Competition in digital markets is drawing attention from Congress, foreign regulators, and antitrust authorities. The House Judiciary Committee opened an investigation of digital markets in 2019. The same year, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) reportedly opened antitrust investigations into four companies—Alphabet, Amazon, Apple, and Facebook. These firms, along with Microsoft, are currently the most valuable publicly traded companies in the United States, and are often referred to as “Big Tech.” Possible issues in the pending investigations may include the effects of vertical integration and acquisitions on competition.
On June 30, 2020, the DOJ and FTC released new Vertical Merger Guidelines. The guidelines outline the agencies’ approach to examining mergers and acquisitions at different stages of a supply chain. The guidelines do not explicitly address digital markets, leaving it unclear how these agencies are examining “Big Tech” in their investigations. This CRS Insight analyzes competition issues raised by vertical integration in digital markets and how acquisitions involving “Big Tech” may differ from those in other industries. A companion CRS Legal Sidebar provides a general overview of vertical merger enforcement and discusses the implications of the new guidelines.