but said the country has a monopoly problem.

Later, over a debate on the ACCESS Act and the power it would give the FTC to oversee and advise on data portability standards, Gaetz pushed back on similar small-government advocacy, asking his colleagues how they would defend denying people the ability to own their data for fear of growing the government.

Republicans coalesced against Lofgren’s proposal to add protection for platforms to remove objectionable content under Cicilline’s anti-discrimination bill, however. That’s been a key concern for conservatives who seek to remove similar language from Section 230 of the Communications Decency Act, tech’s legal shield.

But those like Buck and Gaetz seemed content that these bills would help address conservative concerns about censorship by the platforms. Still others like Jordan and Issa, wanted more explicit prohibitions or at least transparency about speech moderation.

A recurring tension through a portion of the markup became the question over whether Microsoft would be covered by the legislation and if not, why.

Jordan had earlier in the week sought to highlight this point by sending a letter to Microsoft President Brad Smith asking if he considered the company to be a “covered platform” under the bills.

The company became a focus of the discussion at the debate when Rep. Thomas Massie, R-Ky., held up what he said was an early draft of the bill sponsored by Cicilline and given to him by a “whistleblower.” He said the copy had the words “confidential” and “Microsoft.” CNBC has not viewed the document, but from Massie’s description, it sounded similar to draft versions of the bills earlier reported by CNBC that included a lower user threshold for a covered platform.

Additionally, a version of one of the bills amended by Nadler defined online platforms as including “mobile operating systems” when an earlier version did not use the word “mobile.” Microsoft operates a desktop operating system, Windows, but not a mobile one. Eventually, the committee passed an amendment, supported by Cicilline, to strike the word “mobile,” which would more readily allow for Microsoft to be considered subject to the bills.

The ordeal had Massie and others on both sides questioning whether Microsoft had influenced changes to the bills.

When Massie asked directly if Microsoft saw an early version of the legislation, Cicilline said “absolutely not.” Cicilline said the definition included in each bill was based on the 16-month investigation conducted by the subcommittee, which was focused on the four other platforms and not Microsoft.

“We did not advocate to be excluded from the bills,” a Microsoft spokesperson said in a statement to CNBC on Wednesday. “As proposed, they extend to all operating systems. While this may encompass Windows, which has more than 50 million daily active users, it already operates as an open platform that provides broad choice and opportunity to developers and consumers today.”

Gaetz later backed Cicilline, saying it makes sense the definitions would be based on the four companies besides Microsoft because of the scope of the subcommittee’s probe. He added that the tech companies’ forceful response against the bills was convincing evidence to him of their lack of influence in the process.

But even Democrats had concerns with what they interpreted to be a potential exemption for Microsoft. Prior to the passage of the amendment, Lofgren said there’s no good reason for a distinction for Microsoft, though Cicilline responded that there was none.

Jayapal, a lead sponsor of one of the bills whose district includes Amazon‘s headquarters in Seattle and is near Microsoft’s, said she doesn’t take lightly regulating those companies because so many of her constituents work for them. And yet, she said, “the assumption that Microsoft is not covered is incorrect.” She added the main question would be whether Microsoft is a critical trading platform under the bill and said its cloud platform would seem to meet that standard.

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