American multinational technology and internet services company Google logo (top L), USA Online … [+]
The three big internet “platforms” in North America: Amazon, Alphabet (Google), and Meta (Facebook)., continues to face four major antitrust challenges in the United States. Are these lawsuits a good thing for innovation in America and around the world? Research shows that these platforms offer significant benefits to consumers. There is no agreement on the legal basis or economic benefits of the case, which is likely to be met with judicial skepticism and threaten to drag on for years. These platforms also face a proliferation of antitrust lawsuits and regulatory scrutiny overseas. Collectively, these multiple legal actions could impose significant costs on platforms and reduce incentives to innovate. The Hippocratic oath is “first, do no harm,” and suggests that U.S. antitrust enforcement officials should seriously consider dropping the lawsuit.
Four major antitrust lawsuits in the United States
The three tech giants mentioned above are facing four major government challenges to their business practices brought by two federal “sister” antitrust enforcement agencies: the Federal Trade Commission and the Department of Justice. There is. Each case remains pending at the federal trial court level, with pending appeals that could drag on for years.
The Department of Justice sued Google in October 2020, alleging that the platform collectively shut down its users’ search engine, the primary means by which they access the internet, thereby unlawfully maintaining its monopoly on search and search advertising. insisted. The case will go to trial in late 2023, with closing arguments scheduled for May 2024 (the judge said he had “no idea” what his decision would be).
The FTC sued Facebook in December 2020 to eliminate threats, including its acquisition of upstart rival Instagram in 2012, its acquisition of mobile messaging app WhatsApp in 2014, and the imposition of anticompetitive conditions on software developers. He advocated a “systematic strategy” for this purpose.to that [social network] “Monopoly” and “depriving advertisers of the benefits of competition.”
Then, in January 2023, the Justice Department again sued Google, alleging that it violated the Sherman Antitrust Act by “neutralizing or eliminating advertising technology competitors through acquisitions.” Exercise its dominance across the digital advertising market to force more publishers and advertisers to use its products. Prevent the use of competing products. ”
Finally, in September 2023, the FTC sued AmazonHe claimed, “[b]By suppressing competition on price, product assortment, and quality, and by preventing current or future rivals from attracting a significant number of shoppers or sellers, Amazon can help current or future rivals gain an advantage over its own. I am trying not to be able to threaten you. ”
Although the actual details of the lawsuits differ, the general theme is the same. Each of the three major platforms is said to have used different tactics to influence advertisers, retailers, and consumers in order to maintain their dominance in certain corners of the industry. The world of the Internet – social networking (Facebook), search engines (Google), and e-commerce (Amazon).
case evaluation
Platforms have defended their actions as increasing business efficiency and enabling them to better serve consumers. There is plenty of evidence to support this idea. 2019 survey Erik Brynjolfsson, a professor at MIT at the time, harvard business reviewshowed that free digital goods provided by internet platforms bring significant net benefits to consumers.
The platforms’ defense may resonate in court. The Supreme Court stated in 1979 that antitrust law is a “consumer welfare prescription.” Since then, U.S. judges have ruled that the primary purpose of antitrust law is to benefit consumers, not to prop up competitors. Ahead of the Biden administration, both Democratic and Republican enforcement officials agreed that this “consumer welfare standard” should guide U.S. antitrust enforcement policy.
But senior antitrust officials in the Biden administration declined to rely on that standard in 2021. They argue that antitrust law should advance other goals beyond consumer welfare, such as protecting small businesses, worker rights, fighting inequality, and improving the environment.
What’s next for platforms like Google and Facebook?
Lower courts, bound by Supreme Court precedent, could be expected to rule in favor of the government only if they find that the platform’s conduct undermines the competitive process and threatens to harm consumers. There is sex. Whether they will do so is most uncertain. It depends on how the individual court views the law and facts in light of the complex and contradictory arguments presented.
Legal scholars are divided on antitrust prosecution of platforms. For example, Professor Herbert Hovenkamp, a leading US antitrust paper author, said competitive behavior needs to be restored (particularly in the case of Amazon and Facebook) or concerns of “natural monopolies” need to be addressed. (Google) and generally supports antitrust challenges against the platform. ). Douglas Melamed, a professor at Stanford University, said Google’s actions “clearly have some legitimate interest, and the question is how courts will factor that into their overall analysis.” Professor Andrew Gabil of Howard University says:[t]In a 2020 lawsuit against Google, his allegations are undoubtedly serious, but “[w]The big question is whether the evidence turns out.” Legal economist Jeffrey Mann believes the FTC’s case against Amazon “will face a tough battle in court.”
There is at least one outcome we must be prepared for. Platforms facing antitrust uncertainty may be expected to gain a competitive edge and focus on legal strategy rather than consumer-centric innovation. Additionally, Stanford University professor Rita Katila says antitrust laws can have the unintended consequence of stifling innovation by limiting opportunities for complementary companies to do business with giants and fill gaps in the market. It suggests that there is a sex.
It should be mentioned that these platforms are facing both lawsuits and new regulations in Europe and other jurisdictions, which could threaten their long-term global leadership in key internet sectors.
There is no economic agreement on platform support.
There is no consensus among economists on how governments should deal with platforms or what the implications of antitrust and regulatory intervention might be.
Prominent regulatory economists Robert Crandall and Thomas Hazlett argue that overly aggressive antitrust laws and regulations have both reduced the innovation of major U.S. internet platforms and undermined consumer welfare. It is explained that there is a possibility of damage.
Other prominent scholars, Professors Howard Shelansky and William Rogerson, argue that addressing the potential competitive threats posed by platforms requires a more targeted approach than traditional U.S. antitrust enforcement. I believe that narrower regulations may be more appropriate.
A University of Chicago survey of 80 American and European economists found a wide range of opinions on whether antitrust laws and regulations should apply to platform activity.
An important consideration is the Hippocratic oath to “first do no harm.”
U.S. government trustbusters should be mindful of both the potential harms and putative benefits of antitrust challenges to platforms when deciding whether to proceed with these long-term lawsuits. Given the clear benefits that platforms provide to consumers and business users, the costs of platform litigation, and the uncertainty regarding the likely impact of antitrust remedies, U.S. enforcement officials should “first do no harm.” We should keep in mind Hippocrates’ oath. This appears to suggest that existing litigation be discontinued.
