Exercising Antitrust Enforcement Discretion: Android

Abstract

This paper examines what factors guide U.S. antitrust enforcement officials in the exercise of their prosecutorial discretion, and applies that analysis to a hypothetical challenge to the Android operating system for mobile devices. With limited resources, U.S. antitrust enforcement officials must be discerning in the cases they choose to prosecute. Four principal considerations drive antitrust enforcement decisions: (1) the strength of the case on the merits; (2) consumer harm and remedies; (3) deterrence of similar conduct by others in the marketplace; and (4) the importance of protecting competition, not competitors. Applying these considerations, the paper concludes that Section 2 action directed at Android would be unlikely to succeed because Android does not have a monopoly share of a reasonably defined market protected by structural barriers to entry, and Google’s conduct is very different from that condemned by the D.C. Circuit in Microsoft. Moreover, there is no clear-cut consumer harm. On the contrary, the advent of Android, which is based on a disruptive new technology, resulted in downward pressure on prices, expanded output and has led to greater -- not less -- consumer choice. A risky, complex litigation would also produce opportunity costs from an enforcement perspective. Additionally, there is no credible argument that such a case is necessary for deterrence. Finally, the principal complainant about Google has ample means to defend itself, suggesting that its real motivation in seeking government intervention is to enhance its own bottom line, not to protect competition.

Keywords: Monopoly, Antitrust, Microsoft, Google, Android, Tech, Single-Firm Conduct, European Commission, Sherman Act § 2, Market Power

JEL Classification: K21