But the FTC’s loss this week in its monopolization case against Meta is an unequivocal defeat for Khan and the Neo-Brandeisian antitrust movement she began, signaling instead that antitrust authorities have little basis for finding illegal monopolies among big tech’s digital platforms.

Filed under Khan’s watch under President Joe Biden in 2021 and brought to trial this year under President Donald Trump and current FTC Chairman Andrew Ferguson, the FTC alleged that Meta monopolized the market for “personalized social networking” (PSN) services, most notably through its acquisitions of Instagram and WhatsApp. In a Nov. 18 decision, Judge James Boasberg of the D.C. district court ruled that the relevant market in the case is not PSN services but a wider social media market that, at the very least, includes two other major players: YouTube and TikTok. Meta never held a monopoly in that market, Boasberg determined, because Facebook and Instagram together fall well below any threshold that courts would consider a monopoly.

An irrelevant market

According to the FTC, Facebook viewed Instagram as a competitive threat to its dominant share of the PSN market, and instead of competing, chose to buy its competitor. WhatsApp, while not an existing competitor in the PSN services market, was, according to the FTC, well-poised to enter it. Once again, Meta bought a potential competitor.

The market that the FTC chose to define as relevant for the case proved to be its undoing. The PSN services market, according to the FTC, includes Facebook, Instagram, Snapchat, and a smaller platform called MeWe. Even when the case was filed almost five years ago, the boundaries of this market were fragile. Meta argued that the FTC’s case failed to survive a wider market definition that also included YouTube and TikTok. In this larger six-firm market, Meta’s acquisition of Instagram (or potential competitor WhatsApp) would simply not involve enough market share for the monopolization allegations to hold water.

Staking an entire antitrust case on the assertion that YouTube and TikTok are not competitors of Facebook and Instagram was always, at best, a highly risky move by the FTC. In 2021, when the court decided to allow the case to proceed, it warned, “[T]he agency may well face a tall task down the road in proving its allegations.” But if the FTC’s vision of a distinct PSN services market was dubious in 2021, by 2025 it was dead on arrival.

Facebook and Instagram provide users with two broad types of content: “Connected content” refers to personal postings or media shared directly by friends within the app, while “unconnected content” refers to videos that are recommended to users by artificial intelligence (AI). As Boasberg makes clear in his ruling, Facebook and Instagram shifted over the course of a decade from providing almost exclusively connected content to providing mostly unconnected content, with connected content forming an important secondary source of value. According to evidence presented at trial, in January 2025, Facebook users spent only 17 percent of their time on the app viewing connected content, while the figure for Instagram is a mere 7 percent.

Inconveniently for the FTC, TikTok and YouTube are even more focused on the unconnected content model that now also tops the list for Facebook and Instagram. Boasberg writes that, “Facebook, Instagram, TikTok, and YouTube have thus evolved to have nearly identical main features. On all four, users spend most of their time watching videos. All four use algorithms to recommend those videos to users. And if someone finds content that she likes, all four apps let her tap a button to send it to friends—whether via a direct message on Facebook, Instagram, or TikTok, or using a text message.”

Importantly, the court held throughout the case that the FTC must show that Meta is violating the law now, and that the PSN market is properly defined as of 2025. Ten years ago, the case for Meta’s platforms existing in a distinct personalized social networking services market, excluding YouTube and TikTok, might have been plausible. Now, it causes the case to fall apart. The mere fact that users on all four platforms spend the majority of their time doing the same thing goes most of the way to placing them as competitors in a relevant market. Unfortunately for the FTC, its idea of a distinct PSN market fares just as badly by virtually all other standards accepted by courts.

Among the most compelling evidence for vigorous competition between the four platforms comes from the “natural and field experiments” that were presented at trial and summarized in the judge’s decision.  Unexpected outages of YouTube and Meta in 2018 and 2021, respectively, provide windows into short-term substitutions consumers made with their time, while TikTok bans in the United States and India provide an opportunity to track similar longer-term behavior. These are the types of studies economists outside of court would look to when considering the competitive landscape, and they confirm the existence of vigorous competition among the four platforms. Boasberg writes, “[W]hen consumers cannot use Facebook and Instagram, they turn first to TikTok and YouTube. When they cannot use TikTok or YouTube, they turn to Facebook and Instagram. That evidence leaves the Court with no doubt that TikTok and YouTube compete with Meta’s apps.”

Had the FTC been able to rescue the idea of a distinct social networking market, it would have faced several other obstacles, most notably whether consumers were actually harmed by Meta’s acquisitions of Instagram and WhatsApp. But in the wider and more accurately defined social media market, Meta’s combined share (including Facebook and Instagram) doesn’t come close to any threshold considered monopoly power in previous court cases.

Expect the unexpected

In the wake of its defeat, the FTC should carefully consider the story of how Facebook and Instagram came to be competitors with YouTube and TikTok. At the heart of that story are two sets of disruptive innovations that expanded the frontier of what social media apps were able to provide consumers. The first big change was smartphones. In 2011, according to trial evidence, just over one-third of American consumers had adopted smartphones. The majority of the time consumers spent on apps like Facebook was in front of a desktop or laptop screen. As the quality of cellular data networks increased, consumers switched to using Facebook and Instagram as smartphone apps, and it became clear that streaming videos were among the most popular uses.

At the time, the best way to recommend new content to consumers remained their network of friends. Then, social media companies discovered AI. The same technology that enables generative AI chatbots, drawing inferences from billions of points of data, proved extraordinarily successful at recommending video content to consumers.

Despite these disruptive events, the FTC clung to a rigid and out-of-date market definition that drew a hard line between social networking and video content. By 2021, when it filed suit, it should have already been clear that these markets were being remade. Much of the switch to smartphones, along with improvements in video streaming, had already taken place. In the five years since, the AI revolution dealt a final blow to the idea of a distinct social networking market. Meta, along with the parent companies of YouTube and TikTok, quickly learned that the computing power unlocked by AI could recommend content more successfully than any other method, including a user’s own friends. Sharing content with friends ultimately became a complementary feature to viewing content recommended by AI.

FTC v. Meta is the second antitrust case against a major digital platform that ended this year, in which AI technology radically altered the competitive landscape while the trial was underway. In DOJ v. Google, Judge Amit Mehta found in 2024 that Google had unlawfully monopolized the market for online search. But a year later, generative AI had emerged as a force altering how people access online information in ways that even insiders at Google and its competitors did not foresee the previous year. Judge Mehta noted the need for “a healthy dose of humility” under such uncertainty, which contributed to the final remedies against Google being lighter than many had expected.

Reflecting on the rapid pace of change in FTC v. Meta, Judge Boasberg opened his decision with wisdom from the ancients:

“Believing that the only constant in the world was change, the Greek philosopher Heraclitus posited that no man can ever step into the same river twice. In the online world of social media, the current runs fast, too. The landscape that existed only five years ago when the Federal Trade Commission brought this antitrust suit has changed markedly. While it once might have made sense to partition apps into separate markets of social networking and social media, that wall has since broken down.”

Before plotting future antitrust action against firms in the digital age, the FTC and its counterparts at the DOJ would be wise to ponder the meaning of the word “constant.” Nobody could have predicted exactly how social media would change during the last decade. But the fact that unforeseen change was significant enough to remake a digital market in a few short years should surprise nobody. In its zeal to punish Big Tech and infuse antitrust with populism and activism, the FTC rigidly stuck to a market definition that became more obsolete with every year.

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In its lawsuit, the DOJ alleges that Visa has monopolized the market for debit payment, violating Sections 1 and 2 of the Sherman Act. Visa earns about $7 billion in revenue from fees it charges to consumers, banks, and merchants on its network, which the complaint claims constitute monopoly profits. The DOJ alleges that Visa has maintained its dominant position over the past three decades with various exclusionary contracts, along with moves to partner with firms like Apple, whose own innovations in payment products might otherwise have eroded Visa’s position. The DOJ stops short of asking the court for breakups but seeks to enjoin and ultimately ban the firm from the many contracting practices it alleges to be illegal. 

Consistent with the bipartisan nature of the upticks in anti-tech sentiment and aggressive antitrust enforcement, the Trump administration has continued where Biden’s DOJ left off. The court rejected Visa’s motion to dismiss the case in June. Fact discovery in the case is not yet underway, and no trial date has been announced. We will learn much from both fact discovery and expert analysis, so it is too soon to predict the trial’s outcome.  

Visa’s debit network has important traits similar to the antitrust defendants commonly called “Big Tech.” These common features arise from the structure of these businesses, which use information and networking technology to connect different groups of consumers. This type of market complicates many of the core components of more traditional antitrust cases. For example, the rapid pace of innovation means new competition is likely to come from unpredictable sources rather than from entry into Visa’s market as defined in advance. Additionally, consumers derive significant benefit from the structure of the debit payment market as it exists. Along with antitrust litigation against the big tech firms, the DOJ’s case against Visa will likely help decide these questions. 

Two-sided platforms 

Visa’s debit network connects two groups of customers, debit cardholders and merchants, allowing the former to make purchases with the latter using a debit card. This business model, known as a two-sided platform, has become an increasingly important part of many industries and markets with the rise of information and networking technology.  

The modern debit payment market emerged from the combination of two other popular products: automated teller machine (ATM) cards and credit cards. ATM networks, which began in the 1960s and became commonplace by the 1980s, allowed consumers to withdraw cash from machines rather than visiting a bank. Visa and Mastercard first built payment platforms that were national in scope through credit cards, ultimately bringing similar reach to debit payment by partnering with banks to issue branded ATM cards also accepted by merchants.  

In order to connect cardholders and merchants, Visa’s and Mastercard’s debit platforms must also connect and transact with both the cardholder’s and merchant’s banks. This adds an additional layer of technical complexity to the market, along with more distinct groups of consumers. In the “general-purpose debit market” (which the complaint defines as the primary market in the case), Visa currently processes about 60 percent of transactions, with Mastercard in second place at about 25 percent. Visa charges a set of “interchange fees” to merchants and banks and “network fees” to cardholders’ banks. On a purchase of $60, issuer fees and network fees average out to 24 cents and 14 cents, respectively. Visa does not charge debit cardholders themselves any direct fees, though some portion of the network fees charged to their banks are likely passed along indirectly. 

Although the debit payment market evolved separately from the boom in internet technology that gave rise to Google, Facebook, and Amazon, these Big Tech firms are all two-sided platforms. Google and Facebook connect search and social media users, respectively, with advertisers, while Amazon Marketplace performs this function for online retailers and retail customers. The DOJ’s case against Visa is therefore a potentially important battleground, along with the major big tech cases, in deciding major open questions at the current frontier of antitrust. 

Antitrust cases of an earlier era usually involved firms charging one price to a single group of consumers in a relatively well-defined market. Economists in these cases were often able to apply standard statistical techniques to estimate firms’ market power. In two-sided platform markets where pricing is more complex and markets are harder to define, these standard techniques are less informative. This is one reason why economic analyses in the big tech cases have focused instead on alleged exclusionary conduct by defendants in which power in one market is leveraged to obtain a result in another connected by the platform. The allegations in the DOJ’s complaint against Visa are consistent with such a focus. 

