After nearly five years of intense litigation, the landmark United States v. Google antitrust trial is finally over.

Judge Amit P. Mehta ruled last fall that Google illegally monopolized internet search for more than a decade by paying smartphone makers, wireless carriers, and web browsers to be the default—and sometimes exclusive—search engine for users. The case then moved on to the remedies stage, where Justice Department attorneys asked for a sweeping order that ranged from the forced sale of Google’s Chrome web browser, to a ban on all illegal pay-to-play deals, to prophylactic relief that would prevent Google from re-using the same playbook to extend its power into the nascent generative AI sector. Google unsurprisingly asked for a far narrower fix.

On Tuesday, Judge Mehta issued his long-awaited remedy decision, to very mixed reactions. Although the Justice Department may still decide to appeal, it issued a triumphant press release, and DOJ Assistant Attorney General Slater described the agency’s mood as “glass half full.” One big reason for that optimism: the order’s scope will include some fencing-in protections for generative AI markets. Google can no longer leverage its popular Play Store or Maps to coerce smartphone makers into also preinstalling Google’s Gemini AI app on their phones. Google will also have to license its massive cache of data compiled by scraping most of the web, as well as its sought-after search results, to would-be rivals. The underlying idea, pushed by DOJ’s attorneys at the remedies hearing earlier this year, is that a disruptive new technology like generative AI might be our best hope for unleashing real competition in this space.

Other observers are far less sanguine. Criticism of the opinion immediately zeroed in on the fact that the remedy won’t actually address the conduct that landed Google in antitrust trouble. Laypeople and antitrust experts alike tend to view terminating illegal behavior as a bare minimum response to proven violations. Most of us learn this on the playground. Or, as a leading scholarly treatise on antitrust puts it, “relief properly goes beyond merely ‘undoing the act.’”

Yet this remedy order won’t undo, or even halt, the illegal acts. Google can keep paying Apple billions of dollars each year to be the default search tool on hundreds of millions of iPhones, keep paying Mozilla for prime placement on Firefox, and generally keep throwing a portion of its enormous monopoly profits around to maintain its present monopoly power.

Judge Mehta portrayed his decision as a model of judicial humility and restraint. “[C]ourts must approach the task of crafting remedies with a healthy dose of humility,” he wrote. “This court has done so.” As the decision explained, its author has “no expertise” in the business of search engines, online ads, or generative AI. “If judges could accurately chart the path [of] innovation,” the court wryly observed, “we would work on Wall Street (or the Las Vegas Strip).”

But does this decision actually reflect the judicial humility that its author extolled? A judge in this position faces a menu of options that includes stopping the illegal conduct, prohibiting conduct similar to the particular tactics that were already condemned, extending the decree to related markets, ordering the disgorgement of assets gained via the illegal conduct, and mandating structural spinoffs to restore competition. Judge Mehta’s decision combines a quarter-measure of one with a half-measure of another: it leaves most of Google’s current conduct untouched, while taking some limited steps to help spur competition in closely related generative AI markets.

Although the remedies opinion insists strenuously that it’s not gambling on an uncertain future, the justification it offers for this watered-down approach suggests otherwise. Judge Mehta appears to have anticipated a firestorm of criticism for his decision to let Google continue engaging in conduct that he had already deemed illegal. In an attempt to defang that narrative, the decision explains that generative AI startups “are in a better position … to compete with Google than any traditional search company has been in decades,” and these “new realities give the court hope that Google will not simply outbid competitors for distribution if superior products emerge.”

To recap, this is a judge who already found that Google’s payments for default status and exclusive placement are causing significant harm. By locking up the most important ways to reach users, Google cemented its search monopoly and deterred competition for over a decade. Letting Google keep right on engaging in most of its harmful conduct entails real costs for consumers and society at large. This remedies opinion consciously chooses to inflict those costs based on a “hope” of good things happening in the future.

That’s nothing if not a gamble, one with exceedingly high stakes. And this wasn’t just a bad policy judgment. It was also a legal error. The Supreme Court has set down clear rules of the road that—if followed—should’ve yielded a much stronger outcome in this case. A remedy order “must seek” to accomplish multiple goals, one of which is ensuring “that there remain no practices likely to result in monopolization in the future.” That instruction should have prompted, at minimum, a ban on all of Google’s current illegal payment deals.

Our antimonopoly laws are only as strong as the judges who enforce them. This decision puts far too much weight on the mere “hope” of a highly uncertain future. Telling a proven violator that it can freely continue breaking the law is a near-certain recipe for recidivism. Worse yet, this decision also sends a very dangerous message to other would-be monopolists: go ahead and roll the dice.

John Newman is a professor at the University of Memphis School of Law, a former deputy director of the Federal Trade Commission Bureau of Competition, and a former trial attorney with the U.S. Department of Justice Antitrust Division. 

Antitrust restructuring of major corporations is on the table in a way it has not been since the Microsoft case in the late 1990s. Indeed, the historic moment may be comparable to the breakup of Standard Oil in the 1910s and AT&T in the 1980s, when courts reorganized those companies and freed the market from their control. Today, judges face a similar opportunity to rein in today’s rapacious monopolists.

Amid rising public pressure to challenge concentrated corporate power, the federal government has, since 2020, filed antitrust lawsuits against Google, Amazon, Meta, and Apple, as well as dominant firms in the agriculture, debit payment, and rental pricing software industries. These cases aim to break monopolistic control of markets, and not merely to stop unfair practices. The outcome of this litigation wave will determine whether antitrust remains a meaningful check on concentrated private power or operates as regulatory theater.

Antitrust enforcers stand poised to secure favorable judgments in lawsuits that affect multiple sectors of the economy. These lawsuits could bolster farmers’ ability to repair their equipment, reduce the costs retailers incur on e-commerce platforms, increase the revenue software developers earn from their smartphone applications, and reduce the interchange fees businesses must pay to credit and debit card companies.

The poster child for the burgeoning possibilities of antitrust remedies involves the lawsuits against Google. In August 2024, Judge Amit Mehta ruled that Google was liable for monopolizing the search market. He found that Google illegally paid Apple and other manufacturers billions of dollars every year to be the default search provider in web browsers on desktops and smartphones, resulting in the foreclosure of critical distribution channels to competitors. In April 2025, Judge Leonie Brinkema held that Google was liable for monopolizing the ad-tech market, which produces the revenue stream that underpins much of our modern media system. In her decision, she found Google used its dominant control over digital advertising to lock in news publishers, impose supra-competitive take rates on Google’s exchange, and exclude competing digital advertising providers.

Other lawsuits against Google, such as the widely publicized lawsuit by game developer Epic Games, have also found Google liable for monopolization. Given this legal onslaught against Google, odds are in favor that the corporation will undergo some form of corporate restructuring. Due to Google’s immense size and scale, the result would fundamentally alter how the public uses and accesses the internet. Breaking up Google—by divesting Chrome or its digital advertising business—would strip the corporation of its control over access to information and online revenue. The shift would mean more competition, the viability of privacy-oriented alternatives, and greater power for journalists, creators, and users concerning how information is distributed and monetized.

A few federal judges and Gail Slater, the Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, will control the scope of the remedies to be imposed on Google. Regardless of any obstacles the DOJ staff may face in determining which remedies they should pursue, one thing is certain: federal judges are vested with all the authority they need to impose the government’s demands, and they are obligated to impose sweeping remedies on antitrust violators like Google.

Flexing the Structural Relief Muscle

Remedies convert violations of legal rights into actionable consequences. In his leading casebook, renowned remedies scholar Douglas Laycock succinctly asserted that “remedies give meaning to obligations imposed by the rest of the substantive law.” In other words, remedies are how democratic institutions prove their legitimacy: equipping the law with real force to answer public calls for action, rather than serving as a meaningless political gesture. Without effective remedies, the law merely functions as a speed limit sign with no police or cameras to enforce it.

The antitrust laws are, in the words of Senator John Sherman, namesake of the titular Sherman Act, “remedial statute[s].” To accompany the sweeping prohibitions on “restraints of trade” and monopolization, lawmakers were diligent to buttress these proscriptions with a panoply of robust remedial provisions.

The antitrust laws include the ability for harmed private parties to obtain treble damages and attorneys’ fees (a novel feature in American law at the time of their enactment). Lawmakers authorized federal, state, and private enforcers to initiate lawsuits, eventually establishing two separate agencies to advance the cause. Further supporting these profound legal tools were the equity provisions that empowered enforcers to seek and, critically, courts to impose structural changes to a business’s operations. The purpose of this vast and deep remedial landscape was to facilitate the “high purpose of enforcing the antitrust law[s].”

At the federal level, the thinking surrounding the purpose and necessary goals of antitrust remedies has been lost for some time. With the notable exception of the antitrust litigation against Microsoft in the late 1990s, market restructuring has simply not been seriously contemplated by enforcers since the 1970s, when the DOJ was litigating its antitrust lawsuit against telecommunications giant AT&T for willfully stifling competition in, among others, long-distance services. According to historian Steve Coll’s book The Deal of the Century, the prospect of breaking up AT&T and imposing other remedies permeated the government’s legal strategy.

After the breakup of AT&T, however, in concert with the purposeful decline in federal antitrust enforcement, the intellectual and institutional muscles supporting ambitious remedies quickly atrophied. Decades of underenforcement drained both the doctrinal imagination and the human talent needed to design and implement structural relief.

For the federal government, a new opportunity to implement robust structural remedies almost presented itself in its lawsuit against Microsoft in the late 1990s. A structural breakup was interrupted, however, due to improper judicial conduct and changes in political administrations. Enforcers ultimately abandoned a breakup in favor of paltry restrictions on Microsoft’s business practices. Subsequent academic literature criticized the handling of the lawsuit for the lack of critical thinking regarding the remedies that enforcers wanted. Not since the antitrust lawsuit against Microsoft has another opportunity of similar magnitude presented itself to federal enforcers.

A New Opportunity Arises

Now, more than a quarter century later, the public has another chance to witness the full thrust and potential of the antitrust laws. What is critical is that enforcers and judges need to be reminded that restructuring businesses to restore competitive conditions and prohibiting dominant corporations, like Google, from engaging in unlawful behavior has always been at the heart of what the antitrust laws can and must do.

In one sense, the ability to restructure the economy provides the clearest visible indicator to the public that justice has been served. For too long, the public has witnessed instance after instance of corporations engaging in often blatant lawbreaking and walking away with no more than token penalties, accompanied by the boilerplate legal phrase “this is not an admission of guilt” on the settlement form.

It’s no secret that the public’s confidence in our political system was shattered after the 2008 financial crisis, when only one low-level bank manager was jailed, and the biggest financial institutions only got bigger. Meanwhile, President Obama refused to use his executive authority to prevent millions of Americans from losing their homes and livelihoods. The precipitous collapse of white-collar crime prosecution after 2012 only intensified this perception of corporate impunity, a trend that continues today. It should go without saying that a well-functioning democracy of the kind the antitrust laws were meant to buttress requires punishing wrongdoers.

Structural remedies also bring clarity to the purpose of the antitrust laws. They ensure that corporations are adequately incentivized to and remain subservient to the public, and must adhere to established norms concerning what constitutes lawful means of operating in the marketplace. Remedies, in this sense, serve dual purposes: they deter future violations and, when applied to offenders, reinforce institutional legitimacy by ensuring meaningful consequences rather than merely symbolic fixes.

None of this was accidental. Congress wrote the antitrust laws with ambition. In both the statute’s text and its legislative history, Congress codified deeply held moral and ethical norms, grounded in principles of fair competition, non-domination, and democratic control of the economy. To facilitate these principles, Congress gave the public the tools for broad economic reordering in the event of a violation. It was the Supreme Court’s ideological shift, which began in the late 1970s and was subsequently adopted by the Reagan administration in 1981, that neutered the institutional will to enforce and interpret the laws as Congress intended. Nevertheless, once liability is established, structural change is not merely justified by law—it is mandated by it. Indeed, the Supreme Court has been uncharacteristically clear that liability obligates, not just authorizes, the courts to impose structural change.

