Thank you for downloading this transcript to Nota Bene Podcast Ep. 134: U.S. Q3 Check In: Infrastructure Bill Updates and Big Tech Antitrust with Elizabeth Frazee and Chani Wiggins
Listen to the original podcast released July 14, 2021 here: www.notabenepodcast.global
As we enter the third quarter of 2021, we’re taking a look at anticipated legislative activities including President Biden’s infrastructure bill, the U.S.-China trade war, and Big Tech antitrust issues. We’re joined by U.S. government experts and lobbyists Elizabeth Frazee and Chani Wiggins of TwinLogic Strategies to discuss some of the Federal, legislative, and judicial issues on the agenda.
Guests:
Elizabeth Frazee is the Co-Founder and CEO of TwinLogic Strategies, a boutique government relations firm. Elizabeth was named a “Top Lobbyist” by The Hill newspaper and has a 30-year career in Washington that encompasses over a decade working in high-level jobs on Capitol Hill, executive experience at leading tech and entertainment companies and years of successful representation of companies, trade associations and non-profits as a policy advocate and political strategist.
Chani Wiggins, a Co-Founder and Principal at TwinLogic Strategies, has leveraged 16 years of federal government experience to assist clients with various policy interests in Congress and within the Administration. Since September 2010, Chani has represented clients with priorities in national security, telecommunications and technology, and energy policies. She also serves as a strategic advisor for the Government & Technology Services Coalition (GTSC), an organization of small and mid-sized company executives that develop and implement solutions for the federal homeland and national security sector.
Transcript:
Michael P.A. Cohen:
Welcome to Sheppard Mullin's Nota Bene, a weekly podcast for the C-Suite, where we tackle the current national and international legal headlines affecting multinationals doing business without borders. I'm your host, Michael P.A. Cohen. Let's get started.
Michael P.A. Cohen:
Welcome to episode 134 of the Nota Bene Podcast. And thank you so much to all of our listeners in more than 100 nations around the world. We so appreciate your continued participation in our ongoing conversations and your feedback. Please keep it coming. It continues to help influence our programming. Well, I am thrilled today to start our Q3 round of check-ins. I can't believe we have put another calendar quarter under our belt, but as we head into the July month, the math adds up to six under our belt. And this month in July or this quarter, I should say we are going to start our regularly coordinator elite check-ins with the United States regulatory and legislative agenda, where there is a lot going on. Welcoming back to the show two of my favorite regular guests, Elizabeth Frazee and Chani Wiggins. By way of reminder to our guests who are frequent listeners. And for those of you who are new, Elizabeth received her undergraduate degree from the University of North Carolina, her home state.
Michael P.A. Cohen:
She put herself through law school, working on Capitol Hill and obtained her jury's doctorate degree from Catholic University's, Columbus School of Law in Washington, D.C. She has a 30 year career on Capitol Hill, or I should say in Washington rather where she did start on Capitol Hill. She specializes currently in managing issue campaigns and running coalitions, but there's probably nothing she hasn't done in the city. She started her career in Washington working for her native North Carolina senator. She then served as press secretary for the House Energy and Commerce Committee, completed her congressional service running the legislative office for representative Bob Goodlatte.
Michael P.A. Cohen:
She then moved on to the private world where she was the director of government relations for the Walt Disney Company, subsequently serving as vice president of public policy for America Online, which some of you around the world may know as AOL. And was there at the time where she helped navigate that company's merger with Time Warner. Elizabeth co-founded and launched TwinLogic in 2009 and is perennially named among the top lobbyists in Washington, D.C. by The Hill magazine and others.
Michael P.A. Cohen:
Chani, the other half of the TwinLogic for today's show obtained her bachelor's degree in journalism at the University of Florida, and worked as a reporter and many folks go to journalism school and find themselves in Washington. But to don't do that, I think that's pretty cool. Chani was a reporter for newspapers at that I think in Florida and Georgia, her Washington career, once she made it to the nation's capitol started as or included, I should say positions as the assistant secretary for legislative affairs at the United States Department of Homeland Security. She spent 12 years on Capitol Hill where she was the legislative director for Senator McCaskill, the deputy chief of staff for Senator Dayton, a senior policy aide for Senator Harkin, legislative director communications director for a House of member. I can't remember which one on my notes right now, Chani, but you can fill that in for us.
