Courts need to rethink enforcement of U.S. antitrust laws

Heading into 2022, U.S. lawmakers and regulators continue to grapple with reining in powerful tech companies. From lawsuits to bills, U.S. leaders are taking multiple approaches to hold companies like Meta (formerly Facebook), Google, Apple and Amazon accountable under U.S. antitrust laws.

But for full accountability, the interpretation of antitrust laws in court needs to change, said Michael Kades, director of markets and competition policy at the Washington Center for Equitable Growth, a research and nongovernmental organization based in Washington, D.C.

Since the 1980s, antitrust law enforcement has gradually become less strict in the courts, which Kades said has given rise to the powerful tech companies seen today. Reforming antitrust laws to better hold large companies accountable in 2022 will involve strengthening antitrust enforcement in the courts and changing the law, Kades said.

In this Q&A, Kades shares how and why the interpretation of antitrust law needs to change in the courts, as well as what antitrust reform measures he'll be paying the most attention to in 2022.

How did we get here? Why did existing antitrust laws fail to stop companies like Google and Amazon from getting so large and powerful?

Michael Kades

Michael Kades: The answer is a little complicated. All of these companies can be very innovative and consumer-focused. But there's been growing concern of conduct that, outside of a legal context, strikes people as wrong or problematic and the sort of things that antitrust laws maybe should stop.

There's a real issue about whether the antitrust laws have been so eviscerated that they actually don't prevent anticompetitive conduct. I think that's why it's not just about criticizing these companies' actions, but maybe the antitrust laws and that we've narrowed them too much over the last 40 years.

Should U.S. antitrust laws be updated, or should how the courts enforce antitrust laws change?

Kades: I don't think that's an either/or question. If you're concerned about the antitrust laws, you should be thinking about both ways to change them.

How can the way courts enforce U.S. antitrust laws be changed?

Kades: Government enforcers, in past cases, have been able to push back and alter and change the direction of the judicial case law in a way that's helped reinvigorate the antitrust laws. But that can be a time-consuming process. I was involved with the application of the antitrust laws to pharmaceutical patent settlements between brands and generics. We thought the courts had really gone off the rails and taken a position that blessed incredibly anticompetitive agreements. The FTC spent a decade building and bringing a case to the Supreme Court. This was a relatively small area of antitrust law. If you're really thinking about changing the judiciary, you're talking about decades.

If they don't like the way they're being interpreted, Congress has every right to tell the courts, 'This is what we mean.'

Congress can step in. The judiciary has made it pretty clear how they're interpreting the antitrust laws, but Congress is the one who wrote the laws. If they don't like the way they're being interpreted, Congress has every right to tell the courts, 'This is what we mean.'

Why do you think court enforcement of U.S. antitrust law needs to change?

Kades: Maybe the most famous antitrust case people know about is the breakup of the AT&T monopoly in the '80s. AT&T owned all the local phone companies and long-distance phone companies. They would not connect any long-distance competitor to the local exchange; they just refused to deal with these companies. The government brought a strong case and got a very good decision out of the courts and eventually AT&T agreed to a settlement. The company was broken up, and nobody thinks that was a bad thing. The reason we have the internet, mobile communications, can all be traced to this.

However, it's no longer clear that the legal theory in that case -- that the refusal to deal was illegal --would hold up in court. There are some courts that would reject it. If you're in a position where it's not clear that the most important monopoly case arguably in the history of antitrust law would have a solid, merits-based argument anymore, it kind of tells you there's something wrong.

Outside of how courts interpret antitrust law, what else will you be paying attention to regarding antitrust laws and antitrust reform in 2022?

Kades: Major antitrust cases against Google and Facebook. Those move slow, so I don't know that we'll get a decision, but those cases are all seeking what appears to be fairly substantial remedies. Either explicitly or implicitly, breakups are on the table. At this point those may actually move faster than legislation; legislation can take years.

On the legislative side, there's not a lot of opposition to the Merger Filing Fee Modernization Act. As for the other bills, there is a lot of momentum behind the [American Choice and Innovation Online Act]. You have a House version and a Senate version; both have strong bipartisan support. Not to discount the other bills, but right now that seems to be the one that has a lot of momentum.

Editor's note: Responses have been edited for brevity and clarity.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.