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GOP and Democrat Antitrust Focus Unwittingly Helps China

By Steve Pociask and Edward Longe, ACI


There is a widespread belief that social media platforms like Google, Amazon, and Meta Platforms are too big. Unfortunately, this misguided belief is not only publicly popular but also becoming mainstream among officials in the Biden Administration, Congress, and federal regulators at the Federal Trade Commission and the Department of Justice. This erroneous and flawed line of thinking has pushed lawmakers to consider changes to America’s antitrust laws.

Unfortunately, this new era of trustbusting will only harm consumer welfare and surrender America’s tech leadership to foreign competitors who are well-positioned to fill the void. To be clear — recent antitrust proposals endanger not only consumer welfare but. Congress must reconsider.

A growing number of Democrats have publicly stated that big business is bad business. Last July, President Biden issued an executive order designed to increase competition in a  range of sectors – including transportation, meat production, high technology, financial services, medicine, and other sectors – all while invoking the memories of the Gilded Era of “trustbusting.”

While most Democrats are on board and, as noted in the Wall Street Journal, and the President is being called upon to push these antimarket efforts, some Republican lawmakers have expressed a desire to reign in social media companies, concerned about content moderation that may reflect a liberal bias, which censors some conservative speech. That issue is a Section 230, while changing the antitrust laws is a heavy handed big government approach that is ironically being aided by conservative policymakers.

The Department of Justice (DOJ) and the Federal Trade Commission (FTC) are changing the playbook of enforcement guidelines, making it easier for enforcement agencies to use the current antitrust laws to ramp up challenges to businesses practices, acquisitions, and private contract arrangements between firms. The increased scrutiny on deals and practices will inevitably lead to a significant increase in lawsuits and enforcement actions, even when these deals and practices benefit consumers, an antitrust test known as the consumer welfare standard.

The Congressional actions to rewrite current antitrust laws have led to numerous legislative proposals that target social media platforms. Depending on the bill, the various approaches would give the FTC and DOJ more enforcement power, break up large tech firms or limit their lines of business, prohibit some mergers and increase merger fees, ban tech companies from self-preferencing, or favoring their online products, among other things. In addition, Senator Klobuchar’s proposed legislation would significantly change antitrust laws, including tossing out the well-established consumer welfare standard.

What these proposals ignore, however, is the highly competitive nature of the tech industry, particularly among social platforms. For example, while Google’s YouTube and Meta Platforms are among the largest U.S. social media platforms, they both face competition from video-focused networking service TikTok, with over 130 million active users in the U.S. In fact, the Wall Street Journal reported that “TikTok was the internet’s most visited site in 2021, even beating Google.”

The emergence of TikTok as a direct competitor to U.S. social media companies is notable for two reasons. Firstly, it shows that the social media market is competitive, with new threats emerging against incumbents. Secondly, the emergence of TikTok should serve as a warning to lawmakers because it shows that imposing onerous restrictions on how American social media platforms operate would help foreign platforms who don’t have to comply with the new rules.

New antitrust legislation is also targeting Amazon, though it is smaller than Walmart, which is the second-largest e-retailer in the U.S. In addition, some legislative proposals will unquestionably force Amazon to drop its Amazon Prime service since it treats its Prime subscribers and non-Prime customers differently. No matter, Alibaba, a Chinese company, has grown to become another dominant e-commerce player and a direct challenger to Amazon in overseas markets has sought to grow its U.S. footprint exempted from the most onerous antitrust proposals.

Some proposals suggest that the Meta Platforms acquisition of WhatsApp, which led to free text, video, and telephone communication, should be reversed, which would mean that consumers would likely have to pay for service, as consumer did prior to the merger with Meta Platforms. These antitrust bills will result in higher prices for consumers, just as China’s WeChat waits in the wings is with 1.4 billion U.S. users and plans to grow its U.S. presence.

While reining in social media platforms may be politically popular among lawmakers, it should be abundantly clear that any changes to America’s antitrust laws would harm consumers and surrender the countries global tech leadership. It also opens a door to a command and control regulatory environment that will eventually target other sectors of the economy.

Congress must reject any new impetus to reform antitrust laws and ensure the United States maintains an open and accessible regulatory environment that has allowed social media platforms to flourish and provide consumers with substantial benefits.



Steve Pociask is President and CEO and Edward Longe is a Policy Manager at the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.