Why 2022 Might Disappoint Big Tech Antitrust Crusaders
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Big Tech antitrust enforcement efforts have been gaining momentum since the House antitrust subcommittee in October 2020 released its landmark report that wrapped up a 16-month investigation into the market power of Amazon, Apple, Facebook and Google.
Since then, Biden has taken office and appointed anti-monopoly advocates like Lina Khan and Jonathan Kanter as FTC chair and head of the DOJ’s antitrust division (perhaps two of the government’s most prominent antitrust gigs), respectively. In January, an antitrust bill that would forbid tech players from favoring their own products over competitors’ was approved by a Senate committee. State attorneys general have also moved to sue Big Tech players for stifling competition.
So it’s no wonder why some see real change on the horizon. Bhaskar Chakravorti, dean of global business at Tufts University’s Fletcher School, told MarketWatch in late December that 2022 was “shaping up to be the year of Tech Takedown,” for example.
But despite all the momentum to rein in the power of Big Tech, 2022 may go down in the history books to antitrust crusaders and Big Tech critics as a year that showed much promise early but ultimately failed to deliver.
For one, several of the big probes by the FTC and DOJ into Big Tech companies are not likely to end in 2022. And the DOJ’s October 2020-filed lawsuit against Google for violating antitrust laws won’t go to trial until 2023.
Meanwhile, the DOJ is currently probing Apple, but it has not yet actually sued it on antitrust grounds. The Information in October reported an Apple-DOJ antitrust suit was likely, but Politico in December reported that a decision on whether the DOJ will go to court with Apple wasn’t likely to come until March of this year.
The FTC has been pursuing an antitrust lawsuit against Facebook on the grounds that the platform has illegally maintained a social networking monopoly through anticompetitive practices, such as acquiring rivals like Instagram. While the FTC’s antitrust case against Facebook was rejected in June, a judge in January said the government agency could move forward with an amended version of the complaint.
Still, the permission granted to the FTC to move forward with the antitrust suit far from guarantees a victory to Lina Khan and Co. The judge accepting the FTC’s latest suit said the agency “may well face a tall task down the road in proving its allegations.” And it will take years before that case concludes, according to NYT.
In the meantime, the FTC will also be occupying its time with Amazon-related cases.
Last June, it was reported that the FTC would be investigating Amazon’s proposed deal to acquire MGM in addition to a broader investigation (which began under the Trump administration) that the agency had been conducting on the e-commerce giant’s business practices.
But some, like Cardozo law professor Sam Weinstein, see the MGM-Amazon deal as likely to pass.
This sheds light on why the New Yorker in early December reported that some FTC vets worry Khan “is underestimating the risks of pushing ahead with aggressive cases that are likely to fail.”
The broader FTC-Amazon investigation in December expanded to include the company’s cloud business. That expansion may have only pushed any end to the FTC’s years-long Amazon investigation even further out than initially anticipated.
Yes, there are different Big Tech-antitrust inquiries being conducted by other government officials and agencies.
But in the interest of not writing a piece that’s the length of a novel, this article focuses on antitrust-related probes or cases brought forth by the FTC and DOJ, which both enforce federal antitrust laws. The FTC and DOJ cases mentioned above also seem to have the most potential to spur meaningful changes in the business practices of Google, Apple, Meta and Amazon.
The ever-present government scrutiny makes it no wonder why Silicon Valley’s biggest players have spent so much on lobbying. Meta, Amazon and Alphabet, respectively, spent about $20 million, $19 million and $10 million on lobbying in 2021, all figures that were up year-over-year, according to filings from the U.S. Senate Lobbying Disclosure database.
Potentially delaying antitrust legislative efforts against Big Tech is also the midterm elections, which could cause Democrats (which overwhelmingly supported a suite of bills partly aimed at strengthening antitrust agencies) to lose control of either house of Congress.
Keep in mind certain Big Tech companies have already announced deals within the short period of time that has been 2022 so far. Alphabet has already announced three M&A deals in 2022 as of Feb. 6, according to Dealogic data provided to Variety Intelligence Platform.
Between 2011 and 2021, Alphabet was involved with 116 M&A deals that were worth roughly $37.5 billion, per Dealogic. That deal value total was lower than the comparable figure of Amazon ($47 billion) but higher than that of Apple ($31.5 billion) and Meta ($37.4 billion).
All this is not to say no progress will be made on government antitrust regulatory efforts in 2022.
Democrats and Republicans both generally found more unity in wanting to tamp down the powers of Big Tech over the past couple of years, albeit for different reasons (with the left being generally concerned with misinformation troubles and the right looking to hold platforms they view as silencing them accountable).
But if you’ve paid zero attention to Big Tech antitrust-related headlines in recent times, just know that several major probes into and cases against the alleged anticompetitive practices of Amazon, Alphabet, Apple and Meta appear either fluid or far from done.
So despite some discourse signaling that 2022 could be a watershed year in terms of reining in Big Tech, the year ahead could still end up not being the period of change antitrust advocates hoped it would be.