In private, vulnerable Senate Dems back off tech bill

A bipartisan legislative effort to rein in the nation’s largest tech companies is facing fresh resistance from a faction of Senate Democrats over complaints the measure could threaten their chances of holding their slim majority, 10 people familiar with the matter told POLITICO.

The internal opposition comes as Democratic leaders are pushing for a vote on the bill by summer, in an effort to pass what has become a central element of the party’s broader antitrust agenda.

The American Innovation and Choice Online Act, S. 2992 (117) — led by Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) — would ban major tech firms like Amazon and Google from favoring their products over their competitors. For example, the legislation would bar Amazon from promoting its own private-label products over rival items on its e-commerce platform. The bill marks the most serious attempt at tightening oversight of the tech industry in years and passed the Senate Judiciary Committee with support from both parties earlier this year.

Yet in the days since Senate Majority Leader Chuck Schumer told Klobuchar he would hold a floor vote as early as next month, several Democratic senators have privately expressed deep reservations about voting for the legislation, particularly with a midterm election looming, in their conversations with Schumer and other Democratic offices.

Tech lobbyists have claimed the bill could harm popular products like Amazon Prime or Google Docs. And among vulnerable lawmakers, there's growing concern that the sweeping legislation is too contentious for an election year and would eat up valuable time Democrats should instead be spending addressing voters' core concerns.

“We should be focused on items that will help consumers deal with rising costs,” said one Senate aide who criticized the legislation as a “pet project” with little political payoff. “Nobody can quite figure out why it would be a priority.”

On a caucus-wide call held with Democratic chiefs of staff last week, Marc Goldberg, chief of staff to Sen. Maggie Hassan (D-N.H.), was among a handful of senior aides who raised objections, five people familiar with the matter said. They and others spoke on condition of anonymity to discuss off-the-record conversations. Hassan is up for reelection in a highly competitive race this fall, and Goldberg cited the tech antitrust bill as an example of a potentially controversial vote that senators shouldn’t be forced to take just months out from the midterms.

His remark sparked a tense back and forth with Klobuchar’s chief of staff, Doug Calidas, who defended the bill and argued that the legislation would help, not hurt, reelection prospects for senators in swing states. A poll released this week showed about 76 percent support for the American Innovation and Choice Online Act among a random sample of voters in Georgia, New Hampshire, Nevada and Arizona. Several other recent polls have shown that voters are largely supportive of regulating the tech companies, though they often do not prioritize the issue above concerns like inflation and job loss.

A few others on the call, including the acting chief of staff to Sen. Michael Bennet (D-Colo.), who is also up for reelection this year, echoed concerns about Democrats’ legislative agenda ahead of the midterms, though not all directly criticized the antitrust bill.

Supporters of the legislation chalked up the last-minute anxiety from vulnerable Democrats to lobbying by the major tech companies, which have spent tens of millions of dollars campaigning against the bill.

“Anytime a corporate accountability bill gathers steam, the concern trolling heats up and some members try to block a vote because they don’t want to alienate powerful companies,” said Dan Geldon, former chief of staff to Sen. Elizabeth Warren (D-Mass.) — who has led the push to break up the largest tech companies. “But the idea that a popular bipartisan bill like this would hurt any of the re-elects doesn’t pass a straight face test. The polling is incredibly clear on that.”

Representatives for Klobuchar, Hassan and Bennet declined to comment on the exchange on the off-the-record call.

Klobuchar's office late Wednesday night released a revised version of the bill intended to incorporate some of the concerns she has heard from lawmakers on both sides of the aisle.

The behind-the-scenes consternation could jeopardize the legislation’s path to a floor vote — and with it, Democrats’ long-running bid to bolster oversight of the handful of companies that dominate the tech industry.

Klobuchar, the chair of the Senate Judiciary Antitrust and Competition Subcommittee, has spearheaded the party’s efforts to limit big tech’s power for years, developing a sprawling package of reforms targeting alleged anti-competitive behavior by the industry’s largest players. She has worked closely with House Judiciary antitrust subcommittee chair David Cicilline (D-R.I.), seeking to carve out a pathway for passing the legislation in both chambers.

Klobuchar and Cicilline’s antitrust push also won a vote of confidence from the Biden administration, which has pledged to intensify scrutiny of the tech giants and their competitive practices. In March, the Justice Department praised their legislation for its "potential to have a positive effect on dynamism in global markets." Lina Khan, President Joe Biden's Federal Trade Commission chair, helped write the House version of the American Innovation and Choice Online Act when she was a staffer on the Judiciary Committee.

But even as Klobuchar and other Democratic supporters pushed to prioritize the bill ahead of the midterms, they've struggled to resolve serious fissures within the caucus about whether sweeping antitrust legislation is the best way to wrangle the powerful tech companies — or the best use of the party's remaining time in the majority.

"Does the Klobuchar bill reduce rising costs in the short term for consumers?" one Senate aide said. "No. So why would it be a focus between now and the election?"

Separately, several Democrats, including California Sens. Alex Padilla and Dianne Feinstien, have raised concerns about the bill's targeting of specific Silicon Valley companies, such as Apple and Facebook’s parent company, Meta. There are also lingering worries about the possible unintended consequences of such wide-ranging legislation raised by the tech giants, who have warned it could create cybersecurity vulnerabilities.

A handful of Democrats have also privately complained that Klobuchar’s office has been unresponsive to criticism about the legislation, and that they've had difficulty convincing her staffers to discuss some of their suggested tweaks.

“There’s been an open dialogue for months between co-sponsors of the bill and offices about questions or feedback on the bill,” said one Democratic aide familiar with the process.

Over the past year alone, Google, Amazon, Apple and Meta have shelled out tens of millions of dollars in lobbying spending and advertising campaigns arguing that the bills would harm national security and aggravate consumers who rely on products like Google Search and Amazon Prime.

“It’s like the game of whack-a-mole,” Klobuchar told POLITICO earlier this year. “Every time I think I’ve got something done, some other lobbyist pops up.”