In a decision from 1944, the Supreme Court stated, “The Court has quite consistently recognized…[d]issolution[s]…will be ordered where the creation of the combination is itself the violation.” In another decision, the Court opined about the absurdity that would arise if weak remedies were imposed on antitrust lawbreakers. “Such a course,” the Court stated, “would make enforcement of the Act a futile thing[.]” In another decision, the Supreme Court stated that “[c]ourts are authorized, indeed required, to decree relief effective to redress the violations, whatever the adverse effect of such a decree on private interests.” The jurisprudence is replete with many more judicial directives commanding the lower courts to impose sweeping remedies to effectuate Congress’s legislative command.

Not only is there a duty to impose structural remedies, but the Supreme Court has been straightforward that in all but the most wholly unwarranted situations, a district court judge—like Judge Mehta or Judge Brinkema presiding over their respective lawsuits against Google—is afforded broad discretion on what remedy to impose both to “avoid a recurrence of the violation and to eliminate its consequences.” As long as the remedy is a “reasonable method of eliminating the consequences of the illegal conduct,” judges operate with expansive discretion and face virtually no doctrinal constraints on what can be ordered.

If the desired outcomes are realized, a breakup of Google could fundamentally reorganize the structure of the internet and our experience with it. Requiring Google to spin off its digital advertising platform could enable journalists and content creators to diversify their revenue sources through new competitors, giving them greater autonomy over their income. Divestiture could also enable them to have more control over the distribution of their work products and reduce the constant risk of censorship and algorithmic manipulation that Google has deployed to maintain its monopoly over search and advertising. Moreover, a spinoff could also erode the surveillance advertising model, making privacy-friendly alternatives more viable competitors. For the public, more competition in search could expand options for finding and presenting information on the internet. Likewise, a divestiture of Google’s Chrome browser could open new pathways to access the internet and lessen dependence on a single dominant provider.

Corporate Allies Spring into Action

In an attempt to get ahead of the litigation game, executives and ideological friends in the legal academy have churned out scholarship and opinion pieces designed to deter enforcers and courts from imposing remedies deemed “too harsh” to Google’s operations. In a recent paper on structural remedies, Professor Herbert Hovenkamp, a leading establishment antitrust scholar (and a Big Tech sympathizer), provided a hierarchical schematic outlining how remedies should be considered and administered. One of his points stated that “Even with market dominance established, alternatives to structural relief are often superior, and simple injunctions are often best; for any problem, they should be the first place to look.” The International Center for Law and Economics, a member of Google’s “army of paid allies,” submitted an amicus brief to the district court overseeing Google’s antitrust lawsuit, erroneously stating that “structural remedies are disfavored in Section 2 cases[.]”

Naturally, too, Google’s business executives have ardently defended the company’s business practices. In April 2025, Google’s CEO Sundar Pichai testified that any breakup of Google would be “so far-reaching” that it would be a “de facto divestiture” of its search engine. Pichai also decried the forced sharing of the data that underpins Google’s search engine as a remedy that would leave the company with no value. It is revealing to hear the highest-ranking corporate executive at the company admit that Google’s success is dependent on a select few unlawful practices, rather than its business acumen, and that Google is apparently incapable of deploying lawful methods of competition to succeed in the marketplace. Since the filing of both federal lawsuits, Pichai has also embarked on a marketing tour to tout the company’s operations, defend the benefits of its business practices, and detail the potential unintended consequences of the government’s lawsuits. Such alarmism is a standard defensive tactic, deployed to influence judges and sap public support for real solutions.

But from the earliest days of antitrust law, the Supreme Court has consistently affirmed that breakups, divestitures, and other corporate restructuring remedies—though often described as “harsh,” “severe,” or inconvenient by violators—are time-tested, necessary, and appropriate for restoring competitive market conditions. In a forthright statement, the Court stated that antitrust litigation would be “a futile exercise if the [plaintiff] proves a violation but fails to secure a remedy adequate to redress it.” In fact, the Court has lamented that prohibitions on specific conduct—rather than breakups or other corporate reorganizations—are “cumbersome,” delay relief, and position the court to operate in a manner for which it is “ill suited.”

Rising to Meet the Moment

The vigorous enforcement of the antitrust laws in the post-World War II era compared with the drastic decline that began in the late 1970s is clear evidence of the changing “political judgment” (as Professors Andrew Gavil and Harry First call it) concerning what remedies should be imposed. Judges today are far different from their historical counterparts, who viewed antitrust as a facilitator of economic liberty, a bulwark against oligarchy, and fundamental to protecting our democracy. Punishing antitrust violators was not just a legal formality but also a moral imperative.

Even though many judges have not considered these issues in decades—or, in some cases, ever in their careers—during this profoundly important moment in American history, judges should be cognizant of what the jurisprudence plainly mandates them to do. If the rule of law retains any meaning, it demands that courts decisively address the harms the government has been litigating for a half-decade.

The question now is not whether courts can impose structural remedies; it is clear they can. It is whether they will rise to meet the moment. The remedies that judges will impose on Google and the other alleged monopolists in the government’s lawsuits will be a defining test of judicial integrity and democratic accountability to the rule of law. A failure to act calls into question the very legitimacy of our legal system to hold the powerful accountable. As the jurisprudence makes clear, anything less than structural relief results in the public “[winning] a lawsuit and [losing] a cause.”

Daniel A. Hanley is Senior Legal Analyst at the Open Markets Institute.

There is much discussion about what Hal Singer has dubbed “Gangster Antitrust,” the extraction of payments, bribes, or other concessions to allow passage of an otherwise anticompetitive merger. Gangster Antitrust can also take the form of conditioning the approval of a procompetitive merger on a seemingly unrelated remedy that advances the political interests of the administration. “Nice merger—be a shame if anything happened to it!”

David Dayen of the American Prospect correctly wrote that there is a law that is supposed to prevent such skullduggery, the Tunney Act, to assure that consent decrees by the Department of Justice (DOJ) are in the “public interest.” The Tunney Act of 1974 was drafted to prevent judicial “rubber stamping” of consent decrees. As explained here, the Tunney Act and its 2004 amendment, prohibiting continued judicial rubber stamping, have yielded just more vigorous rubber stamping.

I’ve written on the Tunney Act twice before, once with John J. Flynn, who happened to assist in its drafting, about the misuse of the Tunney Act in the Microsoft cases to compel the district court to accept a weakened settlement. I wrote a second time, after the D.C. Circuit continued to engage in activist and blatant disregard for the 2004 Tunney Act amendment.

Unfortunately, the Tunney Act’s purpose has been stifled by D.C. Circuit caselaw, and even the Act’s most fundamental purpose of destroying corruption has been neutered.

A brief history of the Act

The Tunney Act, named after Senator John V. Tunney, emerged from scandal surrounding backroom dealings to settle a DOJ merger challenge. It first became a major issue during hearings on Richard Kleindienst’s nomination to be attorney general. Senator Tunney expressed outrage at such closed-door discussions.

In 1969, the DOJ sued to prevent ITT’s acquisition of three companies under Section 7 of the Clayton Act. The DOJ lost two of the three suits. In 1971, the DOJ and ITT agreed to a settlement of the remaining suit. ITT was allowed to retain Hartford Fire Insurance Company but was required to divest several Hartford subsidiaries. The DOJ made no public statement as to the underlying reasons for the settlement. Instead, as was common practice at the time, only the proposed decree was made public.

Two significant events occurred that made people suspicious. First, President Nixon nominated Richard Kleindienst to be attorney general. Kleindienst had been involved in the ITT litigation in his capacity as deputy attorney general, and questions arose concerning his participation in the settlement of the case. Second, ITT offered to help finance the 1972 Republican National Convention. While no quid pro quo was proven, the appearance of impropriety sparked significant debate. (If you want to hear President Nixon ordering a DOJ official to back off the merger, you can listen here.)

Moreover, Kleindienst’s confirmation hearings revealed to the public for the first time the underlying rationale for the DOJ settlement with ITT: Kleindienst asserted that one reason for the settlement was DOJ fear that divestiture would cause ITT’s stock price to fall, causing hardship to shareholders. Another DOJ concern was apparently that the plummeting stock price would ripple throughout the U.S. economy.

All of this seems tame by today’s standards. But at the time, it was a massive scandal. The Supreme Court typically deferred to the DOJ traditionally with respect to consent decrees.

How the Act lost its teeth

Despite the Tunney Act’s prohibition against rubber-stamping, with rare exception, courts have continued to serve as rubber stamps, and the D.C. Circuit caselaw has played an important role in the rubber stamping. The basic standard laid out by the D.C. Circuit appears in the first Microsoft case, in which Judge Sporkin rejected the DOJ’s mealy-mouthed remedies (and eventually led to Microsoft II). The D.C. Circuit wrote: 

A decree, even entered as a pretrial settlement, is a judicial act, and therefore the district judge is not obliged to accept one that, on its face and even after government explanation, appears to make a mockery of judicial power. Short of that eventuality, the Tunney Act cannot be interpreted as an authorization for a district judge to assume the role of Attorney General.

Subsequent cases in the D.C. Circuit cling to this standard to assure that courts don’t bother with the “public interest” determination.

Congress reacted, and in 2004 changed the Tunney Act to compel a public interest determination. The legislative history expressly and in detail decried the D.C. Circuit’s caselaw (and cited my work with John Flynn, thank you very much).

The D.C. Circuit and its district courts flat out ignored the amendment, choosing to resurrect its “mockery of judicial function standard.” As the D.C. Circuit explained in a 2016 Speedy Trial Act case:

As we have since explained, we “construed the public interest inquiry” under the Tunney Act “narrowly” in “part because of the constitutional questions that would be raised if courts were to subject the government’s exercise of its prosecutorial discretion to non-deferential review.” Mass. Sch. of Law at Andover, Inc. v. United States, 118 F.3d 776, 783 (D.C.Cir.1997); see Swift v. United States, 318 F.3d 250, 253 (D.C.Cir.2003). The upshot is that the “public interest” language in the Tunney Act, like the “leave of court” authority in Rule 48(a), confers no new power in the courts to scrutinize and countermand the prosecution’s exercise of its traditional authority over charging and enforcement decisions.

The basis of the Court’s decision was a misguided notion that failing to enter a consent decree—inherently a judicial function—trampled the DOJ’s prosecutorial discretion under Separation of Powers. It did not consider that forcing a consent decree down the throat of the court also presented separation-of-powers problems. Nor did the Court explain why it is permissible for courts to reject criminal plea bargains without separation of powers problems, yet they must accept consent decrees for the rich and powerful. And while not all of the cases are in the DC Circuit, the vast majority are, and other circuits rely on DC Circuit caselaw and experience. Only one Tunney Act consent decree rejection. Ever.

So, here we are.

The question arises, then, about what exactly would it take to create a mockery of the judicial function?

We don’t know, quite frankly. There does not appear to be much, if anything, out there to suggest what mockery of the judicial function would look like sufficient to reject a consent decree under the Tunney Act.

Prior deals under Tunney Act review have been rubber stamped

Nothing raises eyebrows with the courts when it comes to the Tunney Act. Consider a couple of examples.

In 2008, the DOJ brought a broad and sweeping complaint against American Airlines’ acquisition of U.S. Airways. But politics played a role, according to Propublica: “People were upset. The displeasure in the room was palpable,” said one attorney who worked on the case. “The staff was building a really good case and was almost entirely left out of the settlement decision.” One of the reasons they might have been upset is that President Barack Obama’s former Chief of Staff was now Mayor of Chicago and advocating for the merger at the White House.

In another airline merger, an attorney representing the merging parties became DAAG after the merger won DOJ approval in August of the same year. Sometimes the revolving door in antitrust just spins just that fast.

