Why is the Biden administration going after Big Tech?

A lawsuit against Apple this week followed cases against other tech titans.

March 22, 2024, 3:36 PM

The Biden administration escalated its legal assault on Big Tech this week with a case against the world’s second-largest company, Apple, over alleged abuse of its iPhone monopoly.

The lawsuit comes months after federal agencies filed a lawsuit against Amazon and prosecuted a trial against Google -- both of which targeted the respective companies' market dominance.

An ongoing case against Meta, meanwhile, aims to unwind its ownership of Instagram and Whatsapp.

The campaign in the courts reflects a growing bipartisan consensus concerned about the power of sprawling tech companies whose products and services pervade the lives of everyday Americans, experts told ABC News.

But, they added, the push also indicates a concrete effort to protect consumers and enhance private sector competition, as well as update anti-monopoly enforcement to address 21st century problems.

"These cases are quite a big deal," Bill Baer, a fellow with the Brookings Institution and former head of antitrust at the Department of Justice under President Barack Obama, told ABC News. "These tech platforms have amassed enormous power."

Amazon did not immediately respond to a request for comment. Neither did Google nor Meta.

In a statement to ABC News, Apple strongly rebuked the case brought by the Biden administration. "This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets," the company said.

Amazon rejected the allegations against it and vowed to fight the case. In court proceedings, Google argued that its success owed to its superior product.

In response to ABC News’ request for comment, the White House said it supports protecting consumers and competitive markets.

"The Biden-Harris administration has made clear that no American should pay higher prices and lose choices because companies break the law. President Biden strongly supports fair and robust enforcement of the antitrust laws, and recently launched his Strike Force on Unfair and Illegal Pricing to ensure accountability when companies break the law and keep prices high," White House assistant press secretary Michael Kikukawa said.

Here’s what to know about why the Biden administration is going after Big Tech:

Rein in the power of big tech

President Joe Biden has made no secret of his concern about the power of Big Tech firms, especially when it involves risks to consumers or small businesses.

In 2020, on the campaign trail, Biden backed robust antitrust enforcement and stiff scrutiny for the tech giants, though he stopped short of supporting a breakup of the firms.

The following year, he signed an executive order calling on federal agencies to crackdown on anticompetitive practices in a handful of key sectors, including tech."Capitalism without competition isn't capitalism; it's exploitation," Biden said at a White House signing ceremony.

The aggressive posture toward Big Tech has coincided with a shift in public opinion against the firms from both Republicans and Democrats.

Only one in three Americans hold positive views of the Big Tech firms, according to a 2021 Gallup poll. That finding marked a sizable decline from two years earlier, when 46% of Americans held positive views of the companies.

The darkening view is more stark among Republicans. Sixty-five percent of Republicans held a negative view of Big Tech in 2021, up from 37% in 2019, the poll showed. The court proceeding against Google, in September, resulted from a case filed originally by the Trump administration.

"There is shared concern among Democrats and some Republicans that these companies have this much power," Baer said.

PHOTO: U.S. Attorney General Merrick Garland speaks during a news conference at the Department of Justice Building, March 21, 2024, in Washington.
U.S. Attorney General Merrick Garland speaks during a news conference at the Department of Justice Building, March 21, 2024, in Washington.
Anna Moneymaker/Getty Images

Protect consumers and competition

Across its various cases against big tech, the Biden administration has centered on two key harms: damage to consumers and threats to competition.

In the case against Apple, for instance, the Department of Justice alleged that the company’s dominance in the smartphone market helped balloon the price of the iPhone. In its lawsuit against Amazon, the Federal Trade Commission argues that the company uses illegal business tactics to stop rivals from selling products at lower prices.

The Biden administration has combined its concern for consumer welfare with a push for competitive markets, arguing that competition brings innovation, which in turn benefits consumers, Rebecca Allensworth, a professor at Vanderbilt Law School who focuses on antitrust, told ABC News.

"Future consumers lose out on innovative new products down the line if we don’t keep the competitive environment healthy today," Allensworth said.

Herbert Hovenkamp, a professor at the University of Pennsylvania, criticized the notion that Big Tech firms stifle innovation, saying that the companies file more patents than most firms and roll out new products.

"What the current agencies won’t accept is that frequently we need large firms in order to bring us low prices and high rates of innovation," Hovenkamp said.

Strengthen antitrust law

In addition to seeking a change in business practices, the Biden administration wants to strengthen antitrust enforcement for decades to come, some experts said.

In the 1970s and 1980s, a series of legal decisions narrowed antitrust law to a determination of consumer harm, specifically whether a given example of market concentration led to higher prices.

In turn, if a dominant company enhances its position in a manner that costs customers at the cash register, then the conduct violates the law; otherwise it doesn’t.

In pursuing a series of high-profile cases against Big Tech, the Biden administration is pushing courts to expand their notions of consumer harm to include issues like privacy violations and data collection, Baer said.

"We need to expand our horizons in looking at how there can be anticompetitive conduct that results in invasion of our personal life," he added.

Allensworth said the Biden administration is seeking a wider view of consumer harm that would expand the evidence deemed proof of misconduct.

"The standards of proof of consumer harm that have come about over the last 40 years are disproportionately high," she added.

However, the strategy carries significant risks, said Hovenkamp.

In seeking to land a major blow against each company on a wide range of practices, the Biden administration may lose cases it could have won if attempting to redress a more limited set of specific misconduct, Hovenkamp said.

"I think the fix is to bring much narrower cases," he added.

Allensworth and Baer acknowledged the difficulty of the antitrust cases, saying the outcome could hinge on the willingness of the court to adapt the law to modern day industry.

"They have the power to adjust antitrust to the policy needs of the moment," Allensworth said. "We’re going to have to see."