Innovation and entry  

Debit payment systems have significant network effects, meaning the value of joining the network grows as more consumers and merchants join. They also exhibit economies of scale, where large firms such as Visa and Mastercard can take advantage of efficiencies to lower costs. These are classic barriers to entry that typically increase the monopoly power of large incumbent firms. But like other digital platform markets under antitrust scrutiny, meaningful entry and competition in the debit payment market is likely to come from different and less predictable sources.  

The IT and internet revolution of the late 1990s and early 2000s created numerous opportunities for innovative firms to disrupt the debit payment market with competing models. Payment apps and cryptocurrency are more recent examples of once unforeseen innovations that have partially, though never fully, disrupted the debit payment market. The DOJ’s complaint cites internal Visa documents that called Apple Pay an “existential threat” when first launched. Visa ultimately partnered with Apple, enabling the app to use its debit network and maintaining its market share. The DOJ includes this and similar contracts with firms like PayPal in its allegations of anticompetitive conduct, speculating that these partners would otherwise have been direct competitors to Visa. However, these partnerships undoubtedly delivered a more innovative and widely used service to consumers, complicating efforts to paint them as anticompetitive. 

While Visa’s debit payment model has proven robust to innovations in smartphone apps and cryptocurrencies, more substantial disruption could emerge unexpectedly, a possibility dramatized by the recent remedies phase in the Google search antitrust trial. In that trial, generative artificial intelligence (AI) dramatically altered the market for internet search with a speed and magnitude few had foreseen only a year earlier, when the first phase of the trial ended. As a result, U.S. District Judge Amit Mehta emphasized the need for “humility” when considering court-ordered interventions in such an uncertain climate.  

Consumer welfare 

In order to obtain a judgment against Visa, the DOJ must convince the court that the current debit card market structure or the alleged anticompetitive conduct has been harmful to consumers. Visa’s consumers for the purposes of such an analysis are those found on both sides of its payment platform: merchants and their banks on one side, and debit card users and issuer banks on the other. The current market structure is almost certainly to the benefit of debit card users. They do not directly pay the interchange fees at issue in this case, and benefit from the network effects and economies of scale of Visa’s debit platform. 

A future trial will likely focus on the merchant side of the market, and the potential benefits and harms associated with the many types of contracting discussed in the complaint. The two-sided structure of this market opens the door to many types of contracting that link firms across multiple markets, with parallels to both the Google search and Google ad tech antitrust cases. As the verdicts in both these cases demonstrate, contracting of the type alleged against Visa can raise antitrust concerns. However, there is also reason to believe many merchants have benefited from the discounting and partnership agreements alleged to be anticompetitive in the case.  

Should the case ever proceed to a remedies phase, the benefits to consumers on the user side of the platform may take on added significance. The DOJ is asking the court to ban many of the contracting practices Visa commonly employs on the merchant side of the platform. Such interventions could interrupt the smooth functioning of debit payment systems or potentially change the structure of the market in a way that harms debit card users. An analogous situation in the Google search antitrust case prompted Mehta to scale back remedies proposed by the DOJ. 

Would-be reformers such as Biden-era Federal Trade Commission (FTC) Chair Lina Khan have argued that the two-sided platform structure itself renders the consumer welfare standard, long the dominant paradigm in antitrust, obsolete. While many, if not most, economists and antitrust experts strongly disagree, this position has already influenced the behavior of the FTC and DOJ (primarily through merger guidelines updated in 2023), along with the political debate. However, the consumer welfare standard has mostly stayed in favor in courts, with the complaints in even the big tech cases brought by Khan herself still making arguments in those terms. 

Beyond these big-picture questions about the future direction of antitrust, cases involving two-sided markets raise other difficult and open questions about the standard toolkit economists bring to enforcement agencies and courts. Issues around market definition, entry, and how the welfare of different groups of consumers should be weighed when intervening in these complex markets are all examples of such open questions. Alongside ongoing and recently concluded litigation against Apple, Amazon, Google, and Meta, the Visa case is likely to be a major battleground where such matters are resolved. 

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Joel Mokyr of Northwestern University provided our best answer to an economic and historical mystery of epic proportions, the early 19th century takeoff in global economic growth. Philippe Aghion, of Collège de France, and Peter Howitt, of Brown University, showed how the processes of innovation and creative destruction unleashed during that time continue to drive economic growth today. In 2025 we find ourselves in multiple ongoing examples of creative destruction. Today’s proliferation of artificial intelligence (AI) technology happened before our economy and society were finished adjusting to other recent revolutions like e-commerce and social media. The work of this year’s Nobel laureates offers a much-needed case for optimism in the wake of technological change.

The great takeoff

Economies grow for many different reasons, but something happened around 200 years ago that changed the rules. Before the early 1800s, economic activity on planet Earth grew very slowly. There were booms and busts, golden ages, and disasters. These events mattered for people of a particular time and place, but only fleetingly. Around 1820, economies in Western Europe began growing rapidly, a new normal that came to characterize the entire world. The result, when we look at global gross domestic product (GDP) over time, is known as the “hockey stick.”

Some caution is in order. Summing up world GDP hides many layers of complexity and unevenness. Even as total GDP keeps increasing year by year, modern booms and busts have been more dramatic and less predictable than ever before. Along with the takeoff of the Industrial Revolution came all of modernity’s problems. And even modern GDP is hard to measure accurately, while estimating historic figures is almost a field unto itself. But none of these common criticisms of the hockey stick take away from the importance of understanding this unique moment in world history.

The geniuses are talking

Mokyr’s combination of history and economic analysis reveals the most compelling explanation of what happened and why. The two centuries leading up to the takeoff in economic growth witnessed an equally dramatic blossoming of science and invention. Western Europe in the 17th and 18th centuries is almost overflowing with hall-of-fame scientists (Newton, Galileo), discoveries (the cell, planetary motion), and inventions (the steam engine, the power loom). We call it The Enlightenment for a reason. These great ideas and inventions surely contributed to economic growth, but Mokyr’s findings are much more profound.

What emerged in Europe and particularly England leading up to the early 19th century takeoff was the ability for many minds and ideas to interact. Mokyr noticed that, unlike great discoveries in earlier times, those in early-modern Europe appeared to build on each other—they were cumulative. One reason for this change was “the Republic of Letters.” All around Europe, the geniuses began corresponding. Through letter-writing, the building of research institutions like the Royal Society, and emerging scientific best practices, great ideas could more easily be shared. Western Europe had now assembled a critical mass of propositional knowledge—the math, science, and other basic understandings of the world needed before one can learn other things.

Mokyr next provides an elegant explanation for the exact time and place where all of this core knowledge made the leap to prescriptive knowledge—how to make and do useful things. Through most of history, craftsmen and artisans—the people who made things—occupied a place in society just above rural peasants. By the turn of the 19th century, Great Britain had bucked this trend, with a growing skilled middle class as well as wealthy and educated entrepreneurs. They were increasingly able to put the knowledge created by the Republic of Letters to productive use. Inventions like the steam engine, power loom, and cotton gin formed the foundation of early factories, kicking off the Industrial Revolution.

In the Enlightenment and Industrial Revolution, Mokyr finds more than just innovation-driven economic growth. A critical mass of knowledge and innovation during this period caused a lasting change in the rules of how economies grow.

Why do economists, who usually look for hard numerical proof of new ideas, find this explanation so compelling?  Mokyr’s story explains why the change embodied in the hockey stick happened when and where it did, first in Britain, then Western Europe and North America, and ultimately spreading worldwide. Ideas work differently than other goods: They are not consumed after being put into use. Hockey-stick growth in poorer parts of the world requires improvements in education, governance, and integration with the world economy, but not recreating the Republic of Letters from scratch. This explains why, at the highest level, we do not appear to switch back to the low-growth rules that applied for most of history. No other explanation of the hockey stick comes close to explaining what we observe. 

More creative destruction

The other two 2025 Nobel winners, Aghion and Howitt, demonstrate that fresh rounds of innovation and creative destruction continue to fuel high rates of modern growth. Unlike Mokyr the historian, Aghion and Howitt work with the mathematical growth models of macroeconomics. This alone is an achievement, one of the best examples of economists fitting innovation into quantitative models. They provide mathematical economics with evidence in its own terms of the importance of innovation to the growth of modern economies.

Aghion and Howitt’s argument elegantly captures many features of economic growth missing from other explanations. Underneath the apparently smooth hockey stick, we find booms, busts, creative destruction, and upheaval few people expect until it happens. Economist Brian Albrecht writes:

“We had almost 8 million jobs created in the last quarter of 2024. Think about that number. Eight million new employment relationships formed in three months. But here’s the kicker: we also had over 7 million jobs destroyed in that same period. Firms constantly enter and exit. Workers move between employers. Products get launched and discontinued. The labor market churns.”

High overall growth rates aside, modern economies often feel at the mercy of unexpected and uncontrollable technological forces. Aghion and Howitt show that these forces are once again the result of ideas and innovations percolating from the bottom up, indeed unpredictable but harnessed to great benefit by free minds and free markets. Albrecht continues:

“In any single sector, you get sudden jumps when breakthroughs happen. Netflix enters and destroys Blockbuster’s profits essentially overnight. The iPhone launches, and BlackBerry’s market share collapses. Creative destruction is violent and discontinuous in a single industry at a single moment.”

Today we have large and diversified economies with many sectors. This allows unpredictable innovation many opportunities to take hold but also hedges against too much destruction at once. Aghion and Howitt explain the paradox between the immaculate hockey stick and the apparent chaos beneath.

“There’s no other way”

In the 21st century the pace of technological change is faster than ever. We are still in the process of learning how to adjust to a world of social media, for example, as we contemplate an AI revolution that might mean even greater change. A common thread in the work of all three Nobel laureates is that the truly meaningful innovations must involve a messy and uncertain process of adjustment. The anti-tech backlash that has gathered force in the last several years should therefore come as no surprise.

We must learn to view innovation and creative destruction with optimism and hope. The problems brought by technological change can seem impossible to solve, especially in the moment, but this is an illusion. They are not problems that one mind can solve, but we now live in a world where many minds and ideas work together without a central plan. Our record navigating the problems created by innovation is far from perfect, but our early fears do not come to fruition. This is born out time and again.

Mokyr, Aghion, and Howitt do not view the problems brought by innovation as inevitable or immune to good government policy. But innovation of the magnitude leading to creative destruction, and ultimately economic growth at the tip of the hockey stick, leads to disruption by its very nature. Our ability to keep prospering depends on a society where people are free to exchange ideas and put the best ones to use. As Mokyr said at the close of an interview after learning of his prize, “[T]here’s no other way.”

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Former Assistant Attorney General Jonathan Kanter, the case’s lead prosecutor under President Biden, lamented remedies that “fell short” in a New York Times op-ed titled “Why Google Got Off Easy.” In a revealing analogy, he attributed the lightness of the remedies to a lack of boldness from the judge: 

“There’s a saying in hockey: You miss 100 percent of the shots you don’t take. On Tuesday a federal court in Washington had a wide-open shot to hold Google accountable for sweeping antitrust violations. Instead of taking the shot, the court banked the puck off the boards, hoping for a lucky bounce.” 

