The DOJ’s AAG described the case for antitrust grounds against big technology companies at an ANFC meeting on Tuesday. His colleagues are considering investigating Alphabet and Apple. The FTC is handling the investigation against Amazon and Facebook. Stocks dropped after this news broke. However, it isn’t still clear what’s next as antitrust regulations are considered outdated in the digital frontier.
Delrahim, however, stands by current laws as strong enough and as applicable to all markets. The big tech companies declined to issue a statement. A way of nailing these companies is by checking if they bought off a company in a move that made no financial sense. Regulators may check into big-deal purchases and see if they were worth it or were simply made to retain monopoly status and quash competition.
Modern technology companies usually offer products at least cost, a significant roadblock for those arguing about antitrust violations. However, Delrahim states that competition could have both non-price and price dimensions. Diminished quality could harm competition as well. Google and Facebook don’t charge for their products & services. However, they do collect data about their users, gathering profits in non-monetary methods. Proper competition would force companies to implement privacy and such features too.
Exclusivity agreements may also be used against companies, when they harm or bar the entry of other firms, killing off competition preemptively. For instance, Microsoft was trying to prevent users from installing other browsers, for which it had an antitrust lawsuit against it. Apple has been criticized for regulations around the App Store. The SC ordered that driving up prices due to increased commission takeaways could be grounds for suing the company.
If a product or service has been acquired for the explicit purpose of protecting monopolies, blocking competitors or harming competition, raising prices or slowing innovation, that is grounds for antitrust violations. Facebook is accused of preventing founders from having leverage in acquisitions like Instagram, as they were purchased right when they were young.
Coordinated conduct enhancing market power would also be possible grounds, referring to a Google-Yahoo agreement during 2008. The antitrust division threatened to argue against it in court as the two companies took more than 90% of search syndication and search advertising on the Internet.