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2024 ABA Antitrust Spring Meeting: A Recap of the Global Big Tech Enforcement & Impact Panel

Alysha Pannu

2024 ABA Antitrust Spring Meeting: A Recap of the Global Big Tech Enforcement & Impact Panel
Matt Ryb Pictures

Panel Overview

The Spring Meeting featured a program co-sponsored by the Unilateral Conduct Committee and State Enforcement Committee that explored the topic of Global Big Tech Enforcement & Impact.

The panel covered the multiple “big tech” cases in active litigation and investigation around the globe, including the series of monopolization cases against (a) Google in Shopping/Search, Android/Play Store, and AdTech; (b) Amazon, (c) Facebook, and (d) Apple. The panelists compared agency efforts across jurisdictions and discussed how tech companies have fared against the so called “more aggressive” government theories of harm, how these challenges have been perceived by the courts, and what the expected impact of this enforcement should be. The following article provides a summary of the discussion during the program.

The panel was moderated by Beatriz Marques, the Assistant Attorney General of the Office of the New York State Attorney General. The speakers on the panel were Nicholas Banasevic, the Managing Director of the Brussels office of Gibson, Dunn & Crutcher; Cristina Caffara of the Centre for Economic Policy Research; Daniel Guarnera, the Section Chair of the Civil Conduct Task Force of the United States (US) Department of Justice (DOJ); and Riccardo Woolery, the Attorney Advisor of the Federal Trade Commission (FTC).

Comparing Enforcement Across Jurisdictions

The panel opened with discussion on the different approaches to enforcement by enforcers in the US and European Union (EU). Mr. Banasevic responded to Ms. Marques’ question on the similarities and differences in how various jurisdictions are approaching Google’s conduct in connection with the Google Shopping/Search cases and subsequent Google cases by noting that the theories of harm in US cases are narrower than those in the EU. Mr. Banasevic remarked that the US appears to be more reluctant to raise tying as a theory of harm than the EU, likely owing to a view that raising tying as a theory of harm interferes with product design and innovation.

Ms. Caffara addressed the question of what type of “big tech” enforcement we will likely see in the EU in the future, particularly in light of the Digital Markets Act (DMA) coming into effect. Ms. Caffara noted that at the 2019 ABA Spring Meeting she took the position that European antitrust enforcers were ahead of their international counterparts; however, her view has since changed. She remarked that antitrust enforcement has not been successful in the EU for three key reasons: (1) enforcement processes are incredibly prolonged; (2) theories of harm are ill formulated; and (3) case selection is driven by complainants, which results in enforcers taking a narrow view of the problem. Overall, Ms. Caffara expressed skepticism about the DMA’s effectiveness.

Mr. Woolery commented that US enforcers are keenly observing what is happening in the EU and are learning from their experiences in terms of what approaches to enforcement and remedies work and do not work. In terms of what constitutes an effective remedy, Mr. Woolery stated that: (1) remedies that exacerbate the harms alleged or that result in unintended harms must be avoided; and (2) effective remedies should deter the actors and market participants more generally from engaging in the type of conduct that the remedy seeks to address.

Further expanding on the topic of the US approach to antitrust enforcement, Mr. Guarnera observed that there are many lessons that can be learned from the tech cases that are being litigated in the US, such as the Google Search case:

  • First, Mr. Guarnera suggested that plaintiffs embrace the challenge of describing the technology at issue in the case and become comfortable with describing the technology so that the fact finder feels confident the plaintiff understands how the product works.
  • Second, where there is parallel litigation, Mr. Guarnera suggested that litigation teams should schedule times to regularly connect and consider the impact of the sequencing of decisions.
  • Third, Mr. Guarnera noted that since big tech cases tend to receive a lot of media coverage, plaintiffs should be prepared to address issues of confidentiality as they arise.
  • Fourth, he noted that enforcers’ goal is to restore competition when it is lost, which will usually require some sort of injunction.

Amazon Cases

The program then turned to a discussion of the cases that have been brought against Amazon. Mr. Woolery was asked by Ms. Marques whether the case brought by the FTC against Amazon included new or “more aggressive” theories of harm. Mr. Woolery responded that the FTC’s case applies long-standing principles to a relatively new platform, and that he would leave it to observers to form their own conclusions as to whether the FTC’s approach and theories of harm in the case are more aggressive. He also commented that the FTC’s allegations relating to Amazon’s “Project Nessie” are consistent with its November 2022 Policy Statement regarding the scope of unfair methods of competition under Section 5 of the Federal Trade Commission Act. “Project Nessie” is the internal project name assigned by Amazon to an algorithmic tool that predicted whether a competitor would follow Amazon’s price increases. The FTC alleges that Amazon used this algorithm to inflate prices for products sold on Amazon. The FTC’s complaint against Amazon alleges two unfair methods of competition: one that encompasses Section 2 of the Sherman Act and a second that focuses exclusively on Project Nessie and how it violates Section 5 of the FTC Act.