Even if the courts did awaken to such questions, there is little interest in doing anything about it. One might claim that Judge Leon did a heroic Tunney Act review in CVS-Aetna, but I do not think that the D.C. Circuit precedent left him in  a good position to do anything other than accept the decree.

In other circuits, it is possible (but not likely) for a court to reject a consent decree. For a rare (and non-merger) exception, see U.S. v. SG Interests I, Ltd., 2012 WL 6196131 (unpublished opinion rejecting entry of consent decree in a Sherman Act Section 1 collusive bidding case as settling the case for nothing more than “nuisance value”). 

Parties have also been known to close deals even before the Tunney Act review has been completed.  Judge Leon complained of this practice in CVS-Aetna, but again, the D.C. Circuit caselaw leaves little in the way of judicial action. 

Thus, I imagine that courts will continue to do what they have always done—ostrich-like abdication of their powers.  

The Tunney Act won’t save civilization, democracy, or even antitrust

Is there a problem with Paramount making a major settlement with Trump and firing Colbert and then having its merger with Skydance approved? We’ll never know, because the courts will only review the complaint, the competitive impact statement, and the proposed final judgment. And rubber stamp.

The HPE-Juniper deal also raises serious questions related to the role of lobbying and whether the DOJ’s acquiescence has precious little to do with separation of powers and prosecutorial discretion and more to do with gangster antitrust. As the Wall Street Journal reported, “Hewlett Packard Enterprise made commitments, not disclosed in court papers, that called for the company to create new jobs at a facility in the U.S., according to people familiar with the matter.”  This, if true, ought to be sufficient to reject the consent decree. But I doubt it. While SCOTUS is hard-core killing Chevron and administrative law, it seems totally fine with the extreme level of deference the DOJ gets under the bastardized interpretation of the Tunney Act.

As David Dayen pointed out, there’s a friendly district court judge in the HPE-Juniper matter, who is a former labor lawyer. And both the HPE-Juniper and the UnitedHealth Group-Amedisys matters are outside the D.C. Circuit, which is a reason for hope. Yet other cases have had friendly judges and there are still no cases rejecting a consent decree. And the reason for that is the D.C. Circuit caselaw, regardless of circuit.

How about American Express? According to the Wall Street Journal,

American Express GBT hired Brian Ballard—a longtime Trump backer, who raised $50 million for his 2024 election—to lobby the Justice Department on antitrust issues for the company, according to lobbying disclosure forms. The Justice Department last week dropped a lawsuit it had filed seeking to block American Express GBT’s acquisition of a competitor, CWT Holdings.

This raises another point. The Tunney Act is only involved when we’re dealing with consent decrees with the DOJ. There is zero transparency with respect to merger investigations that have been dropped due to Gangster Antitrust. Decades ago, there was a push for greater transparency for when the DOJ was investigating a matter, and reasoning behind closing a matter without more. That went nowhere, and we are living with the consequences of that as well. And, as administrative law falls for independent agencies like the FTC, there isn’t much to suggest that courts will get in the way of settlements at DOJ’s sister agency, either.

The future looks grim. Sure, Congress reformed the Tunney Act once already. How’d that turn out? And now, it seems unlikely that Congress (in its current sycophantic posture to the Executive Branch) would dare attempt to correct the unbridled power of the Executive Branch to sell out on the cheap or engage in Gangster Antitrust.

Many mornings, the first thing I do is drink coffee out of my FTC mug. I worked at the FTC for three years. There, I helped the smartest career civil servants and political appointees I have ever met fight for the American people. They inspired me to see the law as a force for good and convinced me to go to law school. These days especially, that mug reminds me that good public servants can do good things in this government. The logo on that mug, the FTC’s winged flywheel, represents the role the FTC plays to ensure fairness in the American economy. No longer.

On Wednesday, that logo graced the top of a letter announcing an investigation into Media Matters for America. That investigation can only be fairly considered a politically motivated threat against an advocacy group opposed to the current administration. The investigation seems to concern Media Matters’ purportedly colluding with advertisers to deprive Elon Musk’s Twitter (renamed by Musk “X”) of ad revenue. The investigation seems prompted by Musk’s own suit about the issue—which is a blatant attempt to interfere with Media Matters’ First Amendment rights.

Needless to say, the investigation is without merit. Media Matters’ efforts to stop hate speech on Musk’s platform are in no way the type of horizontal collusion cognizable under the antitrust laws. Indeed, there is no mention of collusion, nor any claim of antitrust violation, in Musk’s original suit. (The suit instead claims that Media Matters interfered with Twitter’s contracts with advertisers, disparaged the quality of the platform.) The legality of such an attempt to coordinate a political boycott was settled long ago in NAACP v. Claiborne Hardware, a case concerning a boycott of racist businesses during the Civil Rights Era. Even the 5th Circuit has acknowledged the danger of this suit—specifically the potential for coercion or intimidation Musk’s discovery efforts to get the names of Media Matters’ donors poses. Under the first Trump administration, the Justice Department pursued a similar theory of coordination among carmakers that reached an accord with California over emission standards—a clear act of political lobbying exempted from antitrust scrutiny under the Noerr-Pennington doctrine. (The case was smartly withdrawn in the early days of the Biden administration.) Despite this background and clear caselaw, the FTC has decided to follow Musk’s vendetta and use its limited resources to pursue a claim with little-to-no chance of success.

Having worked in the agency recently, I am often asked by law school professors and classmates what I think will happen to antitrust enforcement at the FTC during the second Trump administration. Generally, I have said that I assume that not too much will change. The agency’s Republican leaders generally support strong enforcement—for example, Mark Meador is on the record as supportive of the Robinson-Patman Act (RPA), a law hated by big business. (To my disappointment, Meador voted to withdraw the FTC’s pending (meritorious and well-researched) RPA claim against PepsiCo.) In many areas of federal law enforcement, the presumption of regularity has already broken down for this administration. I hoped (though perhaps did not expect) the FTC would be different. That an agency with a history of independence would remain so. That is, after all, what happened during the first Trump administration.

I was wrong. Wednesday’s actions, likely directed by Chair Ferguson and his staff, indicate that the Chair of the FTC plans to use his agency as a weapon in Trump’s antidemocratic arsenal. Ferguson will, presumably in pursuit of Trump’s favor and Musk’s political war chest, sacrifice the goodwill the agency has built up with the judiciary and the public over the decades. I fear that after this administration is over, the agency where I started my career will be a shadow of what it once was—depleted of all its credibility, quality staff, and legitimacy. The Wall Steet Journal editorial page lambasted Lina Khan for “politicizing” antitrust by trying to dismantle concentrations of economic power—even though dismantling such concentrations was the original purpose of the FTC Act. Yet Khan’s FTC never once used its power to harass a political enemy. But that’s precisely what Ferguson’s FTC is doing.

The anti-monopoly community cannot continue to behave as if business-as-usual will continue at the FTC and DOJ. We cannot continue to segment anti-monopoly policy off from the rest of the Trump administration’s authoritarian actions. Under this administration, there is only one policy issue—democracy protection. We should do everything in our power to make sure that agencies like the FTC are not wielded as weapons of authoritarianism. If that means sacrificing the credibility of the agency I love, so be it.

Bryce Tuttle is a student at Stanford Law School. He previously worked in the office of FTC Commissioner Bedoya and in the Bureau of Competition.

Richard Nixon’s Attorney General John Mitchell famously declared: “Watch what we do, not what we say.” When that was done to him, he wound up in prison. A similar lesson applies to understanding the courts.

Academics can debate whether cartels can contribute positively to consumer welfare under some (unlikely) circumstances. Indeed, Penn law professor Herbert Hovenkamp has made the argument that the Trans-Missouri and Joint Traffic cartels were of that sort and a similar proof exists to justify the sewer pipe cartel found illegal in Addyston Pipe. Yet I suspect that no one in the antitrust community thinks that the courts should invite litigation on the merits of cartels. A defendant in a criminal cartelistic market allocation case recently got a trial judge to open that door, but the Tenth Circuit slammed it shut again.

My starting point is that antitrust law is not, especially Section 1, concerned with the ultimate consequences. It sets rules for conduct focused on the kinds of conduct that will be allowed. The well-known analogy is how nations set rules of the road. Arguably it could be more efficient to drive on the other side of the street at some times, but it must not be done! 

In a recent essay titled “Against Efforts to Simplify Antitrust,” Iowa law professor Sean Sullivan tracks the words courts use and not what they do. He is correct that if you look at what courts say about antitrust law doctrine it is complex and confusing. The rhetoric of courts is one of consequentialism (i.e., whether the result is likely to be substantively good or bad), and that opens the door to an infinite array of claims. Simplifying such concerns only invites further confusion.

My view of the complexity problem is that one should not look at what courts say but what they do, given the facts that they find. If we look at what courts do in applying Sherman 1, with the exception of one type of agreement—to which I will return—they condemn absolutely (per se) what Taft, Bork, Steve Ross and I call “naked restraints,” ones that only function to create, allocate or exploit the market. Such restraints pre-empt the function of the market and confer control of that public activity on private parties. This is the case even when the restraint is “vertical” as the recent McDonald’s decision reaffirmed. All such restraints are always illegal (again one type of case may be an exception but rarely is). Despite academic commentary, almost no lawyer defends a cartel on its merits. The defense is always that there was no “agreement” or “conspiracy,” and the cases focus on that element. When the agreement is “tacit,” there is no remedy. Indeed, that is why plaintiffs ought to focus on what the defendants did agree to do and show that that agreement is itself anticompetitive and remediable. But what is central here is that the underlying framework is clear—a purely anticompetitive agreement is illegal regardless of potential contribution to “consumer welfare.” More generally, what I claim is that the “per se” cases fall in a functional category that differentiates them from other cases involving agreements among competitors, e.g., CBS v BMI.

The aforementioned exception comes when there is market failure because of the lack of standards or other necessary regulation of market conduct. As Lande and Marvin pointed out in their article titled “Three Types of Collusion: Fixing Prices, Rivals, and Rules,” most such regulatory agreements create social costs and are not justified. A good example is the Cal Dental case (the FTC failed to call the economist who would have documented these effects). Contrary to the Indiana Federation of Dentists, the Court in Cal Dental assumed that there was a legitimate role for dentists in self-regulation. Indeed, this might have been plausible if there was no state regulation. But as in Indiana, California has a full set of regulations including those governing advertising. This crucial fact was not, as far as I can tell, brought to the Court’s attention. Indeed, Cal Dental is part of a group of cases, which if you look at what courts do, not what they say, stand for the proposition that some private regulatory agreements can be lawful under the Sherman Act. In an article titled “The Per Se Legality of Some Naked Restraints: A (Re)Conceptualization of the Antitrust Analysis of Cartelistic Organizations,” Bett Roth and I have identified the criteria that we think courts are using in fact. I would also observe that most of the time the courts reject the claim of a right to regulate competition.

As Taft point out in Addyston Pipe, it is different when the restraint is a functional incident to a primary transaction or venture involving the parties to the restraint. Again, when such ancillarity is apparent in a case, courts are usually reluctant to intervene without some compelling reason. Hence, the usual “rule of reason” case involves an arguably ancillary restraint which the court treats as presumptively legal. Yes, it can get difficult to determine what rebuts that presumption. But when you look at what courts do and not what they say, there has to be either evidence of substantial market power or evidence that the claim is pretextual before the court will examine the “reasonableness” of the restraint.  

In some cases, however, the presumption is reversed. These are the “quick look” cases. The restraint looks pretty close to being naked, but there is at least a tenuous claim that it is ancillary to some transaction or venture. The advocate for such a restraint has the burden of showing the necessity for the restraint in terms of that transaction or venture. Cal Dental properly understood on its facts did not involve a classic quick look. It is involved the question of whether the association had the right to regulate advertising competition among dentists and, if so, whether the regulations were “reasonable.”   

