Legal director, Sandeep Vaheesan, writes about the limits of competition policy and law as it currently stands, and how to improve it.

This article is translated from its original publication in Japanese.

President Joe Biden has pledged aggressive action against monopolies and other powerful corporations. In July, Biden issued an Executive Order on Promoting Competition in the American Economy and called for 72 actions against corporate power across the economy, including in digital markets. He also appointed or nominated progressive antitrust and privacy advocates to lead the Federal Trade Commission (FTC) and Department of Justice Antitrust Division (DOJ), the two federal bodies responsible for enforcing antitrust laws. Given Biden’s actions, dominant firms across the economy, including Amazon, Apple, Facebook, and Google, could face significant checks on their power and discretion in the coming years.

Despite the executive order and lawsuits, large corporations in the United States may not have much to fear yet. Over the summer, Apple and Facebook defeated major antitrust suits brought against them. And the pace of corporate consolidation has accelerated. Big business executives and boards can be confident they will likely ward off judicial challenges and, at a minimum, draw out the legal process for years. The Biden administration will not solve America’s monopoly problem through litigation alone and instead should look to remake anti-monopoly rules.

For too long, the DOJ and the FTC sat on their hands. Between 2000 and 2019, the DOJ did not litigate a single monopolization suit and did not even investigate many monopolies. The FTC was more active but frequently seemed to target second-tier monopolists in the U.S. economy.

The past year has seen a flurry of major litigation against Big Tech corporations. In the summer of 2020, video game developer Epic Games filed twin antitrust suits against Apple and Google alleging monopolization of the distribution of smartphone apps on their respective mobile operating systems, as well as payment processing for purchases made within games and other apps. Last fall, the Trump administration’s DOJ joined the antitrust fight and filed a complaint against Google alleging monopolization of online search. The FTC sued Facebook near the end of 2020, challenging its acquisitions of Instagram and WhatsApp in 2012 and 2014, respectively, as well as its denial of application programming interfaces to competing apps and services. State governments, working in concert, brought three antitrust suits of their own against Google and Facebook. These lawsuits send an important message: Antitrust authorities and injured businesses will seek to hold the most powerful corporations in the world, at least in the tech sector, to account.

So far though, the outcomes of the cases hardly strike fear into the hearts of CEOs and boards of dominant firms. In June, a district judge dismissed lawsuits brought both by the FTC and a coalition of states led by New York against Facebook. (The FTC filed an amended suit in August, and the states are appealing the dismissal of their suit.) More recently, a judge ruled largely in favor of Apple in the antitrust suit brought by Epic Games. These losses are not outliers. Recent high-profile cases have gone in favor of corporations. For instance, the FTC lost a major pharmaceutical antitrust suit on appeal in 2020 and was stripped by the Supreme Court of the authority to recover money from monopolists and fraudsters in federal court.

If corporations are afraid of a merger crackdown by Biden’s antitrust cops, they certainly are not showing it in their behavior. Merger activity in the United States and around the world continues at a frenetic pace and may set a dollar value record this year. Big tech companies have gone on an acquisition spree and spent more than $260 billion this year buying out firms worth less than $1 billion alone.

The FTC has conceded it does not have the resources to fully review all merger filings. Citing a “tidal wave” of merger filings, an FTC official wrote that the agency could not complete investigating several mergers during the mandatory 30-day waiting period, resigning itself to issuing letters to the merging parties stating that it can challenge their tie-ups in the future. Big corporations can pursue deals with confidence because antitrust enforcers are overwhelmed, and some prominent recent government attempts to stop consolidation have failed. For example, a multistate lawsuit failed to stop T-Mobile’s acquisition of Sprint in 2020 that reduced the number of national wireless carriers from four to three.

Litigation will not solve America’s corporate concentration problem. The law, at present, is stacked in favor of powerful businesses. The government and other antitrust enforcers must surmount multiple procedural obstacles merely to get to trial. And years can elapse between the filing of a complaint and a court decision. For example, the DOJ filed its lawsuit against Google in October 2020 and won’t take its case to trial until late 2023. Adding in possible appeals means that antitrust cases can take five years or more resolve.

Even if the government succeeded in current or future suits against Amazon, Apple, Facebook, and Google, what about other monopolistic firms, not to mention mega-mergers? The costs and staffing requirements of a big antitrust case mean the government can only try to break up a few monopolies or to block a handful of mergers at a given time. State governments and well-heeled private firms like Epic Games can and do bring suits of their own but face low probabilities of success. Successful anti-monopoly litigation across the entire economy would be an extremely tall order and is not a realistic path to solving the general monopoly crisis in the United States.

Current antitrust rules are the problem: They favor large corporations who have the means to hire armies of lawyers and consultants and draw out the process for years in court. They are not designed to stop unfair practices and mergers quickly. Rather they promote corporate monopolization and consolidation.

Advancing anti-monopoly aims requires changing the rules of the game. Policymakers should put corporations on notice that certain practices are illegal. For example, dominant firms should not be able to obtain potential competitors, like Facebook did in acquiring Instagram and WhatsApp, or prevent trading partners from doing business with rivals, like Google has done with wireless handset makers and competing search tools. For dominant firms, these practices should be categorically illegal, and not illegal only after the government has spent tens of thousands of staff hours and millions of dollars to show consumer harm. Businesses should compete and grow by making better products and investing in new technologies, not by muscling out rivals and buying out competitive threats.

Agencies such as the FTC have the power to remake anti-monopoly rules. Congress gave the FTC the expansive power to identify “unfair methods of competition” so the FTC can employ expert judgment to prohibit unfair competitive practices as well as mergers that excessively concentrate markets and maintain or extend the power of dominant firms. Sectoral regulators such as the U.S. Department of Agriculture and Department of Transportation have similar powers. Biden’s executive order encourages these agencies and departments to use their regulatory powers more aggressively.

The headline-grabbing suits against Big Tech are welcome after decades of federal tolerance of monopolies. As the disappointing early results suggest though, litigation will not solve America’s monopoly problem. Trying to enforce a pro-monopoly set of rules to achieve anti-monopoly results will, at best, have only modest effect. To advance its aims, the Biden administration should reconstruct the rules themselves to make clear that monopolistic practices and mega-mergers will not be tolerated in any sector.

Read the article as originally published in Japanese on The Nikkei here.