Platforms, Power and the Antitrust Challenge: A Modest Proposal to Narrow the U.S.–Europe Divide

Competition Policy and Antitrust and Privacy and Security

Article Snapshot

Author(s)

Eleanor Fox

Source

Nebraska Law Review, Vol. 98, No. 2, pp. 297-318 (2019)

Summary

Tech platforms like Facebook and Google dominate the new economy. European Union (EU) authorities are more aggressive than those in the United States in using competition law against tech platforms.

Policy Relevance

Antitrust enforcers in the United States should stop more abuses of power by tech platforms.

Main Points

  • Antitrust authorities in the United States assume that antitrust action against a dominant firm discourages the firm from innovating; EU authorities assume that a dominant firm's conduct can chill other firms' incentives to innovate.
     
  • In the United States, antitrust principles make it hard to prove that tech platforms like Google have broken the law; often, for example, the plaintiff must show that the platform has raised prices and lowered output, which is impossible.
     
  • In the EU, a firm can be considered dominant without satisfying the most stringent definition of a monopolist, by acting as a "gatekeeper" over a dominant platform, or by blocking rivals' access to a market.
     
  • The EU Commission found that Google abused its dominance by refusing to allow rival shopping services to stand out as prominently as Google's own service in search results; in the United States, Google would likely win, as it is not an “essential facility” and has no duty to share resources with rivals.
     
  • The problem is not that tech platforms limit output, but that their conduct distorts the market, so that they succeed for reasons other than the merits of their offerings.
     
  • Big tech platforms like Facebook can buy up or stamp out promising start-ups that might grow into rivals; thwarting this behavior is hard for three reasons:
     
    • One must show the platform's acquisition is anticompetitive at the time of analysis.
       
    • One must show that blocking the acquisition will make consumers better off.
       
    • Some startups might not be founded if founders lose the option to sell out to the dominant firm.
       
  • United States regulators should adopt the EU approach, as competition law offers an alternative to top-down regulation; the EU might be right that tech platforms present a serious competition problem.
     
  • Tech platforms' antitrust abuses are real and pressing:
     
    • Cases should focus on whether the platform has a procompetitive justification for its conduct, not on whether the platform restricts output.
       
    • Platforms should announce whether they give preference to their own products.
       
    • Anticompetitive acquisitions of startups should be questioned.
       

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