Thus, there is a framework, external to the language of the case law, that explains and identifies the legal issues and standards with limited complexity. Some famous cases are often misunderstood in term of their actual facts or outcome. For example, Topco is famous as a “per se” decision, but in fact the Supreme Court after remand upheld a modified territorial restraint of Topco members. The restraint was responsive to the claim by Topco of free riding on “house brands” if a competing member entered the territory of an existing member. Of course, this is nonsense because these are house brands! In operation, the decree lasted ten years and was never invoked even as Topco’s members increasingly competed with each other. Harry First and I wrote up this history. The initial absolute territorial restraint was unreasonable after only a quick look, but a greatly slimmed down restraint assuming that there was a risk of free riding could be justified. The government took only five minutes to put in its case at the initial trial and refused to add anything on remand. This left the implausible claim of a significant risk of free riding unrebutted.

My point here is that simplification works if you start with a coherent framework based on an understanding of what the law is supposed to do. In the case of Section 1 it aims, in my view, to limit the use of contracts and agreements to those that facilitate legitimate transactions and ventures. That frames the central issue and tells the parties and the court when further detail and assessment is necessary and what the proper focus of that assessment should be. Looked at this way, antitrust is a lot less complex in its legal dimension if one focuses on what courts do and not what they say. What creates complexity is trying to parse the confused and confusing lawyer and judge invocation of selective quotations from earlier court decisions. Both judges and lawyers have a deep concern not to appear to have an original thought. This approach to law obscures the relatively coherent and intelligible framework being employed. Let me add that factual issues can still be complex and require substantial inquiry especially if the challenge focuses on an arguably ancillary restraint.

With respect to Sullivan’s other example, merger law and the structural presumption, I would agree that here there is a problem of determining what the framework should be. A merger is by definition an agreement in restraint of trade, as it eliminates the freedom of the acquired party to operate freely in the market. Merger law, therefore, should be understood as a form of presumptive illegality of these restraints that are ancillary to what can be legitimate transactions. Much of the resulting case law is an unnecessarily complex and confused system based on the highly questionable premise that mergers among large corporations are likely to have good results. A growing body of empirical work shows that is rare indeed. Hence, thought of in error terms, a broad prohibition on mergers among (1) large firms engaged in related or directly competitive product or service lines, or (2) the combination of large firms operating at different levels of a market system, e.g., the food system, is unlikely to result in the loss of any significant efficiency or other social value. A presumption based on a basic review of the size and approximate market position of the firms should suffice. Below some boundary (see the various ones used from 1968 to the present in the Merger Guidelines), there is still a real possibility that the merger might have adverse effects on competition. However, the presumption is that mergers below that threshold are less likely to have adverse effect and the burden goes to the government or other challenger to prove that harm to competition is possible.

I am more than 50 years from doing a merger investigation for the government, but what I found then is that it is not hard to get a rough sense of the options for markets and the relative position of the firms. Mergers such as U.S. Foods/Sysco, Staples/Office Depot, Turbo Tax/ Tax Act, ought to have been decided easily without the need for great elaboration. But quick decisions based on presumptions invite reviewing courts, that cling to the myth of the efficient big merger, to allow such transactions. Hence, if a court is to have a basis to reject the merger, the challenger must produce lots of information and the judge needs to write voluminously about the transaction.

Professor Sullivan is correct in the sense that the incentives of the legal system are to complicate everything and extend the debate. Efforts to simplify will always invite complicating responses. Real reform starts with a better sense of what courts are doing (not just what they are saying) and identifying from that the analytic framework being using to test the legality of the conduct or merger (note monopoly is another can of doctrinal worms that could be simplified by a focus on the implicit and changing frameworks being applied). Real simplification can then come from either pointing up the errors in the underlying framework or in showing that the framework while desirable has been unduly complicated by judicial language that should be avoided.

Peter C. Carstensen is the Fred W & Vi Miller Chair in Law Emeritus University of Wisconsin Law School.

The shooting of its CEO has flung UnitedHealth Group (“UHG”) into the American zeitgeist, and there’s been no shortage of heated opinions on what to make of it. With the tragedy nearly two months behind us, perhaps we can now reflect, dispassionately, on the real diagnosis here: UHG has been monopolizing and “monopsonizing” American health care. Agreeing with that diagnosis would be Eric Bricker, M.D., who educates extensively about health care finance on his YouTube channel, AHealthcareZ. With its current market cap at nearly $500 billion—close to that of the rest of the top ten health care companies in America combined—Bricker concludes, “UnitedHealth Group essentially is health care in America.”

Indeed, UHG has gone well beyond its roots in health insurance to bill itself now as “a health care and well-being company.” UHG is the Amazon of American health care—like Amazon, it should be viewed as a multi-sided platform in the health care marketplace, where it dominates as operator, participant, and controller of the “pipes” through which much of health care flows. How so? And how to interpret this from an antitrust perspective? Let us count the ways.

UHG: The Operator

Let’s start with UHG’s roots as a health insurance company, UnitedHealthcare (“UHC”). UHC is in effect a financial middleman that operates a transactional network connecting suppliers with purchasers in the health care marketplace. The suppliers are physicians, hospitals, pharmacies, pharmaceutical companies, and the like. In America, the purchasers are largely the government (via Medicare and Medicaid) and employers, who sponsor health insurance for most of those not on Medicare or Medicaid.

As an intermediary, UHC benefits from what economists call “network effects”—the more suppliers and purchasers utilize its network, the more valuable its network becomes. After a series of horizontal mergers with other insurance companies over several decades, UHC now has the largest share (14%) of the highly concentrated commercial health insurance market. Its share is even greater (28%) of the also highly concentrated Medicare Advantage market, the market of private Medicare plans now accounting for over half of the Medicare market overall. UHC makes twice as much in this space as it does in employer-sponsored health insurance. Even in traditional Medicare, UHC dominates as AARP’s exclusive Medicare Supplement plan provider.

But UHC isn’t the only network-effect-exploiting middleman in UHG’s arsenal. Its other main subsidiary is Optum. Optum itself has three business branches: OptumRx, OptumHealth, and OptumInsight. Of the three branches, OptumRx is the cash cow: it is UHG’s pharmacy benefits manager (“PBM”). PBMs have been in the crosshairs of antitrust advocates for years now, and a whole antitrust-related post could be written on this subtopic alone. Suffice it to say here, OptumRx is the third largest of the three PBMs that control 80% of all prescriptions administered in America. And Bricker illustrates well how a PBM like OptumRx sits right in between purchasers and suppliers in prescription drug administration.

The trouble occurs when OptumRx serves two masters: (1) the employer/government who wants the PBM to negotiate the lowest price possible for a given drug; and (2) the drug manufacturer who pays the PBM various “fees,” aka kickbacks, for preferred placement on the PBM’s drug formulary—kickbacks that increase with increasing drug price. OptumRx also requires its PBM to use its own pharmacy for specialty medications, Optum Specialty Pharmacy. As a recent FTC study shows, those specialty medications are an increasingly growing profit center for OptumRx, with the markup on some of them exceeding 1,000 percent. Such conflicts of interest are endemic to the other major PBMs as well. When it comes to interacting with the powerful, concentrated PBMs, the conflicts of interest and restricted choices make for awfully poor quality. (Ask any physician who’s spent hours on the phone trying to get prior authorization for the PBM to cover a prescription, and you will get an earful of Kafkaesque misery.)

At any rate, UHG plays multiple sides of its multi-sided platform in other unique ways. In 2017, Optum acquired The Advisory Board Company and is now the third largest health care consulting firm in America. In this capacity, UHG now consults hospitals on how to get paid more—while its affiliate, UHC, negotiates with those very hospitals to get paid less. With its acquisition of Change Healthcare in 2022 (more on this below), UHG brought Change’s InterQual into its fold. InterQual is one of only two companies in America that control utilization management of hospital beds: how many paid “bed days” should be assigned to a hospitalized patient with a given diagnosis before the insurance payment is cut off. Conflict of interest strikes again, in a market that Bricker estimates at $400 billion per year in health care spend. That’s a huge market to have such concentration of economic power.

UHG: The Participant

We’re not done with UHG’s non-horizontal mergers. In the last decade, UHG has gone on a vertical-integration buying spree, specifically to occupy the health care marketplace not just as a platform middleman but also as a participant. As UHG’s participant arm, OptumHealth has entered the home health care space with its acquisition of the nation’s third largest home health provider (and also a large hospice provider), LHC Group, a merger that passed through initial scrutiny by the FTC. And OptumHealth now employs or is affiliated with the largest number of physicians in the country—90,000 and counting, or a tenth of all physicians in America.

UHG argues that its acquisition of physician practices aligns with so-called “value-based care,” whereby a health care entity bears risk through capitated payments from, say, the government as in Medicare Advantage plans; the entity then makes profits based not on volume of care but quality. But quality improvement may be more rhetoric than reality, as surfaced by local investigative reports of problems post-merger:

These investigative columns have uncovered the healthcare company’s oppressive physician employment contract; a disastrous phone system; urgent care upheaval; alleged double billing; copay confusion; a scathing internal survey; data privacy breaches; attorney general scrutiny; suspect COVID-19 testing charges; predatory marketing tactics; Medicare Advantage-related profiteering concerns; state lobbying efforts; a disconcerting doctor shortage; the troubling mix of healthcare with insurance services; the unethical banning of unwell patients; and the denial of patient medical records.

That’s a hairy list.

In addition, Bricker presents a “fable” that illustrates the risk of vertical foreclosure. An insurance carrier buys a physician practice, which formerly used Vendor A for a particular patient service that charged $300 per patient per day. After the acquisition, the insurance carrier replaces Vendor A with Vendor I, which the carrier owns—and charges the patient $800 per day. Not only that, the insurance carrier and physician practice had agreed on an earnout in which the practice would earn payments based on future profits of the practice post-merger. Having forced the practice to use the more expensive Vendor I, the carrier decreases practice profits and therefore the earnout. Double win for the insurance carrier. Double loss for the physicians and the employers/other billed insurance carriers financing the health care costs, as those costs rise. Hmm…is this fable the real story of UHG?

Texas and many other states forbid the corporate practice of medicine. Yet UHG’s quiet but aggressive gobbling up of physician practices skirts around the prohibition. And while the OGs of the practices do well in the sellout, the rest may just have to deal with decreased earnouts, pay cuts, increased patient loads, layoffs, onerous do-not-competes—in short, to use Cory Doctorow’s word—the “enshittification” of health care. No wonder physicians are burning out in droves, as these vertical integrations curtail their power.

The curtailing of physician power turns into a classic case of monopsony power. At least one health care organization has filed a lawsuit against UHG in California, alleging that, among other things, UHG’s control of the local primary care physician market unlawfully restricted physicians from working for competing networks and taking their patients with them. And as UHG’s monopsony power (along with that of the other big carriers) to push take-it-or-leave-it insurance contracts with independent physicians has grown, many of those otherwise independent physicians have banded together to set up “management service organizations,” in an attempt to increase countervailing power and negotiate better contracts. It’s an arms race to determine who will get a bigger share of the health care pie. The net effect?  Increasing prices and decreasing quality for those employers and their workers who seek health care.  

UHG: The Pipes

UHG increasingly controls not just the operation and participants of American health care, but also its transmission lines. In 2022, UHG made a bid to acquire Change Healthcare, a company that electronically processed billing claims and remittances between myriad health insurance carriers and the vast majority of hospitals and doctors in America. Change also ran a quarter of another pipe in health care: the “switch” software connecting pharmacies with plan information from all the PBMs, as well as processing the coupons pharmaceutical companies can issue directly to the patient for prescriptions filled at the pharmacy. Around the time of the proposed acquisition, Change had only one percent of the revenue of already gargantuan UHG. What Change had, nevertheless, was the valuable data in all those billing claims and remittances: patient IDs, provider IDs, diagnosis codes, procedure codes, and billed and allowed amounts—for ALL carriers, no less. That data could give UHG an advantage, for example, in quoting lower prices on commercial plans for fully insured employers with healthier employees, targeting lower-risk Medicare Advantage pools, or carving out a few expensive outlier physicians from the insurance network.

