Mergers & Antitrust Law News

FTC to Review Antitrust Laws In Wake of Tech Probes

Nov. 18, 2019, 5:58 PM

The Federal Trade Commission is looking at whether the legal thresholds to bring antitrust suits need to be modified to confront today’s biggest tech companies, such as Facebook Inc. and Alphabet Inc.'s Google.

Enforcers at the commission are taking “a fresh look” at the primary lens used to bring an antitrust violation, called the consumer welfare standard, FTC Chairman Joe Simons said Nov. 18 at an American Bar Association conference in Washington.

Under the consumer welfare standard, the de facto analysis used by federal antitrust enforcers, a merger or anti-competitive conduct, like price-fixing, is an antitrust violation if it results in direct harm to consumers, such as higher prices. Critics have said that standard doesn’t account for the fact that most of the services Facebook, Google, and other tech platforms offer to consumers come at no cost.

The commission, which has publicly disclosed it’s reviewing Facebook Inc. for potential antitrust violations, plans to review the consumer welfare to see if there are “alternatives,” Simons said.

“We expect to have some output on this topic,” Simons added. He did not elaborate on a specific date.

Simons also said the commission is conducting multiple probes, but he didn’t name any additional companies.

The commissioner’s latest remarks come after Deputy Attorney Genereal Jeffrey Rosen, said Nov. 18 at the same conference that the current antitrust laws are “flexible” enough to deal with new technologies.

Rosen, who is overseeing the DOJ’s probes into tech platforms, said antitrust isn’t a “panacea” for every competition problem and that government’s investigation will take into account non antitrust concerns including consumer protection and public safety.

Simons also said the FTC plans to release new “commentary” on how the commission reviews vertical mergers, in which two companies in different parts of a supply chain combine. Such guidance will state how the commission will “deal” with nascent competitors, which includes when dominant platforms buy emerging startups, Simons said.

The FTC is going to try to make the merger commentary “a joint effort” with officials at the DOJ, Simons added.

To contact the reporter on this story: Victoria Graham in Washington at vgraham@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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