Mr. Banasevic noted that the issues raised in the Amazon case are similar to issues raised in other tech cases. He remarked that the Amazon case is a foreclosure/leveraging case, where the theory of harm alleged by the FTC is about using alleged market power in one market to favor a product in an adjacent market.

Apple Cases

The discussion then turned to the monopolization cases brought against Apple. Mr. Guarnera provided an overview of the case filed by the DOJ concerning Apple’s monopolization in the smartphone ecosystem. Before providing the overview, Mr. Guarnera noted it was important to consider the role of innovation in antitrust. He explained that antitrust laws protect the competitive process and monopolization can reduce innovation by insulating the monopolist from competitive pressures and providing rivals and potential entrants with less incentive to innovate because they must overcome the monopolist’s conduct. Mr. Guarnera remarked that the DOJ’s complaint states that Apple blocks innovation by third parties via contractual restrictions placed on third party developers, which results in lost innovation that would have benefitted iPhone users.

Given that in Europe Apple is subject to commitments under the DMA, was subject to a 1.8 billion euro fine for “abusing its dominant position on the market for the distribution of music streaming apps” and has offered several commitments to address the competition concerns of the European Commission in the markets for mobile wallets on iOS, the question was raised whether effective remedies are in place in Europe and how, if it all, they should inform enforcement in the US. Ms. Caffara’s view was that Europe has not been an effective enforcer. She remarked that the music streaming app decision defined the product market too narrowly and that because the product market is defined narrowly as music streaming applications, the decision has limited application to other markets. She also suggested that regulators enforcing the DMA must engage with gatekeepers and be prescriptive as currently it is unclear what is required of them to comply with the DMA and it is unclear for instance, what they may charge others for use of their platforms.

Meta Cases

Ms. Marques then asked Mr. Woolery about the complaint brought by the FTC against Meta under Section 2 of the Sherman Act in connection with its acquisitions of Instagram and WhatsApp, which alleges that the acquisitions violated Section 2, and asked why the case was brought, its current status and how, if it all, the case informed the 2023 Merger Guidelines. Mr. Woolery replied that the case was brought against Meta owing to a concern that Meta acquired these companies to neutralize competitive differences between itself and those firms. He added that Meta’s continued control of Instagram and WhatsApp makes it harder for nascent and potential rivals to enter and build scale around photo sharing and messaging. With respect to the status of the case, Mr. Woolery stated that the summary judgment briefing is ongoing and is scheduled to end August 9th. As to the question of how the case may have informed the Merger Guidelines and FTC priorities, he stated that it is not prudent to draw strong inferences as the case was brought under Section 2 of the Sherman Act, whereas the guidelines focus on Section 7 of the Sherman Act. Mr. Banasevic added that increasingly ex-post enforcement is being used to look at past merger activity.

Google Ad Tech Case

Mr. Guarnera provided insight into the DOJ’s approach to defining the relevant product markets in the DOJ’s Google Ad Tech case. He stated the DOJ’s goal when defining a relevant product market is to capture how markets work. Accordingly, in any market definition exercise, they ask how competition occurs. In the Google case, he stated that the DOJ alleged that Google monopolized three distinct markets, but because these products are not as familiar to the average person, the complaint took the space to describe how the relevant markets work and relied heavily on diagrams.

Ecosystem Theories of Harm

Ms. Caffara stressed that some of the current thinking surrounding markets is outdated and stated that enforcers must adapt to the realities of today’s markets. In particular, she noted that product markets in the context of platforms should not be defined narrowly as platforms have a constellation of assets and capabilities. Rather, enforcers should instead be considering the broader ecosystems.

Final Takeaways

The program concluded with each of the speakers briefly sharing their final takeaways.

  • Mr. Woolery’s two key takeaways for practitioners were that (1) enforcers are quickly getting up to speed on how competition in digital markets works and are constantly refining and expanding their expertise; and (2) enforcers are not afraid to apply their old toolbox to new cases.
  • Mr. Banasevic’s key takeaway for the audience was that the DMA is extensive in its breadth and application.
  • Ms. Caffara’s key takeaway was that while many jurisdictions are following the European Commission’s suit in proposing and enacting DMA-like legislation, such legislation is unlikely to achieve transformative enforcement results, at least in its current form.
  • Mr. Guarnera’s final takeaway was that the U.S. v. Microsoft case helped unleash digital competition in a variety of markets. That enforcement action helped ensure a new generation could make and create new devices. He added that innovators deserve the same opportunities to compete on their merits and to use their hard work to create the next generation of technologies.