The European Example: A Comparative Look at Antitrust Standards in the US and EU
Artificial Intelligence (AI) is poised to be the next major battleground for antitrust law, and the industry’s unprecedented expansion and high economic concentration pose a unique challenge to existing legal frameworks worldwide. The European Union (EU) stands out as a leader in the regulation of the digital economy, having already passed legislation that limits “gatekeeper” corporations (large digital platforms that provide core services like web browsing) in the form of the Digital Markets Act and bringing numerous suits against Big Tech companies for anticompetitive behavior. [1] This momentum for antitrust regulation is somewhat shared by the United States, as Lina Khan’s leadership as Chair of the Federal Trade Commision (FTC) has brought renewed energy and attention to the field at a crucial time. However, despite the European Commission (EC) successfully doling out fines numbering in the billions of euros for giants like Apple and Google for distorting competition, the FTC has struggled significantly in court, losing virtually all its merger challenges in 2023. [2] This discrepancy in actual enforcement is not merely due to policy differences between the US and EU; rather, its underlying cause lies in the fundamentally different legal standards at the core of each respective body’s approach to antitrust: consumer welfare and abuse of dominance, respectively. In the past decades, American courts have placed undue weight on preventing consumer harm rather than safeguarding competition; by contrast, the EU has remained centered on establishing clear standards for competitive fairness. This difference in doctrine has enabled the EC to effectively and efficiently regulate the ever-growing digital economy while its American counterparts continue to flounder, making European antitrust significantly more well-suited to tackle AI’s challenges in the near future.
Antitrust law in the US centers around the Sherman Antitrust Act of 1890, a document whose vagueness invites multiple possible interpretations by the courts. The Act was written to reflect concerns about Gilded Age trusts, but lacks the necessary legal force to actually dissolve them. [3] The Act itself fails to properly define its targets and scope. Section 2, for instance, attempts to outlaw monopolistic behavior with the following language: “every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations.” [4] There is no further elaboration within the Act that explicitly describes what a “monopoly” entails, nor is there an outline of business practices that would fall under an “attempt to monopolize.” Additionally, the use of all-encompassing terms such as “every person” and “any part of trade” immediately drew scrutiny from the Supreme Court, and the Act was not effectively utilized until the era of “trust-busting” that began more than a decade later under President Theodore Roosevelt.
Despite these initial hurdles, Justice Louis Brandeis soon established a legal framework that, for a time, made eliminating exclusionary behavior—which he termed “the curse of bigness”—the sole purpose of antitrust law. Believing that unregulated markets would “devolve into monopolies” rather than promoting the survival of fit businesses whose “efficiencies were passed on to workers and consumers,” Brandeis was the instrumental force behind strengthening the enforcement capabilities of the Sherman Act. [5] His recommendation that prohibitions “of the specific methods or means by which the great trusts … crush rivals” be added along with convictions that could result in “genuine dissolutions” found legal expression in the Clayton Antitrust Act of 1914. [6] Similarly, the FTC Act was passed in the same year in major part due to his endorsement of a board that could “aid in administering the Sherman law”. [7] He was so intimately identified as the Act’s architect that he was offered a commissioner role by President Woodrow Wilson, which he declined. [8] Ultimately, his position that the primary aim of antitrust ought to be the termination of anticompetitive practices is at the core of the two supplementary antitrust acts, placing American antitrust on a standard tantamount to that of the EU.
Beginning with Reiter v. Sonotone (1979), however, the Supreme Court established precedent that de-emphasized the Sherman and Clayton Acts’ goal of ensuring fair competition, weakening the regulatory abilities of anti-monopoly provisions in the process. In this class-action case against hearing aid manufacturer Sonotone Corporation, petitioner Reiter sued under Section 4 of the Clayton Act, which provides that "[a]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws"—vertical and horizontal price-fixing, in this case—can recover relevant damages. [9] The Court ruled in favor of Reiter. In his Majority Opinion, Justice Warren Burger rejected the defendants’ notion that the antitrust laws’ definition of property excluded items purchased for personal use, stating: “floor debates [do not] reflect any such intent … On the contrary, they suggest that Congress designed the Sherman Act as a ‘consumer welfare prescription.’” [10] In doing so, the Court limited Brandeis’ antitrust framework to only apply to cases in which consumer harm could be materially demonstrated. This radical alteration placed a significantly greater burden on the FTC, who has consequently become unable to successfully target monopolistic corporations like Disney, who have horizontally integrated on a massive scale while avoiding substantial increases in product pricing. Thus, the Burger Court opened the door for the weakening of American antitrust.
