Subcommittee: Are antitrust laws and enforcement adequate these days?

The CEOs of Amazon, Apple, Facebook, and Google are scheduled to appear before the U.S. House of Representatives’ Judiciary Antitrust Subcommittee on Monday, July 27, 2020 in a hearing titled, “Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google.” Modified House rules currently permit witnesses to attend virtually. According to the Subcommittee’s press release, it has been scrutinizing the companies’ domineering presence in their respective markets and the corresponding “adequacy of existing antitrust laws and enforcement” since mid-2019.

Legislators are expected to tee up questions regarding possible antitrust abuses, which have been the focus of many state, federal, and foreign oversight inquiries. In Europe, Apple faces European Commission (EC) investigations regarding Apple Pay and its restrictive terms of use for third-party app developers. The EC has also been investigating Amazon for abuse of its market dominance in e-commerce. Charges are soon expected, according to a June 11, 2020 Wall Street Journal article by Valentina Pop and Sam Schechner.

Facebook recently lost a data privacy case in Germany, after the country’s high court found that it not only dominated the online social media market, but that it used its leverage to corner the market on user data access, collection, and retention. With the loss, Facebook will likely have to fundamentally alter the way it collects data in Germany and across the EU. Last year, Google faced a $1.69 billion fine after the EC held it liable for suppressing competition in the online advertising sector.

Domestic concerns are similar. The FTC is examining Amazon’s business model and Facebook’s string of acquisitions, according a New York Times article by David McCabe written on July 1, 2020. The Department of Justice has been toying with antitrust charges against Google, after an inquiry into its control of advertising technology and the search engine market, McCabe reported. The Wall Street Journal reported that state attorneys general and the Department convened a meeting to discuss joint action against Google in an article authored by John D. McKinnon and Brent Kendall on June 23, 2020.

Representatives will likely inquire about Amazon’s treatment of merchants who sell products on its e-commerce platform, Apple’s App Store terms that curtail the rights of third-party application developers, Facebook’s use of acquisitions to entrench its dominance, and Google’s much-scrutinized ad business, according to McCabe’s July 1, 2020 article. According to the same source, legislators may also take the opportunity to ask about how platforms like Facebook and Google’s YouTube plan to curb the spread of misinformation and hate speech, and also about the alleged mistreatment of workers at Amazon warehouses.

The hearing may round out the Subcommittee’s year-long antitrust investigation. A Joint statement from House Judiciary Committee Chairman Jerrold Nadler and Antitrust Subcommittee Chairman David Cicilline stated, “[g]iven the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation.”

‘Big Tech’ is not a monolith.

We have seen some of these CEOs testify before; unfortunately, congressional questioning is often convoluted and fails to live up to the hype. While investigating the market power of these companies is certainly important to maintaining fair competition and innovation, lumping them together into an amorphous “big bad big tech” fails to further that goal. While the “big tech” giants do have some characteristics in common, Google is not the same company or even the same business model as Facebook.

To bring a credible investigation or case against any of these companies, the DOJ must allege company-specific illegal conduct in a well-defined relevant market. Crafting appropriate remedies clearly requires a company-specific inquiry as well. Not until the enforcers, Congress, and commentators stop lumping these companies into a single nebulous “frenemy” can a cognizable antitrust case possibly emerge.

Edited by Tom Hagy and Christina Tabacco J.D. for MoginRubin LLP.