Solving the Gobal Problem of Platform Monopolization
Remarks as Prepared for Delivery
Thank you so much for that introduction. And thank you to the conference organizers for continuing this wonderful tradition of gathering antitrust enforcers from around the world for a discussion about the enforcement and policy issues we face together.
Every era of competition law is different. Each has its own unique set of challenges. Historically, in the 1990s and early 2000s the greatest challenge for the antitrust community was to establish competition law as a global enforcement norm. Today we have largely been successful in meeting that challenge. Most of the global economy is subject to competition laws and the jurisdiction of at least one enforcement agency.
We now face a pressing challenge that demands an aggressive coordinated response from the competition law enforcement community. Unilateral exclusionary conduct—what we in the United States call monopolization—is ascendant.
The digital economy has captivated the world’s attention for two related reasons. First, we have watched how it can serve as a driver of growth and innovation. The power of instantaneous connection to worldwide networks of people, companies, and infrastructure changes what is possible in profound ways. Our lives have been transformed in so many respects.
Second, we have watched these changes lead to the collection of corporate power that threatens our liberty. The digital economy has enabled monopoly power of a nature and degree not seen in a century. Without competition to deliver ready access to the connections we seek, we are forced to pay with our time in endless ad-filled scrolls. Algorithms manipulate our psychology to shape our minds and our behavior, without competition for them to do so responsibly. With too little competition over privacy, we find our most intimate data mined and sold with abandon. The digital age is not only characterized by the presence of monopoly power, but by new means of its exploitation more threatening to individual freedom than ever before.
The promises and perils of the digital economy are fundamentally related. At the same time that platforms connect us to one another, they control how we connect. The power to interconnect millions carries the power to influence the lives of millions and to shape the development of adjacent industries. Today’s monopolists can influence the interactions and behavior of customers and would-be competitors alike. They can pick winners and losers in adjacent markets, discourage switching to rival services, and punish entrepreneurs that stray too closely into competition. We have seen how exclusionary tactics exploiting this power can strengthen already-dominant positions and deepen the moat around a digital castle.
This is a global challenge because monopolization often involves more than just one bad act. The exclusionary power of digital platforms arises from their massive connectivity, and plays out in parts large and small across a wide range of interdependent and reinforcing relationships. The constant threat of its abuse threatens the competitive process and would-be rivals. If we answer one practice, another arises. If we address one behavior in one adjacent market, monopoly power may be used to extend the moat further around it. If we isolate individual practices without considering the flywheel of anticompetitive effects then we overlook the dimension of meaningful competition.
This can look like the old arcade game Whac-a-Mole. One mole’s head pops up, we focus on batting it back down, and by the time we look again two more have jumped out at us. No one ever really wins that game. The moles just keep coming. To stop them from popping up, you really need to unplug the machine.
In the same way, enforcers need to unplug the monopolization machine in digital platform industries. I would like to use my time today to talk about four ways we can do that together.
First, we need to examine a monopolist’s course of conduct. To understand exclusionary behavior by a monopolist, we have to understand their monopoly, what it is, and what protects it. All of the mutually-reinforcing strategies that protect the monopoly are relevant to understanding any one. If we spend a year examining a single tree, no matter how effectively, we will never have a sense of the forest.
Dating back to at least Standard Oil in 1911, the Supreme Court has seen fit to review monopolization claims in the light of the combined effects of the full range of a monopolist’s exclusionary tactics. As the Third Circuit explained in LePage’s, we should examine practices “taken as a whole rather than consider each aspect in isolation” because “the relevant inquiry is the anticompetitive effect of [the] exclusionary practices taken together.” These concerns are most profound in markets that exhibit network or feedback effects.
The realities of digital markets have amplified the need to understand how exclusionary acts work together. The network effects that characterize digital markets create a flywheel effect through which anticompetitive conduct can be self-reinforcing. Enforcers must examine all of the conduct that keeps the wheel spinning, not just individual flicks of the wrist.