The DOJ tried to block the UHG-Change merger but failed. In its defense, UHG pointed to longstanding strict firewalls between Optum’s data analytics and UHC’s insurance underwriting that prevented access and use of sensitive claims information from competitor carriers. That and divestiture of one of Change’s claims edit products, a horizontal competitor to Optum, were enough to convince the district court to approve the merger.

But not all has been well. The February 2024 ransomware attack against Change left thousands of medical practices, hospitals, and pharmacies without incoming cash flow once claims processing shut down. At least one large clinic in Oregon, already in talks to merge with UHG, had to apply for and ultimately get emergency approval for its buyout after running out of cash. How convenient for UHG: as one headline aptly put it, “UnitedHealth Exploits an ‘Emergency’ It Created.”

In any case, will UHG’s so-called firewalls hold up over time? Are the pipes of the health care infrastructure UHG now controls “essential facilities” that should invoke that discarded stepchild of antitrust doctrine? At the very least, UHG has foreclosed any defense that there can be no intra-enterprise conspiracy here. As one researcher lauded, the secret to UHG’s power is that it has set up Optum as a fully autonomous, separate business with its own processes, resources, and profit streams, distinct from the insurance business. That sounds like a disunity of economic interest—which means any collusion, express or tacit, between the Optum and UHC subsidiaries of UHG would implicate Section 1 of the Sherman Act.

Where Do We Go From Here?

The DOJ did not appeal the district court’s judgment on the UHG-Change merger. But it appears the DOJ wasn’t done with UHG. In October 2023, the DOJ reopened an antitrust investigation into UHG’s business practices. And in November 2024, the DOJ along with Maryland, Illinois, New Jersey, and New York sued under a horizontal merger theory to block UHG’s proposed acquisition of Amedisys, the country’s largest home health and hospice provider. It remains to be seen what the antitrust stances of the DOJ and FTC will now be with the upcoming change in administration.

Whatever that change will bring, UHG is the Amazon warrior of the health care marketplace in America. As health care’s increasingly expanding operator, participant, and pipes, UHG reigns supreme over the exploding Medicare Advantage market. As UHG and the others big carriers continue to siphon Medicare Advantage volume away from traditional participants like hospitals, Bricker predicts those hospitals will have their go-to response: demand higher unit prices from the carriers on the commercial side. Who will subsidize those higher prices? The American employer and worker. And who gets hurt the most from the concentration of economic power in health care? Patients who can least afford it.

Sadly, all the charged rhetoric surrounding the UHG CEO shooting has distracted attention away from the real diagnosis here. What ails the American health care system is structural. It has everything to do with antitrust. And the American health care system is increasingly the UnitedHealth Group system.

With the cultural shift toward populism—whether conservative or progressive in bent—let’s hope that we can unite together and make our health care system less United.

Venu Julapalli is a practicing gastroenterologist and recent graduate of the University of Houston Law Center.

Skiers are an admittedly unsympathetic crowd. At least the jetsetters who fly around the country chasing the toniest resorts like Park City.  Local skiers, on the other, might not earn the same incomes as the jetsetters, but nevertheless must pay the same, lofty lift prices. Setting aside the welfare of locals, one can partly understand why antitrust enforcers have largely looked away as Vail Resorts gobbled up nearly 40 North American resorts in the last two decades.

1. Breckenridge Ski Resort, Colorado: 1997
2. Keystone Resort, Colorado: 1997
3. Heavenly Mountain Resort, California: 2002
4. Northstar California Resort, California: 2010
5. Kirkwood Mountain Resort, California: 2012
6. Afton Alps, Minnesota: 2012
7. Mt. Brighton, Michigan : 2012
8. Canyons Resort, Utah: 2013
9. Park City Mountain Resort, Utah: 2014
10. Wilmot Mountain Ski Resort, Wisconsin: 2016
11. Whistler Blackcomb, British Columbia, Canada: 2016
12. Stowe Mountain Resort, Vermont: 2017
13. Crested Butte Mountain Resort, Colorado: 2018
14. Mount Sunapee Resort, New Hampshire: 2018
15. Okemo Mountain Resort, Vermont: 2018
16. Stevens Pass, Washington: 2018
17. Paoli Peaks, Indiana: 2019
18. Hidden Valley Ski Resort, Missouri: 2019
19. Snow Creek Ski Area, Missouri: 2019
20. Attitash Mountain Ski Area, New Hampshire: 2019
21. Crotched Mountain Resort, New Hampshire: 2019
22. Wildcat Mountain Ski Area, New Hampshire: 2019
23. Hunter Mountain, New York: 2019
24. Boston Mills Ski Resort, Ohio: 2019
25. Brandywine Ski Resort, Ohio: 2019
26. Mad River Mountain, Ohio: 2019
27. Alpine Valley Resort, Ohio: 2019
28. Jack Frost Ski Resort, Pennsylvania: 2019
29. Big Boulder Ski Resort, Pennsylvania: 2019
30. Roundtop Mountain Resort, Pennsylvania: 2019
31. Whitetail Resort, Pennsylvania: 2019
32. Liberty Mountain Resort, Pennsylvania: 2019
33. Mount Snow Resort, Vermont: 2019
34. Seven Springs Mountain Resort, Pennsylvania: 2021
35. Hidden Valley Resort, Pennsylvania: 2021
36. Laurel Mountain Ski Area, Pennsylvania: 2021

Vail’s acquisition of Breckenridge, Keystone, and Arapahoe Basin in 1997 raised the ire of the DOJ, which compelled Vail to sell off Arapahoe Basin. (Arapahoe Basin was operated independently until it was acquired by Alterra, another firm engaged in a roll-up strategy, in 2024.) Park City and its neighbor resort, The Canyons, were rolled up by Vail in 2013 and 2014, respectively. If you can get over the ickiness of assisting wealthy skiers and see them instead as consumers, then there is a good policy basis for intervening in these markets.

Your intrepid reporter took his son to Park City in the first week of the New Year, only to be hit with the vacation crowds and a ski patrol strike. Thursday was bearable, at least until the early afternoon. By Friday, the resort imploded, with massive lines, protesting crowds, skiers hiking up the mountains, all leading to a social media avalanche. I was fortunate to have been interviewed by New York magazine on the indignities of Big Ski. The New York Times covered the strike ably, reporting on such nuggets as the 70 percent vacancy rate in Park City.

There are at least two problems with permitting ski monopolies. The first is that lift ticket prices will soar to astronomical levels, in this case over $300 for a weekend pass at Park City. The resort recognizes that jetsetters, after having purchased their flights, equipment, and hotel rooms, are not going to turn around and fly home because the ticket is $50 or $100 more than they expected. (The technical term is low elasticity of demand with respect to price.) Resorts have also figured out that higher lift prices drive the demand for season passes (a form of a bundle), which now fetch nearly $1000 per year. For a class paper, two of my students plotted the price of a Vail lift ticket against its acquisitions, and it’s pretty clear inflation took off around the time Vail acquired Park City and the neighboring Canyons circa 2013.

The second problem with a monopoly ski resort is that there is no constraint on the number of skiers and snowboarders in a given day. If several neighboring resorts competed against each other, then perhaps competition could break out on this non-price dimension (the time waiting in lift lines). The lack of any market discipline, however, leads to overcrowding at Park City, which can create safety hazards, as ski-patrol (when they are being paid competitive rates) can’t patrol every inch of the resort, and skiers (and snowboarders in particular) need space to avoid collisions. Unlike a sports venue, where the seats are limited by the capacity of the stadium, there is no constraint for a ski resort. And because skiers (consumers) bear the external costs of congestion, the resort cannot be counted on to regulate admissions.

Sam Weintraub details Utah’s visitation spikes and the associated infrastructure strain. He attributes part of the congestion problem to the fact that “resorts have not been able to properly handle” the demand from the unlimited passes. Regarding safety risks, some skiers at Park City “have claimed that they’ve had to step in to help injured skiers due to unacceptable response times, and that even in certain cases when patrol has arrived, they’ve come solo and without adequate transportation equipment down the mountain.”

Now an astute neoliberal might point out that the two problems identified here are in conflict, in the sense that higher (monopoly) lift prices are a way to combat the congestion problem. But the massive crowds (and crowding) at Park City during the holidays proves that the price, however inflated, is not pricing the externality correctly. And even if the higher price does address congestion in part, there is no reason why we must live this way. It would limit skiing to the super wealthy. And it would be tantamount to saying that environment regulation can be disregarded so long as we allow massive consolidation (and the attendant monopoly pricing) in the energy industry. (Per DealBook, “More M.&A. in the energy sector seems probable, given Trump’s support for the industry.”)

The solution to this clear market failure is two-fold. An antitrust authority, whether federal or state, or a group of private enforcers, should bring a case against Vail, seeking divestiture of those properties that contribute to Vail’s monopoly power over skiers and its monopsony power over workers or both. Economist Florian Ederer noted that for the first time in a while, output as measured by skier visits, has declined at Vail Resorts, which is consistent with the exercise of monopoly power. It bears noting that the FTC recently brought a case against a private equity firm in Texas that rolled up nearly every large anesthesiology practice under a similar scheme. (Two of my now settled cases, Varsity and UFC, entailed a roll-up of rival platforms as part of the challenged conduct.) An obvious bone of contention will be whether the relevant geographic market is local (under the theory that local skiers only visit neighboring resorts) or national (under the theory that jet-setters are willing to fly across the country). But given the massive roll-ups by both Vail and Alterra (owners of Deer Valley, Steamboat, Winter Park, among others), the ski markets are concentrated even at the national level.

The second solution is that some outside authority, whether the state, municipality, or the Forest Service—fun fact, Jimmy Carter ordered the Forest Service to stop regulating lift-ticket prices—should regulate the number of visitors (lift tickets plus pass holders) in a given day. Before you scream “communism,” note that restaurants and other local establishments must abide by capacity constraints, to prevent against overcrowding and the attendant safety risks. Hat tip to Jordan Zakarin for the analogy! A cap on the number of attendees would support a lower price for lift tickets, and thereby allow for a more diverse skiing clientele.

The alternative to my suggested interventions is to do nothing, and allow the market to dictate outcomes. It’s true that a strike broke the will of a stubborn monopsonist, causing it to cave on the ski patrols’ wage demands. But should we really depend on strikes to compel employers to pay a fair wage? Or bad press caused by overcrowding to discipline the actions of a monopoly ski resort? Why should we resort (pun intended) to such last-gasp methods—which cannot be invoked until we’ve reached a boiling point—when we have better tools in the anti-monopolist toolkit? 

The status quo, with labor strikes, spiking lift prices, and congestion, is clearly not socially optimal. Skiing is becoming unaffordable for many. In avoiding an intervention that might be perceived as assisting the wealthy, antitrust authorities might be inadvertently limiting skiing to a niche sport for the wealthy.

Many Americans are still in shock because our worst fears just came true: European regulators fined an American Big Tech firm a whopping one half of one percent of its annual revenue for violating some kind of “law.” To add insult to injury, radical American enforcers slipped loose from the adult supervision of the defense bar and have filed a volley of their own vindictive lawsuits over the last several years.

Sadly, the onslaught is taking a toll: to staff all of the new investigations, some dominant firms are now likely making do with outside counsel who bill under $2,600 an hour. This translates into skimpy and unimaginative legal defenses.

But protecting our national champions requires more than just copy-pasting now standard unconstitutionality defenses—which often foreshadow separate lawsuits alleging that the FTC’s commissioners and its administrative law judges are unconstitutionally protected from removal by the president—to see what sticks. That’s why we’ve painstakingly curated the following antitrust affirmative defense starter pack for cost-conscious in-house counsel. In giddy anticipation of a coming merger wave unleashed by lax federal antitrust enforcement, there’s no better time to throw merit to the wind and dissolve an enforcement agency or two altogether.

