WASHINGTON — When the nation’s antitrust laws were created over a century ago, they aimed to take on industries like Big Oil. But technology giants like Amazon, Facebook, Google, and Apple, which dominate e-commerce, social networks, online advertising, and search, have risen in ways unforeseen by the laws. In recent decades, the courts have also interpreted the rules more narrowly. On Monday, a pair of rulings dismissing federal and state antitrust lawsuits against Facebook renewed questions about whether the laws were suited to taking on tech power. A federal judge threw out the federal suit because he said the Federal Trade Commission had not supported its claims that Facebook holds a dominant market share, and he said the states had waited too long to make their case.
The decisions underlined how cautious and conservative courts could slow an increasingly aggressive push by lawmakers, regulators, and the White House to restrain the tech companies, fueling calls for Congress to revamp the rules and provide regulators with more legal tools to take on the tech firms. For months, Congress has debated whether the monopoly laws need changes. At a hearing in March, Representative David Cicilline, a Democrat of Rhode Island, said the country needed a “massive overhaul of our antitrust laws and significant updates to our competition system” to police the biggest technology companies.
Moments later, Representative Ken Buck, a Colorado Republican, agreed. He called for lawmakers to adopt antitrust laws to fit the business models of Silicon Valley companies. This week’s rulings have now put pressure on lawmakers to push through a recently proposed package of legislation that would rewrite critical aspects of monopoly laws to make some of the tech giants’ business practices illegal. “This is going to strengthen the case for legislation,” said Herbert Hovenkamp, an antitrust expert at the University of Pennsylvania Law School. “It seems to prove that the antitrust laws are not up to the challenge.”
The legislation comprising six bills was introduced this month and passed the House Judiciary Committee last week. The bills would make it harder for the major tech companies to buy nascent competitors, give preference to their services on their platforms, and ban them from using their dominance in one business to gain the upper hand in another. The bills are far more expansive than traditional antitrust doctrine. Under current norms, which have been solidified by decades of business-friendly court rulings, companies tend to be judged to have violated competition laws if their behavior has hurt the welfare of consumers. The primary measure of that harm has been whether companies have charged people higher prices.
But tech companies like Facebook and Google provide most of their services for free. (Advertisers instead pay them.) Many tech and legal experts — including Lina Khan, a scholar whom President Biden named this month to run the F.T.C. — have argued that a broader definition of consumer welfare, beyond prices, should be applied. Consumer harm, they have said, can also be evident in reduced product quality, like Facebook users suffering a loss of privacy when their data is harvested and used for targeted ads. In one of his rulings on Monday, Judge James E. Boasberg of the U.S. District Court for the District of Columbia said Facebook’s business model had made it especially difficult for the government to meet the standard for going forward with the case.