The new centrality of a consumer welfare standard allowed subsequent cases to further limit the Sherman Act by taking advantage of its original vagueness. Verizon v. Trinko (2003) is an apt example. [11] In a class-action suit, Trinko alleged that Verizon had violated Section 2 of the Sherman Act and the 1996 Telecommunications Act—which in this case, required Verizon to share its phone lines with competitors—by providing AT&T customers worse service. [12] In a unanimous decision for Verizon, Justice Antonin Scalia wrote: “The mere possession of monopoly power … is not only not unlawful; it is an important element of the free-market system … it induces risk taking that produces innovation and economic growth.” [13] Scalia’s judicial logic creates a slippery slope for antitrust enforcement, granting too much leeway for suspected monopolies to defend against FTC suits by claiming that they are simply stimulating invocation, an argument that is sure to be used by businesses involved in the developing AI industry. Furthermore, Scalia’s claim that Verizon’s monopoly power would benefit a competitive market has been proven false by the growing consolidation of the phone market, where several mergers in recent years have made three companies—Verizon, AT&T, and T-Mobile—possess over 90% market share. [14] Thus, the adoption of the consumer welfare standard has permitted US courts to systematically strip antitrust of its ability to properly regulate anticompetitive behavior, ultimately resulting in a market increasingly void of competition.
By contrast, EU antitrust—being created to sustain the varied domestic economies of the union’s member nations—shared a Brandeis-style framework that was primarily concerned with maintaining a competitive free market while entirely avoiding issues of ambiguity at its conception. The Treaty of Rome, which established the European Economic Community in 1957, surpasses the Sherman Act by clearly articulating scope and relevant punishable behavior. [15] Article 85 of the Treaty includes a list of behaviors that it prohibits “as incompatible with the common market,” including the limiting of production or investment, sharing of sources of supply, and placing of parties at a competitive disadvantage by applying “dissimilar conditions to equivalent transactions.” [16] The Article also intentionally limits itself by excluding business agreements that contribute to increasing production or economic growth if they do not impose “restrictions which are not indispensable to the attainment of these objectives.” [17] The explicit phrasing and specific scenarios ultimately guard against judicial re-interpretation, cementing standards for legal analysis of antitrust cases far more solidly than the US.
The EU’s most foundational antitrust standard is subsequently expressed in Article 86: “Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited.” [18] The concept of abuse of dominance is thus baked into the EU’s antitrust framework, legally prioritizing the “fairness” of relationships between corporate entities before their end result to consumers. Notably, Article 86’s legacy is antithetical to that of Brandeis’ framework in that it has been actively strengthened and modernized by the EU. An example comes in the form of a 2009 EC guidance communication that elaborates on the meaning of dominance: “[It occurs when] competitive constraints are not sufficiently effective and … the undertaking in question enjoys substantial market power over a period of time … [Resulting in decisions] largely insensitive to the actions and reactions of competitors, customers and, ultimately, consumers.” [19] Thus, the document both strengthens the regulatory capabilities of the EC—which can be thought of as the FTC of the EU—and articulates a clear legal doctrine that preventing harm to consumers is best achieved by preventing harm to businesses by safeguarding equitable competitive relationships. The immense importance placed on preventing abuses of dominant positions is reflected by the comparable strictness of European antitrust; for instance, the guidance document states that “the Commission's experience suggests that dominance is not likely if the undertaking's market share is below 40% in the relevant market,” whereas some circuit courts in the US place this level as high as 70%. [20]
AstraZeneca v. Commission (2012) illustrates the effectiveness of the abuse of dominance standard in court. In this case, the EC fined pharmaceutical company AstraZeneca (AZ) for violating Article 86 by deregistering their market authorization for anti-ulcer capsules, one of their main products, while simultaneously launching the same medication in tablet form, thereby preventing competition from manufacturers of generic products who are barred from introducing their copies without a registered reference product. [21] AZ ultimately appealed the fine to the Court of Justice of the European Union, which ruled in the EC’s favor. In response to AZ’s claim that a lower court had not adequately considered their intentions in the undertaking, Advocate General Ján Mazák wrote in his Opinion, “It is settled case-law that the concept of abuse of dominance is an objective concept… The General Court was not obliged … to assess AZ’s alleged subjective beliefs on an interpretation of law, bona fides or otherwise, but rather to examine their actual conduct.” [22] The EU, once more, departs from contemporary American antitrust decisions like Trinko by not allowing corporations leeway to determine rulings by defending their monopolistic behavior under the thin guise of supposedly well-meaning intent. Therefore, it is the sharpened focus provided by the abuse of dominance standard that has made prosecution and regulation of anticompetitive behavior in the EU more successful.
