Real antitrust reform of the kind offered by the Judiciary Antitrust Subcommittee is needed to assist enforcers in precisely the types of competitive harms at issue in US v. Google. Reshaping the power imbalance between platforms and input providers, and between employers and their workers, with an aggressive antimonopoly agenda could be Biden’s FDR moment.

President-elect Joe Biden has a lot on his plate, from reversing the spread of Covid-19 to eradicating racial disparities in our justice system. But antitrust should be high on his administration’s list of priorities. Part of what got him here, after all, was a populist movement aimed at combatting rising income inequality and corporate consolidation, as well as an urgent desire to prevent Big Tech from swallowing the internet, if not the entire economy. 

We recently learned from a top economic advisor that Biden is “deeply concerned about a growing problem with economic concentration and monopoly power in our nation today.” Biden’s presidency is a chance to reshape the power dynamics across firms within the same industry, and between employers and their workers, in a way that redistributes economic power downward, and also spurs economic growth by moving resources to economic agents most inclined to spend and invest.

The first order of business for Biden’s Antitrust Division is to pursue the monopolization case against Google, inherited from the Trump administration. The second order of antitrust business is reforming antitrust law so that cases like the one against Google have a greater chance of succeeding. 

This is all part of a serious antimonopoly agenda that was ignored by the prior two Democratic administrations. 

This can be Biden’s FDR moment: Raise the minimum wage, bolster unions, nullify mandatory arbitration clauses, overturn bad Supreme Court precedent, and attack monopsony power over workers though vigorous antitrust enforcement. Where a restraint of trade, such as an exclusive-dealing requirement, permits a dominant platform to overtax atomistic suppliers, depriving them of competitive payments, attack the restraint with antitrust. And where the excess tax is not supported via a restraint, but instead is due to natural barriers to entry—think drivers for Uber and Lyft—permit the suppliers to collectively bargain.  

First Order of Business: Stay the Course on Google

On day one, Biden’s antitrust team will be swarmed by Big Tech’s corporate lobbyists, who successfully commandeered Obama’s antitrust agencies. (Google’s former CEO Eric Schmidt is reportedly being considered to lead a new tech industry task force in Biden’s White House—a tragic mistake of permitting the fox to guard the henhouse if true.) Had Trump’s Antitrust Division not filed the landmark case, “Google’s Guardians,” as coined by David Dayen, could have smothered the DOJ investigation in its cradle. Assistant Attorney General Makan Delrahim, a former Google lobbyist who advocated for Google’s 2007 acquisition of DoubleClick, recused himself from the case, clearing the way for the DOJ to move forward. If Biden’s new Attorney General were to withdraw the case now, or settle quickly with Google for modest concessions, it would result in a swift rebuke from the ascendant New Brandeisian reformers in the Democratic Party.

To be fair, the chances of DOJ prevailing on the merits of its case as designed are not stellar. With its fixation on short-run price and output effects, antitrust law as presently conceived is hostile to DOJ’s complaint against Google, which focuses on non-price harms such as innovation and quality harms. The complaint easily could be amended, however, to implicate price-based theories of harm.

University of Chicago Professor Luigi Zingales likened the DOJ’s decision to file the case right before the election to a “poison pill,” noting that under antitrust’s evidentiary criterion for what makes a restraint unreasonable, “if Google invited a few tech-industry consultants to testify that these default settings are beneficial to consumers in some way, it would likely win the case.” This may be true, but even so, there are four strong reasons, completely apart from the merits of the case, for Biden’s Antitrust Division to stick to its guns.

First, the mere filing of the lawsuit could freeze Google in its tracks, providing some needed relief for independent websites toiling in the edges of its platform. Google now understands that it’s under an antitrust microscope, subject to discovery and countless depositions, and it will be careful not to create any fresh evidence that is consistent with the theories of harm spelled out in the complaint. Although it is hard to prove, many antitrust scholars believe DOJ’s lawsuit against Microsoft created enough of a distraction for Google to get its feet under itself. 

Second, in addition to shining a light on Google’s anticompetitive conduct, DOJ’s fresh exercise of its “decrepit” antitrust apparatus, as noted by The Economist, has put other dominant tech platforms on notice. Amazon might think twice about bullying independent merchants. The Federal Trade Commission (FTC) is reportedly close to making a decision about whether to file an antitrust suit against Facebook relating to its prior acquisitions of Instagram and WhatsApp. And Apple is reportedly considering launching its own search engine in response to the Apple-Google arrangement coming under antitrust scrutiny. 

Third, by focusing on harm to rival search products, which are not priced to the end-user, DOJ’s complaint against Google is not the kind of case pursued by private antitrust enforcers. Whenever prices are inflated (or wages suppressed) by an exclusionary restraint, private enforcers have an economic motive to pursue antitrust cases for their clients, as they are paid a percentage of the overcharge (or underpayment) upon a jury award or settlement. Because private enforcers wouldn’t pursue this kind of case, the only backstop to protecting competition against such abuses is the Antitrust Division (or the FTC). 

Fourth, even a loss by the DOJ would bolster antitrust reform efforts. In particular, a decision clarifying that innovation harms are not sufficient for antitrust plaintiffs to prevail would help cement the argument for why and how to strengthen antitrust law to accommodate non-price antitrust injury. As lawyer Kate Mereand quipped, “It’s like a natural, legal experiment” to be exploited.

“On day one, Biden’s antitrust team will be swarmed by Big Tech’s corporate lobbyists, who successfully commandeered Obama’s antitrust agencies.”

