The Big Tech Antitrust Paradox: A Reevaluation of the Consumer Welfare Standard for Digital Markets

Abstract

In the contemporary American technology landscape, companies such as Apple, Amazon, Google, Meta, and Microsoft exercise unparalleled influence by offering ostensibly “gratis” services. This Article interrogates the veracity of this “free” paradigm, contending that consumers engage in a de facto quid pro quo by tendering personal data. We critically examine the application of the consumer welfare standard in antitrust jurisprudence, a standard that has enabled such corporations to amass significant market power without triggering traditional antitrust scrutiny. Courts have abstained from applying extant antitrust principles to these firms, largely due to an overreliance on consumer price as the litmus test for competitive harm under the consumer welfare standard. We posit that this misapplication perpetuates market concentration, thereby inhibiting innovation and disproportionately impacting vulnerable consumer demographics and small enterprises. To rectify this interpretive misstep, we advocate for the reconceptualization of data as a currency. Such a doctrinal shift would ameliorate the prevailing incongruities in the application of the consumer welfare standard, furnishing regulatory agencies and state Attorney Generals with a more nuanced metric for antitrust and consumer protection enforcement. The Article is segmented into four sections: (1) a reconceptualization of “free services” in the digital age, (2) an empirical analysis of burgeoning market concentration and its concomitant impact on technological innovation, (3) a historical exegesis of the consumer welfare standard’s integration into antitrust law, and (4) a critique of the standard’s role in diminishing consumer welfare. We conclude by proffering a suite of methodological frameworks designed to recalibrate the assessment of consumer welfare and market competition in technology sectors. This reevaluation is pivotal for the invigoration of competition and innovation within the American tech industry.

Details

Publisher:
Stanford University Stanford, California
Citation(s):
  • Christos A. Makridis & Joel Thayer, The Big Tech Antitrust Paradox: A Reevaluation of the Consumer Welfare Standard for Digital Markets, 27 Stan. Tech. L. Rev. 71 (2024).
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