Michael P.A. Cohen:
And she served on the professional staff to the Health Education and Labor Committee. The members that she worked with span four different states which is really quite an achievement and pretty incredible. Another Chani's I think achievements in government is her role co-founding the bipartisan legislative directors group in 2007 to find common ground among the U.S. Senate's 100 legislative directors, which of course matches the number of U.S. senators. Since 2010, Chani has represented clients with priorities in national security, telecommunications, technology, and energy, policies, amongst many others. She currently also serves as a strategic advisor to the Government & Technology Services Coalition. Elizabeth, Chani, welcome back to the podcast.
Elizabeth Frazee:
Thanks Michael, we're happy to be here.
Michael P.A. Cohen:
I can't tell you how thankful I am to have you back on the show. It is so nice to see you both in virtual studio. I may be someday soon in Washington we'll perhaps next quarter, maybe have a live studio show. Elizabeth, I realized that you have an injury that would probably prevent you from moving around too much right now, anyway, but I'll look forward to seeing you both perhaps live in, let's see July, August, September, October maybe. We can shoot for that, but it's great to see virtually. There's actually a lot going on in America in the policy arena. So I throw it open to you both. What do our multinationals and domestic listeners need to know about the regulatory agenda in the executive and legislative branches for our upcoming quarter?
Chani Wiggins:
Well, Michael, again, it's great to be here. We have really enjoyed the sessions with you and talking about the latest and greatest in Congress and the administration, particularly now that Biden is really getting a sea legs. Now that he's been in for six months as the president, but yes, a lot is going on. And the first thing I would say is infrastructure. Every week is infrastructure week and this week is no different. So the big news I'm sure that everybody caught was that there could be this bipartisan framework that the president has agreed to move forward after just a little bit of a hiccup earlier last week when he went a bit too far, but the bottom line is we've got two potential tracks on infrastructure here and they could go together they could go separately and there's a great chance it could all fall apart and implode.
Chani Wiggins:
So the first track is this bipartisan package. It is $2 trillion package. It has Republican and Democratic Senators working on it. This is on the senate side, it's roads, bridges, plus some broadband, maybe a little bit of energy and they have this framework. And now the Senate committees, these are busy actually writing the legislative text, which is really hard and it makes things a lot more challenging and complicated. But the plan is the Senate will take up bipartisan legislation, this bipartisan legislation, if this continues forward in the month of July and they'll pass it and the House may also try to pass something similar and then those bills, those bipartisan bills. Again, if they pass, they're going to be put on ice. Okay? So we're just going to put these in the freezer for right now because we got this other thing going on.
Chani Wiggins:
We got to get this other big package, the second track and that's budget reconciliation, which all that means is, it's a process, a form of passing a major spending and revenue measure with just 51 votes in the Senate. So that second track is also going to go. That track could be up to $6 trillion, probably not, Senator Bernie Sanders, our progressive Senator would love for it to be $6 trillion but probably not. This will also contain climate healthcare, expanded healthcare, expanded child tax credits, and also probably for the community that's listening. It will also contain a lot of different kinds of pay fors. Pay fors being, how are you going to pay for this gigantic package? And so currently President Biden wants to increase the corporate tax rate that was reduced under the 2017 tax bill that passed into law. He wants to raise them up a bit.
Chani Wiggins:
He also wants to have a minimum corporate tax of 15%. And there are other key pay fors like that or tax provisions that will be debated in the Senate and in the House. And so the process of getting to budget reconciliation, that second track will take us up into August and then we will get to budget reconciliation in the fall. So this is where everything gets kind of foggy in the crystal ball, but it's the, how long will it take to get budget reconciliation through if they can keep all the Democrats and then bring in the bipartisan bills as well and how that all goes through into the fall. It's still kind of in question there's technical deadlines that they're hoping to try to meet, which is September 30th, because it's the end of the fiscal year. And also it's some expiring provisions of a surface transportation bill are lower have to be, I mean, will they expire? So they would have to be either extended or reauthorized. So September 30th is the goal. We don't know. We keep hearing this could go all the way into December.
