Justice Department’s Antitrust Chief Sketches Out How Big Tech Firms Will be Assessed
(WASHINGTON) — The U.S. Justice Department’s antitrust chief suggested Tuesday he’ll take a broad view of how competition is harmed when assessing whether big tech firms should be broken up.
Assistant Attorney General Makan Delrahim also was clear in a speech in Israel that he is well aware that just two companies dominate digital advertising, though he did not name the two, Google and Facebook.
Without indicating whether he plans to move against any particular company, he said factors to be considered in assessing whether a monopoly exists — meriting anti-trust action — go well beyond whether a company’s dominance leads to higher prices.
Delrahim’s speech, published on the Justice Department’s website , follows reports that his agency has been given oversight of potential investigations into Google and Apple for anti-competitive behavior while the Federal Trade Commission oversees Facebook and Amazon.
“The current landscape suggests there are only one or two significant players in important digital spaces, including internet search, social networks, mobile and desktop operating systems, and electronic book sales,” he said. “This is true in certain input markets as well. For example, just two firms take in the lion’s share of online ad spending. ”
Delrahim said factors that must be considered include “network effects” — when a business attains so much market share that barriers to entry for competitors are prohibitively high.
And he said acquisitions of nascent competitors can be anti-competitive in the digital realm, including when they protect a monopoly or “otherwise harm competition by reducing consumer choice, increasing prices, diminishing or slowing innovation or reducing quality.”
Delrahim said another factor that must be weighed in the digital economy is services that are, at least ostensibly, free. That would include Google’s search and email, and Facebook and its subsidiaries Instagram and WhatsApp, which generate profits by gathering data from users’ behavior that is then provided to advertisers.
Delrahim also said that, by protecting competition, his department “can have an impact on privacy and data protection.”
He said “two companies can compete to expand privacy protections for products or services.”
Econ One Research managing director Hal Singer, in a Twitter post, called it a fiction that platforms can compete on privacy, interpreting Delrahim as suggesting that no new regulations are needed to make such companies as Facebook and Google more responsive to user data privacy.
Delrahim took stock in his speech of historic anti-trust actions against Standard Oil, AT&T and Microsoft and said there’s no need for new anti-trust laws; those on the books suffice for the new digital arena where the world’s most valuable companies are in the tech sector.
A spokesman for Delrahim confirmed Tuesday that he had received a letter from Sen. Elizabeth Warren asking him to recuse himself from any investigations into Google or Apple because he previously lobbied on behalf of both tech giants.
Delrahim lobbied on behalf of Google in 2007 when it faced anti-trust scrutiny over its acquisition of DoubleClick, a competitor in digital advertising, according to Warren’s letter.
The Massachusetts senator and presidential hopeful said he lobbied on behalf of Apple in 2006 and 2007 on patent-related issues.
Warren says Amazon, Facebook and Google are monopolies and should be split up.