Disputing Apple’s “Walled Garden” Through Reinvigorated Antitrust Enforcement
–Nachiketh Patil
The Neo-Brandeisian Approach to Big Tech
In United States v. Apple, the Department of Justice and 16 states with the District of Columbia filed a lawsuit alleging Apple to have abused its market position illegally under the Sherman Antitrust Act. The release can be found here and filing here. This piece seeks to analyze the potential U.S. antitrust case against Apple through the lens of the emerging “Neo-Brandeisian” school of thought in competition policy.
The Apple case is not an isolated instance; antitrust scrutiny of large tech firms has intensified in recent years. The Department of Justice (DOJ) is pursuing separate lawsuits against Google over alleged anticompetitive practices in search and advertising technology. Meanwhile, the Federal Trade Commission (FTC) has sued Amazon and Meta (formerly Facebook) for allegedly stifling competition. These actions stem from a shift in antitrust enforcement priorities under the Biden administration, though the trend began during the Trump presidency. The DOJ and FTC’s antitrust divisions are now led by proponents of the “New Brandeis Movement,” a school of thought that advocates for a more aggressive approach to curbing corporate power and promoting competition. This movement draws inspiration from the views of Supreme Court Justice Louis Brandeis, who famously warned about the dangers of concentrated economic power and championed robust antitrust enforcement.
The Neo-Brandeisian antitrust movement has two main claims: 1) Existing antitrust tools have been underutilized and need to be reinvigorated, and 2) The consumer welfare standard should be replaced with a broader “competition standard”, and the burden of proof shifted to make it easier for plaintiffs to demonstrate anticompetitive conduct. Regarding Big Tech, Neo-Brandeisians argue these revamped antitrust tools could be applied to rein in the power of major technology companies in ways that go beyond just consumer prices. For example, under a competition standard, conduct like a monopsonist paying higher prices to suppliers to squeeze out rivals (the Weyerhaeuser case) could potentially be challenged, even if it doesn’t directly harm consumers in the short-term. The goal would be to promote a more competitive market structure.
Firstly the piece argues, the Neo-Brandeisian approach represents a paradigm shift in antitrust enforcement by moving beyond the narrow consumer welfare standard to address structural market challenges in digital ecosystems. Secondly, this framework recognizes that true market competition involves more than short-term consumer prices—it requires protecting the competitive ecosystem itself, scrutinizing how technological gatekeeping and exclusive practices systematically foreclose competition across multiple markets. Lastly, by shifting analytical focus from consumer prices to competitive structures, the Neo-Brandeisian approach offers a more robust regulatory framework capable of addressing the complex, multi-sided nature of digital platforms, ultimately protecting market rivalry, innovation, and broader economic potential
Neo-Brandeisian Challenges to Neoliberal Consumer Welfare Standards
The neoliberal view holds that eliminating rivals is acceptable if consumers are ultimately not harmed. However, the Neo-Brandeisian perspective differs fundamentally – it considers the mere elimination of rivals anywhere in the supply chain, without pro-competitive justification, as inherently harmful to competition. This divergence is highlighted in Justice Kavanaugh’s concurrence in NCAA v. Alston, where he suggested that harming competitors in one market should not be justified by benefits to consumers in another market. If this view gains traction, it could have significant implications for companies like Amazon, whose conduct towards upstream suppliers may be evaluated independently from effects on downstream customers.
Another key difference lies in the default burdens of proof. During the neoliberal era, most mergers and unilateral conduct were presumed legal, with plaintiffs facing an uphill battle. Neo-Brandeisians argue for reviving statutes like the Robinson-Patman Act and Clayton Act, which prohibit conduct that “may substantially lessen competition” – a lower bar than the Sherman Act’s “likely anti-competitive” standard. This could shift burdens to defendants to prove their conduct is more likely pro-competitive than not. Burden-shifting is crucially important given the complexity of antitrust analysis and the difficulty of discerning effects in dynamic markets. Placing the burden on defendants could significantly impact big tech litigation going forward. We are potentially witnessing a paradigm shift in antitrust, with the new reigning consensus and analytical framework still being contested. The Neo-Brandeisian movement argues that the statutory language of the Clayton and Robinson-Patman Acts justifies reviving a “competition standard” over the consumer welfare standard that has prevailed. However, it remains unclear which approach will ultimately coalesce as the new dominant paradigm providing the default assumptions for antitrust analysis. This context makes the potential antitrust case against Apple, as reported by The New York Times, particularly significant. As the world’s most valuable tech company that has yet to face major antitrust litigation, this could become a pivotal case in the Neo-Brandeisian reframing of antitrust enforcement priorities.
