The landscape of U.S. antitrust enforcement is poised for transformation under the upcoming administration, yet the spotlight on major tech companies—along with the societal implications of their dominance—remains firmly in place. In recent years, a global wave of antitrust legislation has swept through various nations, empowering authorities to take action against perceived abuses by large technology platforms. A key player in this arena is the European Union, which has successfully implemented the Digital Markets Act, setting a precedent for regulatory frameworks targeting digital giants.
In the U.S., attempts to pass similar regulatory measures have stumbled, leaving the enforcement approach tethered to traditional antitrust methods. This entails pursuing ex post cases against actions deemed illegal under existing laws, rather than preemptively restricting behavior through ex ante rules. This conservative method is seen as less disruptive to entrepreneurial spirit and innovation, contrasting sharply with the EU’s more interventionist stance which, as highlighted in Mario Draghi’s recent report on EU competitiveness, has arguably impeded the growth of innovative industries. The report underscores that the productivity gap between the U.S. and the EU can largely be attributed to advancements in the American tech sector.
Since the inception of the Trump administration, U.S. antitrust enforcers have initiated landmark cases against “Big Tech,” an effort that the Biden administration has not only continued but elevated to a cornerstone of its economic strategy. Embracing the “Neo-Brandeisian” perspective, the administration contends that industrial concentration is a primary driver of wage stagnation, income inequality, and even inflation.
Despite the impressive market capitalization growth of major U.S. tech companies over the past four years, ongoing antitrust litigation poses a significant threat. These cases aim to reshape the structure of the tech sector while also addressing the increasing wave of digital market regulations that primarily target American firms.
Market Capitalization of the Big Tech Firms*
| Company | 2020 Year End Market Cap (Trillion USD) | 2024 Market Cap (Trillion USD) | Annual Rate of Market Cap Growth: 2020-2024** |
| Alphabet | 1.185 | 2.354 | 18.72% |
| Amazon | 1.634 | 2.196 | 7.67% |
| Apple | 2.255 | 3.411 | 10.9% |
| Meta | .778 | 1.603 | 19.8% |
| Microsoft | 1.681 | 3.341 | 18.73% |
*Data from companiesmarketcap.com
**Author’s calculation
This persistent growth is a clear indication of the value consumers find in their products and services. However, should U.S. regulatory bodies succeed in enforcing structural changes or imposing stringent behavioral remedies against these companies, the repercussions could ripple through the consumer experience, diminishing the value of digital platforms and potentially stifling future innovation.
Take, for instance, the Justice Department’s case against Google. The DOJ has asserted that Google wields monopoly power in online search, citing its exclusivity agreements with device manufacturers that position Google as the default search engine as anticompetitive. The DOJ is advocating for a court order that would compel Google to divest Android and Chrome. While such a remedy may seem satisfying to enforcers eager for a landmark victory, it risks being grossly disproportionate to any harm alleged from current business practices.
This fixation on breaking up companies reflects a troubling ideology in antitrust discourse. Concentration, or “bigness,” is often mistakenly viewed as an automatic indicator of market inefficiency. This simplistic narrative was effectively challenged by economists like Harold Demsetz, who argued for a more nuanced understanding of market dynamics in the latter half of the 20th century.
Rather than adhering to Neo-Brandeisian principles, the new administration should consider integrating insights from the literature on firm evolution, which examines how businesses adapt to market forces and incentives. Increased market concentration can, paradoxically, foster competition by driving innovations that ultimately benefit consumers and alleviate their concerns about technology.
Beyond issues of economic efficiency, there are legitimate concerns about the tech sector that resonate with segments of the American populace. Identifying the precise nature of these concerns is a complex task. However, if the core issues extend beyond competition, antitrust enforcement is likely a misdirected tool. Antitrust law is fundamentally about protecting competition and consumer welfare. For instance, if privacy concerns are paramount, those should be addressed through robust privacy legislation rather than through the lens of antitrust.
Giorgio Castiglia is an Economic Policy Analyst for the Schumpeter Project at the Information Technology and Innovation Foundation.
