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.

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Abstract

The Supreme Court’s landmark decision in Ohio v. American Express (“Amex”) remains central to the enforcement of antitrust laws involving digital markets. Specifically, the decision established a framework to assess business conduct involving transactional, multisided platforms from both an economic and legal perspective. At its crux, the Court in Amex integrated both the relevant market and competitive effects analysis across the two distinct groups who interact on the Amex platform, that is, cardholders and merchants. This unified, integrated approach has been controversial, however. The primary debate is whether the Court’s ruling places an undue burden on plaintiffs under the rule of reason paradigm to meet its burden of production to establish harm to competition. Enter Epic v. Apple (“Epic”): a case involving the legality of various Apple policies governing its iOS App Store, which, like Amex, is a transactional, multisided platform. While both the district court and the Ninth Circuit largely ruled in favor of Apple over Epic, these decisions are of broader interest for their fidelity to Amex. A careful review of the decisions reveals that the Epic courts operationalized Amex in a practical, sensible way. The courts did not engage in extensive balancing across developers and users as some critics of Amex contended would be required. Ultimately, the courts in Epic (a) considered evidence of effects across both groups on the platform and (b) gave equal weight to both the procompetitive and anticompetitive effects evidence, which, this Article contends, are the essential elements of the Amex precedent. Relatedly, the Epic decisions illustrate that the burden of production on plaintiffs in multisided platform cases is not higher than in cases involving regular, single-sided markets. Additionally, both parties, whether litigating single-sided or multi-sided markets, are fully incentivized to bring evidence to bear on all aspects of the case. Finally, this Article details how the integrated Amex approach deftly avoids potential issues involving the out-of-market effects doctrine in antitrust, which limits what type of effects courts can consider in assessing conduct.

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The European Commission told Amazon in November 2023 of its preliminary view that the company’s proposed acquisition of iRobot restricted competition in the market for robot vacuum cleaners (RVCs) and could hamper rival RVC suppliers’ ability to compete effectively. The deal, the Commission asserted, would give Amazon incentive to foreclose iRobot’s competitors by engaging in several anticompetitive strategies, including delisting rival RVCs from its marketplace, reducing their visibility, limiting access to certain widget or attractive product labels (“Amazon’s Choice,” “Works with Alexa”), and/or raising rivals’ sales and advertising costs. 

Recently, and in anticipation of a negative clearance decision from the Commission, Amazon and iRobot jointly announced they had terminated their acquisition agreement. 

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As Greg Werden has noted, the process of defining the relevant market in an antitrust case doesn’t just finger which part of the economy is allegedly affected by the challenged conduct, but it also “identifies the competitive process alleged to be harmed.” Unsurprisingly, plaintiffs in such proceedings (most commonly, antitrust enforcers) often seek to set exceedingly narrow parameters for relevant markets in order to bolster their case. In the extreme, these artificially constrained definitions sketch what can only be called “gerrymandered” markets—obscuring rather than illuminating the competitive processes at issue.

This unfortunate tendency is exemplified in the Federal Trade Commission’s (FTC) recent complaint against Amazon, which describes two relevant markets in which anticompetitive harm has allegedly occurred: (1) the “online superstore market” and (2) the “online marketplace services market.” Because both markets are exceedingly narrow, they grossly inflate Amazon’s apparent market share and minimize the true extent of competition. Moreover, by lumping together wildly different products and wildly different sellers into single “cluster markets,” the FTC misapprehends the nature of competition relating to the challenged conduct.

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