Posts Tagged: "competition"

As of today, the world’s major platforms—Apple, Alphabet, Meta, Amazon, Microsoft and ByteDance—must be in full compliance with the European Union’s Digital Markets Act (DMA), an EU regulation intended to level the playing field in the digital marketplace. Signed into law in September 2022, the DMA imposed a complex regulatory framework upon the major Internet services platforms that are deemed to be “gatekeepers” (i.e. have a market capitalization of at least €75 billion [$83 billion USD]) due to their dominant market position. These gatekeepers each market at least one “core platform service” (CPS) that connects large numbers of users and business interests.

On March 4, the European Commission announced that it had levied a fine of more than €1.8 billion ($1.95 billion USD) against American consumer tech giant Apple over app restrictions employed by Apple’s App Store. The massive fine, which the Commission increased to ensure it was sufficiently deterrent to Apple’s anti-competitive practices, is the latest in a series of legal actions within the European Union (EU) to target dominant Internet platforms under competition law.

Just about everyone bundles. It’s about as American as apple pie: if you buy more, you get a better price. Most of the time, that’s a good thing. Consumers benefit from lower prices. The question is, can bundling violate the antitrust laws? It can. So, the real question is, how do we determine when a generally good thing – bundling – should be condemned under the sledgehammer that is antitrust? In cases where usually beneficial conduct is challenged as anticompetitive, clear standards and tests are critically important so that a good thing is not stifled by uncertainty.

The U.S. House of Representatives’ Committee on the Judiciary yesterday held a hearing featuring Federal Trade Commission (FTC) Chair Lina Khan, who has recently come under fire from the Republican-led House leadership. Judiciary Committee Chair Jim Jordan (R-OH) repeatedly grilled Khan about testimony from the independent assessor for Twitter, Ernst & Young, in the Commission’s recent investigation into the social media platform, which Jordan characterized as “targeted harrassment.”

The Chairman of the House of Representatives’ Committee on Oversight and Accountability, James Comer (R-KY), announced an investigation this week into accusations raised by former Federal Trade Commission (FTC) Commissioner Christine Wilson in her resignation against the conduct of FTC Chair Lina Khan. Wilson sent a letter to President Joe Biden in March claiming that his appointment of Khan as Chair brought “an abrupt halt” to Biden’s promised “return to normalcy” for the agency. She said that Khan “scorned and sidelined” knowledgeable career staff, in part by imposing a gag order on staff “that prevented them from engaging in consumer and business education — a vote of no confidence in our staff and a disservice to those we serve.”

The U.S. Department of Justice (DOJ) and the Attorneys General of eight U.S. states on Tuesday announced they are suing Google for antitrust violations of the Sherman Act with respect to the tech company’s monopoly on digital advertising technology. The Attorneys General of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia joined the suit. In a 155-page complaint filed in the Eastern District of Virginia, the DOJ and Attorneys General explained that Google “has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising.”

On June 30, the U.S. Copyright Office officially published a report titled Copyright Protections for Press Publishers, which explores existing frameworks in nations around the world providing additional rights under copyright law for news publishers, and includes recommendations regarding similar changes that could be effected under U.S. law. The Copyright Office’s study concludes that, while the news publishing industry is facing significant problems in obtaining adequate funding during the Internet era, those problems are not due to any current shortcomings in the state of U.S. copyright law.

On Tuesday, January 11, the United States District Court for the District of Columbia denied Facebook’s motion to dismiss a complaint brought against it by the U.S.  Federal Trade Commission (FTC), holding that the FTC had stated a plausible claim for relief under Section 2 of the Sherman Act. The FTC filed a complaint on December 9, 2020, asserting one count of monopoly maintenance under Section 2 of the Sherman Act. Facebook moved to dismiss both this case, and a related state case. The district court dismissed the Commission’s complaint but granted the FTC the opportunity to amend. Following a leadership change from when the complaint was initially filed, the FTC filed an amended complaint in August of 2021. L

You may remember 2014 as the year when we all discovered a plague of noncompete agreements threatening our economy. No? Let me help you. In June that year, the New York Times published an expose of sorts relating the story of a 19-year-old summer camp counselor who couldn’t get hired by a certain camp because the year before she signed a contract with another camp that blocked her from working for any nearby competitor. Noncompete contracts, the article suggested, had previously been reserved for high level corporate executives, and suddenly (and “increasingly”) they were being foisted on rank and file employees engaged in event planning, investment management, and even yoga instruction. A follow-on piece in the Times confirmed the emerging crisis by revealing that the Jimmy John’s fast food chain had forced noncompete clauses on all its sandwich makers (acknowledging, however, that there was no evidence that the company had ever tried to enforce the contracts).

The Senate Judiciary Committee’s Subcommittee on Competition Policy, Antitrust, and Consumer Rights held a hearing yesterday titled “Big Data, Big Questions: Implications for Competition and Consumers,” in which both Republican and Democratic senators pushed representatives of Facebook and Google to answer difficult questions about their platforms’ impact on everything from competitive marketplaces to teenagers’ body image. The hearing is one in a series that aims to conduct a bipartisan review of America’s competition issues, according to Subcommittee Chair, Amy Klobuchar (D-MN).

The Federal Trade Commission (FTC) has pledged to use more of its enforcement resources to ensure that consumers are free from manufacturer-imposed restrictions on self-repair or third-party repair, to the maximum extent allowed under the law. The unanswered question is: how far does the law allow the FTC to go? The answer is, quite possibly, not as far as the White House or the new Chair of the FTC, Lina Khan, would like. One problem for the FTC: doubts about the authority granted to the agency under the FTC Act. Another hurdle will be the legal protections granted to manufacturers—both as market participants responding to consumer demand and, in many cases, as the owners of intellectual property rights. This blog has already discussed some of the ways that the “right to repair” movement might conflict with copyright protections. Here, we focus on the limits of the FTC’s authority and antitrust doctrine, as well as conflicts with patent law.

The European Commission has formed a preliminary view that Amazon has breached Article 102 of the Treaty on the Functioning of the European Union by distorting competition in online retail markets. It announced on November 10 that it had sent a Statement of Objections to the e-commerce company. Article 102 (formerly Article 82 TEC) prohibits “any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it.” Amazon is said to be dominant in France and Germany, its biggest markets in the EU. The Commission said that Amazon systematically relies on non-public business data of independent sellers on its marketplace to the benefit of its own competing retail business. This data includes the number of units of products ordered and shipped, sales revenues, and the number of online visits made to offers.

The novel coronavirus pandemic has upended our lives, creating a far-from-normal “new normal.” And it has also given rise to countless collaborations between and among universities, hospitals, medical centers, pharma companies and others to pool their talent and resources to discover, test, manufacture and distribute diagnostics, treatments, vaccines, personal protective equipment and other resources needed to fight the pandemic. Antitrust law poses no risk to these collaborations, so long as they remain focused on their core missions. But at the same time, antitrust law recognizes that in cooperating and exchanging information and insights for those missions there is the potential for “spill-over effects” that can create antitrust risk. The trick is to know where that dividing line is and to avoid crossing over it.

The House Subcommittee on Antitrust, Commercial, and Administrative Law yesterday heard from Joseph Simons, Chairman of the Federal Trade Commission, and Makan Delrahim, Assistant Attorney General in the Department of Justice’s Antitrust Division as part of the Subcommittee’s fourth hearing in its “Online Platforms and Market Power” series. The latest hearing focused on the perspectives of the antitrust authorities, while previous hearings have examined the effects of the big tech companies on innovation and entrepreneurship; online platforms’ effect on a free and diverse press; and the role of data and privacy in competition. While both Delrahim and Simons said they are aggressively investigating and monitoring dominant platforms like Facebook and Google, they warned against overreach. Subcommittee Chair David Cicilline (D-RI) expressed his concern that, over the past decade, the largest tech firms have acquired more than 436 companies, “many of which were actual or potential competitors,” without intervention from antitrust enforcement authorities. The last major monopolization case was brought in 2001 against Microsoft, Cicilline noted. “This has created a de facto antitrust exemption for online platforms.,” he said, questioning whether the failure lies in the need for congressional action to amend and strengthen existing laws, a lack of agency resources to effectively combat the problem, or simply a lack of will to enforce the laws on the books.