The FTC remakes antitrust for the tech age
Future. Federal Trade Commission head Lina Khan is charting a new course for competition regulators. Even if they can’t find Big Tech guilty of “harming” consumers, Khan is regulating Big Tech for abusing their positions as middlemen, controlling the markets they operate in. But Big Tech is so large that normal consequences don’t make much of a dent in their bottom line. Looks like Khan may have no choice but to try to break up companies… or accept the status quo.
Rise of the monopsonists
Khan is directing the FTC to target “monopsonies” — companies that control a majority of the market and can gouge sellers (as opposed to consumers).
- Big Tech companies like Meta and Google offer many of their services for free to consumers, but they require rich fees or permissions from outside brands that are trying to use their platforms for prominent listing or to host ads.
- Apple and Google act as middlemen between brands and consumers through their respective marketplaces, which many developers call economically unfair.
- Amazon acts as a “gatekeeper” for much of online retail while controlling 40% of the entire U.S. commerce market.
The pressure point with each of these companies (and others that represent Big Tech) is that they do all of this while also promoting their own goods and services, which are sometimes in competition with the companies they’re exerting market power on.
No one company should have all that power…
Khan says that the FTC has plenty of jurisdiction to go after Big Tech under the monopsony definition, and she’s joined by the Department of Justice and pretty much every state attorney general in moving forward with lawsuits… which have had mixed results.
The issue is also, “How do you actually curb these companies’ power?” Fines barely make a dent (though they keep coming), and stopping further M&A is difficult under the $92 million dollar limit set by the Hart-Scott-Rodino Act (Apple, Amazon, Google, Meta, and Microsoft made a collective 616 companies acquisitions in the past ten years).
Maybe antitrust regulation of Big Tech is a decade too late.