You’d expect conservatives to approach reining in Big Tech consistent with free enterprise, property rights and innovation principles.

Yet, what a surprising number on the Right supports is inconsistent with free enterprise, assaults property rights and quashes innovators who could become Big Tech’s competitors. Those conservatives are helping to weaponize antitrust in destructive ways serving the Left’s agenda while weakening intellectual property rights, most notably of patents.

Antitrust is intended to foster fair competition. But it doesn’t displace IP rights of exclusivity.

The foundation of the New Madison Approach, regarding antitrust when it intersects with IP rights and now threatened by the Biden administration, respects the exercise of common, exclusive patent rights. An inventor whose invention is patent-eligible, whose patent is reliable and fully enforceable against infringers, stands a fighting chance with established firms. This is the formula for dynamic (as opposed to static) competition.

Secure, reliable patents give little guys a shot at attracting investment, commercializing their inventions and holding big infringers accountable. Secure private property rights in one’s patents and inventions aligns with free enterprise, property rights and innovation principles.

Rep. Thomas Massie described this better approach for bringing competitors to Big Tech in a statement when the House Judiciary Committee moved a wolf-in-sheep’s-clothing antitrust report. He knows what he’s talking about. Rep. Massie has 30 patents and successfully commercialized his inventions.

Weaponizing Antitrust

As for the Left's antitrust agenda that some conservatives back, consider some examples.

First, S. 2992, the American Innovation and Choice Online Act, makes it illegal to market one’s own products and sales items more prominently on one’s own platform, so-called “preferencing.” The Senate Judiciary Committee voted 16-6 to report out the bill, even though the committee never held any hearings on it. But 14 senators voiced concerns or opposition, including a GOP cosponsor who voted against the problem-plagued antitrust weapon.

Second, GOP-sponsored legislation to lower drug prices wields an antitrust hammer against core intellectual property rights. S. 1435 treats improvements to inventions typical in other technologies as a crime in biopharma.

Going after bad actors who block generic competition by very modestly changing their existing products is one thing. But overbroad definition of “follow-on product” in S. 1435 and H.R. 2873 extends well beyond minuscule modifications. It encompasses significant improvements, such as changes to treat new diseases and changes the FDA classifies as new treatments.

Signs of Hope

There are signs of hope. In June, House Judiciary Committee markup of six antitrust bills showed near-uniform GOP opposition to the four most controversial ones, including H.R. 3816, companion to S. 2992. Sixteen of 19 Republicans voted against H.R. 3816. This included full committee Ranking Member Jim Jordan. This bill squeaked by on a 24-20 vote.

Similar opposition emerged to weaponized antitrust in H.R. 3825, H.R. 3826 and H.R. 3849. H.R. 3825, forcing divestiture of mergers and acquisitions, barely passed 21-20, with 16 GOP “no” votes. H.R. 3826, the Platform Competition and Opportunity Act, passed on a mere 23-18 vote with 15 Republicans opposing. H.R. 3849, dealing with interoperability and data portability, passed 25-19, counting 16 GOP noes. And 16 Republicans opposed H.R. 2873, the antitrust hammer to the biopharma innovation nail, reported out 27-16.

Also, top conservative experts are articulating problems with the direction of antitrust legislation. For example, former FTC official now at the Mercatus Center Alden Abbott regards S. 2992 as regulation rather than antitrust. That’s because antitrust involves promoting competition, while regulation involves government using red tape to hamper targeted businesses.

Former FTC commissioner Joshua Wright, who’s exposed Leftists’ real aim of wrecking the beneficial consumer welfare standard, tweeted, “It would be a particularly odd time for [Republicans] to support a bill (AICOA) that: (1) supercharges an FTC that has made clear it is targeting all commerce (not just tech) while deploying voting shenanigans to strip power from Rs; and (2) circumvents the consumer welfare standard.”