My sense is that antitrust agencies, at least in the United States, have avoided this approach as one of the consequences of what I call the error cost error. Forty years ago, lawyers opposed to antitrust enforcement advocated that enforcers should get it wrong on purpose, and intentionally underenforce the law. In their view, monopolies inherently self-correct, but judicial errors do not, so we should avoid enforcement mistakes at all costs. From this perspective, we cannot risk enforcement against even a single bad act, much less a strategy of monopolization.
This was wrong on both fronts. Monopolies do not self-correct. We have all seen that in digital markets, monopolies self-sustain. Platforms that are fundamentally collaborative become critical trading partners for entire industries, and without competition have greater power to discourage rivalry. Network effects exacerbate this problem.
Moreover, judicial errors need not be set in stone. As Justice Gorsuch explained in the Alston case last year, “whether an antitrust violation exists necessarily depends on a careful analysis of market realities…. If those market realities change, so may the legal analysis.”
Take Trinko for example. That was a case about expensive infrastructure like telephone poles and wires, and the Supreme Court was hesitant to impose unprecedented access because it did not want to discourage infrastructure investment. Digital platforms are profoundly different—they are built with 1s and 0s, not poles and wires, and they are collaborative by nature. In fact, most digital platforms draw their value from interconnection. So the underlying economic logic of Trinko will not apply in the same way to collaborative digital platforms that are built on interconnection.
Indeed, Trinko explained, like Alston, that “[A]ntitrust analysis must always be attuned to the particular structure and circumstances of the industry at issue.” The law’s ability to adapt means that we need not have so much fear of judicial error that we insist on inaction.
I therefore believe we can no longer be so cautious to avoid overenforcement that we intentionally underenforce the law. At the Antitrust Division, we have moved past the error cost error. We have been too limited by a self-imposed requirement that we use our most powerful microscopes to examine an exclusionary act before intervening to stop it. We need a wider lens, and a greater willingness to pursue and remedy all of the harmful behaviors that make up an exclusionary course of conduct.
That brings me to my second strategy to address the Whac-a-Mole monopolization machine. We need to expand our focus from the bad acts of years past to those happening now. Some people call this “horizon scanning” because they recognize the need to see the threats that are coming. I would take that a step further—not only should we look for the threats that are coming, we should go deal with them. We need to skate to where the puck is going.
Skating to the puck means that when we see a problem, we move to the problem in a forward-looking manner. This requires us to be more nimble and act quickly and decisively as the facts present themselves when justice demands. I also believe it requires us to seek preliminary injunctive relief before practices or policies with exclusionary impact are able to irreparably harm the markets. Even just a few months of discouraged innovation or entry in a multi-billion-dollar industry that exhibits powerful network and feedback effects can create irreparable competitive harm that demands preventive action.
Of course, I agree that in order to skate to the puck, we have to see it as well. I have been incredibly impressed with the leadership of the UK CMA in building out its data unit and in sharing its learning with partner agencies. And I have seen other agencies taking similar approaches. Just two days ago I had the opportunity to sit down with our colleagues in Canada and hear about their impressive work in this regard. At the Antitrust Division, we recognize that we need technological expertise and data-handling knowledge in-house in order to understand where markets are going and where the next threats may arise.
We are working to develop those capabilities and I am delighted that the Division has hired PHD data scientist Laura Edelson as its Chief Technologist to serve in our Expert Analysis Group, which is lead by our Chief Economist, Susan Athey. We are working to build a diverse community of experts with a wide range of complementary skills alongside our world-class economists, including our Principal Economist, Ioana Marinescu.
Our capabilities to do this are always, of course, limited by our resources. That is why the Department of Justice strongly supports passage of the Merger Filing Fee Modernization Act of 2021.
I should mention that Susan has also been a great asset to our merger guidelines project. Together with the Division’s Policy Director David Lawrence, she is leading a dream team of talented attorneys and economists at the DOJ, who are working closely with colleagues at the FTC. I have asked them to revise the merger guidelines to be more accessible, more comprehensive, and most importantly to better reflect the law.
