January 15, 2019 / 8:43 PM / in a year

Trump AG pick concerned by Silicon Valley 'behemoths'

WASHINGTON (Reuters) - President Donald Trump’s nominee for U.S. attorney general, William Barr, told lawmakers on Tuesday that he would focus attention on the “huge behemoths” in Silicon Valley at the centre of a debate over antitrust enforcement.

Barr noted at his confirmation hearing that companies can grow to monopolies without breaking antitrust law.

“I don’t think big is necessarily bad,” he told Senator Mike Lee, the top Republican on the Senate Judiciary Committee’s antitrust panel and a frequent critic of Alphabet Inc’s Google. “But I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers. ... I want to find out more about that dynamic.”

Giants such as Facebook Inc and Google have been at the centre of discussions about antitrust because of their high market share and vast troves of data about consumers. Amazon’s online sales prowess, meanwhile, means that it shakes up any market it decides to move into.

Barr also said that he favoured strong enforcement of U.S. antitrust laws and would review data presented by Republican U.S. Senator Josh Hawley, a freshman and another Google critic, showing that merger scrutiny is at historic lows.

“I am for vigorous enforcement of the antitrust laws to preserve competition,” Barr said. “I am sort of interested in stepping back and reassessing or learning more about how the (Justice Department’s) Antitrust Division has been functioning and what their priorities are.”

Hawley asked whether Barr believed that high levels of concentration in many parts of the economy, particularly the technology sector, could hamper competition and deserve scrutiny.

Barr said he was concerned about so-called network effects that occur when a product’s value to one consumer increases as other consumers use it.

“The thing I’m concerned about are the network effects that are now at work where they’re so powerful that particular sectors could essentially be subsumed into these networks,” Barr replied. “They’re just very powerful network effects because of the size.”

Barr also said he would recuse himself from the Justice Department’s ongoing fight to stop AT&T Corp from merging with Time Warner. The government lost in U.S. District court and is awaiting a decision on the matter from the U.S. Court of Appeals for the District of Columbia Circuit.

Reporting by Doina Chiacu, Sarah N. Lynch and Diane Bartz; Editing by Frances Kerry

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