Many of the hottest products on holiday wish lists of tweens, teens and adults are likely to be tech products. This includes excitement around products like AirPods and iPhones, and Kindles, VR headsets and video game systems.
With antitrust cases pending against many of the leading companies behind these sought-after and popular products, will this mean they won’t have the same quality or excitement for consumers next year? In other words, could antitrust be the Grinch that steals iPhones and other technology that operates as consumers desire?
Four of the most successful American companies are facing antitrust litigation that could result in significant changes to products popular with consumers. Google was found to have violated the Sherman Act in its default agreements with various companies and is now possibly facing remedies that could force it to sell its popular Chrome product. Meta recently lost its motion for summary judgment, meaning the FTC case against it will go to trial in 2025 with much of the focus on its past acquisitions of popular services like Instagram and WhatsApp. On November 20, a federal District Court heard oral arguments in an antitrust case against Apple.
The incoming administration is likely to stay on course on these cases, many of which began in the prior Trump administration. Regardless of who is in power, the problem remains that the potential weaponization of antitrust to go after big companies based on their size or disliked policies and business choices means that consumers are the losers.
The Apple case demonstrates how these markets remain competitive and how innovation is often our best competition policy. One of the allegations in Justice’s complaint is that there is a social stigma associated with “green bubbles” in group texts that include non-iPhone users. However, the most recent update to the Apple operating system makes the product capable of responding to such messages in the same way as fellow iPhones.
This change was used by rival company Android in an advertisement talking about how green and blue bubbles can now be friends. Similarly, any number of messaging apps — often with unique features comparable to texting — have sprung up to help solve the market problems faced by different systems without requiring antitrust or other policy intervention. The competition for consumers in highly competitive markets requires these companies to innovate and respond to such demands lest they lose consumers to rivals.
What might it mean if the government were to succeed in its proposed interventions into tech companies via antitrust? Like the ghost of Christmas Future, seeing the results of the attacks on American companies from European regulators provides a warning example of what that needless government intervention could look like.
Following the effective date of the Digital Market Act (DMA) in Europe, many consumers woke up to find that their services had changed or that their favorite products were unavailable.
For example, if users were looking for nearby restaurants or shops, they were no longer able to click on a Google map in a Google search, thanks to requirements of DMA compliance. Similarly, they have yet to find their smartphones ready to use at the point of purchase. Instead, users faced a number of choice screens for essential utility apps like search engines and web browsers.
More recently, various AI services have stopped launching their products in Europe partly because of the regulatory uncertainty faced by the companies under DMA scrutiny. What we can learn from Europe is that over-zealous competition has consequences that often make technology worse for consumers.
As antitrust cases continue to focus on competitors, prosecutors have forgotten the heart of competition policy, and antitrust enforcement is supposed to be a competitive market that benefits consumers. Instead, policymakers seem to focus on presumptions that “big is bad” or that successful companies should be presumed guilty until proven innocent.
The popularity of these products during the holiday season and beyond is not because of a lack of alternatives but due to a unique entrepreneurial spirit that has identified unserved consumer demands. Such success is something American policymakers should be proud of, not skeptical.
* Jennifer Huddleston is a senior fellow in technology policy at the Cato Institute. Her research focuses on the intersection of emerging technology and law with a particular interest in the interactions between technology and the administrative state. Huddleston’s work covers topics including antitrust, online content moderation, data privacy, and the benefits of technology and innovation. Her work has appeared in USA Today, National Review, the Chicago Tribune, Slate, RealClearPolicy, and U.S. News and World Report. She has published in law journals including the Berkeley Technology Law Journal, George Mason Law Review, Oklahoma Law Review, and Colorado Technology Law Journal. Huddleston has a JD from the University of Alabama School of Law and a BA in political science from Wellesley College.
Source: Cato Institute
