Antitrust Reform and Big Tech Firms

Changes from March 22, 2023 to November 21, 2023

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Antitrust Reform and Big Tech Firms
~~March 22~~September 13, 2023 , 2023
Antitrust has become a hot topic. After decades Antitrust has become a hot topic. After decades ~~evolving in~~as a mostly technocratic technocratic ~~obscurity~~discipline, competition , competition
policy now commands the attention of lawmakers, academics, and the general public. policy now commands the attention of lawmakers, academics, and the general public.
Jay B. Sykes
Legislative Attorney Legislative Attorney
One of the driving forces behind this trend has been the rise of a handful of large technology One of the driving forces behind this trend has been the rise of a handful of large technology

firms: Facebook (now Meta Platforms), Google, Amazon, and Apple. While these “Big Tech” firms: Facebook (now Meta Platforms), Google, Amazon, and Apple. While these “Big Tech”
companies have companies have ~~revolutionized~~affected the daily lives of billions, they the daily lives of billions, they ~~also are~~ are also accused of obtaining and accused of obtaining and

For a copy of the full report, solidifying dominant positions through anticompetitive conduct. solidifying dominant positions through anticompetitive conduct.
please call 7-5700 or visit www.crs.gov. Meta is currently defending a Federal Trade Commission (FTC) lawsuit that seeks to unwind its acquisitions of the photo-Meta is currently defending a Federal Trade Commission (FTC) lawsuit that seeks to unwind its acquisitions of the photo-
sharing service Instagram and the messaging app WhatsApp. sharing service Instagram and the messaging app WhatsApp.
Google is embroiled in litigation with the Department of Justice (DOJ), state attorneys general, and private plaintiffs over Google is embroiled in litigation with the Department of Justice (DOJ), state attorneys general, and private plaintiffs over
alleged exclusionary conduct related to its search engine, app distribution on Android mobile devices, and its alleged exclusionary conduct related to its search engine, app distribution on Android mobile devices, and its
digital-advertising businesses. digital-advertising businesses.
~~Amazon has faced lawsuits challenging pricing restrictions it imposes on third-party merchants. Some commentators have~~
~~also alleged that the company has engaged in anticompetitive tying, predatory pricing, and unfair self-preferencing.~~
The FTC and a putative class of private plaintiffs have accused Amazon of stifling competition among online marketplaces. The lawsuits allege that Amazon has excluded rivals by implementing policies that punish sellers for discounting their products on other websites. The FTC’s complaint also claims that Amazon has tied its Prime subscription program to the use of its fulfillment services, hindering the development of independent fulfillment providers that could make selling on other marketplaces more attractive. Several of Apple’s practices have attracted scrutiny, including the firm’s restrictions on the distribution of iOS apps, its use Several of Apple’s practices have attracted scrutiny, including the firm’s restrictions on the distribution of iOS apps, its use
of competitively sensitive information derived from third-party app developers, and its treatment of its proprietary apps.of competitively sensitive information derived from third-party app developers, and its treatment of its proprietary apps.
~~Litigation challenging the iPhone maker’s app-distribution restrictions is currently pending before the Ninth Circuit.~~
Some lawmakers have also expressed concern about the large number of acquisitions that the Big Tech firms have Some lawmakers have also expressed concern about the large number of acquisitions that the Big Tech firms have ~~engaged in~~
undertaken over the past decade. In particular, they have worried about the possibility that some of these transactions eliminated sources over the past decade. In particular, they have worried about the possibility that some of these transactions eliminated sources
of potential or nascent competition. of potential or nascent competition.
Many of these concerns have prompted calls for legal reform. Some commentators have argued that Many of these concerns have prompted calls for legal reform. Some commentators have argued that ex post adjudication is adjudication is
ill-equipped to grapple with competition issues in platform markets that have tipped in favor of a single dominant firm. Other ill-equipped to grapple with competition issues in platform markets that have tipped in favor of a single dominant firm. Other
critiques of the existing framework focus on specific doctrinal rules or the alleged shortcomings of the consumer-welfare critiques of the existing framework focus on specific doctrinal rules or the alleged shortcomings of the consumer-welfare
standard—a general normative benchmark that has heavily influenced current law. standard—a general normative benchmark that has heavily influenced current law.
For their part, defenders of For their part, defenders of ~~antitrust adjudication~~existing law have emphasized the differences between the Big Tech firms. This have emphasized the differences between the Big Tech firms. This
heterogeneity, they contend, counsels in favor of the fact-specific approach employed by current heterogeneity, they contend, counsels in favor of the fact-specific approach employed by current ~~law~~doctrine and against categorical and against categorical
regulatory treatment. Supporters of the consumer-welfare standard argue that it provides a principled and coherent regulatory treatment. Supporters of the consumer-welfare standard argue that it provides a principled and coherent
decision-making framework, in contrast to alternative regimes that would embrace more amorphous goals. decision-making framework, in contrast to alternative regimes that would embrace more amorphous goals.
While some reform proposals would adopt special competition regulations for large tech platforms, others would work within While some reform proposals would adopt special competition regulations for large tech platforms, others would work within
existing antitrust law by adjusting burdens of proof and changing certain doctrinal requirements.existing antitrust law by adjusting burdens of proof and changing certain doctrinal requirements.
The regulatory route raises questions of The regulatory route raises questions of ~~policy design—namely,~~ how to scope the relevant regulations and select an how to scope the relevant regulations and select an
appropriate regulator to administer them. On the issue of scope, two general models have emerged. One would allow a appropriate regulator to administer them. On the issue of scope, two general models have emerged. One would allow a
regulator to designate covered platforms that offer specified services and meet certain quantitative and qualitative criteria. regulator to designate covered platforms that offer specified services and meet certain quantitative and qualitative criteria.
Designated firms would then be subject to the same set of special competition regulations. The other approach is more Designated firms would then be subject to the same set of special competition regulations. The other approach is more
targeted and would apply special targeted and would apply special regulations to individual markets. ~~regulations to individual markets. With respect to the selection of a regulator, commentators~~
~~have proposed giving new authorities to the DOJ and/or FTC, creating a new branch within either of those agencies, or~~
~~establishing a standalone digital-platform regulator.~~
As a substantive matter, proposals to reform the competition laws governing Big Tech firms fall into five categories: As a substantive matter, proposals to reform the competition laws governing Big Tech firms fall into five categories:
(1) (1) ex ante conduct rules, (2) structural separation and line-of-business restrictions, (3) special merger rules, conduct rules, (2) structural separation and line-of-business restrictions, (3) special merger rules,
(4) interoperability and data-portability mandates, and (5) changes to general antitrust doctrine. (4) interoperability and data-portability mandates, and (5) changes to general antitrust doctrine.
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n 2012, a prominent scholar lamented the diminished significance of antitrust in the United n 2012, a prominent scholar lamented the diminished significance of antitrust in the United
States.1 Although there was once a flourishing antitrust movement, he argued, the subject States.1 Although there was once a flourishing antitrust movement, he argued, the subject
appeared to attract little interest from lawmakers, academics, and the public.2 Political appeared to attract little interest from lawmakers, academics, and the public.2 Political
I candidates rarely mentioned competition issues, opinion polls reflected indifference toward I candidates rarely mentioned competition issues, opinion polls reflected indifference toward
economic concentration, and the enforcement agencies seemed to operate with a narrow economic concentration, and the enforcement agencies seemed to operate with a narrow
~~understanding~~view of antitrust’s of antitrust’s ~~scope.3~~
~~Since then, things~~goals.3 Things have changed have changed~~—dramatically~~. In the past several years, antitrust has resurfaced . In the past several years, antitrust has resurfaced
~~as an issue~~as a topic of both popular and political concern.4 The White House has issued an executive order of both popular and political concern.4 The White House has issued an executive order
outlining a “whole-of-government” approach to competition policy;5 advocates of reform have outlining a “whole-of-government” approach to competition policy;5 advocates of reform have
been appointed to lead the Federal Trade Commission (FTC) and the Department of Justice’s been appointed to lead the Federal Trade Commission (FTC) and the Department of Justice’s
(DOJ’s) Antitrust Division;6 and Congress has considered a suite of proposals to overhaul various (DOJ’s) Antitrust Division;6 and Congress has considered a suite of proposals to overhaul various
aspects of antitrust doctrine.7 aspects of antitrust doctrine.7
In the words of one commentator, antitrust now “stands at its most fluid and negotiable moment In the words of one commentator, antitrust now “stands at its most fluid and negotiable moment
in a generation.”8 The subject has not had such political salience, another contends, since 1912.9 in a generation.”8 The subject has not had such political salience, another contends, since 1912.9
Interest in reform has been wide-ranging: “[e]verything is up for grabs, and nothing is free of Interest in reform has been wide-ranging: “[e]verything is up for grabs, and nothing is free of
scrutiny.”10 scrutiny.”10
One of the driving forces behind this trend has been the rise of a handful of large technology One of the driving forces behind this trend has been the rise of a handful of large technology
firms: Facebook (now Meta Platforms), Google, Amazon, and Apple. In 2020, a House firms: Facebook (now Meta Platforms), Google, Amazon, and Apple. In 2020, a House
subcommittee released a detailed report (the HJC Report) concluding that the four companies had subcommittee released a detailed report (the HJC Report) concluding that the four companies had
obtained and solidified dominant positions through anticompetitive conduct.11 These “Big Tech” obtained and solidified dominant positions through anticompetitive conduct.11 These “Big Tech”
firms have also faced antitrust lawsuits from regulators and private plaintiffs, both in the United firms have also faced antitrust lawsuits from regulators and private plaintiffs, both in the United
States and abroad.12 States and abroad.12
This report provides an overview of antitrust issues involving the four Big Tech firms and related This report provides an overview of antitrust issues involving the four Big Tech firms and related
proposals for legislative reform. It is divided into four parts. First, the report provides an proposals for legislative reform. It is divided into four parts. First, the report provides an
introduction to basic antitrust principles. Second, it reviews selected antitrust allegations against introduction to basic antitrust principles. Second, it reviews selected antitrust allegations against

the Big Tech companies. Third, it discusses conceptual issues with proposals to reform the 1 Maurice E. Stucke, 1 Maurice E. Stucke, Reconsidering Antitrust’s Goals, 53 B.C. L. REV. 551, 553 (2012). , 53 B.C. L. REV. 551, 553 (2012).
2 2 Id. at 553-56. . at 553-56.
3 3 Id. .
4 Daniel A. Crane, 4 Daniel A. Crane, Antitrust’s Unconventional Politics, 104 VA. L. REV. ONLINE 118, 118-21 (2018). , 104 VA. L. REV. ONLINE 118, 118-21 (2018).
5 Exec. Order No. 14,036, Promoting Competition in the American Economy, 86 Fed. Reg. 36,987, 36,989 (July 14, 5 Exec. Order No. 14,036, Promoting Competition in the American Economy, 86 Fed. Reg. 36,987, 36,989 (July 14,
2021). 2021).
6 Brent Kendall, 6 Brent Kendall, Senate Confirms Jonathan Kanter as Justice Department Antitrust Chief, WALL ST. J. (Nov. 16, 2021), , WALL ST. J. (Nov. 16, 2021),
https://www.wsj.com/articles/senate-confirms-jonathan-kanter-as-justice-department-antitrust-chief-11637104400; https://www.wsj.com/articles/senate-confirms-jonathan-kanter-as-justice-department-antitrust-chief-11637104400;
David McCabe & Cecilia Kang, David McCabe & Cecilia Kang, Biden Names Lina Khan, a Big-Tech Critic, as F.T.C. Chair, N.Y. TIMES (June 15, , N.Y. TIMES (June 15,
2021), https://www.nytimes.com/2021/06/15/technology/lina-khan-ftc.html. 2021), https://www.nytimes.com/2021/06/15/technology/lina-khan-ftc.html.
7 7 See, e.g., , ~~Prohibiting Anticompetitive Mergers Act of 2022, S. 3847, 117th Cong. (2022); Platform Competition and~~
~~Opportunity Act, S. 3197, 117th Cong. (2021); American Innovation and Choice Online Act, S. 2992~~American Innovation and Choice Online Act, S. 2033, 118th Cong. (2023); Prohibiting Anticompetitive Mergers Act of 2022, S. 3847, 117th Cong. (2022); Platform Competition and Opportunity Act, S. 3197, 117th Cong. , 117th Cong.
(2021); Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. (2021); Competition and Antitrust Law (2021); Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. (2021); Competition and Antitrust Law
Enforcement Reform Act of 2021, S. 225, 117th Cong. (2021); Ending Platform Monopolies Act, H.R. 3825, 117th Enforcement Reform Act of 2021, S. 225, 117th Cong. (2021); Ending Platform Monopolies Act, H.R. 3825, 117th
Cong. (2021). Cong. (2021).
8 Crane, 8 Crane, supra no note 4, at 118. at 118.
9 Carl Shapiro, 9 Carl Shapiro, Antitrust in a Time of Populism, 61 INT’L J. INDUS. ORG. 714, 715 (2018). , 61 INT’L J. INDUS. ORG. 714, 715 (2018).
10 ALAN J. DEVLIN, REFORMING ANTITRUST 265 (2021). 10 ALAN J. DEVLIN, REFORMING ANTITRUST 265 (2021).
11 INVESTIGATION OF COMPETITION IN DIGITAL MARKETS, MAJORITY STAFF REPORT AND RECOMMENDATIONS, SUBCOMM. 11 INVESTIGATION OF COMPETITION IN DIGITAL MARKETS, MAJORITY STAFF REPORT AND RECOMMENDATIONS, SUBCOMM.
ON ANTITRUST, COMMERCIAL AND ADMIN. L. OF THE H. COMM. ON THE JUDICIARY 12-17 (2020) [hereinafter “HJC ON ANTITRUST, COMMERCIAL AND ADMIN. L. OF THE H. COMM. ON THE JUDICIARY 12-17 (2020) [hereinafter “HJC
REPORT”]. This report lists the Big Tech firms in the same order as the subcommittee’s report. REPORT”]. This report lists the Big Tech firms in the same order as the subcommittee’s report.
12 12 See infra “The Big Tech Firms: A Summary of Selected Antitrust Allegations.” ”
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~~the Big Tech companies. Third, it discusses conceptual issues with proposals to reform the~~
competition laws governing Big Tech. Fourth, the report analyzes the substance of specific competition laws governing Big Tech. Fourth, the report analyzes the substance of specific
categories of reform proposals.categories of reform proposals.
Antitrust Law: The Basics
The antitrust laws aim to protect economic competition by prohibiting unreasonable restraints of The antitrust laws aim to protect economic competition by prohibiting unreasonable restraints of
trade,13 exclusionary conduct by dominant firms,14 and mergers and acquisitions that may trade,13 exclusionary conduct by dominant firms,14 and mergers and acquisitions that may
“substantially” lessen competition or “tend to create a monopoly.”15 “substantially” lessen competition or “tend to create a monopoly.”15
The following subsections provide a high-level overview of antitrust doctrine to lay the The following subsections provide a high-level overview of antitrust doctrine to lay the
groundwork for later discussions of competition issues in tech markets and proposals for legal groundwork for later discussions of competition issues in tech markets and proposals for legal
reform. reform.
Restraints of Trade
Section 1 of the Sherman Act prohibits “every” contract or conspiracy “in restraint of trade.”16 Section 1 of the Sherman Act prohibits “every” contract or conspiracy “in restraint of trade.”16
Despite this categorical language, the Supreme Court has interpreted Section 1 to bar only Despite this categorical language, the Supreme Court has interpreted Section 1 to bar only
unreasonable restraints of trade that harm competition.17 restraints of trade that harm competition.17
Applying this general standard, the Court has identified some types of agreements that are so Applying this general standard, the Court has identified some types of agreements that are so
likely to be anticompetitive that they are deemed likely to be anticompetitive that they are deemed per se illegal, meaning courts need not inquire illegal, meaning courts need not inquire
into their effects in individual cases.18 Restraints in this category include agreements among into their effects in individual cases.18 Restraints in this category include agreements among
competitors (“horizontal” agreements) to fix prices,19 divide markets,20 and restrain output.21 competitors (“horizontal” agreements) to fix prices,19 divide markets,20 and restrain output.21
While some types of agreements are While some types of agreements are per se illegal under Section 1, most restraints are evaluated illegal under Section 1, most restraints are evaluated
using a standard called the “rule of reason.”22 Under the rule of reason, courts conduct using a standard called the “rule of reason.”22 Under the rule of reason, courts conduct
fact-specific assessments of a defendant’s market power and the details of a challenged fact-specific assessments of a defendant’s market power and the details of a challenged
agreement to determine a restraint’s competitive effects.23 agreement to determine a restraint’s competitive effects.23
This inquiry typically proceeds via a three-step burden-shifting framework. In that framework, This inquiry typically proceeds via a three-step burden-shifting framework. In that framework,
the plaintiff has the initial burden to prove that the challenged restraint has a substantial the plaintiff has the initial burden to prove that the challenged restraint has a substantial
anticompetitive effect.24 anticompetitive effect.24 ~~If the plaintiff does so, the burden shifts to the defendant to show a~~
~~procompetitive justification for the restraint.25 If the defendant makes this showing, the burden~~

Plaintiffs can make this showing directly or indirectly. Direct evidence of anticompetitive harm involves “proof of actual detrimental effects on competition,” such as reduced output, increased prices, or decreased quality.25 The indirect route involves proof of market power,26 plus “some evidence that the challenged restraint harms competition”—for 13 15 U.S.C. § 1. 13 15 U.S.C. § 1.
14 14 Id. § 2. . § 2.
15 15 Id. § 18. . § 18.
16 16 Id. § 1. . § 1.
17 Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006). 17 Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006).
18 18 Id. .
19 United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 218 (1940). 19 United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 218 (1940).
20 N. Pac. R.R. Co. v. United States, 356 U.S. 1, 5 (1958). 20 N. Pac. R.R. Co. v. United States, 356 U.S. 1, 5 (1958).
21 NCAA v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 100 (1984). 21 NCAA v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 100 (1984).
22 Ohio v. Am. Express Co. (22 Ohio v. Am. Express Co. (~~Amex~~Amex), 138 S. Ct. 2274, 2283-84 (2018). ), 138 S. Ct. 2274, 2283-84 (2018).
23 23 Id. at 2284.. at 2284. ~~The Supreme Court has explained that a firm has market power if it has the ability to price above~~
~~competitive levels, Bd. of Regents, 468 U.S. at 109 n.38, or the power to constrain market output to raise prices, Fortner~~
~~Enters. v. U.S. Steel Corp., 394 U.S. 495, 503 (1969).~~
~~24 Amex, 138 S. Ct. at 2284.~~
~~25 Id.~~
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~~shifts back to the plaintiff to demonstrate that the relevant procompetitive benefits could be~~
~~reasonably achieved through less anticompetitive means.26 Some courts have also added a fourth~~
~~step in which they balance a restraint’s anticompetitive and procompetitive effects.27~~
~~Monopolization~~
~~While Section 1 of the Sherman Act governs agreements between firms, Section 2 prohibits~~
~~dominant companies from engaging in unilateral anticompetitive conduct. In the statutory~~
~~parlance, Section 2 makes it unlawful to “monopolize” commerce.28~~
~~The monopolization offense has two elements:~~
~~1. the possession of monopoly power; and~~
~~2. “the willful acquisition or maintenance of that power as distinguished from~~
~~growth or development as a consequence of a superior product, business acumen,~~
~~or historical accident.”29~~
~~The second element is often referred to as “exclusionary” or “anticompetitive” conduct.30~~
~~Monopoly Power~~
~~The Supreme Court has explained that a firm possesses monopoly power if it has the ability to~~
~~“control prices or exclude competition.”31 Although that standard is similar to many descriptions~~
~~of market power,32 the Court has clarified that monopoly power under Section 2 of the Sherman~~
~~Act requires “something greater” than market power under Section 1.33 Lower courts have thus~~
~~concluded that monopoly power entails a large degree of market power.34~~
~~Some courts have held that monopoly power can be established through direct evidence of~~
~~supra-competitive prices and restricted output.35 However, this type of direct proof is rarely~~
~~available.36 As a result, courts typically evaluate allegations of monopoly power by examining a~~

~~26 Id.~~
~~27 See, e.g., Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1413 (9th Cir. 1991) (acknowledging a possible fourth step);~~ ~~see~~
~~also~~ ~~Michael A. Carrier, The Rule of Reason: An Empirical Update for the 21st Century, 16 GEO. MASON L. REV. 827,~~
~~827 (2009) (concluding that courts reached a fourth “balancing” step in four percent of rule-of-reason cases decided~~
~~between 1977 and 1999). The FTC and some lower courts have also employed an intermediate “quick look” framework~~
~~to evaluate restraints that are similar to per se unlawful conduct but exhibit features warranting additional analysis.~~ ~~See~~
~~Herbert Hovenkamp, The Rule of Reason, 70 FLA. L. REV. 81, 122-31 (2018) [hereinafter “Hovenkamp,~~ ~~The Rule of~~
~~Reason”]. Different courts have described quick-look analysis in different ways, but the basic idea is that some types of~~
~~restraints can be condemned without the full rule-of-reason inquiry. Id. at 122-23.~~
~~28 15 U.S.C. § 2.~~
~~29 United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966).~~
~~30 See, e.g., EINER ELHAUGE, UNITED STATES ANTITRUST LAW AND ECONOMICS 211 (3d ed. 2018).~~
~~31 United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391 (1956).~~
~~32 See, e.g., Fortner Enters. v. U.S. Steel Corp., 394 U.S. 495, 503 (1969) (defining market power as “the ability of a~~
~~single seller to raise price and restrict output”).~~
~~33 Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 481 (1992).~~
~~34 See, e.g., Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 894 (10th Cir. 1991); Deauville Corp. v. Federated~~
~~Dep’t Stores, Inc., 756 F.2d 1183, 1192 n.6 (5th Cir. 1985).~~
~~35 Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297, 307 (3d Cir. 2007); PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101,~~
~~107 (2d Cir. 2002) (per curiam); Conwood Co. v. U.S. Tobacco Co., 290 F.3d 768, 783 n.2 (6th Cir. 2002).~~
~~36 United States v. Microsoft Corp., 253 F.3d 34, 51 (D.C. Cir. 2001) (per curiam).~~
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~~market’s structure—in particular, whether a defendant occupies a dominant market share and is~~
~~protected by entry barriers.37~~
~~These inquiries require a plaintiff to define the boundaries of the relevant product market—an~~
~~exercise that turns on the range of items that are “reasonably interchangeable” with the product at~~
~~issue.38~~
~~The key conceptual issue with market definition is whether buyer substitution to other items~~
~~would limit a monopolist in an alleged market from raising prices significantly above competitive~~
~~levels.39 If buyer substitution would constrain even a firm with a dominant share of an alleged~~
~~market from raising prices significantly, the relevant legal test prescribes that the market must be~~
~~expanded until buyer substitution of other items would not offer such a constraint.40~~
~~Courts have relied on a variety of factors in defining markets, including functional similarities~~
~~and differences between separate items, cross-elasticities of demand (i.e., the extent to which the~~
~~quantity demanded of one item changes in response to price changes for another item), price~~
~~differences, price discrimination, and price trends.41~~
~~Once a market has been defined, courts usually look to a defendant’s share of that market to~~
~~assess claims of monopoly power.42 The case law has not identified a definitive point at which~~
~~monopoly power can be inferred, but courts typically require monopolization plaintiffs to prove~~
~~that the defendant occupies a market share of 70 percent or more.43~~
~~To establish monopoly power, plaintiffs must also~~ 24 Id. 25 Id. (cleaned up). 26 The Supreme Court has offered various definitions of “market power,” many of which are related to a firm’s ability (continued...) Congressional Research Service 2 link to page 6 Antitrust Reform and Big Tech Firms example, evidence that the restraint is the type of restriction that tends to produce anticompetitive outcomes.27 If the plaintiff makes a prima facie case of anticompetitive harm, the burden shifts to the defendant to show a procompetitive justification for the challenged restraint.28 For example, a defendant might argue that the restraint increases output, creates operational efficiencies, makes a new product available, enhances product quality, or broadens consumer choice.29 If the defendant makes this showing, the burden shifts back to the plaintiff to demonstrate that the relevant procompetitive benefits could be reasonably achieved through less anticompetitive means.30 Some courts have also added a fourth step in which they balance a restraint’s anticompetitive and procompetitive effects.31 Although most agreements are evaluated under this framework, courts have also recognized a third standard that lies between the full rule of reason and per se illegality. This intermediate approach—often called “quick look” review—has been applied to agreements that are not per se unlawful but nevertheless exhibit characteristics that make their likely anticompetitive effects clear.32 Different courts have described quick-look analysis in different ways.33 The basic idea, however, is that the plaintiff in a quick-look case can discharge its initial burden without the type of detailed evidence of competitive harm required under the full rule of reason.34 Defendants in quick-look cases, meanwhile, have the opportunity to offer procompetitive justifications for their conduct, distinguishing quick-look review from per se analysis.35 to profitably charge prices higher than those that would exist in a competitive market—that is, a market with many buyers and sellers, homogeneous products, perfect information, no barriers to entry or exit, and no transaction costs. LAWRENCE A. SULLIVAN, ET AL., THE LAW OF ANTITRUST: AN INTEGRATED HANDBOOK 47-48 (4th ed. 2023). Those definitions sweep quite broadly, however, because virtually every firm selling a differentiated product has some market power in this sense; perfect competition is a theoretical abstraction that seldom—if ever—exists in the real world. Id. at 47. Commentators have thus observed that, in practice, the legal concept of market power appears to demand a substantial degree of pricing power. DANIEL FRANCIS & CHRISTOPHER JON SPRIGMAN, ANTITRUST: PRINCIPLES, CASES, AND MATERIALS 73 (2023). As discussed below, courts typically assess allegations of market power by evaluating structural factors like a firm’s market share and any entry barriers in the relevant market. Id. at 116. A market share of less than 30% is typically insufficient for market power. Id. In contrast, a share of 44% has been deemed sufficient when accompanied by evidence that entry barriers are high and that competitors cannot readily expand their output. Id. Higher shares have also supported an inference of market power when paired with evidence of entry barriers. Id. (collecting cases). The process for defining antitrust markets is discussed below. 27 Amex, 138 S. Ct. at 2284. 28 Id. 29 Law v. NCAA, 134 F.3d 1010, 1023 (10th Cir. 1998). 30 Amex, 138 S. Ct. at 2284. 31 See, e.g., Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 993-94 (9th Cir. 2023) (recognizing that Supreme Court precedent “neither requires nor disavows” a fourth step, while interpreting Ninth Circuit precedent to require a fourth balancing step); see also Michael A. Carrier, The Rule of Reason: An Empirical Update for the 21st Century, 16 GEO. MASON L. REV. 827, 827 (2009) (concluding that courts reached a fourth “balancing” step in 4% of rule-of-reason cases decided between 1977 and 1999). 32 Herbert Hovenkamp, The Rule of Reason, 70 FLA. L. REV. 81, 122-31 (2018) [hereinafter “Hovenkamp, The Rule of Reason”]. Often, “quick look” analysis is described as a type of rule-of-reason analysis, rather than a third standard of review, on the theory that the rule of reason represents a sliding scale that imposes different requirements based on the context. See id. at 123-24 (rejecting the idea that quick-look review represents a third “silo” of antitrust analysis that is distinct from the rule of reason). 33 Id. at 122. 34 FRANCIS & SPRIGMAN, supra note 26, at 191. 35 Id. Congressional Research Service 3 link to page 6 Antitrust Reform and Big Tech Firms Monopolization While Section 1 of the Sherman Act governs agreements between firms, Section 2 prohibits dominant companies from engaging in concerted or unilateral exclusionary conduct by making it unlawful to monopolize, attempt to monopolize, or conspire to monopolize.36 The monopolization offense has two elements: 1. the possession of monopoly power; and 2. “the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historical accident.”37 The second element is often referred to as “exclusionary” or “anticompetitive” conduct.38 Monopoly Power The Supreme Court has explained that a firm possesses monopoly power if it has the ability to “control prices or exclude competition.”39 Although that standard is similar to many descriptions of market power,40 the Court has clarified that monopoly power under Section 2 of the Sherman Act requires “something greater” than market power under Section 1.41 Courts have thus concluded that monopoly power entails a large degree of market power.42 Some courts have held that monopoly power can be established through direct evidence of supra-competitive prices and restricted output.43 However, this type of direct proof is rarely available.44 As a result, courts typically evaluate allegations of monopoly power by examining structural factors like a defendant’s market share and any entry barriers in the relevant market.45 These inquiries require a plaintiff to define the scope of the relevant market—an exercise that turns on the range of items that are reasonable substitutes for one another.46 There are two general approaches to market definition. One approach—the hypothetical monopolist test (HMT)—attempts to identify the smallest grouping of products over which a 36 15 U.S.C. § 2. 37 United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966). 38 See, e.g., EINER ELHAUGE, UNITED STATES ANTITRUST LAW AND ECONOMICS 211 (3d ed. 2018). 39 United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391 (1956). 40 See, e.g., Fortner Enters. v. U.S. Steel Corp., 394 U.S. 495, 503 (1969) (defining market power as “the ability of a single seller to raise price and restrict output”). 41 Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 481 (1992). 42 See, e.g., Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 894 (10th Cir. 1991); Deauville Corp. v. Federated Dep’t Stores, Inc., 756 F.2d 1183, 1192 n.6 (5th Cir. 1985). As noted, the legal concept of “market power” in practice appears to involve a substantial degree of “market power” as that concept is used in economic theory. See supra note 26. One commentator has thus observed that monopoly power requires “a substantial degree of a sort of power that is itself defined to exist only when substantial.” Einer Elhauge, Defining Better Monopolization Standards, 56 STAN. L. REV. 253, 259 (2003). 43 Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297, 307 (3d Cir. 2007); PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101, 107 (2d Cir. 2002) (per curiam); Conwood Co. v. U.S. Tobacco Co., 290 F.3d 768, 783 n.2 (6th Cir. 2002). 44 United States v. Microsoft Corp., 253 F.3d 34, 51 (D.C. Cir. 2001) (per curiam). Direct proof of market power is rarely available for a variety of reasons. Perhaps most significantly, it can be difficult to identify and measure a firm’s marginal costs. PHILLIP AREEDA, ET AL., ANTITRUST ANALYSIS: PROBLEMS, TEXT, AND CASES 529 (7th ed. 2013). 45 Microsoft, 253 F.3d at 51. 46 United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 395 (1956). Congressional Research Service 4 link to page 6 link to page 8 link to page 8 link to page 6 Antitrust Reform and Big Tech Firms single seller could exercise significant market power.47 Under a version of the HMT known as the SSNIP test, this inquiry starts with the product at issue in a given case and asks whether a hypothetical monopolist selling that product could profitably increase its price by a significant amount (typically 5%-10%) for a non-transitory period of time (typically one year or more).48 If the answer is yes, then the product represents a relevant antitrust market. However, if consumer substitution would render such a price increase unprofitable, the SSNIP test prescribes that the market must be expanded to include substitute products. This process continues until the point at which a “small but significant non-transitory increase in price” for one of the products would be profitable.49 A second approach to market definition involves an evaluation of qualitative similarities and differences between products and services. This methodology is derived from the Supreme Court’s 1962 decision in Brown Shoe Co. v. United States, which identified a series of “practical indicia” that may be relevant to an evaluation of a market’s boundaries.50 These qualitative factors include industry or public recognition of separate markets, a product’s peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices, sensitivity to price changes, and specialized vendors.51 The HMT and Brown Shoe’s qualitative inquiry both attempt to determine the range of substitutes that constrain a firm’s exercise of market power,52 and judicial decisions often employ both approaches in defining markets.53 As mentioned, once a market has been defined, courts typically assess claims of monopoly power by evaluating a defendant’s market share and other structural factors like entry barriers.54 When entry barriers are present, a market share in excess of 70% can establish a prima facie case of 47 Gregory J. Werden, The 1982 Merger Guidelines and the Ascent of the Hypothetical Monopolist Paradigm, 71 ANTITRUST L.J. 253, 253-54 (2003). 48 FRANCIS & SPRIGMAN, supra note 26, at 68. 49 Id. The SSNIP test runs into a well-recognized baseline problem in cases where a firm is alleged to be charging monopoly prices. In those cases, a SSNIP above prevailing prices may prove unprofitable not because a candidate market is too small to confer significant pricing power on a hypothetical monopolist, but because the defendant is already fully exploiting its monopoly power. The use of prevailing prices to define markets in such circumstances is often called the “Cellophane fallacy,” because the Supreme Court committed this alleged error in a 1956 monopolization case involving cellophane and other packaging materials. E.I. du Pont de Nemours & Co., 351 U.S. at 400-01. Regulators and courts can avoid this problem by using competitive prices rather than prevailing prices as the baseline for evaluating whether a SSNIP would be profitable. AREEDA, ET AL., supra note 44, at 552; see also DEP’T OF JUST. & FED. TRADE COMM’N, HORIZONTAL MERGER GUIDELINES § 4.1.2 (2010) [hereinafter “HORIZONTAL MERGER GUIDELINES”] (acknowledging that use of the SSNIP test may require this modification in certain cases). That approach, however, raises the same difficulties with determining competitive prices that often bedevil attempts to establish market power with direct evidence. AREEDA, ET AL., supra note 44, at 552. A widely referenced textbook notes that the courts “have avoided tackling this issue and mostly act as if raising price above competitive levels were a self-evidently meaningful and applicable standard.” Id. 50 370 U.S. 294, 325 (1962). 51 Id. 52 FRANCIS & SPRIGMAN, supra note 26, at 74. The above discussion focuses on one component of market definition: the relevant product market. In certain cases—for example, where transportation costs are high or consumers prefer a local provider—geography may also represent an important aspect of market definition. Id. at 111. 53 E.g., United States v. Bertelsmann SE & Co., 2022 WL 16949715 at *12-13, 19-20 (D.D.C. 2022); United States v. H&R Block, Inc., 833 F. Supp. 2d 36, 50-60 (D.D.C. 2011); Olin Corp. v. FTC, 986 F.2d 1295, 1298-99 (9th Cir. 1993). 54 See, e.g., U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d 986, 999 (11th Cir. 1993). Congressional Research Service 5 link to page 8 Antitrust Reform and Big Tech Firms monopoly power.55 Courts rarely find monopoly power, by contrast, when a firm’s market share is less than 50%.56 Shares between 50% and 70% present “the greatest uncertainty,”57 with some courts deeming shares in that range to be insufficient absent additional evidence.58 To establish monopoly power, plaintiffs also typically must show that a defendant’s dominant position is show that a defendant’s dominant position is
likely to be durable—for example, with evidence of significant likely to be durable—for example, with evidence of significant ~~entry barriers.44~~ barriers to entry.59 Entry barriers Entry barriers
may include legal and regulatory requirements, control of an essential resource, entrenched buyer may include legal and regulatory requirements, control of an essential resource, entrenched buyer
preferences, and economies of scale.preferences, and economies of scale.4560 In some digital markets, entry barriers may also emerge In some digital markets, entry barriers may also emerge
from network effects (from network effects (~~whereby~~which cause a product’s utility a product’s utility ~~increases~~to increase as it gains more users) and significant as it gains more users) and significant
switching costs (high costs that users of a product would face in switching to a substitute).switching costs (high costs that users of a product would face in switching to a substitute).4661
Exclusionary Conduct
As noted, the second element of a monopolization claim is exclusionary conduct. The Supreme As noted, the second element of a monopolization claim is exclusionary conduct. The Supreme
Court has described this element as involving “the willful acquisition or maintenance of Court has described this element as involving “the willful acquisition or maintenance of
[monopoly] power as distinguished from growth or development as a consequence of a superior [monopoly] power as distinguished from growth or development as a consequence of a superior
product, business acumen, or historical accident.”product, business acumen, or historical accident.”47

~~37 Id.~~
~~38 United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 395 (1956).~~
~~39 ELHAUGE, supra note 30, at 240.~~
~~40 Id. at 241.~~
~~41 MARKET POWER HANDBOOK: COMPETITION LAW AND ECONOMIC FOUNDATIONS, AM. BAR ASS’N 62-74 (2d ed. 2012).~~
~~42 See, e.g., U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d 986, 999 (11th Cir. 1993).~~
~~43 U.S. DEP’T OF JUST., COMPETITION AND MONOPOLY: SINGLE-FIRM CONDUCT UNDER SECTION 2 OF THE SHERMAN ACT~~
~~21 (2008) (withdrawn May 11, 2009) [hereinafter “DOJ MONOPOLIZATION REPORT”] (collecting cases).~~
4462 As a general standard, many have found that description unhelpful. Firms often “willfully” try to obtain monopoly status by developing superior products and by deploying business acumen.63 Moreover, in offering the above formulation, the Supreme Court did not define “business acumen,” leaving little guidance as to when practices like aggressive price cutting, bundling separate products, or refusing to share property with rivals represent savvy strategy as opposed to unlawful exclusion.64 While academics have made several attempts to develop an alternative general standard, courts have not decisively embraced any of them.65 Instead, the doctrine contains a variety of tests that 55 1 ABA SECTION OF ANTITRUST LAW, ANTITRUST DEVELOPMENTS 230 (9th ed. 2022) [hereinafter “ANTITRUST DEVELOPMENTS”] (collecting cases). 56 Id. at 231. 57 Id. at 231-32. 58 United States v. Dentsply Int’l, Inc., 399 F.3d 181, 187 (3d Cir. 2005) (“Absent other pertinent factors, a share significantly larger than 55% has been required to establish prima facie [monopoly] power.”); PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101, 109 (2d Cir. 2002) (“Absent additional evidence, such as an ability to control prices or exclude competition, a 64 percent market share is insufficient to infer monopoly power.”); Colo. Interstate Gas Co. v. Natural Gas Pipeline Co. of Am., 885 F.2d 683, 694 n.18 (10th Cir. 1989) (noting that “lower courts generally require a minimum market share of between 70% and 80%” to support a finding of monopoly power); Exxon Corp. v. Berwick Bay Real Estate Partners, 748 F.2d 937, 940 (5th Cir. 1984) (per curiam) (noting that “monopolization is rarely found when the defendant’s share of the relevant market is below 70%”); United States v. Aluminum Co. of Am., 148 F.2d 416, 424 (2d Cir. 1945) (Hand, J.) (indicating that it is “doubtful” that a share of 64% is sufficient for monopoly power); but see Tops Mkts., Inc. v. Quality Mkts, Inc., 142 F.3d 90, 99 (2d Cir. 1998) (indicating that a share between 50% and 70% can “occasionally” show monopoly power if other factors support the inference). 59 See, e.g., Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 762 F.3d 1114, 1123-25 (10th Cir. 2014); W. Parcel , Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 762 F.3d 1114, 1123-25 (10th Cir. 2014); W. Parcel
Express v. United Parcel Serv. of Am., Inc., 190 F.3d 974, 975 (9th Cir. 1999).Express v. United Parcel Serv. of Am., Inc., 190 F.3d 974, 975 (9th Cir. 1999).
45 60 Rebel Oil Co., Inc. v. Atlantic Richfield Co., 51 F.3d 1421, 1439 (9th Cir. 1995). Rebel Oil Co., Inc. v. Atlantic Richfield Co., 51 F.3d 1421, 1439 (9th Cir. 1995).
4661 FTC v. Facebook, Inc., 581 F. Supp. 3d 34, 51 (D.D.C. 2022). FTC v. Facebook, Inc., 581 F. Supp. 3d 34, 51 (D.D.C. 2022).
4762 United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966) United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966). 63 See, e.g., Daniel Francis, Making Sense of Monopolization, 84 ANTITRUST L.J. 779, 779-80 (2022). 64 Elhauge, supra note 42, at 263. 65 DEP’T OF JUST., COMPETITION AND MONOPOLY: SINGLE-FIRM CONDUCT UNDER SECTION 2 OF THE SHERMAN ACT 33 (2008) (withdrawn in 2009) [hereinafter “DOJ MONOPOLIZATION REPORT”]. Congressional Research Service 6.
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link to page link to page 86 link to page link to page 86 link to page link to page 710 link to page link to page 710 link to page 10 Antitrust Reform and Big Tech Firms govern specific categories of conduct, along with a burden-shifting framework that is similar to the usual rule-of-reason inquiry in Section 1 cases. The following sections review efforts to develop a unified theory of monopolization and several of the conduct-specific tests that courts have adopted in place of such a theory. The Debate over a General Monopolization Standard Courts have held that a wide range of behavior can violate Section 2 of the Sherman Act. As discussed below, a monopolist can—depending on the circumstances—violate Section 2 by entering into exclusive contracts with customers or suppliers, tying or bundling separate products, aggressively cutting prices to deter entry, or refusing to deal with competitors. Other conduct can also constitute monopolization even if it does not fall neatly into any particular doctrinal category. See LePage’s, Inc. v. 3M, 324 F.3d 141, 152 (3d Cir. 2003). This diversity has raised a question: is there a unifying principle that explains when conduct wil qualify as “exclusionary,” as opposed to representing legitimate “competition on the merits”? Commentators have proposed different answers. One option—the “profit sacrifice” or “no economic sense” test—comes in several varieties. The basic idea, however, is that conduct is “exclusionary” only if it would have no rational purpose other than to exclude rivals. SULLIVAN, ET AL., supra note 26, at 112. Under the “profit sacrifice” version of this theory, unilateral conduct would be deemed anticompetitive only if it entails a sacrifice of short-term profits, which the defendant intends to recoup with monopoly prices after eliminating its rivals. Id. The “no economic sense” variant is potentially broader. It would condemn conduct that (1) has a tendency to eliminate competition, and (2) would make no economic sense but for that tendency. Gregory J. Werden, Identifying Exclusionary Conduct Under Section 2: The “No Economic Sense” Test, 73 ANTITRUST L.J. 413, 418 (2006). These approaches are motivated by a desire to avoid chil ing procompetitive behavior and may offer greater certainty than the types of balancing tests employed in some monopolization cases. The “profit sacrifice” test has been criticized for failing to account for cases of costless or cheap exclusion, where a monopolist can exclude rivals at little expense. While the “no economic sense” test may avoid this objection, some commentators have faulted it for failing to capture conduct that causes serious anticompetitive harm while creating minor economic benefits. SULLIVAN, ET AL., supra note 26, at 115. Neither test has been adopted as a general monopolization standard, but their influence is particularly clear in the doctrine governing predatory pricing and refusals to deal. An alternative approach would provide that conduct is “exclusionary” if and only if it is likely to exclude from the defendant’s market an equally or more efficient competitor. RICHARD A. POSNER, ANTITRUST LAW 194-95 (2d. ed. 2001). Like the “profit sacrifice” and “no economic sense” theories, the “equally efficient competitor” test may avoid the uncertainties that accompany open-ended balancing tests, while stil protecting a monopolist’s efficient rivals. The test’s critics have argued that competition from less efficient rivals is often desirable, including in cases where an upstart firm has not yet acquired the scale or expertise to match the incumbent’s efficiency. Administering this approach may also prove challenging, especial y in cases that do not involve price predation. DOJ MONOPOLIZATION REPORT, supra note 65, at 44. While the test is grounded in principles from predatory-pricing cases, it has not been elevated to the status of a general Section 2 standard. A third theory involves the type of balancing test alluded to above, which is similar to ~~Antitrust Reform and Big Tech Firms~~

~~As a general standard, many have found that description unhelpful. Businesses often “willfully”~~
~~try to obtain monopoly status by developing superior products and~~ ~~by deploying business~~
~~acumen.48 The Court’s dichotomy thus offers little clarity on how to distinguish exclusionary~~
~~conduct from legitimate competition on the merits.~~
~~While academics have made several attempts to develop an alternative general standard,49 courts~~
~~have not decisively embraced any of them.50 Instead, the doctrine contains a variety of tests that~~
~~govern specific categories of conduct,51 along with a burden-shifting framework that is similar to~~
the usual rule-of-reason inquiry the usual rule-of-reason inquiry inunder Section 1. Under this approach, conduct qualifies as “exclusionary” based on its net effect on consumer welfare. Steven C. Salop, Exclusionary Conduct, Effect on Consumers, and the Flawed Profit-Sacrifice Standard, 73 ANTITRUST L.J. 311, 330 (2006). Because it entails a totality-of-the-circumstances inquiry into competitive harm, a balancing test may avoid the allegations of underinclusiveness that have been leveled against alternative approaches. On the other hand, commentators have criticized open-ended balancing for being administratively costly and making it difficult for firms to predict whether their behavior is permissible, which may deter procompetitive conduct. DOJ MONOPOLIZATION REPORT, supra note 65, at 37-38. Many courts have employed an effects-balancing framework in Section 2 cases, but—like other theories—it has not risen to the level of an all-purpose test. ANTITRUST DEVELOPMENTS, supra note 55, at 325. Predatory Pricing Some monopolization cases involve allegations that a defendant aggressively cut prices in an attempt to exclude rivals from the market—a practice commonly known as predatory pricing. Congressional Research Service 7 link to page 6 link to page 8 link to page 12 link to page 12 link to page 12 Antitrust Reform and Big Tech Firms Predation has been described as “a play in two acts.”66 In the first stage of a predation scheme, a firm charges unsustainably low prices to drive rivals from the market or deter entry.67 In the second, the firm attempts to recoup the losses incurred in the first stage by raising prices to monopoly levels.68 Predatory pricing has played a notable role in antitrust history and was a part of the federal government’s landmark monopolization case against the Standard Oil Company, which was broken up in 1911.69 The practice was also a common target of antitrust enforcement through the 1960s,70 when some courts evaluated predation claims by focusing on whether the defendant intended to harm rivals.71 Today, matters are different. Beginning in the 1950s, academics affiliated with what came to be known as the Chicago School of antitrust analysis mounted a critique of prevailing theories of predatory pricing.72 They claimed, among other things, that predation is typically an irrational strategy, because monopoly prices charged during the recoupment period will often invite entry, which will in turn drive prices down to competitive levels.73 Chicago School scholars also contended that monopolists will usually suffer greater losses from a price war than their competitors, because large firms tend to make more sales than smaller ones.74 Other academics from what is often called the modern Harvard School later offered arguments for a less interventionist posture that were grounded in institutional concerns about the ability of courts to distinguish predatory pricing from vigorous price competition.75 These criticisms proved highly influential.76 In the 1970s and 1980s, many lower courts took a more restrictive approach to predation claims, often requiring plaintiffs to show that the defendant’s prices fell below its costs rather than inquiring into the defendant’s intent.77 The Supreme Court ultimately ratified this approach in its 1993 Brooke Group decision, which held that predation plaintiffs must establish that (1) the defendant charged below-cost prices, and (2) there is a “dangerous probability” that the defendant will recoup its losses by raising prices upon the elimination of competitors.78 66 FRANCIS & SPRIGMAN, supra note 26, at 341. 67 Id. 68 Id. 69 Standard Oil Co. v. United States, 221 U.S. 1 (1911). 70 William E. Kovacic, The Intellectual DNA of Modern U.S. Competition Law for Dominant Firms: The Chicago/Harvard Double Helix, 2007 COLUM. BUS. L. REV. 1, 44 (2007). 71 Elhauge, supra note 42, at 268 & n.47 (collecting cases). 72 See, e.g., ROBERT H. BORK, THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF 149-55 (1978); John S. McGee, Predatory Price Cutting: The Standard Oil (N.J.) Case, 1 J. L. & ECON. 137 (1958). 73 The Chicago critique is controversial. Economists have identified a variety of circumstances in which predation can, in theory, be a rational business strategy—for example, where entry entails large fixed costs, a dominant firm develops a predatory reputation, capital markets are imperfect, or predation can deny rivals minimum efficient scale. CHIARA FUMAGALLI, ET AL., EXCLUSIONARY PRACTICES: THE ECONOMICS OF MONOPOLISATION AND ABUSE OF DOMINANCE 16-45 (2018). 74 McGee, supra note 72, at 140. Price discrimination can mitigate this effect. For example, a monopolist may be able to limit its losses from predation by cutting prices only in certain markets. FUMAGALLI, ET AL., supra note 73, at 17. 75 See, e.g., Phillip Areeda & Donald F. Turner, Predatory Pricing and Practices Under Section 2 of the Sherman Act, 88 HARV. L. REV. 697 (1975). 76 One commentator has argued that the Areeda-Turner paper “has a strong claim to be the most influential law review article ever written on an antitrust topic.” Kovacic, supra note 70, at 45. 77 Id. at 45-50. 78 Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-24 (1993). Congressional Research Service 8 link to page 6 link to page 5 Antitrust Reform and Big Tech Firms These requirements have proven difficult to satisfy. Since the Brooke Group decision, successful predatory-pricing claims have been rare.79 Refusals to Deal Another category of potentially exclusionary conduct involves refusals to deal with rivals. In general, firms—including monopolists—have the right to choose their business partners.80 In certain cases, however, courts have held that declining to do business with competitors can harm competition without justification and thus violate the Sherman Act. In Aspen Skiing Co. v. Aspen Highlands Skiing Corp., for example, the Supreme Court held that a monopolist of downhill skiing services in Aspen, Colorado violated Section 2 by terminating an “all-Aspen” ski ticket that it had offered with the plaintiff.81 The defendant also made it difficult for the plaintiff to replicate the “all-Aspen” package, refusing to sell the plaintiff lift tickets or accept bank-guaranteed vouchers included in the plaintiff’s replacement ticket package.82 After concluding that the defendant had failed to offer a plausible efficiency justification for its conduct, the Supreme Court affirmed a verdict of Section 2 liability.83 However, the Court later cabined the scope of its decision in Aspen Skiing, explaining that the case lies “at or near the outer boundary” of monopolization law.84 The Court offered this guidance in Verizon Communications Inc. v. Trinko, in which it held that Verizon did not violate Section 2 by refusing to provide interconnection services to a rival local telephone service provider.85 The Court distinguished Aspen Skiing on the ground that the ~~Section 1 cases.52~~
~~The following subsections review the standards governing particular types of conduct by~~
~~dominant firms.~~
~~Predatory Pricing~~
~~Some monopolization cases involve allegations that a defendant aggressively cut prices in an~~
~~attempt to exclude rivals from the market—a practice commonly known as predatory pricing.53~~
~~Under the Supreme Court’s Brooke Group test, plaintiffs must make two showings to prevail on a~~
~~predatory-pricing claim.54 First, plaintiffs must show that the defendant’s prices fell below an~~
~~appropriate measure of its costs.55 Second, plaintiffs must establish a “dangerous probability” that~~
~~the defendant will recoup its investment in below-cost prices by raising prices upon the~~
~~elimination of competitors.56~~
~~These requirements have proven difficult to satisfy. Since the Brooke Group decision,~~
~~predatory-pricing claims have rarely made it past summary judgment.57 The Court has defended~~
~~the restrictiveness of the relevant criteria by arguing that successful predatory pricing is rare and~~
~~by emphasizing the need to avoid deterring procompetitive price cutting.58~~
~~Refusals to Deal~~
~~Another category of potentially exclusionary conduct involves refusals to deal with rivals. For~~
~~example, a dominant firm might control key infrastructure or technology that its competitors need~~

~~48 Many commentators have made this point. For one example, see Daniel Francis, Making Sense of Monopolization,~~
~~84 ANTITRUST L.J. 779, 779-80 (2022).~~
49 For an overview, see CHRISTOPHER SAGERS, ANTITRUST 205-08 (3d ed. 2021); DOJ MONOPOLIZATION REPORT, supra
~~note 43, at 33-47.~~
~~50 DOJ MONOPOLIZATION REPORT, supra note 43, at 33.~~
~~51 Id. at 49-141; ELHAUGE, supra note 30, at 277-355.~~
~~52 Viamedia, Inc. v. Comcast Corp., 951 F.3d 429, 463-64 (7th Cir. 2020); United States v. Microsoft Corp., 253 F.3d~~
~~34, 58-59 (D.C. Cir. 2001) (per curiam).~~
~~53 ELHAUGE, supra note 30, at 277.~~
~~54 Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-24 (1993).~~
~~55 Id. at 222.~~
~~56 Id. at 224.~~
~~57 Lina M. Khan, Amazon’s Antitrust Paradox, 126 YALE L.J. 710, 730 & n.107 (2017) [hereinafter “Khan,~~ ~~Amazon’s~~
~~Antitrust Paradox”].~~
~~58 Brooke Grp., 509 U.S. at 226.~~
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~~to effectively compete, in which case a denial of access to the relevant property may harm~~
~~competition.59~~
~~The Supreme Court has held that monopolists have a duty to deal with rivals only in a narrow set~~
~~of circumstances. In Aspen Skiing Co. v. Aspen Highlands Skiing Corp., the Court affirmed~~
~~Section 2 liability because the only plausible motivation for a monopolist’s refusal to deal was a~~
~~desire to drive its competitor out of business.60 In that case, the defendant’s refusal was not~~
~~motivated by efficiency concerns and instead represented a sacrifice of short-term profits to~~
~~eliminate a rival.61~~
~~In its 2004 decision in Verizon Communications Inc. v. Trinko, however, the Court characterized~~
~~its holding in Aspen Skiing as lying “at or near the outer boundary” of Section 2 liability.62 In~~
~~rejecting a refusal-to-deal claim, Trinko distinguished Aspen Skiing on the grounds that the~~
monopolist in the latter decision had terminated “a voluntary (and thus presumably profitable) monopolist in the latter decision had terminated “a voluntary (and thus presumably profitable)
course of dealingcourse of dealing,” ” with the plaintiff, which suggested a willingness to sacrifice short-term profits for an which suggested a willingness to sacrifice short-term profits for an
anticompetitive end.anticompetitive end.6386 The Court also emphasized that the monopolist in The Court also emphasized that the monopolist in Aspen Skiing refused to refused to
deal with its rival even if compensated at the prices it charged to other customers, which deal with its rival even if compensated at the prices it charged to other customers, which
~~“revealed a distinctly anticompetitive bent.”64~~
~~Based on these decisions~~also revealed an anticompetitive purpose.87 Because those factors were not present in Trinko, the Court held that Verizon’s conduct did not fall within Aspen Skiing’s “limited exception” to the principle that firms are free to refuse to deal with their competitors.88 Based on the Supreme Court’s reasoning in Trinko, some lower courts have concluded that refusal-to-deal plaintiffs must , some lower courts have concluded that refusal-to-deal plaintiffs must
~~establish that a defendant’s refusal entailed a sacrifice of short-term~~ establish that a defendant’s refusal entailed a sacrifice of short-term 79 SULLIVAN, ET AL., supra note 26, at 121; DEVLIN, supra note 10, at 184; Lina M. Khan, Amazon’s Antitrust Paradox, 126 YALE L.J. 710, 730 & n.107 (2017) [hereinafter “Khan, Amazon’s Antitrust Paradox”]. 80 See United States v. Colgate & Co., 250 U.S. 300 (1919). 81 472 U.S. 585, 593-94 (1985). 82 Id. 83 Id. at 608-11. 84 Verizon Commc’ns Inc. v. L. Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 409 (2004). 85 Id. at 409-16. 86 Id. at 409. 87 Id. 88 Id. Congressional Research Service 9 link to page 8 link to page 13 Antitrust Reform and Big Tech Firms profits for an exclusionary profits for an exclusionary
purpose.purpose.6589 Some courts have also required plaintiffs to establish this type of profit sacrifice with Some courts have also required plaintiffs to establish this type of profit sacrifice with
proof that the defendant terminated a voluntary course of dealing.proof that the defendant terminated a voluntary course of dealing.6690
Many circuit courts have also accepted a specific theory of refusal-to-deal liability called the Many circuit courts have also accepted a specific theory of refusal-to-deal liability called the
“essential facilities” doctrine, which the Supreme Court has declined to either recognize or “essential facilities” doctrine, which the Supreme Court has declined to either recognize or
repudiate.repudiate.~~67 To establish liability~~91 To prevail under the essential-facilities doctrine, plaintiffs must establish under the essential-facilities doctrine, plaintiffs must establish:
1. the control of an “essential facility” by a monopolist; 1. the control of an “essential facility” by a monopolist;
2. an inability to “practically or reasonably” duplicate the facility; 2. an inability to “practically or reasonably” duplicate the facility;
3. the denial of the use of the facility to a competitor; and 3. the denial of the use of the facility to a competitor; and
4. the feasibility of providing access to the facility. 4. the feasibility of providing access to the facility.6892
While that doctrine remains on the books as a formal matter, While that doctrine remains on the books as a formal matter,6993 two commentators have described two commentators have described
the Supreme Court’s treatment of it as inflicting “death by dicta.”the Supreme Court’s treatment of it as inflicting “death by dicta.”7094 Its viability thus remains Its viability thus remains
uncertain. uncertain.

