Your Company Isn’t Based in Silicon Valley: Why Should You Care About the Antitrust “Techlash”?


Author: Steven Cernak

Companies like Facebook, Google, Amazon and more have faced an increasing number of antitrust investigations and challenges (globally), both private and government, in recent years.  In the U.S., current Presidential candidates are lining up to propose changes to antitrust laws and advocate for enforcement focused on these same tech companies. While they might not be explicit targets in as many actions, other U.S. companies outside Silicon Valley could be swallowed up in this techlash and so need to be prepared.

Techlash not New and Not Just American

These challenges to the actions, even the structures, of these successful and ubiquitous tech companies did not start with the 2020 U.S Presidential campaign. Even back in 2016, the business and financial media and both major political parties expressed concern and more about these companies, as captured here. In the U.S., those concerns have been expressed in proposed legislative changes to the antitrust laws and promises of even more drastic actions from leading candidates. Enforcers around the globe have reviewed these same companies and issued reports and mounted challenges. (For an updated list of open and open public investigations, check the tracker available here. For thoughtful analyses of competition issues raised by the actions of these companies and more, listen to any and all episodes of the Competition Lore podcast.)

But if your company—or your client—doesn’t sit in Silicon Valley, should you care?  Definitely yes.  Below, I organize the reasons for that answer as Big, Tech and Bad Behavior.


Under current U.S. antitrust law, the absolute size of a company is not important.  Even large relative size—a high share of an appropriately-defined market—does not suffice for a Sherman Act Section 2 violation: That “monopolist” must also be “monopolizing,” that is, taking some actions to maintain that monopoly. Simply using market power gained through better products or service to, say, charge high prices, is not “monopolization” in the U.S.

Some leading candidates would dramatically change those rules: “break up corporations that have accumulated dominant market share”, “institute bright-line merger guidelines that set caps for vertical mergers, horizontal mergers, and total market share” and “big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google.”

While those proposals might have been inspired by companies in Silicon Valley, they would apply to all companies judged to be “big” in a “market”—therefore, you should walk through the market definition analysis to determine if your company might be considered “big.”

Even if the legislation and the interpretations of today’s statutes do not change, enterprising private lawyers could sue companies with large market shares, hope to survive a motion to dismiss by focusing on the large shares and then extract a settlement.  If your company is “Big,” you need to understand how the company’s actions really do benefit consumers and then be prepared to explain the facts convincingly, both in the court of law and public opinion.


All these investigations have spawned—and will continue to spawn—private civil damage lawsuits in at least the U.S.  Some of those suits will take the form of purported class actions.  Because these tech companies interact with so many companies, any such classes could be huge and could include your company. If class certification is successful, you face a decision:  Do you passively remain a member of the class or proactively opt out and file your own suit, with all the greater expenses and potential recoveries such action might entail?  You need to start considering these options now.

Relatedly, because these tech companies interact with so many other companies as a supplier, competitor or customer and because the investigations and suits could be very broad, there is a chance that your executives who deal with these tech companies will become part of the process, even if your company is not a target. So, even more than normal, this is a good opportunity to remind your execs to be careful in what they say and the documents they create because there is a chance the quote will show up in court or Congress.

Finally, consider the possibility that your company might also end up considered “tech” and become a target in the “techlash.”  Not all the technology is developed in Silicon Valley—there is plenty of work on autonomous vehicles being done in the Detroit area, for instance.  Does your company’s “technology work” share any attributes with the work done by any of the targeted tech companies?  For instance, does your company collect customer or other data that give you an advantage over your competitors?  Some have called data “the new oil,” though others have rejected the analogy. As the investigations continue and the actions considered problematic are made public, you need to determine if similar allegations could be made against your company.

Bad Behavior

Finally, your company must not forget about the actions that for years have raised antitrust issues for all companies, tech or not. While not new or unique to tech, the profile of these actions has been raised by the heightened interest in all antitrust issues. For instance, does your company participate in a standard-setting organization or similar process?  Or do joint research on potential technological advancements with competitors? Neither automatically violates the antitrust laws, even for large companies with large market shares, but both can raise antitrust concerns if not done properly, as some German car manufacturers have discovered. Similarly, exclusive dealing contracts can raise antitrust issues when employed by powerful companies – that is just one of the allegations raised by the FTC in its challenge of Qualcomm’s behavior [Editor Note: Bona Law filed an amicus brief supporting Qualcomm in the Ninth Circuit appeal of the district court decision].   Have you checked your company’s arrangements with all its suppliers and distributors lately to see if they could be considered exclusive and, perhaps, anti-competitive?

Even if your company is not on the front lines of the tech war, it could still suffer collateral damage.  Better to be prepared.


Image by ar130405 from Pixabay

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