Kanter expressed puzzlement at Mehta’s rejection of proposals that would force Google to sell its Chrome and Android businesses, along with an outright ban on payments for default status the search giant makes to firms like Apple. Mehta’s decision, however, makes his reasoning quite clear. In each case, he considered the likely positive and negative market impacts of implementing the DOJ’s proposal and decided that the costs outweigh the benefits. The judge’s reliance on this type of common-sense analysis and reasoning, not directly mentioned by Kanter, may be a bad sign for supporters of populist antitrust reform and big-tech breakups. 

Along with Biden-era FTC Chair Lina Khan, Kanter is considered a leader of the Neo-Brandeisian movement in antitrust, which favors more interventionist competition policy than has been the consensus since the late 1970s. They seek a return to antitrust policy that views large firm size and high concentration as inherent reasons to intervene. In the 1980s, courts increasingly adopted the consumer welfare standard, which saw reasons for intervention only when a firm’s size led to harmful market impacts.  

Frequently mischaracterized or misunderstood by Neo-Brandeisians as a myopic focus on low prices, the consumer welfare standard, in practical terms, is a flexible framework to analyze both the benefits and costs of antitrust actions. The recognition that antitrust actions have costs alongside benefits is the most important feature of the shift in antitrust doctrine that took place in the 1980s. For example, a firm that has grown very large and driven competitors out of the market might have done so through illegal monopolization practices. But it also may have reached its position by being the most efficient and low-cost provider of a product or by innovating and creating a better one.  

Prior to the 1980s, courts relied heavily on structural guidelines that looked only at the fact of a firm’s size. By instead expressing the economic costs and benefits of a firm’s size and possible actions to reduce it in terms of consumer welfare, competition authorities and courts developed a systematic method to determine not only when to intervene, but when not to do so. 

Neo-Brandeisians like Kanter and Khan argue that the consumer welfare standard ignores negative effects of firm size that may fall on parties other than end consumers. Large firms may be monopsonists in labor markets, able to pay workers who have no other opportunities lower wages. Large online platforms may have the power to mistreat small businesses to attract more consumers on the other side. And firms that have grown extremely large may have an outsized influence in our democratic system. Opponents, meanwhile, have questioned the size and importance of these effects along with the suitability of antitrust policy to address them. 

Entirely missing from antitrust as practiced by Kanter and Khan is any consideration of the other side of the equation. They do not simply minimize potential positive effects of firm size but fail to consider them at all. Equally importantly, they take no account of the massive distortions or unintended consequences that might arise from heroic top-down interventions. They dismiss consumer welfare as an effective means to express the positive and negative impacts of interventions but propose no alternative. 

In a world where firm size has only negative consequences and antitrust actions only positive ones, what determines the priorities of competition policy? Alongside agency resources, the answer must be the discretion and preferences of the authorities themselves. This appears to be exactly what happened during the Biden presidency. Initial data suggests that, despite trumpeting the need for greater antitrust action across the board, there was no increase in overall enforcement under Kanter and Khan. Instead, they used their agencies’ resources to pursue actions matching the political and policy agendas of their choosing. 

Taken together, Mehta’s decisions in the liability and remedies phases represent mixed results for both Google and the DOJ. But the judge’s analysis and reasoning in the latter make clear the invalidity of any framework failing to consider both costs and benefits of the proposed list of remedies. He rejected each of the DOJ’s three most severe proposals—the forced sales of Chrome and Android and the ban on payments to firms like Apple for default search engine status—because he found that the costs would outweigh the benefits. 

Mehta acknowledged the possible market benefits of each rejected remedy. He considered the logic in favor of the divestitures “straightforward,” because Google makes itself the default search engine in such vertically integrated operations. In the case of the payment ban, he considered possible pro-competitive effects in some detail. These include potentially new competitors entering the market and greater incentives among Google’s contracting partners to appeal more directly to consumers. 

In each case, Mehta rejected the proposed remedy after deciding that its costs would likely outweigh its benefits. A court-ordered Chrome divestiture “would be incredibly messy and risky,” leading to “substantial product degradation and a loss of consumer welfare.” Regarding the ban on payments for default search engine status, Mehta found potential for a host of negative market-wide effects, including small browsers like Firefox forced to shut down, a less robust Android ecosystem, and more expensive mobile phones. 

Kanter’s op-ed covered familiar Neo-Brandeisian territory, where the benefits of harsher remedies are clear. He sees the firm as a bad-faith actor in both the marketplace and courtroom, deserving greater penalties as a matter of justice and accountability. Kanter is also concerned about deterrence, both of Google directly and other firms by example. “If companies can flout the rules, reap trillions of dollars and face only modest constraints,” he wrote, “the deterrent effect evaporates. The message to other companies is plain: It pays to break the law.”  

Kanter also sees value in the political statement that harsher penalties would have made. “At a time when authoritarian power is on the rise, we must not forget that plutocracy is also its own kind of dictatorship,” wrote Kanter. (Whether Kanter truly believes that the fight against Google is a front in the war against the “authoritarianism” of President Donald Trump, whose administrations handed him the case and took it back without any major disagreements, is impossible to say.) 

Apart from his metaphor about an overly finessed hockey shot, Kanter does not engage with the judge’s cost-benefit reasoning on the rejected remedies. One might normally attribute this lack of care for the costs of harsher penalties to the zeal of a frustrated former lead prosecutor. But not caring about the cost of market interventions is a pillar of Neo-Brandeisian antitrust. Mehta’s decision should be viewed with cautious optimism by those who favor antitrust policy based on thorough analysis and clear standards over the whims of populist enforcers. 

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The court’s Sept. 2 decision bans the search giant from certain exclusive deals with browsers and mobile operators that tie the use of products like Google Play to other offerings. Google was also ordered to share certain data and search results with competitors. 

The trial’s eventful remedies phase, which unfolded in 2025, showed that innovation and competition in online search markets do not wait for judges. As the court was considering remedies, generative artificial intelligence (AI) disrupted Google’s core business, creating both threats and opportunities more significant than industry insiders who testified at trial had been aware of just a year before. In his order, Mehta underscored the need for “humility” when intervening in a market undergoing such radical changes. However, the timing of these events illustrates the limits of antitrust policy in markets driven by technology and rapid innovation. 

The Department of Justice and 11 state attorneys general filed suit against Google on October 20, 2020, in the final months of President Donald Trump’s first term. Alleging that Google monopolized the search engine market, the DOJ brought the case to trial in September 2023 in the D.C. District Court. In August 2024, Mehta ruled against Google (a ruling still under appeal separately from the newly filed appeal of the remedies).  

Central to Mehta’s ruling was Google’s use of large revenue-sharing payments for status as the default search engine on browsers and mobile phones. The DOJ asserted in its complaint that: 

Google pays billions of dollars each year to distributors—including popular-device manufacturers such as Apple, LG, Motorola, and Samsung; major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon; and browser developers such as Mozilla, Opera, and UCWeb—to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors.

These payments totaled $26.3 billion in 2021. “Time and again,” wrote Mehta in his August 2024 decision, “Google’s partners have concluded that it is financially infeasible to switch default GSEs or seek greater flexibility in search offerings because it would mean sacrificing the hundreds of millions, if not billions, of dollars that Google pays them as revenue share.”  

After the 2024 ruling against Google, both sides submitted proposed remedies to the court.  Unsurprisingly, the lists vary dramatically. Google proposed several targeted restrictions on the deals it can make for default status with browsers, operating systems, and wireless carriers. The DOJ, in contrast, proposed a long and varied list of penalties, which included forcing Google to sell off its Chrome internet browser now and threatening the forced sale of mobile operating system Android in five years if “either or both monopolized markets have not experienced a substantial increase in competition.” 

Mehta rejects the DOJ’s structural remedies, appropriately criticizing them as a “poor fit” for the case. The DOJ argued that because Google gives itself default status on its internet browser (Chrome) and mobile operating system, Android, forced sales would open these coveted spots to the type of competition previously restrained by revenue-sharing deals. Mehta accepts this possibility but finds that the DOJ ignores the costs of such a plan, particularly to consumers. The forced sales would be “incredibly messy and highly risky,” he wrote, imposing great cost not merely on Google but on Chrome and Android’s many consumers. 

Mehta also stops far short of the ban on multibillion-dollar default payments proposed by the DOJ. This part of the ruling is somewhat surprising given the 2024 liability decision’s focus on precisely these revenue-sharing payments as the primary illegal means by which Google maintained a monopoly. The bulk of Google’s multibillion-dollar payments to Apple, for example, are expected to survive the ruling. 

Mehta accepted that fully eliminating the payments—a “staggering” $26 billion in 2021—would serve the goal of more competition between search engines. He was concerned, however, about the potentially massive downstream effects of halting the payments, including the loss of smaller browsers like Mozilla, a less robust Android ecosystem, and more expensive mobile phones. 

Mehta does ban the exclusivity provisions featured in some previous Google contracts that tied various products, such as the Google Play store and Gemini AI assistant, to the use of others. The decision also requires Google to share data and search results with certain competitors, an attempt to mitigate the competitive advantage of Google’s scale and resulting access to information. 

The procompetitive effects of the remedies approved by Mehta are straightforward in theory. Search engines other than Google will have greater access to be the default status on browsers and mobile phones. The gap in data between Google and other search engines will be reduced through sharing. But this is no longer a path of development that any firm is likely to take.  

“The emergence of GenAI changed the course of this case,” wrote Mehta. “No witness at the liability trial testified that GenAI products posed a near-term threat to GSEs. The very first witness at the remedies hearing, by contrast, placed GenAI front and center as a nascent competitive threat.” 

Generative AI applications powered by large language models are not pure substitutes for search engines, but the interplay between the two technologies, a process still very much underway, has created avenues for competition that few people knew possible just a year ago. Google now finds itself in a highly competitive environment, not because courts or regulators pried open competition, but because innovation opened new opportunities and ultimately new markets. 

Rapid and unexpected disruption of this kind is the norm in 21st-century technology-driven markets. Conversely, five-year trials (still pending multiple appeals) are the norm in antitrust. The timing of these events in the case vividly illustrates a fundamental problem with using antitrust law to create and implement policy: Technology-driven markets change more rapidly than courts can reach and implement decisions.  

The post Google avoids court-ordered breakup as AI revitalizes competition appeared first on Reason Foundation.

Many states have passed or are considering multiple AI bills that are technically complex and politically charged, singling out this technology for extra regulation on issues like discrimination, child safety, and housing. This avalanche of legislation is especially troubling because existing laws in all these areas apply equally to AI, and the current need to single out the technology is highly dubious.  

In making the case for a federal moratorium, many observers correctly point to the danger of a “regulatory patchwork” in which up to 50 states may make widely varying rules and stifle important and useful innovations. There is no natural reason for data to stop at state borders, meaning virtually all economic activity involving AI is interstate commerce. The framers of the U.S. Constitution recognized interstate commerce as essential for both economic prosperity and political unity, placing its control in federal hands. In addition to reducing inefficiencies arising from inconsistent state laws, federal powers over interstate commerce using AI prevent large states such as California from gaining the de facto power to regulate the new technology across the entire country. 

