Thoughts from Assistant Attorney General Makan Delrahim

By RBC Capital Markets, LLC
Published November 19, 2019 | 40 min watch

Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, Makan Delrahim, spoke to RBC Capital Markets’ Mark Mahaney and Jonathan Atkin about the impact of applying antitrust law on the technology, media and telecom sector in the face of continuing growth and consolidation.

Business practice changes – but the law stays the same

According to Mr. Delrahim, Antitrust law is justifiably an important check and balance in the corporate sector, despite being written for the old railroad and oil industries. Technology as an industry may be more dynamic, but as long as there is the risk of consumer harm, there is a need for strong antitrust law.

The Microsoft factor – a game changer?

A significant legal turning point in the tech sector was 1998’s United States v Microsoft Corp trial, in which the court found against Microsoft. In Mr. Delrahim’s view, the firm had historically dominated the sector with its operating system, which in turn restricted competition unfairly. The impact of that judgement, he said, was ultimately beneficial to the cell phone market which flourished as a result.

Big isn’t necessarily bad

“Big isn’t necessarily bad, but big behaving badly is bad” stated Mr. Delrahim. In his view, striving for monopoly is an acceptable mission of capitalism which only fails when a firm pushes a restrictive product onto the market at the expense of competitors.

A big firm that continually innovates on the other hand, can actually do ‘good’ in the market.

The future is bright – but antitrust needs to evolve with it

The future of technology – not least 5G – has the potential to build a fantastic consumer experience. But price alone doesn’t determine if tech companies are behaving fairly or not, said Mr. Delrahim, who argues that antitrust law must evolve with this sector.

Google and Facebook are free at the point of use, he added, but they should also be assessed in how they strive for quality, innovation and choice. “That is the type of thinking we need to be doing,” he said.

Your privacy policy is a defining characteristic

Privacy is a measure of quality when assessing a firm’s behaviour and its likelihood to cause consumer harm. Mr. Delrahim argues that increasing transparency around how data is captured and used on behalf of the consumer is becoming an increasingly important part of that debate.

Antitrust involves prediction – to a degree

One of the paradoxes of antitrust is understanding what direction companies might take some years down the line, as well as reviewing their position or behavior at present. Mr. Delrahim says the lawyers typically look two years ahead to understand the direction of travel. On a set number of metrics, they will make their best predictions, though Mr. Delrahim admits that these calculations are not a perfect science.