Big Tech v. Antitrust, per US Courts
The REAL movers and shakers. Wikimedia Commons
A recent wave of actions under competition laws (or, in the United States, antitrust laws) against tech giants Google, Amazon, and Meta reveal a stark reality: the corporations have amassed unprecedented power and the legal system has not kept pace. In the United States, federal judge Amit P. Mehta ruled in August 2024 that ‘Google is a monopolist, and it has acted as one to maintain its monopoly’ in the high-profile case of United States of America v. Google. [1] The ruling, while significant, also highlights the inadequacies of current antitrust law in effectively curbing the dominance of Big Tech. Judge Mehta's 277-page decision is a step in the right direction. However, it comes after more than a decade of unchecked monopolistic behaviour that reshaped the digital landscape.
The ruling exposes how Google's practice of paying billions annually to device manufacturers for default search status created an almost insurmountable barrier for competitors. [2] In 2021, Google’s payments totalled over $US26 billion – a staggering sum that dwarfs the resources of potential rivals. [3] While the court found Google sustained a monopoly in general search services and general search text ads markets due to its “supracompetitive” pricing strategy, it stopped short of finding monopoly power in the broader search advertising market. [4] This split decision underscores the complexity of applying traditional antitrust concepts to the digital economy and raises questions about whether current laws are sufficiently equipped to address the nuanced ways tech giants exert their influence.
The case, initiated in 2020, took nearly four years to reach a verdict – an eternity in the fast-moving tech world. During this time, Google continued to solidify its market position and expand into new areas like generative artificial intelligence, potentially creating new monopolies before old ones are addressed. [5] The case emphasised data as a critical asset, which is an important forward step. However, the value and power derived from vast troves of user data create monopolistic advantages that are difficult to quantify and even harder to remedy through traditional means.
Cases against other tech behemoths – Amazon and Meta – face similar challenges. These corporations have built intricate ecosystems that lock in users and stifle competition in ways not easily addressed through existing legal frameworks. The United States Federal Trade Commission’s (FTC) efforts to curtail both Meta's suffocating acquisition strategies and Amazon's marketplace dominance, while commendable, have yet to produce tangible results in dismantling these companies' overwhelming market power. [6]
It is argued that the glacial pace of antitrust enforcement has allowed tech companies to entrench their positions so deeply that even significant legal victories may have limited impact. The possibility of breaking up these tech giants has been discussed, however, remains a distant and complex proposition. Their immense financial resources also allow them to wage protracted legal battles, potentially outspending and outlasting prosecutorial efforts. Google's parent company, Alphabet, with its $2 trillion market capitalisation, can easily absorb fines and legal costs that would cripple smaller entities. [7]
Cases against Big Tech companies are important first steps, but they also illuminate the long road ahead. Without significant legal reform and more aggressive enforcement, the digital economy risks remaining under the control of a few powerful entities, stifling innovation and consumer well-being. The challenge for lawmakers and regulators is clear: evolve quickly.
[1] United States v Google LLC, (D DC, No 20-cv-3010 2024, 5 August 2024).
[2] Ibid slip op 228.
[3] Ibid slip op 101.
[4] Ibid slip op 4.
[5] James Vincent, ‘Google invested $300 million in AI firm founded by former OpenAI researchers’, The Verge (Web Page, 4 February 2023) <https://www.theverge.com/2023/2/3/23584540/google-anthropic-investment-300-million-openai-chatgpt-rival-claude>.
[6] Leah Nylen, ‘Meta Withheld Information on Instagram, WhatsApp Deals: FTC’, Bloomberg (Web Page, 5 June 2024) <https://www.bloomberg.com/news/articles/2024-06-05/meta-withheld-information-on-instagram-whatsapp-deals-ftc-says>.
[7] ‘Alphabet Market Cap 2010-2024 | GOOGL’, Macrotrends (Web Page) <https://www.macrotrends.net/stocks/charts/GOOGL/alphabet/market-cap>.
This article was originally published under the title ‘The Big Tech Monopoly: The Uphill Battle for Antitrust and Competition Law’ in The Brief Edition 3, 2024 — Ad Aeternitatem.