DEFENDANT’S AFFIRMATIVE DEFENSES

FIRST AFFIRMATIVE DEFENSE

(Statute of Limitations / Laches)

The FTC’s claims are barred, in whole or in part, by the fact that we hid evidence from them during the initial merger review process.

SECOND AFFIRMATIVE DEFENSE

(Separation of Norms)

This is not how enforcers did things in the four decades from the day Robert Bork founded the field of antitrust law up until those mean hipsters took over.

THIRD AFFIRMATIVE DEFENSE

(Non-Delegation Doctrine)

The FTC jeopardizes American liberty by delegating this case to lawyers. Only economists steeped in the hard science of cost-benefit analysis can be entrusted with first-chairing trials in this area of the law.

FOURTH AFFIRMATIVE DEFENSE

(Exceeding Hidden Statutory Vibes)

Although to the casual eye, the statute does not literally recite the words “consumer welfare standard,” we reserve the right to submit a supplemental expert microscopy report showing fine graphitic indentations consistent with that phrase on an original paper copy preserved by Robert Bork, Junior. In any event, the claims alleged in the Complaint impermissibly exceed the statute’s inherent vibes.

FIFTH AFFIRMATIVE DEFENSE

(Extratemporal Application of Old Law)

Only precedent dating after the New Deal era is valid, binding law. Accordingly, Brown Shoe (1962) has expired. But old cases that we like still remain valid. So Marbury v. Madison (1803) and that case declaring the exploitation of bakers to be the foundation of American free enterprise (1905) are still good law.

SIXTH AFFIRMATIVE DEFENSE

(Procompetitive Kickbacks)

Bribing our competitors not to compete could, hypothetically, set in motion a chain of events that precipitates world peace. Such procompetitive justifications benefit competition, consumers, sellers, and Mars colonizers alike.

SEVENTH AFFIRMATIVE DEFENSE

(Linguistic Existentialism)

Purported legal standards comprised of meaning-contestable units of language—also known as “words” and “phrases”—violate the Constitution. (Actually, the more Defendant thinks about it, the more Defendant suspects that Defendant’s own “separation of powers” and “non-delegation” doctrines might be void for vagueness and lack intelligible limiting principles. But no matter! That’s why Defendant splurged on the premium “kitchen sink level” affirmative defense package. Ultimately, Defendant is just happy to force federal enforcers to divert scarce resources to defending their very existence).

EIGHTH AFFIRMATIVE DEFENSE

(Hypothetical Monomaniacal Enforcer Test)

The FTC Chair flunks the recusal test we invented for the purpose of flunking enforcers. (We commend certain other Commissioners for preemptively recusing themselves despite the lack of any discernable conflict, and for delegating their authority to economist Mark Israel instead). In any event, our lobbyists are confident that the new Congress will ensure that the act of writing law review articles not commissioned by us will be punishable by deportation and disbarment.

NINTH AFFIRMATIVE DEFENSE

(Branch Errata)

Congress itself was probably just a typo, and must be dissolved to liberate the juristocracy.

TENTH AFFIRMATIVE DEFENSE

(Walker Doctrine)

We only destroyed millions of incriminating communications because California State Bar Member No. 122945 told us to. The “Communicate with Care” policy exemplifies the creative brilliance that Kent Walker brings to his job when advising lawmakers how to write their AI laws. Thus, barring Walker from the remedies phase of this case and from our public affairs efforts would harm innovation.

ELEVENTH AFFIRMATIVE DEFENSE

(No Authority to Proceed in Court)

The FTC lacks authority to pursue the claims alleged and relief sought in district court, because an agency intern once browsed the Terms of Service of Defendant’s parent company’s accountant’s app, which mandates arbitration of all claims. Failing to uphold this freedom of contract would violate the Fourteenth Amendment.

TWELFTH AFFIRMATIVE DEFENSE

(Big Escrow Check)

We reserve our right to reneg on the jury trial we demanded by writing an escrow check that is larger than the entire combined budget of all federal antitrust enforcers and waving it in their faces during voir dire.

THIRTEENTH AFFIRMATIVE DEFENSE

(Defamation)

Filing lawsuits against lawbreakers is mean and irreparably hurts our corporate feelings.

FOURTEENTH AFFIRMATIVE DEFENSE

(Rule 11/Twiqbal Immunity)

Rules about heightened pleading standards and minimum factual and legal bases for taking positions in court apply only to Plaintiffs, not Defendants, silly. (Unless we’re the Plaintiff).

FIFTEENTH AFFIRMATIVE DEFENSE

(Swimming Test, Pricking Test, Spectral Evidence)

Lina Khan is probably a witch (but we can’t know for sure until we subject her to the standard tests).

SIXTEENTH AFFIRMATIVE DEFENSE

(The Reverse Hostage Doctrine)

We’re not trapped in this lawsuit with Lina Khan; Lina Khan is trapped in this lawsuit with us. In fact, we’ll amend our counterclaims to name Lina in her personal capacity when she is replaced as Chair. This is a fight to the death.

SEVENTEENTH AFFIRMATIVE DEFENSE

(Wrong Enforcer Doctrine)

What, Jonathan Kanter filed this lawsuit?

Not Lina Khan?

Fine, then: Defendant admits that AAG Kanter knows the secret biglaw partner handshake, so we hereby stipulate to dismissal of the previous defenses, without prejudice. (We reserve all rights if later discovery reveals that an immigrant woman of color stole Kanter’s CM/ECF electronic filing credentials).

EIGHTEENTH AFFIRMATIVE DEFENSE

(South Pacific Doctrine)

Gonna wash that Part III adjudication right out of our hair.

NINETHEENTH AFFIRMATIVE DEFENSE

(Post-Election Enforcement)

Insofar as the current administration made antitrust “political” for the first time ever, thereby violating our due process rights, Defendant respectfully requests an immediate return to objective economic standards. Our experts have calculated that January 20, 2025 is the most economically auspicious day to drop all pending cases, and we reserve the right to file a motion in limine to enjoin any references to “Inauguration Day” as politicized and unprofessional.

TWENTIETH AFFIRMATIVE DEFENSE

(The Consumer Welfare Standard is Back, Baby)

Not that it ever went anywhere. The radical enforcers both cruelly took it away and never deviated from it. And we all agree on exactly what this objective and easily administrable test means, which is: we know it when we see it. Kind of like that other famous legal test…

TWENTY-FIRST AFFIRMATIVE DEFENSE

(Everyone Hates Matt Gaetz)

We applaud the incoming administration for rethinking its decision to nominate an Attorney General whose private indiscretions do not meet the bar for our moral standards. Our jubilation has nothing to do his obvious bias in favor of enforcing antitrust laws or the fact that his successor’s law firm lobbied for us.

TWENTY-SECOND AFFIRMATIVE DEFENSE

(State Ambush)

Allowing Plaintiff States to continue vigorous enforcement even after federal enforcers diverge in their efforts would be a shocking due process violation.

How could Defendant have known or prepared for this possibility, without any notice other than the listing of 38 distinct signature blocks on every filing as well as active State participation in every meet and confer session, deposition, and hearing for three years? Champagne-swilling Federalist Society boomers assure us that this kind of wanton federalism violates the unitary executive doctrine.

TWENTY-THIRD AFFIRMATIVE DEFENSE

(Denial)

This can’t be happening. Is Thomas on vacation? Did we dial the wrong yacht?

TWENTY-FOURTH AFFIRMATIVE DEFENSE

(Bargaining)

What if we agreed to probation overseen by the esteemed Commissioner Melissa Holyoak instead? Under the vigilant watch of such a fearsome enforcer, we might even be willing to pay a fine of three quarters of one percent of our annual revenue.

TWENTY-FIFTH AFFIRMATIVE DEFENSE

(Acceptance)

Okay fine, we admit that the few hot docs we forgot to destroy mean what they say. But we are still going to take this all the way to the Supreme Court—and then file a motion for relief from the judgment at the district court even after our petition for cert is denied. (Turns out we’re not very good at acceptance, and we had pocket change to spare on rolling the dice).

TWENTY-SIXTH AFFIRMATIVE DEFENSE

(Infinite Placeholder)

Whatever we come up with later, we were retroactively asserting all along, because we have always been at war against Oceania.

TWENTY-SEVENTH AFFIRMATIVE DEFENSE

(Almost Forgot: Failure to State a Claim)

The FTC’s causes of action fail to state a claim upon which relief can be granted.

Laurel Kilgour is a law and policy wrangler. The views expressed herein do not represent the views or sense of humor of the author’s employers or clients, past or present. This is not legal advice about any particular legal situation. Void where prohibited.

As Google faces aggressive scrutiny from the Department of Justice—with the search trial moving to the remedies phase and the ad tech trial moving to closing arguments—there’s an elephant in the room that many antitrust watchers are failing to see: YouTube. 

With the platform’s presence on our phones, the part it plays in our online searches, its rapid invasion of our living rooms, and the volume of advertising it serves us, YouTube is an increasingly unavoidable part of our lives. We and other observers have called it “the third leg of the stool that supports Google’s monopoly.” Separating the video giant from the rest of the Google behemoth makes sense as one of the remedies for Google’s decades of monopoly behavior and would reshape the digital landscape for the better—ultimately benefiting consumers, shareholders, and smaller companies in a market newly opened to competition.

Judge Amit Mehta is currently considering what remedies to impose after ruling against Google in August in its landmark search engine antitrust trial. Requiring divestment of one or more business units, like YouTube, is one of his options. A second big antitrust trial, with the government alleging Google illegally controls the advertising technology market, is already underway; and here, too, if the government prevails, divestment would be an option. In the interest of market competition and consumer choice, YouTube—which is intimately bound up with Google’s domination of both sectors—should be among the Google units to be spun off.

Google dominates search with more than 80% of the market, giving it an effective monopoly on the flow of internet information. But YouTube by itself has been recognized as “the world’s second-largest search engine,” handling an estimated 3 billion searches per month. As one commentator noted, after YouTube was founded in 2005, it was “purchased just over a year later by none other than Google, giving it control over the top two search engines on this list.” Another commentator noted recently in the New York Times that, “The gargantuan video site is a lot of things to a lot of people—in different ways, YouTube is a little bit like TikTok, a little like Twitch and a little like Netflix—but I think we underappreciate how often YouTube is a better Google. That is, often YouTube is the best place online to find reliable and substantive knowledge and information on a huge variety of subjects.”

Especially for many younger people, who increasingly prefer video content, YouTube is already the search engine of choice. For these reasons, the European Union recently classified YouTube not only as a large online platform, but a large online search engine.  And because YouTube is so tightly integrated with Google Search, it doesn’t represent true competition. 

Right now, Google faces little pressure to innovate because it dominates nearly every business it’s in; and when it does innovate, it does so with an eye toward further cementing its complete control of the internet. Google’s recent “innovations” have significantly degraded the Google Search experience, as the company increasingly curtails linking to external sites and instead imposes a “walled garden” strategy that keeps you interacting only with Google’s own content instead of the content you really want. The collateral damage is vast, not only to consumers, but also to content publishers, news organizations, and a variety of other third-party businesses that depend on Google traffic for revenue.

Separating YouTube from the rest of Google would shake up the search, ads, and video markets, and—freed from the market imperatives of a giant corporate parent—could take YouTube development in new directions, with the scale, resources, and user base to challenge Google to compete on features and quality. This would yield more diverse content that better meets user needs, and new opportunities for smaller players to enter the market and innovate. 

By owning supply (ad inventory) and setting the terms of demand, Google has been able to charge inflated prices for online advertising while funneling disproportionate revenue to itself and YouTube. Internal communications confirm Google knows their ad fees are roughly double the fair market rate, which one employee admitted is “not long term defensible.” But when you own the entire market, you can charge whatever you want, and Google’s vertical integration has killed competition and put the squeeze on advertisers and publishers. Numerous companies have blamed Google for putting them out of business; new startups that try to break into the business find it tough going. 

