How the House’s Silicon Valley smackdown is dividing conservatives

A set of bipartisan bills to rein in the power of the country’s largest tech companies is splintering the conservative movement, prompting a well-established set of Charles Koch-backed think tanks and advocacy groups to mobilize in defense of Facebook, Amazon, Apple and Google.

The fight is pitting the politically powerful Koch network, which advocates for the government to stay out of business, against major tech antagonists on the right like News Corp. executive chair Rupert Murdoch, who has spent years working behind the scenes to knife Facebook and Google. The Kochs’ opponents also include conservative donor Rebekah Mercer, a major backer of both Donald Trump’s 2016 presidential campaign and the right-leaning social media network Parler.

The Kochs have spent decades funneling millions of dollars into free-market, libertarian and pro-tech groups across Washington to protect the tech industry from regulatory scrutiny. Groups advocating against the tech antitrust legislation received over $1.5 million altogether in 2019 alone from the Koch Foundation, according to the foundation’s financial records. Now that influence army is facing its most serious challenge yet as key GOP lawmakers, emboldened by anti-Silicon Valley fervor among the Trump-supporting Republican base, embrace five Democratic-led antitrust bills that aim to diminish the power of the tech giants.

“Getting down to the specifics of these bills, they range from bad to ugly,” said Patrick Hedger, vice president of policy for the Taxpayers Protection Alliance, which is funded in part by groups connected to the Kochs. Americans for Prosperity, a Koch group, called the antitrust package a “jumble of legislative proposals [that] targets American companies [and] treats them as guilty until proven innocent.”

The critics are arguing, in part, that the bills are antithetical to GOP values, which traditionally emphasize the free market and oppose regulatory intervention.

“These bills represent a huge intervention into the U.S. economy,” said Jessica Melugin, director of the Competitive Enterprise Institute’s Center for Technology and Innovation, which has received tens of thousands of dollars from Koch foundations in recent years as well as funding from the major tech companies. “This is not on-brand for Republicans.”

The House’s top Republican, Minority Leader Kevin McCarthy, weighed in against the legislation on Wednesday, saying it “only gives Democrats in the federal government more power to tip the scales.” McCarthy, a California lawmaker, has received tens of thousands of dollars from Google, Amazon and Facebook, as well as the Koch Industries PAC, in recent years.

But traditional Republican aversion to meddling in big business saw serious erosion under Trump, whose Justice Department filed a major antitrust suit against Google. The antitrust bills’ right-leaning supporters say the Koch groups are simply out of touch with a populist GOP base that feels censored and silenced by the tech giants.

“The Koch group and all of these pro-big tech people on the right, they do have an advantage, which is inertia,” said Jon Schweppe, the director of policy and government affairs at the populist American Principles Project, which has received money from the Mercer family. “The Republican Party for a long time has been a party opposed to any antitrust or concern about concentrated power. But the divide here is that the base definitely wants to break up Big Tech.”

One sign of the anti-tech message’s growing appeal among the GOP caucus: Rep. Ken Buck of Colorado, the top Republican on the House Judiciary antitrust subcommittee, co-sponsored all five of the antitrust bills, along with North Carolina Rep. Madison Cawthorn and Texas Rep. Lance Gooden.

Buck said he believes that the legislative efforts are an extension of his outreach to blue collar voters.

“When I go back to my district, I hear a lot of people talk about the fact that what Big Tech doing is wrong,” he said. “They don’t necessarily know they cheated this particular company in this way, but they have this gut feeling that these companies are too big and they’re cheating. So I do think that we will reach out to a broad spectrum [with these bills].”

Democrats behind the legislation have welcomed the support from Republicans, seeking to ride the populist wave to garner lasting support for their agenda.

Ultimately, it’s a fight for the future of the Republican party — Trump-style populism vs. traditional conservatism — and the Koch network isn’t going down without a fight. As soon as the bills were introduced last week, Koch-backed groups including Americans for Prosperity, the American Enterprise Institute, the Competitive Enterprise Institute, the Taxpayers Protection Alliance, the Open Competition Center, TechFreedom and the Information Technology and Innovation Foundation came out with statements and campaigns condemning the legislation.