~~59 SAGERS, supra note 49, at 219.~~
~~60 Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 608-11 (1985).~~
~~61 See id.~~
~~62 540 U.S. 398, 409 (2004).~~
~~63 Id.~~
~~64 Id.~~
65 Refusal-to-deal doctrine implicates a well-recognized trade-off. On the one hand, compulsory dealing will often increase static efficiency. Requiring a vertically integrated monopolist to supply necessary inputs to downstream rivals, for example, may promote price competition in the downstream market and thereby eliminate allocative inefficiencies.95 Those benefits, however, may come at the expense of dynamic competition insofar as they reduce incentives to invest and innovate.96 As Trinko makes clear, antitrust doctrine currently places greater emphasis on the latter concern.97 The Supreme Court has also expressed skepticism about the institutional competence of courts to craft appropriate remedies in refusal-to-deal cases. The worry is that compulsory dealing will often require generalist judges to set prices and other contract terms—tasks that are typically the province of a sectoral regulator.98 89 E.g., Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1075 (10th Cir. 2013) (Gorsuch, J.); Covad Commc’ns Co. v. , Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1075 (10th Cir. 2013) (Gorsuch, J.); Covad Commc’ns Co. v.
Bell Atl. Corp., 398 F.3d 666, 675 (D.C. Cir. 2005); Bell Atl. Corp., 398 F.3d 666, 675 (D.C. Cir. 2005); but see Viamedia Inc. v. Comcast Corp., 951 F.3d 429, 462 Viamedia Inc. v. Comcast Corp., 951 F.3d 429, 462
(7th Cir. 2020) (concluding that profit sacrifice is relevant but not always dispositive for refusal-to-deal liability). (7th Cir. 2020) (concluding that profit sacrifice is relevant but not always dispositive for refusal-to-deal liability).
6690 E.g., FTC v. Qualcomm, Inc., 969 F.3d 974, 993-94 (9th Cir. 2020); Novell, 731 F.3d at 1075; In re Elevator Antitrust Litig., 502 F.3d 47, 52 (2d Cir. 2007); Covad Commc’ns Co. v. BellSouth Corp., 374 F.3d 1044, 1049 (11th Cir. 2004). 91 E.g., Novell, 731 F.3d at 1075.
67 Trinko, 540 U.S. at 410-11. , 540 U.S. at 410-11.
6892 MCI Commc’ns Corp. v. AT&T Co., 708 F.2d 1081, 1132-33 (7th Cir. 1983). MCI Commc’ns Corp. v. AT&T Co., 708 F.2d 1081, 1132-33 (7th Cir. 1983).
6993 See ELHAUGE, ELHAUGE, supra no note 3038, at 353 n.91 (collecting circuit court decisions recognizing the doctrine). at 353 n.91 (collecting circuit court decisions recognizing the doctrine).
7094 Brett Frischmann & Spencer Weber Waller, Brett Frischmann & Spencer Weber Waller, Revitalizing Essential Facilities, 75 ANTITRUST L.J. 1, 3 (2008); , 75 ANTITRUST L.J. 1, 3 (2008); see also
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~~Tying~~
~~Tying arrangements are vertical restraints of trade~~ HERBERT HOVENKAMP, FEDERAL ANTITRUST POLICY: THE LAW OF COMPETITION AND ITS PRACTICE 337 (4th ed. 2011) [hereinafter “HOVENKAMP, FEDERAL ANTITRUST POLICY”] (concluding that “[n]ot many essential facility claims will survive” post-Trinko); Khan, Amazon’s Antitrust Paradox, supra note 79, at 801 (noting that commentators have wondered whether the essential-facilities doctrine is now “a dead letter”). 95 Howard A. Shelanski, Unilateral Refusals to Deal in Intellectual and Other Property, 76 ANTITRUST L.J. 369, 371 (2009). 96 Id. 97 Verizon Commc’ns Inc. v. L. Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 407-08 (2004) (“Firms may acquire monopoly power by establishing an infrastructure that renders them uniquely suited to serve their customers. Compelling such firms to share the source of their advantage is in some tension with the underlying purpose of antitrust law, since it may lessen the incentive for the monopolist, the rival, or both to invest in those economically beneficial facilities.”). 98 Id. at 408. Congressional Research Service 10 link to page 14 link to page 12 link to page 8 link to page 12 Antitrust Reform and Big Tech Firms As discussed below, in many cases, permissive refusal-to-deal doctrine has significant implications for the viability of antitrust action against major tech platforms under existing law. Tying Tying arrangements are vertical restraints of trade (i.e., restraints involving individuals or firms in a customer-supplier relationship) that can be challenged under several provisions that can be challenged under several provisions
of the antitrust laws, including Sections 1 and 2 of the Sherman Act.of the antitrust laws, including Sections 1 and 2 of the Sherman Act.7199 Tying involves a refusal to Tying involves a refusal to
sell one product (the tying product) unless buyers also purchase another product (the tied product) sell one product (the tying product) unless buyers also purchase another product (the tied product)
from the seller.from the seller.72100
The The ~~traditional~~basic concern with tying arrangements is that they may allow a firm with market power concern with tying arrangements is that they may allow a firm with market power
for the tying product to harm competition in and even monopolize the tied product market.for the tying product to harm competition in and even monopolize the tied product market.73
101 Tying may also help a dominant firm preserve a monopoly in the tying market by eliminating Tying may also help a dominant firm preserve a monopoly in the tying market by eliminating
potential rivals that may enter via the tied market.potential rivals that may enter via the tied market.74
~~Possible redeeming efficiencies of tying include reputation protection and economies of~~
~~production or distribution~~102 However, tying can also produce procompetitive benefits. For example, tying may dissuade consumers from using an inferior . For example, tying may dissuade consumers from using an inferior
substitute to the tied product with the tying product, substitute to the tied product with the tying product, ~~thereby~~ mitigating the risk of reputational mitigating the risk of reputational
damage to a seller’s brand.damage to a seller’s brand.75103 Producing and selling different products together may also reduce Producing and selling different products together may also reduce
production, marketing, and distribution costs.production, marketing, and distribution costs.76
~~In addition, tying arrangements may encourage investment by allowing a firm to convert fixed~~
~~costs into variable costs. For example, a franchisor might sell a franchise for less than its market~~
~~value but employ a tying arrangement to secure overcharges on goods distributed through the~~
~~franchise.77 This type of arrangement might encourage investment by decreasing a franchisee’s~~
~~upfront costs.78~~
~~Contractual tying arrangements are governed by what is often called a rule of quasi-per-se~~
~~illegality, though some have described that label as a misnomer.79 While different circuit courts~~

~~HERBERT HOVENKAMP, FEDERAL ANTITRUST POLICY: THE LAW OF COMPETITION AND ITS PRACTICE 337 (4th ed. 2011)~~
~~(concluding that “[n]ot many essential facility claims will survive” post-Trinko); Khan, Amazon’s Antitrust Paradox,~~
supra note 57, at 801 (noting that commentators have wondered whether the essential-facilities doctrine is now “a dead
~~letter”).~~
~~71 HOVENKAMP, supra note 70, at 435.~~
~~72 ELHAUGE, supra note 30, at 409.~~
~~73 CHIARA FUMAGALLI, MASSIMO MOTTA & CLAUDIO CALCAGNO, EXCLUSIONARY PRACTICES: THE ECONOMICS OF~~
~~MONOPOLISATION AND ABUSE OF DOMINANCE 352 (2018). For a discussion of the Chicago School’s influential critique~~
~~of this “leverage” theory of harm and responses to that critique, see id. at 363-99.~~
~~74 Id. at 386-88. For additional theories of harm involving tying, see HOVENKAMP, supra note 70, at 436.~~
~~75 ELHAUGE, supra note 30, at 419.~~
~~76 FUMAGALLI, et al., supra note 73, at 353.~~
~~77 Erik Hovenkamp & Herbert J. Hovenkamp, Tying Arrangements and Antitrust Harm, 52 ARIZ. L. REV. 925, 964~~
~~(2010).~~
~~78 Id. Some commentators have argued that “variable proportion ties”—whereby consumers purchase a durable tying~~
~~product (e.g., a printer) and amounts of the tied product (e.g., ink) that vary with their use of the tying product—may~~
~~also increase welfare in certain circumstances. Id. at 951-52. Firms may use variable proportion ties to lower the price~~
~~for the tying product while raising the price of the tied product, benefitting low-volume users and harming high-volume~~
~~users. Id. Net welfare effects may thus depend on the number of consumers who would not have purchased the tying~~
~~product absent the price reduction. Id. Some commentators have analogized certain conduct in tech markets to variable~~
~~proportion ties. For example, some have argued that restrictions on app distribution may allow Apple to cut iPhone~~
~~prices, meaning high-intensity app users effectively subsidize low-intensity users. Thomas A. Lambert,~~ ~~Addressing Big~~
~~Tech’s Market Power: A Comparative Institutional Analysis, 75 SMU L. REV. 73, 104 & n.182 (2022). For an~~
~~argument that variable proportion ties are typically welfare-reducing, see Einer Elhauge, Rehabilitating Jefferson~~
~~Parish: Why Ties Without a Substantial Foreclosure Share Should Not Be Per Se Legal, 80 ANTITRUST L.J. 463, 476-86~~
~~(2016).~~
~~79 See, e.g., ELHAUGE, supra note 30, at 420-21.~~
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~~have adopted different formulations of the relevant legal test, many of the inquiries are similar.80~~
104 Some ties can also serve as a means of price discrimination—for example, by allowing firms to discriminate between high-intensity and low-intensity users of a product.105 Commentators have debated the effects of these “requirements” or “variable proportion” ties, whereby consumers purchase a durable tying product (e.g., a printer) and amounts of the tied product (e.g., ink) that vary with their use of the tying product. Firms may employ these types of ties to lower the price of the tying product and raise the price of the tied product, benefitting low-volume users and harming high-volume users.106 Some commentators have argued that “requirements ties” typically increase total and consumer welfare,107 while others have come to the opposite conclusion.108 Like predatory-pricing doctrine, tying law has changed significantly over the course of antitrust history. Throughout much of the 20th century, courts were highly skeptical of tying arrangements, 99 HOVENKAMP, FEDERAL ANTITRUST POLICY, supra note 94, at 435. 100 Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (1984). 101 FUMAGALLI, ET AL., supra note 73, at 352. 102 Id. at 386-88. 103 ELHAUGE, supra note 38, at 419. 104 FUMAGALLI, ET AL., supra note 73, at 353. 105 Dennis W. Carlton & Michael Waldman, Tying, in 3 ISSUES IN COMPETITION LAW AND POLICY 1859, 1866 (Wayne Dale Collins ed., 2008). 106 Erik Hovenkamp & Herbert J. Hovenkamp, Tying Arrangements and Antitrust Harm, 52 ARIZ. L. REV. 925, 951-52 (2010). 107 Id. at 925. One observer has analogized certain conduct in tech markets to requirements ties, arguing that restrictions on app distribution may allow Apple to cut iPhone prices, meaning high-intensity app users effectively subsidize low-intensity users. Thomas A. Lambert, Addressing Big Tech’s Market Power: A Comparative Institutional Analysis, 75 SMU L. REV. 73, 104 & n.182 (2022). 108 Einer Elhauge, Rehabilitating Jefferson Parish: Why Ties Without a Substantial Foreclosure Share Should Not Be Per Se Legal, 80 ANTITRUST L.J. 463, 476-86 (2016). Congressional Research Service 11 link to page 12 Antitrust Reform and Big Tech Firms which were deemed per se illegal under Section 1 of the Sherman Act.109 During this period of disapproval, the Supreme Court consistently described tying as inherently anticompetitive.110 As in other areas of antitrust, academic work challenged this attitude. Beginning in the 1950s, Chicago School scholars criticized the theory that a firm could leverage power in one market to extract additional profits from another market. They argued that when consumers use complementary products in fixed proportions—for example, nuts and bolts—a monopolist cannot extract additional profits by tying one product to the other.111 In such cases, they reasoned, there is one profit-maximizing price for the product set, meaning a monopolist of nuts could extract only one monopoly profit from the nut-bolt set. If the market for bolts is competitive, charging a monopoly price for nuts while tying them to bolts sold at a supra-competitive price would result in a price for the nut-bolt set that exceeds the profit-maximizing level.112 The Chicago critique of leverage theory thus contended that, in these circumstances, firms likely employ tying arrangements because they generate efficiencies.113 The single monopoly profit theory (SMPT) described above applies only under certain restrictive assumptions.114 In addition to being limited to complementary products used in fixed proportions,115 the SMPT does not eliminate the possibility that a firm may employ a tying arrangement to impair the efficiency of rivals in the tied market. If there are necessary scale economies in the tied market, for example, tying can potentially allow a firm to deny those economies to rivals and thus decrease the competitiveness of that market.116 The SMPT also does not preclude the use of a tying arrangement to maintain market power in the tying market (i.e., in cases where firms may enter the tying market via the tied market).117 Despite these limitations, the Chicago critique of traditional leverage theory—along with the development of various efficiency-based rationales for tying—ultimately led courts to move away from the view that ties are almost invariably anticompetitive.118 This change prompted an erosion of the per se rule. In decisions in the 1970s and 1980s, the Supreme Court retained the label of per se illegality for tying arrangements, but limited the rule’s application to firms with sufficient market power in the tying market to force purchases of the tied product.119 109 N. Pac. Ry. Co. v. United States, 356 U.S. 1, 3 (1958). 110 Fortner Enters. v. U.S. Steel Corp., 394 U.S. 495, 503 (1969) (stating that tying arrangements “generally serve no legitimate business purpose that cannot be achieved in some less restrictive way”); Standard Oil Co. v. United States, 337 U.S. 293, 305-06 (1949) (concluding that tying arrangements “serve hardly any purpose beyond the suppression of competition”). 111 Ward S. Bowman, Jr., Tying Arrangements and the Leverage Problem, 67 YALE L.J. 19, 23 (1957). 112 Id. 113 Id. at 29. 114 FUMAGALLI, ET AL., supra note 73, at 367-99. 115 As discussed, commentators have taken different views on the welfare effects of ties involving products used in variable proportions. 116 Einer Elhauge, Tying, Bundling, and the Death of the Single Monopoly Profit Theory, 123 HARV. L. REV. 397, 413 (2009). 117 Id. at 417-19. 118 Ill. Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28, 35-36 (2006) (noting that “[o]ver the years,” the Court’s “strong disapproval of tying arrangements has substantially diminished,” and that the case law had rejected the assumption that tying arrangements usually have no procompetitive purpose). 119 Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 13-16 (1984); U.S. Steel Corp. v. Fortner Enters., Inc., 429 U.S. 610, 620-22 (1977). Congressional Research Service 12 link to page 14 link to page 10 link to page 10 link to page 6 Antitrust Reform and Big Tech Firms Lower courts have adopted different formulations of this modified per se rule, but the inquiries are generally similar.120 One commentator has summarized the doctrine as establishing the following requirements for a One commentator has summarized the doctrine as establishing the following requirements for a
~~tying claim~~per se tying claim under Section 1: :
1. The defendant offered two distinct products; 1. The defendant offered two distinct products;
2. The defendant conditioned the sale of one product (the tying product) on the 2. The defendant conditioned the sale of one product (the tying product) on the
purchase of the other product (the tied product); purchase of the other product (the tied product);
3. The defendant possessed sufficient economic power in the tying product market 3. The defendant possessed sufficient economic power in the tying product market
to coerce purchasers into acceptance of the tied product; and to coerce purchasers into acceptance of the tied product; and
4. The defendant’s conduct affected a “not insubstantial” amount of interstate 4. The defendant’s conduct affected a “not insubstantial” amount of interstate
commerce in the tied product commerce in the tied product~~.81~~
~~Some~~ (an inquiry that focuses on the absolute dollar amount of affected commerce).121 Some lower courts have also required plaintiffs to demonstrate that a tying arrangement had courts have also required plaintiffs to demonstrate that a tying arrangement had
anticompetitive effects in the tied product market.anticompetitive effects in the tied product market.82
~~Although the above test governs most contractual tying arrangements, different standards have~~
~~been applied to so-called technological ties, whereby a firm physically integrates separate~~
~~products or designs its products in a way that makes them difficult to use with those offered by~~
~~other firms.83~~
In its 2001 decision in United States v. Microsoft~~, for example~~122 Others have entertained and accepted business justifications for challenged ties.123 In practice, then, the modified per se rule against tying appears to be more similar to the rule of reason than it is to traditional per se rules.124 Courts have also declined to apply the modified per se rule to ties involving platform software products. In its 2001 decision in United States v. Microsoft, the D.C. Circuit held that a tie involving Microsoft’s Windows~~, the D.C. Circuit held that a~~
~~technological tie involving a computer~~ operating system and operating system and aits Internet Explorer web browser was governed by the web browser was governed by the
~~rule of reason, rather than the traditional rule of quasi-per-se illegality.84 Several other courts~~
~~have taken a permissive approach to product-design decisions and accepted arguments that~~
~~challenged technological ties represented procompetitive quality improvements.85~~
~~Exclusive Dealing~~
~~Like tying, exclusive-dealing arrangements are vertical restraints that~~rule of reason, rather than the modified per se rule.125 In rejecting application of the per se rule, the D.C. Circuit noted that none of the Supreme Court’s tying cases had involved the physical and technological integration of separate products.126 Condemning such ties without evaluating their competitive effects, the court reasoned, would create an unacceptable risk of error and deter innovation.127 In 2023, the Ninth Circuit adopted the D.C. Circuit’s reasoning to conclude that the rule of reason applied to a tying claim challenging Apple’s requirement that software developers use Apple’s payment processor for in-app purchases as a condition of distributing apps through its App Store.128 As mentioned, tying arrangements can be challenged under Sections 1 and 2 of the Sherman Act. The key differences between the provisions are Section 1’s requirement of an agreement; the availability of the modified per se rule under Section 1; and Section 2’s requirement that challenged conduct contribute to the creation or maintenance of monopoly power (or produce a dangerous probability of those effects).129 120 HOVENKAMP, FEDERAL ANTITRUST POLICY, supra note 94 ~~can be challenged under~~
~~both Section 1 and Section 2 of the Sherman Act.86 Exclusive dealing occurs when a firm limits~~
~~the freedom of buyers or sellers to deal with other companies.87 For example, a seller might offer~~
~~widgets on the condition that purchasers obtain all of their widgets from the seller.88~~

~~80 HOVENKAMP, supra note 70~~, at 435 (explaining that “[i]n operation the tests are similar,” but that some courts have at 435 (explaining that “[i]n operation the tests are similar,” but that some courts have
combined elements that other courts recognize as separate requirements). combined elements that other courts recognize as separate requirements).
81121 Id..
82 The Supreme Court has held that $60,800 in sales was sufficient to meet the “not insubstantial” volume requirement, while some lower courts have held that considerably lower volumes are sufficient. ANTITRUST DEVELOPMENTS, supra note 55, at 197 (collecting cases). 122 E.g., Kaufman v. Time Warner, 836 F.3d 137, 141 (2d Cir. 2016); Amey, Inc. v. Gulf Abstract & Title Inc., 758 F.2d , Kaufman v. Time Warner, 836 F.3d 137, 141 (2d Cir. 2016); Amey, Inc. v. Gulf Abstract & Title Inc., 758 F.2d
1486, 1503 (11th Cir. 1985); Driskill v. Dallas Cowboys Football Club, Inc., 498 F.2d 321, 323 (5th Cir. 1974). 1486, 1503 (11th Cir. 1985); Driskill v. Dallas Cowboys Football Club, Inc., 498 F.2d 321, 323 (5th Cir. 1974).
~~83 DOJ MONOPOLIZATION REPORT~~123 ANTITRUST DEVELOPMENTS, , supra no note 4355, at at ~~33.~~
~~84 253 F.3d 34, 89-90~~200. 124 Viamedia, Inc. v. Comcast Corp., 951 F.3d 429, 468 (7th Cir. 2020) (making this observation). 125 253 F.3d 34, 89-91 (D.C. Cir. 2001) (per curiam). (D.C. Cir. 2001) (per curiam).
~~85 See John M. Newman, Anticompetitive Product Design in the New Economy, 39 FLA. ST. U. L. REV. 681, 714-23~~
~~(2012) (summarizing the case law).~~
~~86 HOVENKAMP, supra note 70, at 478. Exclusive-dealing agreements can also be challenged under Section 3 of the~~
~~Clayton Act. 15 U.S.C. § 14. Some courts and commentators have suggested that analysis of such agreements may vary~~
~~based on which provision is invoked. See, e.g., United States v. Dentsply Int’l, Inc., 399 F.3d 181, 197 (3d Cir. 2005)~~
~~(concluding that findings in favor of the defendant under Section 1 of the Sherman Act and Section 3 of the Clayton~~
~~Act did not preclude Section 2 liability for exclusive dealing); ELHAUGE, supra note 30, at 371 n.1 (explaining that~~
~~“some modern courts appear to treat Clayton Act § 3 claims more generously at the margins”). However, the precise~~
~~differences between the relevant inquiries are not entirely clear. DOJ MONOPOLIZATION REPORT, supra note 43, at 132.~~
~~87 HOVENKAMP, supra note 70, at 478.~~
~~88 Id.~~
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~~These types of restrictions may raise antitrust concerns if they foreclose enough of the market to~~
~~deter entry or deny rivals the ability to achieve scale economies.89 Exclusive dealing may also~~
~~raise rivals’ costs by limiting them to inferior inputs or distribution channels.90~~
~~Procompetitive justifications for exclusive dealing include the inducement of relationship-specific~~
~~investments,91 mitigation of uncertainty about future sales,92 and the encouragement of more~~
~~intense competition for distribution, which may result in lower consumer prices.93~~
~~In evaluating exclusive-dealing restrictions, courts ordinarily assess the extent of foreclosure, the~~
~~duration of the restrictions, and any business justifications for the restrictions.94 Although there~~
~~are exceptions, modern courts have tended to require foreclosure of roughly 40 percent of the~~
~~market before condemning exclusive dealing.95~~
~~Monopoly Leveraging~~
~~A firm’s possession of monopoly power has traditionally given rise to concerns that the firm may use that power~~
~~to gain a competitive advantage in another market. For many years, the federal courts split over whether Section 2~~
~~precluded this type of “monopoly leveraging” in cases where a defendant utilized its monopoly power to harm~~
~~competition in—but not reasonably threaten to monopolize—a second market. Elhauge, supra note 30, at 357-58~~
~~nn.97-98 (col ecting cases).~~
~~In 2004, the Supreme Court rejected one type of leveraging claim, remarking that a lower court had erred to the~~
~~extent that it dispensed with the requirement that a plaintiff relying on a leveraging theory establish that the~~
~~defendant had a “dangerous probability” of monopolizing a second market~~126 Id. 127 Id. 128 Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 997 (9th Cir. 2023). 129 FRANCIS & SPRIGMAN, supra note 26, at 382. Congressional Research Service 13 link to page 14 link to page 12 link to page 12 link to page 12 link to page 10 Antitrust Reform and Big Tech Firms In evaluating product-design or “technological tie” claims under Section 2, some decisions have held that the integration of separate products is lawful when it improves quality or reduces cost, even if that conduct forecloses rivals.130 The Microsoft decision, by contrast, employed a rule-of-reason-like burden-shifting framework to the government’s Section 2 claims in that case.131 Another appellate decision has affirmed liability for product integration where evidence of an exclusionary motive cast doubt on the defendant’s argument that the challenged design represented a genuine improvement.132 Exclusive Dealing Like tying arrangements, exclusive contracts—in which a firm commits to refrain from dealing with its counterparty’s rivals—are vertical restraints of trade that can be challenged under Sections 1 and 2 of the Sherman Act.133 Exclusive contracts can harm competition when a dominant firm uses them to foreclose rivals from key inputs or distribution channels.134 They can also produce procompetitive benefits. For example, exclusivity may induce manufacturers to make relationship-specific investments in dealers by providing sales training, technical support, and other promotional assistance.135 To the extent that a dealer can use any of this support to promote rival brands, manufacturers may lack the incentive to provide it. Exclusive dealing can eliminate this free-rider problem and thereby encourage investment.136 Exclusivity may also mitigate uncertainty about future sales or purchases137 and encourage more intense competition for distribution, which may result in lower consumer prices.138 While exclusive dealing has never been deemed per se illegal, its treatment has evolved considerably. In its 1949 Standard Stations decision, the Supreme Court affirmed a decision finding that foreclosure of 6.7% of the relevant market was sufficient to render an exclusive contract illegal.139 In doing so, the Court appeared to approve the lower court’s refusal to engage in a full rule-of-reason analysis of competitive harm.140 The decision thus stood for what came to be called the “quantitative substantiality” approach to exclusivity, which focused on the percentage of the relevant market foreclosed by a challenged agreement.141 The Supreme Court departed from that approach twelve years later in Tampa Electric Co. v. Nashville Coal Co., where it rejected a challenge to an exclusive contract that foreclosed less than 130 See, e.g., Allied Orthopedic Appliances v. Tyco Health Care Grp., 592 F.3d 991, 1000-02 (9th Cir. 2010); Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 286-87 (2d Cir. 1979). 131 Microsoft, 253 F.3d at 65-67. 132 C.R. Bard, Inc. v. M3 Systems, 157 F.3d 1340, 1382 (Fed. Cir. 1998). 133 HOVENKAMP, FEDERAL ANTITRUST POLICY, supra note 94, at 478. 134 FUMAGALLI, ET AL., supra note 73, at 239-62. 135 Id. at 273-74. 136 Id. 137 See Standard Oil Co v. United States (Standard Stations), 337 U.S. 293, 306-07 (1949). 138 Benjamin Klein & Kevin M. Murphy, Exclusive Dealing Intensifies Competition for Distribution, 75 ANTITRUST L.J. 433 (2008). Chicago School academics also questioned why a rational firm would agree to an exclusive contract that enhanced or preserved the market power of its counterparty. E.g., BORK, supra note 72, at 309. In response, economists have developed models showing that buyers may face collective action problems when a monopolist uses exclusive contracts to deny rivals necessary scale economies. FUMAGALLI, ET AL., supra note 73, at 243-54. 139 Standard Stations, 337 U.S. at 308-09. 140 Id. 141 ANTITRUST DEVELOPMENTS, supra note 55, at 209. Congressional Research Service 14 link to page 8 link to page 14 Antitrust Reform and Big Tech Firms 1% of the relevant market.142 In Tampa Electric, the Court did not limit its analysis to the low foreclosure percentage, explaining that it was necessary to also engage in a qualitative analysis of the agreement’s competitive effects.143 The quantitative aspect of foreclosure analysis has also become more permissive. In the Court’s 1984 Jefferson Parish decision, the concurring opinion of four Justices concluded, without a detailed inquiry, that foreclosure of 30% of the market was not sufficient to render an exclusive contract unlawful.144 Since these decisions, reviewing courts have tended to require foreclosure of at least 40% of the market before condemning exclusive contracts under Section 1, while also analyzing the duration of the restrictions, any business justifications, and other factors that may bear on an agreement’s competitive effects.145 Some courts have indicated that the standards for assessing exclusive dealing are more plaintiff-friendly under Section 2, and that a monopolist’s use of exclusive contracts may be illegal even if they foreclose less than the 40% figure that is typically necessary for a Section 1 violation.146 Monopoly Leveraging A firm’s possession of monopoly power has traditionally given rise to concerns that the firm may use that power to gain a competitive advantage in another market. For many years, the federal courts split over whether Section 2 precluded this type of “monopoly leveraging” in cases where a defendant utilized its monopoly power to harm competition in—but not reasonably threaten to monopolize—a second market. Elhauge, supra note 38, at 357-58 nn.97-98 (col ecting cases). In 2004, the Supreme Court rejected one type of leveraging claim, remarking that the leveraging theory offered in that case would be valid only if the defendant had a “dangerous probability” of monopolizing a second market—an element of the attempt-to-monopolize offense. . Verizon Commc’ns Inc. v. L. Offs. of Curtis
V. Trinko, LLP, 540 U.S. 398, 410 n.4 (2004) (citation omitted). The Court thus rejected the proposition that a , 540 U.S. 398, 410 n.4 (2004) (citation omitted). The Court thus rejected the proposition that a
defendant could violate Section 2 merely by gaining an unfair advantage in a second market. defendant could violate Section 2 merely by gaining an unfair advantage in a second market.
As a result, “monopoly leveraging” does not denote a standalone antitrust offense that is distinct from monopolization or attempted monopolization. In its 2001 ~~In its~~ Microsoft decision, however, the D.C. Circuit endorsed what some commentators have called a “defensive decision, however, the D.C. Circuit endorsed what some commentators have called a “defensive
leveragingleveraging~~” or “monopoly maintenance~~” theory. ” theory. See United States v. Microsoft Corp., 253 F.3d 34, 67 (D.C. Cir. , 253 F.3d 34, 67 (D.C. Cir.
2001) (per curiam); Robin Cooper Feldman, 2001) (per curiam); Robin Cooper Feldman, Defensive Leveraging in Antitrust, 87 GEO. L.J. 2079 (1999). While , 87 GEO. L.J. 2079 (1999). While
“offensive leveraging” involves a defendant’s use of monopoly power in one market to extract additional profits “offensive leveraging” involves a defendant’s use of monopoly power in one market to extract additional profits
from another market, “defensive leveraging” involves the use of monopoly power to gain an advantage in another from another market, “defensive leveraging” involves the use of monopoly power to gain an advantage in another
market so as to prevent erosion of a primary monopoly. market so as to prevent erosion of a primary monopoly. See Feldman, Feldman, Defensive Leveraging, 87 GEO. L.J. at 2080. , 87 GEO. L.J. at 2080.
In In Microsoft, for example, the D.C. Circuit concluded that Microsoft had leveraged its operating-system monopoly , for example, the D.C. Circuit concluded that Microsoft had leveraged its operating-system monopoly
into the market for web browsers so as to protect its operating-system monopoly. into the market for web browsers so as to protect its operating-system monopoly. Microsoft, 253 F.3d at 64. , 253 F.3d at 64.
Specifically, Microsoft imposed several restrictions related to its Windows operating system that were designed to Specifically, Microsoft imposed several restrictions related to its Windows operating system that were designed to
reduce the usage of rival web browsers, which threatened to supplant Windows as platforms for software reduce the usage of rival web browsers, which threatened to supplant Windows as platforms for software
development. development. Id. at 60. The D.C. Circuit held that some of this conduct constituted unlawful monopolization. . at 60. The D.C. Circuit held that some of this conduct constituted unlawful monopolization. Id. at . at
64.64.
Accordingly, under current Accordingly, under current ~~monopolization law~~Section 2 doctrine, an “offensive leveraging” theory requires proof that a defendant’s , an “offensive leveraging” theory requires proof that a defendant’s
conduct raised a “dangerous probability” of conduct raised a “dangerous probability” of monopolizing a second market a second market~~; simply~~—a prerequisite for an attempt-to-monopolize claim. Simply gaining an unfair advantage in gaining an unfair advantage in
another market is not sufficient. another market is not sufficient. Trinko, 540 U.S. at 410 n.4. By contrast, “defensive leveraging”—whereby a , 540 U.S. at 410 n.4. By contrast, “defensive leveraging”—whereby a
~~monopolist’s leveraging of its monopoly power into a second market helps preserve its primary monopoly—may~~
~~be a viable theory of harm, even without proof that the defendant threatens to monopolize the second market.~~
See Microsoft, 253 F.3d at 64, 80-84.

~~89 FUMAGALLI, et al., supra note 73, at 239-62.~~
~~90 HOVENKAMP, supra note 70, at 479-80.~~
~~91 ELHAUGE, supra note 30, at 375.~~
~~92 Id. at 374.~~
~~93 Benjamin Klein & Kevin M. Murphy, Exclusive Dealing Intensifies Competition for Distribution, 75 ANTITRUST L.J.~~
~~433 (2008).~~
~~94 Barry Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227, 236 (1st Cir. 1983) (Breyer, J.).~~
~~95 SAGERS, supra note 49, at 173 (collecting cases).~~
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monopolist’s leveraging of its monopoly power 142 365 U.S. 320 (1961). 143 Id. at 329. 144 466 U.S. 2, 46 (1984) (O’Connor, J., concurring). 145 HOVENKAMP, FEDERAL ANTITRUST POLICY, supra note 94, at 487. 146 E.g., United States v. Microsoft Corp., 253 F.3d 34, 70 (D.C. Cir. 2001) (per curiam). Congressional Research Service 15 link to page 9 link to page 20 link to page 8 Antitrust Reform and Big Tech Firms into a second market helps preserve its primary monopoly—is a viable theory of monopoly maintenance, even without proof that the defendant threatens to monopolize the second market. See Microsoft, 253 F.3d at 64, 80-84. Mergers & Acquisitions
The antitrust laws also place limitations on mergers and acquisitions.The antitrust laws also place limitations on mergers and acquisitions.96147 Section 7 of the Clayton Section 7 of the Clayton
Act prohibits Act prohibits ~~mergers whose~~a merger if its effect “may be substantially to lessen competition, or to tend to effect “may be substantially to lessen competition, or to tend to
create a monopoly.”create a monopoly.”97148 Though less common, Section 2 of the Sherman Act Though less common, Section 2 of the Sherman Act ~~can~~has also been used to also been used to
challenge mergers that help a firm acquire or maintain monopoly power.challenge mergers that help a firm acquire or maintain monopoly power.98149
Analysis of mergers varies based on the relationship between the merging parties—specifically, Analysis of mergers varies based on the relationship between the merging parties—specifically,
based on whether a merger is horizontal, vertical, or conglomerate. based on whether a merger is horizontal, vertical, or conglomerate.
~~Horizontal and Vertical Mergers~~
~~Like horizontal restraints of trade, horizontal mergers involve firms that compete in the same~~
~~market.99 These types of deals~~Horizontal mergers (i.e., mergers between competitors) receive the greatest scrutiny and can raise two primary types of concerns. First, horizontal mergers may raise two primary types of concerns. First, horizontal mergers may
~~have unilateral anticompetitive effects—that is, they may allow the merged firm to raise prices~~
~~and reduce output irrespective of the conduct of other firms.100 Second, horizontal mergers may~~
~~produce coordinated anticompetitive effects by creating market structures that facilitate collusion~~
~~or oligopoly pricing.101~~
~~In contrast, vertical mergers involve firms at different stages of the same chain of supply or~~
~~distribution.102 These transactions~~allow a firm to unilaterally increase its prices or decrease the quality of its products by eliminating competition between rivals.150 Second, horizontal mergers may facilitate tacit or express collusion by increasing market concentration (so-called “coordinated effects”).151 Vertical mergers (i.e., mergers between firms in the same supply chain) receive less exacting scrutiny than horizontal receive less exacting scrutiny than horizontal ~~mergers~~ones, because , because
they do not eliminate direct competitors and they do not eliminate direct competitors and are thought to often generate efficiencies.often generate efficiencies.~~103~~
~~The primary~~152 The main concern with vertical mergers is concern with vertical mergers is ~~the possibility that such transactions may foreclose~~
~~sources of supply or distribution previously available to rivals.104 For example, a vertical merger~~
~~might give the merged entity the incentive and ability to charge rivals higher prices for inputs or~~
~~raise rivals’ costs of distribution.105 At the extreme, a merged firm may refuse to deal~~foreclosure; when a firm acquires an important source of inputs or a key distribution channel, it may have the ability and incentive to raise rivals’ costs or refuse to do business with rivals with rivals
~~altogether. Without meaningful alternative sources of supply or distribution, the merged firm’s~~
~~rivals may face competitive difficulties. Foreclosure may also raise entry barriers by requiring a~~
~~firm’s prospective competitors to enter at two levels of the market rather than one.106~~
~~Vertical mergers may also raise concerns if they give a firm access to competitively sensitive~~
~~information about rivals or facilitate collusion by allowing the merged entity to monitor~~
~~compliance with tacit pricing agreements.107~~

96altogether.153 A vertical merger may also prompt concerns if it gives a firm access to competitively sensitive information about rivals or facilitates collusion by allowing the merged entity to monitor compliance with tacit pricing agreements.154 Conglomerate mergers are mergers that are neither horizontal nor vertical.155 Challenges to such mergers are rare.156 Conglomerate mergers may raise antitrust concerns, however, if they allow a firm to acquire a potential competitor.157 147 For ease of discussion, this report will refer to both mergers and acquisitions as “mergers.” For ease of discussion, this report will refer to both mergers and acquisitions as “mergers.”
97148 15 U.S.C. § 18. 15 U.S.C. § 18.
98149 United States v. Grinnell Corp., 384 U.S. 563, 576 (1966); Fraser v. Major League Soccer, LLC, 284 F.3d 47, 61 United States v. Grinnell Corp., 384 U.S. 563, 576 (1966); Fraser v. Major League Soccer, LLC, 284 F.3d 47, 61
(1st Cir. 2002); BRFHH Shreveport, LLC v. Willis Knighton Med. Ctr., 176 F. Supp. 3d 606, 619 (W.D. La. 2016).(1st Cir. 2002); BRFHH Shreveport, LLC v. Willis Knighton Med. Ctr., 176 F. Supp. 3d 606, 619 (W.D. La. 2016).
~~99 ELHAUGE, supra note 30, at 705.~~
~~100 DEP’T OF JUST. & FED. TRADE COMM’N, HORIZONTAL MERGER GUIDELINES § 6 (2010) [hereinafter “HORIZONTAL~~
~~MERGER GUIDELINES”].~~
~~101 Id. § 7.~~
~~102 SAGERS, supra note 49, at 293.~~
~~103 DANIEL A. CRANE, ANTITRUST 164 (2014).~~
~~104 DEP’T OF JUST. & FED. TRADE COMM’N, VERTICAL MERGER GUIDELINES § 4 (2020) [hereinafter “VERTICAL MERGER~~
~~GUIDELINES”].~~
~~105 Id.~~
~~106 Id.~~
~~107 Id. §§ 4-5.~~
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~~In litigation challenging horizontal and vertical mergers, the plaintiff bears the initial burden of~~
~~establishing a prima facie case that a merger will substantially lessen competition in the relevant~~
~~market.108 In horizontal-merger cases, plaintiffs can discharge this burden by establishing that a~~
~~merger would lead to undue levels of market concentration.109~~
~~Vertical-merger doctrine does not offer plaintiffs a similar shortcut, because vertical mergers do~~
~~not result in immediate changes in market share.110 Instead, plaintiffs challenging vertical mergers~~
~~must make a fact-specific showing that a transaction is likely to be anticompetitive.111 While the~~
~~case law on vertical mergers is thin, this prima facie case will often involve the concerns~~
~~discussed above: foreclosure, raising rivals’ costs, and access to competitively sensitive~~
~~information.112~~
~~If a merger plaintiff carries its initial burden, then the defendant must present evidence that the~~
prima facie case inaccurately predicts the merger’s competitive effects or discredit the evidence
~~underlying that case.113 For example, a defendant in a horizontal-merger case might argue that the~~
~~plaintiff’s proposed market is poorly defined, that the entry of other firms will discipline its~~
~~pricing power, or that the merger will create efficiencies that offset any anticompetitive effects.114~~
~~In a vertical-merger case, a defendant may contend that it lacks incentives to foreclose rivals, that~~
~~rivals have adequate alternative sources of supply or distribution, or that the merger would~~
~~produce efficiencies (e.g., by eliminating double marginalization).115~~
150 HORIZONTAL MERGER GUIDELINES, supra note 49, at § 6. 151 Id. § 7. 152 DANIEL A. CRANE, ANTITRUST 164 (2014). By allowing a downstream firm to access inputs at cost instead of paying a markup, vertical mergers may eliminate the “double marginalization” that occurs when two firms within a supply chain each mark-up their prices. DEP’T OF JUST. & FED. TRADE COMM’N, VERTICAL MERGER GUIDELINES § 6 (2020) [hereinafter “VERTICAL MERGER GUIDELINES”] (withdrawn by the FTC in September 2021). The elimination of double marginalization is a key procompetitive benefit that is often cited in defense of vertical mergers. See id. 153 VERTICAL MERGER GUIDELINES, supra note 152, at § 4. 154 Id. §§ 4-5. 155 ELHAUGE, supra note 38, at 811. 156 Id. at 812. 157 The elimination of potential competition is sometimes described as a horizontal theory of harm, because it involves the claim that a potential competitor would likely enter the relevant market or that market participants perceive the potential competitor as being likely to enter their market. CHRISTOPHER L. SAGERS, ANTITRUST 321 n.45 (3d ed. 2021). As discussed below, however, challenges based on these theories are evaluated under different standards than challenges to other types of horizontal mergers. Congressional Research Service 16 link to page 6 link to page 14 Antitrust Reform and Big Tech Firms Merger law has evolved significantly over the last 50 years. During the Warren Court era from the early 1950s through the 1960s, the Supreme Court heard 12 merger cases, siding with the plaintiff in each case where it reached the merits.158 Some of the Court’s decisions blocked small mergers in unconcentrated markets, based in part on a concern about stopping an incipient trend toward concentration and a desire to effectuate congressional intent to protect small businesses.159 In this period, courts were heavily influenced by an approach to industrial organization often called the “structure-conduct-performance” (SCP) paradigm, which held that market concentration tended to produce less competitive markets with higher prices.160 The impact of these theories was made clear in the Supreme Court’s 1963 decision in United States v. Philadelphia National Bank, which recognized a presumption of illegality for mergers that would result in a firm controlling “an undue percentage share of the relevant market” while significantly increasing market concentration.161 This “structural presumption” remains good law, but subsequent developments have chipped away at its strength. In its 1974 decision in United States v. General Dynamics Corp., the Supreme Court held that the defendant coal-mine operator had successfully rebutted the presumption with evidence that almost all of the acquired firm’s coal reserves were depleted or committed under long-term contracts.162 Lower court decisions later interpreted General Dynamics as demanding a more detailed inquiry into a merger’s competitive effects than was evident in the Warren Court’s merger decisions.163 This shift coincided with a wave of academic criticism directed at SCP theories. Among other things, SCP’s detractors argued that high levels of market concentration are often necessary for firms to achieve economies of scale and scope and that many concentrated markets perform competitively.164 Today, much of the action in merger enforcement takes place in the antitrust agencies rather than the courts. This is partly the result of Congress’s adoption of the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) in 1976, which created a pre-merger notification regime that allows the DOJ and FTC to review mergers exceeding certain numerical thresholds before they close.165 Since 1968, the agencies have published guidelines outlining their analytical approach to merger review, including their application of the structural presumption.166 Starting with the 1982 guidelines, the agencies have relied on the Herfindahl-Hirschman Index (HHI) measure of market 158 Eleanor Fox, Antitrust, Mergers, and the Supreme Court: The Politics of Section 7 of the Clayton Act, 26 MERCER L. REV. 389, 396-97 (1975). 159 E.g., United States v. Von’s Grocery Co., 384 U.S. 270, 278 (1966) (blocking a merger that would have resulted in the merged firm occupying a 7.5% market share, based on a concern “that a market marked . . . by both a continuous decline in the number of small businesses and a large number of mergers would slowly but inevitably gravitate from a market of many small competitors to one dominated by one or a few giants”); Brown Shoe Co. v. United States, 370 U.S. 294, 343-44 (1962) (blocking a merger with both horizontal and vertical elements, based in part on the fact that the integrated firm would be able to offer lower prices than unintegrated firms); see also FTC v. Procter & Gamble Co., 386 U.S. 568, 579 (1967) (unwinding a conglomerate transaction involving a large consumer-goods firm and the leading producer of household liquid bleach, based in part on a concern that economies of scope would disadvantage smaller rivals). 160 William E. Kovacic & Carl Shapiro, Antitrust Policy: A Century of Economic and Legal Thinking, 14 J. ECON. PERSP. 43, 52 (2000). 161 374 U.S. 321, 363-64 (1963). 162 415 U.S. 486, 508-11 (1974). 163 SULLIVAN, ET AL., supra note 26, at 464 n.76 (citing examples). 164 HOVENKAMP, FEDERAL ANTITRUST POLICY, supra note 94, at 544. 165 P.L. 94-435, 90 Stat. 1383 (1976). 166 In Philadelphia National Bank, the Supreme Court held that the presumption was triggered by a post-merger market share of 30%. 370 U.S. at 364. The Court did not address market-concentration thresholds, however. Congressional Research Service 17 link to page 6 link to page 6 link to page 6 link to page 9 link to page 6 link to page 6 Antitrust Reform and Big Tech Firms concentration in applying the presumption.167 Revisions to the guidelines in 2010 increased the minimum concentration levels at which the agencies regard horizontal mergers as potentially problematic.168 While the guidelines are not legally binding, courts often treat them as persuasive authority and appear to accord some significance to the relevant HHI thresholds.169 As discussed, the structural presumption can be rebutted—for example, with evidence that the proposed market is poorly defined or that market shares do not reflect a merger’s likely competitive effects; that the entry of other firms will discipline any pricing power; or that the merger will produce efficiencies that offset any anticompetitive effects.170 Upon rebuttal of a Upon rebuttal of a prima facie case, the burden of producing further evidence of anticompetitive case, the burden of producing further evidence of anticompetitive
harm shifts back to harm shifts back to the plaintiff and merges with the burden of persuasion.171 While the case law on vertical mergers is sparse,172 the most recent appellate decision reviewing a vertical deal employed a burden-shifting approach that is similar to the framework used to evaluate horizontal mergers.173 However, the court indicated that plaintiffs challenging vertical mergers cannot rely on the structural presumption to discharge their initial burden.174 Instead, the court explained that such plaintiffs must make a fact-specific showing that a transaction is likely to be anticompetitive,175 which will presumably often involve foreclosure concerns. The current state of merger law is something of an oddity. Although the Supreme Court’s 1960s merger decisions have not been formally overturned, they do not accurately reflect the “law on the ground” as applied by the antitrust agencies and the lower courts.176 Since the Warren Court, for example, merger doctrine has abandoned “non-economic” goals like the protection of small businesses.177 While structural evidence continues to play a role in merger analysis, its centrality 167 FRANCIS & SPRIGMAN, supra note 26, at 423. The HHI is a measure of market concentration calculated by summing the squares of each firm’s market share. Thus, a market with four firms that each occupy 25% of the market would have an HHI of 2,500 (252 + 252 + 252 + 252). 168 Id. 169 SULLIVAN, ET AL., supra note 26, at 500 n.41 (collecting cases). 170~~the plaintiff and merges with the burden of persuasion.116~~
~~Conglomerate Mergers~~
~~Conglomerate mergers are mergers that are neither horizontal nor vertical.117 Challenges to such~~
~~mergers are rare.118 One theory of harm in conglomerate cases, however, is particularly relevant~~
~~to tech markets: the elimination of potential competition.~~
Mergers between potential competitors can raise two types of concerns. First, if the perception
~~that a potential competitor may enter a market constrains a firm’s pre-merger pricing behavior,~~
~~then allowing the firm to acquire the potential competitor eliminates that constraint.119 In the~~

~~108 United States v. AT&T, Inc., 916 F.3d 1029, 1032 (D.C. Cir. 2019) (vertical merger); United States v. Baker~~
~~Hughes, Inc., 908 F.2d 981, 982-83 (D.C. Cir. 1990) (horizontal merger).~~
~~109 See, e.g., FTC v. H.J. Heinz Co., 246 F.3d 708, 715 (D.C. Cir. 2001).~~
~~110 AT&T, 916 F.3d at 1032.~~
~~111 Id.~~
~~112 VERTICAL MERGER GUIDELINES, supra note 104, at § 4.~~
~~113 United States v. Anthem, 855 F.3d 345, 349 (D.C. Cir. 2017).~~
~~114 Herbert J. Hovenkamp & Carl Shapiro, Horizontal Mergers, Market Structure, and Burdens of Proof, 127 YALE L.J.~~
~~1996, 1997 (2018).~~
~~115 VERTICAL MERGER GUIDELINES, supra note 104, at §§ 4, 6. By allowing a downstream firm to access inputs at cost~~
~~instead of paying a markup, vertical mergers may eliminate the “double marginalization” that occurs when two firms~~
~~within a supply chain each mark-up their prices. Id. § 6. The elimination of double marginalization is a key~~
~~procompetitive benefit that is often cited in defense of vertical mergers. See id.~~
~~116 Baker Hughes, 908 F.2d at 983.~~
~~117 ELHAUGE, supra note 30, at 811.~~
~~118 Id. at 812; SAGERS, supra note 49, at 321.~~
~~119 ELHAUGE, supra note 30, at 811.~~
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Herbert J. Hovenkamp & Carl Shapiro, Horizontal Mergers, Market Structure, and Burdens of Proof, 127 YALE L.J. 1996, 1997 (2018). The availability of an efficiencies defense in merger cases is not entirely settled. In the 1960s, the Supreme Court explicitly rejected such a defense and sometimes identified efficiencies as a reason to block mergers. See FRANCIS & SPRIGMAN, supra note 26, at 494-95. More recently, though, some lower courts have indicated that evidence of efficiencies can be used to rebut a prima facie showing of competitive harm. Id. at 496 n.688 (collecting cases). The merger guidelines also provide that certain merger-specific efficiencies may be cognizable. HORIZONTAL MERGER GUIDELINES, supra note 49, at § 10 (“The Agencies will not challenge a merger if cognizable efficiencies are of a character and magnitude such that the merger is not likely to be anticompetitive in any relevant market.”). To date, however, no federal court of appeals has concluded that evidence of efficiencies was sufficient to rebut a prima facie case of anticompetitive effects. FRANCIS & SPRIGMAN, supra note 26, at 499. 171 Baker Hughes, 908 F.2d at 983. 172 In 2018, the DOJ’s challenge to AT&T’s acquisition of Time Warner became the first vertical transaction litigated to judgment since the 1970s. Fruehauf Corp. v. FTC, 603 F.3d 345 (2d Cir. 1979). 173 United States v. AT&T, Inc., 916 F.3d 1029, 1032 (D.C. Cir. 2019). 174 Id. 175 Id. 176 SULLIVAN, ET AL., supra note 26, at 466 (noting the “quasi-irrelevance” of the Supreme Court in merger law). The Supreme Court has not issued a merits opinion in a merger case since 1975. United States v. Citizens & S. Nat’l Bank, 422 U.S. 86 (1975). 177 HERBERT HOVENKAMP, THE ANTITRUST ENTERPRISE: PRINCIPLE AND EXECUTION 208 (2005) [hereinafter “HOVENKAMP, ANTITRUST ENTERPRISE”] (“While antitrust casebooks continue to print 1960s-vintage merger decisions that have never been overruled, no one, not even federal judges and certainly not the government enforcement agencies, pay much attention to them. . . . It is not merely that Supreme Court decisions are not followed on technical grounds—(continued...) Congressional Research Service 18 link to page 10 link to page 14 Antitrust Reform and Big Tech Firms has diminished as regulators and courts also consider a broader range of factors that may illuminate a transaction’s competitive effects.178 That may be changing, however. In 2023, the DOJ and FTC released draft merger guidelines that appear to place more weight on structural considerations than previous iterations of the guidelines.179 It remains to be seen whether courts will follow the agencies in this regard, should the regulators finalize the guidelines in similar form. Mergers Involving Potential Competitors Some mergers involve firms that do not compete at the time of the transaction, but may compete in the future absent the merger. These mergers between potential competitors can raise two types of concerns. First, if the perception that a potential competitor may enter a market constrains a firm’s pre-merger pricing behavior, then allowing the firm to acquire the potential competitor eliminates that constraint. In the doctrine, this concern is known as the elimination of “perceived potential competition.”doctrine, this concern is known as the elimination of “perceived potential competition.”~~120~~
Second, if a potential competitor Second, if a potential competitor actually would have entered the relevant market, then a merger would have entered the relevant market, then a merger
would eliminate actual future competition, irrespective of whether the potential competitor would eliminate actual future competition, irrespective of whether the potential competitor
constrained pre-merger behavior.constrained pre-merger behavior.~~121~~ This concern is called the elimination of “actual potential This concern is called the elimination of “actual potential
competition.”competition.”~~122~~
The Supreme Court has held that the elimination of perceived potential competition may render a The Supreme Court has held that the elimination of perceived potential competition may render a
merger unlawful, but has not expressly recognized the elimination of actual potential competition merger unlawful, but has not expressly recognized the elimination of actual potential competition
as a viable theory of harm.as a viable theory of harm.~~123~~
United States v. Marine Bancorporation, Inc., 418 U.S. 602, 624-25 (1974). The Court has identified several requirements for a perceived-potential-competition claim. A The Court has identified several requirements for a perceived-potential-competition claim. A
plaintiff bringing such a claim must show thatplaintiff bringing such a claim must show that:
 • the relevant market is highly concentrated; the relevant market is highly concentrated;
 • the potential competitor has the “characteristics, capabilities, and economic the potential competitor has the “characteristics, capabilities, and economic
incentive to render it a perceived potential incentive to render it a perceived potential de novo entrant”; and entrant”; and
 • the potential competitor “in fact tempered oligopolistic behavior” by market the potential competitor “in fact tempered oligopolistic behavior” by market
participants.participants.~~124~~
Id. While the While the Supreme Court has declined to resolve the validity of the actual-potential-competition doctrine, Court has declined to resolve the validity of the actual-potential-competition doctrine,
it has explained that plaintiffs relying on that theory must establish thatit has explained that plaintiffs relying on that theory must establish that:
 • the relevant market is highly concentrated; the relevant market is highly concentrated;
 • the potential competitor has “feasible means” of entry other than through the the potential competitor has “feasible means” of entry other than through the
merger; andmerger; and
 • the potential competitor’s entry offers a “substantial likelihood” of the potential competitor’s entry offers a “substantial likelihood” of
deconcentrating the market or producing other significant procompetitive deconcentrating the market or producing other significant procompetitive
~~effects.125~~
benefits. Id. at 633. Lower courts have Lower courts have ~~taken different approaches to actual-potential-competition claims. While the~~
~~Eighth Circuit has accepted the theory,126 other courts have declined to resolve its viability.127~~
~~Lower courts are also divided on the evidentiary requirements in actual-potential-competition~~
~~cases. Some courts require plaintiffs to show that an actual~~adopted different evidentiary requirements in analyzing whether a firm is likely to enter the market absent a challenged transaction. The Fourth Circuit demands “clear proof” of entry but for the merger. FTC v. Atlantic Richfield Co., 549 F.2d 289, 294-95 (4th Cir. 1977). Others have required that the potential potential competitor “probably” or “would likely” enter the relevant market. Tenneco, Inc. v. FTC, 689 F.2d 346, 352 (2d Cir. 1982) (“would likely”); Yamaha Motor Co. v. FTC, 657 F.2d 971, 977 (8th Cir. 1981) (“probably”). Another has demanded a “reasonable probability” of entry, which the court construed to be more demanding than a “probability” or “more likely than not” test. Mercantile Tex. Corp. v. Bd. of Govs. of the Fed. Res. Sys., 638 F.2d 1255, 1268-69 (5th Cir. 1981). The impact of potential-competition doctrine has been fairly modest. Three decisions have found a merger unlawful based on the perceived-potential-competition theory, all of which also relied on the actual-potential-competition theory. ANTITRUST DEVELOPMENTS, supra note 55, at 398. the fundamental ideology of mergers has shifted dramatically over the last three decades and now embodies values that are inconsistent at the most fundamental level with those that the Supreme Court last articulated.”). 178 HOVENKAMP, FEDERAL ANTITRUST POLICY, supra note 94, at 544. 179 U.S. Antitrust Agencies Propose Sweeping Changes to Merger Guidelines—5 Key Things You Need to Know, WHITE & CASE LLP (July 20, 2023), https://www.whitecase.com/insight-alert/us-antitrust-agencies-propose-sweeping-changes-merger-guidelines-5-key-things-you. For an overview of the 2023 draft guidelines, see CRS Legal Sidebar LSB11027, Antitrust Agencies Release Draft Merger Guidelines and Propose HSR Rule Changes, by Peter J. Benson, Chris D. Linebaugh, and Alexander H. Pepper. Congressional Research Service 19 link to page 21 link to page 5 Antitrust Reform and Big Tech Firms Theoretical Approaches to Antitrust As the above discussion makes clear, antitrust doctrine has changed significantly over time, often in response to shifts in political ideology and economic theory. Congress has played a limited role in this evolution; the language of the core antitrust statutes has not meaningfully changed since the Celler-Kefauver Act amended Section 7 of the Clayton Act in 1950.180 Because the flexible nature of the antitrust laws gives the judiciary broad powers to shape competition policy based on prevailing economic and political thinking,181 this section provides a brief overview of the leading theoretical approaches to antitrust and their historical influence. As discussed, SCP theories exerted a strong influence on antitrust policy in the middle of the 20th century.182 This approach to industrial organization was developed by scholars working in a tradition often referred to as the Harvard School, which posited a close causal link between market concentration, firm conduct, and competitive performance.183 In particular, the SCP literature held that there was a tight connection between high levels of market concentration and certain undesirable outcomes, such as high price-cost margins.184 For much of antitrust history—including during the heyday of the SCP paradigm—“non-economic” goals also played a major role in shaping antitrust doctrine. These goals included the protection of small businesses, the dispersion of economic power, the preservation of economic freedom, and the elimination of concentrated political power.185 From the 1940s through the 1960s, structuralist economic theories and the above normative concerns provided the theoretical architecture for a highly interventionist approach to antitrust, judged by today’s standards. As discussed, the Warren Court’s merger jurisprudence was quite restrictive, invalidating small mergers based in part on a desire to “promote competition through the protection of viable, small, locally owned business,” even if “occasional higher costs and prices might result from the maintenance of fragmented industries and markets.”186 Conduct cases during this era reflected similar attitudes. In the federal government’s monopolization case against Alcoa, for example, Judge Learned Hand of the Second Circuit reasoned that the Sherman Act was motivated in part by a belief that “great industrial consolidations are inherently undesirable, regardless of their economic results.”187 He thus construed the statute as an attempt to “put an end to great aggregations of capital because of the helplessness of the individual before them.”188 Based on these principles, the Second Circuit held 180 Pub. L. No. 81-899, 64 Stat. 1125 (1950). 181~~competitor “probably” would~~
~~have entered the relevant market or use some variation of that language.128 Others have required a~~

~~120 Id.~~
~~121 Id.~~
~~122 Id. Arguably, the elimination of potential competition is a horizontal theory of harm, because it involves the claim~~
~~that a potential competitor would likely enter the acquirer’s market or that the acquirer perceives the potential~~
~~competitor as being likely to enter its market. SAGERS, supra note 49, at 321 n.45. As discussed above, however,~~
~~challenges based on these theories are evaluated under different standards than challenges to other types of horizontal~~
~~mergers.~~
~~123 United States v. Marine Bancorporation, Inc., 418 U.S. 602, 624-25 (1974).~~
~~124 Id.~~
~~125 Id. at 633.~~
~~126 Yamaha Motor Co. v. FTC, 657 F.2d 971, 977 (8th Cir. 1981).~~
~~127 Fraser v. Major League Soccer, LLC, 284 F.3d 47, 61 (1st Cir. 2002); Tenneco, Inc. v. FTC, 689 F.2d 346, 355~~
~~(2d Cir. 1982); FTC v. Atl. Richfield Co., 549 F.2d 289, 294 (4th Cir. 1977).~~
~~128 FTC v. Steris Corp., 133 F. Supp. 3d 962, 978 (N.D. Ohio 2015); see also Yamaha Motor, 657 F.2d at 977~~
~~(“probably”); Tenneco, 689 F.2d at 355 (“would likely”).~~
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~~“reasonable probability” of entry129—a standard that one court has construed as more demanding~~
~~than a mere “probability” or “more likely than not” test.130 Another court has demanded “clear~~
~~proof” of entry but for the merger.131 Some courts have further required that the potential~~
~~competitor be one of only a few potential entrants.132~~
~~The Goals of Antitrust~~
~~As the above discussion makes clear, the text of the antitrust laws is very general. The operative~~
~~phrases of the core statutes—“restraint of trade,” “monopolize,” and “substantially . . . lessen~~
~~competition”—are generic and undefined. One commentator has observed that “[n]owhere else in~~
~~the United States code are so few words used to regulate so much.”133 Many scholars also agree~~
~~that the relevant legislative history offers little guidance as to the content of the key statutory~~
~~prohibitions.134~~
~~The courts have responded to this indeterminacy by treating the antitrust laws as common-law~~
~~statutes that vest the judiciary with broad powers to shape competition policy in response to new~~
~~economic learning and conditions.135 In addition to giving judges the power to craft specific~~
~~doctrinal rules, the flexibility of the antitrust laws leaves courts with a need to identify a~~
~~normative benchmark to guide decision-making.136~~
~~The relevant lodestar has changed in the course of antitrust history. For much of the 20th century,~~
~~courts interpreted the antitrust laws as serving various goals, including the dispersion of economic~~
~~power, the protection of small businesses, the preservation of open markets and economic liberty,~~
~~the elimination of concentrated political power, and the minimization of wealth transfers from~~
~~consumers and producers to large firms.137~~

~~129 Mercantile Tex. Corp. v. Bd. of Govs. of the Fed. Res. Sys., 638 F.2d 1255, 1268-69 (5th Cir. 1981); United States~~
~~v. Siemens Corp., 621 F.2d 499, 506 (2d Cir. 1980).~~
~~130 Mercantile Tex. Corp., 638 F.2d at 1268-69; see also Order Denying Plaintiff’s Motion for Preliminary Injunction at~~
~~41, FTC v. Meta Platforms Inc., No. 5:22-cv-04325 (N.D. Cal. Jan. 31, 2023) (adopting the “reasonable probability”~~
~~standard, as clarified by the Fifth Circuit to mean “a likelihood noticeably greater than fifty percent”).~~
~~131 Atlantic Richfield Co., 549 F.2d at 300.~~
~~132 E.g., Mercantile Tex. Corp., 638 F.2d at 1267.~~
~~133 Herbert Hovenkamp, The Text of the Antitrust Laws 3 (U. Penn. Inst. for L. & Econ. Rsch. Paper No. 23-01, 2023),~~
~~https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4277914.~~
~~134 Daniel A. Crane, Antitrust Antitextualism, 96 NOTRE DAME L. REV. 1205, 1206 n.2 (2021); see also United States v.~~
~~Tans-Mo. Freight Ass’n, 166 U.S. 290, 318 (1897) (“Looking simply at the history of the [Sherman] bill from the time~~
~~it was introduced in the senate until it was finally passed, it would be impossible to say what were the views of a~~
~~majority of the members of each house in relation to the meaning of the act. . . . All that can be determined from the~~
~~debates and reports is that various members had various views, and we are left to determine the meaning of this act, as~~
~~we determine the meaning of other acts, from the language used therein.”).~~
~~135~~ See, e.g., Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 899 (2007) (“From the beginning the , Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 899 (2007) (“From the beginning the
Court has treated the Sherman Act as a common-law statute. . . . Just as the common law adapts to modern Court has treated the Sherman Act as a common-law statute. . . . Just as the common law adapts to modern
understanding and greater experience, so too does the Sherman Act’s prohibition on ‘restraint[s] of trade’ evolve to understanding and greater experience, so too does the Sherman Act’s prohibition on ‘restraint[s] of trade’ evolve to
meet the dynamics of present economic conditions.”) (brackets in original); Nat’l Soc’y of Pro. Eng’rs v. United States, meet the dynamics of present economic conditions.”) (brackets in original); Nat’l Soc’y of Pro. Eng’rs v. United States,
435 U.S. 679, 688 (1978) (explaining that Congress “expected the courts to give shape to [the Sherman Act’s] broad 435 U.S. 679, 688 (1978) (explaining that Congress “expected the courts to give shape to [the Sherman Act’s] broad
mandate by drawing on common-law tradition”). mandate by drawing on common-law tradition”).
~~136 See, e.g., ROBERT H. BORK, THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF 50 (1978) (“[A]ntitrust policy~~
~~cannot be made rational until we are able to give a firm answer to one question: What is the point of the law—what are~~
~~its goals? Everything else follows from the answer we give. . . . Only when the issue of goals has been settled is it~~
~~possible to frame a coherent body of substantive antitrust rules.”); Stucke, supra note 1, at 557 (making a similar~~
~~point).~~
~~137 See, e.g., Stucke, supra note 1, at 560-62; Eleanor M. Fox, Modernization of Antitrust: A New Equilibrium, 66~~
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~~In a 1945 monopolization case, for example, Judge Learned Hand remarked that “great industrial~~
~~consolidations are inherently undesirable, regardless of their economic results,” noting that one of~~
~~the purposes of the Sherman Act was to “put an end to great aggregations of capital because of~~
~~the helplessness of the individual before them.”138~~
~~The Supreme Court embraced similar views during the relevant period. In a 1962 merger~~
~~decision, it explained that the Clayton Act was intended “to promote competition through the~~
~~protection of viable, small, locally owned business,” even if “occasional higher costs and prices~~
~~might result from the maintenance of fragmented industries and markets.”139~~
Applying these principles, mid-century courts condemned a wide range of practices as per se
~~Sherman Act violations,140 took a skeptical approach to vertical integration,141 and blocked~~
~~horizontal mergers that would be unlikely to draw the attention of regulators today.142~~
~~In the 1970s and 1980s, things began to change. During that time, courts abandoned small~~
~~business protectionism and the socio-political effects of concentrated economic power as salient~~
~~considerations in antitrust decision-making.143 In place of the mid-century “multiple goals”~~
~~approach, the concept of consumer welfare came to occupy a central place in antitrust doctrine,144~~
~~though its precise meaning and accuracy as a descriptive principle remain contested.145~~

