Read More Prompts Here!
In the second entry of The Prompt series, our experts tackled a question on a recent public consultation period by the Federal Trade Commission (FTC):
"In light of the FTC’s recent public consultation on “censorship” by social media platforms, is there a fact set that allows antitrust to reach conduct such as censorship or shadowbanning?"
The Prompt
Answering antitrust challenges one question at a time
The Chamber has assembled a range of preeminent experts in the field of antitrust from across a wide political spectrum to offer timely views on key questions of antitrust law and policy. This group brings together senior enforcers spanning seven administrations, from both the Antitrust Division at the Department of Justice and the Federal Trade Commission.
13 responses suggest that there would need to be an agreement amongst platforms...
“Agreements to censor – to the extent they reduce output – could be considered as a potential antitrust violation.”
“Potentially – but facts matter. Absent an agreement among competitors, it is very difficult to see the issue as a competition law violation.”
“The easy case is one in which there is coordination among competitors to limit output. The much harder case is one involving unilateral actions even if the unilateral action is an exercise of market power. In those instances, it seems unlikely that antitrust could effectively govern how a firm chooses to manage content.”
“Antitrust cannot reach the unilateral, non-deceptive content moderation policies of the social media platforms. But it can reach group boycotts. Seen in context, it is clear that the current chair of the FTC is using the agency's powers to attack free speech, in the form of the platforms' content moderation policies, not to promote or defend it...”
“Theoretically there could be some theory based on collusion, if there is evidence platforms explicitly agreed to boycott conservative content. However, claims that platforms making independent editorial decisions on content is an antitrust violation because they had market power does not fit any established Section 1 theory. It sounds more like a public interest standard for media mergers under FCC review, but that does not apply to conduct or to entities not subject to FCC oversight.”
“If censorship or shadow-banning is undertaken collectively by several platforms, that could fit into the case law prohibiting group boycotts. There’s a potential First Amendment defense, depending on how one reconciles the Supreme Court cases in Trial Lawyers and Claiborne Hardware, but an agreement among platforms would present a clear question under Sherman Act Section 1. The issue is similar to recent challenges to collective ESG-focused alliances, based mainly in Europe but arguably with U.S. effects. Although the alliances were encouraged by numerous foreign governments and leading NGOs such as the United Nations, commercial participants withdrew from some of them (see Net Zero Insurance Alliance) and restructured their collaboration once they were apprised of U.S. antitrust exposures.”
“This is proverbial old wine/new bottle. Former Commissioner Pamela Jones Harbour pushed the FTC to expand reach of competition mandate to cover privacy, including during the review of the Google/Double-Click deal. Much thought was put into it then and the conclusion from a lot of smart people was that it was just another non-price element of competition – like quality. But hard to imagine using censorship or shadowbanning as the sole factor in challenging conduct. Focusing on traditional price or other traditional non-price elements should be sufficient.”
“This strikes me as similar to the discussion around whether there can be competition issues relating to data privacy concerns. I think there can be, but it’s going to be a pretty narrow set. In the censorship space, you could imagine, for example, competition for users and potentially advertisers based on policies relating to taking down certain types of content. Or you could potentially think about a firm with a so-called 'platform' position exercising some kind of monopsony power vis-à-vis advertisers or speakers of certain viewpoints. But I’m really stretching here.”
“Yes. In theory, censorship could be viewed as a reduction in consumer welfare if such conduct degraded the consumer experience or were otherwise undesirable by consumers. For example, if several competitors agreed to a set of speech restrictions, such an agreement could be akin to an agreement not to compete on product quality. Similarly, speech restrictions could reflect a degradation of product quality by a monopolist exercising market power. Establishing such violations would be fact dependent and face hurdles, but it is at least plausible for Sherman Act theories to apply.”
“Those practices can be reached when they involve joint agreements (explicit or tacit) among competitors not to give access to certain speakers or types of speech. Such agreements could be characterized as illegal agreement not to compete on quality with respect to certain aspects of speech, in violation of Sherman Act Section 1 and FTC Act Section 5. It is also conceivable that joint conduct falling short of a contract that has such a speech-restrictive aim could be deemed as a violation of Section 5 of the FTC Act’s prohibition on unfair methods of competition, though it did not violate Sherman Act Section 1. Mere unilateral conduct to restrict speech, absent government coercion that may be deemed to have compelled such conduct, would not be an antitrust violation.”
“Yes, because of the question's breadth. On the antitrust side, if a group of competitors used censorship to limit competition among them or prevent competition from others, that would be an antitrust violation. If a company used censorship to obtain, protect, or expand a monopoly, that could violate antitrust laws as well (depending on the application of Trinko, etc.). The FTC has not offered a credible theory on how any of this activity has or could create, or protect, or expand market power. The FTC chair has said censorship is a reduction in quality, but that misses the fundamental point. Successful censorship might be evidence of market power; it says nothing about whether a violation of antitrust laws has occurred. Back when a local newspaper could be a monopoly, such a paper could refuse to print anything it wanted to. That decision could very well reduce the quality of the newspaper. It would not violate the antitrust laws. Nor is there much evidentiary basis to suggest the alleged activity is occurring. At a time when the agencies face massive demands and shrinking resources, the public consultation looks like a quixotic quest to find a problem that this FTC wants to exist. It should surprise no one, however, that this is where this FTC is focusing its attention.”