And the House Energy & Commerce Committee recently held a hearing focused on Section 230 reform. This would curb Big Tech’s carte blanche liability shield. Section 230 enables the firms’ escaping accountability when they “cancel” or censor viewpoints that don’t align with their “woke” ideology. Viewpoint discrimination is most people’s main concern.

Maybe we can come out of this with revived commitment to free enterprise, property rights and innovation principles — without destroying the consumer welfare standard in antitrust.

One-hundred twenty-five years ago, foundational invention culminated with the arrival of alternating electrical current’s successful generation, transmission and use. This success set a technological standard, sparked dynamic competition and led to a marked increase in the standard of living.

All this thanks to secure, reliable, private property rights — particularly the exclusive right to one’s inventions for the limited duration of a patent.

Inventor Nikola Tesla and inventor-industrialist George Westinghouse applied and built on the knowledge and the earlier work of scientists such as Alessandro Volta and America's beau ideal Renaissance man Benjamin Franklin. Tesla invented the foundational technology, while Westinghouse provided the resources — R&D lab, industrial, financial, business savvy — vital to commercialization of inventions.

They won out on the type of electrical current transmitted, overcoming direct-current advocate Thomas Edison in the “War of the Electric Currents.” AC conveys electricity longer distance than does DC. AC became the standard for electrification.

Tesla and Westinghouse successfully connected their Niagara Falls hydroelectric station with the city of Buffalo, N.Y. They had worked out the practical application with its countless little, but important details, with associated inventions and improvements along the way.

Commercializing the AC-based electrical inventions was made possible by the protection of private property rights that Tesla’s patents secured. Relying on the property rights in the patents, the allies could pursue business arrangements to monetize their commercialization efforts.

Strong patents ensured that Tesla and Westinghouse could assert their patent rights and enforce their patents against infringers and other disrespecters of property rights. Such patent potency added to the value of patents as intangible assets. Reliable patents are more attractive to investors of venture capital.

They formed the Niagara Falls Power Company as the business entity for their novel power generation using Niagara Falls waters to produce electricity. Its first customer was Buffalo’s Cataract Power and Conduit Company. In turn, Cataract’s first customer for electricity was the city streetcar company.

NFPC built the 26-mile infrastructure from Niagara Falls to Buffalo. On November 16, 1896, power plant transformer switches were thrown at Niagara Falls. Within a second or two, alternating electrical current shooting through the power lines reached Cataract’s transformer and on to juicing Buffalo streetcars. A newspaper called this result “the journey of God’s own lightning bound over to the employ of man.”

On January 12, 1897, Tesla and others attended a celebratory dinner in Buffalo. Some 300 Buffalo citizens, 50 leading scientists and electrical engineers, and a group of industrialists and investors gathered to celebrate the achievement. It had taken 8 years and about $200.9 billion (in 2022 dollars) in venture capital just to build Niagara Falls Power and complete the Buffalo electrical connection.

The rest is history. AC electrification displaced small, local electrical systems. AC electricity was more efficient, cheaper and abundant. The Tesla-Westinghouse inventions, patents and commercialization efforts and AC’s proliferation have benefited people, communities, industries, businesses and multiple aspects of life.

New markets sprung forth implementing countless uses and applications of widespread electrical availability. Implementers have ridden on the rails of the foundational innovation. Numerous new companies have been created around implementing inventions that use electricity for untold applications of this abundant, cheap power coming into homes, shops, factories, hospitals and elsewhere.

That’s what dynamic competition looks like. It comes from the exclusive property right in one’s inventions of foundational technologies and their standardization. Exclusivity and reliable patents electrify innovation and spark the creation of new wealth and jobs.

This holds for today's great inventors, such as Moderna, Pfizer and BioNTech in biopharma and Qualcomm and InterDigital in wireless telecom.

We should never lose sight of the remarkable benefits across society that foundational, standardized inventions spark and how absolutely vital it is that all inventions enjoy secure, exclusive, private intellectual property rights.

(See Jill Jonnes, Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World for a full account.)

