Antitrust Reform and “Coopetition"
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Antitrust Reform and “Coopetition.” Let’s consider what’s happening on the Hill and in Silicon Valley—from antitrust reform to “coopetition”—and then we’re going make a prediction.
New Legislation on the Hill:
This week, Senator Amy Klobuchar introduced the Competition and Antitrust Law Enforcement Reform Act. Among other things, the Act would (1) significantly increase the U.S. government’s resources devoted to the study of competition in digital markets, and (2) shift the burden of proof onto merging parties to show that a merger would not be harmful to competition. If passed, this proposed law could significantly impact the deep, longstanding, symbiotic relationships among many of the biggest companies in tech.
You can read more about the proposed Act by clicking the following link:
https://thehill.com/policy/technology/537279-klobuchar-to-intro-omnibus-antitrust-bill
Silicon Valley’s “Coopetition”:
Keep in mind that in Silicon Valley, Big Tech companies fight like tigers – think of the legendary damnations and anathemas Steve Jobs hurled at Google when it developed Android – yet also cooperate at the same time, through agreements, cross-licensing, standard-setting, and the like. They even have a word for it: “coopetition.”
Antitrust issues may arise, in part, because of such “coopetition.” Bear in mind, first, that antitrust isn’t about protecting competitors – it’s about protecting competition. Second, the central focus is often on defining “markets,” including what are (or could be) substitutes under various circumstances and what are not. Third, some activities are so harmful that they can’t be excused (price-fixing among competitors being among the worst). Fourth, there are some products and services which become more valuable to consumers as they become more ubiquitous, like the telephone, for example: the telephone on your desk which will reach any other number in the world is worth more than it would be worth if it only a few other people had one. Start there, and then consider how the digital world is changing these understandings – or if it really is.
For example, many years ago Apple and Google allegedly agreed that Google would pay to be the default search engine on iPhones and other Apple devices. According to a lawsuit filed by the DOJ in October 2020, asking for an injunction against such deals, one employee even wrote to his counterpart across the table that “our vision is that we work as if we’re one company.” You can read more about Google’s deal with Apple by clicking on the following link:
Consider another example: Facebook and Google, and the issue of “programmatic advertising” in the digital-advertising market. “Programmatic marketing” is the process of “bidding” for digital ad space in the milliseconds after a viewer clicks a link. Google and Facebook allegedly reached a deal that guaranteed Facebook a certain “win rate” for its bids. This deal – which Google code-named “Jedi Blue” – is part of the lawsuit filed by the states last year. You can read more about “Jedi Blue” by clicking the following link:
Our Prediction:
We agree that it’s high time for a fresh look at antitrust – a look which should be taken by people who know what to look at and look for. There seems to be a growing consensus that the Hill has much work to do to update antitrust enforcement and repair the field of competition, and yes, many of these agreements between the Big Tech companies probably should be unwound.
At the same time, on Capitol Hill, polarization has reached a critical stage with people unable to talk across the aisles.
Now may be the perfect time for Congress not only to lean on Big Tech, but to learn from how Big Tech companies have competed and cooperated at the same time. So, we’re going up on a limb to predict that we may see “coopetition” by Congress, in and around the Competition and Antitrust Law Enforcement Reform Act.
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Hosch & Morris, PLLC is a boutique law firm dedicated to data privacy and protection, cybersecurity, the Internet and technology. Open the Future℠.