A New Era of Antitrust: The Impacts of 2024 Cases on Big Tech
Landmark Decisions in 2024
JEC NEW YORK — For big tech, 2024 brought with it a series of harsh antitrust cases — the products of years of investigation by the Department of Justice (DoJ). The first landmark antitrust case — U.S. et al vs. Google — was ruled in August, in which Judge Amit Mehta accused Google of unfairly establishing dominance by paying Samsung, Mozilla, and Apple billions to exclusively provide Google’s search engine on their devices. Google commands over 88% of the general search market, pushing out others like DuckDuckGo and Bing (American Action Forum). It is a clear monopolist, according to the opinion of the court:
“. . .the court holds that (1) there are relevant product markets for general search services and general search text ads; (2) Google has monopoly power in those markets; (3) Google’s distribution agreements are exclusive and have anticompetitive effects; and (4) Google has not offered valid procompetitive justifications for those agreements. Importantly, the court also finds that Google has exercised its monopoly power by charging supra-competitive prices for general search text ads.”
Google executives, including CEO Sundar Pichai, argued that the case would simply make Google less accessible and reduce access to top-quality search engines in their defense. A deadline to remediate the monopoly has been set for August 2025, and solutions may include requesting the company’s break-up.
On September 16th, Google was to stand trial in another antitrust case — but this time, the accused was their Ad Manager, which contributed $31.7 billion to Google in 2021 and is used by websites globally to sell ads on their pages (New York Times). The Department of Justice is planning to argue that Google’s 87% market share in the ad publishing space allows it to artificially raise prices for advertisers: it can take greater cuts of revenue directly tied to advertising from businesses using its service. A state victory in the situation may once again result in divestiture of certain acquisitions, like DoubleClick.
Google is not the only giant facing lawsuits from the DoJ: Apple, Amazon, Meta, and others are also on track to stand in court this year. In March, Apple was accused of engaging in practices that keep users reliant on iPhones and complicate the process of switching to other devices. For example, the company worsens the user experience for iPhone users communicating with those who don’t have iOS devices (i.e. via text messaging), limits fintech companies from using the phone’s payment chip to prioritize Apple Wallet, and creates challenges for users who want to connect to smartwatches other than Apple Watch.
Similarly, Amazon, accused of maintaining an illegal monopoly in online retail, is set to stand trial in October 2026. Its aftermarket business, Fulfillment by Amazon (FBA), which charges for logistics and storage, essentially determines the Prime eligibility for sellers’ products, allowing them to raise prices at the detriment of sellers: over 73% of venders on Amazon use FBA and the majority of them paid close to 50% of their overall revenue to the company in 2021 (New York Times). Amazon also complicates the process for sellers to list their products on other sites for cheaper amounts.
Finally, Meta has been caught up in a legal battle since 2021 that threatens to force it to offload Instagram and WhatsApp. In response to the court’s arguments that the corporation has a monopoly in “personal networking” services, Meta has stated that the court’s definition of the monopolized ‘market’ is weak, not to mention that none of its acquisitions were challenged when the company initially went through with them.
The list of companies under surveillance by antitrust authorities continues: Nvidia may be the DoJ’s next target, given that the governance body has alleged that the tech giant ‘punishes’ buyers that do not exclusively buy their AI chips by offering better prices to those that do. Although a potential Nvidia suit would be far down the line, it’s crucial to consider: What is the catalyst behind this wave of antitrust cases, especially given the history of minimal oversight of these companies? And more importantly, what are the lawsuits’ implications and where are they headed?
A Shifting Regulatory Environment
Appointed by Biden in mid-2021, Lina Khan is currently the Chair of the Federal Trade Commission (FTC) — a governmental organization that enforces guidelines around competition in our market economy, including antitrust regulations. Under her leadership, the FTC has pivoted its priorities from sustaining fair consumer pricing to sustaining capitalistic competition — a transition evident in the words Josipa Predin, a contributor to Forbes: “Khan’s regulatory philosophy is clear: to preserve market dynamism, there must be checks on the monopolistic tendencies of tech behemoths.”
However, a collective of onlookers have become dubious of Khan’s decisions, arguing that she is persecuting companies for the mere possession of monopolies, not for abuse of monopolies to harm customers or control pricing — as expressed by journalist Patrick Moorhead: “I’ve watched very closely, and with more than a little skepticism, as FTC chief Lina Khan has spearheaded a more aggressive approach to antitrust behavior — or even the possibility of antitrust behavior — that has taken the idea of “pre-crime” to new levels in this area of the law. In other words, it’s not what you’ve done, but what you could do.”
The sharp transition in the regulatory environment has been facilitated by Biden in other ways besides appointing Khan. The president has signed an executive order exhorting federal agencies to go after anti-competitive corporations and has pushed for courts to expand definitions of ‘consumer harm’ to include 21st-century concerns like privacy violations. His policy unfolded alongside a bipartisan shift in perception of tech giants: in 2021, only one in three Americans held positive views of Big Tech, and even today, according to the Pew Research Center, 51% of Americans continue to believe that the government should increase regulations on such companies.
Future Direction of Tech
This burst in antitrust action has implications beyond the divestiture of business operations, from FBA to Instagram, from their parent companies, and the fracturing of tech monopolies. Trustbusters have reshaped the way that tech titans try to stay on top of the next wave of innovation, which currently entails generative AI, AR / VR, natural language processing, and more. In the past, corporations simply bought out innovative startups to dominate new trends, in the same manner that Meta purchased Instagram or Google purchased YouTube. Now, with antitrust investigators questioning takeovers, enterprises have turned to investing sizable amounts in the fundraising rounds of startups. According to Pitchbook, a research firm, roughly 66% of the $27B raised by AI companies came from Alphabet, Amazon, and Microsoft (The Economist); these deals allow giants both to hold significant stakes in startups like Anthropic, OpenAI, and Mistral and oftentimes, to gain access to the groundbreaking technology they develop.
Tech giants have also taken to poaching the talent from the next generation of top companies — often the teams of founders who serve as the centerpieces of innovation. Such ‘talent heists’ have played out in Google’s onboarding of Character.ai leadership and Microsoft’s integration of personnel from Adept, a company hoping to use artificial intelligence for supply chain optimization. In the long term, ‘talent heists’ may diminish the number of players in the tech ecosystem, creating an environment in which innovation carried out by startups simply cycles up into the possession of giants. Antitrust prosecutors have caught wind of such deals, but corporations are hoping that they will have gained positioning in the AI segment before lawsuits come in.
The rise of antitrust suits against big tech is unlikely to slow down anytime soon. Harris will likely continue Biden’s strict policy on tech if elected, while Trump, despite his Republican background, has a history of opposing Big Tech: he had his administration file antitrust cases against AT&T and Google, not to mention that he has accused such companies of being politically biased.
As antitrust cases unfold, they will redefine the competitive landscape for tech and set precedents for how market power is managed by giants — many of which we aren’t completely sure of yet. Let’s see what the future has to offer.
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