~~CORNELL L. REV. 1140, 1182 (1981).~~
~~138 United States v. Aluminum Co. of Am., 148 F.2d 416, 428 (2d Cir. 1945).~~
~~139 Brown Shoe Co. v. United States, 370 U.S. 294, 344 (1962).~~
~~140~~182 See Kovacic & Shapiro, supra note 160, at 52. 183 ROGER VAN DEN BERGH, COMPARATIVE COMPETITION LAW AND ECONOMICS 33-36 (2017). 184 Id. at 35-36. 185 See, e.g., Stucke, supra note 1, at 560-62; Eleanor M. Fox, Modernization of Antitrust: A New Equilibrium, 66 CORNELL L. REV. 1140, 1182 (1981). 186 Brown Shoe Co. v. United States, 370 U.S. 294, 344 (1962). 187 United States v. Aluminum Co. of Am., 148 F.2d 416, 428 (2d Cir. 1945) (Hand, J.). 188 Id. Congressional Research Service 20 link to page 24 link to page 25 link to page 22 link to page 12 Antitrust Reform and Big Tech Firms that Alcoa violated Section 2 by expanding its capacity in ways that deterred entry.189 In its Section 1 cases during this period, the Supreme Court likewise condemned a wide range of conduct as per se illegal.190 The 1970s witnessed a marked shift in theory and doctrine. As discussed, beginning in the 1950s, lawyers and economists affiliated with what came to be known as the Chicago School challenged much of prevailing antitrust thinking.191 Chicago School scholars criticized SCP theories on a variety of grounds. Among other things, they argued that markets tend to self-correct; that high levels of concentration often reflect growth by the most efficient firms; and that many business practices that attracted antitrust scrutiny had efficiency-based rationales.192 The Chicago School’s most influential contribution, however, was its prescription that antitrust should be limited to promoting economic welfare.193 An antitrust system that instead committed itself to a series of often-conflicting social objectives, Chicago School scholars claimed, offered no principled method for distinguishing anticompetitive behavior from permissible conduct.194 Chicago’s empirical claims did not go unchallenged. Scholars working in the “Post-Chicago” tradition generally embraced the Chicago School’s focus on economic goals, but developed theories of anticompetitive harm that were not present in the Chicago literature.195 Many of these Post-Chicago models highlighted the possibility that dominant firms could employ strategic behavior to raise their rivals’ costs, relying heavily on game theory.196 Another group of academics from the so-called “modern Harvard School” tended to fall somewhere between the Chicago School and the ideology of mid-20th century antitrust, focusing on the administrability of antitrust doctrine and the institutional limitations of courts.197 Like Post-Chicago scholars, the modern Harvard School endorsed the Chicago view that the ultimate purpose of the antitrust laws is to promote economic welfare.198 The three approaches differ primarily in their empirical claims about market functioning and the competence of courts to remedy market failures.199 In general, the Chicago School and the modern Harvard School have had the greatest impact on the shape of current doctrine.200 Since the 1970s, the Supreme Court has overturned several 189 Id. at 431 (“It was not inevitable that [Alcoa] should always anticipate increases in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field. It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connections and the elite of personnel.”). 190 E.g., United States v. Topco Assocs., Inc., 405 U.S. 596 (1972) (joint venture involving territorial restraints); , United States v. Topco Assocs., Inc., 405 U.S. 596 (1972) (joint venture involving territorial restraints);
Albrecht v. Herald Co., 390 U.S. 145 (1968) (maximum resale price maintenance); United States v. Arnold, Schwinn & Albrecht v. Herald Co., 390 U.S. 145 (1968) (maximum resale price maintenance); United States v. Arnold, Schwinn &
Co., 388 U.S. 365 (1967) (vertical territorial restraints)Co., 388 U.S. 365 (1967) (vertical territorial restraints); International Salt Co., Inc. v. United States, 332 U.S. 392 (1947) (tying). 191 See, e.
~~141 E.g., Brown Shoe Co., 370 U.S. at 332-34.~~
~~142 E.g., United States v. Von’s Grocery Co., 384 U.S. 270 (1966) (blocking a merger that would have resulted in the~~
~~merged firm occupying a 7.5 percent market share in an unconcentrated market).~~
~~143 See, e.g., Joshua D. Wright & Douglas H. Ginsburg, The Goals of Antitrust: Welfare Trumps Choice, 81 FORDHAM~~
~~L. REV. 2405, 2405-06 (2013).~~
~~144~~ .g., Herbert Hovenkamp & Fiona Scott Morton, Framing the Chicago School of Antitrust Analysis, 168 U. PA. L. REV. 1843 (2020). 192 VAN DEN BERGH, supra note 183, at 45-49. 193 See Richard Schmalensee, Thoughts on the Chicago Legacy in U.S. Antitrust, in HOW THE CHICAGO SCHOOL OVERSHOT THE MARK: THE EFFECT OF CONSERVATIVE ECONOMIC ANALYSIS ON U.S. ANTITRUST 11, 12-14 (Robert Pitofsky ed. 2008); RICHARD A. POSNER, ANTITRUST LAW ix (2d ed. 2001). 194 Schmalensee, supra note 193, at 12. 195 Christopher S. Yoo, The Post-Chicago Antitrust Revolution: A Retrospective, 168 U. PA. L. REV. 2145, 2160-61 (2020). 196 Id. 197 HOVENKAMP, ANTITRUST ENTERPRISE, supra note 177, at 37-38, 45-56. 198 Id. at 31. 199 Id. 200 See Kovacic, supra note 70. Congressional Research Service 21 link to page 9 link to page 5 Antitrust Reform and Big Tech Firms decisions establishing per se Section 1 liability for certain categories of conduct201 and established restrictive standards for various types of monopolization claims.202 Similarly, the lower courts and the antitrust agencies have de-emphasized structural merger analysis in favor of more detailed inquiries into the competitive effects of individual transactions.203 Modern antitrust doctrine has also abandoned explicit consideration of “non-economic” goals like small business protectionism and the sociopolitical effects of concentrated economic power.204 Since the 1970s, the Supreme Court has repeatedly described the antitrust laws as being principally concerned with Since the 1970s, the Supreme Court has repeatedly described the antitrust laws as being principally concerned with
the protection of consumers. Seethe economic welfare of consumers.205 This proposition—often called the “consumer welfare standard”—has generated an enormous amount of scholarly attention, especially in recent years. While there is disagreement about what the standard does and should mean in practice,206 contemporary doctrine clearly recognizes economic welfare as the lodestar of antitrust analysis.207 Over the past decade or so, this economic orientation has been criticized by a group of academics and policymakers often described as “Neo-Brandeisians.” Members of this movement have criticized much of existing antitrust doctrine as unduly permissive and called for increased 201 Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007) (minimum resale price maintenance); State Oil Co. v. Khan, 522 U.S. 3 (1997) (maximum resale price maintenance); Cont’l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977) (vertical territorial restraints). 202 Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438 (2009) (price squeezes); Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 549 U.S. 312 (2007) (predatory buying); Verizon Commc’ns Inc. v. L. Offs. of Curtis V. Trinko, LLP, 540 U.S. 398 (2004) (refusals to deal); Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993) (predatory pricing). 203 See, e.g., United States v. Baker Hughes, Inc., 908 F.2d 981 (D.C. Cir. 1990); HORIZONTAL MERGER GUIDELINES, supra note 49, at § 5.3. 204 See, e.g., Joshua D. Wright & Douglas H. Ginsburg, The Goals of Antitrust: Welfare Trumps Choice, 81 FORDHAM L. REV. 2405, 2405-06 (2013). 205 NCAA v. Alston, 141 S. Ct. 2141, 2151 (2021); Ohio v. Am. Express Co., 138 S. Ct. NCAA v. Alston, 141 S. Ct. 2141, 2151 (2021); Ohio v. Am. Express Co., 138 S. Ct.
2274, 2284 (2018); Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 886 (2007); Weyerhaeuser Co. v. 2274, 2284 (2018); Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 886 (2007); Weyerhaeuser Co. v.
Ross-Simmons Hardwood Lumber Co., 549 U.S. 312, 324 (2007); Brooke Grp. Ltd. v. Brown & Williamson Tobacco Ross-Simmons Hardwood Lumber Co., 549 U.S. 312, 324 (2007); Brooke Grp. Ltd. v. Brown & Williamson Tobacco
Corp., 509 U.S. 209, 224 (1993); Jefferson Par. Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 15 (1984); NCAA v. Bd. of Corp., 509 U.S. 209, 224 (1993); Jefferson Par. Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 15 (1984); NCAA v. Bd. of
Regents of Univ. of Okla., 468 U.S. 85, 107 (1984); Reiter v. Sonotone Corp., 442 U.S. 330, 343 (1979); Regents of Univ. of Okla., 468 U.S. 85, 107 (1984); Reiter v. Sonotone Corp., 442 U.S. 330, 343 (1979); see also John John
B. Kirkwood & Robert H. Lande, B. Kirkwood & Robert H. Lande, The Fundamental Goal of Antitrust: Protecting Consumers, Not Increasing
Efficiency, 84 NOTRE DAME L. REV. 191, 219-24 (2008) (collecting lower court cases embracing the consumer-welfare , 84 NOTRE DAME L. REV. 191, 219-24 (2008) (collecting lower court cases embracing the consumer-welfare
~~standard); ANTITRUST MODERNIZATION COMM’N, REPORT AND RECOMMENDATIONS 35 (Apr. 2007) (“For the last few~~
~~decades courts, agencies, and antitrust practitioners have recognized consumer welfare as the unifying goal of antitrust~~
~~law.”).~~
~~145~~standard). 206 There are several issues here. First, Robert Bork There are several issues here. First, Robert Bork ~~used the term “consumer welfare” to refer to a total-welfare~~
~~standard that allows producer gains to offset consumer losses~~—an influential Chicago School academic and later a federal judge—used the term “consumer welfare” to refer to a “total welfare” standard that focuses on the sum of producer and consumer surplus, while many commentators instead use the term , while many commentators instead use the term
“consumer welfare” to “consumer welfare” to ~~mean~~refer to a standard that focuses only on consumer surplus. consumer surplus. See, e.g., Barak Y. Orbach, , Barak Y. Orbach, The Antitrust Consumer Welfare Paradox, ,
7 J. COMPETITION L. & ECON. 133, 142-49 (2010). Both versions of the “consumer welfare” standard have supporters. 7 J. COMPETITION L. & ECON. 133, 142-49 (2010). Both versions of the “consumer welfare” standard have supporters.
See Roger D. Blair & D. Daniel Sokol, Roger D. Blair & D. Daniel Sokol, Welfare Standards in U.S. and E.U. Antitrust Enforcement, 81 FORDHAM L. , 81 FORDHAM L.
REV. 2497 (2013) (favoring a total-welfare standard); Steven C. Salop, REV. 2497 (2013) (favoring a total-welfare standard); Steven C. Salop, ~~Question~~Question: : What Is the Real and Proper Antitrust
Welfare Standard? Answer: The TrueTrue Consumer Welfare Standard, 22 LOY. CONSUMER L. REV. 336 (2010) (favoring a , 22 LOY. CONSUMER L. REV. 336 (2010) (favoring a
consumer-surplus standard). Second, the extent to which the consumer-welfare standard recognizes harms that consumer-surplus standard). Second, the extent to which the consumer-welfare standard recognizes harms that sellers
suffer from anticompetitive conduct remains the subject of ongoing discussion. suffer from anticompetitive conduct remains the subject of ongoing discussion. See, e.g., Herbert J. Hovenkamp, , Herbert J. Hovenkamp, Is
Antitrust’s Consumer Welfare Principle Imperiled?, 45 J. CORP. L. 101, 113-15 (2019); C. Scott Hemphill & Nancy L. , 45 J. CORP. L. 101, 113-15 (2019); C. Scott Hemphill & Nancy L.
Rose, Rose, Mergers That Harm Sellers, 127 YALE L.J. 2078 (2018). Third, some commentators have argued that the , 127 YALE L.J. 2078 (2018). Third, some commentators have argued that the
consumer-welfare standard does not represent an accurate description of current antitrust doctrine for other reasons. consumer-welfare standard does not represent an accurate description of current antitrust doctrine for other reasons.
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~~Since the consumer-welfare revolution, courts have pared back some of the more interventionist~~
~~elements of mid-century antitrust. For example, the Supreme Court has overturned several~~
~~decisions establishing per se Section 1 liability for certain categories of conduct146 and~~
~~established restrictive standards for various types of monopolization claims.147 In a similar vein,~~
~~lower courts and the antitrust agencies have de-emphasized structural merger analysis in favor of~~
~~more detailed inquiries into the competitive effects of individual transactions.148~~
~~These shifts have generated controversy.149 The chair of the FTC and the Assistant Attorney~~
~~General for the DOJ’s Antitrust Division have both criticized the consumer-welfare standard and~~
~~advocated replacing it with a focus on the “competitive process.”150 In academic work, the FTC’s~~
~~chair has specifically emphasized the consumer-welfare standard’s alleged shortcomings with~~
~~respect to large technology platforms.151 Other commentators have criticized several applications~~
~~of the consumer-welfare standard as unduly permissive, but have defended the standard itself.152~~
~~These issues are discussed in greater detail later in this report.153~~
~~The Big Tech Firms: A Summary of Selected~~
~~Antitrust Allegations~~
~~The Big Tech firms have achieved tremendous financial success. As of the publication of this~~
~~report, the combined market capitalization of Meta, Alphabet (Google’s parent), Amazon, and~~
~~Apple is more than $5 trillion—a figure that exceeds the value of most national equity markets.154~~

E.g., Gregory J. Werden, , Gregory J. Werden, Antitrust’s Rule of Reason: Only Competition Matters, 79 ANTITRUST L.J. 713, 713, 743 , 79 ANTITRUST L.J. 713, 713, 743
(2014) (arguing that “the rule of reason focuses solely on how a challenged restraint affects the competitive process,” (2014) (arguing that “the rule of reason focuses solely on how a challenged restraint affects the competitive process,”
and that antitrust protects consumer welfare by protecting the “competitive process”); and that antitrust protects consumer welfare by protecting the “competitive process”); see also DEVLIN, DEVLIN, supra no note 10,
at 254-68 (contending that the consumer-welfare standard is descriptively inaccurate in several respects). at 254-68 (contending that the consumer-welfare standard is descriptively inaccurate in several respects).
~~146 Leegin, 551 U.S. 877 (minimum resale price maintenance); State Oil Co. v. Khan, 522 U.S. 3 (1997) (maximum~~
~~resale price maintenance); Cont’l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977) (vertical territorial restraints).~~
~~147 Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438 (2009) (price squeezes); Weyerhaeuser, 549 U.S. 312~~
~~(predatory buying); Verizon Commc’ns Inc. v. L. Offs. of Curtis V. Trinko, LLP, 540 U.S. 398 (2004) (refusals to~~
~~deal); Brooke Grp., 509 U.S. 209 (predatory pricing).~~
~~148 See, e.g., United States v. Baker Hughes, Inc., 908 F.2d 981 (D.C. Cir. 1990); HORIZONTAL MERGER GUIDELINES,~~
supra note 100, at § 5.3.
~~149 For a collection of essays—many of them critical—on various aspects of these changes in antitrust theory and~~
~~doctrine, see HOW THE CHICAGO SCHOOL OVERSHOT THE MARK: THE EFFECT OF CONSERVATIVE ECONOMIC ANALYSIS~~
~~ON U.S. ANTITRUST (Robert Pitofsky ed. 2008). For a sympathetic account, see Elyse Dorsey, et al.,~~ ~~Consumer Welfare~~
~~& the Rule of Law: The Case Against the New Populist Antitrust Movement, 47 PEPPERDINE L. REV. 861 (2020).~~
~~150 Khan, Amazon’s Antitrust Paradox, supra note 57, at 744-46; Assistant Att’y Gen. Jonathan Kanter Delivers~~
~~Remarks at New York City Bar Association’s Milton Handler Lecture (May 18, 2022),~~
~~https://www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-delivers-remarks-new-york-city-bar-~~
~~association.~~
~~151 Khan, Amazon’s Antitrust Paradox, supra note 57, at 716-17.~~
~~152 See, e.g.,~~ ~~The Consumer Welfare Standard in Antitrust: Outdated or a Harbor in a Sea of Doubt?: Hearing Before~~
~~the Subcomm. on Antitrust, Competition & Consumer Rights~~ of the S. Comm. on the Judiciary, (2017) (testimony of
~~Diana Moss, President, Am. Antitrust Inst.), https://www.judiciary.senate.gov/imo/media/doc/12-13-~~
~~17%20Moss%20Testimony.pdf [hereinafter “Moss Testimony”]; id. (statement of Carl Shapiro, Professor, Haas School~~
~~of Business at Univ. of Cal. at Berkeley), https://www.judiciary.senate.gov/imo/media/doc/12-13-~~
~~17%20Shapiro%20Testimony.pdf [hereinafter “Shapiro Testimony”].~~
~~153 See infra “Substantive Antitrust Doctrine.”~~
~~154 See Largest Companies by Market Cap, COMPANIESMARKETCAP (last visited Mar. 15, 2023),~~
~~https://companiesmarketcap.com/; Largest Stock Exchange Operators Worldwide as of October 2022, By Market~~
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207 See, e.g., ANTITRUST MODERNIZATION COMM’N, REPORT AND RECOMMENDATIONS 35 (Apr. 2007) (“For the last few decades courts, agencies, and antitrust practitioners have recognized consumer welfare as the unifying goal of antitrust law.”). Congressional Research Service 22 link to page 52 link to page 5 Antitrust Reform and Big Tech Firms attention to some of the “non-economic” goals that played a more prominent role in earlier periods of antitrust history.208 The Neo-Brandeisian movement’s prescriptions are discussed in greater detail below.209 The Big Tech Firms: A Summary of Selected Antitrust Allegations The Big Tech firms have achieved tremendous financial success. As of the publication of this report, the combined market capitalization of Meta, Alphabet (Google’s parent), Amazon, and Apple is more than $6.6 trillion—a figure that exceeds the value of all but the largest national equity markets.210 While some have emphasized the quality of the firms’ offerings as the primary driver of their While some have emphasized the quality of the firms’ offerings as the primary driver of their
ascent,ascent,~~155~~211 others have alleged that Big Tech has obtained and cemented monopoly power through others have alleged that Big Tech has obtained and cemented monopoly power through
anticompetitive conduct.anticompetitive conduct.~~156~~212
This section of the report reviews selected antitrust allegations against the Big Tech firms. This section of the report reviews selected antitrust allegations against the Big Tech firms.
Meta Platforms
Meta describes itself as a company that builds technology that “helps people connect, find Meta describes itself as a company that builds technology that “helps people connect, find
communities, and grow businesses.”communities, and grow businesses.”~~157~~213 More specifically, Meta offers a “family of apps” related More specifically, Meta offers a “family of apps” related
to social networking and messaging.to social networking and messaging.~~158~~214 This family of apps consists of This family of apps consists of:
• Facebook (a social network); Facebook (a social network);
• Instagram (a photo-sharing platform); Instagram (a photo-sharing platform);
• Messenger (a messaging app for Facebook users); and Messenger (a messaging app for Facebook users); and
• WhatsApp (a messaging app). WhatsApp (a messaging app).~~159~~
~~In October 2022, Meta reported that Facebook had 1.98 billion daily active users and 2.96 billion~~
~~monthly active users.160 The company’s family of apps reportedly features 2.93 billion daily~~
~~active people and 3.71 billion monthly active people.161~~
~~Allegations of Market Power~~
~~Some observers have argued that Meta possesses significant market power in the market for~~
~~social networking.162 The Federal Trade Commission (FTC) shares that view. In an ongoing~~
~~monopolization lawsuit, the Commission has alleged that Meta has held monopoly power in the~~
~~market for “personal social networking services” (PSNS) since at least 2011.163 To support such~~

215 208 The Neo-Brandeisian movement derives its name from Louis Brandeis, a former Associate Justice of the Supreme Court who was also a proponent of vigorous antitrust enforcement and a critic of large corporations. See Lina M. Khan, The New Brandeis Movement: America’s Antimonopoly Debate, 9 J. EURO. COMPETITION L. & PRACTICE 131 (2018). 209 See infra “Revisiting the Goals of Antitrust: The Neo-Brandeisian Movement.” 210 See Largest Companies by Market Cap, COMPANIESMARKETCAP (last visited Nov. 6, 2023), https://companiesmarketcap.com/; Largest Stock Exchange Operators Worldwide as of October 2022, By Market Capitalization of Listed Companies, STATISTA (Jan. 2023), https://www.statista.com/statistics/270126/largest-stock-Capitalization of Listed Companies, STATISTA (Jan. 2023), https://www.statista.com/statistics/270126/largest-stock-
exchange-operators-by-market-capitalization-of-listed-companies/; Market Capitalization of Listed Domestic exchange-operators-by-market-capitalization-of-listed-companies/; Market Capitalization of Listed Domestic
Companies, THE WORLD BANK (last visited Mar. 15, 2023), https://data.worldbank.org/indicator/CM.MKT.LCAP.CD. Companies, THE WORLD BANK (last visited Mar. 15, 2023), https://data.worldbank.org/indicator/CM.MKT.LCAP.CD.
~~155~~211 E.g., , Investigation into the State of Competition in Digital Markets, Subcomm. on Antitrust, Commercial, & Admin.
L. of H. Comm. on the Judiciary (May 11, 2020) (statement of Randal C. Picker, James Parker Distinguished Service (May 11, 2020) (statement of Randal C. Picker, James Parker Distinguished Service
Prof. of Law, The Univ. of Chi. L. Sch. at 34), https://picker.uchicago.edu/PickerHouseStatement.100.pdf. Prof. of Law, The Univ. of Chi. L. Sch. at 34), https://picker.uchicago.edu/PickerHouseStatement.100.pdf.
~~156~~212 E.g., HJC REPORT, , HJC REPORT, supra no note 11, at 12-17. at 12-17.
~~157~~213 Meta Platforms, Inc., Annual Report (Form 10-K) at 7 (Feb. Meta Platforms, Inc., Annual Report (Form 10-K) at 7 (Feb. ~~3, 2022).~~
~~158~~2, 2023). 214 Id. Meta also produces augmented and virtual reality products via its Reality Labs division. Id. at 8. 215 Id. at 7. Congressional Research Service 23 link to page 5 link to page 5 link to page 28 link to page 28 link to page 28 link to page 28 Antitrust Reform and Big Tech Firms In October 2023, Meta reported that Facebook had 2.09 billion daily active users and 3.05 billion monthly active users.216 The company’s family of apps reportedly features 3.14 billion daily active people and 3.96 billion monthly active people.217 Allegations of Market Power Some observers have argued that Meta possesses significant market power in the market for social networking.218 The Federal Trade Commission (FTC) shares that view. In an ongoing monopolization lawsuit, the Commission alleges that Meta has held monopoly power in the market for “personal social networking services” (PSNS) since at least 2011.219 To support such ~~Id. Meta also produces augmented and virtual reality products via its Reality Labs division. See Eric Rosenbaum,~~
Why Reality Labs Will Keep Spending Billions Even as Meta Makes the Biggest Cuts in Its History, CNBC (Nov. 17,
~~2022), https://www.cnbc.com/2022/11/17/why-reality-labs-will-keep-losing-billions-even-as-meta-makes-big-~~
~~cuts.html.~~
~~159 Meta Platforms, Inc., Annual Report at 7.~~
~~160 Meta Platforms, Inc., Quarterly Report (Form 10-Q) at 33 (Oct. 27, 2022).~~
~~161 Id.~~
~~162 HJC REPORT, supra note 11, at 133; ONLINE PLATFORMS AND DIGITAL ADVERTISING: MARKET STUDY FINAL REPORT,~~
~~U.K. COMPETITION & MKTS AUTHORITY 146 (July 1, 2020),~~
~~https://assets.publishing.service.gov.uk/media/5fa557668fa8f5788db46efc/Final_report_Digital_ALT_TEXT.pdf~~
~~[hereinafter “CMA REPORT”]; Fiona M. Scott Morton & David C. Dinielli,~~ ~~Roadmap for an Antitrust Case Against~~
~~Facebook, OMIDYAR NETWORK 11-15 (June 2020), https://www.omidyar.com/wp-content/uploads/2020/06/Roadmap-~~
~~for-an-Antitrust-Case-Against-Facebook.pdf; DIGITAL PLATFORMS INQUIRY: FINAL REPORT, AUSTRALIAN COMPETITION~~
~~& CONSUMER COMM’N 9 (June 2019), https://www.accc.gov.au/system/files/Digital%20platforms%20inquiry%20-~~
~~%20final%20report.pdf [hereinafter “ACCC REPORT”].~~
~~163 Substitute Amended Complaint for Injunctive and Other Equitable Relief ¶ 164, FTC v. Facebook, Inc., No.~~
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claims, Meta’s critics have argued that the firm has persistently maintained a large market share claims, Meta’s critics have argued that the firm has persistently maintained a large market share
and benefited from substantial entry barriers, including powerful network effects and high and benefited from substantial entry barriers, including powerful network effects and high
switching costs.switching costs.~~164~~220
Others disagree. Meta has argued that it operates in a “dynamic, intensely competitive” industry Others disagree. Meta has argued that it operates in a “dynamic, intensely competitive” industry
in which there are many substitutes for its services.in which there are many substitutes for its services.~~165~~221 In its litigation with the FTC, the firm has In its litigation with the FTC, the firm has
criticized the Commission’s alleged PSNS market as unduly narrow insofar as it excludes rivals criticized the Commission’s alleged PSNS market as unduly narrow insofar as it excludes rivals
like YouTube, TikTok, LinkedIn, and Twitter.like YouTube, TikTok, LinkedIn, and Twitter.~~166~~222
Meta and some commentators have also rejected the notion that entry barriers have caused the Meta and some commentators have also rejected the notion that entry barriers have caused the
market to decisively tip in Meta’s favor.market to decisively tip in Meta’s favor.~~167~~223 For example, observers have highlighted the ability of For example, observers have highlighted the ability of
differentiated firms like TikTok and Snapchat to rapidly gain scale despite Meta’s ostensible differentiated firms like TikTok and Snapchat to rapidly gain scale despite Meta’s ostensible
network advantages.network advantages.~~168~~224
Allegations of Anticompetitive Conduct
~~In addition to facing allegations of monopoly power, Meta has~~ Meta has also been accused of engaging in been accused of engaging in
anticompetitive conduct. The FTC’s lawsuit contends that Meta has maintained its dominant anticompetitive conduct. The FTC’s lawsuit contends that Meta has maintained its dominant
~~position through its 2012 acquisition of Instagram and its 2014 acquisition of WhatsApp.169 The~~
~~Commission argues that Meta’s Instagram purchase allowed it to neutralize a rapidly growing~~
~~competitive threat, giving the firm control over what became two of the most popular social~~
~~networks in the world.170 Similarly, the FTC contends that Meta’s acquisition of WhatsApp~~
~~preserved its monopoly by preventing WhatsApp from entering the PSNS market.171~~
~~Besides targeting Meta’s major acquisitions, the FTC and some commentators have criticized the~~
~~company’s treatment of software developers.172 These allegations involve access to Facebook~~
~~Platform—an initiative whereby Meta encouraged developers to create apps that interoperate with~~
~~Facebook.173 As part of this initiative, Meta provided software developers with application~~
~~programming interfaces (APIs) and other tools that allowed them to access certain Facebook data~~

~~1:20-cv-03590 (D.D.C. Sept. 8, 2021).~~
~~164 Id. ¶ 212; HJC REPORT, supra note 11, at 136-47; Scott Morton & Dinielli, supra note 162, at 11; ACCC REPORT,~~
supra no~~te 162~~position through its 2012 acquisition of Instagram and its 216 Meta Platforms, Inc., Quarterly Report (Form 10-Q) at 35 (Oct. 26, 2023). 217 Id. 218 HJC REPORT, supra no te 11, at 133; ONLINE PLATFORMS AND DIGITAL ADVERTISING: MARKET STUDY FINAL REPORT, U.K. COMPETITION & MKTS AUTHORITY 146 (July 1, 2020), https://assets.publishing.service.gov.uk/media/ 5fa557668fa8f5788db46efc/Final_report_Digital_ALT_TEXT.pdf [hereinafter “CMA REPORT”]; Fiona M. Scott Morton & David C. Dinielli, Roadmap for an Antitrust Case Against Facebook, OMIDYAR NETWORK 11-15 (June 2020), https://www.omidyar.com/wp-content/uploads/2020/06/Roadmap-for-an-Antitrust-Case-Against-Facebook.pdf; DIGITAL PLATFORMS INQUIRY: FINAL REPORT, AUSTRALIAN COMPETITION & CONSUMER COMM’N 9 (June 2019), https://www.accc.gov.au/system/files/Digital%20platforms%20inquiry%20-%20final%20report.pdf [hereinafter “ACCC REPORT”]. 219 Substitute Amended Complaint for Injunctive and Other Equitable Relief ¶ 164, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept. 8, 2021). 220 Id. ¶ 212; HJC REPORT, supra note 11, at 136-47; Scott Morton & Dinielli, supra note 218, at 11; ACCC REPORT, supra note 218, at 58. The FTC and some commentators have also attempted to establish that Meta has monopoly at 58. The FTC and some commentators have also attempted to establish that Meta has monopoly
power with direct evidence, arguing that the firm has degraded the quality of its products without losing significant power with direct evidence, arguing that the firm has degraded the quality of its products without losing significant
numbers of users. Substitute Amended Complaint ¶¶ 205-09, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept. numbers of users. Substitute Amended Complaint ¶¶ 205-09, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept.
8, 2021); Dina Srinivasan, 8, 2021); Dina Srinivasan, The Antitrust Case Against Facebook: A Monopolist’s Journey Towards Pervasive
Surveillance in Spite of Consumer’s Preference for Privacy, 16 BERKELEY BUS. L.J. 39 (2019). , 16 BERKELEY BUS. L.J. 39 (2019).
~~165~~221 Memorandum in Support of Facebook, Inc.’s Motion to Dismiss FTC’s Complaint at 11, FTC v. Facebook, Inc., No. Memorandum in Support of Facebook, Inc.’s Motion to Dismiss FTC’s Complaint at 11, FTC v. Facebook, Inc., No.
1:20-cv-03590 (D.D.C. Mar. 10, 2021). 1:20-cv-03590 (D.D.C. Mar. 10, 2021).
~~166 Memorandum in Support of Facebook, Inc.’s Motion to Dismiss FTC’s Complaint at 10, FTC v. Facebook, Inc., No.~~
~~1:20-cv-03590 (D.D.C. Oct. 4, 2021).~~
~~167~~222 Id. at 10. 223 Id. at 13-16; Herbert J. Hovenkamp, . at 13-16; Herbert J. Hovenkamp, Selling Antitrust, 73 HASTINGS L.J. 1621, 1623 (2022) [hereinafter , 73 HASTINGS L.J. 1621, 1623 (2022) [hereinafter
“Hovenkamp, “Hovenkamp, Selling Antitrust”]; Jay Ezrielev & Genaro Marquez, ”]; Jay Ezrielev & Genaro Marquez, Interoperability: The Wrong Prescription for
Platform Competition, COMPETITION POLICY INT’L ANTITRUST CHRON. 8, 13-14 (June 2021). , COMPETITION POLICY INT’L ANTITRUST CHRON. 8, 13-14 (June 2021).
~~168~~224 Hovenkamp, Hovenkamp, Selling Antitrust, , supra no note ~~167~~223, at 1623; Ezrielev & Marquez, at 1623; Ezrielev & Marquez, supra no note ~~167,~~ ~~at 8.~~
~~169 Substitute Amended Complaint ¶¶ 77-129, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept. 8, 2021);~~ ~~see~~
~~also~~ ~~HJC REPORT, supra note 11, at 150-60 (arguing that Meta’s Instagram and WhatsApp acquisitions harmed~~
~~competition).~~
~~170 Substitute Amended Complaint ¶¶ 80-106, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept. 8, 2021).~~
~~171 Id. ¶¶ 107-29.~~
~~172 Id. ¶¶ 130-163; HJC REPORT, supra note 11, at 166-70; Scott Morton & Dinielli, supra note 162, at 24-25.~~
~~173 Substitute Amended Complaint ¶¶ 25-42, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept. 8, 2021).~~
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~~and functionalities.174~~223, at 8. Congressional Research Service 24 link to page 5 link to page 5 link to page 28 Antitrust Reform and Big Tech Firms 2014 acquisition of WhatsApp.225 The Commission argues that Meta’s Instagram purchase allowed it to neutralize a rapidly growing competitive threat, giving the firm control over what became two of the most popular social networks in the world.226 The FTC also contends that Meta’s acquisition of WhatsApp preserved its monopoly by preventing WhatsApp from entering the PSNS market.227 Besides targeting Meta’s major acquisitions, the FTC and some commentators have criticized the company’s treatment of software developers.228 These allegations involve access to Facebook Platform—an initiative whereby Meta encouraged developers to create apps that interoperate with Facebook.229 As part of this initiative, Meta provided software developers with application programming interfaces (APIs) and other tools that allowed them to access certain Facebook data and functionalities.230 According to the FTC, Facebook Platform ultimately became key According to the FTC, Facebook Platform ultimately became key
infrastructure for app developers because of Facebook’s large user base.infrastructure for app developers because of Facebook’s large user base.~~175~~
231 The Commission’s lawsuit alleges that Meta The Commission’s lawsuit alleges that Meta ~~used its~~leveraged control control ~~over~~of this this ~~key~~ infrastructure to infrastructure to
~~preserve its social networking monopoly. In particular, the FTC claims that Meta required~~
preserve its monopoly, requiring developers that participated in Facebook Platform to refrain from creating apps that would developers that participated in Facebook Platform to refrain from creating apps that would
compete with Facebook products.compete with Facebook products.~~176 In doing so, Meta allegedly suppressed potential competitive~~
~~threats.177~~
232 Meta has denied engaging in anticompetitive conduct. The company has argued that its Instagram Meta has denied engaging in anticompetitive conduct. The company has argued that its Instagram
acquisition acquisition ~~was procompetitive because the transaction allowed Meta~~allowed it to invest to invest ~~significant~~
resources and expertise in resources and expertise in ~~developing Instagram, thereby~~a young startup, hastening the small firm’s growth. hastening the small firm’s growth.~~178~~
233 Meta has also defended its WhatsApp purchase, arguing that the FTC has failed to present Meta has also defended its WhatsApp purchase, arguing that the FTC has failed to present
evidence that WhatsApp would have likely entered social networking absent the acquisition.evidence that WhatsApp would have likely entered social networking absent the acquisition.~~179~~
234 Finally, Meta has argued that its policies governing access to Facebook Platform—which it has Finally, Meta has argued that its policies governing access to Facebook Platform—which it has
since revised—were lawful under duty-to-deal doctrine.since revised—were lawful under duty-to-deal doctrine.~~180~~235
As of the publication of this report, the FTC’s monopolization case against Meta is in discovery, a As of the publication of this report, the FTC’s monopolization case against Meta is in discovery, a
pre-trial stage of litigation in which the parties develop evidence that can be used at trial. pre-trial stage of litigation in which the parties develop evidence that can be used at trial.
Although the district court Although the district court ~~rejected~~dismissed the agency’s initial complaint for failing to plausibly allege the agency’s initial complaint for failing to plausibly allege
monopoly power,monopoly power,~~181~~236 the court ultimately allowed the case to proceed after concluding that the the court ultimately allowed the case to proceed after concluding that the
Commission’s amended complaint was sufficiently plausible to survive a motion to dismiss.Commission’s amended complaint was sufficiently plausible to survive a motion to dismiss.~~182~~
~~Google~~
~~Google is a ubiquitous presence in the digital economy. The firm began as an internet search~~
~~company, and is now also a major player in digital advertising, mobile operating systems, app~~
~~distribution, digital maps, email, and web browsing.183 The following subsections discuss antitrust~~
~~allegations involving Google’s conduct related to online search, mobile operating systems and~~
~~app distribution, and digital advertising.~~

~~174 Id.~~
~~175 Id. ¶ 131.~~
~~176~~237 225 Substitute Amended Complaint ¶¶ 77-129, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept. 8, 2021); see also HJC REPORT, supra note 11, at 150-60 (arguing that Meta’s Instagram and WhatsApp acquisitions harmed competition). 226 Substitute Amended Complaint ¶¶ 80-106, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept. 8, 2021). 227 Id. ¶¶ 107-29. 228 Id. ¶¶ 130-163; HJC REPORT, supra note 11, at 166-70; Scott Morton & Dinielli, supra note 218, at 24-25. 229 Substitute Amended Complaint ¶¶ 25-42, FTC v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Sept. 8, 2021). 230 Id. 231 Id. ¶ 131. 232 Id. ¶ 133. A group of state attorneys general made similar claims in a lawsuit filed in 2020. New York v. Facebook, Inc., 549 F. Supp. 3d 6 (D.D.C. 2021). A federal district court dismissed that lawsuit in 2021, concluding that the claims challenging Facebook’s acquisitions were barred by the doctrine of laches (which precludes lawsuits filed after an unreasonable delay); that Facebook’s general policy of withholding APIs from rival developers was not exclusionary standing alone; and that specific refusals to deal occurred too long ago to support injunctive relief. Id. at 27-31, 34. 233 ~~Id. ¶ 133.~~
~~177 Id. ¶ 134.~~
~~178~~ Memorandum in Support of Facebook, Inc.’s Motion to Dismiss FTC’s Complaint at 29-30, FTC v. Facebook, Inc., Memorandum in Support of Facebook, Inc.’s Motion to Dismiss FTC’s Complaint at 29-30, FTC v. Facebook, Inc.,
No. 1:20-cv-03590 (D.D.C. Oct. 4, 2021). No. 1:20-cv-03590 (D.D.C. Oct. 4, 2021).
~~179~~234 Id. at 24. . at 24.
~~180~~235 Id. at 35. . at 35.
~~181~~236 FTC v. Facebook, Inc., 560 F. Supp. 3d 1, 4 (D.D.C. 2021). FTC v. Facebook, Inc., 560 F. Supp. 3d 1, 4 (D.D.C. 2021).
~~182~~237 FTC v. Facebook, Inc., 581 F. Supp. 3d 34, 43-52 (D.D.C. 2022). While the district court has allowed the FTC’s FTC v. Facebook, Inc., 581 F. Supp. 3d 34, 43-52 (D.D.C. 2022). While the district court has allowed the FTC’s
~~challenge to Meta’s Instagram and WhatsApp acquisitions to proceed, it has rejected the agency’s claims involving~~
~~access to Facebook Platform. Id. at 57-59. In rejecting the latter claims, the court concluded that Meta had no general~~
~~duty to allow potential rivals to access Facebook Platform. Id. at 58-59. Although the court indicated that specific~~
~~refusals may be actionable, it held that the refusals alleged by the FTC could not justify injunctive relief because they~~
~~occurred in 2013 and were not ongoing. Id.~~
~~183 HJC REPORT, supra note 11, at 174.~~
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~~Online Search~~
~~Allegations of Market Power~~
(continued...) Congressional Research Service 25 link to page 5 link to page 28 link to page 5 link to page 28 link to page 5 Antitrust Reform and Big Tech Firms Google Google is a ubiquitous presence in the digital economy. The firm began as an internet search company and is now also a major player in digital advertising, mobile operating systems, app distribution, digital maps, email, and web browsing.238 The following subsections discuss antitrust allegations involving Google’s conduct related to online search, mobile operating systems and app distribution, and digital advertising. Online Search Allegations of Market Power Some commentators have argued that Google has significant market power in the market for Some commentators have argued that Google has significant market power in the market for
general online search.general online search.~~184~~239 The DOJ agrees. In The DOJ agrees. In ~~a pending~~an ongoing monopolization lawsuit, the DOJ contends monopolization lawsuit, the DOJ contends
that Google has monopoly power in the market for “general search services” based on an alleged that Google has monopoly power in the market for “general search services” based on an alleged
market share of 88market share of 88 ~~percent~~% and the presence of substantial entry barriers, including economies of and the presence of substantial entry barriers, including economies of
~~scale.185~~scale.240 The DOJ has also alleged monopolization of separate markets for “general search text advertising” and “search advertising.”241
For its part, Google has claimed that it operates in a “highly competitive environment” and faces For its part, Google has claimed that it operates in a “highly competitive environment” and faces
a “vast array of competitors.”a “vast array of competitors.”~~186~~242 The company also argues that, for particular search queries, it The company also argues that, for particular search queries, it
competes against a range of firms—such as Amazon, eBay, and Yelp—that would not fall within competes against a range of firms—such as Amazon, eBay, and Yelp—that would not fall within
a market for general search services.a market for general search services.~~187~~243
Allegations of Anticompetitive Conduct
Search Distribution
The DOJ’s monopolization lawsuit contends that Google has maintained its search monopoly The DOJ’s monopolization lawsuit contends that Google has maintained its search monopoly
through through ~~various exclusionary agreements with firms that control search distribution.188 In~~
~~particular, the DOJ alleges that Google pays mobile device manufacturers, wireless carriers, and~~
~~browser developers to secure default status for its general search engine.189 Additionally, the~~
~~company—which also controls the Android mobile operating system—allegedly conditions the~~
~~availability of some “must-have” Google apps and APIs for Android devices on manufacturers’~~
~~agreements to preinstall certain apps that use Google Search as their default search engine.190~~
~~Through such agreements and its control of the Chrome browser, the DOJ argues, Google~~
~~“effectively owns or controls search distribution channels accounting for roughly 80 percent of~~
~~general search queries in the United States.”191 By locking up these distribution channels, Google~~
~~has allegedly prevented rivals from gaining the scale necessary to serve as effective~~
~~competitors.192~~

~~184 CMA REPORT, supra note 162, at 73; HJC REPORT, supra note 11, at 176-82; ACCC REPORT, supra note 162~~exclusionary agreements with firms that control search distribution.244 The agreements make Google the default search engine on various products in exchange for a share of Google’s advertising revenue.245 challenge to Meta’s Instagram and WhatsApp acquisitions to proceed, it dismissed the agency’s claims involving access to Facebook Platform. Id. at 57-59. In rejecting the latter claims, the court concluded that Meta had no general duty to allow potential rivals to access Facebook Platform. Id. at 58-59. Although the court indicated that specific refusals may be actionable, it held that the refusals alleged by the FTC could not justify injunctive relief because they occurred in 2013 and were not ongoing. Id. 238 HJC REPORT, supra no te 11, at 174. 239 CMA REPORT, supra note 218, at 73; HJC REPORT, supra note 11, at 176-82; ACCC REPORT, supra note 218, at 58; at 58;
Google Search (Shopping) (Case AT.39740), Commission Decision ¶ 271 (June 27, 2017), Google Search (Shopping) (Case AT.39740), Commission Decision ¶ 271 (June 27, 2017),
https://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_14996_3.pdf [hereinafter “EC Google https://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_14996_3.pdf [hereinafter “EC Google
Shopping Decision”]. Shopping Decision”].
~~185~~240 Amended Complaint ¶¶ 92-96, United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. Jan. 15, 2021). Amended Complaint ¶¶ 92-96, United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. Jan. 15, 2021).
~~186~~241 Memorandum Opinion at 5, United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. Aug. 4, 2023). 242 HJC REPORT, HJC REPORT, supra no note 11, at 179. at 179.
~~187~~243 Id. .
~~188~~244 Amended Complaint ¶ 4, United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. Jan. 15, 2021). A group of state Amended Complaint ¶ 4, United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. Jan. 15, 2021). A group of state
attorneys general has attorneys general has ~~also brought a similar monopolization case challenging Google’s conduct in search markets.~~
~~Complaint, State of Colorado, et al. v. Google, LLC, No. 1:20-cv-03715 (D.D.C. Dec. 17, 2020).~~
~~189 Amended Complaint ¶ 4~~made similar allegations in a case that has been consolidated with the DOJ’s lawsuit. Memorandum Opinion at 5, United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. Aug. 4, 2023). 245 Memorandum Opinion at 3, United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. , United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. ~~Jan. 15, 2021).~~
~~190 Id. ¶¶ 72-77.~~
~~191 Id. ¶ 5.~~
~~192 Id. ¶ 8. In July 2018, the European Commission fined Google €4.34 billion for requiring device manufacturers to~~
~~pre-install the Google Search app and Chrome browser as a condition of licensing the Google Play app store; paying~~
~~device manufacturers and mobile network operators to exclusively pre-install the Google Search app on their devices;~~
~~and preventing device manufacturers that pre-install certain Google apps from selling devices that run versions of~~
~~Android that Google had not approved. See Press Release, Euro. Comm’n, Antitrust: Commission Fines Google €4.34~~
~~Billion for Illegal Practices Regarding Android Mobile Devices to Strengthen Dominance of Google’s Search Engine~~
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~~Google has denied the DOJ’s allegations. The company argues that its agreements with browser~~
~~developers do not preclude developers from integrating or promoting other search engines.193~~
~~Google also contends that, even if the agreements required exclusivity, they are the result of~~
~~lawful, customer-instigated “competition for the contract” that the firm has won because of the~~
~~superiority of its search engine.194~~
~~Similarly, Google has argued that its agreements with mobile device manufacturers and wireless~~
~~carriers do not preclude its counterparties from preinstalling rival apps.195 The company also~~
~~claims that the agreements would not result in substantial foreclosure of search distribution~~
~~channels even if they did require exclusivity.196~~
~~As of the publication of this report, Google’s motion for summary judgment is pending before the~~
~~district court.197~~
Aug. 4, 2023). Congressional Research Service 26 Antitrust Reform and Big Tech Firms The lawsuit focuses on Google’s agreements with two categories of counterparties: (1) browser developers, and (2) manufacturers and wireless carriers that sell devices running the Android mobile operating system, which Google acquired in 2005.246 Under Google’s agreements with browser developers—primarily Apple and Mozilla—the developers have agreed to make Google the default search engine for all search access points on their browsers in exchange for payments from Google.247 The DOJ’s allegations regarding device manufacturers and wireless carriers involve two types of agreements. One set of contracts requires manufacturers to preinstall Google Search and place an associated search widget on device home screens as conditions of licensing other proprietary Google apps.248 Under another set of agreements, manufacturers and wireless carriers commit to make Google the only preinstalled search engine on covered devices and the default for all search access points in exchange for payments from Google.249 In its lawsuit, the DOJ contends that Google’s agreements amount to exclusive contracts that foreclose substantial channels of search distribution, depriving rivals of the scale needed to serve as effective competitors.250 Google has made several arguments in response. While Google concedes that its revenue-sharing agreements with manufacturers and carriers require exclusivity, it has denied that its contracts with browser developers and its Android licensing agreements amount to exclusive dealing.251 The browser agreements are not exclusive, Google contends, because they do not prevent developers from promoting rival search engines and users can change a browser’s default search engine.252 Similarly, Google argues that its Android licensing agreements do not prohibit manufacturers from preinstalling rival search apps or browsers.253 Google further maintains that the relevant agreements would not be anticompetitive even if they did require exclusivity. Rather, Google claims that it has successfully competed with rivals to secure the challenged agreements with browser developers, who have chosen Google as their default search engine based on considerations of quality and price.254 Google claims that this “competition for the contract” is the type of merits competition that antitrust encourages.255 Google also denies that its Android agreements result in substantial foreclosure, arguing that the appropriate measure of foreclosure requires an analysis of consumer behavior absent the agreements, rather than the percentage of the market covered by those agreements.256 Because few consumers would switch from Google to another search engine if the challenged agreements did not exist, Google argues, the agreements do not substantially foreclose rivals.257 246 Id. 247 Id. at 10. 248 Id. at 13. 249 Id. at 13-14. 250 Id. at 30. 251 Id. 252 Id. at 31-33. 253 Id. at 40. 254 Id. at 35-36. 255 Id. at 35. 256 Id. at 42-43. 257 Id. at 43. In its motion for summary judgment, Google argued that the plaintiffs’ expert evidence indicated that (continued...) Congressional Research Service 27 link to page 5 Antitrust Reform and Big Tech Firms In August 2023, a federal district court allowed the claims discussed above to proceed, denying in part Google’s motion for summary judgment.258 The court concluded that there were disputed issues of material fact as to whether Google’s browser agreements and Android licensing agreements were de facto exclusive, including disagreement over the competitive significance of default status.259 The court likewise held that Google’s “competition for the contract” defense and the appropriate measure of foreclosure raised issues that could not be resolved on summary judgment.260 Foreclosure metrics are likely to be a key issue at trial, which began in September 2023 and is ongoing as of the publication of this report. While courts regularly look to the share of distribution covered by exclusive contracts in evaluating foreclosure, some commentators have advocated alternative approaches, including the type of counterfactual analysis that Google proposes.261 The choice between alternative metrics may present the court with a trade-off: while Google’s preferred methodology arguably involves a more accurate assessment of the competitive impact of the challenged agreements, the DOJ’s simpler approach may be more manageable and appears to be more firmly rooted in the case law.262 The issue of procompetitive justification may also prove significant. The DOJ’s case relies heavily on the importance of scale in improving search-engine quality. If Google can establish that it has not exhausted the relevant scale economies, those economies may constitute a procompetitive justification for its distribution agreements.263 To the extent that the court accepts this justification, the DOJ may need to prove that Google can secure those economies through less restrictive means or that the anticompetitive effects of the agreements outweigh their benefits. Self-Preferencing
Commentators and some foreign regulators have also argued that Google has leveraged its Commentators and some foreign regulators have also argued that Google has leveraged its
dominance in general search to favor its own vertical offerings. For example, the HJC Report dominance in general search to favor its own vertical offerings. For example, the HJC Report
concluded that Google has adjusted its search algorithms to automatically elevate some of concluded that Google has adjusted its search algorithms to automatically elevate some of
Google’s vertical services, like its video-sharing platform YouTube, in search results.Google’s vertical services, like its video-sharing platform YouTube, in search results.~~198~~
~~This type of self-preferencing prompted the European Commission—which enforces European~~
~~Union competition law—to fine Google €2.42 billion in 2017 for giving prominent placement to~~
~~its comparison-shopping service and demoting rival services in search results.199~~
~~The FTC investigated similar allegations of self-preferencing involving Google Search in 2012,~~
~~but concluded that it had not found sufficient evidence of an antitrust violation.200 The agency~~
~~determined that Google’s favorable placement of its own verticals could plausibly be viewed as~~
~~an improvement in the quality of Google’s search product.201 The Commission also did not find~~
~~sufficient evidence that Google had manipulated its search algorithms to unfairly disadvantage~~
~~rival vertical websites.202~~

~~(July 18, 2018), https://ec.europa.eu/commission/presscorner/detail/en/IP_18_4581 [hereinafter “EC Android Case”].~~
~~193 Defendant’s Memorandum of Points and Authorities in Support of its Motion for Summary Judgment at 28-31,~~
~~United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. Jan. 11, 2023).~~
~~194 Id. at 35-38.~~
~~195 Id. at 39-40.~~
~~196 Id. at 40-41.~~
~~197 Dave Simpson, Google Seeks Win in Default Search Engine Antitrust Suits, LAW360 (Jan. 11, 2023),~~
~~https://www.law360.com/articles/1564958.~~
~~198 HJC REPORT, supra note 11, at 187-92.~~
~~199 EC Google Shopping Decision, supra note 184.~~
~~200 Statement of the Federal Trade Commission Regarding Google’s Search Practices, In the Matter of Google Inc., No.~~
~~111-0163 (FTC Jan. 3, 2013).~~
~~201 Id. at 3.~~
~~202 Id.~~
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264 (1) approximately 1% of all search queries would shift from Google to non-Google search engines if manufacturers and carriers adopted a “choice screen” allowing consumers to select their own default search engines (a remedy implemented in an EU competition case involving Google Search), and (2) approximately 11.6% to 13.5% of search queries would shift from Google to non-Google search engines if a rival search engine was the exclusive preinstalled default on Android devices. Id. at 43. 258 Id. at 60. 259 Id. at 34-35. 260 Id. at 36-37, 43. The court granted Google’s motion for summary judgment with respect to certain other claims, some brought by the DOJ and some brought by a group of state attorneys general in a case that has been consolidated with the DOJ lawsuit. Id. at 60. 261 Joshua D. Wright, Moving Beyond Naïve Foreclosure Analysis, 19 GEO. MASON L. REV. 1163, 1177-81 (2012). 262 Id. at 1177 (observing that “most courts” rely on the share of distribution covered by a challenged agreement to evaluate foreclosure, with “some occasional modifications”). 263 See Thom Lambert, Why the Federal Government’s Antitrust Case Against Google Should—and Likely Will—Fail, TRUTH ON THE MARKET (Dec. 18, 2020), https://truthonthemarket.com/2020/12/18/why-the-federal-governments-antitrust-case-against-google-should-and-likely-will-fail/. 264 HJC REPORT, supra note 11, at 187-92. Congressional Research Service 28 link to page 30 link to page 5 link to page 5 Antitrust Reform and Big Tech Firms This type of self-preferencing prompted the European Commission—which enforces European Union competition law—to fine Google €2.42 billion in 2017 for giving prominent placement to its comparison-shopping service and demoting rival services in search results.265 The FTC investigated similar allegations of self-preferencing involving Google Search in 2012, but concluded that it had not found sufficient evidence of an antitrust violation.266 The agency determined that Google’s favorable placement of its own verticals could plausibly be viewed as an improvement in the quality of Google’s search product.267 The Commission also did not find sufficient evidence that Google had manipulated its search algorithms to unfairly disadvantage rival vertical websites.268 Mobile Operating Systems and App Distribution
Allegations of Market Power
Mobile Operating Systems
In addition to operating a major search engine, Google controls Android—a leading mobile In addition to operating a major search engine, Google controls Android—a leading mobile
operating system. Android and Apple’s iOS represent the two dominant mobile operating operating system. Android and Apple’s iOS represent the two dominant mobile operating
systems, together accounting for 99systems, together accounting for 99 ~~percent~~% of the market. of the market.~~203~~269 Because Apple does not license iOS Because Apple does not license iOS
to other device manufacturers, Android by itself occupies a very large share of the market for to other device manufacturers, Android by itself occupies a very large share of the market for
licensable mobile operating systems—by some estimates, 99 mobile operating systems—by some estimates, 99 ~~percent~~% of that market. of that market.~~204~~270
Some commentators have argued that the market for licensable mobile operating systems is the Some commentators have argued that the market for licensable mobile operating systems is the
relevant one for antitrust purposes, based on factors like high switching costs.relevant one for antitrust purposes, based on factors like high switching costs.~~205~~271 Private plaintiffs Private plaintiffs
and (in a separate caseand (in a separate case that has been settled) a group of state attorneys general have argued that Google has monopoly ) a group of state attorneys general have argued that Google has monopoly
power in this market based on the company’s dominant market share and the presence of power in this market based on the company’s dominant market share and the presence of
substantial entry barriers, such as network effects and research and development costs.substantial entry barriers, such as network effects and research and development costs.~~206~~272
Google denies such allegations, arguing that consumers “can and do switch and multi-home Google denies such allegations, arguing that consumers “can and do switch and multi-home
among and between mobile and nonmobile ecosystems, including between Android and iOS.”among and between mobile and nonmobile ecosystems, including between Android and iOS.”~~207~~
~~Mobile App Distribution~~
~~Litigants have also contended that, through its Google Play Store, Google has market power in~~
~~certain markets related to mobile-app distribution. Some plaintiffs have defined the relevant~~
~~antitrust market as consisting of the distribution of apps to Android users.208 They allege that~~
~~Google has monopoly power in this market based on the Play Store’s market share of more than~~
~~90 percent, strong network effects, high switching costs, and Google’s ability to charge a 30~~
~~percent commission on apps purchased through the Play Store.209~~
~~Some plaintiffs have also argued in the alternative that Google has market power in a broader~~
~~market for mobile app distribution—that is, a market not limited to Android users.210 A group of~~

~~203~~273 265 EC Google Shopping Decision, supra note 239. 266 Statement of the Federal Trade Commission Regarding Google’s Search Practices, In the Matter of Google Inc., No. 111-0163 (FTC Jan. 3, 2013). 267 Id. at 3. 268 Id. 269 HJC REPORT, HJC REPORT, supra no note 11, at 100-02. at 100-02.
~~204~~270 First Amended Complaint ¶ 7, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1, 2021); First Amended Complaint ¶ 7, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1, 2021); see
also Second Amended Complaint for Injunctive Relief ¶¶ 16, 55, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 Second Amended Complaint for Injunctive Relief ¶¶ 16, 55, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671
(N.D. Cal. Nov. 17, 2022) (alleging a market share of “over 95%”). (N.D. Cal. Nov. 17, 2022) (alleging a market share of “over 95%”).
~~205~~271 HJC REPORT, HJC REPORT, supra no note 11, at 102. In a 2018 enforcement action, the European Commission concluded that at 102. In a 2018 enforcement action, the European Commission concluded that
competition from Apple does not sufficiently constrain Google for similar reasons. competition from Apple does not sufficiently constrain Google for similar reasons. ~~EC Android Case, supra note 192.~~
~~206~~See Press Release, Euro. Comm’n, Antitrust: Commission Fines Google €4.34 Billion for Illegal Practices Regarding Android Mobile Devices to Strengthen Dominance of Google’s Search Engine (July 18, 2018), https://ec.europa.eu/commission/presscorner/detail/en/IP_18_4581. 272 Second Amended Complaint for Injunctive Relief ¶¶ 55-64, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 Second Amended Complaint for Injunctive Relief ¶¶ 55-64, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671
(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 44-58, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 44-58, State of Utah et al. v. Google LLC, No. 3:21-cv-05227
(N.D. Cal. Nov. 1, 2021). (N.D. Cal. Nov. 1, 2021).
~~207~~273 Defendants’ Answers and Defenses to State of Utah et al. First Amended Complaint ¶ 55-56, No. 3:21-cv-05227 Defendants’ Answers and Defenses to State of Utah et al. First Amended Complaint ¶ 55-56, No. 3:21-cv-05227
(N.D. Cal. Nov. 15, 2021); (N.D. Cal. Nov. 15, 2021); see also Defendants’ Answer, Defenses, and Counterclaims to Epic Games, Inc.’s Second Defendants’ Answer, Defenses, and Counterclaims to Epic Games, Inc.’s Second
Amended Complaint for Injunctive Relief ¶¶ 55, 57, No. 3:20-cv-05671 (N.D. Cal. Dec. 1, 2022). Amended Complaint for Injunctive Relief ¶¶ 55, 57, No. 3:20-cv-05671 (N.D. Cal. Dec. 1, 2022).
~~208 Second Amended Complaint for Injunctive Relief ¶¶ 68-72, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671~~
~~(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 63-73, State of Utah et al. v. Google LLC, No. 3:21-cv-05227~~
~~(N.D. Cal. Nov. 1, 2021).~~
~~209 Second Amended Complaint for Injunctive Relief ¶¶ 75-88, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671~~
~~(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 76-78, State of Utah et al. v. Google LLC, No. 3:21-cv-05227~~
~~(N.D. Cal. Nov. 1, 2021).~~
~~210 Second Amended Complaint for Injunctive Relief ¶ 73, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671~~
~~(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 79-81, State of Utah et al. v. Google LLC, No. 3:21-cv-05227~~
~~(N.D. Cal. Nov. 1, 2021).~~
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Congressional Research Service 29 Antitrust Reform and Big Tech Firms Mobile App Distribution Litigants have also contended that, through its Google Play Store, Google has market power in certain markets related to mobile-app distribution. Some plaintiffs have defined the relevant market as consisting of the distribution of apps to Android users.274 They allege that Google has monopoly power in this market based on the Play Store’s market share of more than 90%, strong network effects, high switching costs, and Google’s ability to charge a 30% commission on apps purchased through the Play Store.275 Some plaintiffs have also argued in the alternative that Google has market power in a broader market for mobile app distribution—that is, a market not limited to Android users.276 A group of state attorneys general, for example, has argued that Google occupies a sizeable share of this state attorneys general, for example, has argued that Google occupies a sizeable share of this
market, enjoys large profit margins, and benefits from formidable entry barriers.market, enjoys large profit margins, and benefits from formidable entry barriers.~~211~~277
Google rejects these claims. It contends that consumers can use different platforms to access apps Google rejects these claims. It contends that consumers can use different platforms to access apps
and that “Apple and Google compete vigorously in the mobile operating system environment on and that “Apple and Google compete vigorously in the mobile operating system environment on
multiple dimensions, including innovation, price, privacy, and security.”multiple dimensions, including innovation, price, privacy, and security.”~~212~~278
In-App Payment Processing
Plaintiffs have further claimed that Google has monopoly power in a market for in-app payment Plaintiffs have further claimed that Google has monopoly power in a market for in-app payment
(IAP) processing for Android apps.(IAP) processing for Android apps.~~213~~279 They have based this claim on the They have based this claim on the ~~Google~~ Play Store’s Play Store’s
large share of the market for Android app distribution and Google’s requirement that software large share of the market for Android app distribution and Google’s requirement that software
developers using the Play Store also use Google’s IAP processor.developers using the Play Store also use Google’s IAP processor.~~214~~280
As discussed, for many transactions, Google charges a 30 As discussed, for many transactions, Google charges a 30 ~~percent~~% commission for IAP commission for IAP
processing—a rate that is considerably higher than those charged by other electronic payment processing—a rate that is considerably higher than those charged by other electronic payment
~~processors.215~~
~~Google has denied possessing monopoly power related to IAP processing.216~~
~~Allegations of Anticompetitive Conduct~~
~~Mobile App Distribution~~
~~Google has also been accused of engaging in a variety of anticompetitive activities involving app~~
~~distribution.~~
~~First, Google has allegedly imposed technical barriers that make it difficult for consumers to~~
~~download Android apps from sources other than the Google Play Store—a practice commonly~~
~~known as “sideloading.”217 In particular, litigants have claimed that sideloading Android apps~~

