United States

By Ian Brown. Last updated 31 December 2022

The Biden administration, and Congressional representatives from both parties, have promised significant competition reforms relating to digital markets. Biden appointed reformers to key posts in the Federal Trade Commission and Department of Justice, and in July 2021 issued an executive order entitled Promoting Competition in the American Economy. This included 72 initiatives across the federal government, including vigorous antitrust enforcement focused on labour, agricultural, healthcare and technology markets. 

The order announced a policy of “greater scrutiny of mergers, especially by dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by ‘free’ products, and the effect on user privacy.” The US administration also plans closer regulatory cooperation with the EU via their joint Trade and Technology Council, which first met in Pittsburgh on 29 September 2021.

Following a 16-month investigation, the US House of Representatives antitrust subcommittee introduced five bipartisan antitrust bills in June 2021 targeting the largest “critical trading partner” search, marketplace and user-generated content platforms (with at least 50m monthly active US users/100,000 business MAUs and market capitalisation > $600bn), alongside an additional bill on states’ rights to bring cases. Senators Klobuchar, Blumenthal and Lee also presented antitrust bills. 

Bill	Objectives	Timeline
American Innovation and Choice Online Act H.R.3816 (Rep. Cicilline); S.2992 (Sen. Klobuchar)	Bans discriminatory conduct by covered platforms, including self-preferencing and using their ability to “pick winners and losers” anticompetitively	(House) Ordered to be reported 24/6/21; Placed on Senate Legislative Calendar under General Orders 2/3/22
Platform Competition and Opportunity Act H.R.3826 (Rep. Jeffries)	Bans acquisitions of “competitive threats” or firms expanding/entrenching market power by covered platforms	Ordered to be reported 24/6/21
Ending Platform Monopolies Act HR3825 (Rep. Jayapal)	Gives the antitrust enforcement agencies a new tool to sue to break up a line of business from a covered platform	Ordered to be reported 24/6/21
Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act H.R.3849 (Rep. Scanlon)	Mandates data portability and interoperability via open APIs for covered platforms	Ordered to be reported 24/6/21
Merger Filing Fee Modernization Act H.R.3843 (Rep. Neguse, also S.228)	Increases Department of Justice (DoJ)/Federal Trade Commission (FTC) income from merger fees for antitrust enforcement	Measures included in Consolidated Appropriations Act, 2023
State Antitrust Enforcement Venue Act H.R.3460 (Rep. Buck)	Prevents state antitrust actions being transferred to federal courts	Measures included in Consolidated Appropriations Act, 2023
Competition and Antitrust Law Enforcement Reform Act S.225 (Sen. Klobuchar)	Require parties to mergers significantly increasing concentration, or extremely large, to bear burden of showing not anti-competitive; prohibit certain exclusionary conduct; enabled DoJ/FTC to seek civil monetary penalties for Sherman Act violations	Referred to Senate Judiciary Committee 2/4/21
Tougher Enforcement Against Monopolists Act S.2039 (Sen. Lee)	Consolidating antitrust enforcement in DoJ; new merger presumptions; safe harbour for data portability and interoperability efforts	Referred to Senate Judiciary Committee 14/6/21
Open App Markets Act S.2710 (Sen. Blumenthal, also H.R.5017)	Limits company controlling app stores with 50m+ users from requiring use of its own payment system, requiring most favoured terms, interfering with legitimate business communications with customers, using non-public information to compete, blocking alternative app stores, self-preferencing in search, and closing API access	Placed on Senate Legislative Calendar under General Orders 17/2/22

The House antitrust subcommittee bills faced opposition from technology-firm supported trade groups and Californian Democrat representatives. While they received some Republican support, the New York Times also reported the House Speaker was under pressure to slow consideration of the bills.

In September 2021, 58 civil society groups wrote to the House Speaker and minority leader supporting the six bipartisan bills marked up by the House Judiciary Committee, noting broad public support in recent polling and encouraging their passage. Thirty-two state attorneys general have also written to Congress supporting these six competition reform bills. Bipartisan companion bills continue to be introduced in the Senate, alongside additional bills such as the Filter Bubble Transparency Act, supported by civil society.

The chair and ranking member of the House antitrust subcommittee wrote in October 2021: “Congress has a choice. We can either enact these meaningful reforms—along with others that will protect users’ privacy and safety online—or we can continue to hold hearings and debate the problem as nothing changes.”

The Biden administration wrote to members of Congress supporting the American Online Innovation and Choice Act (AOICA), and proposed a budget increase of $227m for antitrust enforcement by the Department of Justice and Federal Trade Commission. While the Senate agreed a merger assessment fee increase of roughly $350m a year in the final days before the Republicans took over the House in 2023, and restricted the transfer of cases brought by state attorneys-general to other districts, the Majority Leader Chuck Schumer would not allow a vote on the popular AOICA or Open App Markets Act.

Civil society advocacy

As well as legislative reform, civil society groups such as the Open Markets Institute, Public Knowledge, Public Citizen, the American Economic Liberties Project, and the Electronic Frontier Foundation have pushed for stronger enforcement action (welcoming the appointment of antitrust reform expert Lina Khan as FTC chair and the nomination of Alvaro Bedoya, advocating against mergers, and supporting federal and state lawsuits) and called for Big Tech companies to be broken up and regulated. EFF has worked both in the US, and closely with EU groups, on interoperability mandates for the largest platforms.

