Populist Antitrust: The Case of FTC v. Facebook

• DOI: http://doi.org/10.1177/0003603X231163218
• Published date: 01 June 2023
• Date: 01 June 2023

https://doi.org/10.1177/0003603X231163218

The Antitrust Bulletin

2023, Vol. 68(2) 250 –262

© The Author(s) 2023

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DOI: 10.1177/0003603X231163218

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Article

Populist Antitrust: The Case of

FTC v. Facebook

Thomas W. Hazlett*

Abstract

A novel theory of antitrust law may be tested in the case of Federal Trade Commission (FTC) v. Facebook.

It focuses on how pricing might be monopolistic even when the goods delivered to end users are

zero-priced. While there is considerable political momentum behind a regulatory push to toughen

antitrust sanctions on digital platforms in general and Facebook in particular, the economic theory

behind the Government’s antitrust case is shown to be uncompelling. That does not mean it will

necessarily be rejected by a given court, but the chances of the case succeeding and then surviving the

full gamut of appeals is low. However, that predicted outcome may well calibrate the considerable

space between the existing legal equilibrium and an emerging electoral policy equilibrium. If so, the

expected outcome may well fuel the populist movement pushing legislation to fundamentally alter the

antitrust statutes.

Keywords

antitrust, digital platform, market power, quality-adjusted price, personal data, privacy, mergers

I. Introduction

Public choice research has shown that antitrust prosecutions tend to be heavily influenced by intersec-

tional political factions and rent-seeking rivalries across industry segments.1 In the present climate, in

which antitrust enforcement issues have risen to national prominence,2 a popular cause may elicit

critical, perhaps marginally determinative, political support. While antitrust issues are typically

*Hugh H. Macaulay Endowed Professor of Economics, Wilbur O. and Ann Powers College of Business, Clemson University,

Clemson, SC, USA

Corresponding Author:

Thomas W. Hazlett, Hugh H. Macaulay Endowed Professor of Economics, Wilbur O. and Ann Powers College of Business,

Clemson University, 225 Walter T. Cox Blvd., Clemson, SC 29634, USA.

Email: hazlett@clemson.edu

1163218ABXXXX10.1177/0003603X231163218The Antitrust BulletinHazlett

research-article2023

1. Roger Faith, Roger, David Leavens, & Robert Tollison, Antitrust Port Barrel, 25 J. L. & Econ. 329 (Oct. 1982).

2. Antitrust policy generally is not a frontpage topic in political reporting. Yet it has become so. President Joe Biden devoted

“valuable real estate” in his Mar. 1, 2022, State of the Union Speech to pledge action on antitrust enforcement, and both

major parties have made antitrust reforms high-profile causes, focusing on new legislation governing large digital plat-

forms. Leah Nylen, Dems Are Going after Big Tech. It’ll Affect Almost Everything You Do Online, PoLitico (June 15, 2021)

(Article subhead: “The Democratic-led bills take aim at the tech industry’s largest players and some of their most popular

offerings, like Amazon Prime and the Apple App Store.”) Evan Halper, How Conservative Anger at Big Tech Pushed the

GOP into Bernie Sanders’ Corner, L.A. timEs (May 6, 2021).