State Enforcement of Antitrust Laws Against Technology Platforms

The concentration of market power among a small number of large technology platforms has prompted a renewed interest in antitrust enforcement at both the federal and state levels. Companies such as Google, Apple, Amazon, Meta, and Microsoft control critical infrastructure for digital commerce, communications, and information access. Their dominance has raised concerns about anticompetitive conduct including self-preferencing, exclusionary agreements, acquisition of nascent competitors, and the leveraging of dominance in one market to gain advantages in adjacent markets.

State attorneys general have played an increasingly prominent role in antitrust enforcement in the technology sector. Texas has been at the forefront, leading a multistate lawsuit against Google for alleged monopolization of the digital advertising market and participating in actions challenging other technology company practices. The Texas Free Enterprise and Antitrust Act provides state enforcement authority that parallels federal antitrust law but is not identical to it, and the state has its own enforcement apparatus, including the authority to bring civil enforcement actions, seek injunctive relief, and recover damages on behalf of consumers through parens patriae actions.

The Texas Free Enterprise and Antitrust Act, codified in the Texas Business and Commerce Code, prohibits agreements in restraint of trade, monopolization, attempted monopolization, and conspiracies to monopolize, using language that closely tracks the Sherman Act. Texas courts have generally interpreted the state antitrust statute consistently with federal antitrust law, though the state law is independent and courts are not bound to follow federal precedent. The state statute also prohibits unfair methods of competition and deceptive trade practices, providing additional enforcement tools not available under federal law.

The application of antitrust principles to digital markets presents unique analytical challenges. Traditional antitrust analysis focuses on market definition, market power, and anticompetitive effects. In technology markets, these concepts are complicated by multi-sided platforms, network effects, zero-price services supported by advertising, and rapidly evolving competitive dynamics. The opinion analyzes how the state's antitrust framework applies to these features, concluding that the fundamental principles of antitrust law are sufficiently flexible to address anticompetitive conduct in digital markets, even if the specific analytical tools must be adapted.

The opinion examines several specific theories of antitrust liability in the technology context. Self-preferencing, where a platform operator favors its own products or services over those of competitors on its platform, may constitute monopolization if the platform possesses monopoly power and the self-preferencing excludes competition. Tying arrangements, where a dominant platform conditions access to one product on the purchase or use of another, may violate antitrust law when the tying product possesses market power. Acquisitions of nascent competitors, which prevent the emergence of competitive threats before they mature, present enforcement challenges because the competitive harm is prospective rather than demonstrated.

Federal preemption does not bar state antitrust enforcement against technology companies. The Supreme Court's decision in California v. ARC America Corp. (1989) held that federal antitrust law does not preempt state antitrust law, and states may bring enforcement actions that supplement or parallel federal enforcement. The state action doctrine, which exempts certain state-regulated conduct from antitrust liability, is not applicable to technology companies because their activities are not regulated by the state in a manner that displaces competition.

Texas has broad authority to enforce its antitrust laws against technology platforms, using both state-specific legal theories and analyses that parallel federal antitrust enforcement. The state should continue to participate in multistate enforcement actions and should develop its own enforcement expertise in digital markets antitrust. Coordination with the DOJ and FTC is advisable to avoid inconsistent outcomes and to leverage complementary enforcement capabilities.

This opinion signals the Texas Attorney General's intention to pursue aggressive antitrust enforcement in the technology sector. Technology companies operating in or serving Texas customers should evaluate their business practices for potential antitrust exposure under state law. In-house counsel and outside antitrust advisors should be aware that state enforcement adds a layer of exposure beyond federal antitrust risk, and that state attorneys general may pursue theories that federal enforcers have not adopted. Plaintiffs' attorneys representing consumers or competitors should consider state antitrust claims as an alternative or supplement to federal actions, particularly given the broader scope of state consumer protection laws.