An independent YouTube would enable the new video company to go head-to-head with Google and negotiate its own deals with advertisers. This would likely lower the fees that Google charged advertisers, increase transparency in how digital ads are bought and sold, create more opportunities for advertisers to effectively reach more target audiences through more platforms, and also open up space for smaller ad tech companies to thrive. 

All of this would unlock significant new shareholder value. An independent YouTube’s unique market position and strong brand identity would make it a highly attractive investment, pushing its valuation higher than it is today; analysts have speculated that it could be worth up to $400 billion on its own. Its video-based business model is sufficiently different from Google’s core business of search, so it could attract a different class of investors with different expectations, allowing it to grow more independently and with greater strategic flexibility. And a smaller and more nimble Google would likely provide better returns to its own shareholders.

In short, it’s time to face the elephant in the room, and require Google to spin off YouTube into an independent entity positioned to be a market counterweight. This would be a win-win-win-win: for advertisers, publishers, competitors, and consumers. And it would kick one leg out from under the stool that props up Google’s internet monopoly, which has done too much market damage in too many ways for way too long.  

Emily Peterson-Cassin is the Director of Corporate Power at Demand Progress, a national grassroots group with over nearly one million affiliated activists who fight for basic rights and freedoms needed for a modern democracy.

In February 2023, Doha Mekki, the Principal Deputy AAG for Antitrust announced the withdrawal of the FTC-DOJ guidelines on information exchange. It had become painfully apparent that oligopolists had found exchanges of confidential business information to be an effective means of restraining competition without entering into overt conspiracies.  In December of that year, we published our article, Pooling and Exchanging Competitively Sensitive Information Among Rivals: Absolutely Illegal Not Just Unreasonable, 92 U. Cin. L. Rev. 334 (2023), on the exchange of such information.  We argued that most such exchanges are naked restraints of trade. Because there are a few plausible explanations for limited kinds of exchanges that are unlikely to result in restraint on competition, we recommended that a “quick look” approach would be the appropriate standard.  Moreover, we stressed that the focus of such an assessment should be on the merits of any purported justification rather than market shares or other indicia of market power.

Late in 2023, the DOJ sued Agri Stats for its program of collecting, analyzing and  sharing confidential business information for pork packers and poultry and turkey integrators.  Then in 2024, it sued RealPage for its information collection, processing, and rent recommendations to landlords. Both complaints were unclear as to the exact standard that the government was claiming applied to such information exchanges.  What is clear is that the government is contending that the agreements to share such competitively sensitive information are in themselves unlawful restraints of trade regardless of whether there is a further agreement to fix prices or control output.  This is an important step in the process of reclaiming a critical analysis of such agreements.

Most recently the DOJ submitted a Statement of Interest in the Pork Antitrust case where it more clearly invited the court to focus on the justification for the exchange and the market context in which it occurred rather than measuring market shares or other inferences of market power.  Moreover, the Statement initially pointed out that the Supreme Court has held that agreements to exchanges competitively sensitive information can in themselves violate the antitrust law.

Leading decisions such as Todd v. Exxon have referred to the “rule of reason” as the standard and seemed to embrace a requirement of finding market power as a predicate to condemning such an exchange.  The Statement is at pains (unnecessarily in my view) to advance a broad definition of the rule of reason as a flexible inquiry into the merits of the conduct at issue. Quoting from the Gypsum decision, however, the Statement stressed that the focus should be on how the exchange affects competition among the participants and in the market.  Implicit in this approach is a rejection of the standard rule of reason model in which restraints are presumed lawful unless there is substantial market power. 

Indeed, why would rivals, even if they did not dominate the market, exchange competitively sensitive information?  Such an exchange would be likely to and is almost certainly intended to stabilize and restrain the competition between those rivals for customers in common.  The primary function of any such exchange among rivals, however inclusive, is to provide a common understanding of the market to reduce or eliminate the incentives to compete. 

The Statement of Interest in the pork case moves the government closer to recognizing that the appropriate standard is one that both presumes illegality and requires a legitimate explanation.  Explicitly, it first emphasizes that exchanges of information inherently involve an agreement or understanding which satisfies that element of a section 1 case.  Second, pointing to a long history of antitrust decisions, such exchanges can be in themselves illegal.  They need not only serve as facilitating devices for express collusion on price, output, or customer allocation.  This is a very important point to emphasize in relation to such agreements and is the basis on which the government has sued both Agri Stats and RealPage.

Third the Statement emphasizes that even if information is aggregated, it can still serve an anticompetitive function.  Implicit, in this point is the proposition that the focus of analysis should be on why this information is being exchanged, which includes a variety of extrinsic factors. This leads to a section that identifies four factors that a court should consider.  They are 1) the nature (“sensitivity”) of the information exchanged, 2) its granularity (how detailed is the information and how easily can a participant determine what its rivals are doing), 3) the public availability of the information, and 4) its contemporariness.   Missing from this list is any recognition that legitimate bench marking projects might require exchanges of information that satisfy most of these criteria, but if this is a legitimate benchmarking project, there are ways to limit the granularity and contemporaneousness of the data. 

The Statement regrettably failed to take a sufficiently strong and clear position that once the plaintiff established that an agreement to exchange confidential business information exists, that should create a rebuttable presumption that it constitutes a restraint of trade.  Only if the defendant(s) can offer and provide proof of a plausible explanation for the exchange that does not involve a restraint should there be any need for a more nuanced investigation of the merits of the conduct.  At that point, the four factors that the government identified are indeed relevant as is a direct rebuttal of the asserted justification for the exchange.

The legal doctrine governing information exchange continues to wrestle with two decisions from 1925 involving the maple flooring and cement industries that upheld anticompetitive information exchanges.  Those case came during a time of “open competition” advocated by Herbert Hoover, then the Secretary of Commerce, and others to limit competition among business though use of information exchange and trade associations.  Justice Stone, the author of both these opinions, was a friend of Hoover’s and apparently supported this kind of restraint on competition.  A decade later, the Court essentially rejected these decisions.  Justice Stone chose not to participate in that decision rather than dissent.

Nonetheless, the legacy of this early 20th century childlike faith in the potential that such exchanges might serve some public interest has continued to dog the development of a coherent doctrine.  Deference to the dead-hand of the past leaves open too many paths for defendants and courts to justify or excuse harmful information sharing.  The best hope is that the judge in either the Agri Stats or RealPage case (or better both) focus the decision on a presumption of illegality and require the defendants to bear the burden of persuasion that the presumption is inapplicable to the specific case.  The Statement of Interest in the pork case does move the analysis a little closer to the appropriate standard. 

In August, Judge Mehta of the Federal District Court in Washington, D.C., concluded in a careful and detailed opinion that Google had a monopoly in both the internet search market and the associated text advertising market. Google was found to have abused its market power by engaging in exclusionary conduct, including paying large sums of money to equipment makers, browser operators, and cell phone systems to retain this dominance. The opinion declared that while Google got its monopoly because of its “skill, industry, and foresight,” it then used unlawful tactics to entrench and reinforce that position. The decision also recognized the enormous cost of creating and maintaining an effective search engine, as well as a suggestion that the text advertising system involved substantial costs. Given the apparent durability of both these monopolies, the question that the Court now faces is finding an effective remedy.

This week, the Department of Justice (DOJ) is expected to file proposed remedies for this abuse of monopoly power. Several voices have weighed in on remedy design, including The Economist, in a leader titled “Dismantling Google is a terrible idea.” Divestiture of Chrome or Android should be avoided at all costs, argued the magazine, even if that means embracing behavioral remedies such as “limiting its ability to use its search engine to distribute its AI products,” or “mak[ing] public some of the technology that enables its search engine to work, such as its index of web pages and search-query logs.”

In two prior posts, we spelled out two alternative ways to remedy bottleneck monopolies. These monopolies are ones that connect otherwise competitive markets but for a variety of reasons are durable and unavoidable. Obvious examples include electric transmission systems, cell phone service, and natural gas pipelines. The internet world is also subject to a number of bottlenecks.

The Search and Text-Advertising Engines Are Bottleneck Monopolies

Google’s search engine stands between the great mass of users with questions and the entire internet’s resources. Its search engine functions to identify and classify potential responses to the question. The cost of creating the Google search engine was over $20 billion and it requires many billions annually to maintain and expand it. Only two other search engines exist, and one recent effort failed after massive investment. Of the survivors, Microsoft’s Bing has a 10 percent market share overall and the other, Yahoo, has less than 3 percent. Hence, neither is a significant competitor. Browser providers need to have one or more search engines easily accessible for users, and they can’t charge searchers for their searches.

Because the search engine is costly to create and maintain, the question is how to pay for this service. The text-advertising engine is the means for paying for all searches. Text advertisements are the textual lines appearing at the top of any search that implicates a good or service. The line links a searcher to the website of the advertiser that hopes to make a sale.

Google sells such access to advertisers as does Microsoft and Yahoo. Judge Metha found that the creation and maintenance of the text-advertising engine is also very substantial. But at the same time, the other search engines appear to have their own text-advertising engines. This at least suggests that such engines are more readily producible, and that Google’s dominance comes primarily from its control over the search engine. Both browser operators and advertisers agree that they have to use Google’s search engine. They accept the text search engine because that is the means by which Google is compensated. Google also shares that revenue with the browser operators.

The DOJ’s Theory of Harm and Implicit Remedy

The litigation seems to have focused primarily on the anticompetitive effects of the various exclusive dealing contracts that Google obtained to ensure the dominance of its search engine. These contracts involved multi-billion-dollar payments to cell phone makers (like Apple) and browsers (like Mozilla) to ensure Google search was the default option. Nominally, other options could be provided and were included in some browsers, but the effects of Google’s brand recognition and its placement in cell phone and computer browsers resulted in effective retention of a monopoly market share.

While the opinion focuses on the harms resulting from the exclusionary practices of Google, the underlying factual findings suggest that regardless of the specifics of the contracts at this point and for the foreseeable future, the Google search engine will retain its monopoly position. Removing the exclusionary terms from the contracts is unlikely to result in any significant change in the structure of the search engine market.

Perhaps the government belatedly recognized this situation and so tried to shift the focus of its case from an attack on the specific exclusionary effect of the contracts to a broader claim of monopolization. Judge Metha rejected that move because it came late in the litigation. This is somewhat similar to the government’s failure to think through its case against Microsoft in the late 1990s, which started as a challenge to the tying of the operating system to its browser but ultimately morphed into a broader challenge to Microsoft’s monopoly. The failure of the government in that case to have a remedy that would effectively address the monopoly bottleneck of the operating system explains why 25 years later, Window’s still has a monopoly share of computer operating systems and their applications.

The fundamental challenge is to find an effective remedy that will eliminate or significantly reduce the incentive to exploit the bottleneck monopoly and use it to exclude competition in the upstream or downstream markets that the monopoly serves. Eliminating at this point exclusionary contracts given the extraordinary costs of building and operating a search engine that would, at its best, basically duplicate the Google engine, is unlikely to affect the search market in the foreseeable future.

Consider the Alternatives

The central thesis of our prior posts was that where there was an unavoidable bottleneck monopoly, an effective remedy is to change the ownership of that monopoly in a way that would eliminate or greatly attenuate the incentives to exclude and exploit. We also recognized that the first best option would be to break up the monopoly. But in many cases, this is not a feasible option. We suggested that there were two other ways to reallocate ownership and control of the bottleneck. One way is to create a “condominium” that collectively owned the bottleneck, but each user had its own piece to use. The alternative is to move ownership to a “cooperative,” which would both own and operate the bottleneck. While a divestiture remedy is possible, we think that the more likely option is to have either a condo or cooperative own and operate the search engine. As suggested earlier, our assumption here is that the text engine is one that has little exclusionary power on its own and will be further weakened if the current case, in trial, concerning Google’s monopolization of the “ad stack” (e.g., ad server, ad network, and ad exchange) results in dissolution of that monopoly.

