By: John Garrasi
It is the dawning of a new age for American antitrust law. Led by the idealistic Lina Khan as head of the FTC, idealists and regulators alike find themselves gearing up for the biggest fight in a generation. In the more than two decades since the Department of Justice’s last battle against a titan of the tech industry, a new ideology has emerged among the emerging class of law school graduates. Fueled by a stark reality of economic inequity laid bare by the recession of 2008, and the ever-widening wealth gap between the haves and the have-nots, the American ideals of competition are realizing a reinvigoration of fighting spirit once shown by the likes of Teddy Roosevelt and Louis Brandeis.
While the Sherman Act of 1890 sought to return power to the people from clutches of cartels seeking to consolidate their power and forever dominate the American economy, antitrust regulation has largely remained absent from the tech sector in the last several decades. However, under Lina Khan’s leadership, the FTC has been quietly waging what some consider to be a holy war against Big Tech. In the short time since her 2020 appointment by President Biden, Khan has initiated a slew suits alleging breach of antitrust laws against Google, Amazon, and Meta, signalling the opening shots in a fight for the future of US domestic competition policy. Three years since her appointment, Khan shows no hesitation to take on the largest players in one of the biggest industries on the planet.
Yet, the biggest battle may lie ahead. The DOJ has recently concluded a multi-year investigation of Apple and its practices, signalling that a suit may be filed as early as the first quarter of this year. While there appears to be no indication that regulators are concerned with how Apple achieved its position atop the Big Tech heap, the real focus is on how Apple’s design of both its hardware and software platforms precludes the potential for competitors to enter the same market and gain customers. As a result, Apple is allowed to charge customers a premium for the privilege of using their products.
Historically, Apple has avoided the worst of antitrust regulators on a global scale. Recently, Apple has settled with Australian, European, and Russian regulators in an effort to avoid more serious consequences. However, recent judicial decisions allowing class certification for claims alleging anticompetitive practices signal a changing of the tides, and not in Apple’s favor. While previous suits have quietly been settled to avoid public scrutiny, the building momentum of Khan’s FTC and the building reputation of Apple as a monopoly are seemingly beginning to take a toll on public perception.
Regulators are likely to face one of the more challenging cases to prove in antitrust history. In reality, Apple represents one of the most beloved brands for consumers, who are often referred to as one of the most loyal purchasing groups in recent memory. Apple will likely argue that their success, and repeat business from consumers, comes as a result of consumers simply choosing the best option among their many choices. Indeed early signs seem to point that the battle in the courtroom may be rivaled by the battle waged in the press, with the company seeking to frame the issue as one of consumer choice, and the government alternately making claims of consumer welfare. The FTC will also be forced to connect the dots on how this preference of consumers is directly related to Apple’s competitors’ inability to meaningfully challenge the Cupertino behemoth for a piece of the tech market. Obviously, there will be little sympathy for companies who simply cannot compete with the fact that they are, perceivably, unable to offer a superior quality product.
Most crucially, there is great uncertainty about what a remedy would look like in the face of a government victory. As one of the world’s most valuable companies, it seems farcical to suggest the appropriateness of fines, however large in scope they might be. The alternate seems even more difficult to imagine: A breakup between the software and hardware divisions of Apple would be complex, and breathtaking in scope. Whatever the solution, it seems equal only to the task of proving anticompetitive conduct in the first place.
Ultimately, Khan faces her greatest challenge yet to the new vision she has imagined for the competitive landscape in America. A victory against one of history’s most successful titans of tech will cement her legacy amongst those who have also carried the title of “Trust-Buster” in their quest to ensure fairness and free market principles are alive and well between consumers and corporations.
Student Bio: John Garrasi is a second-year student at Suffolk University Law School. He is a staff writer on the Journal of High Technology Law, and received a Bachelor of Arts degree in Political Science from the University of Massachusetts in Boston, Massachusetts.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
