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• Gets antitrust scrutiny on data usage full#

The EU’s regulatory leadership probably explains why the FTC sent its case against the Activision deal to its administrative judges rather than federal court. They have also conducted more vigorous merger reviews, with the UK’s antitrust authority recently forcing Meta to divest another VR-related startup it acquired in 2020. This includes aggressive new legislation such as the Digital Markets Act and the Digital Services Act. In contrast, the EU has vastly expanded both the scope and enforcement of its own antitrust laws over the last two decades, in a campaign waged largely against U.S.-based tech companies. As President Biden wrote in a January op-ed, the U.S., despite its strong lead in the information economy, lags in the regulation of the major participants. There’s another political concern at work, too: Europe has become tech’s most important regulator.

So, President Biden has called on the new Congress to pass bipartisan legislation, including antitrust reforms, “to hold Big Tech accountable.” Playing to a Different Audience Bills that would do just that circulated in the last Congress, but none made it to a conclusive vote. The Biden administration believes that taking big swings, even when they whiff, puts pressure on Congress to pass legislation expanding the types of harms antitrust law can remedy, and giving the FTC and the Department of Justice more authority and resources to manage competition. In the past, IBM, AT&T, Intel, and Microsoft were famously flummoxed for years by antitrust cases that dragged on, much as Google and Meta are today - and perhaps, now, Microsoft again.īut there’s more going on here than just putting companies on notice. Those enterprises may also second guess current plans, worried that new initiatives will inflame existing lawsuits or weaken their negotiating positions. In the interim, senior management may be distracted by spending their time dealing with the lawyers instead of the business. More broadly, an aggressive, if unsuccessful, litigation strategy can provide a potent disruption to companies deemed too powerful. Flagship titles including Call of Duty, notably, will not be pulled from other platforms, and offered instead as Xbox exclusives. In the Activision deal, for example, Microsoft preemptively offered substantial limits on how it will treat Activision’s products post-merger. From the outset, companies will find themselves encouraged to make voluntary concessions. As ex-Biden competition advisor Tim Wu recently noted, it can make a huge difference to an industry if the major players know they’re “under heavy surveillance from the government.”Įven if deals eventually close, regulators see value in everyone understanding that all transactions will be more closely scrutinized. This is particularly true for today’s most successful technology companies, which have long expanded into emerging markets by gobbling up promising startups already on the field. For starters, big cases against big companies send a message designed to discourage future dealmaking. The government doesn’t necessarily need to win cases for lawsuits to have an impact. How Losing Cases Could Be a Winning Strategy

They also need to widen their view of legal risk, and adopt a global plan of action, both for future transactions and for current operations. To navigate increasing uncertainty, companies need to understand the complex politics of competing efforts to craft a new paradigm for competition law. But they also recognize that the stars may be aligning to reshape the law dramatically. But harm not to competitors but to consumers, usually in the form of increased prices, has remained the standard for proving antitrust violations in the courts for roughly the past 40 years. Antitrust authorities have a poor track record of successful lawsuits that proceed to trial, largely because federal law doesn’t cover the behavior regulators now allege is harmful to competition, including the control of consumer data to create competitive advantages, and self-preferencing their own products on their platforms.

Gets antitrust scrutiny on data usage full#

Along with the Federal Trade Commission’s failed effort to stop Meta’s acquisition of a virtual reality startup, an earlier federal case against Google regarding search, multiple ongoing state-level cases against the company, and reports the FTC will soon bring an action against Amazon, it appears that hunting season for large technology companies is in full swing.īut if reigning in big tech is the goal, antitrust law, at least on the surface, seems a problematic weapon. federal government has brought two major antitrust cases: one to block Microsoft’s acquisition of game developer Activision, and another against Google aimed at forcing the company to divest some of its advertising businesses.