Google, Apple, and a Turning Point in Antitrust Law

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The last few weeks will be remembered as a historic turning point in global efforts to regulate the digital economy. In the past few days alone, we have seen the beginning of the third US antitrust case against Google, as well as the EU ruling against Google and Apple.

Meanwhile, this summer, a federal judge ruled that Google’s search engine has an illegal monopoly, the FTC launched a groundbreaking investigation into online price discrimination, and Commerce Secretary Gina Raimondo — often seen as one of the more business-friendly members of the Biden administration — came out strongly in support of anti-monopoly efforts at the Democratic National Convention.

Add to that the French crackdown on Telegram founder Pavel Durov and Taylor Swift’s endorsement of Kamala Harris in a post rejecting online disinformation after Trump reposted AI deepfakes of her endorsing him, and it all made headlines around the world.

What’s the result? While it will take several years to build the regulatory structures and legislative solutions necessary to truly restore digital platforms to the common citizen, we can claim a certain narrative victory over the arguments that the largest tech platforms have been making to consolidate their power since the 1990s.

For example, it’s now become abundantly clear that no, Big Tech is not somehow unique among industries and doesn’t deserve special rules. And yes, digital commerce and communications should follow the same guidelines as their brick-and-mortar counterparts.

This philosophical shift began with two federal rulings declaring Google an illegal monopoly. The third Google case, which began last Monday, will go further, shedding new light on the online advertising system. It should expose the power asymmetry that exists between Google and content creators and advertisers, as well as how surveillance capitalism as a whole has created the conditions necessary for companies of all stripes to algorithmically discriminate against their own customers.

Take the first point. Google’s ability to police publishers and advertisers allows it to potentially undercut the advertising rates of various competitors in order to strengthen its own advertising business.

But Google’s surveillance extends beyond advertisers. As a digital intermediary, it can collect information about almost everything we do online—work, play, access government services, talk to doctors, families and banks, book holidays, buy homes, go to college.

This information can then be used by advertisers to quote us different prices for different products and services. Have you ever felt like you pay more for hotels, for example, because you’re a business traveler used to paying the full freight charge on an expense account? You probably do, and if so, it’s illegal.

As the FTC said in a recent statement launching an in-depth investigation into algorithmic price discrimination, while the transparent use of freely available information to set prices for products and services is normal, “data collection has now become commonplace across devices from smart cars to robotic vacuum cleaners to the phones in our pockets. Many of today’s consumers are unaware that their devices are constantly collecting data about them and that this data can be used to charge them more for products and services. The age-old practice of targeted pricing is now giving way to a new frontier of surveillance pricing.”

The new investigation overlaps with several Justice Department cases brought by top U.S. antitrust enforcer Jonathan Kanter, who has brought a record number of cases during his tenure. More important than breadth is approach. His department got ahead of issues like algorithmic pricing before private actors could build a track record of legal victories in lower courts that would have made it harder.

In 2022, Kanter launched what he calls Project Gretzky, named after hockey great Wayne Gretzky because, as he says, “what made Gretzky great was that he didn’t go where the puck was, he went where the puck was going.” When you’re dealing with large tech platforms that can leverage network effects to create competitive moats around areas entirely outside their own industries—like healthcare, food, automotive, or AI—that kind of foresight is key.

It will be years before a practical victory is declared, as battles are fought on a case-by-case basis in industries from retail to agriculture, housing to insurance. These battles will dovetail with other policy areas, such as reforming the global trading system and adopting new rules for digital trade, or with national security concerns (digital espionage and bottlenecks are a major concern for many governments around the world).

Still, the critical point is clear. And while Harris has been sympathetic to Silicon Valley, I suspect that regulatory efforts will continue if she wins, in part because of her concerns about civil liberties and discrimination. Big Tech’s business model has allowed individuals to be divided, sliced, and discriminated against in countless ways. That’s starting to change now. As these cases make clear just how problematic that model is, and in how many ways it affects our lives, I suspect that digital regulation will eventually catch up.

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