Senior Vice President, International Regulatory Affairs & Antitrust, U.S. Chamber of Commerce
September 25, 2023
Assistant Attorney General Jonathan Kanter, head of the DOJ’s Antitrust Division, often advocates for replacing the consumer welfare standard and rule of reason with the Neo-Brandeisian version of “market realities,” which for all intents and purposes means divorcing antitrust law from empirical economic analysis and relegating the interest of consumers. Unfortunately, this same idea, at times, is being adopted by several state Attorney Generals.
Thankfully, the courts aren’t eager to endorse this charade. Some of this administration’s many notable litigation losses include Booz Allen Hamilton-EverWatch (cybersecurity), UnitedHealth Group-Change Healthcare (insurance reimbursement), U.S. Sugar Corp.-Imperial Sugar, Meta-Within (virtual reality), and Microsoft-Activision (cloud gaming).
In early August, the state attorneys generals case against Alphabet and its Google search engine received a major reality check. In a thorough ruling, the district court tossed out large portions of the complaint, stating the government’s accusations “rely not on evidence but almost entirely on the opinion and speculation of its expert.”
Evidence is at the core of litigation; without evidence, a court can’t separate fact from fiction. The court served all cases that subscribe to the Neo-Brandeisian antitrust views an important reality check – to prevail, the government will have to produce evidence, not mere theory or rhetoric, demonstrating its belief that the competitive behavior of Google (or any company) harmed competition, not just competitors. Much narrowed, the lawsuit will proceed to trial on a handful of issues that require the court to resolve factual disputes and evaluate witness testimony.
Due Process Assured
But there is more worth noting from the various judicial proceedings surrounding these cases. In a perhaps surprising move the DOJ asked the court to bar Google from offering evidence that the challenged conduct improves Google’s products and, therefore, is not anticompetitive. Antitrust requires a thorough review of the facts and often some balancing. Routine, vigorous business conduct can cause some harm to competition, but that same conduct often also benefits consumers. Weighing these factors often ultimately determines whether business conduct violates the law.
If the government can tip the scales and prevent courts from considering pro-competitive effects, however, the government could win every case by default. Moreover, such a move raises serious due process concerns over abusive and corrosive governmental power. Every defendant has the constitutionally protected right to present exculpatory evidence that challenges the government’s narrative.
It’s sad to see the Department of Justice make such a motion, but not entirely surprising. For months, Assistant Attorney General Jonathan Kanter has objected to advancing basic, due process norms in international negotiations. In a letter that the government has acknowledged exists, but refuses to make public, Kanter and FTC Chair Lina Khan have urged the United States Trade Representative to abandon due process provisions as part of the competition chapter negotiations held within Indo-Pacific Economic Framework. These very provisions were most recently included in the United States-Mexico-Canada Agreement (USMCA) and approved on a bipartisan basis by Congress. One of the key provisions in USCMA requires a government to preserve exculpatory evidence in competition investigations.
This protection is what DOJ asked the court to ignore. Thankfully, the court served DOJ with another reality check, siding firmly on the side of the Constitution and due process firmly rejecting DOJ’s attempts to tip the scales.