Elizabeth Frazee:
I think there is still a question on the de-linking the bills because Republicans is, as recently as yesterday, McConnell was saying that he disapproves of the linkage. And the question in my mind is do they lose the Republican support on this bi-partisan part of the legislation that you talked about Chani, and if they lose that bi-partisan support, then the whole plan ends up being just a budget reconciliation plan, as opposed to this nice $2 trillion bi-partisan piece. And then the bigger $6 trillion not bi-partisan piece. It seems very much a mirage and a very difficult thing for them to keep on track through this process. And do we end up at the end of the year in the very same place where we've ended up so many years with this giant continuing resolution bill and none of the other issues resolved, it's just, that could happen too.
Michael P.A. Cohen:
I don't know that our audience has the kind of insight into the mechanics that are going on. So the groundwork that you both laid there is super useful, I think to both me and our audience and our listeners. But one question that came to my mind that I wanted to throw out to you both is that why are the Democrats bothering with Republican support at all? If they can do this by budget reconciliation and get through what they want, and maybe that's the answer they can't, why go through a strange process where you secure $2 million, put it in the freezer and see if you can go for six, is there a problem with the votes?
Chani Wiggins:
Two big reasons, two big factors, one President Biden campaigned on bipartisanship. He wants to be the bipartisan president and try to get the Senate and the House back to a little bit more of a regular respectful order. So that's the first factor. The bigger factor are two people is two people. And that's Joe Manchin from West Virginia, senior senator and Senator Kyrsten Sinema from Arizona. They are moderate Democrats and they want bipartisanship and they have indicated they didn't want to move forward with the easier path of budget reconciliation. So they only needed to have 50, 51 votes with vice-president Harris breaking the tie vote before they did everything they possibly could to form a bipartisan infrastructure deal. And so, I mean, they just laid it on the line and that's why we're going through this.
Michael P.A. Cohen:
I think this, this infrastructure build not only is it needed desperately, but the fact to me that it's taking this long and there's so much politics involved shows me, when something is just so right and it can't get done that America remains broken. I hope that I'm wrong about all of that. I can't wait for people to prove me wrong. I challenge people to prove me wrong right now. There's no infrastructure bill that's passed. There's no spending on infrastructure six months into the new presidency and people can talk about all these things, all they want, but where's the action? China waves its hand and get something done and by a single decision and committee of folks without having to worry about any of these things. And I'm not saying that's a better place to be, but I'm saying that's what you're up against.
Elizabeth Frazee:
Well, I think you also have to put it in the context of how much money has Congress and the administration already spent because of the pandemic. Right. And it's been an extraordinary amount of money spent and we've cumulated an extraordinary amount of debt. I can't quantify right now exactly the price tag, maybe Chani can.
Chani Wiggins:
I can't remember, but it's giant. It's giant.
Elizabeth Frazee:
It's giant and so we're coming up on this point of conversations about inflation and what does it mean for the economy? And so I understand the hesitancy on the part of lawmakers for wanting to spend a lot more, unless they can determine how they're going to pay for it.
Michael P.A. Cohen:
I think they know how to pay for it. I think there's perceptions of what that will mean, but it's really hard for me. I just think that we've got to address bigger problems in this country and to gloss over them under bipartisan dialogue or altruistic notions of moving a country back to the middle that really remains still divided is to brush the broken glass under the rug. Folks need to start dealing with the American electorate in the system because we are now in a comparative war with other economic systems that are surpassing America abroad. And that has not been the case in America's prior history since World War II and it needs to wake up and as long as it's going to let others drag it down, it's not going to move forward. And I think that infrastructure and any other bill in Congress right now remains symptomatic of that if not representative. So that's why I'm kind of interested in what you all are talking about because I see it in a comparative government issue as a current failure and hope we can overcome the noise.