~~211~~processors.281 274 Second Amended Complaint for Injunctive Relief ¶¶ 68-72, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 (N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 63-73, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1, 2021). 275 Second Amended Complaint for Injunctive Relief ¶¶ 75-88, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 (N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 76-78, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1, 2021). 276 Second Amended Complaint for Injunctive Relief ¶ 73, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 (N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 79-81, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1, 2021). 277 First Amended Complaint ¶¶ 79-81, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1, First Amended Complaint ¶¶ 79-81, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1,
2021). The state attorneys general allege that Google’s share of this market in the United States exceeds 30 percent, 2021). The state attorneys general allege that Google’s share of this market in the United States exceeds 30 percent,
while its share of the global market (excluding China) is approximately 53while its share of the global market (excluding China) is approximately 53 ~~percent~~% by revenue. by revenue. Id. ¶ 80. . ¶ 80.
~~212~~278 Defendants’ Answers, Defenses, and Counterclaims to Epic Games, Inc.’s Second Amended Complaint for Defendants’ Answers, Defenses, and Counterclaims to Epic Games, Inc.’s Second Amended Complaint for
Injunctive Relief ¶ 80, No. 3:20-cv-05671 (N.D. Cal. Dec. 1, 2022). Injunctive Relief ¶ 80, No. 3:20-cv-05671 (N.D. Cal. Dec. 1, 2022).
~~213~~279 Second Amended Complaint for Injunctive Relief ¶¶ 158-60, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 Second Amended Complaint for Injunctive Relief ¶¶ 158-60, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671
(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 182-86, State of Utah et al. v. Google LLC, No. 3:21-cv-(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 182-86, State of Utah et al. v. Google LLC, No. 3:21-cv-
05227 (N.D. Cal. Nov. 1, 2021). 05227 (N.D. Cal. Nov. 1, 2021).
~~214~~280 Second Amended Complaint for Injunctive Relief ¶¶ 158-60, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 Second Amended Complaint for Injunctive Relief ¶¶ 158-60, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671
(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 182-86, State of Utah et al. v. Google LLC, No. 3:21-cv-(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 182-86, State of Utah et al. v. Google LLC, No. 3:21-cv-
05227 (N.D. Cal. Nov. 1, 2021). 05227 (N.D. Cal. Nov. 1, 2021).
~~215~~281 Second Amended Complaint for Injunctive Relief ¶ 160, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 Second Amended Complaint for Injunctive Relief ¶ 160, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671
(N.D. Cal. Nov. 17, 2022). In March 2021, Google announced plans to lower its commissions from 30(N.D. Cal. Nov. 17, 2022). In March 2021, Google announced plans to lower its commissions from 30 ~~percent~~% to 15 to 15
~~percent~~% for the first $1 million in revenue that developers earn using Google’s billing system. Manish Singh, for the first $1 million in revenue that developers earn using Google’s billing system. Manish Singh, Google
Play Drops Commissions to 15% from 30%, Following Apple’s Move Last Year, TECHCRUNCH (Mar. 16, 2021), , TECHCRUNCH (Mar. 16, 2021),
https://techcrunch.com/2021/03/16/google-play-drops-commissions-to-15-from-30-following-apples-move-last-year/.https://techcrunch.com/2021/03/16/google-play-drops-commissions-to-15-from-30-following-apples-move-last-year/.
~~216 Defendants’ Answers, Defenses, and Counterclaims to Epic Games, Inc.’s Second Amended Complaint for~~
~~Injunctive Relief ¶ 158, No. 3:20-cv-05671 (N.D. Cal. Dec. 1, 2022); Defendants’ Answers and Defenses to State of~~
~~Utah et al. First Amended Complaint ¶ 182, No. 3:21-cv-05227 (N.D. Cal. Nov. 15, 2021).~~
~~217 First Amended Complaint ¶¶ 83-95, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1,~~
~~2021).~~
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Congressional Research Service 30 Antitrust Reform and Big Tech Firms Google has denied possessing monopoly power related to IAP processing.282 Allegations of Anticompetitive Conduct Mobile App Distribution Google has also been accused of engaging in a variety of anticompetitive activities involving app distribution. Some of the allegations are reviewed below. • Google has allegedly imposed technical barriers that make it difficult for consumers to download Android apps from sources other than the Google Play Store—a practice commonly known as “sideloading.”283 Litigants have claimed that sideloading Android apps entails a complicated process that includes several security warnings discouraging such actions.entails a complicated process that includes several security warnings discouraging such actions.~~218~~
284 Google has also been accused of making it unnecessarily difficult to update sideloaded apps.Google has also been accused of making it unnecessarily difficult to update sideloaded apps.~~219~~
~~Second,~~ 285 • Google has allegedly barred software developers from distributing competing Google has allegedly barred software developers from distributing competing app stores app stores
through the through the ~~Google~~ Play Store.Play Store.~~220~~
~~Third,~~ 286 • Google has allegedly required mobile device manufacturers that license Android Google has allegedly required mobile device manufacturers that license Android and and
certain other key Google services to preinstall the Google Play Store on their devices.certain other key Google services to preinstall the Google Play Store on their devices.~~221~~287 Plaintiffs Plaintiffs
have argued that this preinstallation requirement harms competition by giving the Play Store an have argued that this preinstallation requirement harms competition by giving the Play Store an
advantage over other app stores.advantage over other app stores.~~222~~
~~Fourth,~~ 288 • Google has allegedly required device manufacturers that offer the Google has allegedly required device manufacturers that offer the ~~Google~~ Play Store and Play Store and
other “must-have” Google services to refrain from selling devices that run “Android forks”—other “must-have” Google services to refrain from selling devices that run “Android forks”—
modified versions of Android that Google has not approved.modified versions of Android that Google has not approved.~~223~~ 289 Plaintiffs argue that these Plaintiffs argue that these
restrictions have stifled the development of alternative versions of Android that would be free restrictions have stifled the development of alternative versions of Android that would be free
from some of the restrictions on app distribution discussed above.from some of the restrictions on app distribution discussed above.~~224~~
~~Fifth,~~ 290 • Google has allegedly entered into revenue-sharing agreements that deter device Google has allegedly entered into revenue-sharing agreements that deter device
manufacturers from developing competing app stores.manufacturers from developing competing app stores.~~225 In particular, the~~291 The challenged agreements challenged agreements
give device manufacturers a share of Google’s advertising and Play Store revenue from the give device manufacturers a share of Google’s advertising and Play Store revenue from the
devices they sell in exchange for a commitment to refrain from competing against the Play devices they sell in exchange for a commitment to refrain from competing against the Play
Store.Store.~~226~~
~~Google has either denied engaging in the relevant conduct or rejected the contention that such~~
~~conduct is anticompetitive.227~~
~~In-App Payment Processing~~
~~Plaintiffs have also accused Google of engaging in anticompetitive conduct in the market for~~
~~Android IAP processing. They have alleged that Google’s requirement that developers using the~~
~~Play Store also use Google’s IAP processor represents an unlawful tying arrangement.228~~

~~218 Id.~~
~~219 Id. ¶ 96.~~
~~220 Id. ¶¶ 107-10.~~
~~221 Id. ¶¶ 124-25.~~
~~222 Id. ¶ 125.~~
~~223 Id. ¶¶ 105-06.~~
~~224 Id.~~
~~225 Id. ¶¶ 130-35.~~
~~226 Id.~~
~~227 Defendants’ Answers and Defenses to State of Utah et al. First Amended Complaint ¶¶ 83-89, 96, 105-110, 124-25,~~
~~130-35, No. 3:21-cv-05227 (N.D. Cal. Nov. 15, 2021).~~
~~228 Second Amended Complaint for Injunctive Relief ¶¶ 161-66, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671~~
~~(N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 162-67, State of Utah et al. v. Google LLC, No. 3:21-cv-~~
~~05227 (N.D. Cal. Nov. 1, 2021).~~
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~~Digital Advertising~~
~~Allegations of Market Power~~
292 282 Defendants’ Answers, Defenses, and Counterclaims to Epic Games, Inc.’s Second Amended Complaint for Injunctive Relief ¶ 158, No. 3:20-cv-05671 (N.D. Cal. Dec. 1, 2022); Defendants’ Answers and Defenses to State of Utah et al. First Amended Complaint ¶ 182, No. 3:21-cv-05227 (N.D. Cal. Nov. 15, 2021). 283 First Amended Complaint ¶¶ 83-95, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1, 2021). 284 Id. 285 Id. ¶ 96. 286 Id. ¶¶ 107-10. 287 Id. ¶¶ 124-25. 288 Id. ¶ 125. 289 Id. ¶¶ 105-06. 290 Id. 291 Id. ¶¶ 130-35. 292 Id. Congressional Research Service 31 Antitrust Reform and Big Tech Firms Google has either denied engaging in the relevant conduct or rejected the contention that the alleged conduct is anticompetitive.293 In-App Payment Processing Plaintiffs have also accused Google of engaging in anticompetitive conduct in the market for Android IAP processing. They have alleged that Google’s requirement that developers using the Play Store also use Google’s IAP processor represents an unlawful tying arrangement.294 Digital Advertising Allegations of Market Power In addition to its search and app-distribution activities, Google is a major force in digital display In addition to its search and app-distribution activities, Google is a major force in digital display
advertising markets. advertising markets.
In those markets, online ad publishers—like news websites—sell advertising space through In those markets, online ad publishers—like news websites—sell advertising space through
exchanges.exchanges.~~229~~295 Those ad exchanges conduct automated auctions in which advertisers can bid for ad Those ad exchanges conduct automated auctions in which advertisers can bid for ad
space.space.~~230~~296
Intermediaries facilitate this process for both publishers and advertisers. Large publishers manage Intermediaries facilitate this process for both publishers and advertisers. Large publishers manage
their ad inventory using a type of software known as an their ad inventory using a type of software known as an ad server, which interfaces with ad , which interfaces with ad
exchanges on behalf of publishers.exchanges on behalf of publishers.~~231~~297 On the other side of the market, advertisers employ On the other side of the market, advertisers employ
ad-buying tools, which connect them with ad exchanges and allow them to purchase ad space., which connect them with ad exchanges and allow them to purchase ad space.~~232~~298
Google operates in several segments of these markets via an ad exchange, a publisher ad server, Google operates in several segments of these markets via an ad exchange, a publisher ad server,
and ad-buying tools for advertisers.and ad-buying tools for advertisers.~~233~~299
The DOJ and (in a separate lawsuit) a group of state attorneys general (state AGs) have argued The DOJ and (in a separate lawsuit) a group of state attorneys general (state AGs) have argued
that Google has monopoly power in multiple ad-tech markets. that Google has monopoly power in multiple ad-tech markets.
In January 2023, the DOJ filed a complaint alleging that Google has monopoly power in the In January 2023, the DOJ filed a complaint alleging that Google has monopoly power in the
markets for publisher ad servers,markets for publisher ad servers,~~234~~300 ad exchanges, ad exchanges,~~235~~301 and advertiser ad networks. and advertiser ad networks.~~236~~302
In a separate case, a group of state AGs has alleged that Google has monopoly power in the In a separate case, a group of state AGs has alleged that Google has monopoly power in the
markets for ad exchanges, ad servers, and ad-buying tools for small advertisers.markets for ad exchanges, ad servers, and ad-buying tools for small advertisers.~~237 The state AGs~~
~~also contend that Google has monopoly power or a dangerous probability of acquiring monopoly~~
~~power in the market for ad-buying tools for large advertisers.238~~
~~In September 2022, a federal district court concluded that the state AGs’ allegations involving~~
~~monopoly power were sufficiently plausible to survive a motion to dismiss.239~~

~~229~~303 The state AGs 293 Defendants’ Answers and Defenses to State of Utah et al. First Amended Complaint ¶¶ 83-89, 96, 105-110, 124-25, 130-35, No. 3:21-cv-05227 (N.D. Cal. Nov. 15, 2021). 294 Second Amended Complaint for Injunctive Relief ¶¶ 161-66, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 (N.D. Cal. Nov. 17, 2022); First Amended Complaint ¶¶ 162-67, State of Utah et al. v. Google LLC, No. 3:21-cv-05227 (N.D. Cal. Nov. 1, 2021). 295 Opinion and Order at 3, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13, Opinion and Order at 3, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13,
2022). 2022).
~~230~~296 Id. .
~~231~~297 Id. at 4. . at 4.
~~232~~298 Id. at 10-11. . at 10-11.
~~233~~299 Id. at 6-12. . at 6-12.
~~234~~300 Complaint ¶ 285, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023). Complaint ¶ 285, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023).
~~235~~301 Id. ¶ 296. . ¶ 296.
~~236~~302 Id. ¶ 301. . ¶ 301.
~~237~~303 Opinion and Order at 7-8, 11, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Opinion and Order at 7-8, 11, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y.
Sept. 13, 2022). Sept. 13, 2022).
~~238 Id. at 11.~~
~~239 Id. at 19, 34-35. Google has denied possessing monopoly power in the ad-exchange market, but its motion to~~
~~dismiss did not challenge the other allegations of monopoly power. Id. at 5-6. In response to the DOJ’s lawsuit, Google~~
~~published a blog post in which it argued that competition in online ad markets is “increasing,” citing the growing ad~~
~~businesses of Microsoft, Amazon, Apple, TikTok, and several specialized ad-tech companies. Dan Taylor,~~ ~~DOJ’s~~
~~Lawsuit Ignores the Enormous Competition in the Online Advertising Industry, GOOGLE (Jan. 24, 2023),~~
~~https://blog.google/outreach-initiatives/public-policy/doj-ad-tech-lawsuit-response/.~~
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~~Antitrust Reform and Big Tech Firms~~

~~Allegations of Anticompetitive Conduct~~
Congressional Research Service 32 Antitrust Reform and Big Tech Firms also contend that Google has monopoly power or a dangerous probability of acquiring monopoly power in the market for ad-buying tools for large advertisers.304 In September 2022, a federal district court concluded that the state AGs’ allegations of monopoly power were sufficiently plausible to survive a motion to dismiss.305 In April 2023, a district court likewise rejected Google’s motion to dismiss the DOJ’s ad-tech lawsuit.306 Allegations of Anticompetitive Conduct The DOJ and state AG lawsuits contend that Google has engaged in a range of anticompetitive The DOJ and state AG lawsuits contend that Google has engaged in a range of anticompetitive
practices in several digital-advertising markets, allowing it to obtain and cement a dominant practices in several digital-advertising markets, allowing it to obtain and cement a dominant
position across the ad-tech stack. position across the ad-tech stack.
The DOJ’s lawsuit claims that, in the early 2000s, Google’s ad-buying tools occupied a dominant The DOJ’s lawsuit claims that, in the early 2000s, Google’s ad-buying tools occupied a dominant
position on the advertiser side of the ad-tech market.position on the advertiser side of the ad-tech market.~~240~~307 Then, in 2008, Google acquired a firm Then, in 2008, Google acquired a firm
called DoubleClick, which operated a leading publisher ad server and a nascent ad exchange.called DoubleClick, which operated a leading publisher ad server and a nascent ad exchange.~~241~~308
After the DoubleClick acquisition, the DOJ contends, Google leveraged its position across the After the DoubleClick acquisition, the DOJ contends, Google leveraged its position across the
ad-tech chain to benefit its own properties. Among other things, the DOJ alleges that Google ad-tech chain to benefit its own properties. Among other things, the DOJ alleges that Google
made demand from its ad-buying tools available only through its ad exchange.made demand from its ad-buying tools available only through its ad exchange.~~242~~309 Google also Google also
allegedly required publishers to use its ad server to receive real-time bids from its ad exchange.allegedly required publishers to use its ad server to receive real-time bids from its ad exchange.~~243~~310
The state AG ad-tech lawsuit makes similar allegations.The state AG ad-tech lawsuit makes similar allegations.~~244~~311
In September 2022, a federal district court held that the state AGs had plausibly alleged tying In September 2022, a federal district court held that the state AGs had plausibly alleged tying
claims under Sections 1 and 2 of the Sherman Act based on their assertion that Google had claims under Sections 1 and 2 of the Sherman Act based on their assertion that Google had
coerced publishers into using its ad server as a condition of receiving live bids from its ad coerced publishers into using its ad server as a condition of receiving live bids from its ad
exchange.exchange.~~245~~312
The DOJ and state AG lawsuits also target a program used by Google’s ad server that allegedly The DOJ and state AG lawsuits also target a program used by Google’s ad server that allegedly
gave Google’s ad exchange advantages over rival exchanges.gave Google’s ad exchange advantages over rival exchanges.~~246~~313 Another set of accusations Another set of accusations
involves programs under which Google allegedly manipulated bids from its advertiser clients in involves programs under which Google allegedly manipulated bids from its advertiser clients in
ways that advantaged its ad exchange and publisher ad server.ways that advantaged its ad exchange and publisher ad server.~~247~~
~~The September 2022 district court decision in the state AG lawsuit concluded that the allegations~~
~~of anticompetitive harm from these activities were sufficiently plausible to survive a motion to~~
~~dismiss.248~~
~~The Google ad-tech lawsuits are complex and a full discussion of the relevant claims is beyond~~
~~the scope of this report. Most of the allegations nevertheless implicate a recurring theme in~~

~~240~~314 304 Id. at 11. 305 Id. at 19, 34-35. 306 Order, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Apr. 28, 2023). 307 Complaint ¶¶ 11-13, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023). Complaint ¶¶ 11-13, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023).
~~241~~308 Id. ¶ 16. The FTC declined to challenge Google’s DoubleClick acquisition at the time. Press Release, Fed. Trade . ¶ 16. The FTC declined to challenge Google’s DoubleClick acquisition at the time. Press Release, Fed. Trade
~~Comn~~Comm’n, Federal Trade Commission Closes Google/DoubleClick Investigation (Dec. 20, 2007), ’n, Federal Trade Commission Closes Google/DoubleClick Investigation (Dec. 20, 2007),
https://www.ftc.gov/news-events/news/press-releases/2007/12/federal-trade-commission-closes-googledoubleclick-https://www.ftc.gov/news-events/news/press-releases/2007/12/federal-trade-commission-closes-googledoubleclick-
investigation. investigation.
~~242~~309 Complaint ¶ 89, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023). Complaint ¶ 89, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023).
~~243~~310 Id. ¶ 104. According to the DOJ’s complaint, publishers could use Google’s ad exchange without using its ad server . ¶ 104. According to the DOJ’s complaint, publishers could use Google’s ad exchange without using its ad server
by selling ad space based on historical—rather than real-time—prices. by selling ad space based on historical—rather than real-time—prices. Id. The DOJ contends, however, that this was . The DOJ contends, however, that this was
not an attractive option because the resulting prices were often considerably lower than those received from real-time not an attractive option because the resulting prices were often considerably lower than those received from real-time
bids. bids. Id. .
~~244~~311 Opinion and Order at 18, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13, Opinion and Order at 18, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13,
2022). 2022).
~~245~~312 Id. at 16-20, 77-78. . at 16-20, 77-78.
~~246~~313 Complaint ¶¶ 21, 120-25, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023); Opinion and Complaint ¶¶ 21, 120-25, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023); Opinion and
Order at 44-50, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13, 2022). Order at 44-50, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13, 2022).
~~247~~314 Complaint ¶¶ 24, 139, 161-62, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023); Opinion Complaint ¶¶ 24, 139, 161-62, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023); Opinion
and Order at 50-55, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13, 2022). and Order at 50-55, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13, 2022).
~~248 Opinion and Order at 44-55, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept.~~
~~13, 2022).~~
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~~discussions of antitrust and Big Tech firms: the leveraging of economic power to obtain and~~
~~solidify dominance across different markets.249~~
~~Google maintains that its conduct is permissible under antitrust doctrine governing refusals to~~
~~deal, product design, and tying.250~~
Google maintains that its conduct is permissible under antitrust doctrine governing refusals to deal, product design, and tying.315 The September 2022 district court decision in the state AG lawsuit concluded that the allegations of anticompetitive harm from these activities were sufficiently plausible to survive a motion to dismiss.316 As noted, the district court in the DOJ’s lawsuit also denied Google’s motion to dismiss that case, which focused on the allegations of monopoly power.317 The Google ad-tech lawsuits are complex, and a full discussion of the relevant claims is beyond the scope of this report.318 Most of the allegations nevertheless implicate a recurring theme in discussions of antitrust and tech platforms: the leveraging of economic power to obtain and solidify dominance across different markets.319 Amazon
Like Google, Amazon has expanded its remit over time. The company began as an online Like Google, Amazon has expanded its remit over time. The company began as an online
bookseller, but now operates a leading e-commerce marketplace, a major cloud-computing bookseller, but now operates a leading e-commerce marketplace, a major cloud-computing
platform, a logistics network, and a television and film studio.platform, a logistics network, and a television and film studio.~~251~~320 The discussion below focuses The discussion below focuses
~~principally on~~ on the company’s e-commerce activities. Allegations of Market Power In a pending monopolization lawsuit, the FTC has alleged that Amazon has monopoly power in two markets: the “online superstore” market and the “online marketplace services” market.321 The FTC argues that “online superstores”—which are distinguished based on the breadth and depth of their product offerings—are not reasonably interchangeable with other online stores because consumers’ overall shopping costs would increase “dramatically” if they tried to replace online superstores by shopping at several different online stores with more limited offerings.322 Brick-and-mortar stores are not adequate substitutes for online superstores, the complaint alleges, because of the convenience, wider product selection, and personalized shopping experience offered by online superstores.323 The FTC also identifies a separate market for “online marketplace services” offered to sellers.324 The relevant services include access to a significant number of customers; the ability to create 315 Reply Memorandum of Law in Further Support of Google LLC’s Motion to Dismiss Counts I through IV of State Plaintiffs’ Third Amended Complaint at 16-30, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. May 5, 2022). 316 Opinion and Order at 44-55, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010 (S.D.N.Y. Sept. 13, 2022). 317 Order, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Apr. 28, 2023). 318 For a more detailed discussion of the DOJ’s lawsuit, see CRS Legal Sidebar LSB10956, The DOJ’s Ad Tech Antitrust Case Against Google: A Brief Overview, by Alexander H. Pepper & Jay B. Sykes. 319 See generally Patrick F. Todd, Digital Platforms and the Leverage Problem, 98 NEB. L. REV. 486 (2019). 320 HJC REPORT, supra note 11, at 247. 321 Complaint ¶¶ 121, 184, FTC v. Amazon.com, Inc., No. 2:23-cv-01495 (W.D. Wash. Sept. 26, 2023). 322 Id. ¶ 148. 323 Id. ¶¶ 140-47. 324 Id. ¶ 184~~the company’s e-commerce activities.~~
~~Allegations of Market Power~~
~~The HJC Report concluded that Amazon “has significant and durable market power in the U.S.~~
~~online retail market.”252 While the report acknowledged a wide range of estimates of Amazon’s~~
~~share of that market, it determined that estimates “at about 50% or higher are more credible than~~
~~lower estimates of 30-40%.”253 The report also characterized Amazon as the “dominant online~~
~~marketplace,” noting that the firm reportedly controls “about 65% to 70% of all U.S. online~~
~~marketplace sales.”254~~
~~Based on interviews and other material, the report concluded that Amazon has monopoly power~~
~~over “most” third-party sellers on its e-commerce marketplace and “many” of its suppliers, in~~
~~addition to significant market power over consumers.255 Such power is unlikely to erode, the~~
~~report argued, because of network effects, switching costs, and the difficulty that rivals would~~
~~face in developing a comparable logistics network.256~~
~~The Attorney General for the District of Columbia (D.C. AG) made similar allegations in a 2021~~
~~lawsuit brought under District of Columbia law.257 The D.C. AG lawsuit claimed that Amazon~~
~~had monopoly power among online marketplaces based on an alleged market share of 50%-70%,~~
~~the company’s ability to dictate certain terms to third-party sellers, and entry barriers like network~~
~~effects, data advantages, and extensive logistics capabilities.258~~

~~249 See generally Patrick F. Todd, Digital Platforms and the Leverage Problem, 98 NEB. L. REV. 486 (2019).~~
~~250 Reply Memorandum of Law in Further Support of Google LLC’s Motion to Dismiss Counts I through IV of State~~
~~Plaintiffs’ Third Amended Complaint at 16-30, In re Google Digital Advertising Antitrust Litigation, No. 21-md-3010~~
~~(S.D.N.Y. May 5, 2022).~~
~~251 HJC REPORT, supra note 11, at 247.~~
~~252 Id. at 254.~~
~~253 Id.~~
~~254 Id. at 255.~~
~~255 Id. at 257, 259.~~
~~256 Id. at 260.~~
~~257 First Amended Complaint, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Sept.~~
~~10, 2021).~~
~~258 Id. ¶¶ 85-86~~. During an investigation that began in November 2020, the European Commission preliminarily . During an investigation that began in November 2020, the European Commission preliminarily
concluded that Amazon occupied a dominant position in certain European markets for the provision of online concluded that Amazon occupied a dominant position in certain European markets for the provision of online
marketplace services to third-party sellers. Press Release, Euro. Comm’n, Antitrust: Commission Accepts marketplace services to third-party sellers. Press Release, Euro. Comm’n, Antitrust: Commission Accepts
Commitments by Amazon Barring it From Using Marketplace Seller Data, and Ensuring Equal Access to Buy Box and Commitments by Amazon Barring it From Using Marketplace Seller Data, and Ensuring Equal Access to Buy Box and
Prime (Dec. 20, 2022), https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7777 [hereinafter “Amazon EC Prime (Dec. 20, 2022), https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7777 [hereinafter “Amazon EC
Commitments”]. Congressional Research Service Congressional Research Service

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~~Amazon rejected those allegations, arguing that it competes in a broader market that includes~~
~~physical retail stores.259~~34 Antitrust Reform and Big Tech Firms and maintain pages with product information; and the ability to display customer reviews to shoppers.325 The complaint alleges that “online marketplace services” are not reasonably interchangeable with selling as a vendor to online or offline retail stores, which typically involves wholesale pricing and transfer of title to the relevant products.326 The FTC’s complaint follows similar lawsuits, including an action filed by the D.C. Attorney General (D.C. AG) under D.C. law and another by a putative class of consumers under the Sherman Act.327 The D.C. AG’s complaint alleged that Amazon has monopoly power among online marketplaces,328 while the consumer lawsuit contends that Amazon has monopoly power in a retail e-commerce market and several e-commerce submarkets for specific products.329
In 2022, the Superior Court of the District of Columbia dismissed the D.C. AG lawsuit on several In 2022, the Superior Court of the District of Columbia dismissed the D.C. AG lawsuit on several
grounds, including a failure to plausibly allege monopoly power.grounds, including a failure to plausibly allege monopoly power.~~260~~330 The D.C. AG has appealed that decision.331 In contrast, a federal district court has denied Amazon’s motion to dismiss the consumer lawsuit, concluding that the plaintiffs plausibly alleged monopoly power, in addition to rule-of-reason claims under Section 1 of the Sherman Act.332 Amazon’s alleged monopoly power will likely be litigated vigorously. In identifying an “online superstore” market, the FTC appears to be alleging a “cluster” market that consists of a vast array of noncompeting goods.333 Courts have recognized cluster markets in other contexts. For example, groups of noncompeting financial and medical services have been deemed to be relevant antitrust markets in cases involving banks and hospitals.334 In another case, the Supreme Court concluded that the relevant market consisted of a package of centrally monitored alarm services.335 While some courts have recognized cluster markets based on considerations of administrative convenience (i.e., where distinct markets face similar competitive conditions, obviating the need for separate analyses), the FTC appears to rely on a different theory of clustering grounded in “transactional complementarity.”336 Under this theory, a package of noncompeting goods or services may qualify as a relevant antitrust market if a significant number of consumers would be willing to pay supra-competitive prices for the convenience of receiving the goods or services as a package.337 Commentators have also argued that economies of scope and network effects may 325 Complaint ¶ 185, FTC v. Amazon.com, Inc., No. 2:23-cv-01495 (W.D. Wash. Sept. 26, 2023). 326 Id. ¶¶ 191-97. 327 Frame-Wilson v. Amazon.com, Inc., 591 F. Supp. 3d 975 (2022); First Amended Complaint ~~The D.C. AG has appealed~~
~~that decision.261~~
~~Allegations of Anticompetitive Conduct~~
~~Most-Favored-Nation and Pricing-Parity Clauses~~
~~The D.C. AG lawsuit discussed above focused on most-favored-nation and pricing-parity clauses~~
~~in Amazon’s agreements with third-party sellers that use its e-commerce marketplace.262 One~~
~~iteration of these provisions—which Amazon has discontinued—prohibited third-party sellers~~
~~from offering their products elsewhere online at prices lower than those the sellers offered on~~
~~Amazon.263 Under a later version of the relevant policy, Amazon indicated that it may remove or~~
~~decline to feature products that third-party sellers offered on Amazon at prices significantly~~
~~higher than those the sellers recently charged in any venue.264~~
~~The D.C. AG argued that the latter policy was “effectively identical” to the earlier pricing-parity~~
~~provision because—in practice—Amazon continued to penalize third-party sellers for any offers~~
~~undercutting the sellers’ prices on Amazon.265 The HJC Report reached similar conclusions about~~
~~the relevant policies and contended that they harmed competition among e-commerce~~
~~marketplaces.266~~
~~In 2022, the Superior Court of the District of Columbia dismissed the D.C. AG’s allegations. The~~
~~court reasoned that the newer Amazon policy did not prohibit third-party sellers from offering~~
~~lower prices in other venues; that any broader implementation of the policy was not attributable~~
~~to the agreements themselves; and that the D.C. AG had not plausibly alleged monopoly power,~~

~~Commitments”].~~
~~259 Defendant Amazon.com, Inc.’s Opposed Motion to Dismiss Plaintiff District of Columbia’s Amended Complaint at~~
~~15-16~~, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. , District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. ~~Oct. 25~~Sept. 10, 2021). 328 First Amended Complaint ¶¶ 85-86, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Sept. 10, 2021). 329 Frame-Wilson, 591 F. Supp. 3d at 989. 330~~, 2021); see also HJC~~
~~REPORT, supra note 11, at 255 (noting Amazon’s argument that its share of the total retail market is “the most~~
~~appropriate and relevant” method of estimating its market share).~~
~~260~~ Order at 15-16, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 1, 2022). Order at 15-16, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 1, 2022).
~~261~~331 Notice of Appeal, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 25, Notice of Appeal, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 25,
2022). 2022).
~~262 First Amended Complaint ¶¶ 5-10, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super.~~
~~Ct. Sept. 10, 2021). The Attorney General of California has filed a similar lawsuit under California unfair-competition~~
~~law. See Complaint, The People of the State of California v. Amazon.com, Inc., No. CGC-22-601826 (Cal. Super. Ct.~~
~~Sept. 15, 2022). For a discussion of the antitrust issues raised by most-favored-nation clauses in online platform~~
~~markets, see Jonathan B. Baker & Fiona Scott Morton, Antitrust Enforcement Against Platform MFNs, 127 YALE L.J.~~
~~2176 (2018).~~
~~263 First Amended Complaint ¶¶ 5-8, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct.~~
~~Sept. 10, 2021).~~
~~264 Order at 8, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 1, 2022).~~
~~265 First Amended Complaint ¶ 9, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct.~~
~~Sept. 10, 2021); see also Order at 8-9, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super.~~
~~Ct. Aug. 1, 2022).~~
~~266 HJC REPORT, supra note 11, at 295-97.~~
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~~meaning it could not prevail on a claim alleging unilateral anticompetitive conduct.267 As~~
~~discussed, the D.C. AG has appealed the Superior Court’s decision.268~~
~~Tying~~
~~The HJC Report and some foreign competition authorities have also taken issue with the link~~
~~between Amazon’s e-commerce marketplace and its logistics service, Fulfillment by Amazon~~
~~(FBA).269 According to the report, Amazon effectively requires third-party sellers to use FBA as a~~
~~condition of participating in Amazon Prime—a subscription service that offers customers fast~~
~~shipping of eligible products, among other benefits.270 Many third-party sellers also reported their~~
~~belief that Amazon favors sellers who use FBA in its product search results and in managing its~~
~~“Buy Box”—the program that determines which sellers “win” particular product sales.271 As a~~
~~result of these practices, the report contends, many third-party sellers regard use of FBA as~~
~~essential to success on Amazon’s marketplace.272~~
~~Amazon has responded that it provides non-discriminatory access to the Buy Box and that~~
~~participation in FBA is voluntary.273~~
~~Use of Third-Party Seller Data~~
~~Amazon’s dual role as both a marketplace operator and a seller on its own marketplace has also~~
~~attracted scrutiny. Critics have contended that this integration generates conflicts of interest,~~
~~which have led Amazon to leverage control of its marketplace to advantage its own products and~~
~~services in various ways.274~~
~~Some of these allegations involve Amazon’s use of data. The HJC Report and European~~
~~regulators have accused Amazon of using data generated by third-party sellers on its marketplace~~
~~to identify and imitate popular products for its private-label business.275~~

~~267 Order at 8-9, 15-16, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 1,~~
~~2022). The D.C. AG lawsuit also included allegations regarding Amazon’s contracts with suppliers, which are not~~
~~discussed here.~~
~~268 Notice of Appeal, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 25,~~
~~2022).~~
~~269 HJC REPORT, supra note 11, at 287-90; Amazon EC Commitments, supra note 258; Adam Satariano,~~ ~~Amazon is~~
~~Fined $1.3 Billion in Italy Over Antitrust Violations, N.Y. TIMES (Dec. 9, 2021),~~
~~https://www.nytimes.com/2021/12/09/business/amazon-italy-fine.html.~~
~~270 HJC REPORT, supra note 11, at 287. While there is a way third-party sellers can become eligible for Prime without~~
~~using FBA, the HJC Report characterized that option as “entirely impractical” for “most sellers.” Id.~~
~~271 Id. at 288-90.~~
~~272 Id. at 287-88.~~
~~273 Id. at 292. In 2022, the European Commission accepted certain commitments from Amazon to resolve similar~~
~~concerns. See Amazon EC Commitments, supra note 258. Among other things, Amazon agreed to treat all sellers~~
~~equally in managing its Buy Box and to allow third-party sellers that participate in Prime to freely choose their logistics~~
~~and delivery services. Id.~~
~~274 HJC REPORT, supra note 11, at 16; see also Lina M. Khan, The Separation of Platforms and Commerce, 119~~
~~COLUM. L. REV. 973, 985-94 (2019) [hereinafter “Khan, Platforms and Commerce”].~~
~~275 HJC REPORT, supra note 11, at 274-82; Press Release, Euro. Comm’n, Antitrust: Commission Sends Statement of~~
~~Objections to Amazon for the Use of Non-Public Independent Seller Data and Opens Second Investigation into its E-~~
~~Commerce Business Practices (Nov. 10, 2020), https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2077.~~
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~~During congressional testimony in July 2020, Amazon’s founder and former chief executive said~~
~~that the company has a policy against using seller-specific data to aid its private-label business.276~~
~~He indicated, however, that he could not guarantee that this policy had never been violated.277~~
~~Amazon reportedly does not have a policy against using aggregated seller data to assist its retail~~
~~business.278~~
~~Commentators have disputed the competitive effects of a platform’s use of user data to enter new~~
~~markets. Some commentators~~ 332 Frame-Wilson, 591 F. Supp. 3d at 988-92. 333 See, e.g., Herbert Hovenkamp, Digital Cluster Markets, 2022 COLUM. BUS. L. REV. 246 (2022) [hereinafter “Hovenkamp, Digital Cluster Markets”]. 334 United States v. Philadelphia Nat’l Bank, 374 U.S. 321, 356 (1963); ProMedica Health Sys., Inc. v. FTC, 749 F.3d 559, 566-67 (6th Cir. 2014). 335 United States v. Grinnell Corp., 384 U.S. 563, 572 (1966). 336 See ProMedica Health Sys., Inc., 749 F.3d at 567 (distinguishing this theory from the administrative-convenience approach); Ian Ayres, Rationalizing Antitrust Cluster Markets, 95 YALE L.J. 109, 114-18 (1985) (developing the transactional-complementarity theory of clustering). 337 ProMedica Health Sys., Inc., 749 F.3d at 567. Congressional Research Service 35 link to page 39 Antitrust Reform and Big Tech Firms be rationales for clustering noncompeting products in the same market.338 Whether “online superstores” represent an appropriately defined market for any of these reasons will likely turn on the factual evidence that the FTC can ultimately adduce. By alleging separate markets for “online superstores” and “online marketplace services,” the FTC’s complaint also raises questions regarding the impact of the Supreme Court’s 2018 decision in Ohio v. American Express (Amex).339 In Amex, the Court held that two-sided transaction platforms like credit-card networks represent a single market, meaning a price increase on one side of such a market (there, an increase in merchant fees) cannot by itself demonstrate an anticompetitive exercise of market power.340 Instead, the Court concluded that the plaintiffs in Amex needed to show anticompetitive effects on the credit-card market “as a whole”—for example, that the defendant’s conduct increased the price or reduced the number of credit-card transactions.341 Amex’s implications for the FTC’s case against Amazon are unclear. In a 2018 article, the current FTC Chair argued that the Supreme Court’s reasoning in Amex appeared to apply to Amazon’s marketplace.342 While the article did not elaborate on that assessment, there are similarities between Amazon’s platform and credit-card networks. In Amex, the Court justified its single-market conclusion on the ground that credit-card networks cannot make sales “unless both sides of the platform [i.e., merchants and cardholders] simultaneously agree to use their services.”343 As a result, the Court reasoned, credit-card networks cannot set prices for one side of the market without considering the impact of those prices on the other side of the market.344 Similar dynamics may be at work in Amazon’s case. By allegedly charging monopoly prices to sellers, Amazon may risk losing participants on that side of its platform, which would decrease the value of its marketplace to consumers. If consumers shop elsewhere as a result, that would further diminish the value of Amazon’s platform to sellers, setting off a negative feedback loop.345 The court may thus rely on Amex to reject the FTC’s effort to define separate markets for “online superstores” and “online marketplace services.” Some commentators, however, have highlighted possible distinctions between Amazon’s marketplace and credit-card networks. While credit-card networks do little besides facilitate transactions, for example, Amazon offers sellers a range of additional services.346 Whether these types of distinctions will allow the FTC to sidestep Amex’s single-market rule for two-sided transaction platforms remains to be seen. 338 Hovenkamp, Digital Cluster Markets, supra note 333, at 255-56, 262-71. 339 138 S. Ct. 2274 (2018). 340 Id. at 2287. 341 Id. 342 Lina Khan, The Supreme Court Just Quietly Gutted Antitrust Law, VOX (July 3, 2018), https://www.vox.com/the-big-idea/2018/7/3/17530320/antitrust-american-express-amazon-uber-tech-monopoly-monopsony. 343 Amex, 138 S. Ct. at 2286. 344 Id. 345 Id. at 2281 (describing these dynamics and the interconnected pricing that allegedly results from them). 346 Dan Papscun, Amazon Antitrust Case Must Clear Amex Bar Set by Supreme Court, BLOOMBERG LAW (Sept. 29, 2023), https://news.bloomberglaw.com/antitrust/amazon-antitrust-case-must-clear-amex-bar-set-by-supreme-court; Tim Wu, The American Express Opinion, Tech Platforms & the Rule of Reason, 7 J. ANTITRUST ENFORCEMENT 117 (2018). Congressional Research Service 36 link to page 39 Antitrust Reform and Big Tech Firms Allegations of Anticompetitive Conduct Anti-Discounting Measures Several lawsuits have alleged that Amazon has implemented measures to punish sellers on its marketplace for offering lower prices in other transaction venues. The FTC’s lawsuit contends that Amazon disqualifies sellers from appearing in its Buy Box—which features a product’s price and the “Add to Cart” button, among other information—if Amazon discovers sellers offering their products for a lower price in another online store.347 The complaint further alleges that Amazon has entered into contracts with certain important sellers that prohibit the sellers from discounting their products in other online stores.348 The FTC claims that these anti-discounting measures prevent rival online marketplaces from offering products at lower prices and deprives those rivals of necessary scale.349 The D.C. AG lawsuit and the consumer class action discussed above made similar allegations.350 As discussed, the Superior Court of the District of Columbia has dismissed the D.C. AG’s complaint,351 and the D.C. AG has appealed that decision.352 The district court in the consumer lawsuit, by contrast, denied Amazon’s motion to dismiss, concluding that the plaintiffs had plausibly alleged that Amazon’s conduct caused anticompetitive harm.353 Amazon has rejected the allegation that the relevant policies are anticompetitive, arguing that they reflect a decision to highlight products that are competitively priced.354 Tying of Amazon Prime and Amazon’s Fulfillment Service The FTC’s lawsuit also alleges that Amazon maintains its monopolies by coercing sellers to use its fulfillment services (i.e., storing, packaging, and preparing products for shipment).355 Specifically, the FTC contends that Amazon effectively requires sellers to use its fulfillment services as a condition of participating in Amazon Prime—a subscription program that offers customers fast shipping of eligible products, among other benefits.356 Prime eligibility boosts a seller’s chances of winning the Buy Box, the FTC alleges, while sellers that forgo Prime eligibility “effectively disappear from Amazon’s storefront.”357 347 Complaint ¶ 269, FTC v. Amazon.com, Inc., No. 2:23-cv-01495 (W.D. Wash. Sept. 26, 2023). 348 Id. 349 Id. ¶¶ 305-10, 324. 350 Frame-Wilson v. Amazon.com, Inc., 591 F. Supp. 3d 975, 981-82 (2022); First Amended Complaint ¶¶ 5-10, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Sept. 10, 2021). 351 Order at 8-9, 15-16, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 1, 2022). 352 Notice of Appeal, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775 (D.C. Super. Ct. Aug. 25, 2022). 353 Frame-Wilson, 591 F. Supp. 3d at 991-92. 354 David Zapolsky, The FTC’s Lawsuit Against Amazon Would Lead to Higher Prices and Slower Deliveries for Consumers—And Hurt Businesses, AMAZON (Sept. 26, 2023), https://www.aboutamazon.com/news/company-news/amazon-ftc-antitrust-lawsuit-full-response. 355 Complaint ¶ 351, FTC v. Amazon.com, Inc., No. 2:23-cv-01495 (W.D. Wash. Sept. 26, 2023). 356 Id. ¶ 353. In 2022, the European Commission accepted certain commitments from Amazon to resolve similar concerns. See Amazon EC Commitments, supra note 328. Among other things, Amazon agreed to treat all sellers equally in managing its Buy Box and to allow third-party sellers that participate in Prime to freely choose their logistics and delivery services. Id. 357 Complaint ¶ 352, FTC v. Amazon.com, Inc., No. 2:23-cv-01495 (W.D. Wash. Sept. 26, 2023). Congressional Research Service 37 link to page 41 link to page 5 link to page 5 link to page 5 link to page 39 Antitrust Reform and Big Tech Firms The FTC argues that Amazon’s tying of Prime to its fulfillment services stifles the growth of other online marketplaces in two ways. First, by allegedly tying Prime to its fulfillment services, Amazon effectively requires sellers that want to use both Amazon’s marketplace and other online marketplaces to use two separate fulfillment providers.358 This duplication, the FTC contends, creates extra costs that could be avoided by consolidating inventory with one fulfillment provider, which deters sellers from using other online marketplaces.359 Second, Amazon’s conduct allegedly prevents independent fulfillment providers from gaining necessary scale, which likewise increases the costs to sellers of utilizing multiple online marketplaces.360 In response, Amazon has said that it allows sellers that participate in Prime to use other fulfillment providers as long as those providers “are able to meet . . . Prime customers’ high expectations for fast, reliable delivery.”361 Use of Third-Party Seller Data Amazon’s dual role as both a marketplace operator and a seller on its own marketplace has also attracted scrutiny. Critics have contended that this integration generates conflicts of interest, which have led Amazon to leverage control of its marketplace to advantage its own products and services in various ways.362 Some of these allegations involve Amazon’s use of data. The HJC Report and European regulators have accused Amazon of using data generated by third-party sellers on its marketplace to identify and imitate popular products for its private-label business.363 During congressional testimony in July 2020, Amazon’s founder and former chief executive said that the company has a policy against using seller-specific data to aid its private-label business.364 He indicated, however, that he could not guarantee that this policy had never been violated.365 Amazon reportedly does not have a policy against using aggregated seller data to assist its retail business.366 Commentators have disputed the competitive effects of a platform’s use of user data to enter new markets. Some have argued that Amazon’s entry into new markets forces other have argued that Amazon’s entry into new markets forces other
~~sellers to lower their prices—an outcome that antitrust traditionally encourages.279~~sellers to lower 358 Id. ¶ 366. 359 Id. 360 Id. 361 Zapolsky, supra note 354. 362 HJC REPORT, supra note 11, at 16; see also Lina M. Khan, The Separation of Platforms and Commerce, 119 COLUM. L. REV. 973, 985-94 (2019) [hereinafter “Khan, Platforms and Commerce”]. 363 HJC REPORT, supra note 11, at 274-82; Press Release, Euro. Comm’n, Antitrust: Commission Sends Statement of Objections to Amazon for the Use of Non-Public Independent Seller Data and Opens Second Investigation into its E-Commerce Business Practices (Nov. 10, 2020), https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2077. 364 HJC REPORT, supra note 11, at 277-78. 365 Id. 366 Id. at 278. The European Commission has investigated similar issues. In 2020, the Commission preliminarily concluded that Amazon had relied on aggregated data generated by third-party sellers to support its own retail offerings. See Amazon EC Commitments, supra note 328. In December 2022, the Commission accepted Amazon’s commitment not to use non-public data derived from third-party sellers to assist its private-label business. See id. Congressional Research Service 38 link to page 10 link to page 67 link to page 5 link to page 13 link to page 5 link to page 5 link to page 13 link to page 43 Antitrust Reform and Big Tech Firms their prices—an outcome that antitrust traditionally encourages.367 Others contend Others contend
that the alleged copying may have longer-term anticompetitive effects by chilling incentives to that the alleged copying may have longer-term anticompetitive effects by chilling incentives to
innovate.innovate.~~280~~368
Self-Preferencing
Amazon’s dual role as a marketplace operator and private-label seller has led to a range of other Amazon’s dual role as a marketplace operator and private-label seller has led to a range of other
concerns about self-preferencing. For example, a 2016 ProPublica investigation concluded that concerns about self-preferencing. For example, a 2016 ProPublica investigation concluded that
Amazon designed the ranking algorithm for its marketplace to favor its own offerings and Amazon designed the ranking algorithm for its marketplace to favor its own offerings and
products offered by sellers that use products offered by sellers that use ~~FBA.281~~its fulfillment services.369 The HJC Report The HJC Report ~~also~~ alleged that Amazon has alleged that Amazon has
engaged in other forms of self-preferencing, such as refusing to allow certain competitors to engaged in other forms of self-preferencing, such as refusing to allow certain competitors to
advertise on Amazon’s platform.advertise on Amazon’s platform.~~282~~370
Predatory Pricing
Amazon has also been accused of engaging in predatory pricing at various points in its history.Amazon has also been accused of engaging in predatory pricing at various points in its history.~~283~~371
These allegations have been directed against several aspects of Amazon’s business, including its These allegations have been directed against several aspects of Amazon’s business, including its
sale of e-books;sale of e-books;~~284~~372 its sale of diapers and ultimate acquisition of the parent company of its sale of diapers and ultimate acquisition of the parent company of
Diapers.com;Diapers.com;~~285~~373 and Amazon Prime. and Amazon Prime.~~286~~

~~276 HJC REPORT, supra note 11, at 277-78.~~
~~277 Id.~~
~~278 Id. at 278. The European Commission has investigated similar issues. In 2020, the Commission preliminarily~~
~~concluded that Amazon had relied on aggregated data generated by third-party sellers to support its own retail~~
~~offerings. See Amazon EC Commitments, supra note 258. In December 2022, the Commission accepted Amazon’s~~
~~commitment not to use non-public data derived from third-party sellers to assist its private-label business. See id.~~
~~279 See, e.g., Francis, supra note 48~~374 In previous academic work, the current FTC Chair has argued that Amazon exemplifies the rationality of predatory pricing in markets characterized by strong network effects and extreme scale economies, contrary to the assumptions that underpin current doctrine.375 Other commentators have challenged these allegations.376 In response to the claims involving Diapers.com, some have noted that Amazon has not been accused of occupying a monopolistic share of the market for online diaper sales or diaper sales generally.377 Others have argued that the HJC Report failed to produce sufficient evidence to conclude that Amazon prices Prime memberships below cost.378 Commentators have also questioned whether Amazon’s critics are 367 See, e.g., Francis, supra note 63, at 832; Herbert Hovenkamp, at 832; Herbert Hovenkamp, Antitrust and Platform Monopoly, 130 YALE L.J. , 130 YALE L.J.
1952, 2015 (2021) [hereinafter “Hovenkamp, 1952, 2015 (2021) [hereinafter “Hovenkamp, Platform Monopoly”]. ”].
~~280~~368 ARIEL EZRACHI & MAURICE E. STUCKE, HOW BIG-TECH BARONS SMASH INNOVATION—AND HOW TO STRIKE BACK ARIEL EZRACHI & MAURICE E. STUCKE, HOW BIG-TECH BARONS SMASH INNOVATION—AND HOW TO STRIKE BACK
54-57 (2022). These issues are discussed in greater detail in 54-57 (2022). These issues are discussed in greater detail in infra “Use of Nonpublic User Data.” ”
~~281~~369 Julia Angwin & Surya Mattu, Julia Angwin & Surya Mattu, Amazon Says It Puts Customers First. But Its Pricing Algorithm Doesn’t, PROPUBLICA , PROPUBLICA
(Sept. 20, 2016), https://www.propublica.org/article/amazon-says-it-puts-customers-first-but-its-pricing-algorithm-(Sept. 20, 2016), https://www.propublica.org/article/amazon-says-it-puts-customers-first-but-its-pricing-algorithm-
doesnt. doesnt.
~~282~~370 HJC REPORT, HJC REPORT, supra no note 11, at 283-86. at 283-86.
~~283~~371 See, e.g., Shaoul Sussman, , Shaoul Sussman, Prime Predator: Amazon and the Rationale of Below Average Variable Cost Pricing
Strategies Among Negative-Cash Flow Firms, 7 J. ANTITRUST ENFORCEMENT 203 (2019). , 7 J. ANTITRUST ENFORCEMENT 203 (2019).
~~284~~372 Khan, Khan, Amazon’s Antitrust Paradox, , supra no note 5779, at 756-68. at 756-68.
~~285~~373 Id. at 768-74; HJC REPORT, . at 768-74; HJC REPORT, supra no note 11, at 297-99. at 297-99.
~~286~~374 HJC REPORT, supra note 11, at 299-300. 375 Khan, Amazon’s Antitrust Paradox, supra note 79, at 753, 786, 791-92. 376 Kristian Stout & Alec Stapp, Is Amazon Guilty of Predatory Pricing?, TRUTH ON THE MARKET (May 7, 2019), https://truthonthemarket.com/2019/05/07/is-amazon-guilty-of-predatory-pricing/; Jeffrey Eisenach, Who Should Antitrust Protect? The Case of Diapers.com, AM. ENTER. INST. (Nov. 5, 2018), https://www.aei.org/technology-and-innovation/who-should-antitrust-protect-the-case-of-diapers-com/. 377 Eisenach, supra note 376. 378 Carl Shapiro, Regulating Big Tech: Factual Foundations and Policy Goals, NETWORK L. REV. (forthcoming Fall 2023), https://www.networklawreview.org/shapiro-big-tech/. Congressional Research Service 39 link to page 5 Antitrust Reform and Big Tech Firms relying on a coherent concept of predation, contending that some of the relevant literature appears to reject the idea that raising prices at some point is a necessary part of a predatory strategy.379 Apple Apple is the most valuable company in the world.380 ~~HJC REPORT, supra note 11, at 299-300.~~
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~~In academic work, the chair of the FTC has argued that Amazon exemplifies the rationality of~~
~~predatory pricing in markets characterized by strong network effects and extreme scale~~
~~economies, contrary to the assumptions that underpin current doctrine.287~~
~~Other commentators have challenged these allegations.288 In response to the claims involving~~
~~Diapers.com, for example, some have noted that Amazon has not been accused of occupying a~~
~~monopolistic share of the market for online diaper sales or diaper sales generally.289 Others have~~
~~argued that the HJC report failed to produce sufficient evidence to conclude that Amazon prices~~
~~Prime memberships below cost.290~~
~~Apple~~
~~Apple is the most valuable company in the world.291~~ The firm designs, manufactures, and sells The firm designs, manufactures, and sells
iPhone smartphones, Mac personal computers, iPad tablets, and several wearables and iPhone smartphones, Mac personal computers, iPad tablets, and several wearables and
accessories, in addition to offering a range of related services.accessories, in addition to offering a range of related services.~~292~~381 The discussion below focuses on The discussion below focuses on
issues related to the company’s mobile operating system and App Store. issues related to the company’s mobile operating system and App Store.
Allegations of Market Power
As discussed, Apple’s iOS and Google’s Android are the two dominant operating systems for As discussed, Apple’s iOS and Google’s Android are the two dominant operating systems for
mobile devices in the United States and globally.mobile devices in the United States and globally.~~293~~382 More than half of the mobile devices in the More than half of the mobile devices in the
United States run a version or derivation of iOS.United States run a version or derivation of iOS.~~294~~383 Apple’s App Store is the only method by Apple’s App Store is the only method by
which software developers can distribute apps on iOS devices; Apple does not allow iOS users to which software developers can distribute apps on iOS devices; Apple does not allow iOS users to
download other app stores or sideload apps.download other app stores or sideload apps.~~295~~
~~Based on these restrictions, Apple’s market share, and various entry barriers, the HJC Report~~
~~concluded that Apple has significant and durable market power in markets for mobile operating~~
~~systems and mobile app stores.296 The report also alleged that Apple has monopoly power over~~
~~app distribution on iOS devices.297~~
~~Epic Games—the developer of the video game Fortnite—has made similar claims in litigation,~~
~~arguing that Apple has monopoly power in an~~384 Like Google, Apple requires developers to use its IAP processor as a condition of accessing its App Store and has charged 30% commissions for that service.385 In 2020, Epic Games—the developer of the video game Fortnite—challenged these restrictions under Sections 1 and 2 of the Sherman Act. Epic alleged single-brand aftermarkets for iOS app distribution iOS app distribution ~~market and a market for~~and iOS iOS
~~in-app payment (IAP) processing.298 (Like Google, Apple requires developers to use its IAP~~

~~287 Khan, Amazon’s Antitrust Paradox, supra note 57, at 753, 786, 791-92.~~
~~288 Kristian Stout & Alec Stapp, Is Amazon Guilty of Predatory Pricing?, TRUTH ON THE MARKET (May 7, 2019),~~
~~https://truthonthemarket.com/2019/05/07/is-amazon-guilty-of-predatory-pricing/; Jeffrey Eisenach,~~ ~~Who Should~~
~~Antitrust Protect? The Case of Diapers.com, AM. ENTER. INST. (Nov. 5, 2018), https://www.aei.org/technology-and-~~
~~innovation/who-should-antitrust-protect-the-case-of-diapers-com/.~~
~~289 Eisenach, supra note 288.~~
~~290 Carl Shapiro, Regulating Big Tech: Factual Foundations and Policy Goals, NETWORK L. REV. (forthcoming Fall~~
~~2023), https://www.networklawreview.org/shapiro-big-tech/.~~
~~291 Largest Companies by Market Cap, COMPANIESMARKETCAP (last visited Mar. 15, 2023),~~
~~https://companiesmarketcap.com/.~~
~~292 Apple Inc., Annual Report (Form 10-K) at 1-2 (Oct. 28, 2022).~~
~~293 HJC REPORT, supra note 11, at 100-02.~~
~~294 Id. at 334.~~
~~295 Id. at 335.~~
~~296 Id. at 334.~~
~~297 Id. at 335.~~
~~298 Complaint for Injunctive Relief ¶¶ 58, 119, Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640 (N.D. Cal. Aug. 13,~~
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~~processor as a condition of accessing its App Store and has charged 30 percent commissions for~~
~~that service.)299~~
~~Apple has denied possessing monopoly power. With respect to software distribution, the company~~
~~argues that it competes in a market that includes other app stores, the open internet, and physical~~
~~retail stores.300 In the Epic Games litigation involving video-game distribution, Apple has~~
~~contended that the relevant antitrust market is a market for video game distribution generally,~~
~~which includes other app stores, gaming stores for personal computers, gaming stores on game~~
~~consoles, and cloud-based game streaming services.301~~
~~In September 2021, a federal district court concluded in Epic Games that Apple competes in a~~
~~market for digital mobile gaming transactions, as opposed to a broader market for video-game~~
~~distribution generally or a narrower market for game distribution on iOS devices.302 The court~~
~~further determined that Apple possesses market power—but not monopoly power—in this~~
~~market.303 Epic Games has appealed this decision.304~~
~~Allegations of Anticompetitive Conduct~~
~~Mobile App Distribution and IAP Processing~~
~~Apple has been accused of engaging in several anticompetitive practices in app markets.~~
~~One set of allegations focuses on various technical and contractual restrictions that prevent~~
~~developers from distributing iOS apps outside of the App Store, which allegedly harms~~
~~competition in markets for app distribution.305 Epic Games has also argued that the requirement~~
~~that developers using Apple’s App Store also use Apple’s IAP processor constitutes an unlawful~~
~~tying arrangement.306~~
~~A federal district court has rejected these claims. In Epic Games, the court held that the relevant~~
~~contractual restrictions on app distribution qualified as unilateral rather than concerted conduct.307~~
~~Because the court had determined that Apple was not a monopolist, it rejected the plaintiff’s~~
~~claims involving those restrictions.308~~
~~While the court concluded that the challenged restrictions were unilateral and thus not illegal~~
~~absent monopoly power, it acknowledged certain doctrinal ambiguities involving the distinction~~

