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How will the US competition law investigation affect law firms?

How will the US competition law investigation affect law firms?

Violet

22/10/2019

Despite becoming ever-increasingly popular among users, the biggest tech companies in the US are facing growing criticism from the authorities. Their presence and popularity have soared in recent years and this has led to growing concerns that they are creating a monopoly in the market.

In response to these concerns, the US Department of Justice recently announced that it will carry out an investigation into the competition practices of ‘leading online platforms’. The investigation will look to ascertain whether companies are breaching competition law and the Department of Justice even has the power to break up companies that it thinks are too dominant. Although it has not named the platforms that it will investigate, the Department of Justice has said that its report will cover search engines as well as social media and retail services.

In light of increasing digitisation, this crackdown on big tech companies is interesting. Certain tech giants have vast numbers of users and data about them. The power of such companies has been seemingly unchecked thus far, so it is encouraging to see that the US government is moving with the times by starting to investigate whether these companies are abiding by competition law. In future, this type of investigation will be key for law firms to be aware of, as they may be advising clients in these sectors and will need to be aware of how tech companies will be treated in future.

All aspiring commercial solicitors should be aware of the Department of Justice’s investigation, as it could have major consequences for the future of companies that focus primarily on online content. Many commercial law firms have specialist antitrust or competition departments to advise their clients on competition law. Going forward, firms will need to exercise caution in their approach to certain clients, because competition law could have a stronger influence on their business decision-making than previously. Competition law might also in itself become a growing area of focus as more and more companies rely on advice from legal professionals if and when they see tighter restrictions in their sectors.

The Department of Justice’s investigation means that the biggest companies may have to rethink their business models. One example might be that they are forced to break off subsidiaries from larger parent companies. Law firms will have to be involved at the advisory stages of these changes. Although such changes seem to be targeted for the moment at US companies, their global nature means that there will be widespread consequences of any decision that the Department of Justice makes.