US Department of Justice must make antitrust fit for the age of Big Tech

By The editorial board, Financial Times

Towards the beginning of the previous century, US antitrust regulators broke up Standard Oil. In the 1980s, they did the same to the telephone monopoly AT&T. Now, Big Tech is in their sights. The Department of Justice antitrust investigation announced last week could be a turning point for companies that have gone from plucky start-ups to key drivers of digital innovation to alleged threats to privacy and competition in the digital world — and beyond. The DoJ’s short statement said it would look at online platforms which have “reduced competition, stifled innovation, or otherwise harmed consumers”, and “proceed appropriately” if they have broken the law.

The decision could yet be an important step towards structural reform. It came just after the Federal Trade Commission levied a record-breaking $5bn fine against Facebook for its reckless data protection practices, as well as establishing ways for the company to better protect user privacy. The FTC’s decision failed, however, to assuage fears around the power wielded by the largest tech companies. If it wants to change this, the DoJ should adjust the bar for antitrust legislation. It should also engage with other bodies to maximise its impact.

Enshrining the new Brandeis school of antitrust thinking in law would provide a potent tool for competition. Since the 1980s, the standard for antitrust legislation has been whether customers are spending more than they should. This is no longer fit for purpose, given digital services increasingly cost long-term privacy rather than money.

Modern antitrust should centre on welfare and the threats posed by some of the largest online platforms to users’ political, economic and personal lives. Facebook’s purchase of WhatsApp and Instagram offered troves of data for targeting adverts while eliminating potential competition. Given these platforms are used for sharing news, it also increased Facebook’s power over what people read and watch.

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