All three branches of the federal government are toughening antitrust enforcement against Big Tech and social media.
Legislatively, six bills critical of Big Tech’s competitive practices have just advanced with bipartisan support from the House antitrust subcommittee. Apple’s CEO has complained to Speaker Pelosi but has not succeeded in slowing down the bills’ progress to a likely favorable vote on the House floor.
The next stop would be the U.S. Senate, where Sen. Amy Klobuchar, D-Minnesota, will figure prominently. She has spent a substantial part of her legislative career advocating stronger antitrust enforcement against Big Tech.
Recently, a federal court in Washington, D.C expressed doubt about what seems clear to users of social media, that Facebook dominates the market. A short-term victory for Facebook, this ruling actually demonstrated that accepted antitrust principles might be poorly adapted to the modern tech and social media industries, bolstering the case for new laws.
From the executive branch, President Joe Biden has signaled his desire for vigorous antitrust enforcement against Big Tech by choosing Columbia Law School professor Lina Khan to chair the Federal Trade Commission. A brilliant scholar, Khan nevertheless lacks any experience in the workings of U.S. business (as was the original intent of Woodrow Wilson and Louis Brandeis in establishing the FTC in 1914). She came to notice, rather, because of an exhaustive article she wrote as a Yale law student (only four years ago) laying out how antitrust should be used more vigorously against Amazon.
Mergers have been a fundamental part of the growth of Big Tech and social media giants: think of Google’s acquisition of YouTube and Waze, and Facebook’s buying WhatsApp and Instagram. Most large mergers in America are reviewed by the FTC. There is no statute of limitations on when the FTC can challenge a merger—even one it has already approved. It’s likely the Biden FTC will seek to undo at least some of the biggest acquisitions in high tech and social media of the past several years. One of Klobuchar’s bills would make the legal standard for doing so easier.
As for the judicial branch, a 2019 decision by the U.S. Supreme Court encouraged private antitrust lawsuits. Purchasers of applications sold by developers through the Apple iPhone App Store complained about the surcharge Apple imposed on apps purchased from its store. Under settled antitrust principles, only the app developer, who had to pay Apple’s markup, would have been allowed to sue; but the court allowed the ultimate consumer to sue.
American antitrust law rejected such a result 50 years ago because it could lead to a company being sued for the same overcharge multiple times along a chain of consumers. The court had focused on the danger that too much antitrust enforcement would harm business; the antitrust laws already awarded successful plaintiffs three times their actual harm.
The 2019 court, by contrast, championed a different principle, that parties who suffered from antitrust violations should be allowed to recover, even if others did too. As a result, even if there were no energized antitrust enforcement from the executive branch, or new laws from Congress, the Supreme Court has invigorated antitrust enforcement from private parties.
The new legislative and litigation antitrust activity will identify Google and Amazon’s practice of favoring their own products in search results, to the detriment of competing manufacturers. Current antitrust law would not condemn that practice. After all, Google and Amazon developed a popular service and charge consumers nothing for it. Why shouldn’t they be allowed to favor their own products on their own platforms?