That brings me to my third suggestion for dealing with the monopolization machine. We need to stop mergers that “tend to create a monopoly.” The text of the Clayton Act has used these precise words for more than a century, but we have not always paid them due attention. Ignoring this language has led to underenforcement against mergers that, in the words of the 2010 Merger Guidelines “enhance or entrench market power.”
I believe our horizontal and vertical framework has been limiting in this respect. Focusing on that distinction has sometimes screened out important information about mergers that entrench market power or tend to create a monopoly. Mergers that relate to adjacent markets can have those effects, without being strictly horizontal or vertical. Our tools, however, have not equipped us to analyze them flexibly and comprehensively.
A recent paper Susan wrote with co-author Fiona Scott Morton provides a good example. They explain how important multi-homing services are to platform competition. Anything that makes it easy to switch back and forth, or to use multiple platforms simultaneously, is a multi-homing service. If a powerful platform acquires such a service, it can limit the multi-homing functionality to tip the market toward monopoly. Those types of mergers are not strictly horizontal or vertical, but they are important because they entrench market power and tend to create a monopoly.
When we analyze mergers that entrench market power, we also need to recognize that they may just be one more mole popping up its head as part of an exclusionary strategy. Effective merger review will therefore often demand assessing not only the direct competition between the merging companies, but the core monopoly of the acquirer and how the merger fits into an exclusionary course of conduct.
My final strategy for unplugging the Whac-a-Mole monopolization machine might be the most important. We need effective remedies that actually breach the moats and allow competitors to reach the castle. We need to obtain comprehensive relief that not only prevents the recurrence of a particular anticompetitive tactic, but that stops an exclusionary strategy altogether.
In some cases this will take the form of legislation. I believe that non-discrimination legislation will be a critical tool to discourage a wide range of exclusionary practices and give would-be competitors confidence that they are protected from retaliation. The Department of Justice has strongly encouraged Congress to pass the American Innovation and Choice Online Act.
This also means carefully designing remedies in cases under our existing laws. As we address platforms that thrive on interconnection, global remedies regimes will intersect more than ever. I am committed to deepening our international partnerships and to the hard work of case cooperation to ensure those overlaps are complementary. For the same reason, we look forward to working closely with EVP Vestager and our friends in the European Commission as they implement the Digital Markets Act.
Let me conclude on a hopeful note. I realize that we have tremendous challenges ahead, and that the path to meeting them will not be easy. This will not be as simple as reaching back and unplugging an arcade machine. It will be the work of many years. It will take energy and commitment and dedication.
The good news is that I see those things every day at the Antitrust Division. I am absolutely inspired by the work of the staff there. The attorneys, economists, and support staff come in every day driven by this mission we share. They are tireless. It has been overwhelming to experience their energy, and as I look back on my first year, it has been the highlight.
In addition, I would like to call attention to the unsung heroes, which are our paralegals and professional staff. The Antitrust Division has an incredible program that is buzzing with both new and seasoned paralegals and professional staff. They generate infectious enthusiasm for competition. And they offer fresh thinking about the challenges we face and creative solutions for the future. They are lifeblood of the Antitrust Division.
I hear that same enthusiasm here, among the global law enforcement community. There are new leaders emerging, and experienced leaders helping drive us forward together. As a community, we will address these shared challenges and, as before, emerge stronger for it.
 Diane P. Wood, Dep’y Asst. Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, Speech at the Greater Cleveland International Lawyers Group: International Enforcement at the Antitrust Division (Jan. 17, 1995), available at https://www.justice.gov/atr/file/519176/download.
 For instance, the International Competition Network has membership of 141 competition agencies representing 129 jurisdictions. International Competition Network, ICN Factsheet and Key Messages (Apr. 2022), available at https://www.internationalcompetitionnetwork.org/wp-content/uploads/2022/08/Factsheet-2022.pdf.