~~2020).~~
~~299 Epic Games, Inc. v. Apple Inc., 559 F. Supp. 3d 898, 923 (N.D. Cal. 2021). In November 2020, Apple reduced its~~
~~IAP processing fees from 30 percent to 15 percent for developers with less than $1 million in annual net sales on its~~
~~platform. Kif Leswing, Apple Will Cut App Store Commissions by Half to 15% for Small App Makers, CNBC (Nov. 18,~~
~~2020), https://www.cnbc.com/2020/11/18/apple-will-cut-app-store-fees-by-half-to-15percent-for-small-~~
~~developers.html.~~
~~300 HJC REPORT, supra note 11, at 335.~~
~~301 Epic Games, Inc., 559 F. Supp. 3d at 972-76.~~
~~302 Id. at 921.~~
~~303 Id. at 922.~~
~~304 Notice of Appeal, Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640 (N.D. Cal. Sept. 12, 2021).~~
~~305 Complaint for Injunctive Relief ¶¶ 64-81, 87-102, Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640 (N.D. Cal.~~
~~Aug. 13, 2020).~~
~~306 Id. ¶ 129.~~
~~307 Epic Games, Inc. v. Apple Inc., 559 F. Supp. 3d 898, 1035 (N.D. Cal. 2021).~~
~~308 Id. at 1044.~~
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~~between unilateral and concerted conduct.309 The court thus proceeded to conduct a~~
~~competitive-effects analysis of the challenged restrictions notwithstanding its holding that they~~
~~were unilateral.310 In conducting this analysis under the rule of reason, the court concluded that:~~
~~1. Epic Games had established evidence of the restrictions’ anticompetitive~~
~~effects;311~~
2. in-app payment processing in which Apple possessed monopoly power.386 Apple denied Epic’s allegations, arguing that the relevant market consists of all video game transactions, including transactions involving gaming consoles, personal computers, and streaming services.387 In September 2021, a federal district court arrived at a conclusion that fell between the two parties’ positions. Instead of a single-brand aftermarket for iOS app distribution or a market for video-game distribution generally, the court held that Apple competes in a market for digital mobile gaming transactions, which includes transactions on iOS and Android mobile devices.388 379 Herbert Hovenkamp, Whatever Did Happen to the Antitrust Movement?, 94 NOTRE DAME L. REV. 583, 588-89 (2019). 380 Largest Companies by Market Cap, COMPANIESMARKETCAP (last visited Nov. 6, 2023), https://companiesmarketcap.com/. 381 Apple Inc., Annual Report (Form 10-K) at 1-2 (Oct. 28, 2022). 382 HJC REPORT, supra note 11, at 100-02. 383 Id. at 334. 384 Id. at 335. 385 Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 967 (9th Cir. 2023). 386 Id. at 970. An aftermarket is a market in which demand for a good or service (e.g., an iOS app) depends on an earlier purchase of a durable good (e.g., an iPhone). The Supreme Court has held that, in some cases, single-brand aftermarkets can constitute relevant antitrust markets. Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (1992). In acknowledging the possibility of relevant aftermarkets, the Court reasoned that, in certain instances, asymmetric information and high switching costs can result in consumers being “locked in” to the use of aftermarket products, preventing foremarket competition from disciplining a firm’s aftermarket conduct. Id. at 477-78. Lower courts have generally applied this doctrine narrowly. See David A.J. Goldfine & Kenneth M. Vorrasi, The Fall of the Kodak Aftermarket Doctrine: Dying a Slow Death in the Lower Courts, 72 ANTITRUST L.J. 209 (2004). 387 Id. 388 Epic Games, Inc. v. Apple Inc., 559 F. Supp. 3d 898, 921 (N.D. Cal. 2021). Congressional Research Service 40 Antitrust Reform and Big Tech Firms The district court rejected Epic’s narrower proposed aftermarkets for several reasons, including Epic’s failure to establish consumer unawareness of Apple’s restrictions or produce evidence of the magnitude of the relevant switching costs.389 The court ultimately concluded that Apple possesses market power—but not monopoly power—in the market for digital mobile gaming transactions.390 Epic appealed that decision. In April 2023, the Ninth Circuit took issue with some aspects of the district court’s market-definition analysis, but affirmed the court’s rejection of Epic’s proposed aftermarkets and the holding that Apple does not possess monopoly power.391 Allegations of Anticompetitive Conduct Mobile App Distribution and IAP Processing As discussed, the Epic Games lawsuit challenged Apple’s requirement that iOS app developers distribute their apps through Apple’s App Store and use Apple’s payment processor for in-app purchases.392 The lawsuit also targeted anti-steering provisions in Apple’s developer agreements, which prohibit developers from using certain communications methods—such as in-app links—to inform users about out-of-app payment options.393 In Epic Games, the district court concluded that the first two restrictions did not violate the Sherman Act, but that Apple’s anti-steering provisions violated California competition law.394 In rejecting Epic’s federal antitrust claims, the district court concluded that Apple had proffered valid procompetitive justifications for Apple had proffered valid procompetitive justifications for ~~the restrictions based~~
~~on security concerns, the promotion of interbrand competition, and the protection~~
~~of intellectual property;312 and~~
~~3. Epic Games~~its App Store and payment-processor requirements based on their promotion of security, privacy, and the monetization of intellectual property.395 The district court further concluded that Epic had not shown that those procompetitive benefits could be achieved had not shown that those procompetitive benefits could be achieved
~~through less restrictive means.313~~
~~Accordingly, the court held that the contractual restrictions on app distribution did not violate~~
~~Section 1 of the Sherman Act, even if they amounted to concerted conduct.314~~
~~The court went on to reject other Section 1 and Section 2 claims involving app distribution and~~
~~IAP processing for similar reasons—namely, the plaintiff’s failure to show that various~~
~~procompetitive benefits could be achieved through less restrictive means or establish monopoly~~
~~power.315~~
~~Finally, the court denied the plaintiff’s tying claim on the grounds that IAP processing does not~~
~~represent a separate product from app distribution.316~~
~~As noted, Epic Games has appealed the district court’s decision.317 The Ninth Circuit heard oral~~
~~arguments in the appeal in November 2022.318~~
~~Self-Preferencing~~
~~The HJC Report alleged that Apple has taken a variety of steps to preference its own apps and~~
~~harm rival app developers.319 Among other things, the report accused Apple of injuring~~
~~competition by pre-installing its own apps on iPhones;320 denying third-party apps access to~~

~~309 Id. at 1036.~~
~~310 Id.~~
~~311 Id. at 1036-38.~~
~~312 Id. at 1038-40.~~
~~313 Id. at 1040-41.~~
~~314 Id. at 1041.~~
~~315 Id. at 1041-44.~~
~~316 Id. at 1047. While the court rejected the plaintiff’s federal antitrust claims, it concluded that Apple’s anti-steering~~
~~provisions—which prohibited app developers from including links to external mechanisms for making IAPs—violated~~
~~California’s unfair-competition law. Id. at 1058. Apple has cross-appealed that aspect of the district court’s decision.~~
~~Notice of Appeal, Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640 (N.D. Cal. Oct. 8, 2021).~~
~~317 Notice of Appeal, Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640 (N.D. Cal. Sept. 12, 2021).~~
~~318 Paresh Dave, Epic’s ‘Failure of Proof’ in Apple Antitrust Case Questioned by Appeals Panel, REUTERS (Nov. 14,~~
~~2022), https://www.reuters.com/legal/fortnite-creator-fight-apple-antitrust-ruling-appeal-hearing-2022-11-14/.~~
~~319 HJC REPORT, supra note 11, at 352.~~
~~320 Id.~~
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~~certain APIs and device functionalities that are available to its own apps;321 favoring its own apps~~
~~in search results on its App Store;322 and removing rival apps from the App Store.323~~
~~Apple has denied giving preferential treatment to its own apps in search rankings and justified~~
~~removing specific apps from the App Store as efforts to protect user privacy.324~~
~~Use of Competitively Sensitive Information~~
~~Like Amazon, Apple has faced allegations that it uses its access to data generated by dependent~~
~~businesses to identify and imitate popular offerings.325~~through less restrictive means.396 On appeal, the Ninth Circuit affirmed the district court’s decision.397 In affirming the district court’s rejection of Epic’s Section 1 tying claim, the appellate court concluded that the modified per se rule against tying does not apply to ties involving platform software products, following the D.C. Circuit’s reasoning in Microsoft.398 While the Ninth Circuit disagreed with some aspects of the district court’s rule-of-reason analysis, it affirmed the finding that Epic failed to show that Apple could achieve the relevant procompetitive benefits through less restrictive means.399 389 Id. at 1021-26. 390 Id. at 922. 391 Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 980-81, 998-99 (9th Cir. 2023). 392 Id. at 968. 393 Id. 394 Epic Games, Inc. v. Apple Inc., 559 F. Supp. 3d 898, 1033-57 (N.D. Cal. 2021). 395 Id. at 1038-40. 396 Id. at 1040-41. 397 Epic Games, 67 F.4th at 981-99. 398 Id. at 997. The district court had denied Epic’s tying claim on the ground that app distribution and in-app payment processing are not separate products—a conclusion that the Ninth Circuit rejected. Id. at 996. 399 Id. at 993-94. Congressional Research Service 41 link to page 5 link to page 5 link to page 5 Antitrust Reform and Big Tech Firms Self-Preferencing The HJC Report alleged that Apple has taken a variety of steps to preference its own apps and harm rival app developers.400 Among other things, the report accused Apple of injuring competition by preinstalling its own apps on iPhones;401 denying third-party apps access to certain APIs and device functionalities that are available to its own apps;402 favoring its own apps in search results on its App Store;403 and removing rival apps from the App Store.404 Apple has denied giving preferential treatment to its own apps in search rankings.405 The company has claimed that it has removed specific apps from its App Store based on violations of its privacy policies.406 Use of Competitively Sensitive Information Like Amazon, Apple has faced allegations that it uses its access to data generated by dependent businesses to identify and imitate popular offerings.407 In particular, software developers have In particular, software developers have
accused Apple of using competitively sensitive information about popular apps to build accused Apple of using competitively sensitive information about popular apps to build
competing apps and integrate certain functionalities into iOS.competing apps and integrate certain functionalities into iOS.~~326~~
408 Apple has responded to Apple has responded to ~~questions regarding~~ such allegations by stating that it does not violate such allegations by stating that it does not violate
other companies’ intellectual property rights.other companies’ intellectual property rights.~~327~~409
Big Tech Mergers and Acquisitions
Some of the allegations discussed above involve Big Tech mergers and acquisitions. As noted, the Some of the allegations discussed above involve Big Tech mergers and acquisitions. As noted, the
FTC is currently challenging Facebook’s acquisitions of Instagram and WhatsApp,FTC is currently challenging Facebook’s acquisitions of Instagram and WhatsApp,~~328~~410 while while
Google’s acquisition of DoubleClick is a key part of the DOJ’s monopolization lawsuit targeting Google’s acquisition of DoubleClick is a key part of the DOJ’s monopolization lawsuit targeting
the company’s ad-tech practices.the company’s ad-tech practices.~~329~~411
Some policymakers have expressed broader concerns about Big Tech mergers. Some policymakers have expressed broader concerns about Big Tech mergers.~~330~~412 The companies The companies
have been active dealmakers: between 2000 and 2019, the four firms engaged in hundreds of have been active dealmakers: between 2000 and 2019, the four firms engaged in hundreds of
~~mergers and acquisitions.331 Many of these transactions fell below the numerical thresholds that~~
~~trigger pre-merger review by the antitrust agencies.332~~

~~321~~ 400 HJC REPORT, supra note 11, at 352. 401 Id. 402 Id. at 354. In May 2022, the European Commission preliminarily determined that Apple had violated European . at 354. In May 2022, the European Commission preliminarily determined that Apple had violated European
Union competition law by limiting rival mobile wallet developers from accessing certain technology that Apple makes Union competition law by limiting rival mobile wallet developers from accessing certain technology that Apple makes
available to its own wallet, Apple Pay. available to its own wallet, Apple Pay. See Press Release, Euro. Comm’n, Antitrust: Commission Sends Statement of Press Release, Euro. Comm’n, Antitrust: Commission Sends Statement of
Objections to Apple Over Practices Regarding Apple Pay (May 2, 2022), https://ec.europa.eu/commission/presscorner/Objections to Apple Over Practices Regarding Apple Pay (May 2, 2022), https://ec.europa.eu/commission/presscorner/
detail/en/ip_22_2764. detail/en/ip_22_2764.
~~322~~403 HJC REPORT, HJC REPORT, supra no note 11, at 359-61. at 359-61.
~~323~~404 Id. at 364-67. . at 364-67.
~~324~~405 Id. at 361. at 361~~, 366.~~
~~325~~. 406 Id. at 366. 407 Id. at 361-64. . at 361-64.
~~326~~408 Id. at 362. . at 362.
~~327~~409 Id. at 363. . at 363.
~~328~~410 FTC v. Facebook, Inc., 581 F. Supp. 3d 34 (D.D.C. 2022). FTC v. Facebook, Inc., 581 F. Supp. 3d 34 (D.D.C. 2022).
~~329~~411 Complaint, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023). For a more detailed Complaint, United States v. Google LLC, No. 1:23-cv-00108 (E.D. Va. Jan. 24, 2023). For a more detailed
discussion of mergers and acquisitions in tech markets, see CRS Report R46739, discussion of mergers and acquisitions in tech markets, see CRS Report R46739, Mergers and Acquisitions in Digital
Markets, by Clare Y. Cho. , by Clare Y. Cho.
~~330~~412 HJC REPORT, HJC REPORT, supra no note 11, at 387; SUBCOMM. ON ANTITRUST, COM., AND ADMIN. L. OF THE at 387; SUBCOMM. ON ANTITRUST, COM., AND ADMIN. L. OF THE H. COMM. ON THE H. COMM. ON THE
JUDICIARY, 116TH CONG., THE THIRD WAY: ANTITRUST ENFORCEMENT IN BIG TECH 9 (2020) (written by Ken Buck, et JUDICIARY, 116TH CONG., THE THIRD WAY: ANTITRUST ENFORCEMENT IN BIG TECH 9 (2020) (written by Ken Buck, et
~~al. in response to majority report), https://buck.house.gov/sites/evo-subsites/buck-~~
~~evo.house.gov/files/wysiwyg_uploaded/Buck%20Report.pdf.~~
~~331 Diana L. Moss, The Record of Weak U.S. Merger Enforcement in Big Tech, AM. ANTITRUST INST. 6 (July 8, 2019),~~
~~https://www.antitrustinstitute.org/wp-content/uploads/2019/07/Merger-Enforcement_Big-Tech_7.8.19.pdf.~~
~~332 FED. TRADE COMM’N, NON-HSR REPORTED ACQUISITIONS BY SELECT TECHNOLOGY PLATFORMS, 2010-2019: AN FTC~~
~~STUDY (Sept. 2021), https://www.ftc.gov/system/files/documents/reports/non-hsr-reported-acquisitions-select-~~
~~technology-platforms-2010-2019-ftc-study/p201201technologyplatformstudy2021.pdf [hereinafter “FTC Non-~~
(continued...) Congressional Research Service Congressional Research Service

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link to page link to page 5971 link to page 5 link to page link to page 5 link to page ~~38 link to page 38 link to page 38~~47 link to page link to page 5047 link to page link to page 5761 link to page link to page 5969 link to page link to page 5971 link to page link to page 6371 link to page link to page 6576 Antitrust Reform and Big Tech Firms

mergers and acquisitions.413 Many of the transactions fell below the numerical thresholds that trigger pre-merger review by the antitrust agencies.414 These deals have prompted some commentators to worry that the Big Tech firms are cementing These deals have prompted some commentators to worry that the Big Tech firms are cementing
their dominant positions by acquiring promising potential competitors.their dominant positions by acquiring promising potential competitors.~~333~~415 Transactions involving Transactions involving
“nascent” competitors have been a particular point of concern.“nascent” competitors have been a particular point of concern.~~334~~416 While the concept of a While the concept of a
~~“nascent”~~ nascent competitor has been defined in different ways, it generally refers to an innovative firm competitor has been defined in different ways, it generally refers to an innovative firm
~~whose technology~~ that represents a serious yet uncertain future threat to an incumbent.represents a serious yet uncertain future threat to an incumbent.~~335~~
~~Other commentators have raised concerns about the number of Big Tech mergers that fall below~~
~~the thresholds that trigger premerger review by the DOJ and FTC.336~~
417 These issues are discussed in greater detail These issues are discussed in greater detail in in “Mergers & Acquisitions” infra..~~337~~418
Antitrust Reform and Big Tech: General Issues
The issues discussed above have prompted calls for The issues discussed above have prompted calls for ~~policy~~ reform. Some proposals would reform. Some proposals would
supplement the antitrust laws with sectoral competition regulations directed at large technology supplement the antitrust laws with sectoral competition regulations directed at large technology
~~platforms.338 Others would work within the existing antitrust framework by adjusting burdens of~~
~~proof and changing certain doctrinal rules.339~~
~~While the relevant options are varied, they all implicate the threshold question of whether the~~
~~existing antitrust laws are adequate to address competition issues in the tech sector.~~

~~Reportable Acquisitions Study”].~~
~~333 JONATHAN B. BAKER, THE ANTITRUST PARADIGM: RESTORING A COMPETITIVE ECONOMY 160-61 (2019);~~platforms.419 al. in response to majority report), https://buck.house.gov/sites/evo-subsites/buck-evo.house.gov/files/wysiwyg_uploaded/Buck%20Report.pdf. 413 Diana L. Moss, The Record of Weak U.S. Merger Enforcement in Big Tech, AM. ANTITRUST INST. 6 (July 8, 2019), https://www.antitrustinstitute.org/wp-content/uploads/2019/07/Merger-Enforcement_Big-Tech_7.8.19.pdf. 414 FED. TRADE COMM’N, NON-HSR REPORTED ACQUISITIONS BY SELECT TECHNOLOGY PLATFORMS, 2010-2019: AN FTC STUDY (Sept. 2021), https://www.ftc.gov/system/files/documents/reports/non-hsr-reported-acquisitions-select-technology-platforms-2010-2019-ftc-study/p201201technologyplatformstudy2021.pdf [hereinafter “FTC Non-Reportable Acquisitions Study”]. 415 Steven C. Steven C.
Salop, Salop, Dominant Digital Platforms: Is Antitrust Up to the Task?, 130 YALE L.J. F. 563, 578-79 (2021); Mark Glick, et , 130 YALE L.J. F. 563, 578-79 (2021); Mark Glick, et
al., al., Big Tech’s Buying Spree and the Failed Ideology of Competition Law, 72 HASTINGS L.J. 465, , 72 HASTINGS L.J. 465, 468-75 (2021); JONATHAN B. BAKER, THE ANTITRUST PARADIGM: RESTORING A COMPETITIVE ECONOMY 160-61 (2019); ~~468-75 (2021);~~ HJC HJC
REPORT, REPORT, supra no note 11, at 387; Tim Wu & Stuart A. Thompson, at 387; Tim Wu & Stuart A. Thompson, The Roots of Big Tech Run Disturbingly Deep, N.Y. , N.Y.
TIMES (June 7, 2019), https://www.nytimes.com/interactive/2019/06/07/opinion/google-facebook-mergers-acquisitions-TIMES (June 7, 2019), https://www.nytimes.com/interactive/2019/06/07/opinion/google-facebook-mergers-acquisitions-
antitrust.html; STIGLER CTR. FOR THE STUDY OF THE ECON. AND THE STATE, STIGLER COMM. ON DIGITAL PLATFORMS: antitrust.html; STIGLER CTR. FOR THE STUDY OF THE ECON. AND THE STATE, STIGLER COMM. ON DIGITAL PLATFORMS:
FINAL REPORT 71-72, 75 n.152 (2019), https://www.chicagobooth.edu/-/media/research/stigler/pdfs/digital-platforms---FINAL REPORT 71-72, 75 n.152 (2019), https://www.chicagobooth.edu/-/media/research/stigler/pdfs/digital-platforms---
committee-report---stigler-center.pdf [hereinafter “STIGLER REPORT”]; HM TREASURY, UNLOCKING DIGITAL committee-report---stigler-center.pdf [hereinafter “STIGLER REPORT”]; HM TREASURY, UNLOCKING DIGITAL
COMPETITION, REPORT OF THE DIGITAL COMPETITION EXPERT PANEL 40 (2019), COMPETITION, REPORT OF THE DIGITAL COMPETITION EXPERT PANEL 40 (2019),
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785547/unlocking_dihttps://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785547/unlocking_di
gital_competition_furman_review_web.pdf [hereinafter “UK DIGITAL COMPETITION REPORT”]gital_competition_furman_review_web.pdf [hereinafter “UK DIGITAL COMPETITION REPORT”]. 416
~~334~~ A. Douglas Melamed, A. Douglas Melamed, Mergers Involving Nascent Competition, Stanford L. and Econ. Olin Working Paper No. 566 , Stanford L. and Econ. Olin Working Paper No. 566
(Jan. 17, 2022), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4009229; John M. Yun, (Jan. 17, 2022), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4009229; John M. Yun, Are We Dropping the
Crystal Ball? Understanding Nascent & Potential Competition in Antitrust, 104 MARQ. L. REV. 613 (2021); C. Scott , 104 MARQ. L. REV. 613 (2021); C. Scott
Hemphill & Tim Wu, Hemphill & Tim Wu, Nascent Competitors, 168 U. PA. L. REV. 1879 (2020); OECD, START-UPS, KILLER ACQUISITIONS , 168 U. PA. L. REV. 1879 (2020); OECD, START-UPS, KILLER ACQUISITIONS
AND MERGER CONTROL 21-36 (2020), https://www.oecd.org/daf/competition/start-ups-killer-acquisitions-and-merger-AND MERGER CONTROL 21-36 (2020), https://www.oecd.org/daf/competition/start-ups-killer-acquisitions-and-merger-
control-2020.pdf [hereinafter “OECD STARTUP ACQUISITION REPORT”]. control-2020.pdf [hereinafter “OECD STARTUP ACQUISITION REPORT”].
~~335~~417 Yun, Yun, supra no note ~~334~~416, at 626-29; Hemphill & Wu, at 626-29; Hemphill & Wu, supra no note ~~334~~416, at 1883. 418, ~~at 1883.~~
~~336 STIGLER REPORT, supra note 333, at 111.~~
~~337~~ The FTC was unsuccessful in its first effort to block a Big Tech merger using a potential-competition theory. In The FTC was unsuccessful in its first effort to block a Big Tech merger using a potential-competition theory. In
January 2023, a federal district court denied the FTC’s motion for an injunction against Meta’s proposed acquisition of January 2023, a federal district court denied the FTC’s motion for an injunction against Meta’s proposed acquisition of
Within Unlimited—the developer of a virtual-reality (VR) fitness app. Order Denying Plaintiff’s Motion for Within Unlimited—the developer of a virtual-reality (VR) fitness app. Order Denying Plaintiff’s Motion for
Preliminary Injunction, FTC v. Meta Platforms Inc., No. 5:22-cv-04325 (N.D. Cal. Jan. 31, 2023). In that case, Meta Preliminary Injunction, FTC v. Meta Platforms Inc., No. 5:22-cv-04325 (N.D. Cal. Jan. 31, 2023). In that case, Meta
was the putative potential entrant. The FTC alleged that, absent the acquisition, Meta would have organically entered was the putative potential entrant. The FTC alleged that, absent the acquisition, Meta would have organically entered
the market for VR fitness apps. the market for VR fitness apps. Id. at 39. The Commission also offered a perceived-potential-competition argument, . at 39. The Commission also offered a perceived-potential-competition argument,
contending that the prospect of Meta’s entry exerted competitive pressures on that market. contending that the prospect of Meta’s entry exerted competitive pressures on that market. Id. at 60. The district court . at 60. The district court
rejected both theories, concluding that the FTC failed to establish a “reasonable probability” of entry absent the rejected both theories, concluding that the FTC failed to establish a “reasonable probability” of entry absent the
acquisition or that Meta was perceived as a potential competitor. acquisition or that Meta was perceived as a potential competitor. Id. at 59, 62. . at 59, 62.
~~338~~419 See infra “Ex Ante Conduct Rules,” ” “Structural Separation and Line-of-Business Restrictions,” “Mergers &
Acquisitions” & & “Interoperability & Data Portability.” ”
~~339 See infra “Changes to General Antitrust.”~~
Congressional Research Service Congressional Research Service

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link to page link to page 3878 link to page link to page 3848 link to page link to page 547 link to page link to page 3947 link to page link to page 3943 link to page link to page 3847 link to page link to page 3847 Antitrust Reform and Big Tech Firms Others would work within the existing antitrust framework by adjusting burdens of proof and changing certain doctrinal rules.420 While the relevant options are varied, they all implicate the threshold question of whether tech platform markets have unique features that warrant special treatment under competition law. The proposals that would supplement antitrust with a new regulatory regime raise additional questions regarding scope and administration. This section of the report discusses these general issues in the debate over antitrust reform directed at Big Tech firms. Are Tech Platforms Special? ~~Antitrust Reform and Big Tech Firms~~

~~The proposals that would supplement antitrust with a new regulatory regime also raise additional~~
~~questions of policy design—namely, how to scope the relevant regulations and select an~~
~~appropriate regulator to administer them.~~
~~This section of the report discusses these general issues in the debate over antitrust reform~~
~~directed at Big Tech firms.~~
~~Is Existing Antitrust Law Insufficient?~~
~~Whether antitrust is ill-equipped to deal with competition issues in the tech industry has been the~~
~~subject of debate.~~
~~Reform proponents have alleged that current law is inadequate for two general reasons. First, they~~
~~argue that ex post adjudication is ill-equipped to address competition concerns raised by the~~
~~unique structure of certain tech markets.340 Second, they contend that several elements of~~
~~substantive antitrust doctrine insulate Big Tech firms from liability for specific types of~~
~~anticompetitive conduct.341~~
Market Structure and the Efficacy of Ex Post Adjudication
As discussed, outside of a narrow set of As discussed, outside of a narrow set of per se offenses, antitrust is a fact-specific enterprise. offenses, antitrust is a fact-specific enterprise.
Generally, courts employ a case-by-case approach to evaluate claims of anticompetitive Generally, courts employ a case-by-case approach to evaluate claims of anticompetitive
behavior.behavior.~~342~~421 Because liability typically depends on case-specific facts rather than the application Because liability typically depends on case-specific facts rather than the application
of bright-line rules, antitrust investigations and litigation are often time-consuming and of bright-line rules, antitrust investigations and litigation are often time-consuming and
expensive.expensive.~~343~~422 The open-ended nature of the relevant legal standards can also make it difficult to The open-ended nature of the relevant legal standards can also make it difficult to
predict whether predict whether ~~particular~~certain conduct violates the law, which may undermine enforcement by conduct violates the law, which may undermine enforcement by
allowing large firms to profit from anticompetitive allowing large firms to profit from anticompetitive ~~conduct~~strategies and treat potential lawsuits as a cost and treat potential lawsuits as a cost
of doing business.of doing business.~~344~~423
Advocates of reform have argued that these features of antitrust adjudication make it ill-suited to Advocates of reform have argued that these features of antitrust adjudication make it ill-suited to
deal with tech deal with tech platform markets characterized by a unique confluence of structural characteristics, such as markets characterized by a unique confluence of structural characteristics, such as
strong network effects, economies of scale, economies of scope derived from user data, and strong network effects, economies of scale, economies of scope derived from user data, and
consumer tendencies to singleconsumer tendencies to single -home.home.~~345~~

~~340 See, e.g., OECD, EX ANTE REGULATION AND COMPETITION IN DIGITAL MARKETS 6 (2021),~~
~~https://www.oecd.org/daf/competition/ex-ante-regulation-and-competition-in-digital-markets-2021.pdf [hereinafter~~
“OECD REGULATION REPORT”]; STIGLER REPORT, supra note 333, at 100; UK DIGITAL COMPETITION REPORT, supra
~~note 333, at 123-24.~~
~~341 See, e.g., HJC REPORT, supra note 11, at 395-99.~~
~~342~~424 According to some, these characteristics cause certain platform markets to tip in favor of a single dominant firm.425 After an initial period of competition, one company may gain an edge that becomes self-reinforcing. For example, a platform with a large user base and associated data advantages may be the most attractive to new users, generating a positive feedback loop that allows it to grow even larger and thereby become even more attractive.426 Prospective entrants may then face difficulties achieving the scale necessary to compete with the dominant incumbent.427 420 See infra “Changes to General Antitrust.” 421 William P. Rogerson & Howard Shelanski, William P. Rogerson & Howard Shelanski, Antitrust Enforcement, Regulation, and Digital Platforms, 168 U. PA. L. , 168 U. PA. L.
REV. 1911, 1917-18 (2020). REV. 1911, 1917-18 (2020).
~~343~~422 Rohit Chopra & Lina M. Khan, Rohit Chopra & Lina M. Khan, The Case for “Unfair Methods of Competition” Rulemaking, 87 U. CHI. L. REV. , 87 U. CHI. L. REV.
357, 360-62 (2020); Daniel A. Crane, 357, 360-62 (2020); Daniel A. Crane, Rules Versus Standards in Antitrust Adjudication, 64 WASH. & LEE L. REV. 49, , 64 WASH. & LEE L. REV. 49,
83 (2007). 83 (2007).
~~344~~423 Chopra & Khan, Chopra & Khan, supra no note ~~343~~422, at 360-61. 424, ~~at 360-61.~~
~~345 OECD REGULATION REPORT, supra note 340,~~ ~~at 9-12;~~ STIGLER REPORT, STIGLER REPORT, supra no note ~~333~~415, at 7-8, 99; UK DIGITAL at 7-8, 99; UK DIGITAL
COMPETITION REPORT, COMPETITION REPORT, supra no note ~~333,~~ 415, at 5. While many markets have one or more of these features, some at 5. While many markets have one or more of these features, some
commentators have argued that their combination and strength in digital-platform markets raise unique challenges for commentators have argued that their combination and strength in digital-platform markets raise unique challenges for
antitrust enforcers. antitrust enforcers. See, e.g., Michael Kades & Fiona Scott Morton, , Michael Kades & Fiona Scott Morton, Interoperability as a Competition Remedy for
Digital Networks, WASH. CTR. FOR EQUITABLE GROWTH 7 n.14 (Sept. 23, 2020), https://equitablegrowth.org/working-, WASH. CTR. FOR EQUITABLE GROWTH 7 n.14 (Sept. 23, 2020), https://equitablegrowth.org/working-
~~papers/interoperability-as-a-competition-remedy-for-digital-networks/.~~
~~Congressional Research Service~~

35

link to page 33 link to page 39 link to page 38 link to page 38 link to page 33 link to page 39 link to page 38 link to page 38 link to page 33 link to page 40 link to page 38 link to page 38 link to page 38 link to page 38 link to page 50 link to page 39 link to page 63 link to page 33 ~~Antitrust Reform and Big Tech Firms~~

~~According to some, these characteristics cause certain tech markets to tip in favor of a single~~
~~dominant firm.346 After an initial period of competition, one company may gain an edge that~~
~~becomes self-reinforcing. For example, a platform with a large user base and associated data~~
~~advantages may be the most attractive to new users, generating a positive feedback loop that~~
~~allows it to grow even larger and thereby become even more attractive.347 Prospective entrants~~
~~may then face difficulties achieving the scale necessary to compete with the dominant~~
~~incumbent.348~~papers/interoperability-as-a-competition-remedy-for-digital-networks/. 425 EZRACHI & STUCKE, supra note 368, at 10-11; STIGLER REPORT, supra note 415, at 34-36; UK DIGITAL COMPETITION REPORT, supra note 415, at 4. 426 Michael L. Katz & Carl Shapiro, Systems Competition and Network Effects, 8 J. ECON. PERSP. 93, 105-06 (1994). 427 Joseph Farrell & Paul Klemperer, Coordination and Lock-In: Competition with Switching Costs and Network Effects, in 3 HANDBOOK OF INDUSTRIAL ORGANIZATION 1970, 1974 (Mark Armstrong & Robert H. Porter eds., 2007). Congressional Research Service 44 link to page 43 link to page 47 link to page 47 link to page 43 link to page 49 link to page 47 link to page 47 link to page 47 link to page 47 link to page 43 link to page 49 link to page 43 link to page 49 Antitrust Reform and Big Tech Firms
Big Tech firms may also derive benefits from their roles as gatekeepers for key digital Big Tech firms may also derive benefits from their roles as gatekeepers for key digital
ecosystems, like mobile operating systems, app stores, online marketplaces, and social ecosystems, like mobile operating systems, app stores, online marketplaces, and social
networks.networks.~~349~~428 By controlling access to these ecosystems and setting the rules within them, tech By controlling access to these ecosystems and setting the rules within them, tech
platforms can allegedly preserve their dominant positions and leverage those positions to obtain platforms can allegedly preserve their dominant positions and leverage those positions to obtain
advantages in related markets.advantages in related markets.~~350~~429
Some analysts contend that antitrust adjudication is too slow to adequately police markets Some analysts contend that antitrust adjudication is too slow to adequately police markets
characterized by these winner-take-all dynamics.characterized by these winner-take-all dynamics.~~351~~430 By the time a market has tipped, they By the time a market has tipped, they ~~argue~~suggest, ,
remedies for anticompetitive conduct may be unable to restore meaningful competition.remedies for anticompetitive conduct may be unable to restore meaningful competition.~~352~~
~~These worries have prompted calls for prophylactic rules to supplement case-by-case antitrust~~
~~adjudication.353 Some proposals would also seek to address structural issues in Big Tech markets~~
~~by imposing affirmative duties designed to catalyze competition.354~~
431 Occasionally, this line of argument involves the claim that a particular digital platform is a natural monopoly, meaning its cost structure is such that market demand can be served most efficiently by a single firm.432 In such industries—public utilities are prominent examples—competition is unable to discipline market participants, which has traditionally led policymakers to favor direct regulations of price, entry, and quality of service.433 Other commentators have rejected the claim that antitrust is unable to grapple with competition Other commentators have rejected the claim that antitrust is unable to grapple with competition
issues involving large digital platforms. Someissues involving large digital platforms. Some~~, for example, dispute the proposition~~ dispute that Big Tech that Big Tech
markets have all decisively tipped in favor of a single firm.markets have all decisively tipped in favor of a single firm.~~355~~434 Rather, they contend that the tech giants compete in diverse markets characterized by different competitive dynamics.435 While some of those markets may be susceptible to tipping, others arguably retain a competitive fringe or exhibit competition among rivals of comparable size.436 This variety is said to emerge from several characteristics that distinguish many online platforms from traditional natural monopolies, including product differentiation, multi-homing by consumers, and low switching costs.437 Defenders of the current antitrust regime have thus emphasized the heterogeneity of platform markets, which they contend 428 EZRACHI & STUCKE, supra note 368 ~~Rather, they contend that the tech~~

~~346 EZRACHI & STUCKE, supra note 280, at 10-11; OECD REGULATION REPORT, supra note 340, at 9; STIGLER REPORT,~~
supra note 333, at 34-36; UK DIGITAL COMPETITION REPORT, supra note 333, at 4.
~~347 Michael L. Katz & Carl Shapiro, Systems Competition and Network Effects, 8 J. ECON. PERSP. 93, 105-06 (1994).~~
~~348 Joseph Farrell & Paul Klemperer,~~ ~~Coordination and Lock-In: Competition with Switching Costs and Network~~
~~Effects, in 3 HANDBOOK OF INDUSTRIAL ORGANIZATION 1970, 1974 (Mark Armstrong & Robert H. Porter eds., 2007).~~
~~349 EZRACHI & STUCKE, supra note 280~~, at 45-50; Marco Cappai & Giuseppe Colangelo, at 45-50; Marco Cappai & Giuseppe Colangelo, Taming Digital Gatekeepers:
The More Regulatory Approach to Antitrust Law, Stanford-Vienna TTLF Working Paper 9 (Stanford-Vienna TTLF, , Stanford-Vienna TTLF Working Paper 9 (Stanford-Vienna TTLF,
Working Paper No. 55, 2020). Working Paper No. 55, 2020).
~~350 OECD REGULATION REPORT, supra note 340, at 10.~~
~~351~~429 OECD, EX ANTE REGULATION AND COMPETITION IN DIGITAL MARKETS 10 (2021), https://www.oecd.org/daf/competition/ex-ante-regulation-and-competition-in-digital-markets-2021.pdf. 430 Giorgio Monti, Giorgio Monti, The Digital Markets Act—Institutional Design and Suggestions for Improvement 1 (Tilburg L. & 1 (Tilburg L. &
Econ. Ctr., Discussion Paper No. 2021-04, 2021); STIGLER REPORT, Econ. Ctr., Discussion Paper No. 2021-04, 2021); STIGLER REPORT, supra no note ~~333~~415, at 99; UK DIGITAL COMPETITION at 99; UK DIGITAL COMPETITION
REPORT, REPORT, supra no note ~~333~~415, at 6. at 6.
~~352~~431 EZRACHI & STUCKE, EZRACHI & STUCKE, supra no note ~~280~~368, at 173-75; Monti, at 173-75; Monti, supra no note ~~351~~430, at 1; STIGLER REPORT, at 1; STIGLER REPORT, supra no note ~~333~~415, at 99; at 99;
UK DIGITAL COMPETITION REPORT, UK DIGITAL COMPETITION REPORT, supra no note ~~333~~415, at 6. 432 FRANCESCO DUCCI, NATURAL MONOPOLIES IN DIGITAL PLATFORM MARKETS 74 (2020) (concluding that Google Search is a natural monopoly); STIGLER, ~~at 6.~~
~~353 E.g., STIGLER REPORT, supra note 333,~~ ~~at 100-01; UK DIGITAL COMPETITION~~ REPORT, REPORT, supra no note ~~333~~415, at 99 (arguing that certain structural features “push social media platforms towards natural monopoly”); see also UK DIGITAL COMPETITION REPORT, supra no te 415, at 54 (rejecting the contention that major digital platforms are natural monopolies, while acknowledging that “they share some important characteristics with natural monopolies”). 433 Richard A. Posner, Natural Monopoly and Its Regulation, 21 STAN. L. REV. 548, 548 (1968). 434, ~~at 62-63.~~
~~Proposals involving ex ante conduct rules for Big Tech firms are discussed in “Ex Ante Conduct Rules” infra.~~
~~354 E.g., Rogerson & Shelanski, supra note 342, at 1927-30. Proposals involving these types of affirmative obligations~~
~~are discussed in “Interoperability & Data Portability” infra.~~
~~355~~ E.g., Hovenkamp, , Hovenkamp, Platform Monopoly, , supra no note ~~279,~~ ~~at 1978; Joint Submission of Antitrust Economists, Legal~~
~~Scholars, and Practitioners to the House Judiciary Committee on the State of Antitrust Law and Implications for~~
~~Protecting Competition in Digital Markets at 3-4 (May 15, 2020), https://gai.gmu.edu/wp-content/uploads/sites/~~
~~27/2020/05/house_joint_antitrust_letter_20200514.pdf [hereinafter “Antitrust Economist Submission”];~~367, at 1978; see also
NICOLAS PETIT, BIG TECH AND THE DIGITAL ECONOMY: THE MOLIGOPOLY SCENARIO 153-71, 257 (2020) (arguing that NICOLAS PETIT, BIG TECH AND THE DIGITAL ECONOMY: THE MOLIGOPOLY SCENARIO 153-71, 257 (2020) (arguing that
Big Tech firms face meaningful competitive pressures even when operating in tipped markets); Big Tech firms face meaningful competitive pressures even when operating in tipped markets); How Tech’s Defiance
of Economic Gravity Came to an Abrupt End, THE ECONOMIST (Dec. 24, 2022), https://www.economist.com/business/, THE ECONOMIST (Dec. 24, 2022), https://www.economist.com/business/
2022/12/24/how-techs-defiance-of-economic-gravity-came-to-an-abrupt-end (arguing that some Big Tech firms face 2022/12/24/how-techs-defiance-of-economic-gravity-came-to-an-abrupt-end (arguing that some Big Tech firms face
“fierce” competition from one another and from new rivals); Ryan Bourne & Rachel Chiu, “fierce” competition from one another and from new rivals); Ryan Bourne & Rachel Chiu, A Monopoly of What? Big
Tech in Today’s Context, CATO INST. (Nov. 3, , CATO INST. (Nov. 3, 2022), https://www.cato.org/commentary/monopoly-what-big-tech-todays-context (similar). 435 PETIT, supra note 434, at 257-58; Joshua D. Wright & John M. Yun, Platforms in the Spotlight at FTC Hearings, Geo. Mason L. & Econ. Research Paper No. 18-44 at 3 (Nov. 2018), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3280532. 436 Hovenkamp, Platform Monopoly, supra note 367, at 1978. 437 DUCCI, supra note 432, at 42-43. Congressional Research Service 45 Antitrust Reform and Big Tech Firms militates against categorical treatment of Big Tech firms and in favor of the existing fact-specific approach.438 Some observers have gone further in their rejection of sectoral regulation, arguing that many tech markets have features that support a cautious approach to intervention under the existing antitrust laws. This perspective emphasizes the distinction between static price competition and the dynamic rivalry prevalent in tech markets, which involves efforts to develop new products, services, and business models. Commentators have argued that dynamic competition has non-interventionist implications for several areas of antitrust doctrine. First, in dynamic industries, traditional market definition may overstate the market power of leading firms.439 In particular, static market shares may exaggerate a platform’s market power by failing to account for the threat of displacement by differentiated or innovative rivals.440 Examples of this type of displacement include Facebook supplanting MySpace as the leading social network and Google unseating Yahoo! and AltaVista to become the dominant search engine. In both cases, the ousted incumbents were widely perceived as invulnerable—an assumption that proved incorrect.441 Some observers have highlighted these episodes in arguing that Big Tech platforms face constant competitive pressure despite occupying large static market shares.442 Second, technological innovation often involves combining products or features that were previously available only as separate offerings. Although this type of product integration often benefits consumers, it is also potentially vulnerable to antitrust challenge under tying law.443 To avoid chilling innovation, some courts and commentators have endorsed exceptions to the modified per se rule against tying for platform software products.444 Other observers have gone further and advocated a rule of per se legality for the introduction of new products.445 438 ABA ANTITRUST L. SECTION, COMMON ISSUES RELATING TO THE DIGITAL ECONOMY AND COMPETITION, REPORT OF THE INTERNATIONAL DEVELOPMENTS AND COMMENTS TASK FORCE ON POSITIONS EXPRESSED BY THE ABA ANTITRUST LAW SECTION BETWEEN 2017 AND 2019, at 5 (2020) [hereinafter “ABA DIGITAL ECONOMY REPORT”]; Group of Seven (G7), Common Understanding of G7 Competition Authorities on “Competition and the Digital Economy” (June 5, 2019), https://www.autoritedelaconcurrence.fr/sites/default/files/2019-11/g7_common_understanding.pdf. 439 Jerry Ellig & Daniel Lin, A Taxonomy of Dynamic Competition Theories, in DYNAMIC COMPETITION AND PUBLIC POLICY: TECHNOLOGY, INNOVATION, AND ANTITRUST ISSUES 16, 24, 30 (Jerry Ellig ed. 2001). 440 J. Gregory Sidak & David J. Teece, Dynamic Competition in Antitrust Law, J. COMPETITION L. & ECON. 581, 614-15 (2009); Richard Schmalensee, Antitrust Issues in Schumpeterian Industries, 90 AM. ECON. REV. 192, 193 (2000). 441 Victor Keegan, Will MySpace Ever Lose Its Monopoly?, THE GUARDIAN (Feb. 8, 2007), https://www.theguardian.com/technology/2007/feb/08/business.comment; Randall E. Stross, How Yahoo! Won the Search Wars, FORTUNE (Mar. 2, 1998), https://money.cnn.com/magazines/fortune/fortune_archive/1998/03/02/238576/. 442 See, e.g., David S. Evans, Why the Dynamics of Competition for Online Platforms Leads to Sleepless Nights, But Not Sleepy Monopolies (Aug. 23, 2017), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3009438; D. Daniel Sokol & Jingyuan (Mary) Ma, Understanding Online Markets and Antitrust Analysis, 15 NW. J. TECH. & INTELL. PROP. 43, 48 (2017). 443 See generally John M. Newman, Anticompetitive Product Design in the New Economy, 39 FLA. ST. U. L. REV. 681 (2012). 444 E.g., Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 997 (9th Cir. 2023); United States v. Microsoft, 253 F.3d 34, 89-90 (D.C. Cir. 2001) (per curiam); David S. Evans & Richard Schmalensee, Some Economic Aspects of Antitrust Analysis in Dynamically Competitive Industries, 2 INNOVATION POLICY AND THE ECON. 1, 30-33 (2002). 445 Geoffrey A. Manne & Joshua D. Wright, Innovation and the Limits of Antitrust, 6 J. COMPETITION L. & ECON. 153 (2010). Congressional Research Service 46 link to page 50 link to page 10 link to page 13 link to page 38 link to page 51 Antitrust Reform and Big Tech Firms Third, dynamic competition may raise complications in assessing claims of price predation. The alleged difficulty arises from the fact that technology firms often offer low or zero prices to encourage widespread adoption of new products. In winner-take-all markets with network effects, all firms may charge low prices—which may entail short-term losses—with an eye toward recoupment once they surpass rivals.446 Some commentators have questioned the appropriateness of traditional cost and recoupment tests for predation claims in markets characterized by this type of competition.447 Others have argued that the two-sided nature of certain platform markets raises additional difficulties for predation analysis. The potential trouble involves indirect network effects, whereby a platform becomes more valuable to users on one side (e.g., advertisers, merchants) as it gains more users on the other side (e.g., users of a search engine, e-commerce customers).448 In such markets, evaluating a firm’s pricing on only one side of a platform may be misleading. For example, a firm may offer below-cost prices to one side of a platform to attract more users on the other side, where it charges above-cost prices.449 Looking only to one side of a two-sided market may thus yield inaccurate conclusions about predation.450 Fourth, some have raised more general concerns about the role of antitrust in tech markets. This strand of the literature builds on the error-cost framework originally developed by Frank Easterbook,451 who relied on decision theory to argue that antitrust rules should err on the side of permissiveness.452 Specifically, Easterbrook—who is now a federal judge—reasoned that monopoly profits eventually induce the entry of new firms, mitigating the costs of judicial decisions permitting anticompetitive conduct (false negatives or Type II errors).453 In contrast, market forces cannot correct decisions condemning procompetitive conduct, leading Easterbrook to conclude that the costs of those mistakes (false positives or Type I errors) are more durable.454 446 Evans & Schmalensee, supra note 444, at 24-26. 447 Id. To some extent, the doctrine may already accommodate this concern: some lower courts have recognized a “meeting competition” defense to predation claims. ANTITRUST DEVELOPMENTS, supra note 55, at 301 (collecting cases). In contrast, one district court has rejected this defense. Spirit Airlines, Inc. v. Northwest Airlines, Inc., 2003 WL 24197742 at *11-12 (E.D. Mich. 2003), rev’d on other grounds, 431 F.3d 917 (6th Cir. 2005). The Supreme Court has not directly addressed the issue. Advocates of more aggressive antitrust intervention have supported stricter predation standards for dominant tech firms, but appear to leave open the possibility of a “meeting competition” defense. See Khan, Amazon’s Antitrust Paradox, supra note 79, at 791-92 (advocating a “presumption of predation for dominant platforms found to be pricing products below cost,” while suggesting a business justification defense that “could cover” prices that match competition, among other things). 448 DENNIS W. CARLTON & JEFFREY M. PERLOFF, MODERN INDUSTRIAL ORGANIZATION 393 (2004). 449 Stefan Behringer & Lapo Filistrucchi, Areeda-Turner in Two-Sided Markets, 46 REV. OF INDUS. ORG. 287, 304 (2015); Amelia Fletcher, Predatory Pricing in Two-Sided Markets, 3 COMPETITION POL’Y INT’L 221, 222-23 (2007). 450 The Supreme Court’s 2018 Amex decision may have implications for this type of analysis. 138 S. Ct. 2274 (2018). For a discussion of Amex, see supra “Amazon.” 451 Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1 (1984). 452 Decision theory is a field of microeconomics concerned with the process of making decisions under conditions of costly and imperfect information. C. Frederick Beckner III & Steven C. Salop, Decision Theory and Antitrust Rules, 67 ANTITRUST L.J. 41, 41 (1999). The field gained initial traction in legal scholarship during the law-and-economics movement of the 1970s and has proven particularly influential in antitrust. See Alan Devlin & Michael Jacobs, Antitrust Error, 52 WM. & MARY L. REV. 75, 82-97 (2010). 453 Easterbrook, supra note 451, at 2. 454 Id. Congressional Research Service 47 link to page 12 link to page 5 link to page 25 Antitrust Reform and Big Tech Firms Several commentators have suggested that Easterbrook’s argument has particular force in technology markets.455 They have appealed to what is often called the “inhospitality tradition” of 1960s antitrust—an era in which courts were highly skeptical of nonstandard agreements and business conduct.456 In one narrative, once courts realized that many challenged practices had benign or procompetitive explanations, the law underwent a needed course correction in which context-specific inquiries into economic effects replaced the formalism of per se rules as the dominant mode of antitrust analysis.457 Some argue that this history has implications for the optimal level of intervention in tech markets, where generalist judges may mistake novel products and business strategies for anticompetitive conduct.458 Others have come to the opposite conclusion. John Newman—formerly the Deputy Director of the FTC’s Bureau of Competition—has argued that false negatives in tech markets are far more common and costly than false positives.459 Newman contends that the structure of many digital markets insulates incumbents from competitive threats; that digital markets provide incumbents with unique anticompetitive strategies; and that challenged conduct in digital markets typically has few redeeming benefits.460 These features, he maintains, justify more vigilant antitrust scrutiny of tech markets, contrary to what he characterizes as the “orthodox” view of error costs.461 Revisiting the Goals of Antitrust: The Neo-Brandeisian Movement The optimal level of antitrust intervention—in tech markets and more generally—depends on the underlying goals of antitrust law.462 As discussed, the last 40 years have been marked by a general (though not complete) consensus that antitrust should be limited to promoting some conception of economic welfare.463 While there are lingering disputes within the welfarist approach,464 modern 455 Joshua D. Wright & Murat C. Mungan, The Easterbrook Theorem: An Application to Digital Markets, 130 YALE L.J. F. 622, 634 (2021); Geoffrey Manne, Error Costs in Digital Markets, in GLOBAL ANTITRUST INSTITUTE REPORT ON THE DIGITAL ECONOMY (2020). 456 Elyse Dorsey, Anything You Can Do, I Can Do Better—Except in Big Tech?: Antitrust’s New Inhospitality Tradition, 68 KANSAS L. REV. 975, 978, 981 (2020). 457 Id. at 985-89. 458 Rachel S. Tennis & Alexander Baier Schwab, Business Model Innovation and Antitrust Law, 29 YALE. J. ON REG. 307, 319-20 (2012). 459 John M. Newman, Antitrust in Digital Markets, 72 VAND. L. REV. 1497, 1502 (2019). 460 Id. at 1503-48. 461 Id. at 1502. 462 BORK, supra note 72, at 50 (“[A]ntitrust policy cannot be made rational until we are able to give a firm answer to one question: What is the point of the law—what are its goals? Everything else follows from the answer we give. . . . Only when the issue of goals has been settled is it possible to frame a coherent body of substantive antitrust rules.”); Stucke, supra note 1, at 557 (making a similar point). 463 A. DOUGLAS MELAMED, ET AL., ANTITRUST LAW AND TRADE REGULATION: CASES AND MATERIALS 58 (7th ed. 2018) (noting the “overall consensus” since the 1970s that “economic analysis provides the true north for antitrust law”); ANTITRUST MODERNIZATION COMM’N, REPORT AND RECOMMENDATIONS 35 (Apr. 2007) (“For the last few decades courts, agencies, and antitrust practitioners have recognized consumer welfare as the unifying goal of antitrust law.”); POSNER, supra note 193, at ix (explaining that “[a]lmost everyone professionally involved in antitrust today—whether as a litigant, prosecutor, judge, academic, or informed observer” agrees that “the only goal of the antitrust laws should be to promote economic welfare”). 464 A. Douglas Melamed, Antitrust Law and Its Critics, 83 ANTITRUST L.J. 269, 274-79 (2020) (discussing several points of disagreement between “conservatives” and “mainstream progressives” working within the consumer-welfare tradition). Congressional Research Service 48 link to page 26 link to page 13 link to page 53 link to page 53 link to page 5 link to page 13 link to page 25 link to page 52 Antitrust Reform and Big Tech Firms doctrine generally eschews “non-economic” considerations like equity, the protection of small businesses, and the promotion of democratic values.465 In the past decade, a group of scholars and activists commonly referred to as “Neo-Brandeisians” has mounted a critique of this consensus.466 Members of this movement have argued that the existing antitrust regime has failed to preserve competition, resulting in rising economic concentration, growing wealth inequality, and a political system captured by corporate interests.467 Their influence has not been limited to the academy; some self-described Neo-Brandeisians—like FTC Chair Lina Khan and former White House advisor Tim Wu—have occupied policymaking positions within the federal government.468 Two separate arguments are evident throughout Neo-Brandeisian scholarship. First, Neo-Brandeisians deny that antitrust should serve only economic goals like consumer welfare.469 Instead, they endorse a broader normative vision in which antitrust deconcentrates markets, promotes fairness, and disperses economic and political power.470 Second, Neo-Brandeisians have argued that the consumer-welfare standard has failed even when judged on its own terms. They allege that, in applying an exclusively economic approach to antitrust, courts have embraced simplistic theories that downplay the harms from concentration and the likelihood of exclusion, leading to uncompetitive markets with higher prices and degraded quality.471 Some Neo-Brandeisians have argued that these putative deficiencies are especially severe vis-à-vis large tech platforms, many of which are able to forgo immediate profits to establish long-term dominance and then leverage that dominance across business lines.472 This second set of arguments is not unique to Neo-Brandeisians. As discussed, the Post-Chicago tradition challenged the laissez-faire prescriptions of Chicago School academics from within the welfarist paradigm.473 Many commentators also continue to criticize current doctrine as unduly permissive on economic grounds.474 The distinctiveness of the Neo-Brandeisian critique thus lies in its call for an expansion of the range of antitrust goals—not its repudiation of conservative economic theories.475 The key difficulty facing this project involves operational specifics. One of the central criticisms of mid-20th century antitrust was that it allegedly offered no principled standard for weighing 465 Wright & Ginsburg, supra note 204, at 2406 (noting the 1970s shift in antitrust doctrine from an approach that served “multiple masters” to one in which “economic goals would be exclusive”). 466 See, e.g., Sanjukta Paul, Recovering the Moral Economy Foundations of the Sherman Act, 131 YALE L.J. 175 (2021); Sandeep Vaheesan, The Profound Nonsense of the Consumer Welfare Standard, 64 ANTITRUST BULL. 479 (2019); TIM WU, THE CURSE OF BIGNESS: ANTITRUST IN THE NEW GILDED AGE (2018); Khan, Amazon’s Antitrust Paradox, supra note 79. 467 Lina M. Khan & Sandeep Vaheesan, Market Power and Inequality: The Antitrust Counterrevolution and Its Discontents, 11 HARV. L. & POL’Y REV. 235 (2017). 468 WU, supra note 466, at 127-40; Khan, supra note 208. 469 Vaheesan, supra note 466. 470 Khan & Vaheesan, supra note 467, at 276; HJC REPORT, supra note 11, at 391-92. 471 Khan, Amazon’s Antitrust Paradox, supra note 79, at 739. 472 Id. at 747-53, 774-80. 473 Yoo, supra note 195, at 2160. 474 Melamed, supra note 464, at 274-79. 475 Lina M. Khan, The End of Antitrust History Revisited, 133 HARV. L. REV. 1655, 1671 (2020) (“Post-Chicago’s choice to accept Chicago’s normative paradigm stands in contrast with the New Brandeis intervention, which rejects the idea that antitrust law should be centered on promoting consumer welfare.”). Congressional Research Service 49 link to page 8 link to page 5 link to page 53 link to page 10 link to page 5 link to page 6 link to page 5 link to page 13 Antitrust Reform and Big Tech Firms many of the conflicting goals that courts had read into the antitrust statutes.476 Some business conduct, for example, may benefit consumers while harming a firm’s smaller rivals.477 An antitrust regime that embraces both consumer welfare and small-business protection may thus have difficulty trading off those values in a coherent fashion. Other constituencies—workers, labor unions, potential entrants, existing competitors—may also have divergent interests.478 Adding abstract principles like fairness and democracy to the calculus could create even further uncertainty.479 The Neo-Brandeisian response appears to involve a preference for bright-line rules over the type of fact-intensive analysis employed by current law.480 Neo-Brandeisians may thus conceptualize their favored goals as operating at the level of rule formulation, but not as factors that courts must balance in individual cases. It is unclear, however, whether Neo-Brandeisians intend to reduce all of antitrust doctrine to bright-line rules.481 Moreover, as discussed below, some competition legislation directed at tech platforms would stop short of adopting categorical prohibitions. Instead, it would proscribe specified conduct only upon a showing of harm to “competition,” or ban specified conduct while offering an affirmative defense to platforms that show the relevant activities do not harm “competition.”482 If this language is not intended to denote a welfarist conception of competitive harm, the ambiguities surrounding alternative understandings of “competition” resurface. Several commentators—including some Neo-Brandeisians—have supported a “protection of the competitive process” test as an alternative to the consumer-welfare standard.483 The details of this approach, however, remain hazy.484 Some advocates have equated it with the promotion of 476 See, e.g., Joshua D. Wright, et al., Requiem for a Paradox: The Dubious Rise and Inevitable Fall of Hipster Antitrust, 51 ARIZ. ST. L.J. 292, 300 (2019). 477 See Elhauge, supra note 42, at 268-69 (noting that “all desirable procompetitive behavior and innovation is intended to harm rivals—driving those rivals out of the market by making a cheaper or better product is how firms earn the monopoly profits that reward their investments and innovations in lowering costs and raising quality”). 478 Daniel A. Crane, Four Questions for the Neo-Brandeisians, COMPETITION POL’Y INT’L ANTITRUST CHRON. 63, 66-67 (Apr. 2018). 479 See HJC REPORT, supra note 11, at 391-92 (arguing that antitrust should protect, among other things, “a fair economy” and “democratic ideals”); Zephyr Teachout, Antitrust Law, Freedom, and Human Development, 41 CARDOZO L. REV. 1081, 1105 (2019) (suggesting that democracy and “greater moral freedom” should be among the goals that antitrust serves). 480 Khan & Vaheesan, supra note 467, at 276. 481 See Francis, supra note 63, at 788-89 (noting that “[t]he literature does not yet contain anything we could call a Neo-Brandeisian theory of monopolization,” and that the movement has not produced a comprehensive account of what unilateral conduct should be banned and why); DEVLIN, supra note 10, at 174 (arguing that, while Neo-Brandeisians have advocated overturning certain decisions and eliminating certain enforcement policies, they have not identified replacement rules or standards with a high degree of precision). 482 American Innovation and Choice Online Act, S. 2033, 118th Cong. §§ 3(a)(1)-(3), (b)(2) (2023). 483 SULLIVAN, ET AL., supra note 26, at 16-22; HJC REPORT, supra note 11, at 391-92; Tim Wu, The “Protection of the Competitive Process” Standard, (Colum. Pub. L. Research Paper No. 14-612, 2018), https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=3293&context=faculty_scholarship; Khan, Amazon’s Antitrust Paradox, supra note 79, at 745. 484 Herbert Hovenkamp, The Slogans and Goals of Antitrust Law 54 (U. Penn. Inst. for L. & Econ. Research Paper No. 22-33, 2022) ~~2022), https://www.cato.org/commentary/monopoly-what-big-tech-~~
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~~giants compete in diverse markets characterized by different competitive dynamics.356 While~~
~~some of those markets may be susceptible to tipping, others arguably retain a competitive fringe~~
~~or exhibit competition among rivals of comparable size.357~~
~~Defenders of the adjudicative model of antitrust enforcement have thus emphasized the~~
~~heterogeneity of digital-platform markets, which they contend militates against categorical~~
~~treatment of Big Tech firms and in favor of the existing fact-specific approach.358~~
~~Substantive Antitrust Doctrine~~
~~Support for fact-specific adjudication over regulation does not necessarily entail wholesale~~
~~endorsement of prevailing antitrust doctrine. Commentators with diverse antitrust ideologies have~~
~~argued that certain features of substantive antitrust law allow some types of anticompetitive~~
~~conduct by Big Tech platforms to escape liability. Among other things, they have criticized the~~
~~doctrine governing unilateral refusals to deal,359 monopoly leveraging,360 predatory pricing,361 and~~
~~mergers involving potential and “nascent” competitors.362~~
~~These topics are discussed in greater detail throughout the remainder of this report. For purposes~~
~~of this section, the important point is that alleged doctrinal infirmities represent a concern that is~~
~~distinct from dissatisfaction with adjudication as an enforcement mechanism. A lawmaker’s~~
~~preferred policy response may vary based on this distinction. As discussed below, some reform~~

