Op-Ed: Rep. Tom Campbell: Trump should follow AI's lead, not Biden's
Rep. Tom Campbell lays out an antitrust agenda for the Trump administration.
Last week brought further news that the Trump administration’s antitrust enforcers are woefully out of touch with the modern economy. The Biden administration had asserted that Meta was a monopolist in the market of “personal social networking,” and so, Facebook (now Meta) should not have been allowed to buy Instagram. Surprisingly, the Trump FTC continued this case after the Biden FTC left office.
On Tuesday, the federal court in Washington said that, whatever might have been true in the early Biden years, the present market relevant for economic purposes had changed. The FTC had claimed that the larger market of “social media services” was separate from the kind of communications between friends and family members that characterized Facebook and Instagram. The court held they were the same. With meticulous attention to evidence of consumers readily switching between Facebook, TikTok, Snapchat, Reddit and Youtube, the court demolished the FTC’s attempt to prove Facebook had monopoly power in a narrowly contorted market defined to include only three other participants (Instagram, Snapchat, and Mewe). The court updated the FTC’s definition of market, and found the FTC’s case deficient.
This most recent outcome is disturbing for the pattern it illustrates within the Trump antitrust police. Consider the FTC’s case against Amazon. Under the hyper-critical eye of Lina Khan (Biden’s pick to head the FTC and newly announced transition team co-chair to New York City Mayor-elect Zohran Mamdani), Amazon was faulted for requiring a merchandiser to make use of Amazon’s delivery services if it wanted to be put in a favored position on Amazon’s website. Such an assurance of reliable delivery was essential to Amazon’s value proposition to consumers.
Amazon’s practices have now changed over the two years since the Biden FTC first claimed Amazon was violating the antitrust laws. Merchandisers can offer their own delivery services and still be favored on the Amazon site, provided those services are as reliable as Amazon’s own. Amazon will even offer its delivery service for merchandisers who sell outside of Amazon’s own website.
The Trump FTC, however, continues to pursue Amazon, claiming Amazon is a monopolist “coercing sellers who want their products to be Prime eligible into using Fulfillment by Amazon, which makes it more difficult and more expensive for rivals to offer increased product selection.”
But conditions have changed in the on-line marketplace. The Small Business Roundtable reported last February that “of the marketplaces that SMB [Small and Medium Business] Leaders currently use to sell, Facebook Marketplace is the top primary choice for marketplaces used (28%), followed by eBay (19%), Amazon (15%), and Shopify (11%).”
This multiplicity of on-line marketing platforms makes it exceptionally difficult to maintain that Amazon has what the FTC complaint alleged: “monopoly power in two markets: (1) the online superstore market and (2) the market for online marketplace services.”
Without monopoly power, a company’s practice of ensuring quality delivery services would draw only praise from free market economists.
Like the FTC, the Trump Department of Justice has also run up against the inexorable advance of technology and changed market behavior. The Justice Department won its case against Google a year and three months ago. The federal court found that Google had monopoly power in the market for “general search services” and “general search text ads,” with 89 percent and 88 percent market shares, respectively. The court entered its remedy last September, striking down Google’s pre-positioning its search engine on smart devices and requiring Google to share parts of its database with competitors.
Like Amazon and Facebook, changed conditions have intervened in the Google case — even in the year between the decisions on the merits and on remedies. The federal district judge, quoting the US Supreme Court in another case, admitted the need for “a healthy dose of judicial humility,” since “judges ‘are neither economic nor industry experts…’”
What has happened to the market of “general search services” over the last year is nothing short of revolutionary. Walmart now partners with ChatGPT to allow instant check-out directly from the artificial intelligence result. Other on-line retail platforms are likely to do the same, lest they drop a consumer between her receiving search results and executing a sale.
The ads placed on an AI platform should have been included in calculating the percentage of on-line advertising commanded by Google. What are companies like Perplexity and Copilot offering except search? At the time of the court’s Google opinion, however, they had not developed sufficiently to be included in the calculation of Google’s share of the search market.
The Meta decision is a strong warning to the Trump administration to change course. The FTC has not yet decided whether to appeal its loss. The FTC’s case against Amazon has another year before it goes to trial. The Google case is on appeal.
It is not too late. The Trump administration has an opportunity to update its economic and legal conclusions drawn from a technological and e-commerce market now fundamentally transformed.
Or the White House can continue an approach critical of American business favored by former President Joe Biden and, presumptively, soon to be suggested to Mayor-elect Mamdani by a member of his newly minted transition team, former FTC chair Lina Khan.
Tom Campbell was the Director of the Bureau of Competition, the antitrust arm of the Federal Trade Commission, during the Reagan Administration. He taught antitrust law for many years at Stanford Law School, where he was a tenured professor, and at the Fowler School of Law at Chapman University, where he also served as Dean of the Law School and Professor of Economics. He was also Dean of UC Berkeley’s Business School. He holds a Ph.D. in economics from the University of Chicago, and a J.D., magna cum laude, from Harvard. Campbell served five terms as a US Congressman from Silicon Valley, including being a member of the antitrust subcommittee of the House Judiciary Committee. Mr. Campbell is an antitrust advisor to NetChoice, a trade association focused on promoting free expression and free enterprise. NetChoice includes Google, Meta, and Amazon among its members. These views are Mr. Campbell’s own.