Crackdown on Big Tech May Stall, but Wall Street Regulation Will Heat Up

WITH CONGRESS DIVIDED, AS USUAL, supporters of tougher antitrust regulation of Big Tech have low expectations that they can get a bill passed this year. The big action won’t come from Congress — it will come from the federal regulatory agencies, which will move aggressively, especially against Wall Street.

THE SENATE JUDICIARY COMMITTEE passed a controversial bill yesterday to block the biggest technology platforms from giving preferential treatment to their own products, a proposal that has generated strong opposition from California’s congressional delegation, which receives generous campaign contributions from the industry.

THE MEASURE WOULD BLOCK dominant online companies (defined by user base and revenue) from giving preference to their own products. This is aimed largely at Amazon, Apple, Meta and Google.

THE BILL’S PROSPECTS ON THE SENATE FLOOR later this year are fair at best, since other legislation will take precedence — as Democrats attempt to revive portions of the Build Back Better bill. Several provisions may move, including funding for pre-kindergarten education, Obamacare expansion, drug price controls and environmental programs.

CRITICS OF BIG TECH REFORM argue that it would make foreign companies more competitive, and would hurt innovation, privacy and data security. And conservatives argue that the bill doesn’t crack down against what they view as censorship of their positions.

BIG TECH EXECUTIVES say they would welcome legislation to set clear standards, but in truth they would be happy with a typical Congressional stalemate that drags on and on — maintaining the status quo.

THE BIGGEST REGULATORY STORY IN WASHINGTON will come from the Securities and Exchange Commission, where activist Chairman Gary Gensler is preparing a crackdown on Wall Street. In a speech earlier this week, Gensler said his proposals will “increase efficiency” in the capital markets — in part by reducing the amount of money that companies pay on fees.

THE WALL STREET JOURNAL REPORTS that Gensler will make three proposals in the coming week: a rule to enhance disclosure by private-equity funds; reforms in the U.S. government debt markets; and increasing transparency on executive compensation.

THE SEC IS CONSIDERING other rules, many focused on disclosure, and like virtually every regulatory agency in the Biden Administration, there will be mandates to force companies to address climate change.

GENSLER ALSO WANTS TO bring cryptocurrency companies under stringent SEC control, citing what he believes is the public’s vulnerability to speculation.

GENSLER IS THE MOST AGGRESSIVE of the Biden regulators, although antitrust officials also will be active; they’re carefully scrutinizing the Microsoft-Activision deal. All of the regulators will need to move quickly because a likely Republican takeover of the House in November would make it more difficult win funding to enforce new regulations.

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