Antitrust enforcement in 2022 has been varied and extensive in both the United States and the UK/ Europe. New legislative measures in all jurisdictions as well as unprecedented levels of civil and criminal enforcement have greatly expanded both the scope and breadth of what conduct may be reachable by the antitrust laws. This Article submits that, for the reasons described herein, close public and private partnership is the strongest and most efficient way to handle antitrust enforcement in the current environment.
The United States
The United States has seen a resurgence in antitrust enforcement in both public and private sectors in 2022. This concentration of activity by both sets of enforcers as well as key changes in the legislative and regulatory areas makes coordination and communication even more important moving forward. State attorneys general will also benefit from frequent communication with one another and their federal counterparts, as well as working with competent outside counsel who are closely following these developments.
Public litigation—more trials and new areas of focus
On the public side, the US Department of Justice has been particularly active under the leadership of Assistant Attorney General Jonathan Kanter, who heads the agency’s Antitrust Division. As of September 2022 the Division had seven pending civil antitrust lawsuits, which Kanter described as “the largest number of civil cases in litigation in decades.” He went on to say that he expected the Division to litigate more merger trials in 2022 than in any fiscal year on record. We have also seen an increased degree of cooperation on enforcement matters between the Department of Justice and international enforcers (such as the Bundeskartellamt, Germany’s competition regulator) and other federal and state enforcement agencies within the United States. And concerning the prospect of novel or difficult cases, Kanter said that “[i]mprovements to antitrust enforcement will not happen if the Antitrust Division is unwilling to challenge aggressively anticompetitive conduct and unlawful market consolidation. I am committed to bringing difficult cases. . . .” Lastly, and concerning Big Tech and digital markets, Kanter recently remarked, during a press conference on the Department of Justice’s January 24, 2023 complaint against Google relating to its digital advertising business, that “[i]t is now just as important — if not more — to protect competition in the digital marketplace of ideas, where powerful network effects make monopoly power even more durable and harmful, and the abuses by companies with monopoly power like Google even more pernicious.”
On February 2, 2023, the Department of Justice also announced major changes to its review of companies’ information-sharing practices. While previously the Department recognized what it called an “Antitrust Safety Zone” identifying certain kinds of information sharing that the Department of Justice would not prosecute (e.g. a survey managed by a third party such as a trade association, involving information more than three months old that was aggregated), this announcement abrogated this set of safe harbours, calling them “outdated” and “no longer reflective of market realities.” This change was framed as particularly necessary in light of the expansion of digital markets. In fact, Assistant Attorney General Doha Mekki devoted an entire section of her remarks to the principle that “[i[f we conceive of information exchanges with the limits of the physical world, we will miss anticompetitive conduct in new economy markets.”
The Federal Trade Commission (FTC) has also filed a case against Meta Platforms, Inc. (f/k/a Facebook, Inc.) concerning alleged monopolization in the market for personal social networking. The FTC’s case, which is very similar to a case filed by 48 state attorneys’ general that has since been dismissed, challenges various conduct by Meta including mergers with Instagram in 2012 and WhatsApp in 2014. The case is in the midst of discovery including substantial third-party discovery, with Meta issuing 142 document subpoenas to the FTC’s 160.
All of this suggests that governmental enforcers will continue to aggressively pursue novel antitrust enforcement cases and continue to explore opportunities to collaborate with international and domestic enforcers regarding the same.
Private litigation—big tech MDLs alongside state and federal enforcers
In 2022 multidistrict litigations (MDLs) were, as they often are, at the forefront of U.S. private antitrust enforcement. Two antitrust MDLs concerned Google’s unilateral conduct in the markets for app distribution and digital advertising, and both involved the coordinated prosecution of 1) class actions on behalf of private parties, 2) claims by individual plaintiffs, and 3) damages claims filed by dozens of state attorneys general. These cases have seen coordination between private and public enforcers on both high-level structural issues and more granular case management such as sharing time during depositions. The case against Google related to the Google Play Store (its app distribution platform) is set to go to trial in November of 2023 and will be a particularly interesting example of how modern antitrust claims on behalf of both private and public enforcers may be tried together. A subclass of app developers earning less than $2 million annually has agreed to a settlement that has been preliminarily approved.