Chani Wiggins:
Well, that's pretty deep stuff. And I don't know if I can go that deep, but I think that there, on part of your point, Michael, I think there is a part of the democratic caucus, including the, and also the president. They see infrastructure, these two packages, but particularly the really big package as this sort of once in a presidential lifetime window of opportunity to really affect change and improve and strengthen society for healthcare, for childcare and particularly for climate. And that if we're not going to do this now, if we can't get this done now, our really made great strides right now. It's going to be next to impossible to do anything this sweeping anytime in the near future, for two reasons, one is 2022 is coming around. And so the House could very easily flip based on patterns of previous off a presidential election years.
Chani Wiggins:
But two, we have a lot of older guys and women in the Senate and we have a 50/50 Senate. And if one of them, unfortunately it has to, it passes that creates a huge problem. And there are actually two that are pretty vulnerable and one of them, there's a Republican governor, so there's not going to be a Democratic governor reappointing them. And that's why there's also this sense of urgency among the Democratic caucus that "We've got to get going. We've got to go now, we've got to get this done before the end of the year."
Michael P.A. Cohen:
That explains a lot, my diatribe as usual moved us a little bit forward with a rational response. So that kind of lets us know, the American political balance right now that the Democrats have is precarious is what you're saying and Chani. So that the 2021 timetable here has real impetus to it. And that we are likely to see infrastructure pass in 2021, for those reasons, whether it's through the budget reconciliation process or a bipartisan process. Elizabeth is that where you'd land too.
Elizabeth Frazee:
Yeah. I mean, I do think there is a lot of pressure to get something done and I'm hopeful. And if we can, you raised a really important issue, Michael, which is the U.S. competing against other countries like China, for instance, and Congress has been focused on that as well. The Senate moved legislation last month, the Endless Frontier Act that was of majority leader Schumer priority that took aim at China and would boost R&D in the U.S., had money to address the semiconductor chip shortage in the U.S. and bring manufacturing here of chips, because I don't know, but anyone who's tried to buy a car recently probably realizes the impact of that chip shortage on car sales and prices.
Elizabeth Frazee:
And then funding important things like the National Science Foundation and Department of Energy research programs. And so the Senate passes massive bipartisan package, and it also included some trade legislation. There was some trading between Republicans and Democrats to get priorities done. So it ended up with more in it than how it began. As usual in Washington and the way the legislative process works. But then the House was taking it up and they're only taking up small pieces of it. The House this week passed the National Science Foundation funding and Department of Energy research program funding. How much was that Chani?
Chani Wiggins:
Somewhere around $218 billion.
Elizabeth Frazee:
And then they're taking up in the House Financial Services Committee, additional pieces of it. The committee process in the House is still going to work through, but trying to compete with China is definitely a focus of the House and the Senate right now. I mean, people see where we stand on the world stage and know that we have to take it all extremely seriously right now. And we need resources backed by the federal government to be able to compete.
Michael P.A. Cohen:
Some acknowledgement of that as a starting point, there's a question about what you can do and keep up, but that sounds like America, at least Elizabeth, from what you're saying in our current 2021 moment is in the world again and embracing it rather than withdrawing from it. And that's perhaps a positive thing for everyone, frankly. That's good news.
Elizabeth Frazee:
Because the president already going to Europe and participating in the G7 conversations, even meeting with Putin, those are all really important steps to take. And I hope we see a lot more of that.
Michael P.A. Cohen:
There are important stories in the Washington Post and present a lot of photographs, but it doesn't change the fact that Germany's number one trade partner is China, not America, that's the real world. And right now you can run around and say a whole bunch of things. But I actually think globally, there is more and more trepidation about the wild swings in American politics that are going to make many markets, a little reluctant to pack their chips with just America in some way that is able to gain back what America has lost during the Trump administration. And America lost a lot objectives. This isn't a political statement. The policy was to withdraw and America did, but there wasn't a vacuum. It was immediately filled. You can hear the three podcasts that will follow our quarterly check-in are all going to be in some substantial part about China's new role as the leader and hegemon in their markets, whether it's Europe, Asia, or Africa, that's what America lost in the four years of Trump.
