On Wednesday, CEOs from Amazon, Apple, Facebook, Google will testify in front of the House Judiciary subcommittee on antitrust on their business practices that the committee says may be stifling competition.
George Hay, professor of law at Cornell University and an expert on antitrust, says that while the hearing will be – to some extent – for show, it will also be a chance for the executives to put a human face on their companies.
“Expectations are running high over today’s hearing, but it would be a mistake to expect too much. This is not the first day of hearings. High level antitrust executives from each of the companies have already testified as have competitors, consumer representatives, and economists. All the relevant allegations have been raised and responded to.
“So today is, to some extent, for show. The committee members will have the chance to ask questions directly of each of the top dogs. They will be well prepared and you can expect them to say that they face competition every day, if they have been successful it is because they provide what consumers want, and that, while they compete aggressively to stay on top, they are ever mindful of their obligations to respect the antitrust laws.
“Nevertheless, the hearing is not a trivial matter for these top executives. For them it’s a chance to speak directly to the public and to put a human face on their companies.
“As background, it’s important to remember that we have a very robust system of antitrust enforcement in the U.S. We have two federal agencies (DOJ and FTC), 50 state attorneys general, and an entire army of private antitrust lawyers prepared (and incentivized) to file lawsuits on behalf of aggrieved competitors or consumers. There is not a lot of low hanging fruit. This is not to say that none of the companies have done anything wrong or that tomorrow, the DOJ or FTC might not file a lawsuit, but nothing will be easy. These are sophisticated, well-counseled companies and every significant action they take has been vetted by experienced antitrust lawyers. There will also be complaints that the antitrust laws are outmoded and not up to the task of tackling the modern digital economy, but that’s really a topic for the antitrust experts, not folks like Bezos and Zuckerberg and the others.
“The one issue I expect to see get a lot of attention is the very large number of acquisitions of what were, at the time, small start-ups that, if they had remained independent, might have posed some challenges to the dominance of the ‘big four’ in their respective spaces. The executives will no doubt have a story to tell of how those acquisitions have actually promoted competition, but it is worth remembering that there is no statute of limitations on already consummated mergers or acquisitions. If the DOJ or FTC become convinced competition would have been better off had some of those ‘killer acquisitions’ not occurred, they do have some opportunity (though not without the complications involved in unscrambling an omelet) of challenging them even years after they occurred.”