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June 15, 2019, 10:23 a.m. EDT

Four reasons why antitrust actions will likely fail to break up Big Tech

Facebook, Google, Amazon and Apple are being targeted, but experts say that using antitrust law against them is unlikely to be successful

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By Jon Swartz


Bloomberg News/Landov
”Facebook is the most vulnerable of the four companies under scrutiny because of its dominant status in an easily defined market,” one expert said of reported U.S. antitrust investigations into four of the largest tech companies in the world.

If federal regulators are serious about prosecuting Big Tech icons for antitrust practices, they’ll probably have to redefine what constitutes a monopoly in the industry.

That is one of many steep obstacles in the way of officials at the Justice Department and Federal Trade Commission as they consider reshaping Facebook Inc. /zigman2/quotes/205064656/composite FB +1.01%  , Alphabet Inc.’s Google /zigman2/quotes/202490156/composite GOOGL +1.86% /zigman2/quotes/205453964/composite GOOG +1.79% , Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -0.86% , and Apple Inc. /zigman2/quotes/202934861/composite AAPL +1.19%   through potential probes.

Previously: Feds target four of the biggest tech companies in U.S.

“The likelihood of a Microsoft- or AT&T-like Sherman Act proceeding is highly remote,” Andrew Jay Schwartzman, an attorney with Georgetown’s Institute for Public Representation told MarketWatch in a phone interview, alluding to the Sherman Anti-Trust Act (1890), the first federal law that outlawed monopolistic business practices.

Any endeavor to slice off pieces of the four tech titans or impose restrictions on how they do business is a Sisyphean task in terms of legal maneuvering, resources, and especially time, according to antitrust experts, former regulators and legal scholars.

“Antitrust is a slow, messy remedy,” warns Adam Thierer, a senior research fellow at George Mason University’s Mercatus Center. “It can be a sledgehammer approach when what this situation requires is a scalpel.”

“How the heck would any of this apply to Facebook, Amazon, or Apple? How do you cleave off their units and divest them?” Thierer says.

Regulators face an onerous task. None of the individual companies cry out “monopoly,” but collectively — as Big Tech — they present strong evidence. Apple and Google, for example, control more than 95% of all mobile app spending by U.S. consumers, and the Google-Facebook tandem command nearly 60% of all digital advertising spending world-wide. Amazon, meanwhile, has significantly impacted industries such as booksellers, grocery stores and the postal service.

Opinion: Big Tech is now on feds’ hit list, but will anything really change?

Further muddying the picture, Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +1.29%  — the subject of a yearslong investigation that led to no breakup in the early 2000s — is not under federal scrutiny now, even though it has never been more valuable. On Friday, its market capitalization topped $1 trillion, $100 billion more than Apple or Amazon.

In pursuing antitrust actions against four of the largest public companies in the world, the federal government faces four major challenges.

Defining a monopoly in the internet age

In past marquee antitrust cases, the road map for a breakup was relatively straightforward. The Standard Oil case, decided by the Supreme Court in 1911, split up the company largely along geographic lines.

Easier said than done with tech. Critics of Facebook contend it’s a monopolistic entity because it dominates the online attention of more than two billion people and controls their personal data. But Facebook has competition in the social-media market with Twitter Inc. /zigman2/quotes/203180645/composite TWTR +1.25%   and Snap Inc. /zigman2/quotes/205087158/composite SNAP -2.99% ,  unlike AT&T Inc. /zigman2/quotes/203165245/composite T +1.41%   and its Bell System, which had a nationwide stranglehold on local telephone operators, long-distance service and telephone equipment before its breakup in the 1980s.

Facebook also doesn’t have such easily identifiable boundaries. Social networking occurs only through reaching as many people as possible and connecting them with others, making the idea of separating parts of the business much more complex.

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