Aside from the tech companies themselves, the Koch groups and the U.S. Chamber of Commerce have been some of the loudest voices blanketing Capitol Hill urging Republican lawmakers to oppose the legislation, according to two aides familiar with the conversations who asked to remain anonymous in order to discuss private conversations. (Many of the groups that receive Koch funding also receive money from Facebook, Google or Amazon.)

“I don’t think Koch is out on their own on this,” said Zach Graves, head of policy at the Lincoln Network, a right-of-center tech advocacy group. “I think they have a lot of alignment with relatively powerful industry groups — not just tech, but also just general Chamber of Commerce types who don’t want to see massive expansion of the antitrust regime and giving big new powers to the [Federal Trade Commission] and DOJ.”

Each of the bills has at least one Republican co-sponsor, but the legislation will need more GOP support to push through the Senate. That’s left undecided Republicans in the middle of a tense debate.

For instance, the Heritage Foundation, which is building out its tech policy apparatus, has chosen to stay out of the public conversation for now as it weighs how to thread the needle between taking on Big Tech and maintaining a hands-off approach to government regulation.

“As with any other meaningful policy debate, Heritage is carefully looking at the issues inherent to the Big Tech debate in order to come up with policy recommendations that address legitimate concerns about censorship and the growing influence of Big Tech platforms,” said John Cooper, the Heritage Foundation’s associate director for institute communications. “To argue that these are issues that don’t require some sort of action is simply unrealistic at this point, though it’s important policymakers act in a way that doesn’t give the federal government undue authority that Americans will regret giving to bureaucrats down the road.”

Another crucial dynamic is the fact that the Koch network and the Chamber of Commerce, once two of the most important forces in the Republican Party, fell increasingly out of favor with GOP backers during the Trump era. The Koch network alienated a huge swath of formerly devoted Republican followers as its political arm expressed new openness last year to backing Democrats, and the Chamber drew fire for backing several Democrats as well.

“The Koch network and Chamber crowd have zero influence right now,” said one House Republican aide, who spoke on the condition of anonymity in order to speak candidly. “Most of the House Judiciary members and their staff couldn’t pick out their people from a police lineup.”

But on the other side of the schism, many traditional conservatives and libertarians feel they’re defending the core of their party against Trump’s influence. That includes growing GOP calls for a government crackdown on social media companies that they accuse of censoring conservatives, a theme that Trump pressed repeatedly during his time in the White House.

“I reject the premise that this is ‘the right is divided,’” said Berin Szoka, president of the tech- and Koch-funded think tank TechFreedom. People accusing tech companies of censorship, he added, “are seeking to compel social media sites to host the most despicable people and content imaginable.”

The Democratic-led bills — H.R. 3816 (117), H.R. 3825 (117), H.R. 3826 (117), H.R. 3843 (117) and H.R. 3849 (117) — don’t include prominent anti-tech proposals that Trump and other Republicans had championed, such as stripping or reducing the online industry’s protections against lawsuits over user-posted content. But anti-tech activists on the right have made it clear that they support the House antitrust bills in part to punish the major tech companies’ alleged censorship.

“Conservatives are being canceled by Big Tech, we are being kicked off these platforms, we are being silenced and censored,” said Mike Davis, founder and president of the right-wing Internet Accountability Project, which receives some funding from Oracle. “Conservatives need to pick a side — they’re either with everyday Americans or they’re with these Big Tech monopolists and their D.C. lobbyists.”

Both sides agree that there’s nowhere near as robust of an apparatus on the right for supporting antitrust changes. Whereas a swath of academics and groups on the left have taken up trust-busting as a priority policy area, only a few groups and figures are devoted to the issue on the right.

“I think it’s going to take a new generation of folks,” said the House Republican aide.

So far, most Republicans in Congress have not weighed in publicly on the legislation. Rep. Jim Jordan (R-Ohio), the pro-Trump ranking member on the House Judiciary Committee with a more libertarian bent, has been actively whipping against the bills, targeting their Democratic roots.

On the other side, lobbyists for News Corp. and fellow Murdoch-owned company Fox have been working Republican lawmakers to vote in favor, according to two people familiar with the dynamics. And the tech giants — themselves some of the biggest lobbying spenders in Washington — are caught in the middle.

“There is going to continue to be a battle on this, and it parallels the realignment,” Schweppe said. “The Kochs have always been this more libertarian wing. I don’t think that’s the main thrust of the party anymore.”