Laboratories of Anti-monopoly: States are on the front line of the fight against corporate consolidation.

• Date: 01 April 2022
• Author: Wolfe, Rob

In June 2018, Doug Peterson of Nebraska sat with other state attorneys general in a hotel ballroom in Portland, Oregon, and listened to the bad news. Big Tech, a presenter told them, has spawned a new cohort of monopolies rivaling the power of the 19th-century robber barons. Google, Facebook, Amazon--these companies' constant surveillance over legions of users gives them a commodity more valuable than anything that comes out of the ground: information. It was at that meeting that Peterson first realized the power in knowing what millions--billions--of peo| pie search for, buy, click on, and "like" online. He thought to himself, "Data is the new oil."

A few months after that presentation, Phil Weiser, a wonkish lawyer who quite literally wrote the book on 21st-century consumer protection--Digital Crossroads: Telecommunications Law and Policy in the Internet Age--was elected Colorado's 39th attorney general. Weiser had no idea that his background in antitrust, which he himself considered a niche corner of law, would be relevant. But a week after he took office, Weiser got a call. Doug Peterson needed help. He wanted to sue Google.

"Thank God for Phil Weiser," Peterson says today. Most states have strong antitrust laws that have mostly gone unused for the past few decades, as economists, politicians, and jurists nationwide took a benign view of corporate megamergers. Weiser's experience was critical to dusting off those tools as the pair built their case and recruited more states to their cause over the next two years. As their investigation revealed how Google uses its dominance in online search and advertising--the company sold 28.6 percent of digital ads last year, followed by Facebook's 23.8 percent--to starve competitors of traffic and block them from the ad market, Peterson felt a growing sense of outrage. When filing the suit, in December 2020, he proclaimed to the press that he wouldn't be content with a monetary settlement, and even floated the idea of forced asset sales. "Fines are like kicking gorillas in the shin," he said at the time. "We fortunately have remedies that are much broader in scope."

Meanwhile, the federal Department of Justice was limbering up its own substantial antitrust enforcement powers. In October 2020, the agency launched a similar, but slightly narrower, complaint against Google's market abuse. (Weiser and Peterson also are going after Google's attempts to dominate smart appliances and vehicles, among other areas.) The lawsuits were merged in federal court, but Weiser and Peterson have jealously guarded state control over settlement terms, thereby preserving the ability to keep fighting if the feds decide to give up. The case is now in pretrial maneuvers. Whether or not it succeeds, the show of cooperation between Weiser, a Democrat, and Peterson, a Republican, along with the involvement of 36 other states and territories, is a powerful statement that the American people no longer believe that the tech giant's actions are in their interest.

It also mirrors the early days of antitrust, at the turn of the 20th century, when states first led the way. The conference where Peterson had his epiphany was organized by the National Association of Attorneys General, a professional group that began, appropriately enough, as an interstate meeting about antitrust. In 1907, state regulators gathered at that inaugural conference to discuss a joint strategy addressing the dominance of Standard Oil.

Today, after 40 years of regulatory neglect, the story is much the same, but with different names. Half of America's industries are dominated by their four largest companies, and the tech giants' control over their respective spheres is even more crushing; Google, for instance, accounted for 87 percent of internet searches in 2018. The top 0.01 percent of Americans held roughly 11 percent of the nation's wealth in 2012, compared to 9 percent in 1913 and only 2 percent in 1977, just before Reagan-era deregulation. Many observers are calling this a second Gilded Age.

Meanwhile, in addition to co-leading the Google suit, Peterson and Weiser have become major players in a 48-state lawsuit seeking to break up Facebook, led by New York's Letitia James. Some AGs--in Washington, D.C., and Ohio, for instance--are going it alone against the tech giants, while others are scoring antitrust victories against more conventional monopolists. Of note are recent settlements in California and Pennsylvania that curbed anticompetitive behavior from large hospital chains--a major contributor to soaring health care costs. And lawsuits are just the beginning; states like New York and Illinois are updating their century-old antitrust statutes and lobbying Congress to do the same.

State attorneys general...