On 2 March 2023, Keystone Strategy hosted a conference on Antitrust, Regulation & the Political Economy which brought together policymakers, academics, economists, and lawyers from across Europe and the United States. Three panel discussions devoted particular attention to the current legal framework of competition law in different jurisdictions, the state of antitrust enforcement, and the impetus to clamp down on the Big Tech platforms through antitrust and regulation.
The following provides a summary of the opinions voiced. Allowing for nuance of approach and argument, there seems to be a general consensus that antitrust enforcement, particularly against Big Tech, has strengthened and is strengthening.
There was some debate over the central question posed in the first panel discussion, ‘Fireside Chat: Expanding the Antitrust Agenda: Do we Need New Law, or just New Posture?’. Tim Wu, former Special Advisor on Tech and Competition to the White House, suggested that the Biden administration has already changed its posture towards antitrust instigated by the Executive Order on Promoting Competition in the American Economy. Cristina Caffarra, Managing Partner and Head of Keystone Europe who chaired the conference, echoed Wu’s comments, noting that the word ‘antitrust’ was mentioned in the 2023 State of the Union Address, a first since 1979.
By contrast, Andreas Mundt, President of the Bundeskartellamt, took the position that the U.S. should, indeed, change its application of the law by stepping away from the consumer welfare standard. Mundt contends that the current focus on short-term price effects should be replaced with a Brandeisian approach, assessing the broader structure of the economy and market conditions to promote competition. Barry Lynn, Executive Director of the Open Markets Institute and a key adherent of the New Brandeis Movement, made a similar argument. Mundt also suggested that the EU should reassess its ‘effects-based approach’, which often result in protracted cases, particularly against Big Tech, and consider instead simply proving ‘likely effects’ which would carry a lower evidentiary burden.
Tommaso Valletti, Professor of Economics at Imperial College Business School, likewise expressed the view that competition litigation has been largely ineffective in the EU, noting that on average only one merger has been prohibited per year over the last three decades. Contrary to Mundt, however, Valletti advocates a change in the law to overcome constraints imposed by legal interpretation and standards of proof. Andrea Coscelli, Partner at Keystone and former Chief Executive of the Competition and Markets Authority, took a different view again. He suggested that regulatory agencies should engage with lawmakers directly, and encourage amendments to statute where the law might be inherently obscure as an alternative to lengthy and inefficient litigation to clarify these points of law.
The second panel discussed ‘”Plugging Gaps” in Antitrust Enforcement’. Here, Rebecca Slaughter, Commissioner of the U.S. Federal Trade Commission, emphasised how the agency is looking at people as ‘whole people’ rather than merely end users and went on to exemplify the symbiotic relationship between the FTC’s competition and consumer protection mission. Doha Mekki, Principal Deputy Assistant Attorney General at the U.S. Department of Justice Antitrust Division, stated that the judiciary often lacks experience handling antitrust matters due to the low volume of cases which has resulted in low levels of enforcement. Martjin Snoep, Chairman of the Netherlands Authority for Consumers and Markets (ACM), identified four main gaps in enforcement: (i) horizontal consolidation involving a dominant company (such as killer acquisitions or through roll-up strategies often used by private equity buyers) which often fall below merger thresholds, (ii) tacit collusion, (iii) narrowly defined understandings of exploitative abuse through the lens of price effects, and (iv) the misuse in application of Article 101(3) of the Treaty on the Functioning of the European Union.
The final panel, ‘Making Big Tech Better vs Making it Smaller: Will Antitrust or Regulation Get There First?’, contained highly useful sector-specific discussion of Big Tech and the role that regulation should play in mediating the platforms’ market power. Ken Paxton, Attorney General of Texas, stated that these companies pose an existential threat to democracy, and as such expressed support for wide-reaching structural changes to the big players such as Google. Stephanie Yon-Courtin, Member of the European Parliament, asserted that the recently enacted Digital Markets Act (DMA) and Digital Services Act (DSA) will prevent Big Tech from deciding who enters the market and will preclude them from imposing non-negotiable terms and conditions. Filomena Chirico, Head of Unit at DG Connect at the European Commission, likewise, expressed support for the strides taken in developing an EU ex-ante competition regime. Meanwhile, Alberto Bacchiega, Director of Information, Communication and Media at the European Commission, added that the DMA is not there to ‘explore new forms of anti-competitive behaviour’, instead it is ‘by construction restricted to closed lists’ and if the DMA does not notice something in the first instance (such as a new innovations), it is not its role to tackle it. Taking a slightly broader view, Cory Doctorow, Journalist and Author, concisely summarises the way Big Tech ecosystems grow through his notion of ‘enshittification’. Platform operators allocate surplus to users, locking them in. Subsequently, the surplus is withdrawn and allocated to business customers, who are also locked in. The surplus is finally withdrawn from both of them and allocated to the shareholders of the firm.
Please contact Tim Cowen and Rachael Machado if you have any questions regarding the above.
The material in this article is only for general review of the topics covered and does not constitute legal advice. No legal or business decision should be based on its content.
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