 See, e.g., Monopoly By the Numbers, Open Market Institute, https://www.openmarketsinstitute.org/learn/monopoly-by-the-numbers (last visited Sept. 14, 2022); America Has a Monopoly Problem, Forbes, https://www.forbes.com/sites/johnmauldin/2019/04/11/america-has-a-monopoly-problem/?sh=42862c6e2972 (last visited Sept. 14, 2022); America’s Monopoly Problem: Why It Matters And What We Can Do About It, Institute For Local Self-Reliance (July 2020); https://ilsr.org/fighting-monopoly-power/americas-monopoly-problem-and-why-it-matters/; America’s Monopoly Problem Goes Way Beyond the Tech Giants, The Atlantic (July, 28, 2020), https://www.theatlantic.com/ideas/archive/2020/07/pandemic-making-monopolies-worse/614644/; J. Azar, I. Marinescu, M. Steinbaum, & B. Taska, Concentration in US Labor Markets: Evidence From Online Vacancy Data, (National Bureau Of Economic Research, Working Paper No. 24395, 2019).
 Jonathan Kanter, Asst. Att’y Gen., Antitrust Division, U.S. Dep’t of Justice, Keynote at CRA Conference (Mar. 31, 2022), available at https://www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-delivers-keynote-cra-conference.
 See United States v. Grinnell Corp., 384 U.S. 563, 576 (1966); United States v. Paramount Pictures, Inc., 334 U.S. 131 (1948); United States v. American Tobacco Co., 221 U.S. 106, 181-83 (1911) [hereinafter “Am. Tobacco”]; Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 71-77 (1911). In these cases, the Supreme Court focused on whether the evidence as a whole established the proscribed result, not whether particular acts did so in isolation. See Am. Tobacco at 182-83 (emphasizing that it was “not considering” the legality of certain conduct “isolatedly viewed”).
 LePage's, Inc. v. 3M, 324 F.3d 141 (3d Cir. 2003) (en banc) (“The relevant inquiry is the anticompetitive effect of [the defendant]’s exclusionary practices considered together,” i.e., “taken as a whole rather than considering each aspect in isolation.”); City of. Anaheim v. S. Cal. Edison Co., 955 F.2d 1373, 1376 (9th Cir. 1992) (“it would not be proper to focus on specific individual acts of an accused monopolist while refusing to consider their overall combined effect.”).
 For a modern explanation of the history and errant underpinnings of this doctrine, see Herbert Hovenkamp, Antitrust Error Costs, 24 U. PA. J. BUS. L. 293 (2022); Jonathan B. Baker, Taking The Error Out of “Error Cost” Analysis: What’s Wrong with Antitrust’s Right, 80 Antitrust L.J. 1 (2015).
 NCAA v. Alston, 141 S. Ct. 2141, 2158 (2021).
 Verizon Commc'ns, Inc. v. L. Offs. of Curtis V. Trinko, LLP, 540 U.S. 398 (2004).
 David Lawrence, Policy Director, Antitrust Division, U.S. Dep’t of Justice, Keynote at Hal White Antitrust Conference (June 24, 2022), available at https://www.justice.gov/opa/speech/antitrust-division-policy-director-david-lawrence-delivers-keynote-hal-white-antitrust.
 Trinko, 540 U.S. at 411.
 Attributed to famous New York Rangers player Wayne Gretzky, along with the aphorism “You miss 100% of the shots you don’t take.”
 Stefan Hunt, The CMA DaTA unit – we’re growing!, Competition and Markets Authority (May 28, 2019), https://competitionandmarkets.blog.gov.uk/2019/05/28/the-cma-data-unit-were-growing/.
 15 U.S.C. § 18.
 U.S. Dep’t of Justice & Fed. Trade Comm’n, Horizontal Merger Guidelines (2010), available at https://www.justice.gov/atr/horizontal-merger-guidelines-08192010.
 Susan Athey & Fiona Scott Morton, Platform Annexation (SIEPR Stanford Inst. for Econ. Policy Rsch., Working Paper No. 21-015, 2021).