“At the outset, I confess I have not followed the FTC’s public consultation very closely and certainly did not participate on my own or on behalf of a client. Consequently, I have not considered the views expressed there in providing this answer. Having said that, depending on the relevant circumstances, the antitrust laws in theory could reach conduct that could be characterized as censorship or shadowbanning. If for example X and Instagram agreed to adopt and coordinate the same shadowbanning policy, it seems to me such an agreement could violate section 1 of the Sherman Act. Of course, the likelihood that there is evidence that competing, independently owned platforms have conspired seems low. Nonetheless, an agreement not to compete on censorship policy would be within the ambit of the Sherman Act (or the FTC Act) notwithstanding it does not directly impact price; while there would be good arguments that the agreement is not per se illegal but is subject to the rule of reason, justifications based on the value of the social policies promoted by the non-compete would almost certainly be disregarded. Whether unilateral censorship or shadowbanning, even by a platform with market power, would be subject to antitrust condemnation is less certain. At a minimum, the government or a plaintiff, it seems to me, would have to show that the conduct had an exclusionary effect in a market in which the platform competes. It’s not clear to me the government could show that since it is my understanding that most censorship or shadowbanning was the result of governmental pressure (maybe a First Amendment problem) or for a political purpose (outside the ambit of the antitrust laws). But again, I haven’t focused on all the arguments being made by the proponents of the use of the antitrust laws.”
“Social media platforms compete along several dimensions, including arguably with respect to their content moderation policies. Therefore, actual collusion (not merely parallel conduct) among platforms with respect to their individual content moderation policies (or to deny or degrade access to specific speakers or viewpoints) could violate the Sherman Act by unreasonably restricting this aspect of their competition. Depending on the facts, there could be a question whether an alleged agreement to 'de-platform' certain types of speech is commercial conduct that could lead to antitrust liability or protected speech. The Supreme Court established the framework for assessing this question in Superior Court Trial Lawyers: Antitrust applies to an agreement among competitors where those competitors 'stand to profit financially from a lessening of competition in the boycotted market.' Such a 'commercial' boycott would not be sheltered from antitrust enforcement by the companies’ asserted good intentions. Even if a collusive content moderation-related agreement would not directly impact price (compare public defender pay in Superior Court Trial Lawyers) because of the nature of social media platforms, it could ensure that no competing platform would lose users and advertising revenue as a result of an independent decision to block or restrict certain content. In contrast, I do not believe that a company’s unilateral content moderation decisions could successfully be challenged for two reasons. First, the antitrust laws do not prohibit even a monopolist from unilaterally determining the price or non-price attributes of its product. Second, just like the First Amendment precludes the government from determining what editorial policy a newspaper can adopt, it should preclude the government from determining the content moderation policies of social media platforms.”
Five responses express other sentiments of skepticism...
“It would be a stretch. Even under the consumer welfare standard, finding that harmful consolidation or business practices negatively impact content moderation is tough. The pathway would be a non-price effect like quality, where competition generates stronger incentives to feature diversity of opinion on media platforms. Even then, because of network effects, more competition may not deliver more diversity.”
“The case for using antitrust law to combat censorship is weak. It would have to be grounded in the claim that a firm that reaches a certain degree of economic dominance becomes something like a common carrier or public utility that then has obligations of reasonable access and non-discrimination. It's one thing for a public utility commission to determine the allowable price for electricity or telephone service, and quite another for a court to start regulating a private company's decisions about what speech to allow on its platforms.”
“One could imagine where antitrust and censorship overlap. However, that overlap is not significant and there are limits to what sort of conduct firms must undertake subject to a prior course of dealing. Recent courts cases explain why. Take for example FTC v. Qualcomm, which noted that the Sherman Act 'does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.' Similarly, in Aerotec Int’l, Inc. v. Honeywell Int’l, Inc. the court stated 'Competitors are not required to engage in a lovefest; indeed, ‘[e]ven an act of pure malice by one business competitor against another does not, without more, state a claim under the federal antitrust laws.’”
“It is hard to think of one. Antitrust law exists to regulate competition. So if there is a merger that will reduce competition in news or media delivery, then there is a place for a Clayton Act analysis around whether that reduction in competition will impact competition by or among journalists to deliver the news. Beyond that, the Founders almost certainly would be disturbed to learn that laws created to regulate competition in interstate commerce and big businesses are now being used to regulate free speech on tech platforms. That is the job of the First Amendment and it is not the place of antitrust law to fill that void through content moderation and regulation. To be sure, tech platforms have become critical sources of news for many, but no more than any administration can regulate what appears on 60 Minutes should any administration be able to regulate what appears on Meta, Google, or any other site. Indeed, Truth Social provides a great example of how quickly innovation and entry can occur if there is demand. There is a broader (and critically important) discussion to be had about whether, in the mid 90s, the rise of MSNBC and Fox News broke the democracy by providing politicized platforms for Americans to receive their news. But it is hard to see how regulating tech platforms is any different than telling a news outlet what they can and cannot offer from a content perspective. That is not the task of antitrust law.”
“The FTC's 'censorship' initiative is just the latest example of the bipartisan perversion of antitrust to pursue political agendas that have nothing to do with antitrust, and little to do with consumer protection. Beginning with the Biden FTC under the neo-Brandeisians and continuing in the early stages of the Trump administration, we are seeing the agencies erode decades of hard-won credibility by pursuing initiatives aimed at pleasing the partisan urges of their political leaders that aren't grounded in law, economics or facts. Unilateral decisions about content policies, even by dominant platform firms, are lawful, and absent credible evidence of collusion among competing tech platforms, there is no apparent antitrust issue. One platform's content choices are an invitation to competing platforms to make different choices, as we see playing out in the real world. While we could imagine possible consumer protection issues, we need to acknowledge the obvious: this initiative is not about law enforcement or about protecting free speech, but about partisanship.”
