Antitrust enforcement has transformed in recent years, bringing tech giants under heightened scrutiny from regulators globally. Investigations by the Federal Trade Commission (FTC) and Department of Justice (DOJ) have pushed antitrust policy to the forefront. This has raised questions about competition, innovation, and consumer protection in the digital age. With platform-driven business models and global digital markets, regulators face a more complex enforcement landscape. In this episode, GovExperts Insights host Chris Britton is joined by The Competitive Enterprise Institute Director, Jessica Melugin, who is an expert on technology policy, antitrust and competition in digital markets, and the impact of regulatory interventions on innovation and free-market economics.
Meet the Expert
A key voice in this conversation, Jessica Melugin, Director of The Competitive Enterprise Institute, offers extensive expertise in technology policy. Leading initiatives in antitrust enforcement, online privacy, artificial intelligence, and telecommunications regulation, Melugin has become a prominent figure in policy discussions affecting today’s tech industry. Her insights are regularly featured in esteemed publications such as The New York Times, Wall Street Journal, Financial Times, Bloomberg Law, and National Review. Beyond her institutional role, her deep understanding of antitrust and competition policy earned her recognition as an Innovators Network Foundation Antitrust and Competition Policy Fellow in both 2022 and 2023.
With an academic background from Claremont McKenna College, where she graduated magna cum laude in government and art history, Melugin’s honors thesis focused on the evolution of American antitrust law, with a particular emphasis on the Microsoft antitrust case. Her career path includes contributions to the Manhattan Institute and the American Enterprise Institute, two influential think tanks. Her insights inform the current discourse, providing valuable perspective on the dynamic intersection of technology and regulatory policy.
Evolution of Antitrust Policy
American antitrust policy has evolved since the Sherman Antitrust Act of 1890 and the Clayton Act of 1914. This is shown in high-profile cases like the 1911 breakup of Standard Oil setting early precedents. The 1982 AT&T divestiture further shaped antitrust enforcement, while the 1970s’ consumer welfare standard, introduced by Robert Bork, prioritized price effects, efficiency, and competition. This standard emphasized practices favorable to consumers, even if they harmed competitors. The 1990s Microsoft case marked a turning point in tech-related antitrust policy, influencing today’s regulatory approach.
Current Landscape: Big Tech and Antitrust
Antitrust investigations have surged in recent years, especially in tech. The DOJ and FTC focus on market leaders like Google, Meta, Amazon, and Apple. The Google antitrust and Apple antitrust both center on accusations that the tech giants use monopolistic practices. Google’s in online search and advertising, and Apple’s in app distribution and digital payments—to stifle competition and maintain dominant market positions. Other cases involve Meta’s acquisitions of Instagram and WhatsApp, Amazon’s marketplace practices, and Apple’s dominance in the smartphone market. These cases spotlight the challenges of regulating digital markets, where network effects, data advantages, and platform economics complicate traditional definitions of market power.
The Role of Consumer Welfare in Antitrust
For five decades, the consumer welfare standard has guided antitrust enforcement, focusing on price effects, output, product quality, and competition. This approach allows practices that benefit consumers, even at competitors’ expense. However, recent criticism suggests it overlooks issues unique to digital markets. Assistant Attorney General Jonathan Kanter advocates replacing it with a “competition and competitive process” test, arguing that the consumer welfare standard fails to address the impact of data privacy and long-term competition in tech.
Federal vs. State Antitrust Actions
Federal and state authorities share antitrust responsibilities, though priorities sometimes diverge. The State Antitrust Enforcement Venue Act of 2022 allows state attorneys general to litigate in their own courts, adding regulatory complexity and raising compliance costs for businesses. The T-Mobile and Sprint merger illustrated this dynamic, with some states joining federal agencies in reviewing the merger and others pursuing separate litigation. The DOJ stresses the importance of national interests, seeking coherence in enforcement strategies.
Global Comparisons: EU vs. U.S. Approaches
The U.S. and European Union pursue competition but differ in approach. The EU, exemplified by its Digital Markets Act, enforces stricter requirements for tech platforms, focusing on competitor protection. The U.S. prioritizes consumer harm, requiring proof of adverse effects. EU regulations have led to major fines, like Google’s $8 billion penalty, prompting some firms to reassess their EU operations. These regulatory differences present challenges for companies navigating compliance in both regions.
Antitrust in Regulated Industries: The Case of Healthcare
Healthcare presents unique challenges for antitrust enforcement, with over 1,887 hospital mergers from 1998 to 2021. Mergers often raise prices 20-40% in concentrated markets, with minimal care quality improvements. The FTC and DOJ have intensified scrutiny in response to concerns about consolidation’s impact on prices and access. Recognizing limitations in traditional antitrust alone, the Biden Administration’s 2021 executive order highlighted market concentration among healthcare systems. This urged enhanced competition oversight.
Looking Forward: Antitrust at a Pivotal Moment
Antitrust enforcement is at a pivotal juncture as regulators confront new challenges presented by digital platforms and evolving business models. The FTC and DOJ recently updated merger guidelines, which include stricter scrutiny for mergers exceeding a 30% combined market share. It has an expanded focus on labor market impacts, and additional reporting requirements under the Hart-Scott-Rodino Act.
The Competition and Antitrust Law Enforcement Reform Act proposes increasing enforcement resources and enacting stronger prohibitions against anticompetitive conduct. These reforms aim to address rising concerns about market concentration and adapt antitrust tools to meet the demands of a rapidly changing landscape.
Conclusion
As technology and industry landscapes evolve, antitrust policy must also adapt. Balancing the traditional consumer welfare framework with the need to address unique digital market challenges is essential to promoting a competitive, innovative economy. The convergence of federal and state enforcement actions, coupled with the differing regulatory philosophies of the U.S. and EU, underscores the complexities facing modern antitrust policy.
Moving forward, regulators must find a balance between protecting competition and encouraging innovation. This is particularly important as artificial intelligence and other emerging technologies reshape industries. Achieving this balance will require flexibility and nuance, ensuring that antitrust policy effectively addresses consumer needs while fostering a healthy competitive environment.