Big Tech and Antitrust: Rethinking Competition Policy for the Digital Era

Justice Department (Makan Delrahim) Stance on AT&T/Time Warner:

• The DOJ maintained an offer to allow the merger if structural remedies (specifically an injunction on Turner assets) were granted, a position consistent with pre-litigation proposals.
• The DOJ clarified that litigation was pursued not to block the deal but to resolve competitive harm, leaving room for pro-competitive outcomes like new innovative products using the HBO/Warner Bros library.
• Delrahim rejected the interpretation that the DOJ's remedial offer signaled an admission of likely defeat in court.

T-Mobile/Sprint Merger (4-to-3 Consolidation):

• Panelists agreed the DOJ will rigorously analyze the "output effects" of the merger, specifically regarding competition in wireless services.
• Luigi Zingales characterized the merger as "disaster for U.S. consumers," citing econometric evidence that number portability drives competition, and predicting the deal would act as a "phone tax bill" exceeding Trump administration tax cuts.

Tech Platform Dominance and "Platform Privilege":

• Sally Hubbard defined the core antitrust issue as "platform privilege," where platforms control the arena and play the game simultaneously, distorting the competitive field.
• Hubbard cited the EU's Google Shopping case as evidence, where Google leveraged 80% search market share to prioritize its own services over competitors (placing them on page four).
• Hubbard warned that venture capitalists are increasingly avoiding startups that compete directly with Amazon, Alphabet, or Facebook, signaling a barrier to entry.
• Luigi Zingales emphasized that "free" digital services are not free; users pay via advertising, which is monopolized (80-85% controlled by Google and Facebook) and priced at monopoly levels due to the high value of targeted data.

Innovation vs. Antitrust Enforcement:

• Delrahim argued that U.S. antitrust policy is based on consumer harm and that big tech has been highly innovative, lowering prices and costs for small businesses; he asserted there is no evidence these companies elected specific politicians or act as monopolies in a traditional sense.
• Zingales countered that while innovation is valuable, the law should not exempt today's innovators if they become "yesterday's monopolists" blocking future entry, citing the Microsoft case where blocking the browser threat was the violation.
• Zingales suggested that regulatory investigations (even with small remedies) can act as a remedy by deterring abuse, as the Microsoft trial itself made the DOJ and others "care" about abuse.
• Hubbard argued that focusing solely on low prices misses Amazon's antitrust problems; if a platform observes sellers, replicates successful products as "Amazon Basics," and captures 90% of sales via the "Buy Box," it harms competition even if prices are low.

Data, Privacy, and Regulation:

• Tyler Cowen warned that European privacy laws (GDPR) could cement the dominance of big tech by creating a regulatory moat that small startups cannot afford to navigate, effectively killing data portability and interoperability.
• Zingales advocated for "data portability" and "number portability" as tools to increase competition, arguing consumers should own their transactional data and easily transfer it between competitors (e.g., banks).
• Hubbard disputed Cowen's view on GDPR, stating the regulation forces "affirmative consent" for tracking, which dismantles the "360-degree view" currently monopolized by Google and Facebook, thereby leveling the playing field.
• Delrahim noted that the DOJ views collected data as a company asset if it improves the product, but acknowledged the market may shift toward subscription models where consumers pay to keep their data private.
• Cowen expressed concern about the "Big Brother" risk of concentrated data, noting facial recognition and voice search could enable unprecedented surveillance by private entities.

Voice Search and Future Risks:

• Panelists identified voice search (Alexa, Google Assistant) as a critical new battleground where a single result could be more dangerous than a web page ranking, with Amazon already testing biases toward its own products (e.g., batteries).
• Delrahim highlighted that voice search creates unique challenges for antitrust analysis because "recoupment" is harder to prove when products are free, requiring new analytical frameworks for predatory pricing.

Common Carrier Regulation and Policy Recommendations:

• Delrahim warned that if competition cannot be restored through antitrust enforcement, regulators may be forced to treat tech platforms as "common carriers" or utilities, subjecting them to equal access and rate regulation.
• Zingales suggested that while he prefers dynamic competition, a "utility regulation" approach (like the EU's equal treatment remedy) is a necessary fallback if anti-competitive conduct prevents new entry.
• Hubbard proposed "interoperability" (allowing data flow between networks) and "data portability" as regulatory fixes to enable multi-homing and break the network effect lock-in.
• The panel discussed the potential for a "right to be forgotten" or data ownership model similar to the 1974 Buckley Amendment for student records, allowing consumers to explicitly trade data privacy for service or fees.