Competition Corner

The U.S. Department of Commerce (DOC) recently added to the pressure on Apple and Google to modify their app store practices. The DOC’s National Telecommunications and Information Administration (NTIA) released a 50-page report on February 1, 2023, criticizing the mobile app store model as harmful to developers and consumers and recommending policy changes to reform it.

In another example of heightened antitrust enforcement by the Department of Justice (DOJ) under the Biden administration, on January 24, 2023, DOJ and eight states filed a civil antitrust lawsuit accusing Google of monopolizing multiple digital advertising technology (“ad tech”) products. The lawsuit reflects the continued antitrust focus at both the state and federal levels on Google.

On October 31, the Department of Justice (DOJ) fulfilled its recent promise to “vigorously enforce Section 2 of the Sherman Act” by securing the first guilty plea in a criminal monopolization case since the 1970s. Nathan Zito, the president of a Montana-based paving and asphalt company, admitted to one count of attempted monopolization of the market for highway crack-sealing services in Montana and Wyoming.

On April 21, 2022, Assistant Attorney General Jonathan Kanter gave a spirited keynote address at the University of Chicago, declaring “that the era of lax enforcement is over, and the new era of vigorous and effective antitrust law enforcement has begun.” These are potentially seminal words coming from the head of the DOJ’s Antitrust Division.

The U.S. Department of Justice has signaled its readiness to criminally prosecute individual executives whose conduct violates Section 2 of the Sherman Act. This section makes it unlawful for any person to “monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations”—in other words, targeting those actions taken to attain or preserve monopoly power. 

A putative class of Connecticut citizens is alleging that Hartford HealthCare has amassed monopoly power to “extract higher prices from insurers, employers, and patients.” The suit, filed in Connecticut state court, alleges Hartford HealthCare has illegally monopolized the markets for inpatient hospital services and outpatient medical services in multiple geographic locations throughout Connecticut.

On July 9, 2021, President Biden issued the Executive Order on Promoting Competition in the American Economy and the White House’s Fact Sheet, intended to promote competition and update regulations to combat anticompetitive practices. Included in the Order are several directives to address the Biden administration’s concerns about reduced competition in the agricultural industry, calling for sweeping updates to a key enforcement mechanism in the agricultural industry, the Packers and Stockyard Act of 1921.

To the extent tech companies thought they might be spared from increased antitrust enforcement, President Biden’s Executive Order on Promoting Competition in the American Economy makes clear it is time to gear up. The Order portends far-reaching enforcement extending well beyond the Big Tech platform focus of the Trump administration. 

On July 7, 37 attorneys general from various states and the District of Columbia filed a lawsuit against Google in the Northern District of California alleging antitrust violations related to Google’s Play Store. The complaint alleges that Google maintains unlawful monopolies in the app distribution and in-app payment processing markets on the Android operating system.

On May 19, 2021, the U.S. Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights convened a hearing to discuss hospital consolidation.

On April 29, 2021, the U.S. House of Representatives Subcommittee on Antitrust, Commercial, and Administrative Law met to discuss consolidation in health care markets.

On April 21, 2021, the Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights held a hearing to explore competition in Apple’s App Store and Google Play. Representatives from Apple Inc., Google Inc., Spotify, the Consumer Federation of America, Tile, Inc., and Match Group, Inc. testified about competition within the two app stores.

The nomination of Columbia Law Professor Lina Khan to the Federal Trade Commission last month raised speculation as to whether there might be a new era of antitrust enforcement under the Biden Administration.

Republican Senator Josh Hawley of Missouri introduced a bill on April 12 designed to “crack down on mergers and acquisitions by mega-corporations” and make it easier to break up dominant firms through antitrust enforcement.

Recently, antitrust law and regulations have made their way to the center stage of politics in the United States.

On October 6, 2020, the Democratic Majority of the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law released a report following their investigation into large technology platforms including Amazon, Apple, Facebook, and Google.

On September 14, 2020, the New York Senate Standing Committee on Consumer Protection held a hearing to discuss New York’s antitrust laws, and specifically the Twenty-First Century Antitrust Act (S. 8700-A), which was introduced in July by Senate Deputy Leader Michael Gianaris and Senator Rachel May. As Senator Gianaris noted discussing S. 8700-A, New York’s current antitrust law, the Donnelly Act, was “written over a century ago,” and was “intended to deal with an economy that no longer exists.” 

Epic Games, Inc., developer of the wildly popular online videogame Fortnite, has kicked off a real-life battle royale with Apple and Google over their respective application marketplaces and digital payment processing platforms. Specifically, in separate complaints filed on August 13, Epic accused Apple of monopolizing the iOS app distribution market and iOS in-app payment processing market, and accused Google of monopolizing the Android mobile app distribution market and the Android in-app payment processing market.

After ending her presidential campaign, Senator Amy Klobuchar was back on the Senate floor to introduce another new antitrust bill—this one called the Anticompetitive Exclusionary Conduct Prevention Act—which aims to amend the over-century-old Clayton Antitrust Act in order to “reinvigorate” antitrust enforcement across the economy and (apparently) specifically intended to target industries like pharmaceuticals and telecommunications that—according to Klobuchar—are riddled with players that have grown too “big”.