Slate: Biden’s FTC Can Do More Than Sue Tech Companies. It Can Regulate Them.
2020 has been a turning point for antitrust enforcement: The House completed an extensive bipartisan investigation finding monopolies in several digital markets, Facebook is facing two lawsuits from the Federal Trade Commission and 48 state attorneys general, and Google is facing three; the third suit, from 38 state attorneys general, was announced Thursday. The antitrust enforcers Biden nominates should build on this momentum. The next chair of the FTC will have an opportunity to initiate new rules defining “unfair methods of competition,” a tool that the agency has historically been reluctant to use. While small businesses have been hit hard by the pandemic, COVID-19 has accelerated the dominance of the tech giants—Google, Amazon, Facebook, and Apple—with all of them reporting record-breaking growth in 2020. Now is the time for assertive action to promote competition, and the FTC should use its rulemaking authority to regulate anticompetitive practices in the tech industry.
The FTC’s Facebook complaint makes the case that the company has a monopoly in social networking, arguing that its acquisitions of Instagram and WhatsApp were anticompetitive. The complaint also details the anticompetitive conditions Facebook imposed on third-party software developers’ ability to be interoperable with its platform. Facebook only made application programming interfaces accessible if the developers agreed not to create functions that competed with Facebook’s offerings. One well-known example is the video app Vine, which let users connect with one another by using Facebook’s “Find Friends” API. But hours after Vine’s official launch, Facebook cut off its access. Rather than compete with apps like Vine on the merits, Facebook intentionally limited the competition.
The FTC could change this by creating regulations to rein in anticompetitive practices and prevent companies from monopolizing markets. FTC Commissioner Rohit Chopra and antitrust scholar Lina Khan have argued that agency rulemaking defining unfair methods of competition would enhance the predictability, efficiency, and transparency of antitrust enforcement.
Facebook is not and will not be the only company to engage in the anticompetitive practices alleged by the complaint. The FTC has the authority to define these as “unfair methods of competition,” creating bright-line rules for all companies to follow. This would help avoid the necessity to bring similar cases in the future.