~~todays-context (similar); D. Daniel Sokol & Jingyuan (Mary) Ma,~~ ~~Understanding Online Markets and Antitrust~~
~~Analysis, 15 NW. J. TECH. & INTELL. PROP. 43, 48-50 (2017) (“Online markets are constantly transforming. Indeed,~~
~~online markets typically have innovative challengers against incumbents. Challengers may overtake incumbent firms~~
~~through new ideas and technologies. In such settings, there are low entry barriers.”).~~
~~356 PETIT, supra note 355, at 257-58; Hovenkamp, Platform Monopoly, supra note 279, at 1978; Joshua D. Wright &~~
~~John M. Yun, Platforms in the Spotlight at FTC Hearings, Geo. Mason L. & Econ. Research Paper No. 18-44 at 3~~
~~(Nov. 2018), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3280532.~~
~~357 Hovenkamp, Platform Monopoly, supra note 279, at 1978.~~
~~358 Id.; Antitrust Economist Submission, supra note 355, at 8-9; see also C.D. HOWE INST. COMPETITION POL’Y~~
~~COUNCIL, DIGITAL PLATFORMS: OVERSIGHT IF NECESSARY, BUT NOT NECESSARILY REGULATION 7-8 (2021),~~
~~https://www.cdhowe.org/sites/default/files/attachments/other-research/pdf/Communique_2021_0107_CPC.pdf (arguing~~
~~that general competition law should be the presumptive framework for addressing competition issues in the tech sector~~
~~and that special competition regulations for digital platforms are likely to overlook important distinctions among~~
~~heterogeneous business models); ABA ANTITRUST L. SECTION, COMMON ISSUES RELATING TO THE DIGITAL ECONOMY~~
~~AND COMPETITION, REPORT OF THE INTERNATIONAL DEVELOPMENTS AND COMMENTS TASK FORCE ON POSITIONS~~
~~EXPRESSED BY THE ABA ANTITRUST LAW SECTION BETWEEN 2017 AND 2019, at 5 (2020) [hereinafter “ABA DIGITAL~~
~~ECONOMY REPORT”] (concluding that antitrust authorities should address competition issues in digital-platform markets~~
~~on a case-by-case basis using existing tools); Group of Seven (G7),~~ ~~Common Understanding of G7 Competition~~
~~Authorities on “Competition and the Digital Economy”~~ ~~(June 5, 2019),~~
~~https://www.autoritedelaconcurrence.fr/sites/default/files/2019-11/g7_common_understanding.pdf (“Because of its~~
~~flexible analytical framework, fact-based analysis, cross-sector application, and technology-neutral nature, competition~~
~~law can effectively apply to digital markets and to harmful anticompetitive behaviors in the digital economy.”).~~
~~359 Erik Hovenkamp, The Antitrust Duty to Deal in the Age of Big Tech, 131 YALE L.J. 1483, 1525 (2022) [hereinafter~~
~~“Hovenkamp, Antitrust Duty to Deal”]; HJC REPORT, supra note 11, at 397-98; STIGLER REPORT, supra note 333, at~~
~~96-97; Sandeep Vaheesan, Reviving an Epithet: A New Way Forward for the Essential Facilities Doctrine, 2010 UTAH~~
~~L. REV. 911 (2010).~~
~~360 HJC REPORT, supra note 11, at 396.~~
~~361 Marshall Steinbaum & Maurice E. Stucke, The Effective Competition Standard: A New Standard for Antitrust, 87 U.~~
~~CHI. L. REV. 595, 608 (2020); HJC REPORT, supra note 11, at 396-97; Aaron S. Edlin,~~ ~~Stopping Above-Cost Predatory~~
~~Pricing, 111 YALE L.J. 941 (2002).~~
~~362 Hemphill & Wu, supra note 334; Kevin A. Bryan & Erik Hovenkamp, Antitrust Limits on Startup Acquisitions, 56~~
~~REV. OF INDUS. ORG. 615, 632 (2020); HJC REPORT, supra note 11, at 394-95.~~
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~~proposals target large tech platforms with sectoral regulations that would supplement the antitrust~~
~~laws, while others would make changes within general antitrust doctrine.363~~
~~These debates over specific doctrinal rules take place alongside broader contestation regarding~~
~~the fundamental goals of antitrust. A group of scholars and policymakers commonly identified as~~
~~“Neo-Brandeisians” have called for the abandonment of the consumer-welfare standard as a~~
~~benchmark for antitrust decision-making.364 Members of this movement have argued that a~~
~~singular focus on consumer welfare has led to lax competition enforcement, which has in turn~~
~~generated rising economic concentration, growing wealth inequality, and a political system~~
~~captured by corporate interests.365~~
~~Some Neo-Brandeisians have specifically emphasized the consumer-welfare standard’s alleged~~
~~inadequacy vis-à-vis large tech platforms. In particular, they contend that a focus on short-term~~
~~price and output effects neglects the ways in which tech platforms forgo immediate profits to~~
~~establish long-term dominance and then leverage that dominance across business lines.366~~
~~Defenders of the consumer-welfare standard fall into two broad camps. Some commentators join~~
~~the Neo-Brandeisians in arguing that antitrust enforcement has become overly lax, but support the~~
~~retention of the consumer-welfare standard as a general goal.367 While they object to specific~~
~~doctrinal developments, these commentators attribute such developments to misapplications of~~
~~the consumer-welfare standard rather than the standard itself.368 In contrast, others have defended~~
~~both the consumer-welfare standard and current levels of antitrust enforcement.369~~
~~Among other things, supporters of the consumer-welfare standard have argued that many~~
~~Neo-Brandeisian criticisms are based on an inaccurate view that the standard focuses solely on~~
~~price to the exclusion of other benefits of competition, like innovation and product quality.370~~
~~Abstracting from the merits of the Neo-Brandeisian critique, the possible repudiation of the~~
~~consumer-welfare standard raises the question of whether an alternative benchmark would replace~~
~~it.~~
~~Several options have been proposed. Some critics of the status quo have argued that antitrust~~
~~should focus on the “competitive process.”371 That phrase has been used for a variety of~~

~~363 See infra “Reform Proposals.”~~
~~364 See, e.g., TIM WU, THE CURSE OF BIGNESS: ANTITRUST IN THE NEW GILDED AGE 135-38 (2018); Sandeep Vaheesan,~~
The Profound Nonsense of the Consumer Welfare Standard, 64 ANTITRUST BULL. 479 (2019); Khan, ~~Amazon’s~~
~~Antitrust Paradox, supra note 57, at 744-46. The Neo-Brandeisian movement derives its name from Louis Brandeis, a~~
~~former Associate Justice of the Supreme Court who was also a proponent of vigorous antitrust enforcement and a critic~~
~~of large corporations. See Lina M. Khan, The New Brandeis Movement: America’s Antimonopoly Debate, 9 J. EURO.~~
~~COMPETITION L. & PRACTICE 131 (2018).~~
~~365 Lina M. Khan & Sandeep Vaheesan,~~ ~~Market Power and Inequality: The Antitrust Counterrevolution and Its~~
~~Discontents, 11 HARV. L. & POL’Y REV. 235 (2017).~~
~~366 Khan, Amazon’s Antitrust Paradox, supra note 57, at 747-53, 774-80.~~
~~367 See, e.g., Einer Elhauge, Should the Competitive Process Test Replace the Consumer Welfare Standard?,~~
~~PROMARKET (May 24, 2022), https://www.promarket.org/2022/05/24/should-the-competitive-process-test-replace-the-~~
~~consumer-welfare-standard/; Moss Testimony, supra note 152; Shapiro Testimony, supra note 152.~~
~~368 A. Douglas Melamed, Antitrust Law and Its Critics, 83 ANTITRUST L.J. 269, 274-79 (2020) (discussing several~~
~~points of disagreement between “conservatives” and “mainstream progressives” working within the consumer-welfare~~
~~paradigm).~~
~~369 See, e.g., Antitrust Economist Submission, supra note 355, at 4-12.~~
~~370 Melamed, supra note 368, at 281; Dorsey, et al., supra note 149, at 902; Moss Testimony, supra note 152, at 4.~~
~~371 E.g., HJC REPORT, supra note 11, at 391-92; Tim Wu, The “Protection of the Competitive Process” Standard,~~
~~(Colum. Pub. L. Research Paper No. 14-612, 2018), https://scholarship.law.columbia.edu/cgi/~~
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~~purposes,372 but in this context appears intended to signify a standard that would protect “not just~~
~~consumers, but also workers, entrepreneurs, independent businesses, open markets, a fair~~
~~economy, and democratic ideals.”373 In other work, Neo-Brandeisians have advocated a “citizen~~
~~interest” standard that would “protect consumers from anticompetitive overcharges and small~~
~~producers from anticompetitive underpayments, preserve open markets, and disperse economic~~
~~and political power.”374~~
~~Proponents of these approaches have argued that they are more normatively attractive than the~~
~~consumer-welfare standard and better reflect the full range of considerations that originally~~
~~motivated the antitrust laws.375 Critics have contended that the proposed alternatives embrace~~
~~vague and often contradictory goals and thus offer little guidance regarding the types of conduct~~
~~that they would prohibit or allow.376~~
~~These debates are not purely academic. As discussed below, some legislative proposals would~~
~~subject large tech platforms to special conduct rules that incorporate competitive-effects analysis,~~
~~either as an element of a plaintiff’s case-in-chief or as an affirmative defense.377 The appropriate~~
~~standard for assessing competitive harm may thus have important practical consequences beyond~~
~~its significance in current doctrine.~~
~~Error Costs in Digital Markets~~
~~Modern antitrust has been heavily influenced by concerns about error costs—the harms that result from decisions~~
~~prohibiting procompetitive conduct (false positives) or permitting anticompetitive conduct (false negatives). Alan~~
~~Devlin & Michael Jacobs, Antitrust Error, 52 WM. & MARY L. REV. 75, 78-79 (2010).~~
~~Antitrust conservatives have offered error-cost arguments favoring limited enforcement. In a 1984 article, Frank~~
~~Easterbrook—now a federal judge on the Seventh Circuit—argued that false positives are more harmful than false~~
~~negatives. Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1, 2 (1984). He reasoned that the force of~~
~~judicial precedent makes false positives difficult to correct, but that monopoly profits eventually induce the entry~~
~~of new firms, mitigating the costs of false negatives. Id. Several Supreme Court decisions later relied upon this~~

~~viewcontent.cgi?article=3293&context=faculty_scholarship; Khan, Amazon’s Antitrust Paradox, supra note 57, at 745.~~
~~372 See Herbert Hovenkamp, The Slogans and Goals of Antitrust Law 51-58 (U. Penn. Inst. for L. & Econ. Research~~
~~Paper No. 22-33, 2022), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4121866#.~~
~~373 HJC REPORT, supra note 11, at 391; see also Steinbaum & Stucke, supra note 361, at 602 (proposing an “effective~~
~~competition” standard under which “[a]gencies and courts shall use the preservation of competitive market structures~~
~~that protect individuals, purchasers, consumers, and producers; preserve opportunities for competitors; promote~~
~~individual autonomy and well-being; and disperse private power as the principal objective of the federal antitrust~~
~~laws.”).~~
~~374 Khan & Vaheesan, supra note 365, at 276.~~
375 WU, supra note 364, at 135-38; Steinbaum & Stucke, supra note 361, at 621-23 & n.91; Khan & Vaheesan, supra
~~note 365, at 276.~~
~~376 Dorsey, et al., supra note 149, at 879; Joshua D. Wright, et al.,~~ ~~Requiem for a Paradox: The Dubious Rise and~~
~~Inevitable Fall of Hipster Antitrust, 51 ARIZ. ST. L. J. 292, 362-65 (2019); see also Hovenkamp, supra note 372, at 54~~
(“[A]n antitrust concern articulated as the protection of the competitive process does not give us much help unless we (“[A]n antitrust concern articulated as the protection of the competitive process does not give us much help unless we
have some background substance to tell us what is intelligent competition policy and what is not.”);have some background substance to tell us what is intelligent competition policy and what is not.”); Einer Elhauge, Elhauge, ~~supra~~
~~note 367~~ Should the Competitive Process Test Replace the Consumer Welfare Standard?, PROMARKET (May 24, 2022), https://www.promarket.org/2022/05/24/should-the-competitive-process-test-replace-the-consumer-welfare-standard/ (arguing that a “competitive process” standard that lacks any supplemental benchmark “amounts to a (arguing that a “competitive process” standard that lacks any supplemental benchmark “amounts to a
conclusory I-know-it-when-I-see-it test”); John M. Newman, conclusory I-know-it-when-I-see-it test”); John M. Newman, Procompetitive Justifications in Antitrust Law, 94 IND. , 94 IND.
~~L.J. 501, 514 (2019) (“[T]he actual content of the competitive-process approach remains mercurial, a cipher. The~~
~~scholarly arguments in favor of it never seem to identify what, exactly, constitutes the ‘competitive process.’”); Daniel~~
~~A. Crane, Four Questions for the Neo-Brandeisians, COMPETITION POL’Y INT’L ANTITRUST CHRON. 63, 66-67 (Apr.~~
~~2018) (“[W]hat would happen in a system that was nominally designed to protect consumers, workers, labor unions,~~
~~small businesses, new entrants, and existing competitors all at once? Since the interests of those groups are often in~~
~~conflict, courts and agencies would have to pick their favorites on the fly, without any objective principle to decide~~
~~among them.”).~~
~~377 See infra “Self-Preferencing / Non-Discrimination Rules.”~~
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~~analysis to justify holdings narrowing various aspects of antitrust doctrine. Herbert J. Hovenkamp,~~ ~~Antitrust Error~~
~~Costs, U. PA. J. BUS. L. 293, 295-96 (2022) (col ecting cases).~~
~~Courts and commentators have grappled with error-cost issues in digital markets. In its 2001 decision in~~ ~~United~~
~~States v. Microsoft Corp., the D.C. Circuit relied on the novelty of platform software products to conclude that the~~
~~rule of reason—rather than the traditional rule of quasi-per-se il egality—applied to a challenged tying arrangement~~
~~involving such products. 253 F.3d 34, 89-90 (D.C. Cir. 2001) (per curiam). Other courts and commentators have~~
~~likewise emphasized the complexity and dynamism of tech markets in arguing for a cautious approach to antitrust~~
~~intervention. See FTC v. Qualcomm Inc., 969 F.3d 974, 990-91 (9th Cir. 2020); Rachel S. Tennis & Alexander Baier~~
~~Schwab, Business Model Innovation and Antitrust Law, 29 YALE J. ON REG. 307, 319 (2012).~~
~~This reasoning is controversial. Some observers have mounted general challenges to the claim that error costs~~
~~justify permissive antitrust doctrine. See, e.g., Jonathan B. Baker,~~ ~~Taking the Error Out of “Error Cost” Analysis: What’s~~
~~Wrong with Antitrust’s Right, 80 ANTITRUST L.J. 1, 8-12, 23-25 (2015) (disputing the arguments that markets are~~
~~self-correcting and that erroneous judicial precedent is more durable than market power).~~
~~Others have focused their critique on digital markets. For example, John Newman—now the Deputy Director of~~
~~the FTC’s Bureau of Competition—has argued that false negatives in tech markets are far more common and~~
~~costly than false positives. John M. Newman, Antitrust in Digital Markets, 72 VAND. L. REV. 1497, 1502 (2019). In~~
~~particular, Newman contends that the structure of many digital markets insulates incumbents from competitive~~
~~threats; that digital markets provide incumbents with unique anticompetitive strategies; and that challenged~~
~~conduct in digital markets typically has few redeeming benefits. Id. at 1503-48. These features, he maintains, justify~~
~~more vigilant antitrust scrutiny of tech markets, contrary to what he characterizes as the “orthodox” view of~~
~~error costs. Id. at 1502.~~
~~These error-cost debates have important implications for the choice between adjudication and regulation as~~
~~enforcement mechanisms and the appropriate content of antitrust doctrine.~~
~~Scoping Reform Proposals~~
~~Reform proposals that would go beyond general antitrust to impose sectoral competition~~
~~regulations raise additional questions of policy design. Two general models have emerged.~~
~~One would apply special regulations to digital platforms that offer specified services and meet~~
~~certain quantitative and qualitative criteria intended to capture~~ (continued...) Congressional Research Service 50 link to page 13 link to page 54 link to page 5 link to page 54 link to page 55 link to page 6 Antitrust Reform and Big Tech Firms deconcentrated market structures.485 Jonathan Kanter—the Assistant Attorney General for the DOJ’s Antitrust Division—has similarly described the “competitive process” as protecting “the guarantee that everyone participating in the open market—consumers, farmers, workers, or anyone else—has ‘the free opportunity to select among alternative offers.’”486 As legal standards, these formulations have been criticized for failing to offer meaningful guidance to courts or litigants. It seems unlikely, for example, that they are intended to mean that any conduct that reduces the number of competitors in a market should be illegal; that rule would outlaw many instances of procompetitive price cutting and product improvement, in addition to small mergers in unconcentrated markets.487 The proposals instead appear to endorse an approach that ensures there are “enough” competitors, though it is not clear whether Neo-Brandeisians would endorse the use of some further analytical criterion in evaluating whether a given market has “enough” firms.488 Thus far, Neo-Brandeisian theories do not appear to have made considerable headway with the courts.489 Some commentators, however, have argued that the movement’s influence is evident in several developments at the antitrust agencies, including the FTC’s 2023 proposal to ban non-compete clauses in employment contracts,490 the DOJ’s effort to revive its long-dormant authority to pursue criminal monopolization charges,491 and the 2023 draft merger guidelines.492 Whether Neo-Brandeisian ideas will have a broader impact on antitrust doctrine or legislative action remains to be seen. Scoping Reform Proposals As discussed, some legislative proposals would create special competition rules for large technology platforms. Two general models have emerged. One model involves special rules for digital platforms that offer specified services and meet certain quantitative and qualitative criteria intended to capture L.J. 501, 514 (2019) (“[T]he actual content of the competitive-process approach remains mercurial, a cipher. The scholarly arguments in favor of it never seem to identify what, exactly, constitutes the ‘competitive process.’”). 485 Khan, Amazon’s Antitrust Paradox, supra note 79, at 745. 486 Assistant Att’y Gen. Jonathan Kanter Delivers Remarks at New York City Bar Association’s Milton Handler Lecture (May 18, 2022), https://www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-delivers-remarks-new-york-city-bar-association (quoting Nat’l Soc’y of Pro. Eng’rs v. United States, 435 U.S. 679, 695 (1978)) [hereinafter “Kanter Handler Lecture”]. 487 Elhauge, supra note 484 (noting that a literalist conception of “competition” would “ban two plumbers, in a market with 1,000 plumbers, from forming a partnership to offer better services,” and that this approach “would limit our economy to atomistic competition between sole proprietors in a way that would massively reduce our productivity and impede our economic liberty to collaborate with others in efficient ways”); DEVLIN, supra note 10, at 10 (“Maximizing competition in the most simplistic sense of the term would be self-destructive.”). 488 Elhauge, supra note 484. Certain defenses of the “competitive process” approach appear to reject the use of supplementary goals. See Kanter Handler Lecture, supra note 486 (indicating that “the question of the goals of antitrust starts and ends” with “competition and the competitive process”) (emphasis added). Some commentators, however, have interpreted Neo-Brandeisian scholarship as endorsing an approach that weighs multiple objectives, including consumer welfare. See Thomas A. Lambert & Tate Cooper, Neo-Brandeisianism’s Democracy Paradox, 49 J. CORP. L. _ (forthcoming 2023). 489 FRANCIS & SPRIGMAN, supra note 26, at 24. 490 Id. 491 Id. 492 DOJ and FTC Release Draft of New Merger Guidelines, MORRISON & FOERSTER LLP (July 27, 2023), https://www.mofo.com/resources/insights/230727-doj-and-ftc-release-draft-of-new-merger-guidelines. Congressional Research Service 51 link to page 56 Antitrust Reform and Big Tech Firms platforms with bottleneck power platforms with bottleneck power
over business users.over business users.~~378~~493 Because proposals in this category involve the designation of covered Because proposals in this category involve the designation of covered
platforms by regulators, this report refers to this strategy as the “designated-platform platforms by regulators, this report refers to this strategy as the “designated-platform
approach.”approach.”~~379~~
494 The second model is narrower. While the designated-platform approach would apply the same set The second model is narrower. While the designated-platform approach would apply the same set
of of ~~regulations~~rules to covered firms in a range of markets ( to covered firms in a range of markets (e.g., social networking, e-commerce, online , social networking, e-commerce, online
search), some legislation would apply only to individual markets.search), some legislation would apply only to individual markets.~~380~~495 This report refers to this This report refers to this
strategy as the “market-specific approach.” strategy as the “market-specific approach.”
The subsections below review these two models for sector-specific competition The subsections below review these two models for sector-specific competition ~~regulation~~rules. .
The Designated-Platform Approach
Policymakers in the United States and EU have explored the designated-platform approach. The Policymakers in the United States and EU have explored the designated-platform approach. The
EU has adopted legislation EU has adopted legislation ~~titled~~called the Digital Markets Act, which applies special regulations to designated “gatekeepers.”496 ~~the Digital Markets Act, which applies special regulations to~~

~~378 See infra “The Designated-Platform Approach.”~~
~~379 As drafted, some of these proposals would apply special regulations to platforms meeting the relevant criteria even~~
~~if the platforms are not formally designated by a regulator. See, e.g., American Innovation and Choice Online Act, H.R.~~
~~3816, 117th Cong. § 2(g)(4) (2021) (Reported Version). Nevertheless, this report adopts the terminology noted above~~
~~because of the central role that designation would likely have played in the bills’ application.~~
~~380 See infra “Market-Specific Regulation.”~~
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~~designated “gatekeepers.”381~~ Firms are to be designated as “gatekeepers” if they offer certain Firms are to be designated as “gatekeepers” if they offer certain
“core platform services”—including search engines, app stores, operating systems, advertising “core platform services”—including search engines, app stores, operating systems, advertising
services, social networking, and online marketplaces—and meet certain quantitative and services, social networking, and online marketplaces—and meet certain quantitative and
qualitative criteria.qualitative criteria.~~382~~497
In the United States, several bills in the 117th Congress would have adopted a broadly similar In the United States, several bills in the 117th Congress would have adopted a broadly similar
approach.approach.~~383 Under the bills, “covered platforms” would have included search engines, app stores,~~
~~operating systems, social networks, and online marketplaces that meet specified quantitative and~~
~~qualitative criteria.384~~
~~The proposals would have empowered the DOJ and FTC~~498 One of those bills has been reintroduced in the 118th Congress,499 and other legislation in the 118th Congress employs a comparable strategy.500 The proposals would empower a regulator to designate a platform offering any of to designate a platform offering any of
~~these~~ the relevant services as a covered platform based on (1) quantitative thresholds involving market services as a covered platform based on (1) quantitative thresholds involving market
capitalization, annual sales, and active users, and (2) the platform’s status as a “critical trading capitalization, annual sales, and active users, and (2) the platform’s status as a “critical trading
partner.”partner.”~~385~~
~~Different bills would have imposed different types of competition regulations on designated~~
~~platforms, including rules involving discriminatory conduct against business users,386 vertical~~
~~integration,387 and mergers.388~~
~~Depending on the interpretation of the “critical trading partner” standard, the designation criteria~~
~~may have encompassed the platforms discussed earlier in this report:~~
~~ Facebook, Instagram, and WhatsApp (which are controlled by Meta Platforms);~~
~~ Google Search, Android, the Google Play Store, and some of Google’s ad-tech~~
~~services;~~
~~ Amazon Marketplace; and~~
~~ Apple’s iOS and App Store.389~~
~~Certain Microsoft properties and TikTok—a short-form video app controlled by the Chinese firm~~
~~ByteDance—may also have fallen within the bills’ coverage.390~~
~~The designation criteria employed in these proposals raised several issues. Some commentators~~
~~criticized the use of market capitalization and annual sales as factors that would have determined~~

~~381~~501 493 See infra “The Designated-Platform Approach.” 494 As drafted, some of these proposals would apply special regulations to platforms meeting the relevant criteria even if the platforms are not formally designated by a regulator. See, e.g., American Innovation and Choice Online Act, S. 2033, 118th Cong. § 2(a)(5)(B) (2023). Nevertheless, this report adopts the terminology noted above because of the central role that designation would likely play in the bills’ application. 495 See infra “The Market-Specific Approach.” 496 Press Release, Euro. Comm’n, Digital Markets Act: Rules for Digital Gatekeepers to Ensure Open Markets Enter Press Release, Euro. Comm’n, Digital Markets Act: Rules for Digital Gatekeepers to Ensure Open Markets Enter
Into Force (Oct. 31, 2022), https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6423. Into Force (Oct. 31, 2022), https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6423.
~~382~~497 Id. .
~~383~~498 American Innovation and Choice Online Act, S. 2992, 117th Cong. § 3(d) (2022) (Reported Version); Platform American Innovation and Choice Online Act, S. 2992, 117th Cong. § 3(d) (2022) (Reported Version); Platform
Competition and Opportunity Act of 2021, S. 3197, 117th Cong. § 4 (2021); ACCESS Act of 2021, H.R. 3849, 117th Competition and Opportunity Act of 2021, S. 3197, 117th Cong. § 4 (2021); ACCESS Act of 2021, H.R. 3849, 117th
Cong. § 6 (2021); Platform Competition and Opportunity Act of 2021, H.R. 3826, 117th Cong. § 4 (2021); Ending Cong. § 6 (2021); Platform Competition and Opportunity Act of 2021, H.R. 3826, 117th Cong. § 4 (2021); Ending
Platform Monopolies Act, H.R. 3825, 117th Cong. § 6 (2021); Platform Monopolies Act, H.R. 3825, 117th Cong. § 6 (2021); ~~H.R. 3816 at § 2(d).~~
~~384 See, e.g., S. 2992 § 2(a)(9).~~
~~385~~American Innovation and Choice Online Act, H.R. 3816, 117th Cong. § 2(d) (2021) (Reported Version). 499 American Innovation and Choice Online Act, S. 2033, 118th Cong. (2023). 500 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. (2023). 501 See, e.g., S. 2033 See, e.g., id. §§ 2(a)(5), 3(d).
~~386 S. 2992; H.R. 3816.~~
~~387 H.R. 3825.~~
~~388 H.R. 3826. Another proposal—which would have imposed interoperability and data-portability obligations on~~
~~covered platforms—employed the same general designation standards as the other bills, but would have provided for~~
~~firm-specific standards rather than categorical regulatory treatment of covered firms. H.R. 3849.~~
~~389 Leah Nylen, Tech Antitrust Bill Threatens to Break Apple, Google’s Grip on the Internet, BLOOMBERG (July 26,~~
~~2022), https://www.bloomberg.com/graphics/2022-tech-antitrust-bill/#xj4y7vzkg.~~
~~390 Id.~~
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~~a firm’s regulatory status.391 Those criteria, they contended~~ §§ 2(a)(5), 3(d). Congressional Research Service 52 link to page 57 link to page 57 link to page 57 link to page 8 link to page 57 Antitrust Reform and Big Tech Firms Different bills would impose different types of competition rules on designated platforms, including rules involving discriminatory conduct against business users,502 vertical integration,503 and mergers.504 Depending on the interpretation of the “critical trading partner” standard, the designation criteria may encompass the platforms discussed earlier in this report: • Facebook, Instagram, and WhatsApp (which are controlled by Meta Platforms); • Google Search, Android, the Google Play Store, and some of Google’s ad-tech services; • Amazon Marketplace; and • Apple’s iOS and App Store.505 Certain Microsoft properties and TikTok—a short-form video app controlled by the Chinese firm ByteDance—may also fall within the bills’ coverage.506 The designation criteria employed in these proposals raise several issues. Some commentators have criticized the use of market capitalization and annual sales as factors that would determine a firm’s regulatory status.507 Those criteria, they contend, have little relevance for a platform , have little relevance for a platform
operator’s ability to harm competition, which instead depends on a firm’s market power.operator’s ability to harm competition, which instead depends on a firm’s market power.~~392~~508 As As
discussed, courts typically assess claims of market power by evaluating a firm’s size within a discussed, courts typically assess claims of market power by evaluating a firm’s size within a
relevant antitrust market—not its absolute size.relevant antitrust market—not its absolute size.~~393~~509 Critics of the designated-platform bills thus Critics of the designated-platform bills thus
~~argued~~argue that the proposals that the proposals ~~employed~~employ arbitrary designation criteria intended to single out a small arbitrary designation criteria intended to single out a small
handful of handful of ~~firms.394~~companies.510
The bills The bills ~~sought~~seek to address some of these concerns about arbitrariness with the additional to address some of these concerns about arbitrariness with the additional
requirement that covered platforms include only “critical trading partners”—a term defined to requirement that covered platforms include only “critical trading partners”—a term defined to
mean persons with the ability to “restrict or impede” a business user’s access to customers or mean persons with the ability to “restrict or impede” a business user’s access to customers or
~~tools or services needed to effectively serve customers.395 This phrase would have represented a~~
~~novel addition to the antitrust lexicon.~~
~~The use of the new “critical trading partner” language instead of the more familiar concept of~~
~~market power may have been a response to some of the more demanding elements of~~
~~market-power doctrine. Market definition—which is required if a plaintiff seeks to establish~~
~~market power via market-share evidence—often involves a costly and time-consuming battle of~~
~~economic experts.396 The “critical trading partner” terminology may have been motivated in part~~
~~by a desire to ease these burdens.~~
~~Some commentators have also lodged theoretical objections to the centrality of market definition~~
~~in contemporary antitrust.397 Among other things, they have highlighted the limitations of binary~~
~~market analysis when it comes to differentiated products.398 Products that fall within a relevant~~

~~391~~ 502 S. 2992; H.R. 3816. 503 H.R. 3825. 504 H.R. 3826. Another proposal—which would have imposed interoperability and data-portability obligations on covered platforms—employed the same general designation standards as the other bills, but would have provided for firm-specific standards rather than uniform regulatory treatment of covered firms. H.R. 3849. 505 Leah Nylen, Tech Antitrust Bill Threatens to Break Apple, Google’s Grip on the Internet, BLOOMBERG (July 26, 2022), https://www.bloomberg.com/graphics/2022-tech-antitrust-bill/#xj4y7vzkg. 506 Id. 507 Erik Hovenkamp, Erik Hovenkamp, Proposed Antitrust Reforms in Big Tech: What Do They Mean for Competition and Innovation?, ,
COMPETITION POLICY INT’L ANTITRUST CHRONICLE 15, 22 (July 2022) [hereinafter “Hovenkamp, COMPETITION POLICY INT’L ANTITRUST CHRONICLE 15, 22 (July 2022) [hereinafter “Hovenkamp, Proposed Antitrust
Reforms”]; AURELIAN PORTUESE, INFO. TECH. & INNOVATION FDN., THE REVISED (BUT UNCORRECTED) VERSION OF THE ”]; AURELIAN PORTUESE, INFO. TECH. & INNOVATION FDN., THE REVISED (BUT UNCORRECTED) VERSION OF THE
KLOBUCHAR BILL (2022), https://www2.itif.org/2022-revised-uncorrected-klobuchar-bill.pdf; Comments of the KLOBUCHAR BILL (2022), https://www2.itif.org/2022-revised-uncorrected-klobuchar-bill.pdf; Comments of the
American Bar Association Antitrust Law Section Regarding the American Innovation and Choice Online Act (S. 2992) American Bar Association Antitrust Law Section Regarding the American Innovation and Choice Online Act (S. 2992)
Before the 117th Congress 8 (Apr. 27, 2022), https://www.americanbar.org/content/dam/aba/Before the 117th Congress 8 (Apr. 27, 2022), https://www.americanbar.org/content/dam/aba/
administrative/antitrust_law/comments/at-comments/2022/comments-aico-act.pdf [hereinafter “ABA Letter”]. administrative/antitrust_law/comments/at-comments/2022/comments-aico-act.pdf [hereinafter “ABA Letter”].
~~392~~508 Hovenkamp, Hovenkamp, Proposed Antitrust Reforms, , supra no note ~~391,~~ 507, at 22; PORTUESE, at 22; PORTUESE, supra no note ~~391~~507; ABA Letter, ABA Letter, supra note note
~~391~~507, at 8. at 8.
~~393~~509 ELHAUGE, ELHAUGE, supra no note 3038, at 226. at 226.
~~394~~510 E.g., Herbert Hovenkamp, , Herbert Hovenkamp, Gatekeeper Competition Policy 18 (U. of Penn., Inst. for L. & Econ., Research Paper No. 18 (U. of Penn., Inst. for L. & Econ., Research Paper No.
23-08, 2023), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4347768 [hereinafter “Hovenkamp, 23-08, 2023), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4347768 [hereinafter “Hovenkamp, Gatekeeper
Competition Policy”] (arguing that the strategy of designating platforms based on size rather than market share suggests ”] (arguing that the strategy of designating platforms based on size rather than market share suggests
an intent to protect the rivals of covered platforms from aggressive competition rather than a desire to protect an intent to protect the rivals of covered platforms from aggressive competition rather than a desire to protect
consumers); PORTUESE, consumers); PORTUESE, supra not note ~~391~~507. Congressional Research Service 53 link to page 7 link to page 43 link to page 43 link to page 5 Antitrust Reform and Big Tech Firms tools or services needed to effectively serve customers.511 This phrase would represent a novel addition to the antitrust lexicon. The use of the new “critical trading partner” language instead of the more familiar concept of market power may be a response to some of the more demanding elements of market-power doctrine. Market definition—which is required if a plaintiff seeks to establish market power via indirect evidence—often involves a costly and time-consuming battle of economic experts.512 The “critical trading partner” terminology may be motivated in part by a desire to ease these burdens. Some commentators have also lodged theoretical objections to the centrality of market definition in contemporary antitrust.513 Among other things, they have highlighted the limitations of binary market analysis when it comes to differentiated products.514 Products that fall within a relevant .
~~395 E.g., American Innovation and Choice Online Act, H.R. 3816, 117th Cong. §§ 2(g)(4)(B)(iii), 2(g)(5) (2021)~~
~~(Reported Version). One of the bills defined the term “critical trading partner” to mean a person with the ability to~~
~~“restrict or materially impede” a business user’s access to customers or tools needed to effectively serve customers.~~
~~American Innovation and Choice Online Act, S. 2992, 117th Cong. § 2(a)(6) (2022) (Reported Version) (emphasis~~
~~added). For a more detailed discussion of the American Innovation and Choice Online Act, see CRS Report R47228,~~
The American Innovation and Choice Online Act, by Jay B. Sykes.
~~396 See Hovenkamp, The Rule of Reason, supra note 27, at 98-99 (discussing the administrative costs associated with~~
~~the rule of reason); John E. Lopatka & William H. Page,~~ ~~Economic Authority and the Limits of Expertise in Antitrust~~
~~Cases, 90 CORNELL L. REV. 617, 659-60 (2005) (noting that modern courts recognize that “market definition requires~~
~~the sophisticated use of data and theory,” which in turn requires expert testimony).~~
~~397 Louis Kaplow, Why (Ever) Define Markets?, 124 HARV. L. REV. 437, 476-79 n.78-79 (2010) (cataloguing academic~~
~~criticisms of the role that market definition plays under current law).~~
~~398 Hovenkamp, Platform Monopoly, supra note 279, at 1961 (“If a market is product-differentiated, any conclusion~~
~~about market definition is wrong.”); Joseph Farrell & Carl Shapiro,~~ ~~Antitrust Evaluation of Horizontal Mergers: An~~
~~Economic Alternative to Market Definition, 10 B.E. J. OF THEORETICAL ECON. art. 9 at 4 (2010) (“Product~~
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antitrust market, for example, all count as equally effective substitutes for the product at issue; the antitrust market, for example, all count as equally effective substitutes for the product at issue; the
market-definition paradigm does not consider different rates of substitution among products market-definition paradigm does not consider different rates of substitution among products
within a relevant market.within a relevant market.~~399~~515 Similarly, firms deemed to fall outside a relevant market are treated Similarly, firms deemed to fall outside a relevant market are treated
as if they exert no competitive pressure on a defendant.as if they exert no competitive pressure on a defendant.~~400~~516
Reality is often more nuanced. In markets with differentiated products—like many technology Reality is often more nuanced. In markets with differentiated products—like many technology
markets—there may be a range of firms that compete with a defendant to various degrees. markets—there may be a range of firms that compete with a defendant to various degrees.
Singling out a specific market boundary along this type of continuum may thus yield inaccurate Singling out a specific market boundary along this type of continuum may thus yield inaccurate
assessments of market power.assessments of market power.~~401~~
~~Other commentators have expressed narrower concerns about current market-power doctrine. For~~
~~example, some have argued that the Supreme Court’s 2018 decision in~~ ~~Ohio v. American Express~~
~~(Amex)402—which adopted special market-definition rules for two-sided transaction platforms—~~
~~may hamper antitrust enforcement against some tech firms.403~~517
The “critical trading partner” requirement thus The “critical trading partner” requirement thus ~~appeared~~appears to respond to dissatisfaction with to respond to dissatisfaction with
existing existing ~~case~~ law. However, law. However, ~~many argued that~~ the requirement’s precise relationship with current the requirement’s precise relationship with current
doctrine doctrine ~~was~~is unclear. The core concern of market definition—the availability of reasonable unclear. The core concern of market definition—the availability of reasonable
substitutes—seems relevant to whether a platform has the ability to “restrict or impede” a substitutes—seems relevant to whether a platform has the ability to “restrict or impede” a
business user’s access to customers or necessary tools. As a result, some of the considerations that business user’s access to customers or necessary tools. As a result, some of the considerations that
figure in market definition would potentially figure in market definition would potentially ~~have played~~play a role in evaluations of the “critical a role in evaluations of the “critical
trading partner” requirement. The exact ways in which this inquiry may trading partner” requirement. The exact ways in which this inquiry may ~~have differed~~differ from from
traditional market definition accordingly traditional market definition accordingly ~~remained~~remain uncertain. uncertain.
The literature also The literature also ~~reflected~~reflects different views of the requirement’s stringency. Some commentators different views of the requirement’s stringency. Some commentators
have argued that the relevant bills argued that the relevant bills ~~were~~are “carefully targeted” because they would “carefully targeted” because they would ~~have applied only to~~
~~“critical trading partners.”404 Others contended that the additional criterion would have been~~
~~unlikely to exclude firms that met the bills’ quantitative thresholds.405 The analytical framework~~

~~differentiation can make defining the relevant market problematic, notably because products must be ruled ‘in’ or ‘out,’~~
~~creating a risk that the outcome of a merger investigation or case may turn on an inevitably artificial line-drawing~~
~~exercise.”).~~
~~399 Hovenkamp, Platform Monopoly, supra note 279, at 1961.~~
~~400 Id.~~
~~401 See DEVLIN, supra note 10, at 281-84; Franklin M. Fisher, Diagnosing Monopoly, 19 Q. REV. ECON. & BUS. 7, 16~~
~~(1979) (“By focusing on whether products are in or out of the market, one converts a necessarily continuous question~~
~~into a question of yes or no.”).~~
~~402 138 S. Ct. 2274 (2018).~~
~~403 JAMES BESSEN, THE NEW GOLIATHS: HOW CORPORATIONS USE SOFTWARE TO DOMINATE INDUSTRIES, KILL~~
~~INNOVATION, AND UNDERMINE REGULATION 157 (2022); Lina Khan,~~ ~~The Supreme Court Case That Could Give Tech~~
~~Giants More Power, N.Y. TIMES (Mar. 2, 2018), https://www.nytimes.com/2018/03/02/opinion/the-supreme-court-~~
~~case-that-could-give-tech-giants-more-power.html; but see Tim Wu, The American Express~~ ~~Opinion, the Rule of~~
~~Reason, and Tech Platforms, 7 J. ANTITRUST ENF’T 117 (2019) (arguing that Amex’s holding is narrow and that the~~
~~decision is unlikely to impede antitrust enforcement against major tech platforms).~~
~~404 Letter from Fiona M. Scott Morton, et al., to Sen. Amy Klobuchar & Sen. Charles Grassley 1 (July 7, 2022),~~
~~https://som.yale.edu/sites/default/files/2022-07/AICOA-Final-revised.pdf (“[S. 2992’s] approach is carefully targeted~~
~~in that its prohibitions apply only to platforms deemed ‘critical trading partners’—meaning they have the power to~~
~~deprive business users of access to customers or access to inputs necessary for those users to run their businesses. The~~
~~result is that [S. 2992’s] restrictions apply to the platforms whose market positions confer undue gatekeeping power,~~
~~and no others.”).~~
~~405 Monika Schnitzer, et al.,~~ ~~International Coherence in Digital Platform Regulation: An Economic Perspective on the~~
~~US and EU Proposals, YALE TOBIN CTR. FOR ECON. POLICY 9 (Aug. 9, 2021), https://tobin.yale.edu/sites/~~
default/files/Coherence%20in%20Digital%20Platform%20Regulation.pdf; see also ~~Reining in Dominant Digital~~
~~Platforms: Restoring Competition to Our Digital Markets, Hearing Before the Subcomm. on Competition Policy,~~
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~~governing~~ apply only to 511 E.g., American Innovation and Choice Online Act, H.R. 3816, 117th Cong. §§ 2(g)(4)(B)(iii), 2(g)(5) (2021) (Reported Version). 512 See Hovenkamp, The Rule of Reason, supra note 31, at 98-99 (discussing the administrative costs associated with the rule of reason); John E. Lopatka & William H. Page, Economic Authority and the Limits of Expertise in Antitrust Cases, 90 CORNELL L. REV. 617, 659-60 (2005) (noting that modern courts recognize that “market definition requires the sophisticated use of data and theory,” which in turn requires expert testimony). 513 Louis Kaplow, Why (Ever) Define Markets?, 124 HARV. L. REV. 437, 476-79 n.78-79 (2010) (cataloguing academic criticisms of the role that market definition plays under current law). 514 Hovenkamp, Platform Monopoly, supra note 367, at 1961 (“If a market is product-differentiated, any conclusion about market definition is wrong.”); Joseph Farrell & Carl Shapiro, Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition, 10 B.E. J. OF THEORETICAL ECON. art. 9 at 4 (2010) (“Product differentiation can make defining the relevant market problematic, notably because products must be ruled ‘in’ or ‘out,’ creating a risk that the outcome of a merger investigation or case may turn on an inevitably artificial line-drawing exercise.”). 515 Hovenkamp, Platform Monopoly, supra note 367, at 1961. 516 Id. 517 See DEVLIN, supra note 10, at 281-84; Franklin M. Fisher, Diagnosing Monopoly, 19 Q. REV. ECON. & BUS. 7, 16 (1979) (“By focusing on whether products are in or out of the market, one converts a necessarily continuous question into a question of yes or no.”). Congressional Research Service 54 Antitrust Reform and Big Tech Firms “critical trading partners.”518 Others have contended that the additional criterion is unlikely to exclude firms that meet the bills’ quantitative thresholds.519 The analytical framework governing assessments of the “critical trading partner” standard would thus have to be fleshed out assessments of the “critical trading partner” standard would thus have to be fleshed out
in practice, if Congress were to enact legislation employing that concept.in practice, if Congress were to enact legislation employing that concept.~~406~~520
The use of the “critical trading partner” language instead of a market-power requirement is not The use of the “critical trading partner” language instead of a market-power requirement is not
inherent to the designated-platform approach. In empowering a regulator to designate platforms inherent to the designated-platform approach. In empowering a regulator to designate platforms
for special competition regulation, Congress could consider limiting designations to firms that for special competition regulation, Congress could consider limiting designations to firms that
possesspossess significant market power. market power.
In the 117th Congress, S. 1074 would have taken that approach. In the 117th Congress, S. 1074 would have taken that approach.~~407~~521 The bill would have imposed The bill would have imposed
special merger rules on “dominant digital firms”—a term defined to mean companies that provide special merger rules on “dominant digital firms”—a term defined to mean companies that provide
online services and possess “dominant market power” in any market related to such services.online services and possess “dominant market power” in any market related to such services.~~408~~522
Under the legislation, the FTC would have been empowered to designate companies as “dominant Under the legislation, the FTC would have been empowered to designate companies as “dominant
digital firms” based on their possession of “dominant market power” and several other factors, digital firms” based on their possession of “dominant market power” and several other factors,
including network effects, use of exclusivity agreements, and vertical integration.including network effects, use of exclusivity agreements, and vertical integration.~~409~~
~~In linking platform designation and market power, Congress could address some of the concerns~~
~~discussed above by dispensing with certain elements of market-power doctrine. For example,~~
~~Congress could provide that market definition is not necessary to establish market power or~~
~~abrogate specific decisions like Amex. One general antitrust bill in the 117th Congress would~~
~~have made both of those changes.410~~523
Besides these issues involving designation criteria, the designated-platform approach implicates Besides these issues involving designation criteria, the designated-platform approach implicates
the broader question of whether the Big Tech firms (and any other designated firms) are the broader question of whether the Big Tech firms (and any other designated firms) are
sufficiently similar to warrant sufficiently similar to warrant ~~categorical~~uniform regulatory treatment. As discussed, some commentators regulatory treatment. As discussed, some commentators
have argued that have argued that ~~Big Tech~~certain platform markets share markets share ~~important~~ structural similarities that justify a consistent structural similarities that justify a consistent
regulatory response, while others have emphasized the differences between those markets.regulatory response, while others have emphasized the differences between those markets.~~411~~ For For
proponents of new competition regulations, that issue may be the central question that determines proponents of new competition regulations, that issue may be the central question that determines
the choice between the designated-platform approach and market-specific regulation. the choice between the designated-platform approach and market-specific regulation.

518 Letter from Fiona M. Scott Morton, et al., to Sen. Amy Klobuchar & Sen. Charles Grassley 1 (July 7, 2022), https://som.yale.edu/sites/default/files/2022-07/AICOA-Final-revised.pdf (“[S. 2992’s] approach is carefully targeted in that its prohibitions apply only to platforms deemed ‘critical trading partners’—meaning they have the power to deprive business users of access to customers or access to inputs necessary for those users to run their businesses. The result is that [S. 2992’s] restrictions apply to the platforms whose market positions confer undue gatekeeping power, and no others.”). 519 Monika Schnitzer, et al., International Coherence in Digital Platform Regulation: An Economic Perspective on the US and EU Proposals, YALE TOBIN CTR. FOR ECON. POLICY 9 (Aug. 9, 2021), https://tobin.yale.edu/sites/default/files/Coherence%20in%20Digital%20Platform%20Regulation.pdf; see also Reining in Dominant Digital Platforms: Restoring Competition to Our Digital Markets, Hearing Before the Subcomm. on Competition Policy, Antitrust and Consumer Rights of the S. Comm. on the Judiciary (Mar. 7, 2023) (testimony of Daniel Francis, Assistant (Mar. 7, 2023) (testimony of Daniel Francis, Assistant
Professor of Law, New York University School of Law at 85), https://www.judiciary.senate.gov/imo/media/doc/2023-Professor of Law, New York University School of Law at 85), https://www.judiciary.senate.gov/imo/media/doc/2023-
03-07%20-%20Testimony%20-%20Francis.pdf [hereinafter “Francis Testimony”] (arguing that the definition of 03-07%20-%20Testimony%20-%20Francis.pdf [hereinafter “Francis Testimony”] (arguing that the definition of
“critical trading partner” in the American Innovation and Choice Online Act “critical trading partner” in the American Innovation and Choice Online Act ~~was~~is “strikingly broad and vague,” and that “strikingly broad and vague,” and that
it “appears to encompass any business that offers a desirable means of reaching customers for even a single business it “appears to encompass any business that offers a desirable means of reaching customers for even a single business
user”). user”).
~~406~~520 One commentator has proposed a potentially similar test for identifying dominant platforms without resorting to One commentator has proposed a potentially similar test for identifying dominant platforms without resorting to
traditional market-power analysis. The relevant proposal would subject platforms to special competition regulations traditional market-power analysis. The relevant proposal would subject platforms to special competition regulations
based on an assessment of their “cost of exclusion”—a concept that measures the costs to an individual or business of based on an assessment of their “cost of exclusion”—a concept that measures the costs to an individual or business of
being excluded from a platform. HAROLD FELD, ROOSEVELT INST., THE CASE FOR THE DIGITAL PLATFORM ACT: MARKET being excluded from a platform. HAROLD FELD, ROOSEVELT INST., THE CASE FOR THE DIGITAL PLATFORM ACT: MARKET
STRUCTURE AND REGULATION OF DIGITAL PLATFORMS 41-47 (May 8, 2019), https://rooseveltinstitute.org/wp-STRUCTURE AND REGULATION OF DIGITAL PLATFORMS 41-47 (May 8, 2019), https://rooseveltinstitute.org/wp-
content/uploads/2020/07/RI-Case-for-the-Digital-Platform-Act-201905.pdf. For a discussion of the mathematics content/uploads/2020/07/RI-Case-for-the-Digital-Platform-Act-201905.pdf. For a discussion of the mathematics
involved in calculating a firm’s “cost of exclusion,” seeinvolved in calculating a firm’s “cost of exclusion,” see id. at 43-44.. at 43-44.
~~407~~ 521 Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. § 4 (2021). Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. § 4 (2021).
~~408~~522 Id. .
~~409 Id.~~
410 Competition and Antitrust Law Enforcement Reform Act of 2021, S. 225, 117th Cong. §§ 9, 13 (2021); see also
~~DEVLIN, supra note 10, at 282 (calling for a reduced role for market definition in antitrust doctrine); HJC REPORT,~~
supra note 11, at 399 (arguing that Congress should adopt legislation overriding Amex and providing that market
~~definition is not required to prove an antitrust violation). For a defense of market definition, see Gregory J. Werden,~~
Why (Ever) Define Markets? An Answer to Professor Kaplow, 78 ANTITRUST L.J. 729 (2013). For a defense of the
~~Supreme Court’s Amex decision, see Geoffrey A. Manne,~~ ~~In Defence of the Supreme Court’s “Single Market”~~
~~Definition in~~ ~~Ohio v. American Express, 7 J. ANTITRUST ENFORCEMENT 104 (2019).~~
~~411 See supra “Market Structure and the Efficacy of Ex Post Adjudication.”~~
523 Id. Congressional Research Service Congressional Research Service

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The Market-Specific ~~Regulation~~Approach
Some proposals for sectoral competition regulation rely on a more targeted strategy than the Some proposals for sectoral competition regulation rely on a more targeted strategy than the
designated-platform approach. Instead of applying the same set of designated-platform approach. Instead of applying the same set of ~~regulations~~rules to designated firms to designated firms
operating across a range of different tech markets, policymakers could adopt regulations tailored operating across a range of different tech markets, policymakers could adopt regulations tailored
to individual markets. In to individual markets. In ~~the 117th Congress~~recent years, lawmakers , lawmakers have introduced bills targeting two industries: introduced bills targeting two industries:
app stores and digital advertising.app stores and digital advertising.~~412~~
~~The~~524 In the 117th Congress, the Open App Markets Act (OAMA) would have established competition Open App Markets Act (OAMA) would have established competition ~~regulations~~rules for large for large
app stores.app stores.~~413~~525 Among other things, the legislation would have prohibited operators of covered app Among other things, the legislation would have prohibited operators of covered app
stores from tying their app stores to their payment processorsstores from tying their app stores to their payment processors,; preferencing their own apps in preferencing their own apps in
search resultssearch results,; and using nonpublic information derived from third-party apps to compete with and using nonpublic information derived from third-party apps to compete with
those apps.those apps.~~414~~526 The bill’s requirements are discussed in greater detail in The bill’s requirements are discussed in greater detail in “Ex Ante Conduct Rules”
infra. .
~~The Competition and Transparency in Digital Advertising Act would have imposed~~
In the 118th Congress, the Advertising Middlemen Endangering Rigorous Internet Competition Accountability (AMERICA) Act would impose structural-separation requirements and conduct rules on certain digital-advertising platforms.structural-separation requirements and conduct rules on certain digital-advertising platforms.~~415~~
527 The legislation would The legislation would ~~have prohibited~~prohibit firms with more than $20 billion in annual firms with more than $20 billion in annual
digital-advertising revenue from owning platforms that operate in more than one of the key nodes digital-advertising revenue from owning platforms that operate in more than one of the key nodes
in the ad-tech supply chain (ad exchanges, sell-side brokerages, and buy-side brokerages).in the ad-tech supply chain (ad exchanges, sell-side brokerages, and buy-side brokerages).~~416~~528 It would also require It
~~also would have required~~ firms with more than $5 billion in annual digital-advertising revenue to firms with more than $5 billion in annual digital-advertising revenue to
~~abide by customer-protection rules involving best execution, transparency, and conflicts of~~
~~interest.417~~
~~Choice of Enforcers~~
~~A new regulatory regime for large tech platforms would require the selection of a regulator.~~
~~Several options are available. The designated-platform bills discussed above would have~~
~~empowered the DOJ and FTC to designate firms for special regulation.418 One of those bills—~~
~~which included interoperability and data-portability mandates—would have granted the FTC~~
~~rulemaking authority to develop standards implementing the relevant requirements.419 The others~~
~~would have given enforcement authority to the DOJ and FTC, but did not include explicit grants~~

~~412 Competition and Transparency in Digital Advertising Act, S. 4258, 117th Cong. (2022~~abide by customer-protection rules involving best execution and transparency.529 Enforcement Reform proposals have taken different approaches to issues of enforcement. In the 118th Congress, the Digital Consumer Protection Commission Act (DCPCA) would establish a new federal agency tasked with regulating large online platforms.530 The new agency would have a broad mandate covering competition, transparency, privacy, and national security issues.531 On the competition front, the DCPCA would charge the new agency with enforcing prohibitions of abuses of dominance532 and conflicts of interest,533 in addition to granting the agency the authority to block platform mergers under a public-interest standard.534 524 Advertising Middlemen Endangering Rigorous Internet Competition Accountability Act, S. 1073, 118th Cong. (2023); Open App Markets Act, S. ); Open App Markets Act, S.
2710, 117th Cong. (2022) (Reported Version); Competition and Transparency in Digital Advertising Act, H.R. 7839, 2710, 117th Cong. (2022) (Reported Version); Competition and Transparency in Digital Advertising Act, H.R. 7839,
117th Cong. (2022); Open App Markets Act, H.R. 7030, 117th Cong. (2022); Open App Markets Act, H.R. 5017, 117th Cong. (2022); Open App Markets Act, H.R. 7030, 117th Cong. (2022); Open App Markets Act, H.R. 5017,
117th Cong. (2021). 117th Cong. (2021).
~~413~~525 S. 2710; H.R. 7030; H.R. 5017. S. 2710; H.R. 7030; H.R. 5017.
~~414~~526 S. 2710 § 3; H.R. 7030 § 3; H.R. 5017 § 3. S. 2710 § 3; H.R. 7030 § 3; H.R. 5017 § 3.
~~415 S. 4258; H.R. 7839.~~
~~416 S. 4258 § 2; H.R. 7839 § 2. As discussed in supra “Digital Advertising,” the DOJ has filed a monopolization lawsuit~~
~~seeking to compel Google to divest some of its ad-tech businesses.~~
~~417 S. 4258 § 2; H.R. 7839 § 2.~~
~~418 American Innovation and Choice Online Act, S. 2992, 117th Cong. § 3(d) (2022) (Reported Version); Platform~~
~~Competition and Opportunity Act of 2021, S. 3197, 117th Cong. § 4 (2021); ACCESS Act of 2021, H.R. 3849, 117th~~
~~Cong. § 6 (2021); Platform Competition and Opportunity Act of 2021, H.R. 3826, 117th Cong. § 4 (2021); Ending~~
~~Platform Monopolies Act, H.R. 3825, 117th Cong. § 6 (2021); American Innovation and Choice Online Act, H.R.~~
~~3816, 117th Cong. § 2(d) (2021) (Reported Version).~~
~~419 H.R. 3849 § 6(c).~~
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~~of rulemaking power.420 Some of the bills also would have given enforcement authority to state~~
~~attorneys general.421~~
~~Some commentators have endorsed an alternative approach involving the creation of a new~~
~~specialist regulator for large digital platforms.422 In certain proposals, this regulator would be an~~
~~entirely new agency,423 while others would establish a new branch with special powers within an~~
~~existing antitrust authority.424 In the 117th Congress, the Digital Platform Commission Act would~~
~~have taken the former approach and created a new Federal Digital Platform Commission tasked~~
~~with regulating “systemically important digital platforms.”425~~
~~Reform Proposals~~
~~With the conceptual ground cleared, this~~527 S. 1073. 528 Id. § 2. 529 S. 1073. 530 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2111 (2023). 531 Id. §§ 2201-2321, 2411-2503. 532 Id. § 2311. 533 Id. § 2312. 534 Id. § 2313. Congressional Research Service 56 link to page 30 Antitrust Reform and Big Tech Firms The bill’s abuse-of-dominance provision would make it unlawful for a covered platform operator to abuse its dominance or “otherwise engage in conduct that harms competition or creates or helps maintain an unfair method of competition, a monopoly, or a monopsony, regardless of any alleged procompetitive benefit or efficiencies.”535 While the legislation identifies several practices as presumptive violations of this prohibition, it would also give the new agency rulemaking authority to identify additional practices as presumptive violations.536 Platforms could rebut a presumptive violation with clear and convincing evidence that their conduct “did not result in any harm to the relevant aggrieved party.”537 Other proposals adopt a different approach. As discussed, several bills in the 117th Congress (one of which has been reintroduced in the 118th Congress) would have empowered the DOJ and FTC to designate firms based on certain quantitative and qualitative criteria.538 Designated firms would then be subject to special competition rules. The bills would have charged the DOJ and FTC with enforcing the relevant prohibitions in federal court, but would not have given the agencies rulemaking authority to expand or clarify their scope. Reform Proposals This final section of the report discusses the substance of final section of the report discusses the substance of
various proposals to reform the competition laws governing Big Tech platforms. The proposals various proposals to reform the competition laws governing Big Tech platforms. The proposals
fall into five categories: (1) fall into five categories: (1) ex ante conduct rules, (2) structural separation and line-of-business conduct rules, (2) structural separation and line-of-business
restrictions, (3) special merger rules, (4) interoperability and data-portability mandates, and restrictions, (3) special merger rules, (4) interoperability and data-portability mandates, and
(5) changes to general antitrust doctrine. (5) changes to general antitrust doctrine.
Ex Ante Conduct Rules
As discussed, some commentators As discussed, some commentators ~~and legislators~~ have advocated the adoption of prophylactic have advocated the adoption of prophylactic
conduct rules for Big Tech platforms, which would supplement general antitrust law.conduct rules for Big Tech platforms, which would supplement general antitrust law.~~426~~ This This
subsection reviews several of these proposals for subsection reviews several of these proposals for ex ante competition competition ~~regulations~~regulation. .
Self-Preferencing ~~/ Non-Discrimination Rules~~
The ability of large digital platforms to preference their own offerings is a recurring concern in The ability of large digital platforms to preference their own offerings is a recurring concern in
debates over antitrust reform. As discussed, several of the Big Tech firms have been accused of debates over antitrust reform. As discussed, several of the Big Tech firms have been accused of
engaging in various forms of self-preferencing. Google has allegedly favored its own verticals in engaging in various forms of self-preferencing. Google has allegedly favored its own verticals in
general search resultsgeneral search results,; its own app store and apps through its control of Android its own app store and apps through its control of Android,; and its own and its own
ad-tech businesses through its presence in multiple segments of the ad-tech market.ad-tech businesses through its presence in multiple segments of the ad-tech market.~~427 Apple has~~
~~likewise been accused of preferencing its own apps and app store,428 while Amazon has allegedly~~
~~privileged its own private-label products and products that use its logistics service.429~~

~~420 S. 2992; S. 3197; H.R. 3826; H.R. 3825; H.R. 3816.~~
~~421 S. 2992 § 2(c)(1)(C); S. 3197 § 5(a)(3); H.R. 3826 § 5(a); H.R. 3816 § 2(h)(1)(C). Some of the bills also would have~~
~~created private rights of action. S. 3197 § 7; H.R. 3826 § 7; H.R. 3816 § 6.~~
~~422 STIGLER REPORT, supra note 333, at 104-06; UK DIGITAL COMPETITION REPORT, supra note 333, at 8.~~
~~423 Rogerson & Shelanski, supra note 342, at 1916; STIGLER REPORT, supra note 333, at 104-06.~~
~~424 ACCC Report, supra note 162, at 31; see also UK DIGITAL COMPETITION REPORT, supra note 333, at 10 (noting both~~
~~options); FELD, supra note 406, at 188-95 (discussing the advantages and disadvantages of creating a new~~
~~digital-platform regulator).~~
~~425 Digital Platform Commission Act of 2022, S. 4201, 117th Cong. (2022); Digital Platform Commission Act of 2022,~~
~~H.R. 7858, 117th Cong. (2022).~~
426 S. 2992; H.R. 3816; OECD REGULATION REPORT, supra note 340, at 9-15; UK DIGITAL COMPETITION REPORT, supra
~~note 333, at 62-63.~~
~~427 See supra “Google.”~~
~~428 See supra “Apple.”~~
~~429 See supra “Amazon.”~~
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~~The primary concern with this type of conduct involves monopoly leveraging.430~~539 Apple has 535 Id. § 2311(b). The “abuse of dominance” language is borrowed from EU competition law, which generally reflects a more restrictive approach to the unilateral conduct of dominant firms than U.S. antitrust law. See DANIEL J. GIFFORD & ROBERT T. KUDRLE, THE ATLANTIC DIVIDE IN ANTITRUST: AN EXAMINATION OF US AND EU COMPETITION POLICY 63-196 (2015). 536 S. 2597 § 2311(e). 537 Id. § 2311(d). 538 American Innovation and Choice Online Act, S. 2033, 118th Cong. § 3(d) (2023); American Innovation and Choice Online Act, S. 2992, 117th Cong. § 3(d) (2022) (Reported Version); Platform Competition and Opportunity Act of 2021, S. 3197, 117th Cong. § 4 (2021); Platform Competition and Opportunity Act of 2021, H.R. 3826, 117th Cong. § 4 (2021); Ending Platform Monopolies Act, H.R. 3825, 117th Cong. § 6 (2021); American Innovation and Choice Online Act, H.R. 3816, 117th Cong. § 2(d) (2021) (Reported Version). 539 See supra “Google.” Congressional Research Service 57 link to page 44 link to page 38 link to page 38 link to page 62 link to page 13 Antitrust Reform and Big Tech Firms likewise been accused of preferencing its own apps and app store,540 while Amazon has allegedly privileged its own private-label products and products that use its fulfillment services.541 The primary concern with this type of conduct involves monopoly leveraging.542 As discussed, As discussed,
leveraging theories of harm can take two forms. Offensive leveraging occurs when a firm leveraging theories of harm can take two forms. Offensive leveraging occurs when a firm
attempts to use monopoly power in a primary market to extract additional profits from a attempts to use monopoly power in a primary market to extract additional profits from a
secondary market.secondary market.~~431~~543 By contrast, defensive leveraging involves the use of monopoly power to By contrast, defensive leveraging involves the use of monopoly power to
gain an advantage in a secondary market so as to preserve a primary market monopoly—for gain an advantage in a secondary market so as to preserve a primary market monopoly—for
example, by eliminating competitive threats that might emerge from the secondary market.example, by eliminating competitive threats that might emerge from the secondary market.~~432~~544
Defensive leveraging may be a viable theory of harm under existing monopolization law. Defensive leveraging may be a viable theory of harm under existing monopolization law.~~433~~545
Offensive-leveraging claims, however, cannot succeed under Section 2 absent evidence that a Offensive-leveraging claims, however, cannot succeed under Section 2 absent evidence that a
defendant had a dangerous probability of defendant had a dangerous probability of monopolizing a secondary market; mere harm to a secondary market; mere harm to
competition in the secondary market is not sufficient.competition in the secondary market is not sufficient.~~434~~546
For some of the self-preferencing allegations against Big Tech firms, these limitations may For some of the self-preferencing allegations against Big Tech firms, these limitations may
preclude preclude ~~monopolization~~antitrust claims. claims.~~435~~547 It may be unlikely, for example, that Amazon will achieve It may be unlikely, for example, that Amazon will achieve
monopoly power over most of the products that it sells on its marketplace. As a result, it would be monopoly power over most of the products that it sells on its marketplace. As a result, it would be
difficult to challenge the preferential display of those products under an offensive-leveraging difficult to challenge the preferential display of those products under an offensive-leveraging
theory.theory.~~436~~ 548 This type of alleged favoritism may also be a weak foundation for a This type of alleged favoritism may also be a weak foundation for a
defensive-leveraging or monopoly-maintenance case; it is not clear that Amazon’s defensive-leveraging or monopoly-maintenance case; it is not clear that Amazon’s ~~alleged~~
elevation of elevation of allegedly inferior products inferior products ~~helps~~would help it maintain a putative e-commerce monopoly. it maintain a putative e-commerce monopoly.
Similarly, the case law governing Similarly, the case law governing ~~unilateral~~ refusals to deal refusals to deal ~~is not an attractive vehicle for~~may serve as an impediment to antitrust claims
challenging platform self-preferencing. A platform operator’s favorable treatment of its own challenging platform self-preferencing. A platform operator’s favorable treatment of its own
verticals relative to rivals that use its platform is typically less harmful to rivals than an outright verticals relative to rivals that use its platform is typically less harmful to rivals than an outright
refusal of access.refusal of access.~~437~~549 Because antitrust imposes access duties only in a narrow set of Because antitrust imposes access duties only in a narrow set of
circumstances,circumstances, courts would likely find many forms of self-preferencing many forms of self-preferencing ~~are unlikely to constitute unlawful refusals to~~
~~deal.438~~