Option A: Divestiture

The historic response to monopoly expressly declared in the Standard Oil and American Tobacco cases is to break up the monopoly into separate competing firms. It is hard to imagine how a search engine could be subdivided, but it is possible to imagine that multiple entities could receive the right to use the existing engine, “hiving off” the search engine. Each might then have the right to undertake further development of the search engine. There probably would have to be some significant compensation to Google given its massive investment to date in the search engine. This would limit the number of browser or cell phone operators that could even consider a license.

A second concern would be brand loyalty. Would searchers, assuming that Google was allowed to retain its own version of the search engine, be willing to use alternatives in sufficient quantity that the result would be economically attractive? To recover the costs and make money, text advertising needs to be attractive to advertisers.

Finally, the engine itself needs continued work. This means that those entities that took the engine would need to develop additional capacity to perform those tasks, which is unlikely to be easy or inexpensive. This suggests that divested versions of the Google search engine would struggle to compete in the market.

It would also appear that if the text-advertising engine is currently a bottleneck monopoly in its own right, a licensing system for its use with the further right of each user to amend and improve its version would probably resolve this part of the monopoly. There is no brand loyalty for such engines. Moreover, as noted above, the pending Google ad tech monopoly case is likely to result in a further increase in competition in that area of technology.

Option B: A Condominium Solution

If the search engine is sufficiently distinct from the operation of browser and cell phone operating systems, then one remedy would be to transfer ownership of search engine to an entity owned by the various users, but with the on-going maintenance performed by a separate entity that contracts to provide this service to the owners. This is analogous to a condominium association contracting with a management company. Each owner of a condominium would pay for the managerial services and would be able to use the search engine.

The manager would have significant capacity, however, to exploit this system. If compensation were on a cost-plus basis, that might reduce the risk. An even more open system in which the manager’s task is only to review and implement proposed improvements developed by third parties might reduce further the risk of exploitation. The puzzle then would be how to compensate third parties for developments.

Overall, we are skeptical that a condominium-type structure would be a very effective solution to the monopoly bottleneck that the Google search engine presents.

Option C: Cooperative Solution

A cooperative type of organization would own the search engine itself and share the ongoing costs of its operation, based on usage by the participating enterprise. The cooperative would in turn either have its own staff to maintain the engine or it would contract with various third parties to supply necessary inputs. Each participant would be able to use the search engine as it saw fit and match it with whatever text-advertising system was most attractive given the customer base and technology of that entity.

A cooperative solution to the search engine monopoly is a much more promising solution than the options of injunction, divestiture, or condominium ownership. But we see two real risks and problems. First, there is a question of the incentives to innovate especially where some users would be advantaged over others. The risk is that if most distributors of the search engine are using the same vehicle, they may have a hard time supporting innovations that might favor some types of users, e.g., cell phones, over others, e.g., computers.

Second, as Judge Metha observed, and as The Economist points out, there is a possibility that AI may eventually make search engines obsolete or offer a very credible and open alternative. The judge concluded, however, that this potential was only that. There is no current or immediately foreseeable AI search system. The concern would be that if most search providers are participating in a cooperative that provides a search engine, they may have a collective disincentive to support or sponsor the potentially costly and time-consuming effort to develop an AI search system.

Conclusion

Finding an effective remedy for the monopoly created by Google search and text-advertising engines is a major challenge. Our concern is that the government has too narrowly focused on Google’s exclusionary contracts. Removing those contracts at this late date is unlikely to produce any significant change in the monopolization of these markets and potential for ongoing exploitation and exclusion. It is regrettable that the government did not initiate its case with an explicit focus on a remedy or remedies that could actually affect the future structure and conduct in this market. We have here examined three options that could dissipate the underlying monopoly power. Each has risks and problems, but each is a better alternative than a simplistic elimination of exclusionary contracts.

The FTC is seeking a preliminary injunction to prevent two of the country’s largest supermarket chains, Kroger and Albertsons, from merging. The case was heard in the U.S. District Court for the District of Oregon, where U.S. District Judge Adrienne Nelson, a former Oregon Supreme Court justice, will soon render a verdict.

The merger would make Kroger-Albertsons the second largest retail store after Walmart. The FTC alleges that, in hundreds of local grocery and labor markets, the merger increases Kroger’s market share to a degree sufficient to activate the structural presumption against the merger. Kroger, unsurprisingly, has advanced various standard arguments in favor of mergers: that it is necessary to compete with even larger retailers (in this case, Walmart), will result in lower prices for consumers, and that any anticompetitive harm would be offset by the divestiture plan built into the merger.

As an initial matter, it is unclear whether the central mission of the Sherman Act—to promote healthy competition—is compatible with Kroger’s argument that the merger is necessary to compete with Walmart. While it is undoubtedly true that Walmart is a corporate behemoth whose very existence is an existential threat to competition, it hardly follows that allowing a merger that creates a second behemoth is the best way to reign in the first. Indeed, it is hard to imagine that the drafters of the Sherman Act could even comprehend a corporation as large as Walmart in the first place—and even if they could, it is hard to imagine that they would accept a second, equally large corporation as a legitimate solution.

Kroger’s Defenses Are Unavailing

Putting this aside for a moment though, it is worth taking a closer look at some of the arguments Kroger-Albertsons have advanced to support the merger. First, Kroger has tried to portray Albertsons as a failing firm. Yet testimony has established that Albertsons is not a failing or flailing firm—and in fact, is far from it. Albertsons CEO Vivek Sankaran, testifying in front of Congress in 2022, stated that the firm is in “excellent financial condition” with “more than sufficient resources to continue” with their current plan. Albertsons has admitted that, if the merger does not go through, they have no plans to close any stores. In FY 2023 securities filings, Albertsons told investors that it was “pleased” with their reported $1.3 billion net income. Albertsons COO Susan Morris has also testified that the company is still on track to achieve its savings goals whether or not the merger goes through. What then explains Albertsons leadership’s eagerness to merge? The answer is hardly surprising—their executives have testified that their private equity backers stand to gain tens of millions of dollars in parachute payments should the merger be approved.

Second, Kroger argues that the merger would not produce anticompetitive effects due to the divestiture plan built into the acquisition. The plan is to sell hundreds of stores in overlapping grocery markets to C&S, a wholesale grocer, which, according to Kroger, would mitigate any anticompetitive harm. As the FTC has repeatedly pointed out throughout the trial, there are more than a few reasons to be suspicious of this argument.

The Court should be skeptical of this remedy, as every party in this transaction has a failing record of making divestiture work. For example, in Albertsons’ 2015 acquisition of Safeway, 146 stores were divested to Haggen. Haggen filed bankruptcy within months, and shortly thereafter, Albertsons reacquired 54 of the stores it had previously sold. This is not the only reason for skepticism. As was revealed at trial, Alona Florenz (C&S Senior VP of corporate development and financial planning), writing to a Bain consultant, stated “just be careful with FTC. We want to say we can run them.” It doesn’t take a genius to read the subtext—C&S wants to say that they can run the stores so that, after the merger is approved, they can turn around and gut them for profit.

This interpretation is further supported by the economic realities inherent in the divestiture plan. C&S is primarily a wholesale grocer, meaning that its primary mode of business is selling in bulk to grocers, not operating stores that sell groceries to consumers. It is extremely unlikely that C&S has the infrastructure or know-how to successfully operate hundreds of grocery stores across the country that are acquired simultaneously. Further, it was revealed during discovery that C&S officials themselves believe that they are buying Kroger’s worst stores. Not only have they been caught saying the quiet part out loud, the price that C&S would pay is itself revealing: the deal is priced close to the value of the real estate alone, suggesting that C&S could easily sell off the stores for close to what it paid.

You may be thinking: even if C&S doesn’t stand to lose much on the deal, what’s in it for them? Fortunately, one need not look far for an answer. When Price Chopper and Tops, (two grocery stores) merged, C&S acquired certain stores as part of the divestiture plan. As they have done here, C&S was happy to tell the FTC that they planned to use the newly acquired stores to robustly compete with the newly merged firm. But what actually happened? C&S operated some of the stores at a loss while using others as leverage to increase profits in its wholesale business—its primary money-maker. They sold many of the recently acquired stores to their wholesale customers, who, in return, extended their lucrative contracts with C&S.

As further evidence of C&S’s true intentions, the acquisition price of the divested stores is essentially equal to the value of the real estate alone. And in a previous merger, after telling the Court that they would use stores acquired in a divestiture plan to compete with the merged firm, they turned around and sold enough stores to ensure that their wholesale profits, their primary source of revenue, would eclipse the losses from the self-proclaimed dud firms they acquired and retained. What possible reason would Judge Nelson have to believe that this would go any differently? And to top it off, even if the divestiture plan went exactly as Kroger and C&S say it would, it would fail to cure the anticompetitive harm in hundreds of local markets across the country.

Beware of Dynamic Pricing

Beyond the inadequacy of the divestiture plan, the FTC has raised other concerns that may be even more serious—especially for consumers. In 2018, Kroger began rolling out “digital price tags,” which allow the company to change retail prices in real time. Several lawmakers have expressed concern that these digital price tags could be used to facilitate dynamic pricing, whereby the price charged depends on the identity of the consumer making the purchase. The digital price tags come equipped with cameras, which use the vast amounts of data to which Kroger has access to change the price of an item depending on who the camera sees looking at the shelf. If the merger were to go through, Kroger would acquire all Albertsons’ data about their consumers, which would greatly increase the efficiency with which Kroger can price discriminate.

Kroger, of course, has steadfastly denied that the new technology will be used to raise prices. These denials are a staple of merger cases—firms poised to merge have consistently argued that they won’t raise prices, and far too often, courts have been content to take them at their word. Here, should the merger go through, Kroger has promised to invest $1 billion to keep prices low. Government attorneys correctly pointed out that, not only are these promises completely unenforceable, but history has shown that they are utterly meaningless, as post-merger firms have consistently broken these promises without consequence. Corporations such as Kroger have a fiduciary duty to their shareholders, not to their customers. If they see opportunities to raise profits, this duty requires them to pursue it—consumers be damned. Beyond history, Kroger itself has proven to be untrustworthy—in the course of these proceedings, they were forced to admit that they had engaged in price gouging on consumer staples such as milk and eggs in the midst of the Covid-19 pandemic.

Worker Welfare Matters Too

Beyond hurting consumers, the merger also harms employees. Kroger and Albertsons currently employ around 710,000 people across about 5,000 stores nationwide. Currently, unions can bargain separately with Kroger and Albertsons, and thus have greater leverage to advocate for increased wages and other protections for their workers. Should the merger go through, unions will lose this critical leverage, and would again be subjected to the whims of Kroger’s leadership. Kroger’s attorney, the aptly named Matthew Wolf, told Judge Nelson that “[Kroger] will preserve the unions.” As with his promise that the merger would lead to lower prices, taking Mr. Wolf at his word would be no wiser than taking the word of an actual wolf who tells the farmer that he will diligently guard the hen house.

Judge Nelson should grant the FTC’s preliminary injunction blocking the merger between Kroger and Albertsons. Albertsons is a healthy firm whose presence in the market is essential to competition, and their desire to merge is motivated by the fact that their executives stand to make tens of millions of dollars should it be consummated. The divestiture plan, even if it plays out exactly as Kroger says it would, is inadequate to mitigate the anticompetitive harm that would result from the merger. C&S, the acquirer, has openly stated that it is taking on Kroger’s worst firms, has a strong economic incentive to pawn off the newly acquired firms to secure greater profits in its primary revenue source as a wholesaler, and has a known track record of doing exactly that. The acquisition, which would include all of Albertsons’ consumer data, would allow Kroger to exponentially increase the sophistication and efficiency of their dynamic pricing regime. And, after admitting to price gouging amidst a global pandemic, Kroger offers nothing more than its legally unenforceable word that it won’t use the immense increase in market share to raise prices or harm workers. This merger will harm competition, consumers, and workers. The Court should reject it.

Corey Lipton is in his final year of the JD/MPP program at the University of Michigan.