How Trump’s antitrust officers can tackle Big Tech and keep America innovative
As the Trump administration takes shape, one key question with implications for consumers across America is how it will handle Biden-era antitrust cases against Google, Amazon, Meta and other tech giants.
The Department of Justice and Federal Trade Commission appear ready to regulate mergers, acquisitions and innovative technologies more pragmatically than former President Joe Biden’s aggressive antitrust officials did. At the same time, they are expected to spearhead the Trump administration’s fight against purported abuses by large tech giants and platforms, including the suppression of conservative speech and business practices they believe harm consumers and “little tech” firms.
Striking the right balance between punishing anticompetitive behavior and allowing companies to leverage their scale to satisfy consumers would be a win for innovation and prosperity. Getting the balance wrong would cost U.S. consumers, do nothing for small businesses and make America less competitive with tech rivals like China.
Let’s start with Google, which is subject to two Justice Department antitrust cases. It is appealing a district court ruling that it illegally maintains its 90 percent-plus market share in searches by paying browsers like Apple’s Safari and Mozilla Firefox to make its engine their default, thereby circumventing rivals such as Microsoft’s Bing. The judge, however, acknowledged that Google gained dominance with a superior product and feedback from its users.
Proposed remedies, like forcing Google to sell its search engine or its Chrome browser (as Biden's Justice Department requested) would destroy its consumer-favored, integrated services. This would harm users and competition, something Trump recognizes. Banning Google from making default agreements is a more subdued option. However, this may lessen competition among browsers since Firefox and others would lose key revenue, ironically weakening their ability to challenge Chrome.
Forcing Google to release its search indexation data would likely help competitor search engines improve. Yet under this precedent, would Google (or its competitors) invest in improving products or gathering data that they may have to share?
Enforcers must weigh all this when deciding what to request next from the courts. Importantly, the Department of Justice was spared from having to demonstrate that rival engines have a realistic chance of becoming competitive against Google absent the default agreements — an error that could see the result overturned.
The other Google case is for alleged abuse of a monopoly in three layers of digital advertising. The Justice Department argues that Google harms its customers by forcing them to use its full stack of three different ad services through an anticompetitive tying arrangement, allowing it to charge excessive prices. Google says customers aren’t forced to use all services and that bundling is efficient and beneficial.
Here too, enforcers should tread carefully. Even if the court accepts the Justice Department’s prior narrative — including that Google is a monopolist despite competition from social media, websites, streaming services and apps — forcing Google to abandon some ad services could destroy any efficiencies or product improvements that integration allows.
This would deter firms from investing in innovative advertising tools, require “middlemen” to bridge gaps between unintegrated platforms, and raise customer costs, an outcome that would harm small businesses, including “little tech.” It’s also why blocking specific practices, based only on evidence of real harm, is preferable to structural breakups.
Such evidence may be hard to come by in the FTC’s case against Amazon. Amazon encourages sellers to offer lower prices on its platform than anywhere else through a “buy box” feature that expedites the ordering process. The FTC has argued that this reduces competition by incentivizing sellers to offer higher prices than they otherwise would when selling outside Amazon. However, it also increases Amazon’s value to consumers as a one-stop shop and helps sellers and customers enjoy low shipping costs.
Finally, Biden’s FTC argued that Meta illegally formed a monopoly by acquiring Instagram and WhatsApp, but relied on a market definition that excludes ongoing Meta competitors, including LinkedIn, YouTube, X and others. Some have gained prominence after Meta’s acquisitions, making the FTC’s claim especially tenuous and perhaps a waste of agency resources.
Unwinding Meta’s acquisitions, however unlikely at this point, might mean a new trophy in the FTC’s pool room. There’s little reason to think it will mean product improvements or limit future governments’ ability to pressure companies into suppressing information or dissent.
New FTC Chair Andrew Ferguson recently criticized an FTC study for speculating without sufficient evidence on how partnerships between big tech and AI startups could harm competition. Hopefully, the whole administration will mix vigilance toward legitimately anticompetitive behavior with a better understanding of how business partnerships can unite big tech’s customer-reaching, price-lowering resources with new ideas and technology provided by startups.
Trump’s enforcers should apply this pragmatism in choosing which cases to continue. Tough stances against big tech have populist appeal and wrongdoers should be punished. However, unwinding competitive companies for narrow or debatable violations is a cure worse than the poison.
Satya Marar is a visiting postgraduate fellow at the Mercatus Center at George Mason University specializing in competition, innovation and governance.
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