Currently, the US has launched several antitrust inquiries into the AI industry, with the Department of Justice investigating Nvidia’s role in the AI chip market and the FTC examining the relationship between Microsoft and smaller start-ups like OpenAI. [23] The results of these inquiries, however, are radically different when the two aforementioned legal frameworks are applied. Considering that AI is a new industry and that innovation has occurred without substantially increasing prices for the consumer, the US courts’ existing consumer welfare standard would conceivably fail to properly prosecute the Big Tech companies involved where the abuse of dominance standard would likely prevail. Thus, federal prosecutors would remain unable to deter the rapid consolidation of AI in the hands of a small number of corporations. Concerns such as these over the future and strength of American antitrust have long since sparked a movement to restore an antitrust framework centered on the welfare of market competition, adequately known as Neo-Brandeisianism. [24] The FTC’s attempts to revive US antitrust reflect the growing influence of this movement, but if enforcement outcomes are not achieved by shifting the courts’ emphasis on consumer welfare towards a more EU-style framework, antitrust law is in danger of continuing to be toothless in the face of an unprecedented digital market.
Edited by Devon Hunter
[1] European Commission, “The Digital Markets Act: ensuring fair and open digital markets,” European Commission, October 12, 2022, https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-and-open-digital-markets_en
[2] Satya Marar and Alden Abbott, “Antitrust Enforcement in 2023: Year in Review for the Federal Trade Commission and the Department of Justice,” Mercatus Center at George Mason University, January 17, 2024, https://www.mercatus.org/research/policy-briefs/antitrust-enforcement-2023-year-review-federal-trade-commission-and.
[3] “Sherman Anti-Trust Act (1890),” National Archives, March 15, 2022,
[4] Sherman Antitrust Act, 15 U.S.C. § 2 (1890).
[5] Kenneth Elzinga and Micah Webber, “Louis Brandeis and Contemporary Antitrust Enforcement,” Touro Law Review 33, no. 1 (2017): 282
[6] Elzinga and Webber, “Louis Brandeis,” 286.
[7] Elzinga and Webber, “Louis Brandeis,” 286.
[8] Elzinga and Webber, “Louis Brandeis,” 285.
[9] Reiter v. Sonotone Corp., 442 U.S. 330 (1979).
[10] Reiter v. Sonotone Corp., 442 U.S. 330 (1979).
[11] Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2003)
[12] Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2003)
[13] Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2003)
[14] Sneha Padney, “T-Mobile Acquires Mint Mobile – 2022’s Fastest-Growing US Mobile Service Provider,” Similarweb, April 25, 2024, https://www.similarweb.com/blog/insights/software-tech-news/t-mobile-aquires-mint-mobile/
[15] “The Treaty of Rome,” March 25, 1957, European Commission Historical Archives, https://ec.europa.eu/archives/emu_history/documents/treaties/rometreaty2.pdf.
[16] “The Treaty of Rome,” 31.
[17] “The Treaty of Rome,” 31.
[18] “The Treaty of Rome,” 32.
[19] European Commission, Information from European Union Institutions and Bodies, “Communication from the Commission—Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertaking,” February 24, 2009, 8, https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:045:0007:0020:EN:PDF.
[20] European Commission, “Communication from Commission,” 9.
[21] AstraZeneca AB and AstraZeneca plc v. European Commission, ECLI:EU:C:2012:770 (2012), https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62010CJ0457.
[22] AstraZeneca AB and AstraZeneca plc v. European Commission, ECLI:EU:C:2012:770 (2012), Opinion of AG Mazák, 11, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62010CC0457.
[23] David McCabe, “U.S. Clears Way for Antitrust Inquiries of Nvidia, Microsoft and OpenAI,” New York Times, June 5, 2024, https://www.nytimes.com/2024/06/05/technology/nvidia-microsoft-openai-antitrust-doj-ftc.html.
[24] “A Brief Overview of the ‘New Brandeis’ School of Antitrust Law,” Patterson Belknap Web & Tyler LLP, November 8, 2018, https://www.pbwt.com/antitrust-update-blog/a-brief-overview-of-the-new-brandeis-school-of-antitrust-law