The review will focus on practices that may cause “structural impediment” to competition and consumer benefit.
Background: Regulatory scrutiny around online platforms is on the rise in several countries. In the EU, a new platforms-to-business regulation will set out the conditions under which businesses and traders interact with online platforms as of July 2020. The EC has also recently commenced investigations into Amazon’s business practices, due to its vertical integration as platform and direct vendor to consumers. Between 2017 and 2019, Google was repeatedly hit by fines for a total exceeding €8bn for different anti-competitive practices.
Things are starting to move in the US too: The Department Of Justice (DOJ) announced has now launched an inquiry into whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers. The review will consider the concerns that consumers, businesses, and entrepreneurs have expressed about online platforms’ services, and comes at a time when lawmakers are engaging with the impact of online platforms on a range of issues. The Judiciary Committee of the Congress carried out two hearings on online platforms and market power between June and July 2019. The Federal Trade Commission is investigating possible antitrust violations, and has carried out a series of hearings on “competition and consumer protection in the 21st century”.
Where will this lead? The DOJ simply says it will seek redress if it will identify violations of law, which means it could issue fines or other types of penalties. However, there is a broader message in the sudden rise in antitrust activity against tech companies: US authorities are gradually moving away from an approach purely based on consumer harm in the form of rising prices.
