DOJ Antitrust Chief Stresses Role of Competition in Digital Economy
June 11 2019 - 12:48PM
Dow Jones News
By Brent Kendall and Dov Lieber
TEL AVIV -- The Justice Department's top antitrust official said
Tuesday he would act to protect competition in the digital
marketplace, his first public remarks since news reports that t he
department was preparing to investigate Alphabet Inc.'s Google.
U.S. Assistant Attorney General Makan Delrahim, in remarks
delivered via video to a Tel Aviv University antitrust conference,
didn't specifically mention plans for an investigation of big tech
firms, but he noted that a close examination of the digital economy
is important in markets where one or two companies are
dominant.
"The current landscape suggests there are only one or two
significant players in important digital spaces, including internet
search, social networks, mobile and desktop operating systems, and
electronic book sales," Mr. Delrahim said. "This is true in certain
input markets as well. For example, just two firms take in the
lion's share of online ad spending."
Some markets, he said, have few firms "for reasons having
nothing to do with a failure of competition. Even so, digital
markets are not impervious to anticompetitive transactions, illegal
restraints and unlawfully obtained or exercised monopoly
power."
Mr. Delrahim's speech stressed that dominant companies can raise
competition concerns in ways other than higher prices, an issue
particularly relevant in the digital economy, where some companies
give away their services free.
"Price effects alone do not provide a complete picture of market
dynamics, especially in digital markets in which the
profit-maximizing price is zero," he said.
Antitrust enforcers are concerned about harms to innovation,
product quality and privacy, the DOJ antitrust chief said. He
compared today's tech giants to the Standard Oil monopoly of the
late 19th and early 20th century.
"Like today's tech giants, Standard Oil was pioneering and
generated a number of important patents. Scholars have noted,
however, that Standard Oil's innovation slowed as it became an
entrenched monopolist," Mr. Delrahim said.
The Wall Street Journal reported May 31 that the Justice
Department's antitrust division was laying the groundwork for an
antitrust investigation of Google, after reaching a jurisdictional
agreement with the Federal Trade Commission. The department hasn't
commented on whether it was planning such an investigation.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
June 11, 2019 12:33 ET (16:33 GMT)
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