Notice & Comment

Ranking the Big Tech Monopolization Cases: Some Economists’ Perspectives, by Brian C. Albrecht & Daniel J. Gilman

Antitrust scrutiny of “big tech” is hardly new, but the Justice Department’s recent monopolization case against Apple caps an unprecedented federal antitrust offensive against major tech firms. There are at least five open monopolization matters, beginning with the DOJ’s 2020 Google search complaint, and followed by cases against Facebook/Meta, Amazon, a second case against Google focused on its AdTech business, and now the Apple case. The resolution of these cases may shape the future of the digital economy. For the present discussion, we leave aside the FTC’s thus-far-failed attempts to block Meta’s acquisition of Within and Microsoft’s acquisition of Activision-Blizzard, both under Section 7 of the Clayton Act. 

But how strong are the cases? And which one is the strongest? Daniel Crane recently surveyed antitrust lawyers for their views on the matters. We have followed suit by surveying economists with expertise in antitrust. Responses varied considerably, although a rough consensus emerged on the relative strength of the matters and, as explained below, few respondents rated any of the cases as “strong.” 

We reached out to a range of economists from pure academics to former agency staff to consultants. We sought to survey economists with varied approaches to antitrust, keeping in mind that our survey, like Professor Crane’s, was a casual one. It was based on a convenience sample that was neither perfectly random nor, in the end, defensible as fully representative of the profession. Our goal, simply, was to reach out to economists representing a wide range of perspectives and backgrounds in the field. All answers were anonymous. We did not survey economists presently on staff at the agencies. We received 18 complete responses.

We asked each survey participant to provide two numerical ratings for each case. First, much as Professor Crane did, we asked for ordinal rankings: each of the five cases was to be ranked on its strength relative to the other four cases, with 1 representing the weakest of the bunch and 5 representing the strongest. Our results largely mirrored those rankings from Professor Daniel A. Crane’s recent survey of antitrust law professors. From best to worst (with 5 points for best of the bunch, down to 1 point for worst, the economists ranked the relative strength of cases as follows:

  1. Google AdTech (77)
  2. Google Search (65)
  3. Facebook (48)
  4. Apple (41)
  5. Amazon (39)

This aligns closely with Professor Crane’s findings, as his responding law professors also ranked Google Search as the strongest of the cases, followed by Google AdTech, Facebook, Apple, and Amazon.

We also wanted to get a sense of the overall strength of each case. When asked to score the strength of each case on a 5-point scale, with 5 being strong and 1 being weak, the economists’ mean average scores were: Google AdTech (3.2), Google Search (2.9), Facebook (2.5), Apple (2.2), and Amazon (2.1). The median scores were 3.5 (Google Ad Tech), 3 (Google Search), 2 (Facebook), 2 (Amazon), and 2 (Apple). That is, most of the responding economists rated the Facebook, Amazon, and Apple cases either 1 or 2, at the weak end of the scale; and most assigned the medium rating (3) to the Google Search case. Only the Google Ad Tech case had an equal number of scores above and below 3, and none of the cases received a median score of 4 or 5.  

In brief, on average, the two Google cases received the strongest ratings in response to each prompt, and the Apple and Amazon cases received the weakest ratings in response to each prompt. However, most respondents did not consider any of the cases to be strong ones.

We also allowed for anonymous comments. The qualitative comments from the economists echoed many of the same themes as those from the law professors surveyed by Professor Crane. One economist noted the fundamental problem of market definition that plagues all five cases, lamenting the lack of a clear paradigm akin to the SSNIP test used in merger analysis – a concern that Professor Crane’s respondents also highlighted.

Some of the comments were rather strong. For example, one respondent identified him- or herself as a former  FTC economist and opined that “[t]hese are all TERRIBLE cases,” (caps in original) on the way to noting each case individually in highly unfavorable terms. Another respondent opined, “[o]n the economic merits, I think these cases range from quite bad to outright appalling.” 

Despite the overall skepticism, a few respondents saw potential merit in some of the cases. One economist described the Google AdTech case as “clearly the strongest,” noting that it “just doesn’t get as much attention as the other cases because it’s pretty complicated and the ad tech stack is unfamiliar to most people.” While respondents generally thought the Apple case was weak, that was not universal. One respondent said it was the strongest case because of private APIs. “Apple private APIs is why I think that case is strongest.”

Even those economists who gave relatively high rankings couched their assessments in caveats and contingencies, much like the law professors who predicted that more of the cases would lose than win.

What can we make of this striking convergence between the economists and the lawyers? At a minimum, it suggests that the perceived strengths and weaknesses of these cases cut across disciplinary lines. There seems to be a broad consensus that, while the government may have a path to victory–at least in several of the cases–it faces an uphill battle on all fronts.

Of course, as both Professor Crane and we have noted, these surveys are based on convenience samples, and they represent informed opinions rather than rigorous empirical analyses. Those cases that are not settled by the parties will be decided in the courts, not in the legal and economic academies, and certainly not in the blogoshpere. Complex questions of market definition, anticompetitive conduct, and competitive and consumer welfare effects will be hashed out through adversarial litigation.

Nonetheless, the alignment between these two expert communities is striking. It suggests a shared set of priors about the legal and economic merits of the government’s cases, at least as reflected in the complaints and other publicly available information.

Brian C. Albrecht is the Chief Economist of the International Center for Law & Economics. Daniel J. Gilman is a senior scholar of competition policy at the International Center for Law & Economics

Print Friendly, PDF & Email