AI is a foundational technology with an impact many expect to be on par with the internet or personal computers. Like those technologies, AI is already spawning an abundance of applications for a wide range of uses. This makes the development of AI extremely important, but also highly uncertain. There is no single finish line in the “AI race.” While building the technology and its countless applications will require massive efforts, they cannot be coordinated toward a single goal. This fundamental uncertainty is the source of AI’s great potential. AI breakthroughs will be made not only in university laboratories, but by firms, workers, and entrepreneurs in our market economy. This process of innovation will ultimately lead us toward finish lines we can’t yet even imagine. 

Nothing about AI places the technology or its applications outside the reach of any existing laws or government agencies with respect to any policy. Just as we remain early in the process of finding out what AI can do, we have much to learn before concluding that AI requires different laws or approaches to regulation. But proponents of restrictive AI legislation today are guilty of exactly this mistake.  

State bills seeking to govern the design and performance of AI systems are not typically written with today’s chatbots in mind. They are concerned about what future AI technology might do, or what our future energy and data center needs might be. Supporters of such efforts do not appreciate that transformative technologies and the societies they transform change together. Those who worry about AI replacing workers, for example, usually miss that such technological changes happen over time rather than all at once. Workers, therefore, can and do adjust to new technology. 

As the path of AI’s development becomes clear over the coming years and decades, speculative and restrictive laws will do more harm than if they were simply outdated rules that missed the mark. Government regulation influences the course taken by technology. When that course is based on flawed assumptions, we fail to realize the benefits of technology fully and often don’t know what those benefits might have been. 

Compounding these difficulties and potential for misunderstanding is the expansion in the list of technologies commonly called “AI.” Once associated with science fiction and futurism, the term “AI” gained widespread use in the last few years, after generative AI chatbots powered by large language models were introduced. However, people now frequently apply the term to many algorithmic tools widely used for years or even decades. 

There is no current need to single out AI, over and above other technologies or means of expression, for regulation or enforcement beyond existing laws. Nonetheless, the political temptation of singling out real or imagined use of AI is too great for many to resist. Users of AI technology in housing and labor markets are singled out for more oversight and compliance under anti-discrimination law. Large AI developers are singled out for more transparency rules, seemingly at the discretion of state officials. Images of political figures created using AI are singled out and banned in the lead-up to elections. AI-powered human resources software suites face extra scrutiny. 

The correct approach toward AI at all levels of government is to enforce existing laws and regulations. Indeed, Congress’ AI moratorium proposal from earlier this year explicitly exempted from federal preemption “generally applicable” state and local laws and regulations. Comprehensive legislation targeting AI may prove desirable in the future, but that day has not arrived. While some might consider such a level-headed approach from the federal government unlikely, expecting similar restraint in 50 statehouses at once is all but impossible. Absent a moratorium, state legislators would nevertheless be well advised to exercise and advocate such restraint. 

State lawmakers can also pass legislation that affirms the applicability of current laws to AI and establishes basic individual freedoms with respect to computing. Bills such as Right to Compute, passed in Montana and introduced in an increasing number of states, provide an important blueprint for those who see the importance of restraint to make that case and partially mitigate the efforts of overactive colleagues. 

A torrent of bills singling out AI in misguided attempts to solve what amount to guesses of future problems would threaten the open climate of innovation and entrepreneurship that has greatly benefited the United States in recent decades. But uncertainty, misunderstanding, political incentives, and media hype conspire in the current moment to produce this outcome in statehouses across the country. A federal moratorium on bills singling out AI would help ensure the U.S. remains fertile ground for the AI revolution. 

The post A moratorium on state laws targeting AI would safeguard innovation and interstate commerce  appeared first on Reason Foundation.

The rapid advancement of artificial intelligence (AI) has led to a recent rise of “deepfakes,” in which AI is used to manipulate or fabricate audio, video, or images with realistic accuracy. The highly realistic depiction of deepfakes technology has led to fears of potential misuse, such as harming others’ reputations through deliberate misrepresentation or spreading misinformation online.

Thirty-nine states have passed laws regulating the spread of intimate or erotic deepfakes, including bans on the creation and distribution fabricated images or videos depicting child sexual abuse material (CSAM) and revenge porn. Revenge porn, or nonconsensual pornography, is sexual or pornographic images of individuals distributed without their consent. These laws are expansions of currently existing laws and reiterate that these activities are still illegal when done with this new technology.

In addition, over 30 states have also proposed laws to try and regulate political deepfakes, which would restrict certain fabricated depictions of political candidates or office holders. These proposals have different goals than restrictions on sexual deepfake regulation; they are meant to prevent the creation and spread of images that may deceive voters, spread misinformation, and potentially influence elections.

Most of these state laws allow for political deepfakes so long as they include clear disclosures or watermarks identifying them as synthetic media. Deepfakes of candidates lacking these disclosures created or distributed before an election are outlawed. The watermark approach reflects a growing consensus that these disclosure requirements are a key tool in combating malicious political deepfakes.

While these proposals may have good intentions, restricting political deepfakes risks limiting political speech that is protected by the First Amendment. Many state laws are intended to combat political deepfakes that attempt to deceive voters. However, regulations may lead to the targeting of deepfakes meant to be parody or satire. Not all deepfakes are created with the intent to deceive. Parody and satire often use exaggerated or fabricated imagery to critique public figures or highlight social issues, and the line between humor and deception can be highly subjective. States may attempt to ban satirical political deepfakes that are realistic enough to potentially mislead some viewers, regardless of the creator’s actual purpose. The ambiguity of which political deepfakes a law regulates can create a chilling effect, deterring artists, comedians, and political commentators from engaging in creative expression out of fear that their work could be mischaracterized as deceptive and subject to legal action.

It is crucial that policymakers approach this issue with caution. Deepfakes can be used as a form of self-expression, parody, and satire, all of which are protected speech under the First Amendment. Regulatory responses must not inadvertently infringe on free speech. Rather than rushing to impose restrictions, policymakers should focus on an approach that recognizes the protections already provided by libel and slander laws and encourages transparency and accountability without undermining fundamental rights.

This policy brief explores the potential dangers of deepfakes while advocating for solutions that prioritize technological advancement, self-regulation, and public education over government intervention. A nuanced response will allow society to address the challenges of deepfakes while preserving the benefits of creative and expressive digital technologies.

Read the full report here:

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SafeRent settled the suit out of court, agreeing to pay over $2.2 million and modify certain features of the scoring algorithm it offered to property owners to evaluate prospective tenants. The case received little news attention at the time of its filing in 2022, but that changed when its settlement was approved in late 2024.

“She didn’t get an apartment because of an AI-generated score — and sued to help others avoid the same fate,” proclaimed a Guardian headline in December. Associated Press coverage of the settlement explained that:

While such lawsuits might be relatively new, the use of algorithms or artificial intelligence programs to screen or score Americans isn’t. For years, AI has been furtively helping make consequential decisions for U.S. residents…When a person submits a job application, applies for a home loan, or seeks particular medical care, there’s a chance that an AI system or algorithm is scoring or assessing them, just as it did with Louis. Those AI systems, however, are largely unregulated, even though some have been found to discriminate.

Persistent discriminatory outcomes, even without direct intent to discriminate, are unfortunately not a new phenomenon in housing markets. Neither are computer algorithms, which have been commonly used throughout housing markets for decades and are subject to existing anti-discrimination laws. What is new is calling these algorithms “artificial intelligence” or “AI.” At the time of the alleged discrimination in 2021, a computer program that generated a financial score would not commonly have been called AI. The term does not appear a single time in the 43-page complaint filed in 2022.

These years coincide with the widespread adoption of AI chatbots and their solidification in public awareness. There’s no indication that SafeRent’s algorithm used any of the new technology employed by these chatbots, such as large language models. If, in 2021, its designers had searched for an of-the-moment buzzword to describe their product, they would more likely have landed on “big data” or “machine learning” than AI. This had changed by 2024, and “AI” is found in almost every headline covering the settlement.

Legally speaking, this does not matter. Whether SafeRent’s algorithm employed a large language model or older programming technology does not impact whether it violated discrimination law. In general, there is no clear line between what we call AI today and many of the algorithms we have used for years without that moniker. It is not surprising that the big tent of what we call AI continues to grow. Companies want to use the term for branding purposes, just as the media does for headlines.

However, this rapid renaming of many algorithms as “AI” matters in the realm of policy. Both regulators and the public are willing to consider bolder and more sweeping regulation of AI than would be likely with more incremental technological change. Mainstream policy proposals for regulating AI have run the gamut from a somewhat fantastical moratorium on AI innovation itself to a moratorium on regulation at the state level. The technologies placed in the “AI” bucket may end up on a very different regulatory trajectory than those that don’t.

The combination of technology-driven anxiety and media hype is behind a wave of state legislation aimed at protecting housing markets from AI-driven discrimination. These bills create costly disclosure requirements and rules, which are necessarily based on speculation about what forms potential threats from the still-evolving technology might take. In Virginia, Gov. Glenn Youngkin vetoed House Bill 2094 for these reasons, stating that the bill’s “rigid framework fails to account for the rapidly evolving and fast-moving nature of the AI industry and puts an especially onerous burden on smaller firms and startups that lack large legal compliance departments.” A similar bill was signed into law by Colorado Gov. Jared Polis, who, in an unenthusiastic signing statement, expressed support for a federal moratorium on such state efforts.

Misguided AI regulatory efforts risk limiting innovation and sowing misunderstanding in many markets. However, the long, complex, and still-pertinent history of U.S. housing discrimination makes the potential damage even greater. Cases like SafeRent are sometimes referred to as “digital redlining,” reflecting how discriminatory outcomes can inadvertently emerge from data-driven algorithms. However, this term is somewhat misleading, as it harkens back to the mid-20th century when housing discrimination was overt and government-led.

Between 1935 and 1940, the federal Home Owners’ Loan Corporation (HOLC) created maps and neighborhood taxonomies to help guide the lending decisions of banks and mortgage lenders. HOLC gave each neighborhood a grade of A through D, with the neighborhoods receiving a grade of D notoriously marked in red and designated “hazardous.”

HOLC did not attempt to hide its discriminatory aims, docking numerous city points for neighborhoods where the number of immigrants and black Americans passed certain thresholds. Low-income minority communities were systematically denied access to credit and financial capital, essential for robust economic activity. HOLC’s condemnation of these neighborhoods was based on nothing more than racism and xenophobia, but the agency’s vast powers meant its pronouncements did significant harm to some neighborhoods over time. The lines drawn on maps around “hazardous” neighborhoods gave the practice its name—redlining.

In contrast, digital redlining refers to modern cases where computers use data or information reflecting disparities stemming from these once-intentional and widespread practices. Researchers see the persistent impact of 20th-century redlining and other forms of housing discrimination on current financial and housing market outcomes.

There are no easy answers to leveling the playing field or quantifying the impacts on minority homeowners and renters today. But state legislatures should take note that the class action lawsuit and settlement were brought under existing anti-discrimination law. As AI does not represent a break in the algorithmic tools being used, merely incremental improvements, there is no reason to suspect efforts like the Virginia and Colorado bills would succeed where other government efforts have failed.

As the AI revolution brings new algorithmic tools to many markets—and rebrands existing tools as “AI” in others—there exist opportunities both for learning and greater honesty in debates about housing discrimination. Different types of discrimination must be clearly distinguished. Twentieth-century redlining was intentional and government-led. Digital redlining, in contrast, lacks direct “bad guys” to deter or prosecute. Attempting to curb bad results by going after technology is tempting for some, but it has no track record of working.

