DOJ Antitrust Chief Stresses Role of Competition in Digital Economy

Date : 06/11/2019 @ 5:48PM
Source : Dow Jones News
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DOJ Antitrust Chief Stresses Role of Competition in Digital Economy

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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)

Copyright (c) 2019 Dow Jones & Company, Inc.

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