Groups including Public Knowledge and Open Markets strongly advocated for the successful US Senate confirmation of Department of Justice Assistant Attorney-General for Antitrust Jonathan Kanter (also welcomed by Economic Liberties), as well as Federal Communications Commission (FCC) chair Jessica Rosenworcel, and in favour of the nominations to the Federal Trade Commission (FTC) of Alvaro Bedoya (which was finally approved in May 2022) and FCC of Gigi Sohn (still stalled, limiting the ability of the FCC to make decisions).

Key enforcement actions

In October 2020, the US Department of Justice (DoJ) and 11 states filed a lawsuit alleging illegal monopolization by Google of search and search advertising markets. The judge has indicated the case will not go to trial until 2023. (Axios noted the 1990s DoJ case against Microsoft took five years, and 13 years against IBM in the 1970s.)

38 state and territory Attorneys-General (AGs) filed a parallel complaint in December 2020, alleging Google disadvantages specialised search engines by favouring its own results, and extends its search monopolies into new markets such as smart speakers. It has been consolidated and will go to trial in 2023 if it survives a motion for summary judgment.

The District Court for the District of Columbia will allow the FTC lawsuit against Meta to proceed, which was applauded by Public Knowledge. And sixteen economists have submitted an amicus brief in the appeal of the New York-led case against Meta in the same district.

Games developer Epic has filed lawsuits in federal court against Apple and Google over restrictions on the use of alternative in-app payment systems imposed by both companies’ app stores. In September 2021, the trial judge ruled Apple was not a monopoly, but had violated California’s unfair competition law by preventing developers notifying users of alternative payment methods. The Ninth Circuit Court of Appeals stayed enforcement of part of the injunction granted, allowing Apple to continue requiring apps to use its own payment system (and charging up to 30% commission) until the appeal is heard. Epic filed an opening brief on 20 January.

The US Department of Justice, 35 state attorneys, Microsoft, civil society organisations, and a group of 38 law, economics and business professors also filed amicus briefs. Microsoft said: “If Apple is allowed to step between any company with online services and users of iPhones, few areas of the vast mobile economy will be safe from Apple’s interference and eventual dominance. Consumers and innovation will suffer — indeed, they already have.” 

Apple has also recently agreed with developers bringing a class-action lawsuit to relax some app store restrictions, relating to developers communicating directly with customers about alternative payment options, to base app store search results on objective criteria, and to create a $100m fund for small US developers. The same judge must approve the settlement. 

On 25 October 2021, the FTC announced it would rescind a 1995 policy statement and reinstate its previous policy of requiring prior approval for all acquisitions in relevant markets from parties pursuing anticompetitive mergers, for at least ten years. FTC Chair Lina Khan and the US Assistant Attorney General for Antitrust, Jonathan Kanter, gave speeches to launch an FTC and DoJ joint public inquiry into their merger guidelines on 18 January 2022.

Digital markets are one area of focus, with the agencies “seek[ing] information on how to account for key areas of the modern economy … which often have characteristics like zero-price products, multi-sided markets, and data aggregation that the current guidelines do not address in detail.” The Open Markets Institute welcomed these reforms. The two agencies also announced a collaboration with the UK’s competition authority, stating: “Deeper recognition of our common cause of tackling anticompetitive conduct and mergers opens up possibilities for us to implement robust cross-border enforcement regimes and achieve success in ways that would elude individual agencies working alone.”

AAG Kanter gave a further speech to the New York Bar on 24 January 2022, where he notably said: “merger remedies short of blocking a transaction too often miss the mark. Complex settlements, whether behavioral or structural, suffer from significant deficiencies. Therefore, in my view, when the division concludes that a merger is likely to lessen competition, in most situations we should seek a simple injunction to block the transaction. It is the surest way to preserve competition.”  

Following the collapse of Nvidia’s attempted acquisition of Arm, the FTC released a statement from its Bureau of Competition Director, noting: “This result is particularly significant because it represents the first abandonment of a litigated vertical merger in many years… [and] for the cooperation between FTC staff and competition agencies in the European Union, United Kingdom, Japan, and South Korea.” 

FTC Director Lina Khan and Assistant Attorney-General Jonathan Kanter both gave significant speeches at the March 2022 CRA conference in Brussels. Khan welcomed the EU’s Digital Markets Act, and told the event: “After two decades during which we witnessed an open and dynamic internet morph into a set of fiefdoms controlled by a small number of digital giants, we now see transatlantic efforts to tackle this new era of monopoly power…. practices like self-preferencing and blocking interoperability are or should be unlawful.” Kanter announced important changes in enforcement policy addressing “moats” built around dominant platforms, and noted:

Today, citizens have too little choice in many digital markets. Citizens have too little choice where they get their information, or who takes and uses their personal data. They have too little choice which algorithm will decide what news is promoted across the culture. They have too little choice how to interact with their social network online. This threatens democracy and puts at risk economic progress and prosperity. It stifles open markets and competition.

Jonathan Kanter, US Assistant Attorney-General for Antitrust

Rohit Chopra, director of the Consumer Financial Protection Board, stated he plans to make use of “unused rulemaking” authority to implement open banking and consumer control of data. 

The FTC is seeking to block Microsoft’s $68.7bn acquisition of games designer Activision Blizzard. In a detailed review of Microsoft’s decades of antitrust tangles by Vox, Open Markets analyst Daniel Hanley commented: “It’s about what can Microsoft do with its portfolio of products and services, with this company, against its rivals and for the market? And what will happen to the market after Microsoft does this?” Public Knowledge’s Alex Petros blogged about the competition risks, noting: “Microsoft claims that they want gamers to be able to play whatever games they want on whatever device they happen to have. Their commitments around fairness in app stores are encouraging, but we need far more than self-enforced business commitments—we need vigorous antitrust review.”

Acknowledgment: this update was commissioned by Open Society Foundations.