Interview: Sen. Mike Lee on Consumers and Antitrust Laws
As a ranking member of the Senate's Antitrust subcommittee, Utah Republican Sen. Mike Lee keeps a keen eye on the practices of the technology industry's heavy hitters.
Being Congress' youngest senator is helping Lee, a Tea Party favorite elected in 2010, make his mark on the often technically-oriented committee, which is tasked with determining the shape of potent issues like data tracking and carrier mergers and acquisitions.
"In order to ensure that high-tech companies have the opportunity to reach their potential, the government must keep burdensome regulations to a minimum and cautiously apply our nation's antitrust laws to safeguard robust competition, preserve optimal production incentives, spur innovation, and enhance consumer welfare," Lee said of the considerations he keeps in mind when reviewing these issues.
The Antitrust Subcommittee has an essential oversight role to make sure government regulators help keep market competition without burdening industries or unnecessarily intervening in private business decisions. In this framework, Lee says the proper focus of antitrust law is consumer welfare, a goal he is committed to working with the Department of Justice and Federal Trade Commission to ensure.
While the Republican senator has made headlines recently for his comments in response to the Supreme Court's ruling on the Affordable Healthcare Act, he took some time to talk to Mobiledia about his views on today's technology issues and what he sees down the road.
MOBILEDIA: Sen. Lee, you were part of the congressional hearing, which focused on Google's practices. At that time, you said, "Google is in a position to determine who will succeed and who will fail on the Internet. In the words of the head of the Google's search ranking team, Google is the biggest kingmaker on Earth."
Do you think that enough is being done to make sure Google isn't unfairly stifling competition and are you in support of the FTC's continuing investigation?
LEE: I remain concerned about a number of allegations made by a wide range of companies and observers that Google engages in anticompetitive conduct that threatens to stifle innovation and may lead to consumer harm. I am pleased that both the FTC and European antitrust authorities are investigating these issues, and I am following their investigations closely.
As one who generally favors minimal government interference, I hope that Google will agree to take voluntary action to curtail anticompetitive activities.
MOBILEDIA: What do you think about the merger between AT&T and T-Mobile, which was ultimately scrapped late last year?
LEE: After our Antitrust Subcommittee held a hearing and analyzed extensive evidence, I wrote a letter to the Justice Department that outlined many of the potential benefits of a merger between AT&T and T-Mobile.
Although critics raised some legitimate concerns about market concentration, I remain convinced that the deal was primarily pro-competitive and would likely have resulted in more efficient deployment of scarce spectrum, enhanced wireless service, and further innovation in data-rich applications.
MOBILEDIA: Are there other looming mergers that could spark similar concerns on the horizon?
LEE: I have made it a practice not to rush to judgment until our subcommittee has had the opportunity to conduct extensive research and analysis, in order to determine the likely effect of various transactions on competition and consumer welfare.
MOBILEDIA: Regarding carriers, what do you think about their move towards shared data plans?
LEE: I do not believe it is proper for legislators or government regulators to dictate the particular economic model that an industry must use in providing services to consumers.
MOBILEDIA: Some believe the reduced number of authoritative players is allowing monopolistic practices and consumers feel they have little recourse. Do you agree with that? If so, what solution do you see?
LEE: In general, robust competition within a market is sufficient to ensure consumers receive a fair price for services offered. To the extent that consumers do not have options to substitute a preferred offering for one they dislike, this would reflect negatively on the competitive state of that market.
But I am unaware of significant evidence that the present market for wireless services lacks meaningful competition.
MOBILEDIA: What do you think about the Department of Justice's antitrust case against Apple and the remaining publishers?
LEE: Although I firmly believe that government regulators should not interfere with market forces absent a significant threat to competition and consumer welfare, the allegations made in the complaint filed by the DoJ against several book publishers and Apple, raise serious concerns about the prices paid by consumers for e-books. Illegal price fixing harms consumers and must not be tolerated.
MOBILEDIA: Do you think the agency pricing, wholesale pricing, a combination of the two or another model is best for the emerging e-book market?
LEE: It is not my role, or that of any government policy maker, to determine which pricing model is best for the emerging e-book market. I believe it is improper for legislators or government regulators to choose a winner from among such economic models, or even to seek to guide an industry toward a particular model.
Rather, our role is to ensure that companies do not engage in illegal anticompetitive conduct that would prevent the market from properly determining the most efficient and productive outcomes.
MOBILEDIA: How do you respond to concerns that the DoJ may be limiting one monopoly in Apple only to create another in Amazon with its ruling on the case?
LEE: In the case of e-books, I am confident that the judicial process will properly resolve the matter and curtail any illegal actions that result in significant consumer harm. Should evidence arise that Amazon is engaging in anticompetitive behavior, such activity would rightfully be the subject of a separate antitrust investigation.
As a general matter, concerns that an industry player has a dominant position are best addressed through separate antitrust scrutiny of that situation and do not justify other industry participants engaging in illegal anticompetitive conduct.
MOBILEDIA: Verizon, AT&T, Sprint and T-Mobile are reporting a spectrum crisis -- they're forming partnerships and making deals with others in the industry to secure the valuable mobile resource, sparking anti-trust and other concerns. What are your thoughts on the scramble for spectrum, how the industry can best handle it, and how it relates to service and fairness for consumers?
LEE: As I noted in my recent letter to the DoJ and FCC regarding Verizon's acquisition of spectrum from Spectrum Co., most experts estimate that the demand for data will continue to increase dramatically in the next few years, putting additional pressure on the distribution of a scarce resource.
The government must do all it can to make additional spectrum available. Government has a proper role in ensuring that no single entity unfairly obtains a dominant share of spectrum, but it is essential that government regulators not inhibit industry from making good faith efforts to grow and innovate. The secondary market for spectrum is essential to fair and efficient distribution of that resource.
MOBILEDIA: Do you think these kinds of technology issues are registering with consumers?
LEE: I believe consumers can sense when a market lacks meaningful competition or when government regulators curtail innovation through unwarranted intervention. Such circumstances typically result in reduced consumer choice, increased prices, and less innovation.
Given the increasing prevalence of technology in the lives of most Americans, consumers may be especially sensitive to competition issues within these industries.
MOBILEDIA: Have they reached that critical mass with the population that they influence voters?
LEE: I am hopeful voters will continue to pay close attention to the manner in which regulators and legislators approach issues of competition within the tech industry so as to hold government officials more accountable for decisions that harm the free market.
MOBILEDIA: Sen. Herb Kohl (D, Wisc.), who chairs the anti-trust committee, often partners with you on tech endeavors is retiring. How do you see the committee changing without Kohl's leadership?
LEE: I have greatly appreciated the opportunity to work with Sen. Kohl and his staff on the Antitrust Subcommittee. Although Sen. Kohl and I have not always agreed on the proper role the government should take in particular matters, we have been able to join together on several important issues where I believe the government has a legitimate role protecting market competition.
Sen. Kohl established a wonderful tradition of collaboration on the Antitrust Subcommittee that I hope to continue even after he has left the Senate. I plan to take an active role on the subcommittee to ensure that government regulators do not overstep their proper bounds and that competitive forces continue to thrive and provide consumers with the most efficient and beneficial outcomes.
MOBILEDIA: Sen. Lee, thank you very much for your time. And we hope to follow up with you soon.
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