Antitrust and Competition Policy: Big Tech and Merger Enforcement

Federal antitrust law is built on three foundational statutes: the Sherman Act of 1890, which prohibits monopolization and agreements in restraint of trade; the Clayton Act of 1914, which addresses anticompetitive mergers and acquisitions, price discrimination, exclusive dealing, and tying arrangements; and the Federal Trade Commission Act of 1914, which prohibits unfair methods of competition and created the FTC as an expert agency to enforce competition law. These statutes provide broad authority that has been interpreted through decades of judicial precedent and agency enforcement.

Since the late 1970s, antitrust analysis has been heavily influenced by the Chicago School of economics, which emphasizes consumer welfare (primarily measured by price and output effects) as the appropriate standard for evaluating competitive harm. This approach generally favored permissive merger review and skepticism toward monopolization claims. In recent years, a "New Brandeis" or "neo-antimonopoly" movement has argued for a broader conception of competitive harm that considers effects on market structure, innovation incentives, labor markets, privacy, and democratic values.

Section 1 of the Sherman Act prohibits contracts, combinations, and conspiracies in restraint of trade, addressing both horizontal agreements among competitors (price-fixing, market allocation) and vertical agreements between firms at different levels of distribution (resale price maintenance, exclusive dealing). Section 2 prohibits monopolization and attempted monopolization, requiring proof of monopoly power in a relevant market and exclusionary conduct. The Sherman Act carries criminal penalties, including imprisonment and substantial fines for per se violations such as price-fixing and bid-rigging.

Section 7 of the Clayton Act prohibits mergers and acquisitions whose effect may be substantially to lessen competition or tend to create a monopoly. The Hart-Scott-Rodino Act requires pre-merger notification to the DOJ and FTC for transactions exceeding specified size thresholds, providing the agencies with an opportunity to review proposed mergers before consummation. The FTC exercises additional authority under Section 5 of the FTC Act, which prohibits unfair methods of competition and has been interpreted to reach conduct beyond the scope of the Sherman and Clayton Acts.

Legislative proposals include bills that would amend the Clayton Act to strengthen merger enforcement, establish nondiscrimination and interoperability requirements for dominant digital platforms, increase merger filing fees to fund enhanced enforcement, and codify the FTC's authority to challenge unfair methods of competition through rulemaking. The American Innovation and Choice Online Act and the Open App Markets Act would prohibit certain self-preferencing and gating conduct by dominant platforms.

Other options include increasing antitrust enforcement budgets, strengthening criminal enforcement of cartel behavior, addressing the role of common ownership by institutional investors in potentially reducing competition, and developing new analytical frameworks for evaluating competitive effects in digital markets where services are offered at zero price. International coordination on competition enforcement, particularly with the EU and other jurisdictions pursuing aggressive digital market regulation, presents both opportunities and challenges for U.S. policy.

The DOJ secured a landmark ruling in United States v. Google (2024), finding that Google violated Section 2 of the Sherman Act by maintaining monopoly power in general search through exclusive distribution agreements. Remedies in this case could reshape the technology industry. The FTC's case against Meta and additional Google litigation (ad tech market) continue in federal courts. The revised Merger Guidelines are being applied in ongoing merger reviews, with the agencies signaling greater willingness to challenge transactions in concentrated markets. Congressional debate over platform-specific legislation continues, though comprehensive tech antitrust legislation has not been enacted.