Harnessing the Energy Around Antitrust and Competition to Promote a Healthy Internet

By Caroline Holland, Mozilla Tech Policy Fellow, Former Official at the U.S. Department of Justice Antitrust Division, Former Chief Counsel of the Senate Antitrust Subcommittee

Competition has long driven ingenuity and economic growth in the U.S. and around the world. It also ensures that consumers get the highest quality goods and services at the best prices while fueling the innovation and revolutionary ideas that will transform our lives. In the fast-paced and ever-changing digital world, competition is particularly important to ensuring the openness and accessibility of one of our greatest and most powerful public resources — the Internet.

That is why Mozilla is supporting my research on the intersection of competition and the promotion of a healthy Internet as a Mozilla Tech Policy Fellow. Looking through the competition lens, a healthy Internet is one where consumers have access to affordable and competitive high speed broadband and equal access to the lawful content they desire. A healthy Internet also has a level playing field for competition among operating systems, websites, apps, and platforms.

The antitrust laws in the U.S. serve a critical law enforcement function to protect competition and consumers by stopping mergers and business practices that harm the competitive process, resulting in higher prices, lower quality good and services, or reduced innovation. Over the last several years, the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) — the antitrust agencies — successfully challenged anticompetitive mergers and conduct of health insurance companies, hospitals, banks, appliance makers, cable, broadband, and mobile service providers, pharmaceutical companies, online product reviews and ratings platforms, and office supply stores, among others. And enforcers may soon be examining a merger between T-Mobile and Sprint, which would leave consumers with only three choices for nationwide wireless service and at risk of higher prices for worse service and less innovation.

With growing concern about concentration in some markets and its potentially harmful impact on competition, “trustbusting” and the antitrust laws are taking center stage in policy discussions. It is a common-sense policy exercise to reassess the effectiveness of the law and weigh whether changes may be needed. A perennial question is whether U.S. antitrust laws are still relevant for the high-tech economy and whether they are sufficiently nimble to address concerns in the fast-changing digital world. Indeed, the wisdom of the antitrust laws is that they contain broad principles that can be readily applied to any industry and can tackle new competition problems as technology advances. Antitrust enforcers and courts are well-accustomed to applying these principles to evolving market dynamics.

So what is new now that demands our attention? While size alone is not indicative of an antitrust violation or competition problem, as large digital platforms increase their reach into so many aspects of our everyday lives, they raise a number of important competition questions that I hope to tackle through my work with Mozilla:

• Are we headed toward a future where a large part of our web-based interaction is channeled through a few large firms? What does this mean for competition, consumers, and innovation?
• What challenges and nuances are there in defining digital markets and assessing market power? How does the collection of data affect market power and the ability of new firms to enter and compete?
• In the merger context, how skeptical should we be of large players acquiring tiny startups that could become the disruptive competition of the future even though they are not significant direct competitors today?
• What competition risks are posed when large platforms vertically integrate to compete head to head with the firms that depend on these very platforms to do business?
• What are the competitive dynamics that drive innovation in digital markets? How can antitrust enforcement and competition policy protect and promote innovation and how might enforcement or policy prescriptions threaten or slow technological innovation?

The ultimate question, of course, is what solutions are possible under the antitrust laws if and when competitive harm occurs? In addition to thinking creatively about how to deploy the antitrust toolkit, the antitrust agencies and policy-makers should consider whether industry or problem-specific rules or guidelines may be a more effective way to protect and promote competition. Many federal agencies have statutory authority to promote competition and they can help by adopting rules or regulations that increase competition or by eliminating rules and regulations that create barriers to competition. Some agencies have a mission that is complementary to competition, such as the Federal Trade Commission’s consumer protection mandate that can address potential data and privacy concerns in the digital space.

One recent example of a successful policy solution to a competition issue is the Federal Communication Commission’s 2015 net neutrality rules. Consumers typically have only one or two choices for high-speed broadband. As a result, Internet service providers (ISPs) face little risk of losing consumers if they block or slow down content or create paid fast-lanes. Yet, they have both the incentive and ability to do these things to bolster their bottom line, especially when the content competes with their own products and services.

While antitrust laws could likely be used to stop the most nefariously anticompetitive conduct, detecting, investigating, and litigating antitrust violations is a lengthy process and would be too-little-too-late for a startup that has been blocked from reaching consumers to compete.

Antitrust also may not be able to address non-competition values that we associate with an open Internet such as free speech and expression. Instead, strong net neutrality rules most effectively and efficiently counter the incentive and ability of dominant ISPs to stymie competition. These rules not only protect consumers, but they help drive innovation by ensuring a pathway to competition for new Internet products and services.

As someone who has been steeped in antitrust and competition policy for many years, I’m excited by the growing energy around competition and antitrust. I look forward to learning from technologists, academics, economists, and advocates to better understand the competitive landscape and potential competition challenges in the Internet ecosystem. And I hope to contribute to the debate about what role the antitrust laws can play to address competition concerns, what changes to the laws may be helpful, what research and learning would be useful to advance effective antitrust enforcement and competition policy, and what policy tools beyond antitrust law can promote a robust competitive environment on the Internet.