Michael P.A. Cohen:
And where it stands right now is not quite Yertle the Turtle king of the mud, but it is on top of what is still a very dynamic and innovative capital market, but that's what we have. And America is going to have to do more than shake hands and meet people and embrace the world again. It needs to compete now in ways that are yet to be seen and relatively undefined. And I think hangups like the political wrangling that the world sees on the major policies like we're talking about today, don't help that process. And I'm not sure the American Congress appreciates that point at all. When I hear people rattling about benefits that are going to help people in their state, that doesn't really seem to take into account the daily ground, this market loses in its export world, including services, where it was the leading market world on a daily basis.
Michael P.A. Cohen:
There's just an assumption in America that everything will always be prosperous and that it has the luxury to raggle about these things in its political systems. And I'm not sure that luxury has a long leash. It certainly has some room, but I'm not sure it has a long leash. So for now, though, there are some positive development is what I'm hearing from you both in a bipartisan sense to move important things forward. And there's some political impetus for the Democrats to get it done in 2021, in an area that is hugely impactful to the tune of somewhere between two and $6 trillion. I see nods. So we'll take that point away and that's good news all around.
Elizabeth Frazee:
Since we're on a podcast we need to actually say yes, that's right, Michael we agree.
Michael P.A. Cohen:
Well, it's interesting too. I don't mean to be kind of like so critical on this. Part of something that I feel is important in an multinational show, right, is to bring the comparative perspective beyond just the American perspective to the developments in America. And I think that America can be very insular in its own thought processes because it is an echo chamber to itself on both sides of the aisle politically. I mean, meaning that most Americans really don't have a sense for its comparative positions in the world and how much they are changing and how much the world is changing. And the dialogue seems to be framed around this new enemy "China."
Michael P.A. Cohen:
Well, just targeting somebody, you may not be able to beat and framing a bunch of rhetoric around it as if they are out to get you when they're not they're out to expand their own welfare and a lack of understanding about those kinds of things, that's just ratcheting up we're talk. I mean, that's the worst of all worlds, frankly, the world's changed and America needs to find a narrative and a dialogue in it that is consistent with reality and not the delusion of the news channels on both sides that I see which really never report on these things. Chani you're an old reporter, you've been on the beat, who's reporting the news, man? Everybody's reporting their positions, not really the news.
Chani Wiggins:
It's an easier soundbite. I can't explain it, but I do think there's, and maybe it's an over manipulation of this kind of messaging, but it is an appealing one to both Democrats and Republicans who recognize that they need to do something to spur U.S. manufacturing. So we aren't as dependent on everybody else for key pieces of technology. And so maybe it is unfortunate that they're using that kind of messaging, but the one upside is it seems to be working to at least try to move forward some important legislation and some important investments.
Michael P.A. Cohen:
Yeah. But what you're talking about is high tech manufacturing, and that's a lot different than textile manufacturing. If you're going to have high tech manufacturing in America, you need high tech manufacturing employees. You need to educate those employees into that system. You can't just transfer somebody from this job to that job. This is highly sensitive arenas. And one of the reasons that American multinationals conduct their high-tech manufacturing and Korea, Taiwan, and China, isn't just the low cost like the news reports because that's not even true. It's because they have actual training and an a workforce that is ready on the ground and can adapt and ebb and flow with production demand and supply.
Michael P.A. Cohen:
Intel, I read this morning, as now rescheduling the development of a chip it's been working on because it's not working. This is the kind of thing that really matters right now. It's not like America can just flip toggle switches and do what it wants. It's got to have an educated workforce for a 21st century to move into it. And I'm not sure it does.
Elizabeth Frazee:
It does definitely need that educated workforce. And that's something that at least House Democrats have been focused on in the Education and Labor Committee. They've been looking at how to use things like apprenticeships to train and how to segue the workforce from textile workers to high tech workers. But one thing I was going to highlight Michael is the last administration's attempt to hurt China actually ended up harming U.S. companies and harming U.S. workers. And that is the 301 tariffs that they put on. Does sanction China didn't hurt China at all. People are not moving their supply chains out of China because they weren't able to do it quickly enough to transition. And so what we're hearing from a lot of our clients is that they really hope the administration moves to eliminate those additional tariffs on imports from China.
