Concentrated Digital Markets, Restrictive APIs, and the Fight for Internet Interoperability
68 Pages Posted: 28 Jun 2019 Last revised: 14 Jun 2022
Date Written: June 7, 2019
The Internet consists of disparate websites that, though built independently by separate developers, must interact with each other to provide a seamless user experience. Application Programming Interfaces (APIs), which enable these interactions, were originally built out of necessity but expanded in functionality as businesses matured. Some of the most familiar names on the Internet—Facebook, Amazon, Google—have long made APIs available to allow smaller players the chance to gain a foothold in a data marketplace controlled by a concentrated few. In turn, these platforms rose to prominence as the downstream success of these third parties using APIs generated upstream value for the provider via user traffic or valuable data. Increasingly, however, dominant platforms have begun closing off access to information and features by restricting APIs.
This Article shows APIs are critical to Internet interoperability, which in turn fosters a truly competitive online marketplace. Conversely, overly restrictive APIs can amount to violations of competition law. However, this Article argues that while traditional antitrust is illsuited to redress these harms, the Federal Trade Commission’s Section 5 authorities are sufficiently flexible to fill the void. Given the political push to check “big tech” and the rise of Section 5 activity in data privacy, now is the time for the FTC to begin using this authority to monitor detrimental API designs.
Keywords: section 5, ftc, federal trade commission, antitrust, interoperability, api, application programming interface, unfair competitive practices, consumer harm, big tech, tech regulation, administrative law, walled gardens, coding, software, internet, mergers, competition, new economy, network platforms
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