The post Existing laws already fight AI housing discrimination—new state AI bills increase confusion appeared first on Reason Foundation.

In an era where personal data is both a critical economic asset and a sensitive aspect of individual autonomy, privacy laws worldwide increasingly rely on user consent as the primary mechanism for governing data collection, processing, and sharing. However, despite its central role, the effectiveness of current digital consent frameworks remains highly contested.

This paper critically reviews how consent currently operates within major regulatory frameworks, particularly contrasting the European Union’s stringent, opt-in-based General Data Protection Regulation (GDPR) against the predominantly opt-out approach of the United States, exemplified by California’s Consumer Privacy Act (CCPA).

Part 2 outlines key legal frameworks and definitions.

Part 3 examines how consent mechanisms shape user behavior, finding that repeated prompts often lead to disengagement rather than meaningful choice.

Part 4 analyzes the broader economic effects, showing that consent requirements tend to favor large firms, raise compliance costs for smaller players, and constrain innovation.

In the final section, we synthesize leading policy and academic proposals to outline a set of potential reforms. These reforms include risk-based consent frameworks, universal privacy management tools, and co-regulatory accountability models.

The GDPR, adopted in 2016 and enacted in 2018, is built around the more stringent opt-in approach and aspires to consent that is “freely given, specific, informed, and unambiguous.”

The CCPA, adopted in 2018 and enacted in 2020, in effect for U.S. firms doing business in California, follows an opt-out approach, where consent is presumed unless actively withdrawn. As the U.S. and other countries debate national approaches to data privacy, the debates remain unresolved.

Drawing on empirical studies, this review highlights persistent shortcomings in current consent models—from interface design flaws to the disproportionate compliance burden on smaller entities. It concludes by identifying potential reforms aimed at balancing user autonomy, regulatory flexibility, and market competitiveness.

Full Policy Brief: Consent requirements in comprehensive data privacy laws

The post Consent requirements in comprehensive data privacy laws: Current practices and the path forward appeared first on Reason Foundation.

In the five years since the case was filed, however, the market for internet search has been upended by artificial intelligence (AI). In a revitalized market undergoing rapid innovation and unexpected change, the remedies proposed by the DOJ will not open competition as intended and will become less relevant with time in the wider market. They will simply harm Google and its ability to compete at the intersection of search and AI. 

In August 2024, Mehta found Google liable in the case, a verdict Google still plans to appeal. The judge recognized the role that simple product quality has played in Google’s dominance of internet search, but ruled that market conduct, such as contracts for default status that paid Apple and Firefox billions of dollars, served to maintain illegal monopoly power. 

Outside the courtroom, Google is in what many consider the competitive fight of its life. Advances in generative AI technology and public adoption of AI-powered assistants (“chatbots”) mean the alleged monopolist is facing a reality few foresaw in 2020 when the DOJ filed suit. On May 7, the company’s stock took a hit after news that AI chatbots had already made a dent in overall Google searches. Meanwhile, Google rolled out major new AI offerings, signaling its intent not to cling to older search products suddenly at risk. 

Proponents of breaking up big tech have spent most of the past decade treating companies like Google as having reached an endpoint in their evolution—its dominance of internet search, not to mention the centrality of internet search in our lives, frozen in place unless the government intervenes. But today’s seemingly dominant firms, especially in the tech sector, often face new competitive realities tomorrow.  This process, termed disruption or creative destruction, is a major source of competition over time that antitrust authorities frequently ignore. 

People now use generative AI assistants (“chatbots”) to answer many of the questions that previously required an internet search. Much of the necessary innovation in LLMs, and especially widespread awareness in the market, has taken place while Google has been an antitrust defendant. In 2020, when the DOJ filed suit against Google for monopolizing internet search, few expected rapid disruption at the hands of AI. 

Mehta’s fall 2024 decision finding Google liable in the case and triggering the remedies phase contained a lengthy analysis of generative AI that would have been unrecognizable to anyone at the trial’s start. Some of that reasoning has already been called into question by even more recent market events. Last fall, the judge ruled that AI chatbots were outside the relevant market for internet search. Fast forward to May 7, when Apple CEO Tim Cook testified in the remedies phase that losses to AI chatbots caused Google searches in Apple’s Safari browser to decline during March and April for the first time in over 20 years. Google stock fell 7 percent on the news. 

Internet search and generative AI, as currently used in chatbots, are neither competitors nor complementary products. This lack of clarity is driven in part by remaining uncertainty around what kind of products AI chatbots are. Current AI chatbots access enormous amounts of information but don’t update it in real time, an example of the innovative process still underway. Rather than seeking to suppress new technology to keep people using its search products, Google is leaning into developing AI products.  

There is some irony in the timing of these events, happening opposite a trial that was launched because of Google’s supposed insurmountable dominance of a market that some expected to remain unchanged. The DOJ has pivoted in the rationale it presents for why Google should sell its Chrome browser, along with other major restrictions going forward. Its arguments in May centered on why Google must be stopped (by the government) from parlaying its dominance of search into dominance of AI. 

The DOJ believes that because internet search has the real-time capability mentioned above that AI chatbots today lack, it will become a choke point where Google can flex its muscles either to push its own products or make others like ChatGPT pay up. The logic is vague and not fully developed, because everything about the rapidly evolving AI landscape is vague and not fully developed. 

Courts are slow by design, and the interventions they can order from the top down are inherently blunt instruments. Since the DOJ rolled out its proposed remedies, many have rightly protested that the punishment does not fit the alleged crime of monopolizing internet search. Unlike the steel and telephone breakups of the past, it would not be clear along what lines to split the tech giant even under the most draconian penalties. 

It is absurd to think that the same list of brute-force remedies, still subject to years of appeal and implementation, will have anything resembling the outcomes the DOJ now says they will on AI markets. The current pace of innovation makes it impossible to say what the impacts of these remedies would be on AI markets years from now. 

The DOJ’s remedies also risk negative unintended consequences. An ecosystem of developers and content creators, most of them very small, has grown from the bottom up around Google. Divesting Chrome and severely limiting other forms of contracting could limit this ecosystem’s unique capacity to innovate at the intersection of AI and search.  

Google I/O, an annual event attended by thousands and livestreamed by more, also took place in May. The event is where Google traditionally announces new products as well as initiatives of interest to its developer and creator ecosystem. This year’s installment, unsurprisingly, was dominated by products and initiatives using the company’s own AI offerings.  

Google’s Gemini currently ranks third among AI chatbots. No longer a nimble startup, the company will likely play a different role in this round of innovation than it did at the start of the century. However, Google can bring thousands of software developers, app makers, and others in the industry together not just to advertise its own products, but to benefit from the many connections in its ecosystem.  

Nobody could have predicted that the disruption of internet search as we know it would come to a head just as the DOJ delivered closing arguments for its plan to curtail Google’s search monopoly. The DOJ’s pivot from opening the search market to protecting competition in AI should call its credibility into question. The main effect of its proposed remedies will be to harm Google and its future operations. Innovation and competition will continue to create new market realities faster than any court-ordered intervention. 

The post Proposed antitrust remedies for Google ignore the impact of AI on internet search appeared first on Reason Foundation.

The world’s leading online search firm now must battle authorities eager to force Google to sell off major business units in two major cases. Next week, the DOJ will argue in a different court that Google should be forced to divest major business units, potentially including its Chrome internet browser and Android operating system, in the wake of an August 2024 guilty verdict for antitrust violations related to online search.

Google has already announced it will appeal Thursday’s ad tech verdict. Pending appeals, the case will proceed to a similar remedies phase, where the DOJ is expected to seek the divestiture of a part of the ad tech business, which generated 12% of parent company Alphabet Inc.’s revenue last year, approximately $42 billion.

The ad tech case has been overshadowed in the public debate by the search case and antitrust suits against Amazon, Facebook, and Apple. The Trump Administration, usually eager to reverse course on many of former President Joe Biden’s policies, has instead opted to continue all five major antitrust cases.

Observers have viewed the Google ad tech case as the most technical and least ideological of the five big tech cases. Advertising is among the leading components of Google parent company Alphabet Inc.’s revenue. A vast online ecosystem has grown around Google’s search and advertising businesses, introducing much complexity into the court’s analysis of the markets in question.

The online advertising market is often divided into multiple interrelated parts. The verdict applied to two sections of the market where website publishers can view bids from advertisers and manage their own inventory through Google’s popular Ad Exchange and Ad Manager packages. For a third part of the market, where advertisers can supply bids and view inventory from publishers, Judge Brinkema dismissed charges, finding that the DOJ did not meet the criteria to establish a relevant market.

No firm played a greater role in innovating and building the online advertising market than Google. While Google and the DOJ clashed over the definition of markets and measurement of markets (as occurs in every antitrust trial), the simple fact of Google’s dominance is hard to debate. Google’s shares in these markets exceed 85% and sometimes 90%, as observed in the decision. While acquisitions and outmaneuvering rivals played a part in attaining this dominance, in other cases, Google invented these offerings as its business evolved. Few dispute that Google has leveraged its scale and links across markets to create unique sources of value for firms that place online ads. But in the late 2010s, tying arrangements and rules imposed by Google raised concerns in the first Trump administration.

For example, the DOJ accused Google of tying two of its offerings together to the detriment of the website publishers it counts among its customers. Website publishers were only allowed to access the full functionality of Ad Exchange, which allowed them to view real-time bids from advertisers, if they also used Ad Manager to track their own inventory. The DOJ alleged that Ad Manager became and remains the dominant software in the industry because Google required its use to access features in Ad Exchange that publishers considered essential.

Google will have ample scope to dispute technical and legal issues in its appeal and likely remedies phase. Notably, however, the allegations of anticompetitive acts and consumer harm in the ad tech case more closely resemble those found in older cases, while those in the Google search case, along with ongoing cases against Amazon, Facebook, and Apple, depart more from past precedent. Tying allegations like the one discussed above are relatively common in cases forming the body of precedent on which judges rely.

Federal Judge Amit Mehta of the District Court of the District of Columbia ruled in a 2024 decision against Google in the search case, which drew more criticism on fundamental economic grounds than Brinkema’s appears poised to draw, and the possible forced divestitures in the case may be even larger. The case against Google’s search dominance departed more from standard antitrust ideas about consumer welfare. Critics have also questioned whether the search engine default agreements, found to be anticompetitive in that case, truly constrained consumers to the degree asserted by the judge. Imposing among the harshest penalties in U.S. antitrust history on a firm clearly favored by most consumers would signify a huge shift from the past half century of antitrust enforcement.

The paths taken by the two Google antitrust suits, as the White House transitioned from President Donald Trump to Biden and back again, underscore that a shift has already occurred. Democrats formed the brain trust of the New Brandeisian school of antitrust, associated during the Biden administration with Lina Khan at the Federal Trade Commission (FTC) and Jonathan Kanter at the DOJ. But with fears and concerns about big tech growing at the same time, Trump’s first-term FTC and DOJ took notice. Kanter’s DOJ continued the search case it inherited and won, while Khan spearheaded suits against Amazon and Facebook (now underway).

