News
DC is testing its Big Tech antitrust campaign away from DC
The Biden administration is testing its antitrust push far from Washington as it seeks to lessen Big Tech’s dominance.
The nation’s capital is no longer the preferred trial venue for the Justice Department and the Federal Trade Commission, which are bringing competition challenges against Silicon Valley’s biggest names.
Instead, it was in New Jersey that the government decided to sue Apple (AAPL). Or in California, where he challenged Microsoft (MSFT). Or Washington state, where it confronted Amazon (AMZN). Or in Virginia, where it filed a second antitrust lawsuit against Google (GOOG, Google).
“They are clearly bringing these technology cases in different jurisdictions where the law is less developed,” said Douglas Ross, an antitrust professor at the University of Washington School of Law. “And they’re doing it for a reason.”
Attorney General Merrick Garland speaks during a press conference on March 21 as he announces a sweeping antitrust lawsuit against Apple. The case was opened in New Jersey. (AP Photo/José Luis Magana) (ASSOCIATED PRESS)
A variety of strategies could explain the multijurisdictional approach, according to antitrust lawyers.
Prosecutors could target appellate courts with jurisprudence more favorable to their legal theories, since all district courts selected by Biden’s FTC and DOJ report to different appeals courts.
The government could also be evaluating a court’s speed in handling litigation and the convenience for early witnesses, said Juan Arteaga, a partner in Crowell & Moring’s antitrust litigation division.
It’s also possible, he added, that government officials want to display vigorous anticompetitive enforcement to the rest of the country.
“I think the current leadership team and the DOJ antitrust division have really made a point of trying to move antitrust enforcement out of the D.C. bubble,” Arteaga said.
Ross is more skeptical of a strategy that seeks jurisdictions where judges have less antitrust experience and where there are fewer antitrust enforcement cases underway.
Outside of D.C. and a few other popular antitrust districts, Ross said, “antitrust is like a hen’s tooth — there are very few cases and most average federal district judges haven’t heard any antitrust cases.”
DC Domain
DC has been the location of choice for many of the most prominent antitrust cases in US history, including landmark cases against ATT (T) and Microsoft (MSFT) in the 1970s, 1980s and 1990s.
Its dominance goes back even further in time.
Since 1899, first year records are available, DOJ presented 391 antitrust cases in the district.
That’s nearly double the closest count of 222 records in the Northern District of California and 220 in the Southern District of New York.
The story continues
Then-Microsoft President Bill Gates at a June 2000 press conference in Redmond, Washington, to discuss the Justice Department’s antitrust case against his company. (Photo: DAN LEVINE/AFP via Getty Images) (DAN LEVINE via Getty Images)
It has also maintained its dominance for most of the last decade. D.C. has been home to the most new cases, or tied for that title, from 2015 to 2022.
That changed last year. In 2023, the government filed more antitrust lawsuits in several places outside of DC, including states like Michigan and Oklahoma.
When considering private antitrust lawsuits, the district with the highest number of competition lawsuits combined last year – totaling 42 – was the U.S. District Court for the Northern District of California. Federal district courts in New Jersey, Illinois and New York followed.
The D.C. government’s move is happening at a time when there are growing concerns within the legal community about purchasing judge in the hope of sympathetic decisions, and the state and federal governments intervening in private antitrust litigation.
Bills to disrupt judicial power in single-judge districts have been introduced in the Senate, and the Judicial Conference recommended changes to the case assignment process in March.
Changing course
The Biden White House kicked off its campaign against Big Tech close to home, in D.C. District Court. That’s where the FTC, under Biden-appointed Lina Khan, archived again action against Facebook in 2021.
That case, first brought during President Trump’s administration, alleged that the social media giant illegally blocked competition through its acquisitions of Instagram and WhatsApp.
It also took on another case filed in DC by the previous administration, against Google, challenging the company’s dominance in online search. A judge’s decision in this case is expected soon.
Then prosecutors changed course and moved away from DC.
In December 2022, the FTC chose the U.S. District Court for the Northern District of California to challenge Acquisition of video game giant Activision Blizzard by Microsoft. The effort failed, and regulators appealed the issue to the 9th Circuit.
A month later, in January 2023, the DOJ accompanied by 8 state attorneys general pursued Google in a second antitrust case, this time in the U.S. District Court for the Eastern District of Virginia. Prosecutors alleged that Google abused its monopoly in the digital advertising technology market.
In September 2023, the FTC and 17 states processed Amazon in the U.S. District Court for the Western District of Washington. The lawsuit accused the retail giant of illegally monopolizing online marketplace services.
Then this year, in March, the DOJ and a group of state attorneys general processed Apple in the US District Court in New Jersey. The promoters claimed Apple illegally abused its dominance in the smartphone market.
‘Trying to avoid the DC circuit’
New Jersey is a less logical place for the government to challenge Apple when compared to some other cases outside of DC.
Amazon was attacked in Washington DC, where the company is headquartered, and Microsoft was sued in the Bay Area, where it has a significant physical presence.
But Apple is not domiciled in New Jersey nor does it have dominant operations there.
One factor that may help explain the government’s choice is that appeals from New Jersey’s federal courts are heard by the 3rd Circuit Court of Appeals, which in recent years has made decisions This could further the government’s claims against the iPhone maker.
“I think the DOJ concluded that the case law was much more favorable to the 3rd Circuit than the 9th Circuit,” Arteaga said.
Apple CEO Tim Cook in April. (AP Photo / Achmad Ibrahim) (ASSOCIATED PRESS)
As for the case against Google in Virginia, the DOJ may be looking for a quick solution. The Eastern District Court won its “rocket summary“nickname for the speed with which it deals with disputes.
“I think there’s probably an element of trying to avoid the D.C. Circuit,” Ross said. “Whether this will be worth it to them or hurt them, I don’t know.”
The tactic, he said, could lead to more chaos in the law and increase the chances of one of the cases being heard by the Supreme Court.
Keith Harrison, also a partner in Crowell & Moring’s litigation practice, said bringing cases against the country’s most dominant and consumer-oriented companies could be valuable to the administration, win or lose, as it tries to communicate its agenda to a wider population.
“That [Apple] the case will be a big case wherever it takes,” Harrison said. “But in New Jersey, it will be the biggest case in that court and in the local news regularly.”
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
Click here for the latest technology news that will impact the stock market.
Read the latest financial and business news from Yahoo Finance