Top Policy Trends 2020: Antitrust

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Shifts in 2020

Antitrust is getting a makeover, shifting from a focus on traditional views of competition in the physical world, to a more modern mindset that focuses on the new digital economy and the impact of data being concentrated in the hands of a few. Big Tech is being held accountable for many things: consumer privacy, data protection, halting the spread of misinformation, not engaging in anticompetitive behavior from owning both products and platforms, among other growing concerns. How Big Tech responds in 2020 could shift value to other companies or even create opportunities for new companies in the innovation economy.

 

45% of respondents are “very actively” looking to shape antitrust policy.

Source: PwC Election 2020 Poll, November 2019

The four influencers

FTC and DOJ

The Federal Trade Commission (FTC) and the Department of Justice (DOJ) are the two US regulatory bodies tasked with enforcing antitrust laws. They’ve agreed to split the investigations into Big Tech with each focusing on two of the major players. For 2020, the FTC has vowed to “monitor, study, and maintain competition” of technology, while also taking a closer look at consumer protection in the 21st century based on hearings it held in 2019; enforcement in the healthcare industry is also a priority.

DOJ Chief Makan Delrahim said during a speech at Harvard Law School that the agency is specifically looking at the collection of data and the impediment of competitor access to data.  Regulators are increasingly concerned about the impact of vertical integration in industries such as media and telecom, as large companies see the need to consolidate to remain competitive. As PwC noted, hostile antitrust reaction has had a measurable impact on media deals, with companies waiting on the results of pending litigation before entering into agreements.

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State AGs

US state Attorneys General from across the country are pursuing investigations, united in concern about control of personal data by large tech companies, anticompetitive practices that have led to their dominance, and breaches of privacy. States can flex their own muscle to tackle specific issues in the face of slow federal action. Consider how California is seeking its own tough state-level net neutrality law. Or how New York recently passed the SHIELD ACT that increases the AG’s enforcement authority to prosecute data protection violations on behalf of New Yorkers. States are also influencing the tenor of the investigations by urging the FTC to look beyond price to assess whether consumers are harmed, also pushing for focus on quality, privacy, and innovation.

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2020 Candidates

Antitrust has become a major election issue for the first time in decades, with many high-profile Democrats voicing concern about the market dominance of several large technology companies. Senator Elizabeth Warren (D-MA) has pushed for break up of Big Tech  companies, while Enforcement and penalties related to antitrust, in general, are increasing. Senator Amy Klobuchar (D-MN) introduced legislation that would give the FTC and DOJ the power to enact civil penalties for monopolistic practices — up to 15 percent of domestic revenues for the prior year or 30 percent of US revenues in affected markets during the period in which antitrust laws were violated — making the stakes for compliance much higher.

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Margrethe Vestager

Already known as a strong enforcer of anticompetitive behavior and tax avoidance during her previous term as European competition commissioner, Vestager’s reappointment for another five years likely means stepped up efforts to make Europe Fit for Digital Age. As Europe’s antitrust chief, she is focusing on enforcing competition rules — particularly around digital platforms. During an antitrust investigation in October 2019, Vestager ordered one company to halt certain business practices mid-investigation — a new move in antitrust enforcement.

Margrethe Vestager:  Already known as a strong enforcer of anticompetitive behavior and tax avoidance during her previous term as European competition commissioner, Vestager’s reappointment for another five years likely means stepped up efforts to make Europe Fit for Digital Age. As Europe’s antitrust chief, she is focusing on enforcing competition rules — particularly around digital platforms. During an antitrust investigation in October 2019, Vestager ordered one company to halt certain business practices mid-investigation — a new move in antitrust enforcement.
Margrethe Vestager:  Already known as a strong enforcer of anticompetitive behavior and tax avoidance during her previous term as European competition commissioner, Vestager’s reappointment for another five years likely means stepped up efforts to make Europe Fit for Digital Age. As Europe’s antitrust chief, she is focusing on enforcing competition rules — particularly around digital platforms. During an antitrust investigation in October 2019, Vestager ordered one company to halt certain business practices mid-investigation — a new move in antitrust enforcement.
Margrethe Vestager:  Already known as a strong enforcer of anticompetitive behavior and tax avoidance during her previous term as European competition commissioner, Vestager’s reappointment for another five years likely means stepped up efforts to make Europe Fit for Digital Age. As Europe’s antitrust chief, she is focusing on enforcing competition rules — particularly around digital platforms. During an antitrust investigation in October 2019, Vestager ordered one company to halt certain business practices mid-investigation — a new move in antitrust enforcement.

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37% of financial services respondents rank antitrust among top 3 policies most impactful to their business.

Source: PwC Election 2020 Poll, November 2019

How to prepare for the shift

Enforcement and penalties related to antitrust, in general, are increasing. Prepare for cost and complexity of compliance to go up, particularly as states increase their involvement in antitrust issues.

This means threading antitrust practices throughout your organization; continue to reevaluate policies while also emphasizing the importance of antitrust compliance to all your employees. Examine your practices within the framework of US antitrust regulatory standards. Determine whether any of them might constitute unfair competition.

Be particularly mindful when considering a merger or acquisition. With the exception of certain critical technologies, cross-border deals can still get done. Potential acquirers just need to up their due diligence so they can either avoid problematic deals from the get-go, or remediate deals that might land in a “grey zone” for regulatory authorities.

Any major enforcement against Big Tech could have trickle down effects for other industries. This could drastically alter targeted advertising practices, as well as data policies at every company.

Contact us

Alison Kutler

Principal, Strategic Policy Leader, PwC US

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