With Trump back in the White House, the bipartisan adoption of “break up Big Tech” is complete. The five flagship cases passed on from Khan and Kanter are all now in the hands of Trump’s antitrust authorities and are moving forward without major change. For those, including this economist, who see the shift as dangerous to prosperity and innovation, this development is cause for concern.

The post Google found guilty of monopolizing online advertising as fight against Big Tech goes bipartisan appeared first on Reason Foundation.

Introduction

We applaud President Trump’s Executive Order (E.O.) 14179, Removing Barriers to American Leadership in Artificial Intelligence, signed on January 23, 2025. We shared President Trump’s concern regarding former President Biden’s E.O. 14110, and we support the decision to revoke it in E.O. 14148. President Trump’s E.O. 14179 properly focuses on innovation and global competitiveness to keep the United States at the cutting edge of this critical new technology.

Because of its dynamic market economy, the United States is the world’s leader in innovation and the deployment of new technologies. Artificial intelligence (AI) promises to be among the most important technological revolutions in recent history, and the importance of President Trump renewing the nation’s commitment to free markets and bold innovation in E.O. 14179 cannot be overstated.

AI is the type of foundational technology where new ideas build on each other, opening innovative paths that are difficult to foresee in advance and counterproductive to regulate using knowledge that will quickly become obsolete. We agree with Vice President Vance that “AI will have countless revolutionary applications in economic innovation, job creation, national security, healthcare, free expression, and beyond.” Free markets are not just the best way to realize this future; they are the only way to realize it.

To assist in the administration’s development of an AI Action Plan, we submit comments on several key policy areas important to continued AI growth: avoiding overregulation, data access,  security, and free speech.

Avoiding overregulation and encouraging innovation

President Trump’s E.O. 14179 reflects a decisive shift toward a light-touch regulatory approach to AI development and deployment in the United States. This policy direction prioritizes innovation and global competitiveness while reversing regulations that could be burdensome to AI development. We see the development of the AI Action Plan as a key opportunity for the Trump administration to work alongside AI developers and deployers to create a clear and concise framework to best encourage innovation.

Among the most important steps the AI Action Plan can take is discouraging the overregulation of AI. As Vice President J.D. Vance noted in his February 11, 2025, remarks at the Artificial Intelligence Action Summit in Paris, governments frequently respond to new technologies by being “too self-conscious, too risk-averse.” When governments regulate new technology too early, they often completely cut off whole directions for development without knowing it. Innovation is a costly and uncertain process for which people and firms freely competing in the private sector is essential.

Revoking former President Biden’s E.O. 14110 was an important step in this direction. In that case, fears about outcomes like discrimination motivated premature and burdensome regulation. Importantly, the United States already has numerous laws and regulations prohibiting discriminatory conduct. We will not know if or how these laws should be modified until the technology develops further. 

The Action Plan should adopt a similar recommendation that would be applied across federal departments and use cases for AI. Federal agencies should clarify how existing laws apply to AI technology rather than introducing duplicative or overly burdensome new regulations. Many existing legal frameworks can be adapted to address emerging AI challenges, reducing the need for entirely new regulations. This approach not only minimizes compliance burdens for businesses but also ensures that regulations remain flexible enough to accommodate the rapid evolution of AI technologies.

The Action Plan should also seek to make recommendations that are responsive to the many diverse use cases and industries that AI promises to impact. Different industries use AI in unique ways, and a one-size-fits-all regulatory approach may fail to address sector-specific risks and opportunities. For instance, health care applications of AI require stringent privacy protections due to sensitive patient data, while financial services, fairness, and anti-discrimination concerns could come to the forefront in credit scoring algorithms. The Action Plan should encourage agencies to make use of technical expertise in the private sector for knowledge and tools needed to craft effective policies tailored to their domains.

By assessing the laws and regulations that already apply to AI, determining general and industry-specific legal issues that may arise, and learning from ongoing innovation in the private sector, federal agencies can move toward consistent, clear, and flexible AI policy that will encourage rather than stifle innovation.

Promoting secure access to data for AI models

Former President Biden’s E.O. 14110 sought to scrutinize how personal data might be used in training datasets, no matter if it was private or publicly available. In keeping with President Trump’s goal of promoting AI innovation, the Action Plan should encourage the removal of barriers to accessing and utilizing public data for the training of AI models. Unrestricted access to public information is crucial for maintaining the United States’ global leadership in AI technology. This approach aligns with the Administration’s goal of maintaining American AI leadership worldwide.

Both publicly available data and private data are necessary for AI models’ continued improvement. Any standard on data collected for AI models should clearly distinguish between publicly available and private personal data. Publicly available data includes information that is accessible to the general public, often through government records, public websites, or other open sources. In contrast, private personal data is information that is not intended for public access and is typically collected directly from individuals with an expectation of confidentiality. 

Access to publicly available data directly impacts AI systems’ quality, functionality, and overall performance. It also enables substantial cost and time efficiencies for researchers, entrepreneurs, and government agencies. By eliminating the need to collect, aggregate, and store data from scratch, these stakeholders can focus their resources on problem-solving and innovation. This accelerates the development of new AI models and enables the creation of diverse applications across multiple sectors, from health care and housing to economic development and national security.

Open data fosters innovation by promoting higher-quality decision-making, increasing data-driven accountability, and supporting global advancements in AI. Government agencies can use these AI tools, leveraging open data, to enhance the efficiency, accessibility, and effectiveness of services. For instance, machine learning algorithms can process weather information to provide timely insights to farmers, or AI can simplify tax filing processes for citizens. The combination of open data and AI holds great promise for improving government efficiency, reducing fraud risks, and enhancing security in key economic sectors.

The research community benefits immensely from public datasets, as these enable the training of predictive models that create value for both public and private sectors. Government healthcare data, for example, can contribute to improving existing treatment options and even aid in the development of novel cures. By making information freely available for people and entities to use, reuse, and consume open data, more people can contribute to the United States’ AI development and keep the country at the top of such development.

While access to personal data is also important to AI development, this can raise serious privacy concerns. The AI Action Plan should encourage agencies to work together and with the private sector to keep data secure as technology continues to evolve. Maintaining data security both reduces the risk of personal information being leaked and helps create avenues for more secure AI development in the future. The federal government can collaborate with industry to enhance data security. The National Institute of Standards and Technology (NIST) enhances data security by providing structured guidelines in its Cybersecurity Framework (CSF) and AI Risk Management Framework (AI RMF) for managing risks across traditional information technology infrastructure and AI systems, respectively. The CSF focuses on foundational protections like encryption and access controls, while the AI RMF addresses unique AI risks such as data privacy. These two frameworks help ensure comprehensive security through proactive risk management and regulatory alignment. 

Free speech

President Trump’s E.O. 14179 emphasizes the need for AI systems to be “free from ideological bias or engineered social agendas.” With this in mind, the AI Action Plan should emphasize First Amendment protections for free expression online and in the development of AI systems. Doing so will encourage innovation and maintain the vitality and free flow of information essential to our democracy.  

The “right to compute” is a legislative concept that protects individuals’ ability to privately own and use computational technologies, such as AI and data centers, as a fundamental exercise of free speech and property rights. Currently, bills have been proposed in states such as Montana and New Hampshire that would protect this right to compute. This principle is inherently pro-free speech because computational tools are essential for modern communication, creativity, and information-sharing. By safeguarding access to these technologies, the right to compute ensures that individuals can fully exercise their First Amendment rights in a digital age. It also intersects with property rights, emphasizing autonomy over privately owned computational resources, which supports innovation and economic growth.

To advance the right to compute, the AI Action Plan should encourage federal protections for computational technologies as essential tools for free expression and innovation. The Action Plan should also encourage streamlined regulatory processes for infrastructure development, ensuring timely construction of critical infrastructure while maintaining necessary safeguards. Integrating digital rights into broader policy discussions will bolster public trust in emerging technologies while safeguarding individual freedoms. By taking these steps, the U.S. can maintain its leadership in AI innovation while protecting constitutional freedoms in an increasingly digital world.

Another recent development in AI and First Amendment rights is the creation and sharing of political deepfakes. Deepfakes are AI-generated videos or sounds that convincingly depict real people or events. Using advanced generative AI techniques, they analyze and synthesize vast amounts of visual and audio data to create highly realistic replicas. There is concern that the potential misuse of deepfakes poses significant risks, such as undermining trust in media, spreading misinformation, and influencing public opinion—especially during politically charged events like elections. As policymakers grapple with the implications of deepfake technology, particularly in politics, they face a delicate balance between protecting against malicious uses and safeguarding free speech rights. Political deepfakes are simply a new form of expressing one’s opinions, parody, or satire. Rather than rushing to implement broad regulatory frameworks that could inadvertently stifle free expression or innovation in AI technology, lawmakers should focus on leveraging existing laws—such as those addressing campaign impersonation, slander, and libel—to address these issues.

Section 230 of the Communications Decency Act has played a crucial role in safeguarding free speech online since the early days of the internet, and it should be left untouched in order to protect online expression as AI continues to develop. Section 230 provides immunity to interactive computer services, like social media sites, for content posted by their users. This protection allows platforms to host diverse user-generated content without fear of legal repercussions, fostering a vibrant ecosystem of online expression. By shielding platforms from liability for both hosting and moderating third-party content, Section 230 enables the flourishing of social media, discussion forums, and other online spaces where users can freely exchange ideas, criticize policies, and share information. If Section 230 were weakened or repealed entirely, many platforms might severely restrict user content or stop hosting it altogether, significantly limiting the internet’s role as a forum for free expression and diverse viewpoints. If this were to happen, the United States risks losing a prominent avenue for free expression. 

Conclusion

We are only at the beginning of the AI revolution, and the many possibilities it suggests spark excitement and ingenuity, as well as understandable concerns. America’s free markets and free society enable those exciting possibilities to be realized, but many incorrectly assume that these freedoms lead to greater dangers. In reality, these same freedoms protect us against the risks of new technology as we learn more about risks and adjust along with what we learn.

Former President Biden’s E.O. 14148 projected today’s knowledge onto tomorrow’s highly uncertain AI landscape, attempting to reduce or eliminate risks. Had we continued on this path, we would have given up many of AI’s benefits and still been unprepared to address the real risks as they became clear. By shifting the focus from “AI safety” to “AI opportunity,” in the words of Vice President Vance, this administration makes it possible to achieve both goals.

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Virginia House Bill 1624 (H.B. 1624) intends to require that minors have parental consent to access social media. Along with the many heavily debated pros and cons of online age restrictions and parental consent in general, H.B. 1624 opens the door to negative unintended consequences due to how it is written.

H.B. 1624 attempts to define which features and services offered by social media platforms are potentially risky for minors. Concerns over the personalized algorithms social media uses to recommend content (“addictive feeds”) stem from some highly publicized recent studies about kids and screen time, as well as features of algorithms some worry have addictive properties.

Using this definition, H.B. 1624 breaks down the activities performed by social media algorithms and provides a list of features for which minors must have verifiable parental consent. Algorithms recommending, displaying, and moderating content provided by others based on information obtained from the user would require minors to have parental consent, though the bill sets forth several exemptions.

Social media in our society is still quite new. It has changed and evolved quickly, often in ways that experts were not able to predict. By almost all accounts, this path of rapid and hard-to-predict change will continue. One major example is the unforeseen ways in which social media is starting to incorporate artificial intelligence (AI).

