Big Tech

The answer is both. How so? The recent antitrust complaint against Apple heralds a pivotal shift in understanding the influence of tech giants on innovation in the digital realm. This article highlights three key takeaways. 

Randy Picker reviews the context of the Department of Justice’s lawsuit against Apple and the questions of merit and the competitive obligations of dominant firms driving the case.

Fiona Scott Morton provides her initial thoughts on the Department of Justice’s lawsuit against Apple, how it compares to current and past tech cases, and the arguments she anticipates each side will make.

Drawing on new research, Oles Andriychuk identifies eight defining features of the European Union’s and United Kingdom’s new laws to regulate competition in digital markets that transform how we understand competition policy.

The European Commission has fined Apple for abusing its App Store. The Commission did not mention Spotify, but the fine appears to answer the music streaming platform’s complaint that Apple’s App Store fees to developers are too high. But now that Spotify has seen Apple’s new approach under Europe’s new Digital Markets Act, Spotify is still unhappy, highlighting the flaws of Spotify’s original complaint and the Commission’s fine, writes Randy Picker.

The various antitrust complaints the Department of Justice and the Federal Trade Commission have brought against Google, Amazon, and Facebook are based on monopolization claims under Section 2 of the Sherman Act. Herbert Hovenkamp explains why the government should also  have relied on Section 1 of the Sherman Act and Section 7 of the Clayton Act to support their Big Tech cases.

At the heart of the United States Google Search case is the monopolizing effect of Google securing for its own search offering the status of default search engine on a web browser, such as Safari, Chrome, or Firefox. The authors review the behavioral economics and empirical evidence of this effect and suggest several conduct and structural remedies to open up the search market to competition.

Following the Federal Trade Commission’s 2021 publication of “Nixing the Fix: An FTC Report to Congress on Repair Restrictions,” private “right to repair” cases have multiplied against companies that leverage their market power in a “primary equipment market” (e.g., tractors) to force their customers also to purchase their offerings in “aftermarkets” (e.g., tractor repairs) that otherwise would be competitive. Daniel McCuaig argues that the application of the 1992 Supreme Court decision in Eastman Kodak Co. v. Image Technical Services, Inc. to these cases misunderstands that case and improperly shields monopolists from competitive pressures, including in Epic’s recent case against Apple.

The European Union’s Digital Markets Act (DMA), designed to regulate Big Tech, supplements current antitrust laws that pursue case-by-case analyses of business conduct with general rules to block potentially anticompetitive behaviors. Detractors criticize the DMA for its lack of nuance. Supporters applaud its general principles as a necessary bulwark against Big Tech’s market powers, which current case-by-case analysis has been unable to rein in. However, neither side appreciates the true complexity of the DMA or how its principles interact to prevent anticompetitive behavior, writes Alba Ribera Martínez.

Recent antitrust interventions have put forward behaviorally informed theories of harm. However, they have adopted a deterministic model of behavior, missing the nuances that allow behavioral economics to provide a richer picture of people’s conduct. The recently concluded Google trial, grounded on the stickiness of defaults, is a good example. A more careful application of behavioral economics would have shown how Google’s purchase of default search engine status was a part of a broader monopolization plan. It would also show why the dominant remedy, forced choice, would have negligible effects.