US antitrust enforcers must focus on ways to “unplug the monopolisation machine” across the digital sector rather than singling out individual forms of conduct in a single market, the head of the Department of Justice’s antitrust division has said.
Speaking at Fordham University School of Law’s annual antitrust conference on Friday, assistant attorney general Jonathan Kanter compared past monopolisation enforcement to a game of Whac-A-Mole. By the time enforcers address one form of anticompetitive conduct, two more problematic behaviours have taken hold, he said.
“No one ever really wins that game. The moles just keep coming,” Kanter said. “To stop them from popping up, you need to unplug the machine.”
Forty years ago, Kanter argued, lawyers often opposed antitrust enforcement based on the idea that monopolies would self-correct. But that approach is wrong today as monopolies in digital markets instead proved they could self-sustain market power, he said.
“Platforms that are collaborative become critical trading partners for entire industries and without competition have greater power to discourage rivalry,” Kanter said.
The assistant attorney general cited Verizon v Trinko as an example of how legal analysis should change while market realities change. In that case, the Supreme Court sided against Curtis Trinko, an AT&T customer who accused Verizon of violating Section 2 of the Sherman Act by providing him with worse service than it did to its own customers.
The highest court unanimously ruled in 2004 that the complaint alleging breach of Verizon’s Telecommunication Act duties to share its network with competitors did not state a claim under the Sherman Act.
But Kanter asserted that cases like Trinko do not have to lessen antitrust enforcers’ efforts to tackle monopolies.
“Digital platforms are profoundly different as they are built with ones and zeroes, not poles and wires, and they are collaborative by nature,” he said. “The underlying economic logic of Trinko, for example, will not apply in the same way to collaborative digital platforms that are built on interconnection.”
The assistant attorney general also touched on upcoming revisions to the FTC and DOJ merger guidelines, which President Biden has asked the agencies to update.
Kanter did not say when the new guidelines might be published. But he said the Antitrust Division would need to stop any mergers that “tend to create” a monopoly – language included in the Clayton Act that he claimed antitrust enforcers often ignore.
Kanter added that the DOJ must overcome its tendency to view deals on a horizontal or vertical binary, an approach the agency has for so long relied on. “Focusing on that distinction has sometimes screened out important information about mergers that entrench market power or tend to create a monopoly,” he said.
The assistant attorney general’s comments came the same day FTC chair Lina Khan said the commission was considering a new Section 5 policy statement to revive the part of the statute that was previously rejected in a 2015 policy.
“As enforcers, we of course must exercise discretion in deciding what cases to bring and how to use our limited resources,” Khan said. “But we cannot simply ignore the text of our governing statutes and our core congressional mandate.”
At a separate event at Georgetown Law last week, Kanter also argued that enforcers have often overlooked the actual text of US merger law and instead turned to complex economic models to try and predict whether a deal will result in higher prices.
Fordham’s annual conference concluded on Friday.