When regulating new technology, our well-intentioned efforts to make concrete rules that are easy to interpret can lead to unintended consequences down the road. The framework defining “addictive feeds” in H.B. 1624–with dozens of terms defined and several exemptions set forth–may do a good job of describing the ways we use social media algorithms today. However, a similar effort five or ten years ago would likely have looked very different, and the framework of H.B. 1624 will likely be obsolete in ways we can’t predict five or ten years from now.

This will reduce the effectiveness of H.B. 1624. Enforcement will grow more complicated, and new features and activities provided by social media will lead to new arguments about what is and isn’t covered in the bill. As compliance and enforcement grow more complicated, the playing field will tilt toward larger, more experienced firms and away from small firms and new entrants.

The “addictive feeds” framework, particularly if adopted by more states, could ultimately distort future innovation, once again in unintended and undesirable ways. By concerning itself with the specific nuts and bolts of how social media operates in 2025, innovative platforms may stick to old processes because they make compliance easier, even when new processes or features could be of greater value or even safer for users.

Finally, the same factors that make the “addictive feeds” framework problematic–high-profile and rapidly changing technology–raise questions about whether the research on potential harms will stand the test of time. The studies noted above are both recent and controversial. Our understanding of yesterday’s media revolutions (recorded music and television, to name just two) and their possible harms have changed with time. Our understanding of any harms from social media and the sources of those harms will no doubt change as well.

These potential consequences of adopting the “addictive feeds” framework are but one small part of the complicated set of debates over kids and social media. However, they suggest that the “addictive feeds” framework is the wrong approach for an industry defined by rapid and unpredictable technological change. The potential unintended consequences of this method of requiring parental consent, in our view, outweigh the potential benefits.

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Florida law defines price gouging as an “unconscionable” price hike during a declared state of emergency and for what it deems essential goods, including food, water, gasoline and transportation. 

Florida Attorney General Ashely Moody’s office says it investigates every price gouging claim, most of which come through a dedicated hotline “activated” in the run-up to each storm where consumers provide tips. Businesses can be slapped with a misdemeanor and fines of up to $1,000 per act and $25,000 daily.

The idea of charging high prices to desperate consumers evokes anger in many, but most economists warn against price controls even in the face of potentially large hikes after a disaster. While not unanimous, economists’ prevailing view is that government price controls create new problems while trying to solve what is really no problem at all. Shortages of essential items, such as gasoline, are made worse, not to mention longer, by reducing sellers’ incentives to rush the product to affected areas.

In an October National Public Radio report, NPR chief economics correspondent Scott Horsley noted, “Both Florida and North Carolina have laws on the books that prohibit price gouging during times of emergency. But, you know, it can be tricky to draw the line between illegal price gouging and just the normal forces of supply and demand.” 

Most economists would respond that they are one and the same. The supply and demand curves indelibly associated with economics explain this intuition quite elegantly, making the example of price gouging after a hurricane a mainstay of economics textbooks. Higher prices increase incentives to supply goods and end the shortage faster.

However, economists remain frustrated that their broad agreement often fails to impact politics or popular opinion. Florida and more than 30 other states have laws against price gouging. And, the recent hurricanes made the term a useful attack for any price increases politicians want to position themselves against.

We often spend so much time debating the idea of price gouging that we forget to ask what the fuss is about. States no doubt receive tips revealing some amount of consumer exploitation and other unsavory business practices. Considering how much we hear from politicians and media about the practice during emergencies and their recoveries, we hear little about the hundreds of misdemeanor investigations after storms have passed. The few specifics on consumer complaints we hear don’t look like the textbook case we debate.  

In the wake of Helene, media outlets reviewed limited samples of the complaints from Floridians, most from the areas hardest hit by storm-surge flooding. It turns out most of the gouging complaints related to fuel and occurred before the disaster rather than after. Maybe there were complaints of gas stations selling at high prices, but the state has reported none. Instead, complaints focused on gas stations being out of fuel — up to 75% of gas stations in these areas were sold out of gasoline before Milton hit.

Examples of actual allegations included a seller only leaving his premium pump on before storms and another of a 10-cent price increase. As a whole, consumer complaints appear more the product of chaos, frustration and, most importantly, many gas stations in storm areas being sold out of fuel.

In early October, Florida Attorney General Ashley Moody reported a “rapid response team” investigating 160 consumer complaints. In late October, the office’s website remained emblazoned with a red banner reading, “STATE OF EMERGENCY IN EFFECT. REPORT POSSIBLE PRICE GOUGING.” 

There is no evidence that the resources put into hotlines and investigations during the most serious of emergencies ensnare anything more than angry consumers looking for sellers with any stock. In effect, the current system is taking in mostly reports of too little price gouging, leading to shortages, than too much of it. 

So, while politicians love to talk about price gouging to rile up voters, there is scant evidence of anything like price gouging, even in Florida after severe hurricanes. One of us was here in Sarasota through both Helene and Milton and did not witness any gouging — places that ran out of things charged normal prices once they got resupplied. 

The government waste and media overhype might be cause for amusement were they not occupying significant resources and far more than their share of public attention when everything and everyone is stretched to the limit. One struggles to find benefits from state anti-price gouging laws like Florida’s other than false badges of honor sought by those enforcing the law.

A version of this column first appeared in the Sarasota Observer.

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Missouri’s Amendment 3 would add language to the state constitution protecting the right to reproductive freedom, defined as:

“[T]he right to make and carry out decisions about all matters relating to reproductive health care, including but not limited to prenatal care, childbirth, postpartum care, birth control, abortion care, miscarriage care, and respectful birthing conditions.”

The Amendment also allows the state legislature to regulate abortion after fetal viability. Abortion in Missouri is currently banned with exceptions such as procedures necessary for the health or life of the mother. The current law went into effect in June 2022 in the wake of the U.S. Supreme Court’s overturning of Roe v. Wade.

Fiscal Impact

The official ballot title contains the statement:

State governmental entities estimate no costs or savings, but unknown impact. Local governmental entities estimate costs of at least $51,000 annually in reduced tax revenues. Opponents estimate a potentially significant loss to state revenue.

The measure appearing on the ballot contains similar language, and both have been controversial. While state entities estimating no cost are equivalent to a finding of zero fiscal impact in measures frequently covered in this guide, the contribution by local government entities is uncommon and specific to this measure.

Proponents Arguments

Support and opposition to Missouri’s ballot measure protecting abortion rights mostly divide along familiar ideological lines. The state’s Democratic Party, ACLU, and League of Women Voters chapters endorsed the initiative. Statements issued by groups in favor of the amendment will be familiar to Missourians and all Americans who have followed the recent abortion debate.

Opponents Arguments

Senator Josh Hawley (R-MO) and Governor Mike Parsons (R-MO) joined state pro-life and Catholic groups in opposing the amendment. Again, opponents’ main talking points do not differ in tone or content from those employed in similar debates nationwide. 

Discussion

Unlike several other pro-choice state initiatives in the wake of the U.S. Supreme Court’s May 2022 Dobbs v. Jackson Women’s Health Clinic decision overturning Roe vs. Wade, Missouri’s proposed amendment does more than provide extra protection to current pro-choice legislation. Given the current legislative ban, the fate of Amendment 3 in November should have immediate and important consequences for the provision of abortion in Missouri.

Many ballot initiatives require informed voters to familiarize themselves with details of fiscal policy and regulation that are not usually at the forefront of political debate and on which voters may not have strong opinions when walking into the voting booth. Missouri’s proposed amendment on abortion rights is just the opposite. Most voters nationwide already have pro-choice or pro-life views–often firmly held–and will vote on the measure according to those views.

Voting along ideological lines makes at least as much sense in Missouri as in other states since passing the amendment will do much more than prevent rights from future threats or make a progressive political statement. Neither side has advanced any arguments of core importance suggesting voters behave otherwise.

Ironically, the most contentious disputes between Missourians supporting and opposing the amendment have sprung from the attempted moderation of the measure at issue and the law it would replace. The exceptions already provided–cases where otherwise prohibited abortion may be allowed or where generally protected abortion may be restricted–are vaguely enough worded to allow both sides to fall back on familiar tropes when casting each others’ views in a negative light.

The most egregious example is the already-mentioned addition to the estimate of zero fiscal impact by state authorities. This cost was calculated selectively by a few participating counties intended to capture reduced tax revenue from the unborn who would have been residents but for the amendment.

Missourians will vote on Amendment 3 based on previously developed pro-choice and pro-life positions. The result will largely determine the future of abortion in the state, though clashes between groups on both sides promise to continue no matter the result.

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Daron Acemoglu, Simon Johnson, and James A. Robinson received the 2024 Nobel Memorial Prize in Economic Sciences for finding ways to bridge this gap. In making the award on Monday, October 14, 2024, the Royal Swedish Academy of Sciences explained that “Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better. The laureates’ research helps us understand why.”

The three frequent coauthors provided empirical results demonstrating the crucial roles of institutions, such as protecting property rights and equality under the law, in underpinning a prosperous economy. In one prominent paper, “The Colonial Origins of Comparative Development: An Empirical Investigation,” they observed that some nations had different colonization practices than others. Former colonies that once faced “extractive” practices, those that only sought to extract resources for the benefit of the colonizer, often failed to develop the institutions necessary to produce a pro-growth environment. 

In a subsequent paper, the three authors found more evidence of the link between development and colonial legacy in what first may seem like a puzzle. All else being equal, European nations that were more prosperous in 1500 were less likely to be prosperous in 1900. The authors argue that colonizing countries with more prosperous economies in 1500 continued subjecting their colonies to extractive institutions, while laggards in 1500, like England, had more incentive to change and adopted a more liberal set of institutions.

These results provide evidence that institutions like the rule of law, property rights, and limited government are the best ways to improve the lives of ordinary people. Extractive regimes exist for the benefit of the elite, who already have an entrenched position in the economy. More liberal regimes, with strong rule of law and property rights, give ordinary people the incentive to innovate and produce goods and services that create wealth, not merely transfer wealth from elite to elite.

Predictions, debates, and post-prize reactions have become a beloved Nobel-season ritual for economists. Acemoglu, Johnson, and Robinson are well-known in the world of economics and often beyond. Many considered their winning the prize only a matter of time.

Free market-oriented economists’ reactions to recent winners have varied. Many who are critical of the Federal Reserve and mainstream policy toward money and banking emphasized their differences with the 2022 winners, Ben Bernanke, Douglas Diamond, and Philip Dybvig. Claudia Goldin, the 2023 winner who has spent a career analyzing women’s role in the workforce, was met with wide celebration and acclaim.

Reactions from free-market economists to this year’s prize have been more mixed. In The Wall Street Journal, David R. Henderson of the Hoover Institution writes, “It’s good to see a Nobel Prize awarded to economists who understand the importance of private property and the rule of law.”

Brian Albrecht, chief economist at the free market International Center for Law and Economics, emphasized the 2024 Nobelists’ importance in modern institutional research, writing:

“Despite the debates and critiques surrounding AJR’s work, their contributions to the field of economics are undeniably significant. They pioneered new approaches to studying the long-term impacts of institutions on economic development, bringing sophisticated empirical methods and game theoretic models to bear on fundamental questions of political economy.”