Second Order of Business: Embrace the House Judiciary Antitrust Subcommittee Report

A few weeks before DOJ’s complaint against Google, but with full knowledge that the complaint was imminent, the Judiciary Antitrust Subcommittee, led by Congressman David Cicilline (D-RI), released a report laying out how antitrust could be reformed to combat the anticompetitive tactics of Big Tech. It also spelled out regulations that could complement the gaps in antitrust enforcement, including line-of-business restrictions (aka structural separation) and a nondiscrimination regime that would police acts of self-preferencing by vertically integrated tech platforms, citing the 1992 Cable Act’s nondiscrimination provisions as a regulatory template.

A regime that adjudicates discrimination complaints between an independent edge provider and a dominant platform would not require a new regulator; instead, this “Net Tribunal” could be housed in the FTC, which already has an administrative law judge. (If housed there, however, appeals would go straight to the DC Circuit and skip the FTC Commissioners.) Regulatory agencies, especially those focused on a single industry, are subject to industry capture, whereas judges are not. 

Not only would a nondiscrimination regime make good policy sense as a gap filler to prevent innovation harms, such a rule would be exceedingly popular: Two-thirds of respondents to a Data for Progress survey said they would support Congress mandating a rule that search engines give consumers the best information rather than preferencing their own products. 

Alas, the Minority Report from the Subcommittee, authored by Congressman Ken Buck (R-CO), assailed the nondiscrimination idea, likening it to net neutrality. While it’s true that Amazon and Google are prioritizing their own content in search, which has notes of net neutrality, Rep. Cicilline’s report doesn’t object to the tech platforms putting a price on a website’s landing at the top of search results. 

In contrast, net neutrality proponents sought to ban any pricing of priority in the treatment of packets by internet service providers; so Rep. Buck’s analogy is inapt. In any event, because net neutrality rules came (twice) from the Federal Communications Commission and not from Congress, there is no legislative template from which net neutrality requirements could be extended to tech platforms.

The Judiciary Subcommittee Report also has been criticized from center-left organizations, particularly with respect to the Report’s endorsement of “allocating coordination rights to individuals or entities that lack bargaining power in a marketplace.” These critiques fail to heed the lessons of labor unions, which showed that collective bargaining can effectively combat monopsony power and achieve more competitive outcomes.  

Antitrust and Regulation Are Complements, Not Substitutes

The nexus between antitrust and regulation seems to befuddle many, including certain antitrust practitioners. An October 22 article in the New York Times was unfortunately titled “Forget Antitrust Laws. To Limit Tech, Some Say a New Regulator Is Needed.”

The reason why antitrust has not been working is that enforcers in Obama’s and Trump’s antitrust agencies heretofore have been reluctant to take risks, in part because of the narrowing pathways to success for antitrust plaintiffs, but also because of their unwillingness to accept a loss or, even worse, to upset future employers in the private sector

Certain exclusionary practices by the dominant platforms fall squarely within the ambit of antitrust, and those should be prosecuted to the fullest under current antitrust law. Modern antitrust courts tend to prefer antitrust theories of harm that (1) entail conduct that crosses a firm’s boundaries, typically via a contract with suppliers or buyers, and (2) generate short-run price or output effects. Amazon’s tying of its fulfillment service to search results meets both criteria, and there is no reason for trustbusters to hold back. Other conduct, such as Google’s self-preferencing in search, fails to meet either criterion. This does not mean, however, that enforcers should refrain from challenging those practices. It just means the likelihood of success is smaller.

As it turns out, DOJ’s complaint challenges Google’s self-preferencing: “Over time, however, Google has pushed the organic links further and further down the results page and featured more search advertising results and Google’s own vertical or specialized search offerings. This, in turn, has demoted organic links of third-party verticals, pushing these links  ‘below-the-fold.’” By degrading search results to promote their own content, self-preferencing could be shown to inflict quality harms as well.

A judge might decide this conduct violates antitrust law, confident that a case can rest on innovation (or quality) harms, and enjoin the practice in a few years. But in the interim, independent websites will remain subject to Google’s whims. And the lawsuit against Google does nothing to assist independent merchants beholden to Amazon. By imposing a nondiscrimination regime next year, Congress can protect edge innovation much sooner, and do so for all independent content creators. It is for this reason that antitrust and regulation are complements, not substitutes.

Biden’s FDR Moment

So let’s not “forget antitrust.” Despite DOJ’s filing its landmark monopolization case against Google, antitrust reform is still needed, as well as regulation, to get at conduct that skirts the boundaries of modern antitrust law. But current antitrust law is sufficient to stop certain anticompetitive conduct today. 

On the legislative front, it shouldn’t be too hard to pick up a few Republican Senators who care deeply about monopoly power, beginning with Josh Hawley (R-MO). And non-legislative vehicles, such as altering FTC rules under Section 5 to rein in unfair terms in (say) franchise agreements, could bring significant relief absent any Congressional action. Looking outside of Big Tech, if the antimonopoly movement has legs, some quick wins in the pharmaceutical or food industry would deliver tangible gains to workers, small firms, or consumers. A few wage-fixing cases would go a long way to make antitrust’s relevance and value clear again. 

Biden’s administration should proceed in the forward direction on both antitrust and regulatory fronts. To rescue edge innovation, it must move decisively and expediently. To borrow a phrase from FDR’s re-nomination acceptance speech in 1936, confronting the new breed of “economic royalists” with a powerful antimonopoly agenda could be Biden’s “rendezvous with destiny.”

*Disclosure: Hal Singer is a managing partner at Econ One, and his firm has been retained to work on a related yet different antitrust case against Google.