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US antitrust spotlight on the technology industry

Is 2021 a year of change?

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US antitrust spotlight on technology: Is 2021 a year of change?

All eyes are on technology in the US and around the world. In the US, there appears to be bipartisan agreement that some type of change is needed in the technology industry. If those voices get their way, new legislation could change that, with an outsized impact on the technology industry.         

What’s changing?

In line with the overall “big is bad” movement, some calls for antitrust reform from both major US political parties could have a huge impact on the technology sector. In 2020, the House Subcommittee on Antitrust’s Majority Staff Report and Recommendations issued sweeping findings resulting from its investigation into four of the largest technology companies, and called for broad changes to US antitrust laws that would affect the tech industry and beyond.   

Additionally, recent legislation, such as bills proposed by Senators Klobuchar (D-Minn.) and Hawley (R-Mo.), seek to create new merger presumptions and prohibitions—some of which are specifically geared towards large corporations—and to prohibit novel forms of supposedly “exclusionary conduct” such as “self-preferencing.” US federal and state antitrust enforcers have already begun to increase enforcement actions, while private plaintiffs are targeting technology companies, and many expect that this is just the beginning. Indeed, FTC nominee Lina Khan, who has been an outspoken technology critic, has already made clear that she will not recuse herself from all technology matters, signaling that enforcement may continue to increase.         

What does it mean for you?

We expect that legislators, enforcers and private plaintiffs will continue to focus on antitrust issues relating to technology, with a particular emphasis on those companies at the center of ongoing debates about censorship and privacy. Moving forward, mergers by large technology companies could face more scrutiny, particularly when an upstart, or nascent, competitor is involved in a transaction. Other novel claims of supposed anticompetitive conduct (such as self-preferencing and allegations of anticompetitive data use) are likely to arise.    

 

Further reading

 

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