Based on prior cases like Epic v. Apple and media reports, it appears the potential DOJ antitrust case against Apple is likely to centre around tying claims. Specifically, that Apple is using its dominant position in the smartphone market with the iPhone to extend its market power into adjacent products and services. The core theory seems to be that Apple is tying or bundling products like the Apple Watch, iMessage app, and most critically the App Store, with the iPhone in technologically or contractually restrictive ways. This allegedly privileges Apple’s offerings over competitors for iPhone users. Drawing parallels to the Microsoft antitrust case in the 1990s over tying Internet Explorer to Windows, the DOJ may argue Apple is leveraging its smartphone monopoly to gain power in smartwatches, app stores, and ability to charge high commission fees to app developers serving iPhone users. While the 9th Circuit’s Epic v. Apple decision didn’t directly take issue with the iPhone-App Store tie, attacking that nexus appears the most promising avenue for antitrust enforcers under a revised, Neo-Brandeisian “competition standard” approach.
First, the Neo-Brandeisian movement must be credited for focusing attention on the abuse of power by Big Tech companies and the associated enforcement zeal. They have successfully converted an intellectual movement into an actual enforcement strategy by bringing a flurry of antitrust cases against Big Tech. While the Google search case was, in relative terms, amongst the most straightforward of all Big Tech antitrust cases, this victory is still notable. These agreements had been in existence for several years and it has been noticed by the regulators just recently.
The evolution of antitrust analysis in digital markets represents a sophisticated shift from simplistic economic indicators to a more nuanced understanding of market power. Courts are now critically examining complex market dynamics beyond zero-price services and nominal switching costs, focusing on structural barriers like network effects, default bias, and choice friction. In the Apple ecosystem, this means interrogating how technological architecture generates competitive advantages that extend beyond traditional economic metrics. The Neo-Brandeisian approach recognizes that digital markets possess non-traditional economic characteristics, where value is derived not just from immediate consumer pricing, but from the systemic advantages created by integrated technological and contractual designs.
Looking at Existing Legal Precedents
The recent Google decision does not transform antitrust law but instead adheres to the established and relatively uncontroversial exclusive dealing framework outlined in US v Microsoft. Under this framework, plaintiffs must demonstrate: 1) the defendant’s monopoly power within the relevant market, and 2) anticompetitive effects stemming from the disputed conduct. Once this prima facie case is established, the defendant bears the burden of providing procompetitive justifications for their actions. This standard, which relies on proving anticompetitive harm through a detailed rule of reason analysis rather than applying a per se rule, remains widely accepted among scholars of both the Chicago and Post-Chicago schools.
The more ambitious Neo-Brandeisian proposition, which sets it apart from its predecessors, aims to challenge neoclassical price theory—which focuses exclusively on short-term price increases or output reductions as indicators of harm—and to curtail the overuse of the rule of reason, which has made antitrust violations harder to prove. Additionally, it seeks to revive presumptions of illegality for certain forms of conduct, such as monopolistic practices that undermine competitive market structures.
Google’s exclusive agreements presented a strong opportunity to advance this Neo-Brandeisian agenda. Evidence showed that Google: 1) held monopoly power in the general search market, and 2) engaged in exclusive agreements. Despite this, the court undertook a detailed examination of the anticompetitive effects of these agreements. The DOJ could have used this case to push for treating exclusive agreements by monopolists as per se illegal. However, this legal innovation did not occur. Instead, the court reiterated that such agreements, even when executed by a monopolist, are not inherently illegal.
Current Focus on Economistic Methods and Consequentialist Goals
A key distinction of the Neo-Brandeisian movement is its rejection of the view that the economization and increasing technocratic nature of antitrust law have made the discipline more objective, apolitical, or precise. Instead, Neo-Brandeisians advocate for an approach that considers a broader range of economic and non-economic factors, such as the effects of monopoly power on inequality, innovation, democracy, labour, and more. This intellectual pluralism, which looks beyond economics to include other social sciences and emphasizes the law’s role in shaping the relationship between politics and the economy, aligns the movement with the broader intellectual framework of Law and Political Economy. However, the Google decision does not reflect this intellectual pluralism. Economic analysis remains central to the court’s reasoning, although it is more nuanced and sophisticated than in previous cases.
The Google decision also marks a departure from the previous emphasis on ‘consumer welfare,’ with no mention of this term in the judgment. The court assessed anticompetitive effects not through neoclassical price theory but by examining the impact on the competition structure, such as foreclosure and exclusionary effects. However, despite the shift in focus, the legal standard and goals of antitrust analysis remained unchanged. The analysis continued to be consequentialist, where the predicted consequences of actions are prioritized over the characteristics of the action itself. While the court moved away from price and output effects to focus on foreclosure or exclusion, the consequentialist framework remained. The ruling favoured the government because the anticompetitive effects of the challenged conduct were clear, but the decision did not signal a shift away from economistic consequentialism.
