US election: What future for global enforcement of Big Tech?

Posted by Admin November 4, 2024 Tech

This week’s election could prove a turning point for US antitrust enforcement, especially of Big Tech, with ramifications for Europe since the last few years have seen similar approaches adopted on both sides of the Atlantic.

Joe Biden’s 2020 victory heralded a series of radical appointments to key US agency positions with responsibility for competition enforcement. Notable among these were Lina Khan’s appointment as head of the Federal Trade Commission (FTC) and Jonathan Kanter, who also arrived under the Biden administration as assistant Attorney general for the antitrust division of the American department of justice (DOJ).

Both are “neo-Brandeisians”, followers of an antitrust movement worried about how too much market power can hurt competition, named after early 20th-century US trustbuster Louis Brandeis, who believed that monopolies are bad for workers and hurt business innovation.

Khan’s arrival heralded a more vigorous approach to antitrust enforcement, particularly in relation to Big Tech. In December 2020 the FTC – in conjunction with 46 states – filed an antitrust suit against Facebook’s parent Meta, alleging its acquisitions of Instagram and WhatsApp were anti-competitive.

The protracted case has rumbled in and out the courts, surviving attempts to knock it away, but is yet to come to trial. In 2023 the FTC started an action against Amazon’s enrolment of users into its Prime program without their consent.

Meanwhile two landmark antitrust cases brought by the DOJ are ongoing. In October 2020 the agency accused Google of illegally monopolising the search and search advertising markets, notably on Android devices, as well as with Apple.

Following a hearing in Washington in late 2023, Google was held to have illegally used its monopoly position on the search engine technology market to secure its position with mobile device and website partners. But the court is yet to determine what remedies will be imposed on Google.

In a second action against the search giant brought in January 2023 the DOJ accused Google of illegally monopolizing the advertising technology – or ‘adtech’ market. This technology acts as a kind of middleman for websites seeking to monetise from advertising.

A trial took place this September, and the US government department is looking to force Google to sell off significant portions of adtech business and to stop some of its business practices. Closing arguments are yet to be delivered but are scheduled to come later this month after the election.

“Lina Khan has managed to make antitrust pretty much a kitchen table issue in a way that no one had succeeded before,” according to the Centre for Economic Policy Research’s Cristina Caffarra.

This stricter approach to competition enforcement over Big Tech in the US has also brought it closer to the European Commission’s mindset. Under Competition Commissioner Margrethe Vestager the EU implemented its Digital Market Act (DMA) in 2022, imposing up-front obligations on digital platforms in an attempt make enforcement against the tech giants easier.

The DMA followed on from several landmark antitrust actions brought against Google which exposed the weakness of using legal tools to clamp down on a fast-moving tech sector.

“The FTC’s and DOJ’s words are close to those of the Commission: ‘We have to intervene to block Big Tech’s dominance,’ they say,” according to Christophe Carugati, a consultant with Digital Competition.

But this approach might change if Donald Trump wins.

“If Trump wins, it is a fair bet that the new chair of the FTC would be less aggressive towards Big Tech than Lina Khan is,” according to MEP Markus Ferber (Germany/European People’s Party), who believes “the same goes for other key players of the US administration”. By contrast, “the EU is unlikely to change its stance on the big platforms as the DMA and the Digital Services Act have only entered into force a short time ago,” said Ferber, a member of the Parliament’s economic affairs committee.

But a Trump victory would not necessarily see the curtain fall on Khan and Kanter’s neo-Brandeisian roadshow. Khan herself has come in for praise from Trump’s own running mate and Silicon Valley afficionado J D Vance. “She recognized there has to be a broader understanding of how we think about competition in the marketplace,” Vance said recently of Khan.

In February, around the time that the DOJ was moving in on its second action against Google, Vance signalled his approval in a post on X. “Long overdue, but it’s time to break Google up. This matters far more than any other election integrity issue. The monopolistic control of information in our society resides with an explicitly progressive technology company,” he wrote.

This ‘Khanservative’ view is shared by others in the Republican party, including Senators Josh Howley and Mike Lee, as well as Texas Attorney General Ken Paxton.

“There are today two coexisting views in the Republican Party on antitrust,” according to Caffarra.

One of these might be seen as ‘the Chamber of Commerce wing’, she said, adding that this pro-business lobby “represents traditional GOP values in favour of large corporations and against aggressive antitrust enforcement.”

The other wing, by contrast, “is militant against some of the digital giants because of what they perceive as restrictions to freedom of speech and privacy”. This second wing – more akin to Vance’s stance – would be content to see some tech giants broken up, according to Caffarra.

The endorsement of the ‘Khanservatives’ might also be reserved to the tech field, according to Paul Lugard, a partner with US firm Baker Botts. “If Trumps wins, antitrust enforcement might continue to be tough against big platforms, but maybe less aggressive against consolidation in other industries,” he said. If this happens, restraining the dominance of Big Tech on the market would remain a common objective on both sides of the Atlantic.

Neither is the future course of US antitrust policy certain in the case of a Harris’ victory, as it seems also to divide the Democrats.

Some donors to Harris’ campaign from Big Tech, such as LinkedIn co-founder Reid Hoffman and tech investor Mark Cuban, have called on Lina Khan to resign, though Harris herself has remained silent on the FTC chair.

Her platform commits, however, to fighting big corporations: “As President, she [Kamala Harris] will direct her Administration to crack down on anti-competitive practices that let big corporations jack up prices and undermine the competition that allows all businesses to thrive while keeping prices low for consumers.”

“Within the Democrats, there are the progressive-populists like Warren, Sanders or AOC but also many more in the mainstream of the party who regard Lina Khan and Jonathan Kanter as the biggest assets of the Biden administration,” Cristina Caffarra claims.

“Harris has not shown her cards on this, but the hope is that if she wins, she will keep Khan and Kanter,” she added, considering that Harris would ignore the donors putting pressure on her to sack Khan.

Whether and how long Khan might have to continue to pursue her fight against Big Tech dominance, there will also be a question over how EU enforcement may develop under the leadership of a fresh new competition commissioner .

As Carugati points out: “We don’t know yet the vision of Teresa Ribera [Spain’s designated-commissioner for competition] on antitrust policy towards digital market.”