Reining in Consumer Big Tech: Antitrust and Beyond

The U.S. House of Representatives recently released a long-anticipated report on the state of antitrust in consumer tech. It found that key gateways and highways online are heavily consolidated around a few Consumer Big Tech giants and that reforms of antitrust laws are needed to inject more competition into the internet.

But while the report’s recommendations are ambitious, they are not enough to take on all of the harmful effects to our culture, economy, and politics caused by consolidated consumer tech markets. One reason is that they do not tackle the law’s foundational shortcomings, which overly complicate the antitrust analysis and must be reformed. The other reason goes to the core of what modern competition laws are and what they are not, which requires looking beyond antitrust to other rules and regulations to rein in the broader societal consequences of bigness in the digital economy.

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How tech forces a reckoning with prediction-based antitrust enforcement

Tech is testing the limits of a half-century experiment in antitrust in which predictions made by experts have guided enforcement of the law.

Over that time, it has become increasingly common for the lawfulness of a given merger or monopolist’s conduct to be decided by predicting its actual effects on competition. On first blush, it seems a sensible approach. And ostensibly a rational replacement of what came before it, which was a set of hard-and-fast rules that trained antitrust on the protection of market conditions believed conducive to competitive outcomes, with little regard for how competition was actually impacted in an individual case.

But lawyers and economists may have jumped the gun in thinking themselves up to the task. A half decade of experience with the predictive approach to antitrust, bolstered by research in uncertainty and decision-making in other fields, suggests that little more than wishful thinking may support the premise that predictions about complex markets can be accurate enough to guide competition policy. And to make matters worse, the prediction-making apparatus has been focused exclusively on an overly restrictive subset of competition concerns that only serve to help consumers to buy more things for less money. The result has been the consolidation of large swaths of the economy.

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Don’t believe the hype: managing expectations for the antitrust investigation of Google

Although much attention has been given to last week’s report that federal and state governments conducting antitrust investigations of Google in the US may file lawsuits as soon as this summer,1https://www.wsj.com/articles/justice-department-state-attorneys-general-likely-to-bring-antitrust-lawsuits-against-google-11589573622 those keeping score at home would be wise to manage their expectations for a groundbreaking case.

Exactly what kind of case the government is thinking about bringing is not clear, but it appears on track to involve claims that Google has abused a dominant market position in search and advertising. Yet if recent history teaches us anything about such monopolization cases, it is that they are difficult to bring and to expect, at most, incremental–not sweeping–changes in the course of the antitrust laws. That is because any case the government brings will be confined by a strong case law precedent that has in recent decades significantly curtailed the reach of monopolization laws in the US.

Those looking for big change anytime soon would be wise to instead put their energy elsewhere, such as new tech-specific industry regulations. Looking to competition laws—at least as they are currently crafted—for a big fix is only likely to disappoint and frustrate.

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The visible hand: how data privacy can reshape digital markets and inform competition policy

California earlier this year took a big first step to narrow the American-European tech regulatory divide with a comprehensive data privacy law. Tech companies operating in two of the largest markets in the world must now give their users some basic transparency and control over what data is collected about them and why. But data protection is more than just another compliance check-box. Data privacy rules are reshaping digital markets and informing the debate about competition policy in tech to address increased consumer demand for better protection of personal information.

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Coronavirus and tech regulation in a new normal

Two month ago, plans to ramp up regulation of the digital economy under competition, privacy, and consumer protection laws looked like a head-first dive into the deep end of the pool. Now, as governments focus on keeping people safe and markets stable, a spotlight has been cast on the role of technology in our lives and economies. What might the coronavirus crisis mean for the future of tech regulation when restrictions subside and a new normal emerges?

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