North America’s three major “internet platforms,” Amazon, Alphabet (Google), and Meta (Facebook), continue to face four major antitrust challenges in the United States. Are those demands smart for American (and global) innovation? These platforms have brought really important benefits to consumers. The lawsuits are likely to be met with judicial skepticism and threaten to drag on for years, and there is no consensus on their legal basis or economic benefits. Platforms also face a proliferation of antitrust laws. litigation and regulatory scrutiny abroad. Ultimately, those multiple legal moves will impose significant prices on platforms and may simply decrease their incentive to innovate. The Hippocratic oath, “first, do no harm,” suggests that the US antitrust government deserves to seriously drop the charges.
Top Four US Antitrust Lawsuits
The three tech giants mentioned above have faced four situations of primary government exigency in their practices, brought through the two “sister” federal antitrust authorities, the Federal Trade Commission and the Department of Justice. Each case is still in federal trial court and can drag on for years, pending appeals.
The Department of Justice sued Google in October 2020, alleging that the platform had jointly blocked the main means by which users access search engines and, therefore, the Internet, illegally maintaining monopolies on advertising related to the search. in late 2023, with final argument scheduled for May 2024 (the ruling says it has “no idea” how it will be ruled).
The FTC sued Facebook in December 2020, alleging a “systematic strategy… including the 2012 acquisition of up-and-coming rival Instagram, the 2014 acquisition of cellular messaging app WhatsApp, and the imposition of anticompetitive situations on software developers, until threats. to its monopoly [of social media]” and “depriving advertisers of the benefits of competition. ”
Then, in January 2023, the Justice Department sued Google again, alleging a violation of the Sherman Antitrust Act by “neutralizing or ditching ad tech competition through acquisitions; to exercise its dominance in virtual advertising markets to force more publishers and advertisers to use its products; and frustrate the choice of competing products.
Finally, in September 2023, the FTC sued Amazon, arguing that “by stifling the festival on price, product selection, and quality, and preventing its existing or long-term competition from attracting a critical mass of buyers and sellers, “Amazon guarantees that no existing or long-term rival can threaten its dominance. “
The factual details of the cases differ, but the overall theme is the same: each of the three major platforms is said to have used tactics that affected advertisers, stores, and consumers, to maintain their dominance in their specific corner of the market. Global Internet: social networks (Facebook), search engines (Google) and e-commerce (Amazon).
Case evaluation
The platforms have defended their moves, saying they expand the power of their business, allowing them to better serve consumers. There is plenty of evidence for this idea, such as a 2019 study published by then-MIT professor Erik Brynjolfsson in Harvard Business Review, which indicated that free virtual goods provided through web platforms brought huge net benefits to consumers. consumers.
The platforms’ defenses can resonate well in court. The Supreme Court declared in 1979 that antitrust law was “a customer protection measure. ” American judges have since ruled that the number one goal of antitrust law is to gain advantages for customers rather than propping up competitors. Before the Biden administration, Democratic and Republican government officials agreed that this “customer welfare standard” deserved to be a benchmark in US antitrust policy.
However, the Biden administration’s more sensible antitrust officials rejected the use of this popular in 2021. They argue that antitrust measures promote other goals beyond customer welfare, such as protecting small businesses, labor rights, addressing inequality and improve the environment.
What’s in it for platforms like Google and Facebook?
Lower courts, bound by Supreme Court precedent, only deserve to rule in favor of the government if they believe that the platforms’ moves have undermined the competitive process and threaten to harm consumers. It is very doubtful that they will do so. It depends on how each court views the law and the facts in light of the complex and contradictory arguments presented to it.
Legal experts differ on antitrust lawsuits against the platforms. For example, a prominent American antitrust author, Professor Herbert Hovenkamp, generally supports demanding antitrust situations for platforms, believing that it is mandatory to repair the competitive habit (especially in the case of Amazon and Facebook) or respond to the “natural monopoly”. disorders (Google). Stanford professor Douglas Melamed says Google’s conduct “clearly has valid benefits, and the question is how courts will include that in the overall analysis. “Andrew Gavil, a professor at Howard University, says that “[t]he allegations are serious” in the 2020 case against Google, but “the big question is whether the evidence will work. » Law and economics specialist Geoffrey Manne believes the FTC’s lawsuit against Amazon “will face an uphill war in court. “
There’s at least one end result we’re preparing for. In the face of antitrust uncertainty, platforms can be expected to be competitive and focus more on finding legal methods than on consumer-centric innovation. In addition, Stanford professor Riitta Katila suggests that antitrust legislation may have unintended consequences by restricting innovation by restricting opportunities for complementary corporations that deal with giants and occupy niches in the market.
It bears mentioning that the platforms face both lawsuits and new regulations in Europe and other jurisdictions, potentially threatening their long-term global leadership in key internet sectors.
There is no economic consensus on the control of platforms
There is no consensus among economists on how governments treat platforms or the effects of antitrust or regulatory interventions.
Leading regulatory economists Robert Crandall and Thomas Hazlett say overly competitive antitrust and regulation can cause giant web platforms in the United States to innovate less and harm customer welfare.
Other leading researchers, Professors Howard Shelanski and William Rogerson, argued that targeted regulation, rather than classic US antitrust enforcement, would likely be better suited to address potential competitive threats posed through platforms.
A University of Chicago survey of 80 American and European economists found a diversity of perspectives on whether to implement antitrust legislation or regulation on platform activities.
The key focus will be on the Hippocratic oath: “First, do no harm”
The U. S. government’s trusted hunters U. S. citizens deserve to be aware of the imaginable harms and potential benefits of platform antitrust challenges, before deciding whether or not to pursue those cases in the long run. Given the transparent benefits that platforms have brought to consumers and business users, the prices of platform-related litigation, and the uncertainty about the most likely effects of antitrust lawsuits, the United States government deserves to keep in mind the Hippocratic oath: “first, do no harm. “This results in recommending that existing prosecutions deserve to be discontinued.
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