Bank Error in Our Favor
A backroom drafting error leads to more antitrust enforcement. It's Veep, not Master of the Senate.
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There are a lot of TV shows that purport to show how politics really works, from Madame Secretary to House of Cards to The West Wing. Whether the main characters are malevolent or idealistic, these shows project a romantic image of insiders operating according to some plan. And that’s natural. We want to believe that the people in charge know what they are doing. But most insiders will tell you these shows are silly, and that the only accurate fictionalization of politics is Veep - where most characters are bumbling morons tripping over complex procedures. Stuff just kind of happens.
And all of that brings me to how the antitrust legislation was accidentally strengthened today on the floor of the Senate, because a Senate leadership staffer fucked up the version of the document they were supposed to include in the final legislative package. There are villains in the story, namely Senate Majority Leader Chuck Schumer and Mitch McConnell, and there are heroes such as Senators Amy Klobuchar, Mike Lee, and Elizabeth Warren. But this anecdote is fundamentally stupid.
Over the course of the last year, Schumer has controlled the Senate floor. In May, he promised Democratic Senators that he would hold a vote to strengthen antitrust laws, so they did a lot of hearings and work to write it. But surprise surprise, Schumer, who is constantly currying favor with Google, was lying. Over the course of the next six months, he delayed and deferred, until everything had to get jammed into a four thousand page final funding package.
Schumer and McConnell refused to stick anything related to tech antitrust in the final package, despite overwhelming bipartisan support. But out of pure shame, Schumer did include a bill to make changes to where antitrust cases are heard, as well as an increase in merger filing fees that would go to the antitrust agencies. This bill had already passed the House and key parts had passed the Senate, so it was hard to refuse to include it.
But that’s not all. Schumer and his Republican counterpart McConnell tried to water down the reform they did stick into the bill. They wanted to be sure that Federal Trade Commission Chair Lina Khan couldn’t get extra money, so they put a two-year delay into the bill. Under the version they included, the merger filing fee money won’t get to the Antitrust Division until 2025, after Biden’s first term is over. It was a way of saying that they would boost enforcement, but only if people who are aggressive wouldn’t get to touch the money.
So that’s where we stood earlier this week. The problem is, someone in Schumer/McConnell world screwed up the drafting, essentially cutting and pasting the wrong Microsoft Word file. The version that had passed the House and Senate applied to new antitrust cases filed by state attorneys general. The version they accidentally stuck in the omnibus applies not only to cases filed by state attorneys going forward, but applies to pending cases. And this is a problem for Google, because they are facing just such a case in Texas. Texas Attorney General Ken Paxton has a devastating complaint against Google’s ad monopoly, but the suit had been removed from its Texas-friendly court and combined with a bunch of other suits in New York. If the strong version of the venue bill passed, that case would get kicked back to Texas, which Google does not want.
After the omnibus became public and Google lobbyists realized what had happened, they went nuts and demanded Schumer and McConnell fix it. California Senator Alex Padilla, who tends to support the search giant, pushed to fix it as well. So Schumer and McConnell groveled to the original authors of the bill, Amy Klobuchar and Mike Lee, and asked if they would consent to fixing what everyone knew was a drafting error. Most Senators are lazy and weak, and would probably allow such a fix without putting up a fuss. But Schumer had treated Klobuchar with contempt, and Klobuchar is actually substantive. So she and Lee said that they would only agree to the legislative fix if Schumer and McConnell backtracked on the two-year merger filing fee delay, thus allowing extra money to flow to the agencies (mostly the Antitrust Division).
So that was the trade. It was a good deal. It would have been hard to get the Paxton antitrust suit moved back to Texas anyway, and Google probably would have sued on constitutionality grounds. Meanwhile, the extra money will lead to a dozen or more antitrust suits over the next few years. So while this is very much Veep, good for Lee and Klobuchar leveraging the screw-up.
And to that Senate staffer who cut and pasted from the wrong document, we in the anti-monopoly movement salute you.