Who Wants to Break Up Big Companies?

Clues to what moves public opinion toward stricter antitrust policy

While the appetite for antitrust regulation waxes and wanes with each new administration, the nation’s leaders aren’t the only ones who get a say in how or whether competition laws are enforced. Public opinion matters, too, most directly as jurors deciding whether to punish monopoly practices. Just ask Google or Ticketmaster. They, like other megacorporations, have spent billions paying out jury awards from antitrust trials, or just fighting to keep antitrust cases away from juries in the first place. 

Yet public opinions about the competitive practices of large corporations aren’t well understood. The public clearly appreciates cost savings that a dominant company can bring — WalMart certainly isn’t hurting for customers. But might we still want to punish companies that build their dominance illegally, or rein in a company whose sheer size smothers competition? These, however, aren’t the hottest polling topics today. 

A working paper aims to uncover what perceptions shape public demand for antitrust enforcement. In a preregistered randomized controlled trial, UCLA Anderson’s Ricardo Perez-Truglia and University of Stuttgart’s Jeffrey Yusof consider four types of information around antitrust cases that might influence public opinion: 

• a large market share 
• evidence of consumer harm
• unfair competition
• an antitrust defendant’s negative image

For the experiment, the researchers first sorted roughly 4,000 subjects culled from an online provider into a control and four treatment groups to read summaries of arguments in real-life antitrust cases. Twenty percent read about a 2020 case the Department of Justice and 11 state attorneys general brought against Google. Other groups read about a Federal Trade Commission case against Meta (parent of Facebook); DOJ actions against Live Nation; Federal Trade Commission v. Meta; Epic Games v. Apple; and a class action price fixing case against eyeglasses company Luxottica.   

The subjects — which the researchers point out are not representative of the U.S. population — somewhat or strongly supported increasing antitrust enforcement generally. In the control group, for example, more than 80% supported three stricter antitrust policy proposals. Support for plaintiffs in the case summaries was still strong but lower, and far from unanimous. About 56% of the control group supported the plaintiff in the case they learned about. 

Each of the treatment groups was then given more facts about its case, supported by actual court documents, related to the four tested factors. In the Google case, for example, subjects learned about its share of online search advertising; how its customers’ advertising costs may be passed on to consumers; its payments to companies to pre-install Google search as the default on their products; and a controversy involving Google that was unrelated to antitrust.

The researchers again measured subject support for plaintiffs and remedies, which in the Google case, included options to break up the company or limit its default-search agreements. Noting that more than one category of information (consumer harm and unfair competition, for example) can affect opinions at the same time, they ran the results through an econometric model to rate the importance of each factor around antitrust enforcement support generally. 

Learning that a company’s practices harmed consumers had the most systematic effects on subjects’ opinions around antitrust policy, the study observes. It appeared to increase support for plaintiffs and, more broadly, created more lasting support for antitrust remedies, such as breaking up a monopoly or limiting its contracts. 

The subjects didn’t seem to care about the extent of a company’s market dominance alone. Most economists don’t think huge market share conflicts with free and fair markets by itself, either. But a sample of economists surveyed for this study had predicted the subjects would be more alarmed by it. 

Image issues did appear to move support toward plaintiffs. The subjects also wanted unfair competition stopped. But support under these conditions waned over a month’s time, and did not appear to affect broader views around antitrust regulation.