The Biden administration is testing its antitrust push far from Washington as it seeks to roll back the grip of Big Tech companies.
The nation's capital is no longer the main court venue when the Justice Department and Federal Trade Commission challenge competition from Silicon Valley giants.
Instead, the government decided to sue Apple (AAPL) in New Jersey. Or in California, it took on Microsoft (MSFT). Or Washington State, which has a standoff with Amazon (AMZN). Or in Virginia, it filed its second antitrust lawsuit against Google (GOOG, GOOGL).
“They're obviously bringing these technology lawsuits in a variety of jurisdictions where the laws are less developed,” said Douglas Ross, an antitrust professor at the University of Washington School of Law. “And they’re doing it for a reason.”
Attorney General Merrick Garland announced a wide-ranging antitrust lawsuit against Apple at a March 21 press conference. The lawsuit was filed in New Jersey. (AP Photo/Jose Luis Magana) (ASSOCIATED PRESS)
Antitrust lawyers say the multijurisdictional approach could be explained by a variety of strategies.
The district courts chosen by Mr. Biden's FTC and Justice Department all report to different appeals courts, so prosecutors could be targeting appeals courts with precedents favorable to their legal theories.
Juan Arteaga, a partner in Crowell & Moring's antitrust litigation practice, said the government may also be weighing the court's speed in processing cases against the convenience of potential witnesses. .
He added that government officials may also want to demonstrate aggressive anti-competitive enforcement to other parts of the country.
“I think the current leadership team and the antitrust division of the Department of Justice have made a serious effort to remove antitrust enforcement from the Washington, D.C., bubble,” Arteaga said.
Mr. Ross is more skeptical of strategies that seek out jurisdictions where judges are less experienced in antitrust law and where few dominant antitrust cases have been registered.
Outside of Washington, D.C., and a few other popular antitrust jurisdictions, “antitrust law is like chicken teeth. There are very few lawsuits, and most average federal district judges “We have never heard a case for a violation,” Ross said.
DC advantage
DC has long been the setting for many of the most prominent antitrust cases in U.S. history, including the landmark cases against AT&T (T) and Microsoft (MSFT) in the 1970s, 1980s, and 1990s. It has been.
That advantage extends even further back.
Since 1899, the earliest year for which records are available, the Justice Department has filed 391 antitrust cases in the district.
This is nearly double the number of applications filed in the next closest districts, the Northern District of California (222) and the Southern District of New York (220).
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In June 2000, then-Microsoft Chairman Bill Gates held a press conference in Redmond, Washington, to discuss the Justice Department's antitrust lawsuit against his company. (Photo: DAN LEVINE/AFP via Getty Images) (DAN LEVINE via Getty Images)
It maintained its dominance for most of the past decade. From 2015 to 2022, Washington, D.C., was the city with the most new cases, or as many cases as its title.
That changed last year. In 2023, the government filed additional antitrust lawsuits in several locations outside Washington, D.C., including Michigan and Oklahoma.
When considering private antitrust cases, the district with the most combined competition cases last year (42 total) was the U.S. District Court for the Northern District of California. Federal district courts in New Jersey, Illinois, and New York followed suit.
The government's move from Washington, D.C., comes amid concerns in the legal community that judges are being hoarded in hopes of sympathetic rulings and that state and federal governments are intervening in private antitrust cases. This is happening in the midst of a growing trend.
A bill was introduced in the Senate that would disrupt judicial power in single-judge districts, and the Judicial Conference recommended changes to the case assignment process in March.
Course change
President Biden launched his campaign against Big Tech in the District Court of Washington, D.C., close to his hometown. In 2021, the FTC, led by Biden-appointed Commissioner Lina Khan, filed a new lawsuit against Facebook.
The lawsuit, first filed during President Trump's administration, alleges that the social media giant illegally interfered with competition through its acquisitions of Instagram and WhatsApp.
It also inherited a separate lawsuit against Google brought by the previous administration in Washington, D.C., challenging the company's dominance in online search. A judge's decision on this matter is expected soon.
Prosecutors then changed course and moved away from D.C.
In December 2022, the FTC selected the United States District Court for the Northern District of California to challenge Microsoft's acquisition of video game giant Activision Blizzard. That effort failed, and the regulator appealed the matter to the Ninth Circuit.
A month later, in January 2023, the Justice Department, along with eight state attorneys general, pursued Google in a second antitrust case, this time in the U.S. District Court for the Eastern District of Virginia. Prosecutors alleged that Google abused its monopoly in the digital advertising technology market.
In September 2023, the FTC and 17 states filed suit against Amazon in the U.S. District Court for the Western District of Washington. The lawsuit accused the retail giant of having an illegal monopoly over online marketplace services.
Then, in March of this year, the Department of Justice and a group of state attorneys general filed suit against Apple in the U.S. District Court for the District of New Jersey. Prosecutors argued that Apple illegally abused its dominance in the smartphone market.
“I'm trying to avoid DC circuits.”
New Jersey is not logical for the government to challenge Apple when compared to some other cases outside of Washington, DC.
Amazon was targeted in the Washington area, where its headquarters are located, and Microsoft was sued in the Bay Area, where it has a large physical presence.
But Apple is not based in New Jersey, nor does it have a dominant business there.
One factor that may help explain the government's choice is that appeals from New Jersey's federal trial court are heard by the Third Circuit Court of Appeals. The court has issued rulings in recent years that could favor the government's claims against the iPhone maker.
“I think the Justice Department has concluded that the case law is much more favorable to the Third Circuit than it is to the Ninth Circuit,” Arteaga said.
Apple CEO Tim Cook said this in April. (AP Photo/Ahmad Ibrahim) (ASSOCIATED PRESS)
The Justice Department may be looking to move quickly on the case against Google in Virginia. The Eastern District Court has earned the nickname “Rocket Case” because of the speed with which it processes cases.
“I think there's probably an element of trying to avoid the D.C. circuit. I don't know if that's going to help them or hurt them,” Ross said.
He said the tactic could further confuse the law and increase the likelihood that one of the cases will be heard by the Supreme Court.
Keith Harrison, a litigation partner at Crowell & Mohring, said filing lawsuits against the nation's most powerful consumer companies is an attempt to communicate the administration's policies to a wider audience. , said that both wins and losses can be beneficial.
“this [Apple] “This case would be a big one no matter where it was filed,” Harrison said, “but in New Jersey, it would be the biggest case in that court and regularly covered on the local news. ” he said.
Alexis Keenan is a legal reporter at Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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