~~430~~to be permissible if such conduct is evaluated as a refusal to deal.550 540 See supra “Apple.” 541 See supra “Amazon.” 542 See generally Todd, Todd, supra no note ~~249~~319.
~~431~~543 GIUSEPPE COLANGELO, INT’L CTR. FOR L. & ECON., ANTITRUST UNCHAINED: THE EU’S CASE AGAINST SELF- GIUSEPPE COLANGELO, INT’L CTR. FOR L. & ECON., ANTITRUST UNCHAINED: THE EU’S CASE AGAINST SELF-
PREFERENCING (2022), https://laweconcenter.org/resources/antitrust-unchained-the-eus-case-against-self-PREFERENCING (2022), https://laweconcenter.org/resources/antitrust-unchained-the-eus-case-against-self-
preferencing/?doing_wp_cron=1675175836.8782548904418945312500. preferencing/?doing_wp_cron=1675175836.8782548904418945312500.
~~432~~544 Robin Cooper Feldman, Robin Cooper Feldman, Defensive Leveraging in Antitrust, 87 GEO. L.J. 2079, 2080 (1999); Matthew Levinton, , 87 GEO. L.J. 2079, 2080 (1999); Matthew Levinton,
Defensive Leveraging as Monopolization, AM. BAR ASS’N (June 22, 2022), https://www.americanbar.org/groups/, AM. BAR ASS’N (June 22, 2022), https://www.americanbar.org/groups/
antitrust_law/resources/newsletters/defensive-leveraging-as-monopolization. antitrust_law/resources/newsletters/defensive-leveraging-as-monopolization.
~~433~~545 See United States v. Microsoft, 253 F.3d 34, 67 (D.C. Cir. 2001) (per curiam). United States v. Microsoft, 253 F.3d 34, 67 (D.C. Cir. 2001) (per curiam).
~~434~~546 Verizon Commc’ns Inc. v. L. Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 410 n.4 (2004); Verizon Commc’ns Inc. v. L. Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 410 n.4 (2004); see also Levinton, Levinton,
supra no note ~~432~~544.
~~435~~547 See GREGORY J. WERDEN, THE FOUNDATIONS OF ANTITRUST: EVENTS, IDEAS, AND DOCTRINES 355 (2020) (discussing GREGORY J. WERDEN, THE FOUNDATIONS OF ANTITRUST: EVENTS, IDEAS, AND DOCTRINES 355 (2020) (discussing
leveraging claims under U.S. law and concluding that “[s]elf-preferencing by digital platform monopolists will be leveraging claims under U.S. law and concluding that “[s]elf-preferencing by digital platform monopolists will be
minimally constrained in the United States unless Congress creates a new regulatory structure for digital platforms”). minimally constrained in the United States unless Congress creates a new regulatory structure for digital platforms”).
~~436~~ 548 Herbert J. Hovenkamp, Herbert J. Hovenkamp, Monopolizing and the Sherman Act 32 (Penn. Carey L. Sch., Research Paper, No. 2769, 32 (Penn. Carey L. Sch., Research Paper, No. 2769,
2022), https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=3772&context=faculty_scholarship. 2022), https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=3772&context=faculty_scholarship.
~~437~~549 Erik Hovenkamp, Hovenkamp, The Antitrust Duty to Deal~~, supra note 359, at 1546.~~
~~438~~ in the Age of Big Tech, 131 YALE L.J. 1483, 1546 (2022). 550 Trinko, 540 U.S. at 409. Refusal-to-deal doctrine is discussed in greater detail in , 540 U.S. at 409. Refusal-to-deal doctrine is discussed in greater detail in supra “Refusals to Deal.” The ” The
essential-facilities doctrine is also unlikely to preclude many forms of platform self-preferencing for a variety of essential-facilities doctrine is also unlikely to preclude many forms of platform self-preferencing for a variety of
reasons, even if that doctrine remains good law. For an overview of the difficulties facing an essential-facilities reasons, even if that doctrine remains good law. For an overview of the difficulties facing an essential-facilities
challenge to “search bias,” for example, see Marina Lao, challenge to “search bias,” for example, see Marina Lao, Search, Essential Facilities, and the Antitrust Duty to Deal, ,
11 NW. J. TECH. & INTELL. PROP. 275, 298-304 (2013). 11 NW. J. TECH. & INTELL. PROP. 275, 298-304 (2013).
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In the In the ~~117th~~118th Congress, the American Innovation and Choice Online Act (AICOA) would Congress, the American Innovation and Choice Online Act (AICOA) would ~~have~~
~~responded~~ respond to these doctrinal difficulties by prohibiting covered platform operators from to these doctrinal difficulties by prohibiting covered platform operators from
preferencing their own products and services preferencing their own products and services “in a manner that would materially harm competition.”551 Given the ubiquity of self-preferencing by vertically integrated firms, the meaning of the “materially harm competition” standard is key to assessing the prohibition’s scope. However, many argue the meaning of that language is not clear.552 The bill does not by its terms clarify whether the “materially harm competition” standard embodies a consumer-welfare test or one of the alternative standards for assessing competitive harm urged by proponents of antitrust reform.553 As a result, it is unclear whether the AICOA would permit defendants to justify challenged conduct on the ground that it benefits consumers. If the AICOA becomes law, this may be a dispositive issue in many litigated cases. A wide range of platform self-preferencing may harm a firm’s rivals while also offering consumer benefits. For example, when Google displays a Google Maps result in response to a search query, it may disadvantage rival map services, but benefit consumers.554 Apple’s preinstallation of its own apps on iPhones, Microsoft’s inclusion of certain apps with its Windows operating system, and Amazon’s free provision of its video-streaming service to Amazon Prime members may have similar effects.555 It is not clear how the “materially harm competition” standard would apply to such practices. In cases that do not involve per se offenses, Sherman Act defendants typically have the opportunity to defend challenged conduct on the ground that it benefits consumers.556 To the extent that the “materially harm competition” standard is intended to incorporate prevailing concepts of competitive harm from the antitrust case law, then, consumer-welfare arguments would likely be cognizable. 551 American Innovation and Choice Online Act, S. 2033, 118th Cong. § 3(a)(1) (2023). Versions of the AICOA were also introduced in the 117th Congress. American Innovation and Choice Online Act, S. 2992, 117th Cong. (2022) ~~in certain circumstances.439~~
~~Different versions of the legislation structured the prohibition differently.~~
~~The Senate Judiciary Committee reported a version of the AICOA that would have prohibited~~
~~covered platform operators from preferencing their own products “in a manner that would~~
~~materially harm competition.”440~~
~~The House Judiciary Committee, by contrast, reported a version of the bill that would have~~
~~prohibited platform self-preferencing but granted defendants certain competition-related~~
~~affirmative defenses.441 In particular, the reported House bill would have allowed defendants to~~
~~avoid liability if they established by clear and convincing evidence that their conduct would~~
~~(1) not harm “the competitive process by restricting or impeding legitimate activity by business~~
~~users,” or (2) increase “consumer welfare.”442~~
~~These competing approaches raise a central issue in the debate over conduct rules for Big Tech~~
~~platforms: the role of business justifications. As discussed, antitrust has developed a general~~
~~burden-shifting framework that often allows defendants to rebut a prima facie case of competitive~~
~~harm by establishing procompetitive justifications for their conduct.443 The opportunity to offer~~
~~such arguments likely reduces the incidence of false positives.444 One of the primary motivations~~
~~for ex ante conduct rules, however, is a desire to avoid the delays and expense that accompany~~
~~this type of fact-intensive analysis.445 The proper framework for evaluating business justifications~~
~~thus implicates a key trade-off facing proponents of competition regulation.~~
~~The AICOA’s resolution of that trade-off was not entirely clear. As discussed, different versions~~
~~of the bill employed different approaches to the issue of competitive harm. The self-preferencing~~
~~prohibition in the reported Senate bill would have made “material harm to competition” an~~
~~element of the government’s case-in-chief.446 The reported House bill, by contrast, offered~~
~~competition-related affirmative defenses subject to a clear-and-convincing-evidence standard.447~~
~~That difference might suggest that the reported Senate bill took a more defendant-friendly~~
~~approach than the reported House bill. Some lawmakers and commentators, however, argued that~~

~~439 American Innovation and Choice Online Act, S. 2992, 117th Cong. § 3(a)(1) (2022)~~ (Reported Version); American (Reported Version); American
Innovation and Choice Online Act, H.R. 3816, 117th Cong. Innovation and Choice Online Act, H.R. 3816, 117th Cong. ~~§ 2(a)(1)~~ (2021) (Reported Version).(2021) (Reported Version). The OAMA included The OAMA included
a more limited prohibition of self-preferencing related to app-store search results. The bill would have prohibited a more limited prohibition of self-preferencing related to app-store search results. The bill would have prohibited
covered firms from “unreasonably preferencing or ranking” their own apps in search results. Open App Markets Act, S. covered firms from “unreasonably preferencing or ranking” their own apps in search results. Open App Markets Act, S.
2710, 117th Cong. § 3(e)(1) (2022) (Reported Version); Open App Markets Act, H.R. 7030, 117th Cong. § 3(e)(1) 2710, 117th Cong. § 3(e)(1) (2022) (Reported Version); Open App Markets Act, H.R. 7030, 117th Cong. § 3(e)(1)
~~(2021); Open App Markets Act, H.R. 5017, 117th Cong. § 3(e)(1) (2021).~~
~~440 S. 2992 § 3(a)(1).~~
~~441 H.R. 3816 §§ 2(a)(1), (c)(1), (c)(3).~~
~~442 Id. §§ 2(c)(1), (c)(3). The bills offered separate affirmative defenses related to user privacy, data security, and~~
~~compliance with other laws. S. 2992 § 3(b)(1); H.R. 3816 § 2(c)(2). The reported Senate version of the bill also~~
~~provided an affirmative defense related to the maintenance or enhancement of a platform’s “core functionality.” S.~~
~~2992 § 3(b)(1)(C).~~
~~443 See, e.g., Ohio v. Am. Express Co., 138 S. Ct. 2274, 2284 (2018) (describing the framework in a Section 1 case);~~
~~Viamedia, Inc. v. Comcast Corp., 951 F.3d 429, 463-64 (7th Cir. 2020) (describing the framework in a Section 2 case).~~
~~444 See, e.g., Crane, supra note 343, at 55.~~
~~445 See, e.g., Chopra & Khan, supra note 343, at 360.~~
~~446 S. 2992 § 3(a)(1).~~
~~447 H.R. 3816 §§ 2(c)(1), (c)(3).~~
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~~the meaning of the “materially harm competition” standard in the Senate-reported bill was~~
~~unclear.448 Among other things, they highlighted the novelty of the standard’s materiality~~
~~language, the absence of a market-power requirement, and the bill’s omission of an explicit~~
~~consumer-welfare defense.449~~
~~Those factors made it difficult to predict the type of framework a court might have adopted in~~
~~applying the “materially harm competition” standard. In particular, it appeared unclear whether~~
~~that language was intended to broaden the types of competitive harm that antitrust has~~
~~traditionally recognized.450~~
~~This issue overlapped with questions about the relationship between the “materially harm~~
~~competition” standard and antitrust’s existing analytical tools. For example, if that standard was~~
~~intended to implement something similar to traditional rule-of-reason burden shifting—which~~
~~allows defendants to offer procompetitive justifications for their conduct—then litigation under~~
~~the AICOA may have been nearly as costly and time-consuming as Sherman Act lawsuits.451 On~~
~~the other hand, an interpretation of the bill that did not permit consumer-welfare or efficiency~~
~~justifications would have represented a departure from the prevailing framework for assessing~~
~~competitive harm.452 If the AICOA had been enacted, courts may have been reluctant to move~~
~~away from these existing analytical tools without clearer legislative direction.~~

~~448 Hovenkamp, Gatekeeper Competition Policy, supra note 394, at 24 (arguing that the meaning of the “materially~~
~~harm competition” standard was unclear and that “[i]f the AICOA is redrafted, this provision more than any other~~
~~needs clarification”); A. Douglas Melamed,~~ ~~Why I Think Congress Should Not Enact the American Innovation and~~
~~Choice Online Act, COMPETITION POLICY INT’L (June 19, 2022), https://www.competitionpolicyinternational.com/why-~~
~~i-think-congress-should-not-enact-the-american-innovation-and-choice-online-act/ (arguing that the meaning of the~~
~~“materially harm competition” standard was not clear); ABA Letter, supra note 391, at 5, 9-11 (similar); Transcript of~~
~~Markup of S. 2992 at 53 (Jan. 20, 2022) (on file with author) [hereinafter “S. 2992 Markup Transcript”] (Sen. Thom~~
~~Tillis) (“It’s not clear how existing competitor or competition jurisprudence would support or be changed by [S. 2992].~~
~~The purpose of competition law is to eliminate harm to consumers not to pick winners and losers. I’m also aware of the~~
~~spirited debate [over] whether decades of antitrust law based on [the] consumer-welfare standard should be put in the~~
~~burn pit. I’m open to having [a] separate discussion about potential changes to that standard and I hope that we will.~~
~~But as it stands in relation to this bill, what standard will enforcers look to[?] What about amendments [that] would~~
~~insert [the] consumer welfare standard back into the definition of material harm to competition?”).~~
~~449 Melamed, supra note 448; ABA Letter, supra note 391, at 6; S. 2992 Markup Transcript, supra note 448, at 53.~~
~~450 Francis Testimony, supra note 405, at 55 (“‘[H]arm to competition’ is just not a phrase with a single self-executing~~
~~meaning. It could be interpreted to mean welfare harm in a manner we would associate with traditional antitrust; or it~~
~~could be interpreted to mean ‘injury to rivals[.]’”) (emphasis in original); Hovenkamp, Gatekeeper Competition Policy,~~
supra note 394, at 23-24 (“If competition is defined in an economically sensible way to refer to reduced market output
~~and higher prices, then the statute might end up limiting its reach to conduct posing a realistic threat of competitive~~
~~harm. If it means something else, such as merely injuring a rival or placing it at a disadvantage on that particular~~
~~platform as opposed to the market as a whole, then it could end up doing a great deal of harm.”).~~
~~451 See Francis, supra note 48, at 823-24 (arguing that antitrust rules allowing defendants to offer justifications for~~
~~challenged conduct would be “unlikely to lighten the adjudicative load much”). Under this reading of the bill, the~~
~~self-preferencing prohibition still would have modified existing law by substituting the designation criteria discussed~~
~~earlier in this report for a market-power requirement. The prohibition also would have potentially covered conduct that~~
~~currently escapes liability because of the limitations on monopoly-leveraging and refusal-to-deal claims discussed in~~
~~this section.~~
~~452 Ohio v. Am. Express Co., 138 S. Ct. 2274, 2284 (2018); United States v. Microsoft Corp., 253 F.3d 34, 59 (D.C.~~
~~Cir. 2001) (per curiam); Schnitzer, et al., supra note 405, at 20 (interpreting the AICOA to not allow platforms to~~
~~defend challenged conduct on efficiency grounds, “as might be possible in a standard antitrust case”). The absence of~~
~~consumer-welfare and efficiency justifications would, however, be consistent with some conceptions of “competition”~~
~~that prevailed in earlier periods of antitrust history and with the stated aims of the recent Neo-Brandeisian movement.~~
See supra “The Goals of Antitrust” & “Substantive Antitrust Doctrine.”
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~~Given the potential expansiveness of a general self-preferencing prohibition,453 these issues~~
~~involving competitive harm and business justification would likely represent key questions for~~
~~any similar legislative efforts.454 Those issues also underscore that the distinction between~~
~~adjudicative and regulatory approaches to competition issues in the tech sector may be more of a~~
~~continuum than an either/or question. Unless ex ante rules entail categorical prohibitions based on~~
~~the form of challenged conduct, the competitive-effects analysis that characterizes modern~~
~~antitrust adjudication would likely play some role in a new regulatory regime.~~
~~Tying~~
~~Besides its self-preferencing prohibition, the AICOA would have barred covered platform~~
(2021); Open App Markets Act, H.R. 5017, 117th Cong. § 3(e)(1) (2021). 552 Hovenkamp, Gatekeeper Competition Policy, supra note 510, at 24; A. Douglas Melamed, Why I Think Congress Should Not Enact the American Innovation and Choice Online Act, COMPETITION POLICY INT’L (June 19, 2022), https://www.competitionpolicyinternational.com/why-i-think-congress-should-not-enact-the-american-innovation-and-choice-online-act/; ABA Letter, supra note 507, at 5, 9-11. 553 Francis Testimony, supra note 519, at 55 (“‘[H]arm to competition’ is just not a phrase with a single self-executing meaning. It could be interpreted to mean welfare harm in a manner we would associate with traditional antitrust; or it could be interpreted to mean ‘injury to rivals[.]’”) (emphasis in original); Hovenkamp, Gatekeeper Competition Policy, supra note 510, at 23-24 (“If competition is defined in an economically sensible way to refer to reduced market output and higher prices, then the statute might end up limiting its reach to conduct posing a realistic threat of competitive harm. If it means something else, such as merely injuring a rival or placing it at a disadvantage on that particular platform as opposed to the market as a whole, then it could end up doing a great deal of harm.”); see also SULLIVAN, ET AL., supra note 26, at 13 (noting that the term “competition” can refer to different and inconsistent goals, including “structural numerosity,” the protection of small businesses for their own sake, markets in which no single actor can influence price or output, and markets that are “efficient” on some measure). 554 Cf. Statement of the Federal Trade Commission Regarding Google’s Search Practices, In the Matter of Google Inc., No. 111-0163 at 3 (FTC Jan. 3, 2013) (concluding that Google’s display of its own content at or near the top of search results “could plausibly be viewed as an improvement in the overall quality of Google’s search product”). 555 Francis Testimony, supra note 519, at 26. 556 See, e.g., United States v. Microsoft Corp., 253 F.3d 34, 59 (D.C. Cir. 2001) (per curiam). Congressional Research Service 59 link to page 52 link to page 55 link to page 53 Antitrust Reform and Big Tech Firms In interpreting other industry-specific competition statutes, however, some courts and commentators have taken the view that “harm to competition” encompasses types of harm beyond those proscribed by the antitrust laws.557 Additionally, some of the AICOA’s proponents have rejected suggestions to amend the bill to adopt a consumer-welfare test.558 An interpretation that eschewed consumer-welfare justifications would also be consistent with the normative vision articulated by many advocates of antitrust reform. As discussed, the role that consumer welfare is meant to play in non-welfarist conceptions of “competition” is not clear.559 Much of the reformist literature, though, appears to reject the idea that courts and enforcers should balance different antitrust goals against one another.560 This context, along with the bill’s omission of other traditional antitrust concepts like market power, may cut against the argument that consumer-welfare arguments would be cognizable under the “materially harm competition” standard.561 The DCPCA appears to be more explicit about this issue. That legislation would make it presumptively unlawful for covered platforms to preference their own products and services, “regardless of any alleged procompetitive benefits or efficiencies.”562 Defendants could rebut an allegation of unlawful self-preferencing only by establishing by clear and convincing evidence that their conduct “did not result in any harm to the relevant aggrieved party.”563 557 Michael Kades, Protecting Livestock Producers and Chicken Growers: Recommendations for Reinvigorating Enforcement of the Packers and Stockyards Act, WASH. CTR. FOR EQUITABLE GROWTH 48-57 (May 2022) (explaining that some courts have equated “harm to competition” under the Packers and Stockyards Act with anticompetitive harm under the antitrust laws, while others have adopted a broader interpretation). 558 Hearing Transcript at 39-40, Reining in Dominant Digital Platforms: Restoring Competition to Our Digital Markets, Hearing Before the Subcomm. on Competition Policy, Antitrust and Consumer Rights of the S. Comm. on the Judiciary (Mar. 7, 2023) (on file with author). 559 See supra “Revisiting the Goals of Antitrust: The Neo-Brandeisian Movement.” 560 See Marshall Steinbaum & Maurice E. Stucke, The Effective Competition Standard: A New Standard for Antitrust, 87 U. CHI. L. REV. 595, 604 (2020) (proposing an “effective competition” standard under which “a substantial lessening of competition suffices for liability,” and “[e]nforcers and courts need not . . . balance the harms to one set of stakeholders against the supposed benefits for another”); see also Kanter Handler Lecture, supra note 486 (indicating that “the question of the goals of antitrust starts and ends” with “competition and the competitive process”) (emphasis added); Khan & Vaheesan, supra note 467, at 276 (arguing that “[t]he shift from per se rules and presumptions to the rule of reason and other standards-based tests has dramatically undercut antitrust enforcement,” and that “antitrust doctrine should be simplified to ease enforcement and avoid interminable and largely fruitless inquiries into market dynamics”). 561 The 117th Congress’s consideration of the AICOA featured discussion of the availability of a consumer-welfare defense. The House Judiciary Committee ultimately adopted an amendment offering an affirmative defense under which platform operators could avoid liability if they established by clear and convincing evidence that their conduct would increase consumer welfare. American Innovation and Choice Online Act, H.R. 3816, 117th Cong. § 2(c)(3) (2021) (Reported Version). The relationship between the “materially harm competition” test and the consumer-welfare standard was also discussed during the Senate Judiciary Committee’s markup of the AICOA. Transcript of Markup of S. 2992 at 53 (Jan. 20, 2022) (on file with author) [hereinafter “S. 2992 Markup Transcript”] (Sen. Thom Tillis) (“It’s not clear how existing competitor or competition jurisprudence would support or be changed by [S. 2992]. The purpose of competition law is to eliminate harm to consumers not to pick winners and losers. I’m also aware of the spirited debate [over] whether decades of antitrust law based on [the] consumer-welfare standard should be put in the burn pit. I’m open to having [a] separate discussion about potential changes to that standard and I hope that we will. But as it stands in relation to this bill, what standard will enforcers look to[?] What about amendments [that] would insert [the] consumer welfare standard back into the definition of material harm to competition?”). 562 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2311(b), (c)(3) (2023). 563 Id. § 2311(d). Congressional Research Service 60 link to page 14 Antitrust Reform and Big Tech Firms Tying The AICOA, OAMA, and DCPCA also contain provisions prohibiting tying in certain circumstances. The AICOA would bar covered platform operators from tying access to or preferred placement on their platforms to the purchase or use of operators from tying access to or preferred placement on their platforms to the purchase or use of
other products or servicesother products or services~~.455~~ that are not “part of or intrinsic to” a platform.564 The legislation would offer an affirmative defense, however, for conduct that does not result in “material harm to competition.”565 The OAMA included a narrower tying provision. The bill would The OAMA included a narrower tying provision. The bill would
have prohibited covered firms from conditioning access to their app stores on the use of their have prohibited covered firms from conditioning access to their app stores on the use of their
~~payment processors.456~~
~~As discussed, existing antitrust doctrine prohibits tying in certain circumstances. Under current~~
~~law, a plaintiff can prevail on a tying claim by showing that:~~
payment processors for in-app transactions.566 The DCPCA’s tying provision is the broadest of the three bills. It would presumptively prohibit covered platforms from engaging in tying, while offering platforms the ability to rebut an alleged violation with clear and convincing evidence that their conduct “did not result in any harm to the relevant aggrieved party.”567 All three bills go beyond current tying law. As discussed, the modified per se rule against tying allows a plaintiff to prevail by showing that 1. The defendant offered two distinct products; 1. The defendant offered two distinct products;
2. The defendant conditioned the sale of one product (the tying product) on the 2. The defendant conditioned the sale of one product (the tying product) on the
purchase of the other product (the tied product); purchase of the other product (the tied product);
3. The defendant possessed sufficient economic power in the tying product market 3. The defendant possessed sufficient economic power in the tying product market
to coerce purchasers into acceptance of the tied product; and to coerce purchasers into acceptance of the tied product; and
4. The defendant’s conduct affected a “not insubstantial” amount of interstate 4. The defendant’s conduct affected a “not insubstantial” amount of interstate
commerce in the tied product. commerce in the tied product.~~457~~
~~Some~~568 Additionally, some courts have courts have ~~also~~ required plaintiffs to demonstrate that a tying arrangement had required plaintiffs to demonstrate that a tying arrangement had
anticompetitive effects in the tied product marketanticompetitive effects in the tied product market~~.458~~
~~Unlike this test, neither the AICOA nor the OAMA contained explicit market-power~~
~~requirements. Instead, as discussed, the AICOA used certain quantitative criteria and a “critical~~
~~trading partner” standard to identify the platforms that would be subject to its prohibitions.459 The~~
~~OAMA, in contrast, employed only a quantitative threshold. The bill would have applied to~~
~~companies that control app stores with more than 50 million U.S. users.460~~

~~453 See Hovenkamp, Proposed Antitrust Reforms, supra note 391, at 18 (noting the ubiquity of self-preferencing by~~
~~vertically integrated firms); Randy Picker, How Would the Big Tech Self-Preferencing Bill Affect Users?, PROMARKET~~
~~(June 16, 2022), https://www.promarket.org/2022/06/16/how-would-the-big-tech-self-preferencing-bill-affect-users/~~
~~(reviewing possible implications of a general self-preferencing prohibition for Big Tech platforms).~~
~~454 See D. Daniel Sokol, A Framework for Digital Platform Regulation, 17 COMPETITION L. INT’L 95, 102 (2021)~~
~~(discussing the role that defenses and competitive-effects analysis may play in a regulatory regime for digital~~
~~platforms).~~
~~455 American Innovation and Choice Online Act, S. 2992, 117th Cong. § 3(a)(5) (2022) (Reported Version); American~~
~~Innovation and Choice Online Act, H.R. 3816, 117th Cong. § 2(b)(2) (2021) (Reported Version).~~
~~456 Open App Markets Act, S. 2710, 117th Cong. § 3(a)(1) (2022) (Reported Version); Open App Markets Act, H.R.~~
~~7030, 117th Cong. § 3(a)(1) (2021); Open App Markets Act, H.R. 5017, 117th Cong. § 3(a)(1) (2021).~~
~~457 HOVENKAMP, supra note 70~~,569 while others have entertained business justifications for challenged ties.570 Two cases—the Ninth Circuit’s recent decision in Epic Games v. Apple and the D.C. Circuit’s 2001 Microsoft decision—have also held that the rule of reason, rather than the modified per se rule, applies to ties involving platform software.571 564 American Innovation and Choice Online Act, S. 2033, 118th Cong. § 3(a)(5) (2023). 565 Id. § 3(b)(2). 566 Open App Markets Act, S. 2710, 117th Cong. § 3(a)(1) (2022) (Reported Version); Open App Markets Act, H.R. 7030, 117th Cong. § 3(a)(1) (2021); Open App Markets Act, H.R. 5017, 117th Cong. § 3(a)(1) (2021). 567 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2311(c)(2), (d) (2023). The DCPCA’s definition of “self-preferencing” also borrows language from the AICOA’s tying provision, defining that term to include “conditioning access to the platform or preferred status or placement on the platform on the purchase or use of other products or services offered by the covered platform operator.” Id. § 2311(a)(5)(D). A tying arrangement employed by a covered platform may thus constitute a presumptive violation of the DCPCA on two independent grounds. 568 HOVENKAMP, FEDERAL ANTITRUST POLICY, supra note 94, at 435 (summarizing the test employed by most federal circuit courts of appeals). at 435 (summarizing the test employed by most federal circuit courts of appeals).
~~458~~ 569 Id. at 435-36. at 435-36.
~~459 See supra “The Designated-Platform Approach.”~~
~~460 S. 2710 § 2(3); H.R. 7030 § 2(3); H.R. 5017 § 2(3).~~
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~~Both bills also would have departed from the tying test employed by some federal courts of~~
~~appeals that requires proof of anticompetitive effects.461 The AICOA’s tying prohibition would~~
~~have instead offered defendants certain competition-related affirmative defenses.462 The OAMA’s~~
~~enforcement would not have involved competitive-effects analysis.463~~
570 E.g., Mozart Co. v. Mercedes-Benz of N. Am., Inc., 833 F.2d 1342, 1348 (9th Cir. 1987); Dehydrating Process Co. v. A.O. Smith Corp., 292 F.2d 653, 655-57 (1st Cir. 1961). 571 Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 997 (9th Cir. 2023); United States v. Microsoft, 253 F.3d 34, 89-90 (D.C. Cir. 2001) (per curiam). Congressional Research Service 61 link to page 30 link to page 38 link to page 27 link to page 44 Antitrust Reform and Big Tech Firms In addition to ties involving app stores and payment processors, the In addition to ties involving app stores and payment processors, the ~~AICOA’s tying provision~~
~~potentially would have implicated several of the other~~ tying provisions in the AICOA and DCPCA may implicate several of the practices discussed practices discussed ~~above,~~ earlier in this report, including some including some
of Google’s conduct in ad-tech markets and the link between favorable placement on Amazon’s of Google’s conduct in ad-tech markets and the link between favorable placement on Amazon’s
marketplace and use of Amazon’s marketplace and use of Amazon’s ~~logistics service.464~~fulfillment services.572
Interoperability and Data Access
Other proposals involve the ability of business users to interoperate with and access data they Other proposals involve the ability of business users to interoperate with and access data they
generate on covered platforms. generate on covered platforms.
The AICOA The AICOA~~, for example, included~~ includes an interoperability provision that would an interoperability provision that would ~~have prohibited~~
prohibit covered platform operators from restricting or impeding the ability of business users to covered platform operators from restricting or impeding the ability of business users to
interoperate with features that are available to the operator’s own products or servicesinteroperate with features that are available to the operator’s own products or services~~.465~~, except where such access would lead to a “significant cybersecurity risk.”573 Among Among
other conduct, the prohibition may other conduct, the prohibition may ~~have been~~be directed at Facebook’s alleged refusal to allow directed at Facebook’s alleged refusal to allow
certain app developers to access Facebook Platform and Apple’s alleged refusal to allow certain app developers to access Facebook Platform and Apple’s alleged refusal to allow
developers to access some APIs and device functionalities that are available to Apple’s apps.developers to access some APIs and device functionalities that are available to Apple’s apps.~~466~~574 The AICOA’s data-access provision would prohibit covered platform operators from restricting or impeding a business user from accessing or transferring data generated by the user’s activities on a covered platform.575
The OAMA also contained interoperability requirements. The bill would have required covered The OAMA also contained interoperability requirements. The bill would have required covered
companies to allow users of their operating systems to install third-party apps and app stores companies to allow users of their operating systems to install third-party apps and app stores
through means other than the covered companies’ app stores.through means other than the covered companies’ app stores.~~467~~576 It also would have mandated that It also would have mandated that
covered firms provide developers with access to operating-system interfaces, development covered firms provide developers with access to operating-system interfaces, development
information, and hardware and software features on terms that are functionally equivalent to those information, and hardware and software features on terms that are functionally equivalent to those
that covered firms offer to their own apps.that covered firms offer to their own apps.~~468~~
~~The AICOA’s data-access provision would have prohibited covered platform operators from~~
~~restricting or impeding a business user from accessing or transferring data generated by the user’s~~
~~activities on a covered platform.469~~
~~Interoperability and data-portability issues are discussed in greater detail in~~ ~~“Interoperability &~~
~~Data Portability”~~ infra.

~~461 See, e.g., Kaufman v. Time Warner, 836 F.3d 137, 141 (2d Cir. 2016); Amey, Inc. v. Gulf Abstract & Title Inc., 758~~
~~F.2d 1486, 1503 (11th Cir. 1985); Driskill v. Dallas Cowboys Football Club, Inc., 498 F.2d 321, 323 (5th Cir. 1974).~~
~~462 American Innovation and Choice Online Act, S. 2992, 117th Cong. § 3(b)(2)(A) (2022) (Reported Version);~~
~~American Innovation and Choice Online Act, H.R. 3816, 117th Cong. §§ 2(c)(1), (c)(3) (2021) (Reported Version).~~
~~463 S. 2710; H.R. 7030; H.R. 5017.~~
~~464 See supra “Google” & “Amazon.” The tying provision in the reported Senate version of the AICOA would not have~~
~~barred ties involving products that are “part of or intrinsic to” a covered platform. S. 2992 § 3(a)(5). Some~~
~~commentators have argued that this exception was vague and would likely be the subject of litigation. See Francis~~
~~Testimony, supra note 405, at 68; ABA Letter, supra note 391, at 5-6.~~
~~465 S. 2992 § 3(a)(4); H.R. 3816 § 2(b)(1).~~
~~466 See supra “Meta Platforms” & “Apple.”~~
~~467 S. 2710 § 3(d)(2); H.R. 7030 § 3(d)(2); H.R. 5017 § 3(d)(2).~~
~~468 S. 2710 § 3(f); H.R. 7030 § 3(f); H.R. 5017 § 3(f).~~
~~469 S. 2992 § 3(a)(7); H.R. 3816 § 2(b)(4).~~
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577 The DCPCA contains both interoperability and data-portability mandates for covered platforms. The bill’s interoperability provision would require covered platform operators to • allow business users to interoperate with hardware and software features that are available to services on a covered platform provided by the platform operator; • provide business users with continuous and real-time access to data generated by the use of certain platform services; and • provide business users with the necessary tools to access and analyze data on a covered platform without a transfer from the platform.578 The DCPCA’s data-portability provision would require covered platform operators to maintain a set of interfaces that provide users with “effective portability” of the data they generate using certain platform services.579 572 See supra “Google” & “Amazon.” 573 American Innovation and Choice Online Act, S. 2033, 118th Cong. § 3(a)(4) (2023). 574 See supra “Meta Platforms” & “Apple.” 575 S. 2033 § 3(a)(7). 576 Open App Markets Act, S. 2710, 117th Cong. § 3(d)(2) (2022) (Reported Version); Open App Markets Act, H.R. 7030, 117th Cong. § 3(d)(2) (2021); Open App Markets Act, H.R. 5017, 117th Cong. § 3(d)(2) (2021). 577 S. 2710 § 3(f); H.R. 7030 § 3(f); H.R. 5017 § 3(f). 578 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2321(b) (2023). 579 Id. § 2321(a). Congressional Research Service 62 link to page 76 link to page 38 link to page 44 link to page 10 link to page 43 link to page 38 Antitrust Reform and Big Tech Firms Other, potentially broader interoperability and data-portability legislation is discussed in greater detail in “Interoperability & Data Portability” infra. Use of Nonpublic User Data
As discussed, some Big Tech firms have been accused of using their access to user data to As discussed, some Big Tech firms have been accused of using their access to user data to
identify and imitate popular offerings. Amazon, for example, has allegedly used nonpublic identify and imitate popular offerings. Amazon, for example, has allegedly used nonpublic ~~user~~
data to find profitable opportunities for its own private-label business.data to find profitable opportunities for its own private-label business.~~470~~580 Apple has similarly been Apple has similarly been
accused of using competitively sensitive information to replicate fast-growing apps and integrate accused of using competitively sensitive information to replicate fast-growing apps and integrate
certain functionalities into iOS.certain functionalities into iOS.~~471~~581
Some proposals would prohibit this conduct. Some proposals would prohibit this conduct. ~~Both the AICOA and OAMA included provisions~~
~~that would have barred~~ The AICOA includes a provision that would bar covered companies from using nonpublic data from dependent businesses covered companies from using nonpublic data from dependent businesses
to support their own to support their own offerings.582 The OAMA included a similar prohibition.583 These types of measures have~~offerings.472~~
~~This type of prohibition has~~ been debated. Some commentators have argued that a platform been debated. Some commentators have argued that a platform
operator’s imitation of rival products typically increases static efficiency by stimulating operator’s imitation of rival products typically increases static efficiency by stimulating
competition and lowering prices.competition and lowering prices.~~473~~584 Others have argued that a ban on the use of nonpublic data by Others have argued that a ban on the use of nonpublic data by
platform operators would boost dynamic efficiency by protecting the incentives of other platform operators would boost dynamic efficiency by protecting the incentives of other
businesses to innovate.businesses to innovate.~~474~~585
Most-Favored-Nation ~~and Anti-Steering~~ Policies
Another general category of proposals involves platform restrictions Another general category of proposals involves platform restrictions ofon the activities of business the activities of business
users in other transaction venues. users in other transaction venues.
~~The~~In the 117th Congress, the reported House version of the AICOA would have prohibited covered platform operators reported House version of the AICOA would have prohibited covered platform operators
from restricting a business user’s pricing of its products or services or its communications on a from restricting a business user’s pricing of its products or services or its communications on a
covered platform regarding other transaction options.covered platform regarding other transaction options.~~475 Similarly, the OAMA would have barred~~
~~covered companies from restricting developers from communicating with users about “legitimate~~
~~business offers,” including pricing terms and product or service offerings.476~~586 The DCPCA contains a similar prohibition. The bill would make it presumptively unlawful for a covered platform to interfere with or restrict a business user’s pricing of its products or services, whether or not those products or services are offered on the platform.587
Some of the pricing restrictions targeted by Some of the pricing restrictions targeted by ~~the House version of the AICOA~~these bills include include
most-favored-nation clauses (MFNs), which prohibit a platform’s business users from offering most-favored-nation clauses (MFNs), which prohibit a platform’s business users from offering
lower prices on rival platforms.lower prices on rival platforms.~~477~~588 Platform MFNs may make it difficult for rivals to compete Platform MFNs may make it difficult for rivals to compete
~~with a dominant platform by charging lower commissions, because such clauses prevent business~~
~~users from passing along those savings to consumers.478~~
~~The primary procompetitive benefit proffered in defense of MFNs involves concerns about~~
~~free-riding. The basic worry is that, absent an MFN, consumers will use a highly functional~~
~~platform to search for and compare products, but then make their purchases on a different~~

~~470~~with a dominant platform 580 See supra “Amazon.” ”
~~471~~581 See supra “Apple.” ”
~~472 S. 2992 § 3(a)(6); H.R. 3816 § 2(b)(3);~~582 S. 2033 § 3(a)(6). 583 S. 2710 § 3(c); H.R. 7030 § 3(c); H.R. 5017 § 3(c). S. 2710 § 3(c); H.R. 7030 § 3(c); H.R. 5017 § 3(c).
~~473~~ 584 Francis, Francis, supra no note 4863, at 832; Hovenkamp, at 832; Hovenkamp, Platform Monopoly, , supra no note ~~279~~367, at 2015; D. Daniel Sokol, A Framework for Digital Platform Regulation, 17 COMPETITION L. INT’L 95, 102 (2021). 585, ~~at 2015; Sokol, supra note 454, at~~
~~102.~~
~~474~~ Andre Hagiu, Tat-How Teh & Julian Wright, Andre Hagiu, Tat-How Teh & Julian Wright, Should Platforms Be Allowed to Sell on Their Own Marketplaces?, 53 , 53
RAND. J. ECON. 297, 32 (2022). RAND. J. ECON. 297, 32 (2022).
~~475 H.R. 3816 § 2(b)(6), (b)(8).~~
~~476 S. 2710 § 3(b); H.R. 7030 § 3(b); H.R. 5017 § 3(b).~~
~~477 Baker & Scott Morton, supra note 262,~~ ~~at 2181. As discussed, Amazon has faced a lawsuit~~586 American Innovation and Choice Online Act, H.R. 3816, 117th Cong. § 2(b)(6), (b)(8) (2021) (Reported Version). 587 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2311(a)(5)(C), (c)(3) (2023). The DCPCA would impose this prohibition by defining the term “self-preferencing” to include the specified type of interference and by making “self-preferencing” presumptively unlawful. Id. 588 Jonathan B. Baker & Fiona Scott Morton, Antitrust Enforcement Against Platform MFNs, 127 YALE L.J. 2176, 2181 (2018). As discussed, Amazon has faced lawsuits challenging its pricing challenging its pricing
restrictions, though the nature of the relevant policies restrictions, though the nature of the relevant policies ~~was~~has been disputed. disputed. See supra “Amazon.” ”
~~478 Baker & Scott Morton, supra note 262, at 2195 n.82. Platform MFNs may also facilitate collusion among sellers on~~
~~a platform. Id. at 2182.~~
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low-cost platform.low-cost platform.~~479~~590 Under those conditions, platforms may lack incentives to invest in Under those conditions, platforms may lack incentives to invest in
expensive site features like an attractive design or effective comparison tools, even though those expensive site features like an attractive design or effective comparison tools, even though those
features benefit consumers.features benefit consumers.~~480~~591
The literature has distinguished between “narrow” platform MFNs (which restrict a seller’s prices The literature has distinguished between “narrow” platform MFNs (which restrict a seller’s prices
only on the seller’s own website) and “wide” platform MFNs (which restrict a seller’s prices on only on the seller’s own website) and “wide” platform MFNs (which restrict a seller’s prices on
all other platforms).all other platforms).~~481~~592 Some theoretical analyses have concluded that narrow MFNs are more Some theoretical analyses have concluded that narrow MFNs are more
likely to be procompetitive than wide MFNs.likely to be procompetitive than wide MFNs.~~482~~
~~The reported House version of the AICOA would have prohibited both narrow and wide platform~~
~~MFNs.483 Challenged~~593 Both narrow and wide platform MFNs would fall within the scope of the DCPCA and the reported House version of the AICOA in the 117th Congress. Under the relevant version of the AICOA, challenged restrictions would have escaped liability restrictions would have escaped liability~~, however,~~ if a platform operator if a platform operator
established by clear and convincing evidence that its conduct would (1) not harm “the established by clear and convincing evidence that its conduct would (1) not harm “the
competitive process by restricting or impeding legitimate activity by business users,” or competitive process by restricting or impeding legitimate activity by business users,” or
(2) increase “consumer welfare.”(2) increase “consumer welfare.”~~484~~
~~App Preinstallation~~
~~The AICOA and OAMA also included provisions~~594 Under the DCPCA, by contrast, covered platforms would need to show by clear and convincing evidence that their conduct “did not result in any harm to the relevant aggrieved party.”595 App Preinstallation The AICOA also includes a provision prohibiting covered firms from restricting or prohibiting covered firms from restricting or
impeding the uninstallation of preinstalled appsimpeding the uninstallation of preinstalled apps ~~or changing default settings that steer users to a~~
~~covered firm’s own products or services.485~~
~~These prohibitions appeared~~, unless such conduct is necessary for the security or functioning of the platform or to prevent data from being transferred to a foreign adversary.596 The OAMA contained a similar prohibition.597 These prohibitions appear to be directed at concerns that Google and Apple have leveraged to be directed at concerns that Google and Apple have leveraged
control of their control of their mobile operating systems to favor their own apps and app stores.operating systems to favor their own apps and app stores.~~486~~598 Though the bills Though the bills ~~did~~
do not explicitly prohibit the preinstallation of a covered firm’s proprietary apps, commentators have not explicitly prohibit the preinstallation of a covered firm’s proprietary apps, commentators have
debated whether such preinstallation would run afoul of the AICOA’s general self-preferencing debated whether such preinstallation would run afoul of the AICOA’s general self-preferencing
prohibition.prohibition.~~487~~
~~Structural Separation and Line-of-Business Restrictions~~
~~Several of the proposed rules discussed above respond to concerns that Big Tech firms face~~
~~conflicts of interest when they operate both a digital platform and vertically related businesses~~
~~that compete with platform users. The proposals sought to address those concerns by prohibiting~~
~~specific categories of allegedly problematic conduct. One possible downside of this approach~~
~~involves administrability.~~

~~479~~599 589 Baker & Scott Morton, supra note 588, at 2195 n.82. 590 Id. at 2183-84. . at 2183-84.
~~480~~591 Id. at 2184. . at 2184.
~~481~~592 Schnitzer, et al., Schnitzer, et al., supra no note ~~405~~519, at 18 n.12. at 18 n.12.
~~482~~593 Baker & Scott Morton, Baker & Scott Morton, supra not note ~~262~~588, at 2184 n.23 (citing examples). at 2184 n.23 (citing examples).
~~483~~594 American Innovation and Choice Online Act, H.R. 3816, 117th Cong. § American Innovation and Choice Online Act, H.R. 3816, 117th Cong. §§ 2( 2(~~b)(8~~c)(1), (c)(3) (2021) (Reported Version).) (2021) (Reported Version).
~~484 Id. §§ 2(c)(1), (c)(3).~~
~~485~~ 595 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2311(d) (2023). 596 American Innovation and Choice Online Act, S. American Innovation and Choice Online Act, S. ~~2992, 117th~~2033, 118th Cong. § 3(a)(8) ( Cong. § 3(a)(8) (~~2022) (Reported Version); H.R. 3816~~
~~§ 2(b)(5);~~2023). 597 Open App Markets Act, S. 2710, 117th Cong. § 3(d)( Open App Markets Act, S. 2710, 117th Cong. § 3(d)(~~1), (d)(~~3) (2022) (Reported Version); Open App 3) (2022) (Reported Version); Open App
Markets Act, H.R. 7030, 117th Cong. § 3(d)(Markets Act, H.R. 7030, 117th Cong. § 3(d)(~~1), (d)(~~3) (2021); Open App Markets Act, H.R. 5017, 117th Cong. 3) (2021); Open App Markets Act, H.R. 5017, 117th Cong.
§ 3(d)(§ 3(d)(~~1), (d)(~~3) (2021). 3) (2021).
~~486~~598 See supra “Google” & & “Apple.”
~~487~~” 599 Compare Randy Picker, How Would the Big Tech Self-Preferencing Bill Affect Users?, PROMARKET (June 16, 2022), https://www.promarket.org/2022/06/16/how-would-the-big-tech-self-preferencing-bill-affect-users~~Picker, supra note 453 (arguing that the AICOA’s self-preferencing prohibition may prohibit app~~
~~preinstallation), with Hal Singer,~~ ~~Rep. Cicilline’s Nondiscrimination Bill Would Offer a Lifeline to Independent App~~
~~Developers, PROMARKET (July 2, 2021), https://www.promarket.org/2021/07/02/antitrust-self-preferencing-~~
~~preinstallation-app-developers-apple/~~ (arguing that (arguing that the AICOA’s self-preferencing prohibition may prohibit app preinstallation), with Hal Singer, Rep. Cicilline’s (continued...) ~~the AICOA would not prohibit app preinstallation).~~
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link to page 5 link to page link to page 5 link to page 3242 link to page link to page 910 link to page 5 link to page link to page 5 link to page 3242 link to page 42 Antitrust Reform and Big Tech Firms Structural Separation and Line-of-Business Restrictions Several of the proposals discussed above respond to concerns that Big Tech firms face conflicts of interest when they operate both a digital platform and vertically related businesses that compete with platform users. The proposals seek to address those concerns by prohibiting specific categories of allegedly problematic conduct. One possible downside of this approach involves enforcement costs. ~~link to page 32 link to page 56 link to page 30~~ ~~Antitrust Reform and Big Tech Firms~~

The worry is twofold. First, conduct rules require regulators to continuously monitor the behavior The worry is twofold. First, conduct rules require regulators to continuously monitor the behavior
of covered firms.of covered firms.~~488~~600 Second, Second, ~~as discussed,~~ the availability of affirmative defenses means that rule the availability of affirmative defenses means that rule
enforcement may entail some of the same issues of cost and timeliness that have led to enforcement may entail some of the same issues of cost and timeliness that have led to
dissatisfaction with the existing antitrust framework.dissatisfaction with the existing antitrust framework.~~489~~601
Based on these potential difficulties, some commentators have argued that structural restrictions Based on these potential difficulties, some commentators have argued that structural restrictions
have important advantages over behavioral rules.have important advantages over behavioral rules.~~490~~602 Such restrictions can take two general forms. Such restrictions can take two general forms.
Structural regulation could involve total separation, meaning firms would be prohibited from Structural regulation could involve total separation, meaning firms would be prohibited from
owning both a covered platform and a business that operates on that platform.owning both a covered platform and a business that operates on that platform.~~491~~603 Alternatively, Alternatively,
regulations could mandate partial or functional separation, whereby firms would be required to regulations could mandate partial or functional separation, whereby firms would be required to
house a covered platform and vertically related businesses in separate legal entities.house a covered platform and vertically related businesses in separate legal entities.~~492~~604
There is precedent for these types of structural regulations, including in the railroad, banking, and There is precedent for these types of structural regulations, including in the railroad, banking, and
telecommunications industries.telecommunications industries.~~493~~
~~In the 117th Congress, H.R. 3825 would have adopted a separations regime for covered platform~~
~~operators.494~~605 The DCPCA would impose a separation requirement on certain tech platforms. The legislation would make it unlawful for a covered platform operator to “maintain, or engage in any action that creates, a platform conflict of interest.”606 It would empower a newly created agency to order divestitures and other necessary remedies to eliminate prohibited conflicts of interest.607 The new agency would also have the authority to engage in rulemaking to implement this prohibition.608 In the 117th Congress, H.R. 3825, the Ending Platform Monopolies Act, contained a more detailed separation requirement.609 The bill would have prohibited covered platform operators from owning, controlling, The bill would have prohibited covered platform operators from owning, controlling,
or having a beneficial interest in a “line of business” thator having a beneficial interest in a “line of business” that:
• utilizes the covered platform for the sale or provision of products or services; utilizes the covered platform for the sale or provision of products or services;
• offers a product or service that the covered platform requires business users to offers a product or service that the covered platform requires business users to
purchase or utilize as a condition of accessing or receiving preferred placement purchase or utilize as a condition of accessing or receiving preferred placement
on the platform; or on the platform; or
~~ gives rise to a “conflict of interest.”495~~
~~The bill would have provided that “conflicts of interest” arise when a platform operator’s~~
~~ownership or control of another “line of business” creates the incentive and ability for its platform~~
~~to (1) advantage the platform operator’s products or services over those of competitors, or~~
~~(2) exclude or disadvantage the products or services of competitors.496~~
~~These types of proposals have generated debate. Critics of separation requirements have argued~~
~~that a platform’s entry into new markets typically benefits consumers.497 For example, by selling~~
~~its own private-label products on its marketplace, Amazon may offer consumers low-cost~~

~~488~~ Nondiscrimination Bill Would Offer a Lifeline to Independent App Developers, PROMARKET (July 2, 2021), https://www.promarket.org/2021/07/02/antitrust-self-preferencing-preinstallation-app-developers-apple/ (arguing that the AICOA would not prohibit app preinstallation). 600 HJC REPORT, HJC REPORT, supra no note 11, at 381; Khan, at 381; Khan, Platforms and Commerce, , supra no note ~~274~~362, at 1036. at 1036.
~~489~~601 See, e.g., Francis, , Francis, supra no note 4863, at 823-24. at 823-24.
~~490~~602 HJC REPORT, HJC REPORT, supra no note 11, at 381; Khan, at 381; Khan, Platforms and Commerce, , supra no note ~~274~~362, at 1036; at 1036; see also Rory Van Rory Van
Loo, Loo, In Defense of Breakups: Administering a “Radical” Remedy, 105 CORNELL L. REV. 1955, 2007 (2020) (arguing , 105 CORNELL L. REV. 1955, 2007 (2020) (arguing
that breakups may be preferable to access remedies in certain circumstances). that breakups may be preferable to access remedies in certain circumstances).
~~491~~603 Khan, Khan, Platforms and Commerce, , supra no note ~~274~~362, at 1052. at 1052.
~~492~~604 Id. .
~~493~~605 Id. at 1037-43, 1045-51. . at 1037-43, 1045-51.
~~494 Ending Platform Monopolies Act, H.R. 3825, 117th Cong. (2021).~~
~~495 Id. § 2(a).~~
~~496 Id. § 2(b). In the 117th Congress, S. 1204 would have also imposed structural separation requirements on large~~
~~online marketplaces, exchanges, and search engines. Bust Up Big Tech Act, S. 1204, 117th Cong. § 2 (2021).~~
~~497 Hagiu, et al., supra note 474, at 319; Herbert J. Hovenkamp, The Looming Crisis in Antitrust Economics, 101 B.U.~~
~~L. REV. 489, 541 (2021) [hereinafter “Hovenkamp, Looming Crisis”]; Giuseppe Colangelo,~~ ~~Evaluating the Case for~~
~~Regulation of Digital Platforms, in GLOBAL ANTITRUST INSTITUTE REPORT ON THE DIGITAL ECONOMY 905 (2020);~~
~~Thomas A. Lambert, The Case Against Legislative Reform of U.S. Antitrust Doctrine 21-22 (Univ. of Mo. Sch. of L.~~
~~Legal Studies, Research Paper No. 2020-13, 2020), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3598601;~~
~~Todd, supra note 249, at 524-25.~~
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~~alternatives to established brands.498 Integration into related business lines may also create~~
~~efficiencies.499~~606 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2312(a) (2023). 607 Id. § 2312(b). 608 Id. § 2312(c). 609 Ending Platform Monopolies Act, H.R. 3825, 117th Cong. (2021). Congressional Research Service 65 link to page 67 link to page 38 link to page 70 link to page 38 link to page 38 link to page 48 link to page 42 Antitrust Reform and Big Tech Firms • gives rise to a “conflict of interest.”610 The bill would have provided that “conflicts of interest” arise when a platform operator’s ownership or control of another “line of business” creates the incentive and ability for its platform to (1) advantage the platform operator’s products or services over those of competitors, or (2) exclude or disadvantage the products or services of competitors.611 These types of proposals have generated debate. Critics of separation requirements have argued that a platform’s entry into new markets typically benefits consumers.612 For example, by selling its own private-label products on its marketplace, Amazon may offer consumers low-cost alternatives to established brands.613 Integration into related business lines may also create efficiencies.614 Apple and Google, for instance, may be well-positioned to produce apps and app Apple and Google, for instance, may be well-positioned to produce apps and app
stores for their respective operating systems, as well as related devices like earphones and smart stores for their respective operating systems, as well as related devices like earphones and smart
watches.watches.~~500~~615
Separation requirements may also face line-drawing difficulties. The boundary between a covered Separation requirements may also face line-drawing difficulties. The boundary between a covered
platform and separate services is not always clear.platform and separate services is not always clear.~~501~~616 For example, Apple produces many apps and For example, Apple produces many apps and
functionalities—including a voice assistant (Siri), a camera app, and a payment system (Apple functionalities—including a voice assistant (Siri), a camera app, and a payment system (Apple
Pay)—that are integrated with its iOS operating system to various degrees.Pay)—that are integrated with its iOS operating system to various degrees.~~502~~617 Whether these Whether these
services would qualify as “lines of business” that are distinct from iOS may be uncertain; H.R. services would qualify as “lines of business” that are distinct from iOS may be uncertain; H.R.
3825 did not define that term. Because tech platforms regularly add new functionalities to their 3825 did not define that term. Because tech platforms regularly add new functionalities to their
primary services, some observers have argued that an absence of clarity surrounding permissible primary services, some observers have argued that an absence of clarity surrounding permissible
activities may deter innovation and thereby harm consumers.activities may deter innovation and thereby harm consumers.~~503~~618
Proponents of separation requirements have acknowledged these criticisms. In response, they Proponents of separation requirements have acknowledged these criticisms. In response, they
have argued that the innovation benefits of an equal playing field would likely outweigh any have argued that the innovation benefits of an equal playing field would likely outweigh any
losses in static efficiency that result from the elimination of a platform operator’s downward losses in static efficiency that result from the elimination of a platform operator’s downward
pricing pressure in adjacent markets.pricing pressure in adjacent markets.~~504~~619 In addition, advocates of separation rules contend that any 610 Id. § 2(a). 611 Id. § 2(b). 612 Hagiu, et al., supra note 585, at 319; Herbert J. Hovenkamp, The Looming Crisis in Antitrust Economics, 101 B.U. L. REV. 489, 541 (2021) [hereinafter “Hovenkamp, Looming Crisis”]; Giuseppe Colangelo, Evaluating the Case for Regulation of Digital Platforms, in GLOBAL ANTITRUST INSTITUTE REPORT ON THE DIGITAL ECONOMY (2020); Thomas A. Lambert, The Case Against Legislative Reform of U.S. Antitrust Doctrine 21-22 (Univ. of Mo. Sch. of L. Legal Studies, Research Paper No. 2020-13, 2020), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3598601; Todd, supra note 319, at 524-25. 613 Hovenkamp, Looming Crisis, supra note 612 ~~In addition, advocates of separation rules contend that any~~
~~decreases in platform innovation caused by such rules must be weighed against likely increases in~~
~~innovation by platform users.505 The arguments in favor of broad separation requirements have~~
~~thus focused on innovation policy, in addition to the foreclosure concerns that sound in traditional~~
~~antitrust analysis.~~
~~Mergers & Acquisitions~~
~~Substantive Merger Law~~
~~Other proposals target Big Tech mergers. In the 117th Congress, H.R. 3826 would have~~
~~prohibited covered platform operators from acquiring other firms unless they could demonstrate~~
~~by clear and convincing evidence that a target does not:~~
~~ compete with the platform operator;~~

