Big Tech’s Buying Spree and the Failed Ideology of Competition Law

Big Tech is on a buying spree. Companies like Apple, Google, Facebook, and Amazon are gobbling up smaller companies at an unprecedented pace. But the law of competition isn’t ready for Big Tech’s endless appetite. Today’s antitrust law is controlled by the Chicago School of Law and Economics.

The Chicago School’s ideological frame is toothless when a dominant firm purchases a startup that could be a future competitor. Under the “potential competition” doctrine, the Chicago School is impotent to face the anti-competitive thread of Big Tech. This Article shows how the Chicago School of law and economics hobbles antitrust law and policy on potential competition mergers. It illustrates this problem with a close study of public information regarding Facebook.

The Article assembles a database of Facebook’s completed acquisitions—ninety in all—and shows how the “potential competition” doctrine renders competition law entirely impotent to protect the consumer interest in this space. What is true for Facebook applies to the market generally. While we offer no opinion on any particular merger, protecting the consumer against the ravenous appetite of Big Tech requires rejecting the potential competition test and adopting the empirically tractable structural approach to potential competition mergers.