Written in conjunction with - Zaid Omar Sidki: LLB Law, Humboldt University Berlin
The Rapid Evolution of Big Tech and Legal Challenges
Barely any industry is as innovative as big tech. Anything from electrical transportation and semiconductor technology to entertainment has made huge advancements in record time. Famously, the law is slow to adapt to real-world change. Tech giants, mostly US-based, aggravate this trend due to their diverse intersectoral operations, posing a significant challenge to legal systems globally. Here, antitrust law comes in to ensure fair market conditions.
The US Antitrust Approach: Legislation and Litigation
US antitrust law mainly focuses on price impact and consumer welfare. Through reactive litigation, the Federal Trade Commission (FTC) and the Department of Justice (DoJ) have taken on mergers and general monopolistic practices. Though legislative proposals have been made, some even passed, they are mostly stuck in Congress. This results in legislation taking a backseat as an antitrust instrument. Examples include the proposed American Innovation and Choice Online Act (AICOA) and The AMERICA Act. Despite being introduced as bipartisan bills and receiving considerable bipartisan support, they have yet to pass Congress.
Non-legislative action in the form of premerger reviews, rulemaking, investigations and most importantly active litigation has taken centre stage. This is best characterised by its breakout star, FTC Chair Lina Khan. A woman who has been described as being “too good at her job” by international press (Zeit Online).
Since coming into office, she has been central in strengthening the FTC and reversing the decline in influence that began in the Reagan era. Modern robber barons* are likely to oppose the development. As a consequence, Khan remains one of the most targeted public officials in the US. However, she continues to lead the advance against non-competitive practices. Most notably, in Federal Trade Commission v. Meta Platforms, Inc. the FTC under Khan managed to repeal two motions to dismiss the lawsuit before the United States District Court for the District of Columbia and is now awaiting trial in April this year. In the case, the FTC alleges that Meta’s acquisitions of WhatsApp and Instagram are uncompetitive mergers and constitute monopolisation. More recently, the FTC moved to introduce a ban on most noncompete clauses to enhance competition in labour markets and improve worker mobility.
The Role of the DoJ in Antitrust Enforcement
Meanwhile, the DoJ Antitrust Division, under Jonathan Kanter (acting Doha Mekki since Dec/2024), wields further-reaching jurisdiction, including criminal prosecution. While investigations are often a joint effort, the legal prosecution is relegated to only one of the two agencies to avoid overlap and increase efficacy. In United States v. Google LLC (2020) the DoJ has brought allegations of monopolisation in violation of Sections 2 and 3 of the Sheman Antitrust Act (1890). According to the DoJ, Google partnered with powerful allies, mainly Apple, to unfairly curb competition in the search engine market and subsequently abused its dominance to establish exclusive control over search advertising. The case turned out to be a major success when the court sided with the DoJ in August of 2024, though Google is likely to appeal the decision.
Market reactions and political pressure
While these cases have received considerable bipartisan praise (Sen. Warren and Cruz) taking on trillion-dollar companies can never be expected to be without backlash. Beyond the arduous legal battles against the seemingly inexhaustible resources of the legal departments of the tech companies lies a hidden battle for the favour of politicians fought by tech lobbyists.
President-elect Trump's taking office is seen as a major turning point by many observers. In 2022 the EU introduced the Digital Markets Act (DMA) aimed at increasing the competitiveness and fairness of the EU economy. Under the act, companies seen as having a durable dominant market position are classified as “gatekeepers”, a definition which comes with predefined responsibilities and obligations supposed to prevent the companies from further consolidating their position. For instance, companies can no longer combine data collected from different services. Should the measures in place not deliver the desired outcome or the targeted companies not comply, the EU has put penalties in place ranging from fines of up to 10% of a given company’s global revenue (up to 30% for repeat offenders) to corporate breakup. In the first month since the act was introduced, research conducted by Reuters found that independent browsers have seen spikes in users up to 250%.
Trump and Elon Musk have long been strong opponents of such action and hinted on multiple occasions that under Trump the EU can expect serious repercussions for any action limiting or even jeopardising American business abroad. Trump's main instrument and according to his own admission also favorite word – Tariffs. This comes as no surprise, with tech companies having recognised him as a likely ally since before he took office. This has also led companies, among them Amazon and Meta, to announce dialling back their controversial DEI measures (diversity, equality and inclusion) to align with Trump and secure his favour in the long term.
The foreseeable future
Especially in the US, antitrust action hinges on the willingness of a few powerful figures. New Trump appointee for FTC chair Andrew Ferguson has garnered attention after he announced that once in office, he plans to reverse Khan’s “anti-business agenda”. His main grip with big tech is what he calls their “war on free speech”. With them seemingly playing ball, it’s unlikely they will see much counter play from him. With Khan out of the picture and the EU under pressure, we’re likely to witness the FTC regress into increasing obscurity and with that, most regulations targeting US tech giants.
Definition:
*Robber baron: A term derived from the 19th century industrialisation period and refers to American industrialists who made fortunes by monopolising industries through the formation of trusts and exploiting workers.
References and Further Reading:
„U.S. Proposes Breakup of Google to Fix Search Monopoly” (David McCabe, 20.11.2024)
“Mega terminates its DEI programs days before Trump inauguration” (Adria R Walker, The Guardian 10.01.2025)
„Knickt die EU vor Trump ein?“ (Angela Göpfert , 14.01.2025)
„Eine Frau, die ihren Job zu gut macht“ (Heike Buchter, 21.10.2024)
Comments