- If government officials hope to successfully rein in the anticompetitive behavior of tech giants and other dominant companies, they need to reassess — and possibly revamp — the way they deal with antitrust enforcement, legal expert Gary Reback told Business Insider.
- Antitrust officials need to evaluate whether they have the right personnel on board to pursue cases and whether to bring in lawyers from outside, he said.
- They also need to figure out their strategy in pursuing and prosecuting cases, especially because the federal judiciary has severely limited what can be addressed through antitrust laws, he said.
- And government officials are going to need to think about how to update the antitrust laws to address today's competitive concerns — and the ways the judiciary has "gone off the rails," he said.
- Visit Business Insider's homepage for more stories.
Antitrust seems to be back in fashion as a topic of concern in Washington, DC, particularly after Congress harangued the heads of four leading tech companies earlier this summer about their alleged anticompetitive moves.
But any real effort to promote competition and constrain monopolies is going to require a major reassessment — and quite possibly a revamping — of laws, policies, and personnel, said antitrust law expert Gary Reback.
Federal judges, under the influence of conservative, pro-market academics, have significantly restricted what counts as anticompetitive behavior. Meanwhile, it's unclear after years of bringing few antitrust cases whether the Department of Justice and Federal Trade Commission have the personnel they need to step up enforcement, Reback said.
The next Congress and whichever administration is in office next year are "going to have to figure out almost from scratch how they're going to enforce the antitrust laws," Reback told Business Insider in a recent interview.
Antitrust enforcement appears to be coming to a head. Federal enforcement officials and state attorneys general have been investigating four of the tech giants — Apple, Amazon, Facebook, and Alphabet — for more than a year. The Department of Justice reportedly is gearing up to file a suit against Alphabet — the parent company of Google — by the end of this month.
But US enforcement authorities could run into trouble prosecuting those cases due to a lack of qualified personnel and skeptical federal judges, said Reback, who represents companies that have made antitrust complaints with the FTC about some of the tech giants.
The government lacked litigators when it took on Microsoft
The personnel problem is not a new one. As far back as the Microsoft trial 20 years ago, it was apparent that the federal government was lacking litigators who could prosecute antitrust cases, said Reback, whose work with companies harmed by the software giant's anticompetitive actions helped prepare the ground for the government's case.
The Justice Department tapped an outside litigator — David Bois — to lead its prosecution of the case. Meanwhile, the team of in-house layers the agency assembled to put together the case was based in San Francisco, even though the trial took place in Washington, D.C.
"I'm telling you, even back then it was a struggle within the Antitrust Division to find … a good team to support Bois," Reback said. "You might logically argue," he continued, "'well, weren't there lawyers in Washington in the Justice Department that could have done this?' And the answer is no."
The Department of Justice seems to have the ability to conduct a thorough antitrust investigation, Reback said. But it's unclear whether it has the personnel in place to litigate a case against Alphabet or any of the other tech giants, he said. It may well have to bring in outside attorneys, just like it did with the Microsoft case, he said.
But personnel isn't the only thing antitrust enforcement officials need to evaluate — and not the only reason why they might conclude they need to hire private attorneys to litigate cases, Reback said. They also need to think long and hard about strategy.
Antitrust officials are going to need to convince a skeptical judiciary
The federal judiciary, under the influence of pro-laissez faire economists, has constrained the definition of what counts as illegal anticompetitive behavior. Over the last 40 years, judges and federal enforcement officials have largely discarded other competitive concerns and refocused antitrust enforcement on the issue of whether consumers have been harmed by having to pay higher prices.
If they're going to be at all successful in taking on the Big Tech companies, antitrust officials are going to have to figure out how to combat that mindset, Reback said. One tactic the heads of the Antitrust Division and the FTC should take is to become "evangelists" to the judiciary about the need to constrain these companies, he said.
"Somebody has to try to explain to Republican judges that we're in an unprecedented situation here," Reback said. He continued: "Even if you come from the position that you don't like government intervention in the economy … we have here a set of circumstances that is different than anything that we've experienced before and that really does need your attention."
But that need to convince conservative judges could be another reason for the DoJ to bring in outside litigators. Given the anti-government, anti-regulatory mindset of many federal judges, it's quite possible that a government attorney could make a solid case against one of the Big Tech companies and essentially be ignored because the attorney works for the Justice Department, Reback said.
Antitrust officials need to consider "would a judge be more likely o listen to an outside litigator like David Bois representing the government than they would somebody from the DoJ," Reback said. "They shouldn't, but is it likely that they would?"
New legislation could be needed
Government policymakers are also going to have to figure out whether and what kind of legislation might be needed to redirect the judiciary and better address the anticompetitive actions being taken by the giants in tech and other industries, he said. Even with the way the judiciary has limited the laws, it's still possible even today to go to court and win an antitrust case, he said. But it's difficult, and it's pretty clear to Reback, at least, that legislation is needed to address areas where judges have "gone off the rails" in terms of allowing anti-competitive behavior.
What's more debatable is just how much farther legislators should go in trying to curb today's monopolists. For his part, Reback favors legislation such as that put forward by Sen. Amy Klobuchar, D-Minn., that would essentially define a monopoly as a company that has more than 50% share of a particular market and would subject such companies' behavior to greater scrutiny.
He's not, however, in favor of legislation that such as that pushed by Sen. Elizabeth Warren, D-Mass., that would bar companies from both operating a platform or marketplace and competing against other companies on that same platform. Such a bill would bar Amazon, say, from hosting third-party retailers on its ecommerce site and selling goods on that same site. It might force Amazon to sell or close its marketplace.
"I would hate to have to do [Warren's approach], in part because it would cause so much dislocation," he said.
Regardless, new legislation is insufficient to curb the abuses of the tech giants, Reback said. Antitrust officials are going to need the right personnel, the right strategy — and the will to pursue cases.
"Even if there's from, my perspective, good legislation, by itself, that's not going stop anything. It's not going to change anything," he said. "You will need go into court, and you will need to figure out how to do that."
Got a tip about tech? Contact Troy Wolverton via email at [email protected], message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can alsocontact Business Insider securely via SecureDrop.
Source: Read Full Article