Legislative and regulatory activity—new venue rules for state enforcers and expanded FTC activity
Lastly, there have been two major developments in the legislative and regulatory arena of antitrust enforcement that are likely to increase opportunities for governmental enforcers to participate in enforcement litigation in the United States going forward.
The first concerns the State Antitrust Enforcement Venue Act, which was passed on December 29, 2022 as part of the most recent omnibus spending bill. This new law makes antitrust suits, including those seeking money damages, brought by state attorneys general and the Department of Justice’s Antitrust Division exempt from consolidation by the Joint Panel on Multidistrict Litigation (JPML). A stated reason for the new law is to help state enforcers remain in their preferred venue, and this change will both strengthen opportunities for state AGs to bring cases where and how they choose and will also require increased coordination among enforcers at the public (state and federal) levels as well as coordination with private plaintiffs who may have similar cases pending elsewhere.
The second concerns a new policy statement by the FTC regarding its authority under Section 5 of the FTC Act concerning unfair methods of competition. This statement, which passed by a 3-1 vote in November 2022, expands the FTC’s view of its enforcement authority to address competition matters. The expanded view may yield: a possible resurgence in price discrimination cases brought by the FTC under the Robinson-Patman Act; cases involving practices that violate the “policy” or “spirit” of the antitrust statutes rather than the statutes themselves; and “incipient” violations of the antitrust laws, all by showing only “probable” harm to competition. Many states have consumer protection and antitrust statutes that track the language and jurisprudence of Section 5 of the FTC Act, and allow private enforcement. Moreover, this expanded interpretation of the FTC’s authority may lead to a similar expansion of enforcement capabilities for state AGs under the state “Little FTC Acts.”
Across the Atlantic, the UK has seen an expansion of the scope and breadth of competition enforcement, with scrutiny of global tech companies increasingly taking priority. This shift, along with significant legislative changes, has set the scene for a stronger, closer, relationship between public and private enforcement, especially in digital markets.
The Consumer Rights Act 2015
One legislative measure that has been in place for some time in the UK, and which is now coming to the fore, is the Consumer Rights Act 2015 (the “CRA”). This legislation introduced a collective action regime and gave the Competition Appeal Tribunal (the “CAT”) the jurisdiction to hear ‘standalone’ claims for breaches of competition law. In 2021, with the certification of the collective in Merricks v Mastercard, the regime clicked into gear, and several of the major collectives commenced in 2021 and 2022 are standalone claims against tech giants for abuse of dominance. The new system was designed to address the gap between public enforcement, which could issue fines and impose behavioural and structural remedies, and private enforcement, which could offer compensation to market participants harmed by competition infringements, but tended in practice to be limited to large companies with large individual claims. The new collective regime was designed to give access to justice to smaller businesses and consumers, by giving class representatives for UK citizens the right to bring proceedings on an opt-out basis, and creates a mechanism that would act as a powerful deterrent to corporate wrongdoers.
Since its creation, the collective action regime has succeeded in releasing the untapped resource of private enforcement, not least as which has coincided with the increase in investigations and allegations of abuses of dominance in digital markets. Claims for abuse of dominance tend to relate to factual matters that are not covert, unlike cartels. These claims can therefore be brought more easily on a standalone basis, as affected parties are in a position to identify anti-competitive conduct without the need for a regulatory investigation and enforcement decision. As a result, third party claims for abuse of dominance, particularly against the tech giants, are taking place in parallel to, and in symbiosis with, public investigations. In fact, the Competition and Markets Authority (“CMA”) acknowledges that the availability of private redress for consumers and businesses is an important complement to the CMA’s public enforcement.
