Microsoft, Google, and a New Era of Antitrust

By Blair Levin & Larry Downes, Brookings Institution & Larry Downes Consulting Group

The U.S. federal government has brought major antitrust cases against Microsoft and Google. Regulators likely don’t expect to win either case outright, but the government doesn’t need to win these cases for them to have an impact. For one, an aggressive litigation strategy can provide a potent disruption to companies deemed too powerful. But these cases also send a message to European regulators, who have stepped into a leading role on antitrust. To navigate increasing uncertainty around where and how antitrust law is enforced, companies need to understand the complex politics of competing efforts to craft a new paradigm for competition law, and have plans in place for threading the needle and getting deals done.

But if reigning in big tech is the goal, antitrust law, at least on the surface, seems a problematic weapon. Antitrust authorities have a poor track record of successful lawsuits that proceed to trial, largely because federal law doesn’t cover the behavior regulators now allege is harmful to competition, including the control of consumer data to create competitive advantages, and selfpreferencing their own products on their platforms. But harm not to competitors but to consumers, usually in the form of increased prices, has remained the standard for proving antitrust violations in the courts for roughly the past 40 years.

The regulators know that, of course. But they also recognize that the stars may be aligning to reshape the law dramatically. To navigate increasing uncertainty, companies need to understand the complex politics of competing efforts to craft a new paradigm for competition law. They also need to widen their view of legal risk, and adopt a global plan of action, both for future transactions
and for current operations.

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