ff enforcement. For instance, a too narrow definition may result in a market looking more concentrated than it is, while defining it too loosely may result in the opposite problem. 

Google argues that the DOJ purposefully exaggerates the extent of its market power, ignoring the fact that Google faces significant competition from other online advertising providers such as social media platforms and Amazon. The DOJ’s lawsuit focuses primarily on open web advertising and Google contends that the advertising on mobile apps should be included in the market of online advertising. 

Narrow market definitions have been a reoccurring theme for regulatory agencies. Meta is currently the target of a Federal Trade Commission (FTC) lawsuit regarding its alleged monopoly over the personal social media market. Meta believes that the Commission has intentionally defined the social media market narrowly to exclude relevant competition. 

Other examples include the FTC’s recent lawsuit against Microsoft for its acquisition of Activision, defining the market of high-performance gaming consoles so as to exclude commonly used alternatives, as well as the DOJ’s lawsuit against Apple for its alleged monopoly over the “performance smartphone” market. In each case, the government utilized market definitions to exclude competitors these businesses face, often by understating interchangeability between products.  

This turn toward flawed market definitions coincides with a recent change in how antitrust regulators approach cases. Increasingly, regulators are taking a more adversarial approach that relies less on consumer welfare and more on novel legal theories of harm. Unfortunately for agencies, this approach has led to less success in the courtroom. In their push to go after large companies, antitrust regulators have missed the mark. 

Market definitions are foundational to any antitrust case, and these should be made as accurate as possible. When antitrust regulators manipulate market definitions to make their case, it undermines their credibility. Therefore, it is in everyone’s best interest that regulators define markets accurately the first time. 

Published in the Economic Standard.