Prime examples of the symbiotic relationship between public and private enforcement are the investigations by the CMA into abuses of dominance by Apple and Google in relation to their App Store and Play Store businesses respectively, and the collective actions against Google and Apple brought by class representatives Liz Coll and Dr Rachel Kent, respectively, on behalf of millions of UK consumers in relation to the tech companies’ alleged abuses of dominance. There are investigations and proceedings on foot in many jurisdictions regarding these issues, including adverse findings, but there are as yet no regulatory decisions in the UK, so these cases were brought on a standalone basis. The CMA commenced its regulatory investigation into abuse of dominance in the Apple App Store on 3 March 2021, and collective proceedings for compensation for consumers were launched shortly thereafter on 11 May 2021. Upon the filing of collective proceedings, the class representative is required to provide the CMA with a copy of the claim form. This ensures that the CMA is informed of the basis upon which private enforcement proceedings are brought, so that it can take that into account. In the case of the allegations of abuse of dominance against Google in relation to its Play Store, collective proceedings were launched first, on 29 July 2021, and the CMA was provided with a copy of the claim form in those proceedings, almost a year before the start of the complementary investigation, on 10 June 2022.
Public body interventions into private actions
The CMA has, as a matter of right, the ability to participate in private actions before the CAT and, in particular, the CMA has the right to submit written observations to the CAT on issues relating to the application of relevant competition law along with making oral observations at the hearing with the CAT’s permission. In 2021, the CMA’s Senior Director of Litigation stated in a keynote address that the CMA is likely to intervene in collective proceedings, especially where claims raise policy or legal issues that could affect the CMA’s own decisions, stating that “the CMA’s work will be complemented by private enforcement and, over the coming years, it will increasingly be intervening in private actions”.
Since then, the CMA has followed through on its promise, intervening in both the Apple App store and the Google Play Store collective actions, and a separate private action brought by Epic Games against Google in relation to its Play Store conduct. Through its position as an intervener, the CMA is then in a position to be informed about the progress of the proceedings, to have access to materials that are the subject of those proceedings, and to make submissions where appropriate. None of this adversely affects the progress or the proper conduct of any parallel regulatory investigation. On this basis, both the public and private enforcement proceedings are able to progress expeditiously, while minimising any possibility of conflict.
Looking to the future of the UK, legislative measures have been proposed to increase the scope and breadth of competition enforcement to meet the challenge of regulating digital markets, as part of a pro-competitive, ex ante regime. A Digital Markets Unit (“DMU”) has been established as part of the CMA in order to oversee a new regulatory regime for the most powerful digital firms. Legislation will be needed in order to grant these powers to the DMU but, in the meantime, the DMU is focussed on evidence gathering on digital markets in order to provide key insights into the shape of the forthcoming pro-competition regulatory regime, including the preparation of an enforceable code of conduct to mitigate the effects of the market power of digital gatekeepers. The initial focus will undoubtably be public enforcement, and the extent to which the proposed regime will harness the power of private enforcement remains to be seen.
In Europe, symbiosis between public and private enforcement has been made a feature of the ex ante legislative regime crafted to meet the challenge of enforcement against digital gatekeepers. The Digital Markets Act (“DMA”) – is in the form of a regulation, and can therefore be enforced privately by third parties on a standalone basis before the national courts where infringements occur, or in follow-on actions for damages that arise from infringements determined by the European Commission.
Given the market power of the tech giants, harnessing the resources of the private sector to stand shoulder to shoulder with public authorities in enforcing competition law seems logical. In December 2021, the Netherlands Authority for Consumers and Markets ordered Apple to change its App Store rules and allow dating apps to offer alternate payment services. Apple failed to comply, instead incurring the maximum fine of €50m from the regulator. In circumstances where tech giants have the financial strength to pay fines without breaking step, the prospect of liability for damages–assessed by reference to the loss suffered by claimants, whether they are competitors, customers or consumers–is an important additional deterrent. These claims can reach billions of pounds or euros in digital markets that are adversely affected by abuses of dominance, and the legislative regime thus harnesses the resources of both the public and the private sector in meeting the challenge of enforcing competition law in fast moving digital markets.
Antitrust legislation has expanded in scope and breadth to meet the challenge of regulating digital gatekeepers. We have reviewed how aspects of these legislative measures have harnessed the resources of both the public and the private sector in seeking to render the enforcement of that regulation effective. The indications are promising, on both sides of the Atlantic, that the health of the enforcement ecosystem is growing, as it must do to meet and match the challenges posed by the extraordinary growth in digital ecosystems that now dominate our lives. In this context, close collaboration and efficient co-ordination between the public and private sectors will be essential to keep digital markets healthy and competitive.*