WASHINGTON – When the country’s antitrust laws were created more than a century ago, they aimed to conquer industries like big oil.
But tech giants like Amazon, Facebook, Google, and Apple, which dominate e-commerce, social networks, online advertising, and search, have risen in ways unforeseen by the law. The courts have also interpreted the rules more narrowly in recent decades.
A couple on Monday Judgments to reject cartel lawsuits from the federal and state governments against Facebook renewed questions as to whether the laws were designed to take tech power. A federal judge dismissed the federal suit because he said the Federal Trade Commission had failed to prove that Facebook had a dominant market share and that states had waited too long to bring their case.
The decisions underscored how prudent and conservative courts could slow increasingly aggressive pressure from lawmakers, regulators, and the White House to hold back tech companies, fueling calls for Congress to overhaul the rules and provide more legal tools to regulators Tech firms.
For months, Congress has been debating whether the monopoly laws are in need of reform. At a hearing in March, Representatives David Cicilline, a Democrat from Rhode Island, said the country needed a “massive overhaul of our antitrust laws and major updates to our competition system” to oversee the largest tech companies.
Moments later, Rep. Ken Buck, a Republican from Colorado, agreed. He called on the legislature to adapt antitrust law to the business models of Silicon Valley companies.
This week’s rulings have now put pressure on lawmakers to pass a recently proposed legislative package that would rewrite important aspects of monopoly laws to make some of the tech giants’ business practices illegal.
“This will bolster the case for the legislation,” said Herbert Hovenkamp, an antitrust expert at the University of Pennsylvania’s Law School. “It seems to be evidence that antitrust laws are not up to the challenge.”
The bill, which consists of six bills, was introduced this month and passed the House Justice Committee last week. The bills would make it difficult for big tech companies to buy up emerging competitors, give preference to their own services on their platforms, and forbid them to use their dominance in one business to gain the upper hand in another.
The bills are far more extensive than the traditional cartel doctrine. According to the current norms, which have been strengthened by decades of business-friendly court rulings, companies tend to be judged as violating competition law if their behavior has harmed the well-being of the consumer. The main indicator of this damage was whether companies charged people higher prices.
But tech companies like Facebook and Google offer most of their services for free. (They’re paid by advertisers instead.) Lots of tech and legal professionals – including Lina Khan, a scholar appointed by President Biden to head the FTC this month – argued that a broader definition of consumer welfare beyond prices should be applied. Consumer harm can also manifest itself in reduced product quality, as Facebook users suffer a loss of data protection when their personal data is collected and used for targeted advertisements.
Judge James E. Boasberg of the US District Court for the District of Columbia said in one of his rulings on Monday that Facebook’s business model had made it particularly difficult for the government to meet the standard for proceeding.
The government, said Judge Boasberg, did not provide enough evidence that Facebook held monopoly power. One of the difficulties he highlighted was that Facebook did not bill its users for access to its website, which means that its market share could not be measured by revenue. The government has not found a good alternative measure to advance its position, he said.
He also spoke out against another part of the FTC’s lawsuit, which looked at how Facebook monitors the use of the data generated by its product, while also pointing out the kind of conservative antitrust doctrine that critics believe is inconsistent with the Business practices of the technology industry.
The FTC that brought the federal antitrust lawsuit against Facebook December can file a new complaint within 30 days that addresses the judge’s concerns. The attorneys general can appeal against Judge Boasberg’s second verdict, which dismissed similar proceedings.
Lindsay Kryzak, a spokeswoman for the FTC, said the agency “is carefully reviewing the opinion and evaluating the best option for the future.”
For Facebook, the rulings were another example of the company’s continued ability to evade the harshest consequences for its business. Although the social network was Fined $ 5 billion by the FTC In 2019, there were few significant changes to the way the company’s products worked due to data breaches. And Facebook continues to grow: More than 3.45 billion people use one or more of its apps every month – including WhatsApp, Instagram and Messenger.
Mr Biden has not yet named anyone to permanently head the Justice Department’s antitrust division, which filed a lawsuit last year Google had illegally protected its monopoly via the online search.
The White House is also expected to pass an executive order this week aimed at consolidating companies in the tech and other areas of the economy. A White House spokesman did not respond to requests for comment on the executive order or Judge Boasberg’s rulings.
Activists and lawmakers said this week that Congress shouldn’t wait to give regulators more tools, money, and legal red lines to use against the tech giants. Mr Cicilline, along with Jerrold Nadler, Chairman of the House Judiciary Committee, said in a statement that the judge’s decisions on Facebook “demonstrate the urgent need to modernize our antitrust laws to address anti-competitive mergers and abusive behavior in the digital economy fight. ”
Senator Amy Klobuchar, a Minnesota Democrat who heads the Antitrust Subcommittee of the Senate Judiciary Committee, answered her call.
“After decades of binding Supreme Court rulings that have weakened our antitrust policies, we cannot rely on our courts to keep our markets competitive, open and fair,” she said in a statement. “We urgently need to rejuvenate our antitrust law in order to meet the challenges of the modern digital economy.”
But the six bills updating monopoly laws still have a long way to go. They have yet to pass the full house, where they are likely to be criticized by moderate Democrats and libertarian Republicans. Then they must survive the Senate, where Republican support is needed for proposals to overcome the filibuster of the law.
The bills may also not go as far as some hope in amending antitrust law. One of the bills was amended by the Judiciary Committee last week to strengthen the standard on consumer welfare.
Nonetheless, Monday’s rulings gave impetus to the proposals. Bill Baer, who headed the Justice Department’s antitrust division during the Obama administration, said it “gives a tremendous boost to those in Congress who believe the courts are too conservative when it comes to monopoly power.”
Facebook and the tech platforms might like the judge’s decisions, he said. “But they may not like what happens in Congress.”
Mike Isaac Reporting contributed.