Experts discuss antitrust enforcement of tech industry

America's antitrust standards have largely worked as designed for decades. There hasn't been a major revision to any of the core federal antitrust laws since 1976.

But lawsuits from the government, states and private parties challenging massive consolidation and growth in the digital markets industry by Facebook and Google have tested the status quo.

The issue of whether traditional antitrust is up to the task of reigning in big tech split a panel of legal experts Wednesday at the George Mason Law Review's annual antitrust symposium.

The Department of Justice lawsuit against Google marks the first time since it sued Microsoft in 1998 that the government is seeking to break up a company for anticompetitive behavior. It mentions "structural relief," as do two additional complaints from over 40 states demanding the Alphabet-owned company sell assets "as appropriate" to restore competition in the digital advertising market. U.S. v. Google LLC, 20-cv-03010 (District of Columbia, filed Oct. 20, 2020).

Antitrust lawsuits from a coalition of 48 states and the Federal Trade Commission against Facebook followed soon, after alleging that the tech giant stifled competition by illegally collecting consumer data to identify and purchase emerging rivals. State of New York v. Facebook, Inc., 20-cv-03589 (District of Columbia, filed Dec. 9, 2020); Federal Trade Commission v. Facebook, Inc., 20-cv-03590 (District of Columbia, filed Dec. 9, 2020).

The filing of these cases, some of the panelists argued, is proof that current antitrust enforcement can address monopolization by big tech.

Nicolas Petit, chair of competition law at the European University Institute, advocated for legislators to wait on the outcome of the litigation to craft further regulation, if it's even necessary. He asked whether lawmakers are rushing to remedy a problem that might not need to be fixed after the lawsuits are resolved.

"Saying that antitrust law is fine because we filed a lot of cases, I'm not holding my breath," replied Christopher L. Sagers, professor of law at Cleveland State University. "Most of the lawsuits will fail. Those that succeed won't do so in the way that proponents hope."

Geoffrey A. Mane, president of the International Center for Law and Economics, agreed that the government and states will not prevail in their cases. He said, "There's massive amounts we don't know" about big tech's impacts on the digital market industry and potential consequences that could result from restructuring major companies.

Taking it a step further, Petit suggested there's competition between big tech companies that is inconsistent with anticompetitive behavior and might encourage competition and innovation.

"This is something that'll take 20 years to completely unpack," he said.

There have been numerous blunders over the course of antitrust history, warned moderator Tad B. Lipsky, when the courts step into the market.

"The same lesson has been that it's probably a mistake to intervene if the vision you have is long term regulatory enforcement," the professor of law at the Antonin Scalia Law School said. He noted an antitrust lawsuit against AT&T filed in 1974 that forced it to split into separate companies in which the new entities continued to provide regional telephone services while AT&T retained its long distance operations.

Most are now again under an even larger AT&T after the regional operating companies began to merge and buy each other during deregulation of the telecommunications industry.

But supporters of revising antitrust law to account for today's anticompetitive behavior have argued that unforeseen consequences are not valid reasons to tolerate current circumstances.

"What kinds of mistakes are more important?" Sagers asked. "Is it more costly to society to let the government stick its nose into business, or is it more costly to say government should stay out and say, 'What's good for [General Motors] is good for America.'"

The potential fallout of failing to intervene, he said, similarly presents unknown risk.

Diana L. Moss, president of the American Antitrust Institute, shared that concern. She argued that current antitrust standards in evaluating mergers and acquisitions have allowed big tech to quash emerging rivals and are setting the companies up to monopolize other industries using the same anti-competitive tactics."

"We're still at an abysmal 2.5% challenge rate in the digital tech space compared to 15% across all other sectors," she said.

Accusations that Facebook acquired Instagram and WhatsApp to illegally further its monopoly are among the central claims in lawsuits filed by state attorneys general and the FTC. They seek to undo the purchases.

"The FTC did nothing," Sagers said. "Facebook bought the couple of firms that were the only threats to its long term dominance and we didn't do anything."