The U.S. Justice Department’s (DOJ) recent complaint charging Apple with monopolizing smartphone markets is, according to Assistant U.S. Attorney General Jonathan Kanter, intended as a contribution to the agency’s “enduring legacy of taking on the biggest and toughest monopolies in history.”

Unfortunately, the case has fundamental weaknesses in its assessment of both Apple’s alleged monopoly power and the “exclusionary” nature of its business strategies. These infirmities have been discussed at-length by, among others, Alden Abbott, Herbert Hovenkamp, and Randall Picker.

What appears to have flown under the radar, however, is the DOJ’s flawed understanding of the goals and scope of what it calls “our system of antitrust laws.”

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Through laudable competition on the merits, Google achieved a usage share of nearly 90% in “general search services.” About a decade later, the government alleged that Google had maintained its dominant share through exclusionary practices violating Section 2 of the Sherman Antitrust Act. The case was tried in U.S. District Court in Washington, D.C. last fall, and the parties made post-trial filings this year.

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Antitrust scrutiny of “big tech” is hardly new, but the Justice Department’s recent monopolization case against Apple caps an unprecedented federal antitrust offensive against major tech firms. There are at least five open monopolization matters, beginning with the DOJ’s 2020 Google search complaint, and followed by cases against Facebook/Meta, Amazon, a second case against Google focused on its AdTech business, and now the Apple case. The resolution of these cases may shape the future of the digital economy. For the present discussion, we leave aside the FTC’s thus-far-failed attempts to block Meta’s acquisition of Within and Microsoft’s acquisition of Activision-Blizzard, both under Section 7 of the Clayton Act.

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The lawsuit filed yesterday by the U.S. Justice Department (DOJ) against Apple for monopolization of the U.S. smartphone market (joined by 15 states and the District of Columbia) has big implications for American competition and innovation.

At the heart of the complaint is the DOJ’s assertion that…

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Mexico’s Federal Economic Competition Commission (COFECE, after its Spanish acronym) has published the preliminary report it prepared following its investigation of competition in the retail electronic-commerce market (e.g., Amazon). The report finds that: 

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Following Monday’s announcement by the European Commission that it was handing down a €1.8 billion fine against Apple, Spotify—the Swedish music-streaming service that a decade ago lodged the initial private complaint that spawned the Commission’s investigation—published a short explainer on its website titled “Fast Five Facts: Facts that Show Apple Doesn’t Play Fair.” The gist of the company’s argument is that Apple engages in a series of unfair and anticompetitive practices. In this piece, we put some of these claims to the test.

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The EU’s Digital Markets Act (DMA) will come into effect March 7, forcing a handful of digital platforms to change their market conduct in some unprecedented ways. The law effectively judges them guilty (with a very limited, formalistic trial), and brands them “gatekeepers” based purely on size. It then sentences them to far-reaching, one-size-fits-all antitrust-style remedies in pursuit of the stated objectives of “fairness” and “contestability.” We’ll soon begin to see what that looks like in practice, and whether innocent conduct will be caught in the crossfire.

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Abstract

Antitrust law and policy rely on a hypothetical average consumer. But no one is average. With this basic observation in mind, we show how agent-based modeling (“ABM”) allows enforcers and policymakers to bypass imaginary averages by observing interactions between unique agents. We argue that agent-based regulatory and enforcement policies have a greater potential than average-based public policies because they are more realistic. As we show, the realism brought by ABM enables antitrust agencies and policymakers to better anticipate the effects of their actions and, perhaps more importantly, to time their interventions better.

Read at SSRN.