Michael P.A. Cohen:
Yeah. This is a story we've been tracking on this show. In fact, it's the very reason this show formed my partner on the show. Scott Mayberry episode, after episode, we discussed this very issue and Scott agreed that there'd be no winners, but I kept saying, there's going to be a winner and it's not us. And that's exactly what happened as it turns out, Scott probably will have a more informed view of that and they can discuss it with me at some point. But I have been saying on this podcast for three years now that there's only so many billions of dollars, the United States government can throw at American farmers not to grow food because they have nowhere to sell it overseas. And now farmers are talking about driving tractors to the government to get rid of these tariffs so they can reinstitute these very things.
Michael P.A. Cohen:
I mean, you're absolutely right Elizabeth, the 301 tariffs hurt nothing but America, did they cause diversions in China? Yeah, absolutely. They caused China to do things differently, but at the end of the day, the China economy didn't slow down or if it slowed down, it didn't slow down in a way that was harmful to it. It just slowed down in a way that was positive growth, but less positive growth, which is manageable right? Than net loss on growth, which is what happened it largely here. And that's an interesting point though, because you're kind of are Republican in the show and the fact that you say that shows me that there some Republican recognition of that fact, and perhaps there is economic pressure and American policy to rethink trade war type activity.
Elizabeth Frazee:
Absolutely. On the Republican side, we are hearing from leaders on trade issues and both the House and the Senate that they do not embrace the trade war and would like to see a way to walk it back.
Michael P.A. Cohen:
Yeah, absolutely. Well, that's all interesting news. I mean, what I'm hearing from you both is that there is internal American governmental recognition of the new world order, so to speak. And the lessons from the trade war that occurred and economics do tend to drive policy, right? More than almost anything else. At least in immediate ways. Social change comes in dramatic revolutionary ways, but economics can actually drive politics in ways that are perhaps more conventional. Let's put it that way. It seems like a lot of that dialogue is going on in government, which is a very positive thing to hear only six months into a new administration. It's something I think you pointed out earlier, Chani this we're not even two years into a new administration yet. We're six months into a new administration at a stage where the new president has just had time to get his, get his legs under him and make appointments. And he still got a lot of appointments to make.
Michael P.A. Cohen:
What else does our audience need to know? I've kept you guys a lot. And I know I sidetracked you a lot on some comparative global debate, which is always my inclination. And I'm sorry if I ambushed you both by that. But I thought it was an interesting conversation to have.
Elizabeth Frazee:
Not an ambush at all. That is central question to everything Congress is doing right now, where do we stand on the world stage and how do we compete with other countries in the particular China? And that speaking of competition, competition issues have been center stage, at least in the House over the last few weeks. And Congress is trying to find a way to reign in tech or at least some in Congress are trying to find a way to reign in what they call Big Tech, which others would argue Big Tech is a place where we're actually winning in this country. We're beating China, we're beating Europe we're standing at the top of our game. But there are concerns from both the left and the right that Big Tech has too much power. And the House Judiciary Committee last week reported out six bills.
Elizabeth Frazee:
Every single one of them, surprisingly to me has some Republican support. Chairman Cicilline, the chairman of the Antitrust Subcommittee on how judiciary decided a few years ago. He wanted to take on Big Tech, issued a report. And that report did not get a lot of Republican backing at the time, but he's taken the report findings and has doled out across the committee, legislative pieces, six pieces to address some of the concerns about Big Tech. And those concerns are everything from how companies like Amazon compete with the sellers on their platform to data portability and whether American consumers can move across platforms and take their data with them when they move across platforms, issues like the fees, filing fees for mergers and a number of other issues that the committee took on and they broke it into six pieces. They got Republicans to support at least a Republican on each of them.
