Structural Antitrust Relief Against Digital Platforms

Structural (“breakup”) remedies for monopolization cases under § 2 of the Sherman Act are uncommon. When they do occur the courts almost always break firms along the boundary lines that had been formed by an earlier combination or merger. The FTC’s current request that Facebook spin off Instagram and WhatsApp are of this kind. The complaints in the government cases against Google Search and Amazon are far more general. The choice whether to “break up” a violator or use a more focused remedy, such as an injunction against anticompetitive practices, depends significantly on how much faith we have in the market to correct the problem. An injunction opens the path for more competitive choices, but consumers and other users must still take advantage of them. By contrast, a structural remedy such as a breakup often removes choice or severely restricts its domain. By and large, the antitrust record of monopoly breakup decrees has not been pretty. The courts certainly have the power to ruin a firm, but coming up with a structural remedy that will actually increase output or improve the welfare of consumers or labor is not easy. When the market in question is a digital network, different considerations apply that can point in both directions. First, “breaking up” a network is much more difficult and hazardous. On the other hand, sharing obligations that involve data portability or interconnection are often easier to develop and apply. One limitation of a court, as opposed to a legislature, is that the court has jurisdiction over only the parties, not to others who might be needed to make a sharing decree work. When considering the appropriate remedy for a proven antitrust violation, courts should always look first to injunctions, which can be more effectively targeted at the harm and are likely to do less collateral damage. Then “quasi-structural” relief such as interoperability decrees should be considered, and strictly structural remedies only as a last resort.