A year into the Biden administration, a characteristic has emerged that’s emblematic of its central approach to achieving its policy goals: The wholesale embrace and hypercultivation of the Administrative State.

Evidentiary exhibit A is the appointment of radical Leftist acolytes of Sens. Elizabeth Warren and Bernie Sanders to government positions — e.g., Lina Khan at the Federal Trade Commission, Rohit Chopra at the Consumer Financial Protection Bureau, Tim Wu at the White House.

Exhibit B is reckless, unbridled conduct in their official positions, intended to disrupt policies and processes. They employ chaos as a tactic for unilateral policy change. Their administrative actions effect policy while disregarding rules, established procedures and congressional authorization.

These violate the rule of law and threaten private property rights. Some examples illustrate the extremist, antidemocratic antics now in play.

Mischief marks the Federal Trade Commission under Chairwoman Khan. Her dervishlike approach includes launching questionable antitrust investigations into petroleum, rail, grocery, sugar and other economic sectors. She is disrupting mergers and acquisitions, including some that have cleared antitrust review or already been consummated.

Khan is decoupling the FTC from the objective, evidence-based consumer welfare standard of antitrust. She has acted to remove important guardrails such as bipartisan Section 5 enforcement guidelines and merger review guidance, and advanced partisan subpoena and investigatory authority and rulemaking power.

Rebuffed FOIA requests and a recent complaint charging the agency with ignoring a FOIA request would shed light on these troubling developments. And Khan’s only been at the FTC since the summer!

The FTC’s stockpiling of “zombie votes” demands scrutiny. As he was leaving the FTC and taking appointment at the CFPB following Senate confirmation, former FTC Commissioner Chopra cast votes on future matters of FTC business — though no longer effectively an FTC commissioner. Khan’s FTC has since counted several of Chopra’s zombie votes.

Zombie voting at the FTC has led to congressional pushback (here and here) and a request for investigation into the practice.

Chopra is aggressively encroaching on — and trying to displace — well established bank merger policy and process. Chopra’s attempted hostile takeover of the FDIC’s authority ranges far outside his ex officio role on the FDIC board.

Chopra aims to radicalize and politicize bank merger reviews in unprecedented ways. The bureaucratic, unelected aiders and abetters in the Biden administration at the CFPB, Federal Reserve, the Comptroller of the Currency and the Justice Department have ganged up on the FDIC’s legitimate authority over these matters.

A dozen Republican U.S. Senators in a sharply worded letter note, “Director Chopra and [expired holdover] Director [Martin} Gruenberg’s statement and actions make clear that they violated FDIC procedures with the apparent goal of usurping the powers of the chairman and inhibiting her ability to carry out her official duties and responsibilities.”

This Chopra et al. hostile takeover and end-run of legitimate policymaking is part and parcel of the Administrative State mentality. It’s pernicious. It’s contrary to limited government and the rule of law. It may be illegal.

Chopra’s, Khan’s, Gruenberg’s and other denizens of the Administrative State’s unbounded, radical misconduct under color of law deserves reversal, and they warrant removal from office.

Thus, the minions of administrative mischief erect and consolidate political power in administrative agencies. They circumvent the constitutional separation of powers. They undo the means of safeguarding against government’s overreach, which confines the realm of the unelected to clearly enumerated authorities. Leviathan increasingly escapes transparency and accountability to duly elected officials, namely the legislative branch, and to the electorate.

The strengthening of the Administrative State and the weakening of oversight, checks and balances, and accountability have shifted into overdrive in the past 11 months. The Administrative State’s newly empowered “true believers” are working overtime to consolidate administrative power by combining legislative, administrative and judicial powers, and dismantling the procedural norms, rules and tools of due process.

The Administrative State never works out well for ordered liberty and the rule of law. This direction will lead to much destruction, unnecessary disruption and antidemocratic effects for many American citizens, private enterprises and our nation. The current course promises tyrannical rule by unlimited government.

Locke's Notebook

Vintage Maps 3