The Neo-Brandeisian approach to antitrust analysis in digital markets represents a critical evolution from traditional economic metrics, specifically in examining technological ecosystems like Apple’s. By shifting from a transactional to a systemic view of market power, this framework explores how integrated technological architectures generate competitive advantages through complex mechanisms such as network effects (where the ecosystem’s value increases with user adoption), default bias (the tendency to use pre-configured settings that privilege Apple’s services), and choice friction (the practical and psychological barriers to switching platforms). Rather than focusing solely on immediate consumer pricing, the analysis reveals how technological design can constitute substantial economic barriers to entry, demonstrating anti-competitive constraints embedded within seemingly seamless digital ecosystems. This nuanced perspective recognizes that in digital markets, economic value extends beyond monetary transactions, encompassing the structural advantages created by sophisticated technological and contractual designs that privilege incumbent platforms.
The Legitimacy of Apple’s Market Power: Tying and Exclusivity
Apple’s main defense will likely be that while it may possess significant market power in the smartphone market, this dominant position was gained legitimately through offering a superior product, rather than via exclusionary conduct. Under Section 2 of the Sherman Act, merely possessing monopoly power is not itself illegal – the offense is the wilful acquisition or maintenance of that power through anticompetitive or predatory means. Apple will likely argue that its high market shares and ability to charge premium prices like the App Store’s 30% commission simply allow it to recoup investments in developing an attractive integrated “walled garden” ecosystem across its iPhone, App Store, Apple Watch and other offerings. It will characterize this as pro-consumer product integration that enhances security, privacy and user experience.
However, the counterargument from antitrust enforcers could be that while product bundling is not per se illegal, Apple has gone too far by making its services an unnecessarily exclusive or default path for iPhone users in a way that forecloses competition in complementary markets like wearables and app distribution platforms. This could potentially run afoul of Section 3 of the Clayton Act’s prohibitions on tying and exclusive dealing arrangements. The key issue is whether Apple’s “walled garden” amounts to legitimately advantageous product design and integration as Apple claims, or an instance of illicitly leveraging its smartphone monopoly into extending that market power to other domains, which could contravene a renewed focus on preserving market competition versus just low consumer prices.
So while not disputing Apple’s market dominance, its central defense will likely centre on whether its tying of services like the App Store across product lines constitutes fair, pro-consumer innovation under the consumer welfare standard, or is an instance of monopoly leveraging and reduced rivalry that a more Neo-Brandeisian “competition” oriented antitrust approach would deem impermissible. While revitalizing antitrust enforcement and adopting a Neo-Brandeisian “competition” standard could help address some concerns around big tech’s market dominance, it may not fully grapple with other core issues like the ad-driven “attention merchant” business model itself.
While Apple’s integrated “walled garden” ecosystem is not the sole option for consumers, it is the default path that most iPhone users follow. The key question is whether there are less restrictive means for Apple to deliver the purported benefits of integration and a curated experience without leveraging its smartphone dominance to extend market power into adjacent domains like smartwatches, app stores and developer relations. Antitrust enforcers may argue that even if some consumers prefer Apple’s tightly controlled ecosystem, the company could provide similar integration advantages through means that are substantially less limiting to competition. For example, making the App Store and Apple Watch more optional add-ons rather than de facto exclusive paths for iPhone users.
The crux of the debate boils down to whether Apple’s “walled garden” constitutes legitimately advantageous product design and integration as Apple claims, or whether it goes too far by requiring an anti-competitive technological/contractual lock-in that forecloses rivals in complementary markets from accessing the iPhone user base. While some consumers may want Apple’s integrated experience, the question is whether the company could provide that option through less exclusionary avenues that still enable meaningful competition from other smartwatch makers, app stores, and developers seeking to serve iPhone owners. Evaluating whether there are genuinely less restrictive alternatives will be critical in assessing the competitive effects.
Conclusion
Antitrust, is primarily aimed at promoting market rivalry and checking anti-competitive conduct that forecloses competition. But some problems inherent to major tech platforms, like commodification of user data and attention-harvesting for targeted advertising, may require solutions beyond just breaking up integrated ecosystems. For those systemic issues around surveillance capitalism and monetization of human experiences, competition alone may be insufficient. Complementary approaches through sectors like regulated industries, public utilities, privacy law and data governance may ultimately be needed to address concerns that pure competition cannot solve
While enforcing antitrust laws and challenging anti-competitive practices like tying and bundling are essential first steps, a comprehensive approach to addressing the dominance of big tech will require more than just competition policy. It must include broader reforms, such as treating user data as a public good with corresponding governance frameworks. The revival of antitrust is important but not a cure-all; it needs to be supported by regulatory changes that tackle not just market structure but also the business models and data exploitation practices that underpin the societal impacts of major tech platforms. As the Neo-Brandeisian movement advances, it is crucial for scholars and enforcers to remain focused on their core goals of restoring legal standards and driving a normative shift, particularly as the current case moves through the appellate process. The movement must avoid the fate of many past intellectual trends, which, after litigation and strategic compromises, have ultimately become indistinguishable from the status quo.
Author is student of National Law School of India University.