Elizabeth Frazee:
And they reported out this package. Now we'll see what happens. We understand that they will move in the House, but in the Senate, they haven't been quite as quick to move on antitrust. The chairman of the Antitrust Subcommittee on Senate Judiciary Amy Klobuchar, has her own package of bills, which is different from the House version. But the ranking member on the subcommittee, Senator Lee from Utah has his own bill and he's opposed to Klobuchar's approach. So it might be much more difficult to get agreement on antitrust legislation in the Senate. But remember, you've still got people like Josh Holly, from Missouri, who is interested in censorship of conservative speech. So there are some conservative in the Senate who may join with the Klobuchar's and try to move something. It's just harder in the Senate because we now you have to have 51 votes to move.
Michael P.A. Cohen:
No, thanks for that staging it, super helpful. That really breaks out where all that stands. Chani, any thoughts to add to the competition issues in America? I mean, this is pretty important stuff, right? Congress is talking about redrawing the rules for competition that have essentially existed untouched for 125 years.
Chani Wiggins:
And then you've got also have the White House and they are potentially working on an executive order that would direct the Federal Trade Commission and which is an independent body, but whatever, direct the FTC and the Department of Justice Antitrust Division to examine hurt regulations and on antitrust and submit recommendations on how to change them and potentially strengthen them. So I think there are a lot of eyes, both parties, both big branches are with the legislative and the executive branches are really watching Big Tech really closely. But meanwhile, you've got the recent court. I'm not the lawyer in the room. One of those courts actually throwing out the case, the FTCs case against Facebook and saying that, "Wait a second, you need to have more, there, there, you need to have more evidence and really build your tastes and come back to us." So it's really interesting competition issues for Big Tech, I think will be, are here to stay and there will be continued scrutiny.
Michael P.A. Cohen:
Yeah. It's an interesting area, Elizabeth mentioned, there's a notion that Big Tech has too much power, but the economist broke down that power in an issue. I think two months ago that I talked about on the podcast when I did a Big Tech episode and the economic data shows that there is not power. The economic data shows some really big companies who are go into a war against each other and that it's sparking innovation, lowering prices, expanding services. If you think about Coke and Pepsi and the beverage space, that hasn't been bad, that has been a good thing. And now you have Amazon and cloud services, you have Apple putting reigns on Facebook. You have all kinds of things going on by companies with resources to do that. And so what kind of power is Congress talking about?
Michael P.A. Cohen:
Where is the economic power that they're worried about? What is the economic harm that Congress is focused on? Because I only see potential to harm innovation. I think Congress is hung up on social power and that's not really the province of antitrust law. That's the province of something else. And there is a danger. It seems to me to couch, I power a problem of a different order in laws that were designed to check economic power and are otherwise doing that. That's why Facebook was thrown out. The court found there was no economic power under the markets that the nation's leading antitrust agency drove and went farther and say, "I don't think he can replete it."
Michael P.A. Cohen:
I mean, the conventional press was all about, "Oh, they'll just replete in 30 days," but you read that judge's opinion. It's hard to see how they can. And why didn't the antitrust division bring that case? Because the Antitrust Division has to go to court. The FTC doesn't always have to go to court and it doesn't think that way, has the power to do other things, including going to its own court. And what do you think? Is this an economic power issue or is this a red herring for something else?
Elizabeth Frazee:
Oh, it's a red herring for content moderation issues, right? Republicans are concerned about conservative speech being censored and about Trump being thrown off the platforms. That's why they're so turned off about this. And they know that going after Big Tech is a great election issue for them, their base loves it. You wouldn't believe the amount of emails I get trying to raise money from conservatives going after Big Tech. So on the Republican side, it's definitely about content moderation, Chani, how about on the Democrat side?
Chani Wiggins:
Well, it is I think also related to content moderation. And I am definitely not the expert here, but I think there was a lot of anger from the Democrats that from last year and the spread of misinformation, not just on politics and the elections, but also the spread of misinformation on vaccines and the pandemic that potentially helped generate a lot of the reluctance, the current reluctance to get vaccinated now and to continue to spread lies about what happened during our November elections. So they put a lot of that blame on the social media platforms. So I'm sure there were other reasons, but I think that's certainly a key one. And this is why you're saying some of this bipartisan collaboration that you would normally see in the House and the House Judiciary.
