The European Union does everything it can to block competition from Americans, but they have finally encountered some from an unexpected source: American antitrust enforcement is now more extreme than Europe’s.
Any day now, Google will learn what remedies it will have to offer following a Justice Department lawsuit that found they unfairly monopolized search. Government lawyers are seeking to break up the company by forcing divestiture of its flagship search service.
Meanwhile, Meta and Amazon face their own antitrust suits from the Federal Trade Commission. What these cases have in common, besides being holdovers from the “big-is-bad” Biden era, is the gerrymandered market definitions government lawyers have marshalled to claim they hold monopoly power where none exists. After years of EU regulators swelling their treasuries with arbitrary fines on American tech companies, our own government is threatening to break up our most successful innovators driving growth.
Gerrymandering is in the news for political reasons, but it also aptly describes the strange market definitions over-zealous government lawyers are using to argue these companies are monopolies.
In the Amazon case, the FTC’s market definition borders on the byzantine. It includes Walmart’s and Target’s market shares of online commerce while excluding their retail stores. The FTC argued that Amazon competes only with other online retailers and does not seek to win over customers who would otherwise visit brick-and-mortar locations, never mind that the original conceit of Amazon was to compete with bookstores by eliminating overhead.
Even if one accepts this bizarre market definition, Amazon also fights for online-only customers with international competitors like Temu, which was conveniently excluded from the FTC’s market definition despite attracting 70 million US users in 2023. In other words, Amazon might hold monopoly power in online retail so long as you ignore all the other online retailers.
Deliberate ignorance of well-known competitors also undergirds the DOJ’s Google case. According to the ruling in the Google search trial, the search engine violated antitrust law by monopolizing open-web digital advertising markets. Essentially, businesses who published with Google had no other option to make sure potential customers could find them.
But Google has always had competitors. I’m just old enough to remember when Google was the disrupter in search technology against the old incumbent Yahoo. It has faced competition from Bing since 2009. In both cases, Google dominated the market because consumers chose to use their product over well-known alternatives. Businesses publish with Google because that is the platform most people have chosen to use. Creative market definitions can gerrymander a monopoly on paper, but they can’t erase the reality that other search engines have been available the whole time, even if consumers remain uninterested in them.
As a matter of fact, Google has been losing its search market share to Amazon of late. Far from exercising monopoly power over which products consumers are routed to when they make online queries, Google is losing eyeballs to the Amazon’s built-in search function. That these two companies are in direct competition with each other for a significant portion of searches undermines the cases against both.
Meta faces a similarly tortured market definition from the FTC. Their first attempt to define the acquisition of Instagram by then-Facebook as a monopoly in the “friends and family” social networking market was laughed out of court, and their amended filing defines Meta as a monopoly in “personal social networking services.” Both are novel definitions that somehow exclude TikTok, X, Snapchat, and YouTube, despite intense competition in the short-form video space. Once again, even if you accept this definition it fails on its own terms because Snapchat and LinkedIn are clearly “personal social networking services,” extensions of users’ real-life social networks.
Perhaps more perverse is the goal of the Meta case, which is to unwind their acquisitions of Instagram and WhatsApp that were pre-approved by the FTC more than a decade ago. Government lawyers shouldn’t be afforded a mulligan on old mergers and acquisitions just because they later decide to redraw the boundaries of a competitive market.
It seems the chief qualification for a monopoly these days is to be too good at service customers and growing too large as a result. Even the EU doesn’t go that far.
If successful, these cases will stifle investment and innovation from our most successful companies, threatening America’s technological edge. Aggressive antitrust gerrymandering is also at odds with the consumer harm standard, which has been the cornerstone of American antitrust for several decades. If the theory of your case requires redrawing the boundaries of a market to allege monopoly power, it is most likely because you cannot point to an obvious consumer harm.
It undermines the Trump agenda too. In a July 23 speech at the Hill and Valley Forum, President Trump praised these companies directly for their investment in critical artificial intelligence capabilities: “In a few months, Meta, Amazon, Google, Microsoft are all investing $320 billion or more in data centers and AI infrastructure. This year, those companies are really, they’re really going at it. And they’re very smart people, very good people.”
The president’s own antitrust enforcers still haven’t gotten the memo.
To maintain American tech leadership, the Trump administration should drop these holdover cases from the Biden era and once again support our innovators. If we are to continue leading the world in technological progress, we must jettison gerrymandered market definitions and an antitrust regime more extreme than Europe.
