• Sat. Nov 26th, 2022



How a top Washington analyst weighs antitrust risk against Big Tech

Paul Gallant, managing director of the Cowen Washington Research Group

H/O: Paul Gallant

A View from the Top is a Q&A series exclusively available on CNBC Pro. CNBC reporters will regularly speak with a business leader about decision-making, investing and industry news.

It’s still anyone’s guess whether and when U.S. law enforcement will bring antitrust charges against the nation’s Big Tech companies, but Paul Gallant, a managing director of the Cowen Washington Research Group, has been trying to determine the odds.

Gallant has been closely tracking the tech scrutiny of Amazon, Apple, Facebook and Google parent Alphabet as federal and state enforcers probe their businesses for potential violations of the U.S. antitrust laws. Along the way, he’s analyzed the likelihood of enforcement action against the four giants. In a November report, Gallant and his colleagues predicted the chances of antitrust lawsuits from federal or state enforcers depending on the outcome of the 2020 presidential election. What they found was:

  • Prior to the election, Google faced a 75% chance of antitrust action, Facebook had a 60% chance, Amazon and Apple, 40%.
  • Under a second term of Donald Trump’s presidency, they estimated a 65% chance of a lawsuit against Google, 40% chance against Facebook and 30% chance against Amazon or Apple.
  • Assuming a win by Sens. Elizabeth Warren, D-Mass., or Bernie Sanders, I-Vt., (predicted prior to their decisions to drop out of the race), Google and Facebook would face a 75% chance of a lawsuit and Amazon and Apple would face a 65% chance.
  • A win by any other Democrat, including former Vice President and current Democratic nominee Joe Biden, would represent a 75% chance of a lawsuit against Google, 60% chance for Facebook, 40% chance for Amazon and 35% chance for Apple.

Gallant’s prediction that Google will face an antitrust lawsuit may soon pan out. The New York Times and Washington Post reported that Attorney General William Barr is pushing the Antitrust Division to announce a case against Google by the end of the month.

In a late August interview, Gallant said certain factors could still change the calculus of his predictions for the other tech companies. Epic Games’ recent lawsuit against Apple alleging anti-competitive behavior, for example, could turn the tide against the smartphone maker if the suit serves as a “catalyst” for other opponents to air their own grievances, Gallant said.

Here’s the full Q&A:

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