Michael P.A. Cohen:
I happen to share both of your views. I mean, I don't think this issue is about economic power. I think it's being dressed up under competition law and there's not a competition law issue to be had here that this is a social issue and it has everything to do with the influence of big platforms on thinking on one hand, you have people who want to be able to spread whatever they want to say, and say they have a first amendment, right. To say whatever it is, whether it's true or not, doesn't matter. And on the other hand, you have people who were saying, "This is dangerous, man." The way the world used to be, there is a first amendment right to stand on a soap box and stand in a park and spit out whatever you want. I think that's an important first amendment right.
Michael P.A. Cohen:
It's the right to expression. But in the old world, people would walk kind of by that lunatic in a park and not many people would pay attention to them. If you collect all the lunatics in the parks in the world and then make it look like it's real, which is what social media has the effect or impact of doing, that becomes a weird thing. You didn't have the right for your opinion to be expressed in a newspaper or the radio show of your choice, pre social media, right? I didn't have right for NPR to carry my rantings before I could have a podcast show. But I think this is the issue and I kind of clued into it because I did a show on Big Tech about two weeks ago. And the upshot of that was I got a really angry antisemitic email from a highly educated person telling me that I was off the chart. And that Big Tech was a danger to America and citing these kinds of things, having nothing to do with competition law or the economic issues discussed in the show.
Michael P.A. Cohen:
And I think you both have characterized the real debate that should be going on in Congress, because I think that's fair and honest. And it's one that can be had frankly, and we've had content regulation in America before, we had the fair time laws and other types of things at the FCC regulated. But this is the issue. And addressing this up in competition bandages, isn't going to heal the wound. There needs to be a real dialogue about the impact and dangers of social media in a 21st century world. And that is a fair thing to address. I worry that it gets put under the rug in an issue that's a phantom.
Elizabeth Frazee:
During the very committee markup, some of the Republicans led by Darrell Issa of California, did a really nice job of pointing out some of the challenges with the economic approach. And they pointed out that it might actually be the small companies that get hurt the most. If they move forward and limit Big Tech's ability to purchase companies, some of the best and brightest ideas out there, people go out and they develop companies, but with the intention of spinning them off and selling them, and one of the bills would limit the ability to do that. And that could be very dangerous for startups.
Michael P.A. Cohen:
Absolutely. I mean, that's a huge churn of the American innovation economy, and has been since the early days of Silicon Valley where it was the model to invent and get bought and still is in large part. I mean, the American Congress is playing with fire by not squarely addressing what they really care about here and dressing it up in terms of economic language that could literally have very serious long-term consequences. This is a big deal. And we'll have to keep an eye on it, Elizabeth.
Elizabeth Frazee:
That's right. We'll keep watching it for next quarter.
Michael P.A. Cohen:
Absolutely. Elizabeth Frazee, Chani Wiggins. Thank you so much as always for joining me on the Nota Bene Podcast and for being so generous with your time today, it's been such a pleasure to have you, and I can't wait to see you in October and we will certainly come back with anything else we should know. Thanks for being on the show today.
Elizabeth Frazee:
Thanks, Michael. It's been a pleasure. It always is.
Chani Wiggins:
Thanks, Michael.
Michael P.A. Cohen:
Absolutely. Anytime. And thanks are mine. As I hope I say enough and probably have too many times in the past few seconds, but I really mean it. Well, that's it for this week, folks, I should mention that we will attach Elizabeth and Chani's bios along with the link to TwinLogic in the show notes. So anybody listening can just click through and go right to them. Next week we'll be continuing our quarterly check-ins with another of my favorite people, Oliver Heinisch in London. So stay tuned and as always, thanks so much for listening.
Contact Information:
TwinLogic Strategies website - https://twinlogicstrategies.com/
* * *
Thank you for listening! Don’t forget to FOLLOW the show to receive every new episode delivered straight to your podcast player every week.
If you enjoyed this episode, please help us get the word out about this podcast. Rate and Review this show in Apple Podcasts, Amazon Music, Stitcher Radio, Google Podcasts, or Spotify. It helps other listeners find this show.
Be sure to connect with us and reach out with any questions/concerns:
This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs.