The rise of global technology superstars like Amazon, Apple, Facebook and Google created new challenges for the competition watchdogs who enforce the nation’s antitrust laws. Those companies dominate markets in e-books and smartphones, search advertising and social-media traffic, spurring a global debate over whether it’s time to rein in such winner-take-all companies. The U.S. has largely been hands off, but that may be changing.
1. Are the tech giants monopolies?
They’re powerful, for sure. Google and Facebook Inc. together control almost 60 percent of digital ad revenue in the U.S. and 64 percent of mobile ad revenue, according to eMarketer. Apple Inc. has about 45 percent of the U.S. smartphone market. About 47 percent of all U.S. e-commerce sales go through Amazon.com Inc. But under modern antitrust enforcement, those percentages alone aren’t enough to alarm regulators in the U.S., which long ago stopped equating big with bad. (For comparison’s sake, Standard Oil’s market share got as high as 88 percent late in the 19th century.) What’s illegal is for a monopoly to abuse its market power to prevent rivals from threatening its dominance. Federal courts ruled Microsoft Corp. did so in the 1990s.
2. How often does the U.S. go after monopolies?
The Microsoft lawsuit was the last major monopolization case brought by the U.S. The ensuing 20-year dry spell is often cited by those who argue enforcement has been too timid. President Barack Obama’s administration vowed to get tough on dominant companies in 2009, but it didn’t follow through. The number of monopoly cases brought by the U.S. dropped sharply from an average of 15.7 cases per year from 1970 to 1999 to less than three between 2000 and 2014.
3. Is antitrust thinking outdated?
Some lawyers and economists think it’s time to move past conventional antitrust enforcement to consider harmful effects from increased concentration such as lower private investment, weak productivity growth, rising…