With just three weeks into 2021, those of you who have been following the Antitrust field, know that a lot has happened in a short amount of time.
One great thing about 2020 was that the exposure of the antitrust field was greatly magnified, with the House Judiciary Antitrust Subcommittee investigating four BigTech leaders and releasing a 450 page report with their findings and recommendations, as well as cases against Google and Facebook (More on this below). With the COVID-19 pandemic, these agencies also announced an expedited review process for COVID-19 requests, and compliance during public health emergencies. Among other things in 2020, the DOJ and FTC also outlined vertical merger guidelines, which reflect “significant changes in enforcement policy” and “new learning.” The FTC, in fact, brought more merger challenges in 2020 than it had in the past 19 years. In mid-December, the FTC issued orders to nine digital companies (Amazon, ByteDance, Facebook, Reddit, Snap, Twitter, WhatsApp, and YouTube) to learn more about their data collection practices, to answer questions including but not limited to: how do these companies “collect, use, track estimate, or derive” personal information, how their ad preferences algorithms operate, and how they measure user engagement.
- Resignations: Both Makan Delrahim and Joseph Simons resigned from their positions at the DOJ Antitrust Division and the FTC respectively, ahead of the change in administration
- Delrahim called for antitrust reform on his way out, offering a list of antitrust legislative reforms, including creating a rulemaking board for digital markets
- President Biden nominated Commissioner Rebecca Slaughter, and she is now Acting-Chairman for the FTC.
Google: Not only is Google facing an antitrust suit from the Justice Department, but 38 states and territories are also filing a suit against the big tech company, alleging monopolistic conduct in their search practices. Google emphasizes that their free services help countless consumers around the world and while antitrust regulators allege they have a monopoly, Google insists that consumers choose their product because of their innovation and technology and not because there are no other alternatives. The answer to this question will take some time; U.S. District Judge Amit Mehta has set a tentative trial date for September 13, 2023. The critics who are worried that antitrust moves too slowly to regulate an everchanging digital economy might be right; a lot can change in the next two years.
Facebook: Soon after the aforementioned House report, Facebook has been hit with suits from the FTC and various states, alleging illegal monopolies. A common understanding in the antitrust community is that the Microsoft settlements over 20 years ago paved the way for BigTech to be the way it is now, and some say that action is past due. This is not the first time that Facebook has been under scrutiny. Facebook purchased Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion. Though the government did not stop the acquisitions then, nothing stops them from stepping in now to break up the alleged monopoly. The FTC is seeking a permanent injunction to divest the company of these acquisitions. Beyond the merits of the suit, I believe it to be a mistake for the FTC to bring their case against Facebook in federal court instead of using their internal adjudicative measures. While the efficiency of Part III proceedings have long been unfairly scrutinized for internal bias, the FTC has been criticized for not effectively using adjudicatory processes, and not taking advantage of those procedures is a mistake. While there are incentives and drawbacks to both, the FTC is demonstrating that when they are bringing an “important case,” they do not use the very administrative system that the FTC was created to use. In the complaint, the FTC states that they made this decision because “it has reason to believe that Defendant Facebook is violating or is about to violate a provision of law enforced by the Federal Trade Commission, and this is a proper case for permanent injunctive relief.” However, administrative law judges’ decisions are appealable. The vote to file the suit in the U.S. District Court for D.C. was 3-2, with then-Chairman Joe Simons with Commissioners Rohit Chopra and Rebecca Slaughter in the majority, and Commissioners Noah Phillips and Christine Wilson dissenting.
Amazon and E-Books: When someone says “antitrust” and “e-books” in the same sentence, most people are transported back to 2012, when the DOJ sued Apple for price-fixing e-books. In that case, Apple settled for over $400 million dollars, and the “Big Five” publishers settled “for millions more.” History does tend to repeat itself, though in different ways, as a class-action lawsuit was filed January 14, 2021, against Amazon.
Staples: An ever-persistent Staples has attempted to buy rival Office Depot for the third time in early January for $2.1 billion. In both 1996 and 2015, Staples was “blocked by federal antitrust regulators.” This time, however, Staples addressed the FTC’s concern in 2015 by indicating to Office Depot in their offer letter they will sell the commercial business during the takeover. before the federal regulators could block the acquisition, Office Depot itself rejected Staples offer, but is still open to other acquisitions.
Tyson Foods and Pilgrim’s Pride Corp: Tyson Foods and Pilgrim’s Pride Corp have been facing antitrust litigation for their price-fixing scheme to inflate chicken prices. January 11, Pilgrim’s Pride, owned by Brazil’s JBS SA, disclosed they will pay $75 million for their settlement. On January 20, 2021, Tyson Foods agreed to settle all their class-action claims and will “pay an aggregate of $221.5 million.”
Visa and Plaid Merger: In November 2020, the DOJ filed a suit to block Visa’s proposed $5.3 billion acquisition of Plaid, a “data network that enables individuals to connect their financial accounts to the apps and services they use to manage their financial lives.” Critics are concerned that fintech startups face a uphill battle going forward. Visa has since abandoned their acquisition of Plaid.
Antitrust regulation will no doubt continue in the upcoming year. With a new president, a new antitrust enforcement regime begins, and time will only tell what will unfold.
Thank you everyone for taking the time to read my antitrust post and trying something new. This was actually the first post I’ve written on this blog related to legal content, so I greatly appreciate your interest! Thank you to Judge Williams for encouraging me to write this post and thank you to Professor Kovacic for furthering my passion for antitrust! I would love to hear your thoughts below and if you would like to talk more about Antitrust, then please connect with me on Twitter!