However, while Acemoglu, Johnson, and Robinson have emphasized free-market principles, they often align more with a technocratic progressive approach. They are equally, if not more, concerned with active state intervention. Most recently, Acemoglu and Johnson’s 2023 book on artificial intelligence, “Power and Progress,” gave many market-oriented economists considerable pause.

Acemoglu, Johnson, and Robinson, more than anyone else, have brought the modern economist’s toolkit to bear on the long tradition of political economy. While many disagree with some of their results and conclusions, their professional success, capped with the Nobel prize, has done much to fuel the debate over institutions and economic prosperity in recent decades.

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Florida Amendment 4, the Right to Abortion Initiative, would add to the state’s constitution that “no law shall prohibit, penalize, delay, or restrict abortion before viability or when necessary to protect the patient’s health, as determined by the patient’s healthcare provider.” 

Abortion in Florida is currently banned after six weeks of pregnancy, a law which took effect on May 1, 2024. 

A 60% supermajority is required to vote yes for the amendment to pass. 

Fiscal Impact 

The financial impact statement for Amendment 4 drafted by state officials, and at the time of this writing the subject of ongoing litigation, classifies the impact of the proposed measure as “indeterminate.” Sources of uncertainty include whether the state will pay for abortions with state funds in programs like Medicaid, which itself will likely be the source of more litigation “that will negatively impact the state budget.” The document concludes, more generally: 

An increase in abortions may negatively affect the growth of state and local revenues over time. Because the fiscal impact of increased abortions on state and local revenues and costs cannot be estimated with precision, the total impact of the proposed amendment is indeterminate. 

In court, Floridians Protecting Freedom, one of the groups campaigning for passage of the amendment, alleges the financial impact statement is overly politicized, while Governor Ron DeSantis and his appointees have defended the document. 

Proponents’ Arguments 

Proponents emphasize that the amendment would allow individuals and their doctors to make decisions about their healthcare regarding pregnancy without interference from politicians. They also point out that many women with problem pregnancies are facing limited medical options and suffering due to the current restriction on ending a medically fraught pregnancy. They argue the amendment is needed to expand abortion rights for Floridians relative to the recent status quo and afford the extra layer of protection granted by the state constitution. Democratic elected officials tend to support the amendment, and as is customary in Florida, these include national as well as state figures. 

In late April, President Joe Biden warned: “Next week one of the nation’s most extreme anti-abortion laws is going to take effect here in Florida. It criminalizes reproductive healthcare before a woman even knows that they are pregnant.” The president urged Floridians to vote in favor of the amendment. 

Florida Senate Minority Leader Lauren Book (D-Broward) emphasized the role the state’s proposed amendment played in a national struggle, saying,

“The fight for freedom has never been more critical. Despite the fact that abortion is no longer a partisan issue for Americans, elected Republicans across the U.S. are working to take away access to women’s healthcare. We must not back down!” 

Opponents’ Arguments 

Florida Governor Ron DeSantis has criticized the proposed amendment as “radical,” and multiple Florida pro-life groups have extensively expanded upon this theme. Florida Voters Against Extremism, the group leading the “vote no” campaign, said of the one-sentence amendment: 

Amendment 4 pretends to ‘just bring things back to how they were with Roe vs. Wade‘– but it actually goes much further – allowing for abortion throughout all 9 months of pregnancy with no protections for the unborn baby. Unlike other Amendments, Amendment 4 provides ZERO definitions of key words like ‘government interference’, ‘viability’, ‘health care provider’, ‘patient’s health’ – so voters won’t even know what they’re voting on. This creates huge loopholes that will result in years of litigation and legal uncertainty. … Amendment 4 gives abortion clinics a rubber stamp to approve late-term, third trimester abortions. … Amendment 4 would make abortion the only medical procedure that minors could undergo without parental consent. 

Discussion 

Many ballot initiatives require the informed voter to familiarize themselves with details of fiscal policy and regulation that are not usually at the forefront of political debate, and on which voters may not have strong opinions when walking into the voting booth. Florida’s Right to Abortion Initiative is just the opposite. Most voters nationwide already have pro-choice or pro-life views–often firmly held–and Floridians will vote on the measure according to those views. 

The outcome of the vote will have significant consequences for current Florida law. If 60% or more Floridians vote “yes,” abortion in Florida would be legal until viability, generally taken to be about 24 weeks. Florida’s current law bans abortion except to save the life of the mother after six weeks. (The amendment would not impact previous language in the state constitution that allows the legislature to pass a law requiring parents of most minors to be informed before abortions.) 

Much of the attention of elected and other government officials has been on the court battle over the financial impact statement. Meanwhile, many pro-life groups in the state have adopted messaging claiming that the amendment is more radical than the regime similar to Roe it intends to restore.  

The claims about legal loopholes made by amendment opponents are vague and in part untrue since the language of the initiative does limit abortions to before viability. They are not wrong, however, that approving this amendment will lead to a lot of future litigation since a large and high-publicity state like Florida will be a magnet for litigation for pro-choice and pro-life groups in any event. 

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Colorado Amendment 79, the Right to Abortion and Health Insurance Coverage Initiative, would add Section 32 to Article II of the state’s constitution, reading: 

The right to abortion is hereby recognized. Government shall not deny, impede, or discriminate against the exercise of that right, including prohibiting health insurance coverage for abortion. 

Colorado currently has no legal restrictions on abortion at any time during pregnancy, but a 1984 ballot initiative banned the use of state funds for abortion except in cases where the mother’s health is in danger. 

Fiscal Impact 

The state estimates no fiscal impact from this measure but notes that the removal of the 1984 provision in the constitution banning state funds for abortion may influence the decisions of future state legislatures. 

Proponents’ Arguments 

Arguments in favor of the amendment come from advocates of abortion rights and are targeted at pro-choice Colorado voters who oppose the U.S. Supreme Court’s Dobbs vs. Jackson decision. Pro-choice voters also typically oppose Colorado’s constitutional ban on state funds for abortion services, which was passed by voters in 1984 by a margin of 50.4% to 49.6% and upheld by a wider margin in 1988.  

The measure has been endorsed almost unanimously by Colorado Democrats. At the time of this writing, both U.S. senators, all five Democratic U.S. representatives, and over 50 state Democratic legislators were listed as supporters. Support also comes from the Colorado Democratic Party, pro-choice organizations, the League of Women Voters, and the Colorado chapter of the American Civil Liberties Union.

Proponents argue that while abortion rights are already a part of Colorado law, enshrining them in the state constitution would add another layer of protection. Furthermore, they view access to abortion services for state employees and others constrained by the existing ban on state funds as essential to guaranteeing all residents of the state the right to reproductive services. 

In a statement, Coloradans for Protecting Reproductive Freedom, a group campaigning for passage, said that: 

People enrolled in state health insurance plans—teachers, firefighters, and other state employees—should have access to abortion coverage. Coloradans should have the freedom to decide for themselves whether to have an abortion, without interference by politicians. Coloradans deserve the freedom to make personal, private healthcare decisions—and that right shouldn’t depend on the source of their health insurance or who is in office. A right without access is a right in name only. 

Opponents’ Arguments 

Pro-life advocacy groups have led opposition to the Colorado amendment. Opponents particularly emphasize the extension of protection to abortions at all times during a pregnancy, as well as the proposed reversal of the 1984 measure banning state funds for abortion. 

Jean Mancini, president of March for Life Education and Defense, said:

“Tragically, abortion is legal through all three trimesters in Colorado. We need every pro-life Coloradan to stand up for the unborn and advocate for life-affirming policies that support both mom and baby, born and unborn.” 

Brittany Vessely, a board member of Pro-Life Colorado, warned:

“The only provision keeping Colorado from being the number one destination for unrestricted abortion in the United States is the 1984 Colorado constitutional prohibition against the use of public funding for abortion.” 

Opponents have also targeted moderate Democrats who may have opposed Dobbs but still favor some restrictions, for example, on late-term abortions. In a guest op-ed column for The Denver Post, founding members of Democrats for Life Colorado emphasized the permanence of an amendment, preventing what they view as needed changes now or in potential futures: 

Initiative 79 would preclude the Colorado legislature from making any course corrections. They would be barred from a future choice to protect the viable fetus for social or economic reasons. They could not limit abortions for sex selection. 

Discussion 

Like several other state initiatives in the wake of the U.S. Supreme Court’s May 2022 Dobbs v. Jackson decision overturning Roe vs. Wade, the Colorado ballot measure seeks to further protect abortion rights already written into law by enshrining them in the state constitution. In 2022 and 2023, voters in four states (California, Vermont, Michigan, and Ohio) passed similar measures, while voters in three other states (Kansas, Kentucky, and Montana) defeated measures that would have restricted abortion rights. Colorado is one of at least six states with abortion-related measures on the 2024 ballot. 

Colorado ballot initiatives currently require 124,388 valid voter signatures (approximate 5% of voter turnout). The Colorado Right to Abortion and Health Insurance Coverage Initiative had the required signatures approved by the Colorado secretary of state in May 2024. Concurrently, a proposed ballot initiative enshrining restrictions on abortion rights in the state constitution failed to gain the required signatures. The measure must be approved by 55% of Colorado voters. 

Many ballot initiatives require the informed voter to familiarize themselves with details of fiscal policy and regulation that are not usually at the forefront of political debate, and on which voters may not have strong opinions when walking into the voting booth. The Colorado Right to Abortion and Health Insurance Coverage Initiative is just the opposite. Most voters nationwide already have pro-choice or pro-life views—often firmly held—and will vote on the measure according to those views. 

Colorado has been a frequent election-day battleground for abortion, with voters over the past several decades approving and rejecting measures associated with both the pro-choice and pro-life camps. Colorado’s long history with abortion ballot initiatives includes: 

• A narrowly-passed 1984 (upheld in 1988) measure banning use of state funds for abortion in most cases, including the denial of abortion services to employees on state insurance plans and Medicaid; 

• A parental-notification requirement passed by voters in 1998; 

• A ban on “partial-birth” abortions rejected by voters the same year; 

• Several more rejections on measures making abortion access more difficult, culminating in a 2020 rejection of a measure banning abortion after 24 weeks. 

The biggest immediate change to Colorado law, should the current measure be passed, will be a lifting of the state funds ban. The measure will also add constitutional protections to the state’s current basic legal regime, which allows abortion and does not condition on how far the pregnancy has progressed. 

Colorado’s pro-life voters will oppose the measure on all accounts, and are likely, as in other states, to vote against it in overwhelming numbers. 

Pro-choice voters will heavily favor the extra protections on abortion rights overall, but may be divided to some degree on the amendment’s extension of protections to abortion rights after fetal viability. Polling typically shows many voters who identify as pro-choice and oppose Dobbs but also favor restrictions in some cases, including the length of the pregnancy and viability. 

Some basic facts may add useful perspective. Over 99% of abortions occur before the 24th week of pregnancy, the most common estimate of fetal viability. The vast majority of the less than 1% of abortions happening after viability are motivated by the mother’s health or fetal anomalies. Many such procedures are medical emergencies where time is of the essence. Bans on late-term abortions, or protections requiring often-subjective circumstances can and in some instances have cost critically needed time. 

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