Navigating the New Competition Law Frontier: Reviewing Global Antitrust Approaches to Technology Platforms

• Author: Michael Byowitz - Jacqueline Downes - John Eichlin - Elizabeth Wang - Pierre Zelenko
• Position: Mr. Byowitz is Of Counsel (and a former Partner), Wachtell, Lipton, Rosen & Katz LLP, New York, New York. Ms. Downes is a Partner, Allens, Sydney, Australia. Mr. Eichlin is Senior US Associate, Linklaters LLP, New York, New York. Ms. Wang is Executive Vice President, Compass Lexecon, Boston, Massachusetts. Mr. Zelenko is a Partner, Linklaters L...
• Pages: 159-176

Navigating the New Competition Law Frontier:

Reviewing Global Antitrust Approaches to

Technology Platforms

M

ICHAEL

B

YOWITZ

, J

ACQUELINE

D

OWNES

, J

OHN

E

ICHLIN

,

E

LIZABETH

W

ANG

,

AND

P

IERRE

Z

ELENKO

*

Up to date through March 24, 2019

I. Executive Summary

Large multi-sided technology platforms have redefined how people

interact around the world. As network effects concentrate usage onto a

relatively small number of platforms (e.g., Amazon, Apple, Facebook, and

Alphabet’s Google), those firms are increasingly targets of politicians,

regulators, and enforcement authorities who express concern about the

economic importance of one or more platforms, and whether each has or

could achieve dominance. While many antitrust experts argue that

traditional antitrust tools are ample to address any legitimate concerns about

these firms, others (sometimes referred to as antitrust “hipsters”) question

whether more is required to adequately protect consumers, advertisers, or

journalists.

The issue is complicated because the application of competition laws to

technology platforms in key jurisdictions has been diverging. This article

provides an overview of the current dialogue globally, including the status of

enforcement and market studies in Europe, the United States, Australia,

China, and other key economies.

II. Key issues

Antitrust enforcement authorities in leading jurisdictions have been

evaluating this new frontier of competition law either in enforcement actions

targeting specific platforms or in more general market studies. In particular,

several key questions have emerged:

• How should dominance be defined in the context of large multi-sided

technology platforms, and under what circumstances should any firms

* Mr. Byowitz is Of Counsel (and a former Partner), Wachtell, Lipton, Rosen & Katz LLP,

New York, New York. Ms. Downes is a Partner, Allens, Sydney, Australia. Mr. Eichlin is

Senior US Associate, Linklaters LLP, New York, New York. Ms. Wang is Executive Vice

President, Compass Lexecon, Boston, Massachusetts. Mr. Zelenko is a Partner, Linklaters

LLP, Paris, France. Any views expressed in this article are not to be attributed to any of the

authors’ firms or clients.

THE INTERNATIONAL LAWYER

A TRIANNUAL PUBLICATION OF THE ABA/SECTION OF INTERNATIONAL LAW

PUBLISHED IN COOPERATION WITH

SMU DEDMAN SCHOOL OF LAW

160 THE INTERNATIONAL LAWYER [VOL. 52, NO. 2

that may have achieved dominance by superior performance be

constrained going forward?

• When is a technology platform’s preferential treatment of its own

service offerings sufficient to sustain a monopolization or abuse of

dominance action?

• Do traditional competitive effects tests focused on consumer welfare

rely too heavily on price effects, when large technology platforms

generally offer services free of charge to one user group (e.g.,

consumers) while being paid by another group (e.g., advertisers)?

• How should a technology platform’s collection, use, and storage of

user data be assessed relative to other measures of market power?

How should the potential to exploit this data to the possible detriment

of consumer privacy be evaluated? Should such concerns be the

subject of antitrust analysis or privacy regulation?

• Does traditional merger analysis underestimate the potential

competitive significance of startups and technology innovators when

acquired by more established competitors?

The debate on the appropriate answers to these questions is continuing.

Some worry that under-enforcement and under-regulation will result in

further consolidation and entrenchment of market power among incumbent

platforms leading to significant long-term harm to consumers. Others

emphasize that the risks of over-deterrence are higher in dynamic industries,

where long-term competitive effects are inherently uncertain and short-term

intervention may ultimately deter investment in innovative new offerings.

III. Overview of Policy and Enforcement Initiatives by

Jurisdiction

Enforcement and legislative responses to these trends have varied.

European competition law enforcers – both at the European Commission

and in some Member States – have been more aggressive based on concerns

about potential under-enforcement against conduct by potentially dominant

firms and perceived abusive practices by some platforms. By contrast, US

antitrust enforcers have tended to perceive the most significant risk to be

over-enforcement, potentially resulting in a stifling of innovation and loss of

efficiencies, although that stance is currently being debated. Australia,

China, and other countries are carving out their own approaches tailored to

their own market structures but with broader implications.

A. E

UROPEAN

C

OMMISSION

Over the past few years, the most active competition enforcement

involving digital platforms has been in Europe, both at the European

Commission and several EU Member States. At the Community level, the

European Commission has proceeded against Google for exclusionary and

discriminatory practices favoring its own platforms over competitors in a

number of enforcement actions.

THE INTERNATIONAL LAWYER

A TRIANNUAL PUBLICATION OF THE ABA/SECTION OF INTERNATIONAL LAW

PUBLISHED IN COOPERATION WITH

SMU DEDMAN SCHOOL OF LAW