~~498 Hovenkamp, Looming Crisis, supra note 497~~, at 541 (“Many of the brands that compete with Amazon’s own brands at 541 (“Many of the brands that compete with Amazon’s own brands
are sold by large firms, often at margins that are significantly higher than Amazon’s margins. . . . Forcibly separating are sold by large firms, often at margins that are significantly higher than Amazon’s margins. . . . Forcibly separating
Amazon’s brands from the offerings of these companies will almost certainly reduce downward pricing pressure on Amazon’s brands from the offerings of these companies will almost certainly reduce downward pricing pressure on
these national name brands, resulting in higher prices for consumers.”). these national name brands, resulting in higher prices for consumers.”).
~~499~~614 See, e.g., Todd, , Todd, supra no note ~~249~~319, at 514-17. at 514-17.
~~500~~615 Randy Picker, Randy Picker, The House’s Recent Spate of Antitrust Bills Would Change Big Tech as We Know It, PROMARKET , PROMARKET
(June 29, 2021), https://www.promarket.org/2021/06/29/house-antitrust-bills-big-tech-apple-preinstallation/. (June 29, 2021), https://www.promarket.org/2021/06/29/house-antitrust-bills-big-tech-apple-preinstallation/.
~~501~~616 Carl Shapiro, Carl Shapiro, Protecting Competition in the American Economy: Merger Control, Tech Titans, Labor Markets, 33 J. , 33 J.
ECON. PERSPS. 69, 84 (2019); Hal Singer, ECON. PERSPS. 69, 84 (2019); Hal Singer, Inside Tech’s “Kill Zone”: How to Deal With the Threat to Edge Innovation
Posed by Multi-Sided Platforms, PROMARKET (Nov. 21, 2018), https://www.promarket.org/2018/11/21/inside-tech-kill-, PROMARKET (Nov. 21, 2018), https://www.promarket.org/2018/11/21/inside-tech-kill-
zone/. zone/.
~~502~~617 Todd, Todd, supra no note ~~249~~319, at 536. at 536.
~~503~~618 E.g., Rogerson & Shelanski, , Rogerson & Shelanski, supra no note ~~342~~421, at 1934. at 1934.
~~504~~619 Khan, Khan, Platforms and Commerce, , supra no note ~~274~~362, at 1085; at 1085; see also Feng Zhu & Qihong Liu, Feng Zhu & Qihong Liu, Competing with
Complementors: An Empirical Look at Amazon.com, 39 STRATEGIC MGMT. J. 2168 (2018) (concluding that, while , 39 STRATEGIC MGMT. J. 2168 (2018) (concluding that, while
Amazon’s entry into a new market typically reduces prices, it may also reduce the number of innovative products on Amazon’s entry into a new market typically reduces prices, it may also reduce the number of innovative products on
Amazon’s marketplace by discouraging participation by third-party sellers). Amazon’s marketplace by discouraging participation by third-party sellers).
~~505 Khan, Platforms and Commerce, supra note 274, at 1085.~~
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~~ constitute “nascent or potential competition” for the platform operator;~~
~~ enhance or increase the platform operator’s market position with respect to~~
~~products or services offered on or directly related to a covered platform; or~~
~~ enhance or increase the platform operator’s ability to maintain its market position~~
~~with respect to products or services offered on or directly related to a covered~~
~~platform.506~~
~~The reported version of the bill included an amendment that would have exempted transactions of~~
~~less than $50 million from the prohibition.507~~
~~For transactions of $50 million or greater, then, the bill would have prohibited Big Tech firms~~
~~from engaging in horizontal mergers, mergers involving “nascent or potential” competitors, and~~
~~vertical and conglomerate mergers that enhance, increase, or help maintain their market positions~~
~~with respect to products or services “offered on or directly related” to a covered platform.~~
~~As drafted, the bill raised three issues. The first involved the legislation’s prohibition of~~
~~acquisitions involving “potential” competitors.508 As discussed, antitrust doctrine has recognized~~
~~two theories of harm in potential-competition cases: the elimination of perceived potential~~
~~competition and the elimination of actual potential competition.509 Courts have identified~~
~~prerequisites for both theories.510~~
~~The relationship between those prerequisites and H.R. 3826’s requirement that a Big Tech~~
~~platform show that a target firm is not a “potential” competitor may have generated complex legal~~
~~questions,~~ Congressional Research Service 66 link to page 42 link to page 9 Antitrust Reform and Big Tech Firms decreases in platform innovation caused by such rules must be weighed against likely increases in innovation by platform users.620 Mergers & Acquisitions Substantive Merger Law Other proposals target mergers involving large tech platforms. The DCPCA would create a new agency charged with reviewing certain mergers that involve covered platform operators.621 For transactions subject to the HSR Act’s pre-merger filing requirement, the bill would require covered platform operators to submit their filings to the new agency, in addition to the antitrust agencies. To proceed with such transactions, covered platform operators would need to prove by clear and convincing evidence that the transactions would “serve the public interest.”622 The bill lists 13 factors that are relevant to this inquiry, including a transaction’s effects on competition, national security, privacy, and local communities.623 It also identifies certain fact patterns in which a covered transaction “would not” serve the public interest, in addition to fact patterns that “may” support a determination that a transaction would not serve the public interest. The bill prescribes that a covered transaction “would not” serve the public interest if • the acquired firm offers services or products that overlap or compete with, or that are functionally equivalent to, those offered by the covered platform operator; • the acquired firm is a “critical trading partner in the supply chains or business ecosystems of the parties”; or • the transaction would create a “platform conflict of interest.”624 The legislation identifies the following facts that “may” support a determination that a covered transaction would not serve the public interest: • the transaction would result in a post-transaction market share of greater than 33% in any relevant market (including labor markets); • the transaction would (1) result in a Herfindahl-Hirschman Index (HHI) greater than 1,800 in any relevant market, and (2) increase the HHI by more than 100;625 or 620 Khan, Platforms and Commerce, supra note 362, at 1085. 621 Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2313 (2023). 622 Id. § 2313(b)(1). 623 Id. § 2313(d)(1). 624 Id. § 2313(d)(2). 625 As discussed, the HHI is a measure of market concentration calculated by summing the squares of each firm’s market share. Thus, a market with four firms that each occupy 25% of the market would have an HHI of 2,500 (252 + 252 + 252 + 252). A market with an HHI of 1,800 qualifies as “moderately concentrated” under the 2010 Horizontal Merger Guidelines, which indicate that mergers in such markets “potentially raise significant competitive concerns and often warrant scrutiny” when they increase the market’s HHI by more than 100 points. HORIZONTAL MERGER GUIDELINES, supra note 49, at § 5.3. Under the 1992 Merger Guidelines, a market with an HHI above 1,800 would have qualified as “highly concentrated,” and the antitrust agencies adopted a rebuttable presumption of illegality for mergers that increased the HHI of such markets by more than 100 points. DEP’T OF JUSTICE AND FED. TRADE COMM’N, 1992 MERGER GUIDELINES § 1.5 (1992). Congressional Research Service 67 Antitrust Reform and Big Tech Firms • the transaction would result in an aggregation of data or access to data that “harms the competitive process or creates or helps maintain a monopoly, a monopsony, market power, or unfair methods of competition.”626 In addition to requiring covered platform operators to prove by clear and convincing evidence that HSR-reportable mergers would serve the public interest, the DCPCA would empower the newly created platform regulator to block non-reportable transactions involving covered platform operators upon a determination that they would not serve the public interest.627 The DCPCA would also give the new regulator the authority to review consummated mergers involving covered platform operators and unwind those transactions upon a determination that they “materially harmed the public interest.”628 The bill would allow the regulator to evaluate whether a consummated transaction “materially harmed the public interest” by evaluating the factors identified above, while also providing that such harm is present if • the covered platform operator acquired a “critical trading partner”; • the transaction resulted in a post-transaction market share of greater than 50% in any relevant market (including labor markets); or • the transaction (1) resulted in an HHI greater than 2,500 in any relevant market, and (2) increased the HHI by more than 200.629 The DCPCA thus envisions a broad overhaul of the legal regime governing mergers involving dominant platforms. In place of the existing framework in which courts inquire primarily into a transaction’s economic effects, the bill would adopt per se rules against platform mergers that fall into certain categories and empower a new specialist regulator to block platform mergers under a public-interest standard. Legislation in the 117th Congress likewise would have adopted certain per se rules for mergers involving dominant platforms, but would not have established a public-interest standard for those mergers or created a new regulator. H.R. 3826, the Platform Competition and Opportunity Act, would have prohibited covered platform operators from acquiring other firms unless they could demonstrate by clear and convincing evidence that a target does not • compete with the platform operator; • constitute “nascent or potential competition” for the platform operator; • enhance or increase the platform operator’s market position with respect to products or services offered on or directly related to a covered platform; or • enhance or increase the platform operator’s ability to maintain its market position with respect to products or services offered on or directly related to a covered platform.630 626 S. 2597 § 2313(d)(3). 627 Id. § 2313(e). 628 Id. § 2314(a)-(b). 629 Id. § 2314(c). 630 Platform Competition and Opportunity Act of 2021, H.R. 3826, 117th Cong. § 2(b)(2) (2021). The bill would have excluded certain categories of transactions that are exempt from pre-merger filing requirements for reasons other than their size. Id. § 2(b)(1). Congressional Research Service 68 link to page 20 link to page 47 link to page 47 link to page 47 link to page 47 Antitrust Reform and Big Tech Firms The reported version of the bill included an amendment that would have exempted transactions of less than $50 million from the prohibition.631 For transactions of $50 million or greater, then, the bill would have prohibited covered platforms from engaging in horizontal mergers; mergers involving “nascent or potential” competitors; and vertical and conglomerate mergers that enhance, increase, or help maintain their market positions with respect to products or services “offered on or directly related” to a covered platform. As drafted, the bill raised three issues. The first involved the legislation’s prohibition of acquisitions involving “potential” competitors.632 As discussed, antitrust doctrine has recognized two theories of harm in potential-competition cases: the elimination of perceived potential competition and the elimination of actual potential competition.633 Courts have identified prerequisites for both theories.634 The relationship between those prerequisites and H.R. 3826’s requirement that a covered platform show that a target firm is not a “potential” competitor may have generated complex legal questions if the bill had become law. For example, the bill could have been read to allow if the bill had become law. For example, the bill could have been read to allow
platform operators to make such a showing by negating an element of both types of platform operators to make such a showing by negating an element of both types of
potential-competition potential-competition claims.635 However, that is not~~claims.511 That is not, however,~~ the only interpretive option; the details the only interpretive option; the details
surrounding the relevant burden would have had to be fleshed out in practice. That the Supreme surrounding the relevant burden would have had to be fleshed out in practice. That the Supreme
Court has recognized only the perceived-potential-competition theory might have complicated Court has recognized only the perceived-potential-competition theory might have complicated
this inquiry.this inquiry.
The second issue concerned the bill’s prohibition of Big Tech acquisitions involving “nascent” The second issue concerned the bill’s prohibition of Big Tech acquisitions involving “nascent”
competitors.competitors.~~512~~636 Commentators have offered different definitions of the concept of Commentators have offered different definitions of the concept of ~~“nascent”~~nascent
competition.competition.~~513~~637 In general, however, the term has been used to refer to In general, however, the term has been used to refer to ~~new~~firms and technologies with technologies with
uncertain prospects that nevertheless pose serious threats to an incumbent.uncertain prospects that nevertheless pose serious threats to an incumbent.~~514~~

~~506 Platform Competition and Opportunity Act of 2021, H.R. 3826, 117th Cong. § 2(b)(2) (2021). The bill would have~~
~~also excluded certain categories of transactions that are exempt from pre-merger filing requirements for reasons other~~
~~than their size. Id. § 2(b)(1).~~
~~507~~638 Despite posing such threats, acquisitions of nascent competitors may be difficult to challenge under existing law. As discussed, to prevail under an actual-potential-competition theory, a plaintiff must establish a “substantial likelihood” that a target firm would deconcentrate the relevant market or produce other procompetitive benefits.639 In cases involving unproven or 631 Amendment to the Amendment in the Nature of a Substitute to H.R. 3826 Offered by Ms. Ross of North Carolina, Amendment to the Amendment in the Nature of a Substitute to H.R. 3826 Offered by Ms. Ross of North Carolina,
Markups, H.R. 3843, the Merger Filing Fee Modernization Act of 2021, et al., H. Comm. on the Judiciary, 117th Cong. Markups, H.R. 3843, the Merger Filing Fee Modernization Act of 2021, et al., H. Comm. on the Judiciary, 117th Cong.
(June 24, 2021), https://docs.house.gov/meetings/JU/JU00/20210623/112818/BILLS-117-HR3826-R000305-Amdt-(June 24, 2021), https://docs.house.gov/meetings/JU/JU00/20210623/112818/BILLS-117-HR3826-R000305-Amdt-
1.pdf. 1.pdf.
~~508~~632 H.R. 3826 § 2(b)(2)(B). H.R. 3826 § 2(b)(2)(B).
~~509~~633 See supra “~~Conglomerate Mergers.~~”
~~510 Id.~~
~~511~~Mergers & Acquisitions.” 634 See id. 635 Under the bill, such efforts would be subject to a clear-and-convincing-evidence standard. H.R. 3826 § 2(b). Under the bill, such efforts would be subject to a clear-and-convincing-evidence standard. H.R. 3826 § 2(b).
~~512~~636 Id. § 2(b)(2)(B). . § 2(b)(2)(B).
~~513~~637 Yun, Yun, supra no note ~~334~~416, at 626 (“Amongst antitrust practitioners and scholars, various definitions have emerged for at 626 (“Amongst antitrust practitioners and scholars, various definitions have emerged for
nascent competition”); Hemphill & Wu, nascent competition”); Hemphill & Wu, supra no note ~~334~~416, at 1881 (“Nascent competition means different things to at 1881 (“Nascent competition means different things to
different people.”). different people.”).
~~514~~638 United States v. Microsoft Corp., 253 F.3d 34, 79 (D.C. Cir. 2001) (per curiam); Yun, United States v. Microsoft Corp., 253 F.3d 34, 79 (D.C. Cir. 2001) (per curiam); Yun, supra no note ~~334~~416, at 626-27; at 626-27;
Hemphill & Wu, Hemphill & Wu, supra no note ~~334~~416, at 1886-88; Tracy J. Penfield & Molly Pallman, at 1886-88; Tracy J. Penfield & Molly Pallman, Looking Ahead: Nascent Competitor
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~~Despite posing such threats, acquisitions of “nascent” competitors may be difficult to challenge~~
~~under existing law. As discussed, to prevail under an actual-potential-competition theory, a~~
~~plaintiff must establish a “substantial likelihood” that a target firm would deconcentrate the~~
~~relevant market or produce other procompetitive benefits.515 In cases involving unproven or~~
Acquisition Challenges in the “TechLash” Era, ANTITRUST SOURCE 2 (June 2020), https://www.americanbar.org/content/dam/aba/publishing/antitrust-magazine-online/2020/june-2020/jun20_penfield_6_17f.pdf. 639 United States v. Marine Bancorporation, Inc., 418 U.S. 602, 633 (1974). Congressional Research Service 69 link to page 47 link to page 47 link to page 47 link to page 47 link to page 28 link to page 47 Antitrust Reform and Big Tech Firms developing technology, that burden could prove problematic for a plaintiff. H.R. 3826 was a developing technology, that burden could prove problematic for a plaintiff. H.R. 3826 was a
response to this doctrinal difficulty.response to this doctrinal difficulty.~~516~~640
While the bill thus sought to address an issue that has generated considerable attention, the While the bill thus sought to address an issue that has generated considerable attention, the
analytical framework that would govern inquiries into analytical framework that would govern inquiries into ~~“nascent”~~nascent competition remains unsettled. competition remains unsettled.
There is little case law addressing issues of There is little case law addressing issues of ~~“nascent”~~nascent competition in the merger context. competition in the merger context.~~517~~641
Accordingly, H.R. 3826 would have leaned on the courts to develop standards for evaluating Accordingly, H.R. 3826 would have leaned on the courts to develop standards for evaluating
whether a firm constituted a whether a firm constituted a ~~“nascent”~~nascent competitor of a covered platform. competitor of a covered platform.
The third issue raised by H.R. 3826 involved the breadth of the provisions prohibiting mergers The third issue raised by H.R. 3826 involved the breadth of the provisions prohibiting mergers
that “enhance or increase” a platform operator’s market position or ability to maintain its market that “enhance or increase” a platform operator’s market position or ability to maintain its market
position.position.~~518~~642
By their terms, these prohibitions did not distinguish between procompetitive mergers and By their terms, these prohibitions did not distinguish between procompetitive mergers and
anticompetitive mergers. As drafted, the bill thus appeared to prohibit mergers that “enhance or anticompetitive mergers. As drafted, the bill thus appeared to prohibit mergers that “enhance or
increase” a increase” a ~~Big Tech~~covered platform’s market position by improving the quality of its products or platform’s market position by improving the quality of its products or
services, even when the target company is not a competitor, potential competitor, or nascent services, even when the target company is not a competitor, potential competitor, or nascent
competitor of the platform. As a result, H.R. 3826 may have limited Big Tech platforms to competitor of the platform. As a result, H.R. 3826 may have limited Big Tech platforms to
in-house development or licensing of complementary technologies; acquisitions of firms that in-house development or licensing of complementary technologies; acquisitions of firms that
could enhance a platform’s core offerings would have likely been off-limits. could enhance a platform’s core offerings would have likely been off-limits.
S. 1074—another bill in the 117th Congress—would have taken a similarly strict approach S. 1074—another bill in the 117th Congress—would have taken a similarly strict approach
toward Big Tech mergers.toward Big Tech mergers.~~519~~643 Among other things, S. 1074 would have prohibited companies Among other things, S. 1074 would have prohibited companies
designated as “dominant digital firms” from engaging in acquisitions valued at more than designated as “dominant digital firms” from engaging in acquisitions valued at more than
$1 million.$1 million.~~520~~

Acquisition Challenges in the “TechLash” Era, ANTITRUST SOURCE 2 (June 2020),
~~https://www.americanbar.org/content/dam/aba/publishing/antitrust-magazine-online/2020/june-~~
~~2020/jun20_penfield_6_17f.pdf.~~
~~515 United States v. Marine Bancorporation, Inc., 418 U.S. 602, 633 (1974).~~
~~516 There is an ongoing debate within the antitrust community~~ 644 Other proposals are more limited. Several commentators, for example, have advocated a requirement that Big Tech firms bear the burden of proving that their mergers would not harm competition.645 Abstracting from specific policy options, the debate over special merger rules for Big Tech firms has focused on two general concerns. 640 There is an ongoing debate as to whether Section 2 of the Sherman Act provides a as to whether Section 2 of the Sherman Act provides a
more attractive vehicle for challenging acquisitions of nascent competitors than Section 7 of the Clayton Act. more attractive vehicle for challenging acquisitions of nascent competitors than Section 7 of the Clayton Act. Compare
Hemphill & Wu, Hemphill & Wu, supra no note ~~334~~416, at 1896-1901 (discussing the advantages of Section 2); Melamed, at 1896-1901 (discussing the advantages of Section 2); Melamed, supra no note ~~334~~416, at at
6-7 (similar), 6-7 (similar), with Scott Sher, Keith Klovers & John Ceccio, Scott Sher, Keith Klovers & John Ceccio, Nascent Competition, Section 2, and the Agencies’
Quixotic Quest to Avoid the Potential Competition Doctrine, ANTITRUST MAGAZINE ONLINE (Aug. 2021), , ANTITRUST MAGAZINE ONLINE (Aug. 2021),
https://www.americanbar.org/content/dam/aba/publishing/antitrust-magazine-online/august-2021/atonline-sher.pdf https://www.americanbar.org/content/dam/aba/publishing/antitrust-magazine-online/august-2021/atonline-sher.pdf
(arguing that Section 2 is less stringent than Section 7 as applied to mergers); Jonathan Jacobson & Christopher (arguing that Section 2 is less stringent than Section 7 as applied to mergers); Jonathan Jacobson & Christopher
Mufarrige, Mufarrige, Acquisitions of “Nascent” Competitors, ANTITRUST SOURCE 5-6 (Aug. 2020), , ANTITRUST SOURCE 5-6 (Aug. 2020),
https://www.americanbar.org/content/dam/aba/publishing/antitrust-magazine-online/2020/august-https://www.americanbar.org/content/dam/aba/publishing/antitrust-magazine-online/2020/august-
2020/aug20_full_source.pdf (similar). Both approaches remain largely untested. 2020/aug20_full_source.pdf (similar). Both approaches remain largely untested.
~~517~~641 See, e.g., Yun, , Yun, supra no note ~~334~~416, at 635 (“A considerable downside to bringing a nascent competition case under at 635 (“A considerable downside to bringing a nascent competition case under
[Section] 7 is that there are no court precedents for doing so. . . . Consequently, a court would need to develop new [Section] 7 is that there are no court precedents for doing so. . . . Consequently, a court would need to develop new
conditions and requirements to find a violation, which is certainly a major impediment to applying the nascent conditions and requirements to find a violation, which is certainly a major impediment to applying the nascent
competition doctrine in [Section] 7 cases.”). competition doctrine in [Section] 7 cases.”).
~~518~~642 Platform Competition and Opportunity Act of 2021, H.R. 3826, 117th Cong. § 2(b)(2)(C)-(D) (2021). Platform Competition and Opportunity Act of 2021, H.R. 3826, 117th Cong. § 2(b)(2)(C)-(D) (2021).
~~519~~643 Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. § 4 (2021). Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. § 4 (2021).
~~520 Id.~~
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~~Other proposals are more limited. Several commentators, for example, have advocated a~~
~~requirement that Big Tech firms bear the burden of proving that their mergers would not harm~~
~~competition.521~~
~~Abstracting from specific policy options, the debate over special merger rules for Big Tech firms~~
~~has focused on two general concerns.~~
644 Id. 645 STIGLER REPORT, supra note 415, at 98, 111; ACCC Report, supra note 218, at 109; see also OECD STARTUP ACQUISITION REPORT, supra note 416, at 38-41 (cataloguing various rebuttable-presumption proposals). Congressional Research Service 70 link to page 47 link to page 75 link to page 75 link to page 74 link to page 47 link to page 47 link to page 47 link to page 47 Antitrust Reform and Big Tech Firms First, opponents of such rules have argued that Big Tech mergers are typically benign or First, opponents of such rules have argued that Big Tech mergers are typically benign or
procompetitive.procompetitive.~~522~~646 Acquisitions of complementary technologies, for example, may reduce the Acquisitions of complementary technologies, for example, may reduce the
transaction costs associated with licensing arrangements or allow for more efficient integration transaction costs associated with licensing arrangements or allow for more efficient integration
with a platform’s offerings.with a platform’s offerings.~~523~~647 Mergers may also stimulate competition among Big Tech firms by Mergers may also stimulate competition among Big Tech firms by
giving them an attractive means of entering or expanding within each other’s core markets.giving them an attractive means of entering or expanding within each other’s core markets.~~524~~648
Second, some have argued that limitations on Big Tech mergers may reduce startup investment by Second, some have argued that limitations on Big Tech mergers may reduce startup investment by
eliminating a popular exit route for venture investors and other entrepreneurs.eliminating a popular exit route for venture investors and other entrepreneurs.~~525~~649
Proponents of special merger rules for tech platforms have responded that the procompetitive Proponents of special merger rules for tech platforms have responded that the procompetitive
benefits of tech mergers are often overstated.benefits of tech mergers are often overstated.~~526~~650 Merger limitations targeting a handful of Merger limitations targeting a handful of
prospective acquirers may also leave startup investors with enough viable exit options to mitigate prospective acquirers may also leave startup investors with enough viable exit options to mitigate
concerns about dampened investment. concerns about dampened investment. ~~Some~~Additionally, some commentators have commentators have ~~also~~ suggested that reducing suggested that reducing
investment in innovations that end up in the hands of dominant incumbents is the intended investment in innovations that end up in the hands of dominant incumbents is the intended
outcome of the relevant proposals.outcome of the relevant proposals.~~527~~651
The Merger Review Process
Before moving on from mergers, one final topic warrants mention: the Before moving on from mergers, one final topic warrants mention: the ~~Hart-Scott-Rodino (HSR)~~
~~premerger~~HSR pre-merger review process. review process. ~~Under~~As discussed, under the HSR Act, parties to mergers that exceed certain thresholds the HSR Act, parties to mergers that exceed certain thresholds
must report their transactions to the DOJ and FTC and abide by specified waiting periods before must report their transactions to the DOJ and FTC and abide by specified waiting periods before
closing.closing.~~528~~652 This process gives the agencies the opportunity to review proposed mergers for This process gives the agencies the opportunity to review proposed mergers for
antitrust concerns and seek relief before deals are consummated. antitrust concerns and seek relief before deals are consummated.
Some commentators have expressed concerns about the number of Big Tech mergers that fall Some commentators have expressed concerns about the number of Big Tech mergers that fall
below the relevant thresholds and thus below the relevant thresholds and thus ~~evade~~avoid HSR review. HSR review.~~529~~653 In September 2021, the FTC released a report indicating that the four Big Tech firms discussed in this report and Microsoft together engaged in 819 non-reportable deals between 2010 and 2019.654 646 ~~In September 2021, the FTC~~

~~521 STIGLER REPORT, supra note 333, at 98, 111; ACCC Report, supra note 162, at 109; see also OECD STARTUP~~
~~ACQUISITION REPORT, supra note 334, at 38-41 (cataloguing various rebuttable-presumption proposals).~~
~~522~~ Samuel Bowman & Sam Dumitriu, Samuel Bowman & Sam Dumitriu, Better Together: The Procompetitive Effects of Mergers in Tech, INT’L CTR. FOR , INT’L CTR. FOR
L. & ECON. (Oct. 1, 2021), https://laweconcenter.org/resources/better-together-the-procompetitive-effects-of-mergers-L. & ECON. (Oct. 1, 2021), https://laweconcenter.org/resources/better-together-the-procompetitive-effects-of-mergers-
in-tech/?doing_wp_cron=1676398306.5821518898010253906250; UK DIGITAL COMPETITION REPORT, in-tech/?doing_wp_cron=1676398306.5821518898010253906250; UK DIGITAL COMPETITION REPORT, supra no note ~~333~~415,
at 101 (concluding that regulators should adopt a “balance of harms” approach to platform mergers instead of a at 101 (concluding that regulators should adopt a “balance of harms” approach to platform mergers instead of a
presumption of illegality because “the majority of acquisitions by large digital companies are likely to be either benign presumption of illegality because “the majority of acquisitions by large digital companies are likely to be either benign
or beneficial for consumers”). or beneficial for consumers”).
~~523~~647 Bowman & Dumitriu, Bowman & Dumitriu, supra no note ~~522~~646; A. Douglas Melamed & Nicolas Petit, A. Douglas Melamed & Nicolas Petit, The Misguided Assault on the
Consumer Welfare Standard in the Age of Platform Markets, 54 REV. OF INDUS. ORG. 741, 754 (2019). , 54 REV. OF INDUS. ORG. 741, 754 (2019).
~~524~~648 Bowman & Dumitriu, Bowman & Dumitriu, supra no note ~~522~~646.
~~525~~649 Gary Dushnitsky & D. Daniel Sokol, Gary Dushnitsky & D. Daniel Sokol, Mergers, Antitrust, and the Interplay of Entrepreneurial Activity and the
Investments That Fund It, 24 VAND. J. OF ENT. & TECH. L. 255 (2022); Jacobson & Mufarrige, , 24 VAND. J. OF ENT. & TECH. L. 255 (2022); Jacobson & Mufarrige, supra no note ~~516~~640, at 10; at 10;
UK DIGITAL COMPETITION REPORT, UK DIGITAL COMPETITION REPORT, supra no note ~~333~~415, at 101. at 101.
~~526~~650 John M. Newman, John M. Newman, Antitrust in Digital Markets, 72 VAND. L. REV. 1497, 1541 (2019). , 72 VAND. L. REV. 1497, 1541 (2019).
~~527~~651 Hemphill & Wu, Hemphill & Wu, supra no note ~~334~~416, at 1893. at 1893.
~~528~~652 15 U.S.C. § 18a. 15 U.S.C. § 18a.
~~529 STIGLER REPORT, supra note 333, at 111.~~
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~~released a report indicating that the four Big Tech firms discussed in this report and Microsoft~~
~~together engaged in 819 non-reportable deals between 2010 and 2019.530~~
As discussed, the DCPCA would require covered platform operators to also submit HSR-reportable deals to a newly created regulator and allow that regulator to block such deals under a public-interest standard. Digital Consumer Protection Commission Act of 2023, S. 2597, 118th Cong. § 2313(a)-(c) (2023). 653 STIGLER REPORT, supra note 415, at 111. 654 FTC NON-REPORTABLE ACQUISITIONS STUDY, supra note 414, at 10. Congressional Research Service 71 link to page 5 link to page 50 link to page 5 link to page 47 link to page 47 link to page 5 link to page 47 link to page 48 link to page 28 link to page 76 link to page 76 link to page 48 Antitrust Reform and Big Tech Firms In response to worries about these transactions, some have supported a blanket HSR filing In response to worries about these transactions, some have supported a blanket HSR filing
requirement for requirement for ~~Big Tech acquisitions.531~~acquisitions by dominant tech platforms.655 Opponents of such a rule have argued that it would be Opponents of such a rule have argued that it would be
burdensome and offer few benefits for regulators.burdensome and offer few benefits for regulators.~~532~~656
Interoperability & Data Portability
Network effects and switching costs are frequent themes in discussions of Big Tech.Network effects and switching costs are frequent themes in discussions of Big Tech.~~533~~657 Some Some
reform proposals seek to address these structural features of certain platform markets by imposing reform proposals seek to address these structural features of certain platform markets by imposing
interoperability and data-portability obligations on designatedinteroperability and data-portability obligations on designated -platform operators.platform operators.~~534~~
~~In broad strokes, interoperability~~658 Interoperability refers to the ability of distinct services to work together and refers to the ability of distinct services to work together and
communicate with one another.communicate with one another.~~535~~659 Interoperability can develop organically—as with email Interoperability can develop organically—as with email ~~and~~
~~many patent pools~~—or as a result of a legal mandate.—or as a result of a legal mandate.~~536~~660 Examples in the latter category include Examples in the latter category include
the 1996 Telecommunications Act’s requirement that local exchange carriers interconnect with the 1996 Telecommunications Act’s requirement that local exchange carriers interconnect with
other providers.other providers.~~537~~661 The DOJ’s 2002 monopolization settlement with Microsoft also included an The DOJ’s 2002 monopolization settlement with Microsoft also included an
interoperability provision prohibiting Microsoft from excluding other firms’ web browsers from interoperability provision prohibiting Microsoft from excluding other firms’ web browsers from
its Windows operating system.its Windows operating system.~~538~~662
These types of measures seek to lower the entry barriers associated with networked industries by These types of measures seek to lower the entry barriers associated with networked industries by
shifting network effects from individual firms to the market as a whole, shifting network effects from individual firms to the market as a whole, ~~thus~~ making them making them
available to nascent and potential competitors of a dominant incumbent.available to nascent and potential competitors of a dominant incumbent.~~539~~663
Data portability, by contrast, refers to a consumer’s right to move his or her data from one Data portability, by contrast, refers to a consumer’s right to move his or her data from one
platform to another.platform to another.~~540~~664 Telecommunications law again offers an example by granting phone users Telecommunications law again offers an example by granting phone users
the right to retain their phone numbers when they change carriers.the right to retain their phone numbers when they change carriers.~~541~~665 Such requirements decrease Such requirements decrease
the switching costs that might otherwise discourage consumers from taking their business to a the switching costs that might otherwise discourage consumers from taking their business to a
more attractive provider.more attractive provider.~~542~~

~~530 FTC NON-REPORTABLE ACQUISITIONS STUDY, supra note 332, at 10.~~
~~531~~666 In the 117th Congress, H.R. 3849 would have imposed interoperability and data-portability duties on designated digital platforms.667 The bill would have directed the FTC to develop standards 655 HJC REPORT, HJC REPORT, supra no note 11, at 388. at 388.
~~532~~656 ABA DIGITAL ECONOMY REPORT, ABA DIGITAL ECONOMY REPORT, supra no note ~~358~~438, at 16. at 16.
~~533~~657 See, e.g., HJC REPORT, , HJC REPORT, supra note note 11, at 40-42; STIGLER REPORT, at 40-42; STIGLER REPORT, supra no note ~~333~~415, at 38-39, 109; UK DIGITAL at 38-39, 109; UK DIGITAL
COMPETITION REPORT, COMPETITION REPORT, supra no note ~~333~~415, at 35-36. at 35-36.
~~534~~658 OECD, DATA PORTABILITY, INTEROPERABILITY AND DIGITAL PLATFORM COMPETITION (2021), OECD, DATA PORTABILITY, INTEROPERABILITY AND DIGITAL PLATFORM COMPETITION (2021),
https://www.oecd.org/daf/competition/data-portability-interoperability-and-digital-platform-competition-2021.pdf https://www.oecd.org/daf/competition/data-portability-interoperability-and-digital-platform-competition-2021.pdf
[hereinafter “OECD INTEROPERABILITY REPORT”]; HJC REPORT, [hereinafter “OECD INTEROPERABILITY REPORT”]; HJC REPORT, supra no note 11, at 384-86; STIGLER REPORT, at 384-86; STIGLER REPORT, supra note note
~~333~~415, at 109-10, 113; at 109-10, 113; see also Kades & Scott Morton, Kades & Scott Morton, supra no note ~~345~~424 (advocating interoperability remedies in antitrust (advocating interoperability remedies in antitrust
litigation involving tech platforms). litigation involving tech platforms).
~~535~~659 Ezrielev & Marquez, Ezrielev & Marquez, supra no note ~~167~~223, at 9; OECD INTEROPERABILITY REPORT, at 9; OECD INTEROPERABILITY REPORT, supra no note ~~534~~658, at 12. at 12.
~~536~~660 Herbert Hovenkamp, Herbert Hovenkamp, Antitrust Interoperability Remedies, 123 COLUM. L. REV. F. 1, 10 (2023) [hereinafter , 123 COLUM. L. REV. F. 1, 10 (2023) [hereinafter
“Hovenkamp, “Hovenkamp, Interoperability Remedies”]. ”].
~~537~~661 47 U.S.C. § 251(c). 47 U.S.C. § 251(c).
~~538~~662 United States v. Microsoft Corp., 215 F. Supp. 2d 1 (D.D.C. 2002). For other examples of antitrust cases in which United States v. Microsoft Corp., 215 F. Supp. 2d 1 (D.D.C. 2002). For other examples of antitrust cases in which
interoperability has been used as a remedy, see Hovenkamp, interoperability has been used as a remedy, see Hovenkamp, Interoperability Remedies, , supra no note ~~536~~660, at 13 n.74. at 13 n.74.
~~539~~663 Kades & Scott Morton, Kades & Scott Morton, supra not note ~~345~~424, at 41-42; Becky Chao & Ross Schulman, at 41-42; Becky Chao & Ross Schulman, Promoting Platform
Interoperability, NEW AM. FDN. 21-22 (May 2020). , NEW AM. FDN. 21-22 (May 2020).
~~540~~664 Michal S. Gal & Daniel L. Rubinfeld, Michal S. Gal & Daniel L. Rubinfeld, Data Standardization, 94 NYU L. REV. 737, 739 (2019). , 94 NYU L. REV. 737, 739 (2019).
~~541~~665 47 U.S.C. § 251(b)(2). 47 U.S.C. § 251(b)(2).
~~542~~666 Juan Pablo Maicas, et al., Juan Pablo Maicas, et al., Reducing the Level of Switching Costs in Mobile Communications: The Case of Mobile
Number Portability, 33 TELECOMMS. POL’Y 544 (2009). 667 ACCESS Act of 2021, H.R. 3849, 117th Cong. §§ 3-4 (2021). Congressional Research Service Congressional Research Service

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~~In the 117th Congress, H.R. 3849 would have imposed interoperability and data-portability duties~~
~~on designated digital platforms.543 The bill would have directed the FTC to develop standards~~
implementing those duties for individual covered platforms.implementing those duties for individual covered platforms.~~544~~668 In promulgating standards under In promulgating standards under
the legislation, the FTC would have been advised by technical committees that included the legislation, the FTC would have been advised by technical committees that included
representatives of a platform’s competitors, competition and privacy-advocacy organizations, the representatives of a platform’s competitors, competition and privacy-advocacy organizations, the
National Institute of Standards and Technology, and covered platforms.National Institute of Standards and Technology, and covered platforms.~~545~~669
The obligations contemplated by H.R. 3849 were potentially broader than those in the AICOA, The obligations contemplated by H.R. 3849 were potentially broader than those in the AICOA,
which were discussed earlier in this report.which were discussed earlier in this report.~~546~~670 The AICOA’s interoperability provision would The AICOA’s interoperability provision would
~~have prohibited~~prohibit a covered platform operator from restricting the ability of business users to a covered platform operator from restricting the ability of business users to
interoperate with features that are available to the operator’s own products or services.interoperate with features that are available to the operator’s own products or services.~~547~~
671 Accordingly, the prohibition would have been limited to a platform operator’s unequal treatment Accordingly, the prohibition would have been limited to a platform operator’s unequal treatment
of firms that utilize its platform.of firms that utilize its platform.~~548~~672
In contrast, H.R. 3849 would have granted the FTC rulemaking authority to impose potentially In contrast, H.R. 3849 would have granted the FTC rulemaking authority to impose potentially
broader, platform-specific interoperability obligations.broader, platform-specific interoperability obligations.~~549~~673 For a social network like Facebook, an For a social network like Facebook, an
interoperability rule might have included duties to allow users of other networks to “friend” interoperability rule might have included duties to allow users of other networks to “friend”
Facebook users and transmit posted content from Facebook to other networks.Facebook users and transmit posted content from Facebook to other networks.~~550~~674 Supporters of Supporters of
interoperability have argued that these types of obligations would catalyze competition by interoperability have argued that these types of obligations would catalyze competition by
allowing users of upstart social networks to benefit from Facebook’s scale.allowing users of upstart social networks to benefit from Facebook’s scale.~~551~~675
H.R. 3849’s data-portability provision was also potentially broader than the parallel requirement H.R. 3849’s data-portability provision was also potentially broader than the parallel requirement
in the AICOA. While the AICOA’s requirement would in the AICOA. While the AICOA’s requirement would ~~have applied~~apply only to a platform’s business only to a platform’s business
users,users,~~552~~676 H.R. 3849’s data-portability obligation would have encompassed individuals who use a H.R. 3849’s data-portability obligation would have encompassed individuals who use a
covered platform.covered platform.~~553~~677
A rule implementing this duty might have required a social network like Facebook to keep a A rule implementing this duty might have required a social network like Facebook to keep a
user’s messages, photos, and other content in an accessible format that could be transferred to user’s messages, photos, and other content in an accessible format that could be transferred to
other platforms.other platforms.~~554~~678 Although this type of requirement may have partially overlapped with the Although this type of requirement may have partially overlapped with the
ongoing transferability contemplated by H.R. 3849’s interoperability mandate, it could also have ongoing transferability contemplated by H.R. 3849’s interoperability mandate, it could also have

Number Portability, 33 TELECOMMS. POL’Y 544 (2009).
~~543 ACCESS Act of 2021, H.R. 3849, 117th Cong. §§ 3-4 (2021).~~
~~544 Id. § 6(c).~~
~~545 Id. § 7.~~
~~546~~included categories of data not subject to continuous real-time interoperability for technical or other reasons.679 Data-portability rules may likewise require Amazon to allow retailers on its 668 Id. § 6(c). 669 Id. § 7. 670 See supra “Interoperability and Data Access.”
~~547~~671 American Innovation and Choice Online Act, S. American Innovation and Choice Online Act, S. ~~2992, 117th~~2033, 118th Cong. § 3(a)(4) (2023). 672 ~~Cong. § 3(a)(4) (2022) (Reported Version); American~~
~~Innovation and Choice Online Act, H.R. 3816, 117th Cong. § 2(b)(1) (2021) (Reported Version).~~
~~548~~ The reported House version of the AICOA The reported House version of the AICOA in the 117th Congress also included a broader provision that prohibited covered platform also included a broader provision that prohibited covered platform
operators from restricting a business user’s ability to interoperate with “any product or service.” H.R. 3816 § 2(b)(9). operators from restricting a business user’s ability to interoperate with “any product or service.” H.R. 3816 § 2(b)(9).
~~549~~ 673 ACCESS Act of 2021, H.R. 3849, 117th Cong. §§ 4, 6 (2021); ACCESS Act of 2021, H.R. 3849, 117th Cong. §§ 4, 6 (2021); see also Schnitzer, et al., Schnitzer, et al., supra no note ~~405~~519, at 22 at 22
(contrasting the AICOA’s interoperability provision with the “general interoperability requirement” in H.R. 3849). (contrasting the AICOA’s interoperability provision with the “general interoperability requirement” in H.R. 3849).
~~550~~674 Kades & Scott Morton, Kades & Scott Morton, supra not note ~~345~~424, at 16; Transcript of Markup of H.R. 3843, the Merger Filing Fee at 16; Transcript of Markup of H.R. 3843, the Merger Filing Fee
Modernization Act, et al., at 48,832-48,835 (June 23, 2021) (on file with author) [hereinafter “H.R. 3849 Markup Modernization Act, et al., at 48,832-48,835 (June 23, 2021) (on file with author) [hereinafter “H.R. 3849 Markup
Transcript”] (Rep. Mary Gay Scanlon) (“Much like texting allows iPhone owners to communicate with Android Transcript”] (Rep. Mary Gay Scanlon) (“Much like texting allows iPhone owners to communicate with Android
owners, so, too, would [H.R. 3849] allow individuals switching to new social media platforms to be able to owners, so, too, would [H.R. 3849] allow individuals switching to new social media platforms to be able to
communicate and interact with their friends and family on Facebook.”). communicate and interact with their friends and family on Facebook.”).
~~551~~ 675 Kades & Scott Morton, Kades & Scott Morton, supra not note ~~345~~424, at 9. at 9.
~~552 S. 2992 § 3(a)(4); H.R. 3816 § 2(b)(1).~~
~~553~~676 S. 2033 § 3(a)(4). 677 H.R. 3849 § 3. H.R. 3849 § 3.
~~554~~678 Hovenkamp, Hovenkamp, Interoperability Remedies, , supra no note ~~536~~660, at 27. 679 See id. (arguing that “dynamic” interoperability for social networks might be technically difficult and that the “static” interoperability offered by data portability may thus be a more promising option). , ~~at 27.~~
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~~included categories of data not subject to continuous real-time interoperability for technical or~~
~~other reasons.555 Data-portability rules may likewise require Amazon to allow retailers on its~~
marketplace to port their customer reviews to rival e-commerce platforms and Apple to permit marketplace to port their customer reviews to rival e-commerce platforms and Apple to permit
iPhone users to transfer their message histories to an Android device.iPhone users to transfer their message histories to an Android device.~~556~~680
Objections to interoperability and data-portability mandates take several forms. Some have Objections to interoperability and data-portability mandates take several forms. Some have
highlighted the complexity of interoperability requirements, which may pose challenges of highlighted the complexity of interoperability requirements, which may pose challenges of
implementation and enforcement.implementation and enforcement.~~557~~681 Others have focused on possible privacy and data-security Others have focused on possible privacy and data-security
risks that might accompany both interoperability and data-portability rules.risks that might accompany both interoperability and data-portability rules.~~558~~682
H.R. 3849 attempted to address complexity concerns by directing the FTC to establish technical H.R. 3849 attempted to address complexity concerns by directing the FTC to establish technical
committees to assist with rule development.committees to assist with rule development.~~559~~683 The bill sought to mitigate privacy and The bill sought to mitigate privacy and
data-security risks by imposing data-security requirements on firms that interoperate with or data-security risks by imposing data-security requirements on firms that interoperate with or
receive ported data from a covered platform.receive ported data from a covered platform.~~560~~684
Another category of criticism directed at interoperability requirements involves innovation Another category of criticism directed at interoperability requirements involves innovation
concerns. Some have worried that interoperability may result in homogenized markets as an concerns. Some have worried that interoperability may result in homogenized markets as an
incumbent’s rivals coalesce around a single set of standards.incumbent’s rivals coalesce around a single set of standards.~~561~~685 Compelled interoperability also Compelled interoperability also
potentially implicates the free-rider problems that motivate narrow duty-to-deal doctrine: by potentially implicates the free-rider problems that motivate narrow duty-to-deal doctrine: by
requiring firms to share the fruits of their innovation with competitors, policymakers may dampen requiring firms to share the fruits of their innovation with competitors, policymakers may dampen
incentives to invest in new products.incentives to invest in new products.~~562~~686 Defenders of interoperability have acknowledged this Defenders of interoperability have acknowledged this
risk, but maintain that interoperating Big Tech platforms would still face incentives to innovate to risk, but maintain that interoperating Big Tech platforms would still face incentives to innovate to
prevent rivals from gaining a competitive edge.prevent rivals from gaining a competitive edge.~~563~~
687 Changes to General Antitrust
While the proposals discussed above would entail special competition rules for large tech While the proposals discussed above would entail special competition rules for large tech
platforms, other options involve changes to general antitrust law. Because general antitrust reform platforms, other options involve changes to general antitrust law. Because general antitrust reform
is a vast topic, this report does not attempt an exhaustive overview of the relevant proposals. is a vast topic, this report does not attempt an exhaustive overview of the relevant proposals.
Instead, it briefly reviews selected bills involving exclusionary conduct and merger law. Instead, it briefly reviews selected bills involving exclusionary conduct and merger law.

~~555 See id. (arguing that “dynamic” interoperability for social networks might be technically difficult and that the~~
~~“static” interoperability offered by data portability may thus be a more promising option).~~
~~556 H.R. 3849 Markup Transcript, supra note 550, at 4,564-4,568 (Rep. David Cicilline).~~
~~557~~ Exclusionary Conduct S. 225, the Competition and Antitrust Law Enforcement Reform Act (117th Cong.) In the 117th Congress, S. 225 would have made several changes to the legal framework governing exclusionary-conduct claims.688 The bill would have amended the Clayton Act to 680 H.R. 3849 Markup Transcript, supra note 674, at 4,564-4,568 (Rep. David Cicilline). 681 See, e.g., Hovenkamp, , Hovenkamp, Interoperability Remedies, , supra no note ~~536~~660, at 35; Randy Picker, at 35; Randy Picker, Forcing Interoperability on
Tech Platforms Would Be Difficult to Do, PROMARKET (Mar. 11, 2021), https://www.promarket.org/2021/03/11/, PROMARKET (Mar. 11, 2021), https://www.promarket.org/2021/03/11/
interoperability-tech-platforms-1996-telecommunications-act/. interoperability-tech-platforms-1996-telecommunications-act/.
~~558~~682 See, e.g., Laura Alexander & Randy Stutz, , Laura Alexander & Randy Stutz, Interoperability in Antitrust Law & Competition Policy, COMPETITION , COMPETITION
POLICY INT’L ANTITRUST CHRON. 31, 36 (June 2021); OECD INTEROPERABILITY REPORT, POLICY INT’L ANTITRUST CHRON. 31, 36 (June 2021); OECD INTEROPERABILITY REPORT, supra no note ~~534~~658, at 24; Peter at 24; Peter
Swire & Yianni Lagos, Swire & Yianni Lagos, Why the Right to Data Portability Likely Reduces Consumer Welfare: Antitrust and Privacy
Critique, 72 MD. L. REV. 335, 365-75 (2013). , 72 MD. L. REV. 335, 365-75 (2013).
~~559~~683 ACCESS Act of 2021, H.R. 3849, 117th Cong. § 6 (2021). ACCESS Act of 2021, H.R. 3849, 117th Cong. § 6 (2021).
~~560~~684 Id. §§ 3(b), 4(b). . §§ 3(b), 4(b).
~~561~~685 Hovenkamp, Hovenkamp, Interoperability Remedies, , supra no note ~~536~~660, at 35; Ezrielev & Marquez, at 35; Ezrielev & Marquez, supra no note ~~167~~223, at 10-11. at 10-11.
~~562~~686 See, e.g., FUMAGALLI, et al., , FUMAGALLI, et al., supra no note 73, at 547; ABA Letter, at 547; ABA Letter, supra no note ~~391~~507, at 14; Ezrielev & Marquez, at 14; Ezrielev & Marquez, supra
nonote ~~167~~223, at 10-11; Shelanski, supra no te 95, at 371. 687, ~~at 10-11; Howard A. Shelanski, Unilateral Refusals to Deal in Intellectual and Other Property, 76~~
~~ANTITRUST L.J. 369, 371 (2009).~~
~~563~~ Kades & Scott Morton, Kades & Scott Morton, supra not note ~~345~~424, at 26. 688 Competition and Antitrust Law Enforcement Reform Act of 2021, S. 225, 117th Cong. §§ 9, 13 (2021). Congressional Research Service 74 Antitrust Reform and Big Tech Firms , ~~at 26.~~
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~~Exclusionary Conduct~~
~~S. 225, the Competition and Antitrust Law Enforcement Reform Act (117th~~
~~Cong.)~~
~~In the 117th Congress, S. 225 would have made several changes to the legal framework~~
~~governing exclusionary-conduct claims.564 The bill would have amended the Clayton Act to~~
prohibit “exclusionary conduct that presents an appreciable risk of harming competition.”prohibit “exclusionary conduct that presents an appreciable risk of harming competition.”~~565~~689
“Exclusionary conduct” would have been defined to mean conduct that (1) “materially “Exclusionary conduct” would have been defined to mean conduct that (1) “materially
disadvantages” an actual or potential competitor, or (2) “tends to foreclose or limit” the ability of disadvantages” an actual or potential competitor, or (2) “tends to foreclose or limit” the ability of
an actual or potential competitor to compete.an actual or potential competitor to compete.~~566~~690
S. 225 would have adopted a presumption that exclusionary conduct presents “an appreciable risk S. 225 would have adopted a presumption that exclusionary conduct presents “an appreciable risk
of harming competition” if it is undertaken by a firm with a market share of greater than 50of harming competition” if it is undertaken by a firm with a market share of greater than 50
~~percent~~% or that otherwise has “significant market power” in the relevant market. or that otherwise has “significant market power” in the relevant market.~~567~~691 That That
presumption could be rebutted, however, if a defendant established by a preponderance of the presumption could be rebutted, however, if a defendant established by a preponderance of the
evidence thatevidence that:
1. “distinct procompetitive benefits of the exclusionary conduct in the relevant 1. “distinct procompetitive benefits of the exclusionary conduct in the relevant
market eliminate the risk of harming competition presented by the exclusionary market eliminate the risk of harming competition presented by the exclusionary
conduct”; conduct”;
2. another firm has “entered or expanded their presence in the market with the effect 2. another firm has “entered or expanded their presence in the market with the effect
of eliminating the risk of harming competition posed by the exclusionary of eliminating the risk of harming competition posed by the exclusionary
conduct”; or conduct”; or
3. “the exclusionary conduct does not present an appreciable risk of harming 3. “the exclusionary conduct does not present an appreciable risk of harming
competition.” competition.”~~568~~692
The bill would have provided that several of the conduct-specific tests that courts have adopted in The bill would have provided that several of the conduct-specific tests that courts have adopted in
Sherman Act cases would not apply to exclusionary-conduct claims under the amended Clayton Sherman Act cases would not apply to exclusionary-conduct claims under the amended Clayton
Act. Among other things, exclusionary-conduct plaintiffs would not have to showAct. Among other things, exclusionary-conduct plaintiffs would not have to show:
• that a defendant terminated a prior course of dealing, that a defendant terminated a prior course of dealing,~~569~~693 which some courts have which some courts have
held is a prerequisite for refusal-to-deal liability under the Sherman Act; held is a prerequisite for refusal-to-deal liability under the Sherman Act;~~570~~694
• that the defendant priced its products below its costs or is likely to recoup losses that the defendant priced its products below its costs or is likely to recoup losses
from below-cost pricing, from below-cost pricing,~~571~~695 which are both requirements for predatory-pricing which are both requirements for predatory-pricing
claims under the Sherman Act;claims under the Sherman Act;~~572 or~~

~~564 Competition and Antitrust Law Enforcement Reform Act of 2021, S. 225, 117th Cong. §§ 9, 13 (2021).~~
~~565 Id. § 9.~~
~~566 Id.~~
~~567 Id.~~
~~568 Id.~~
~~569 Id.~~
~~570~~696 or • that the conduct of a multi-sided platform presents an appreciable risk of harming competition on more than one side of the platform,697 contrary to the rule the Supreme Court adopted for two-sided transaction platforms in Ohio v. American Express.698 S. 225 also would have provided that market definition is not necessary to prove an antitrust violation, except in cases where the applicable statute includes the phrase “relevant market,” “market concentration,” or “market share.”699 689 Id. § 9. 690 Id. 691 Id. 692 Id. 693 Id. 694 E.g., Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1075 (10th Cir. 2013) (Gorsuch, J.). , Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1075 (10th Cir. 2013) (Gorsuch, J.).
~~571~~695 Competition and Antitrust Law Enforcement Reform Act of 2021, S. 225, 117th Cong. § 9 (2021). Competition and Antitrust Law Enforcement Reform Act of 2021, S. 225, 117th Cong. § 9 (2021).
~~572~~696 Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-24 (1993). Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-24 (1993).
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~~ that the conduct of a multi-sided platform presents an appreciable risk of harming~~
~~competition on more than one side of the platform,573 contrary to the rule the~~
~~Supreme Court adopted for two-sided transaction platforms in Amex.574~~
~~S. 225 also would have provided that market definition is not necessary to prove an antitrust~~
~~violation, except in cases where the applicable statute includes the phrase “relevant market,”~~
~~“market concentration,” or “market share.”575~~
697 S. 225 § 9. 698 Ohio v. Am. Express Co., 138 S. Ct. 2274, 2286-87 (2018). 699 S. 225 § 13(a). Congressional Research Service 75 Antitrust Reform and Big Tech Firms S. 1074, the Trust-Busting for the Twenty-First Century Act (117th Cong.)
S. 1074—another bill in the 117th Congress—also would have made changes to the standards S. 1074—another bill in the 117th Congress—also would have made changes to the standards
governing exclusionary-conduct claims.governing exclusionary-conduct claims.~~576~~700 The legislation would have provided that, in litigation The legislation would have provided that, in litigation
under Section 1 or Section 2 of the Sherman Act, a defendant that relies upon procompetitive under Section 1 or Section 2 of the Sherman Act, a defendant that relies upon procompetitive
effects to justify its conduct must establish by clear and convincing evidence thateffects to justify its conduct must establish by clear and convincing evidence that:
1. the relevant procompetitive effects “clearly outweigh” any anticompetitive 1. the relevant procompetitive effects “clearly outweigh” any anticompetitive
effects; and effects; and
2. the defendant “could not obtain substantially similar procompetitive effects 2. the defendant “could not obtain substantially similar procompetitive effects
through commercially reasonable alternatives that would involve materially through commercially reasonable alternatives that would involve materially
lower competitive risks.”lower competitive risks.”~~577~~701
Like S. 225, the bill would have provided that market definition is not required to prove a Like S. 225, the bill would have provided that market definition is not required to prove a
violation of Section 1 or Section 2.violation of Section 1 or Section 2.~~578~~702
Mergers
S. 225, the Competition and Antitrust Law Enforcement Reform Act (117th
Cong.)
In addition to the exclusionary-conduct provisions discussed above, S. 225 would have modified In addition to the exclusionary-conduct provisions discussed above, S. 225 would have modified
several aspects of merger law. The bill would have amended Section 7 of the Clayton Act to several aspects of merger law. The bill would have amended Section 7 of the Clayton Act to
prohibit mergers that “create an appreciable risk of materially lessening” prohibit mergers that “create an appreciable risk of materially lessening” ~~competition579~~competition703—a —a
change from the current language that prohibits mergers that may “substantially” lessen change from the current language that prohibits mergers that may “substantially” lessen
competition.competition.~~580~~704 The term “materially” was defined to mean “more than a de minimis amount.” The term “materially” was defined to mean “more than a de minimis amount.”~~581~~705
S. 225 also would have shifted the relevant burden of proof to the merging parties in certain S. 225 also would have shifted the relevant burden of proof to the merging parties in certain
circumstances.circumstances.~~582~~706 For example, merging parties would have had the burden of proving that their For example, merging parties would have had the burden of proving that their
transactions would not “create an appreciable risk of materially lessening” competition in cases transactions would not “create an appreciable risk of materially lessening” competition in cases
wherewhere:

~~573 S. 225 § 9.~~
~~574 Ohio v. Am. Express Co., 138 S. Ct. 2274, 2286-87 (2018).~~
~~575 S. 225 § 13(a).~~
~~576~~ • a merger would lead to a “significant increase in market concentration”; • a firm with a market share greater than 50% or that possesses “significant market power” acquires a competitor or a company that has a “reasonable probability” of becoming a competitor; • a transaction is valued at more than $5 billion; or • the acquiring firm has assets, net revenue, or a market capitalization exceeding $100 billion and the transaction is valued at $50 million or more.707 700 Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. § 2 (2021). Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. § 2 (2021).
~~577~~701 Id. .
~~578~~702 Id. .
~~579~~703 S. 225 § 4(b)(1). S. 225 § 4(b)(1).
~~580~~704 15 U.S.C. § 18. 15 U.S.C. § 18.
~~581~~705 S. 225 § 4(b)(3). S. 225 § 4(b)(3).
~~582~~706 Id. 707 Id. .
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~~ a merger would lead to a “significant increase in market concentration”;~~
~~ a firm with a market share greater than 50 percent or that possesses “significant~~
~~market power” acquires a competitor or a company that has a “reasonable~~
~~probability” of becoming a competitor;~~
~~ a transaction is valued at more than $5 billion; or~~
~~ the acquiring firm has assets, net revenue, or a market capitalization exceeding~~
~~$100 billion and the transaction is valued at $50 million or more.583~~
S. 1074, the Trust-Busting for the Twenty-First Century Act (117th Cong.)
S. 1074 also included merger restrictions.S. 1074 also included merger restrictions.~~584~~708 The bill would have prohibited firms with market The bill would have prohibited firms with market
capitalizations exceeding $100 billion from engaging in mergers whose effect “may be to lessen capitalizations exceeding $100 billion from engaging in mergers whose effect “may be to lessen
competition in any way.”competition in any way.”~~585~~709 It also would have explicitly provided that market definition is not It also would have explicitly provided that market definition is not
necessary to block a merger and that mergers shall not be presumed to be legal on the grounds necessary to block a merger and that mergers shall not be presumed to be legal on the grounds
that the parties are not direct competitors.that the parties are not direct competitors.~~586~~710
S. 3847, the Prohibiting Anticompetitive Mergers Act (117th Cong.)
In the 117th Congress, S. 3847 would have taken a similarly skeptical approach to large mergers. In the 117th Congress, S. 3847 would have taken a similarly skeptical approach to large mergers.
The legislation would have prohibited mergers valued at more than $5 billion, mergers that result The legislation would have prohibited mergers valued at more than $5 billion, mergers that result
in a market share of over 33in a market share of over 33 ~~percent~~% for sellers or 25 for sellers or 25 ~~percent~~% for employers, and mergers that for employers, and mergers that
would result in specified levels of market concentration.would result in specified levels of market concentration.~~587~~711
S. 3847 also would have made changes to the merger-review process. S. 3847 also would have made changes to the merger-review process.~~588~~712 Among other things, the Among other things, the
bill would have extended the initial HSR waiting period from 30 days to 120 days and allowed bill would have extended the initial HSR waiting period from 30 days to 120 days and allowed
the antitrust agencies to block mergers without obtaining a court order.the antitrust agencies to block mergers without obtaining a court order.~~589~~713
In addition, the bill would have directed the DOJ and FTC to review mergers consummated after In addition, the bill would have directed the DOJ and FTC to review mergers consummated after
January 1, 2000, if they would have qualified as “prohibited mergers” under the categories January 1, 2000, if they would have qualified as “prohibited mergers” under the categories
mentioned above.mentioned above.~~590~~714 It would have further required the agencies to pursue remedies to restore It would have further required the agencies to pursue remedies to restore
competition or address the anticompetitive effects of competition or address the anticompetitive effects of ~~these~~those mergers in specified circumstances. mergers in specified circumstances.~~591~~

~~583 Id.~~
~~584~~715 Author Information Jay B. Sykes Legislative Attorney 708 S. 1074 contained both size-based merger restrictions and merger restrictions that would have applied to companies S. 1074 contained both size-based merger restrictions and merger restrictions that would have applied to companies
designated as “dominant digital firms.” Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. §§ 3, 4 designated as “dominant digital firms.” Trust-Busting for the Twenty-First Century Act, S. 1074, 117th Cong. §§ 3, 4
(2021). The latter are discussed in (2021). The latter are discussed in supra “Substantive Merger Law.” ”
~~585~~709 S. 1074 § 3. S. 1074 § 3.
~~586~~710 Id. .
~~587~~711 Prohibiting Anticompetitive Mergers Act of 2022, S. 3847, 117th Cong. § 3 (2022). The market-concentration Prohibiting Anticompetitive Mergers Act of 2022, S. 3847, 117th Cong. § 3 (2022). The market-concentration
prohibition would have barred mergers that would (1) result in prohibition would have barred mergers that would (1) result in ~~a Herfindahl-Hirschman Index (HHI)~~an HHI of greater than of greater than
1,800, and (2) increase the 1,800, and (2) increase the ~~relevant~~ HHI HHI by more than 100 points. Id. 712 S. 3847 § 4(b). 713 Id. 714 Id. § 6. 715 Id. Congressional Research Service 77 Antitrust Reform and Big Tech Firms ~~by more than 100 points. Id. A market with an HHI of 1,800 qualifies as~~
~~“moderately concentrated” under the current Horizontal Merger Guidelines, but would have been deemed to be “highly~~
~~concentrated” under the 1992 version of the Guidelines. HORIZONTAL MERGER GUIDELINES, supra note 100, at § 5.3;~~
~~DEP’T OF JUSTICE AND FED. TRADE COMM’N, 1992 MERGER GUIDELINES § 1.5 (1992).~~
~~588 S. 3847 § 4(b).~~
~~589 Id.~~
~~590 Id. § 6.~~
~~591 Id.~~
~~Congressional Research Service~~

64

~~Antitrust Reform and Big Tech Firms~~

~~Author Information~~

~~Jay B. Sykes~~

~~Legislative Attorney~~

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