Top Hat & Thimble - July 2025
Welcome to NextGen Competition’s newsletter, delivering insider insights on antitrust battles, industry shakeups, AI trends, and more.
With Big Tech investing billions in the promise of AI, there is a dangerous risk that this key technology will be controlled by just a few firms and individuals.
While AI is a catch-all term that can include predictive algorithms and social media recommendation algorithms, and generative AI foundation models (Gen AI) is the rapidly developing technology and focus of Big Tech’s investment spree.
Given Gen AI’s widespread use and potentially transformative impact across industries, competition is essential to maximize the benefits and to ensure they’re widely shared. Effective competition among suppliers of Gen AI technologies will ensure companies downstream – drug companies, car manufacturers, and health service providers – freely deploy, innovate, and commercialize this technology on their own terms. More competition and the freedom to bring disruptive innovations and business models to market will also benefit consumers and make the market more responsive to their preferences.
The challenge is to decide when to intervene – when are the competition problems most likely to arise?
Google, Amazon, Microsoft, Meta, and Apple have dominant market positions in key inputs required to develop these transformational tools and control ecosystems of products and services where they can deploy and commercialize this technology. These market positions, and their large scale of operations across related ecosystems of services, also means these companies are best placed to make the huge ongoing investments in cloud infrastructure and specialized chips required to develop Gen AI models.
Any acquisitions by these companies must be put under a microscope. We support agency investigations and policies such as the FTC’s January 2025 Staff Report on AI Partnerships and Investments which shed light on three Big Tech-AI partnerships: Amazon-Anthropic, Google-Anthropic, and Microsoft-OpenAI.
In addition, remedies in any on-going monopolization cases against these companies must ensure that their alleged monopolies in related markets—Google in search and digital advertising, Meta in personal social networks, Microsoft and Amazon in cloud computing, and Apple in iOS – are not used to monopolize the development and deployment of Gen AI models. The DOJ’s March 2025 proposed remedies in the Google Search case is an example where remedies try to take into account AI developments in general internet search.
It is essential that the DOJ and FTC continue to take targeted action to ensure that this developing ecosystem remains open. Smaller companies should be able to operate free from the market power of the largest technology firms and seize disruptive opportunities to challenge them.
If this key technology is controlled by a few firms, it will allow these firms to tax and control every other company and sector of the economy that uses this technology – much like Apple and Google do via monopoly control of their respective app stores on our smartphones. We need plurality and diversity of competition to ensure that downstream business users and end consumers get their fair share of the considerable benefits that this technology is likely to unlock.
Thank you for reading and your support.
With regards,
Sumit Sharma
Executive Director
NextGen Competition
Growing Tension as DOJ Does Lobbyist Bidding
Jefferson linked liberty to dispersed economic power; antitrust once upheld that ideal.
In the Trump administration, it appears lobbyists are now in control. After firing two veteran deputies, and ignoring analysis by the antitrust division that raised competition concerns with Hewlett Packard Enterprise’s $14 billion Juniper merger, Chad Mizelle, Chief of Staff to Attorney General Pam Bondi blessed the deal – and the next day the DOJ quietly dropped a challenge to a $540 million Amex GBT–CWT merger pushed by Ballard Partners, Bondi’s former firm.
If HPE and Amex can pay lobbyists to make the DOJ look the other way, what stops Alphabet, Meta, Apple, or Amazon from doing the same?
According to The Wall Street Journal:
[Assistant Attorney General Gail] Slater has told top Justice Department officials in recent weeks that she needs discretion to police mergers and that her team shouldn’t be subject to political interference, some of the people familiar with the matter said. Others in the department believed she had an unrealistic expectation of how much deference the antitrust division would have under the Trump administration, which favors cutting deals and says all executive-branch appointees are accountable to the president.
What the Administration calls accountability, we call corruption. The House and Senate Judiciary Committees must launch a bipartisan probe into this interference, and the courts must scrutinize the HPE-Juniper settlement under the Tunney Act, which protects against bribery in antitrust enforcement. We commend Senators Warren, Klobuchar, Booker, and Blumenthal for their letter to the District Court asking that a review be undertaken under the Tunney Act. More Senators, including Republican Senators, must join them in holding this administration accountable.
An Open Letter to OpenAI
OpenAI gives the world plenty of reasons for concern. Its alliance with Microsoft skirted antitrust review. Sam Altman’s power play, threatening to withhold computing power to regain the CEO seat, exposed troubling governance. The company also pursued a quiet attempt to convert its nonprofit into a for-profit venture behind closed doors. And that’s only the beginning.
NextGen Competition has joined more than 100 academics, organizations, and public figures in demanding that OpenAI bring real transparency to its proposed corporate restructuring. The plan appears set to dilute, if not eliminate, the safeguards enshrined in the organization’s original charitable mission.
We call on OpenAI’s board to publish detailed information on how the restructuring will change its legal duties to humanity and to affirm, in writing, that it will preserve robust public-interest protections. Anything less betrays both the spirit and the letter of its founding charter.
As Jacob Hilton, a former OpenAI employee, penned in Time Magazine, offering a prescription for getting the organization back on track:
OpenAI's next steps will determine the trajectory of the company for years to come. Instead of irreversibly abandoning its commitments to the public's interest, it could step back from the brink and reaffirm them, by enhancing the nonprofit board's ability to fulfill its duty of oversight.
Read the coalition’s full letter here.
Other Competition News
Headlines from the past month you might have missed:
Europe vs. Big Tech: Regardless of how the Trump administration feels about Europe’s crackdown on Big Tech, Europeans in France, Spain, and Germany are in agreement: don’t let up on keeping U.S. tech giants in check.
People vs. Big Tech and WeMove Europe conducted a joint poll earlier this month, finding that 68%, 65%, and 63% of respondents in Spain, Germany, and France respectively feel that “Europe should continue to enforce European laws on Big Tech companies, even if this damages relations with President Trump.”
The poll also found that regulations are too relaxed, and that more respondents believe Big Tech has more of a negative, than positive, impact on European democracy.
Trade-Talk Double Standard: While Trump’s antitrust enforcers talk tough on Big Tech at home, in trade talks abroad, it’s a different story. Trump is doing tech giants’ bidding abroad, undercutting “Little Tech” companies in the U.S. that benefit from stronger competition rules overseas. As David Dayen writes in The American Prospect, formal investigations may have taken hold at home, but internationally the President and Vice President have become Big Tech’s personal lobbyists:
[T]here is far more evidence that Trump and Vance are happily doing the bidding of the biggest tech firms, while claiming to be adversaries. You see it in the friendliness toward AI, which Google and Microsoft and Meta are certainly thrilled about. You also see it in how the Trump administration is using its clout all over the world to force other governments to take down their sovereign laws that impact Big Tech. Any more of this and Trump and Vance might have to register as personal lobbyists for Jeff Bezos and Mark Zuckerberg.
Even FTC Commissioner Rebecca Anne Slaughter is skeptical as to whether the administration can both talk the talk and walk the walk:
“There’s been a lot of rhetoric about working for the people and populism, and a lot of action in the other direction,” she said.
Medical Data on Tech’s Terms? In a move that will surprise no one, Big Tech is trying to learn more about our personal health to make its surveillance advertising even more pervasive. Last week, President Trump announced a collaboration with Big Tech to launch a system to keep track of medical records using apps and programs manned by tech giants. If you’re skeptical, so are we. Big Tech can’t keep user data safe and already knows far too much about us, why on Earth would we trust them with private medical records? 🤯
Andrew Crawford, a senior policy counsel at the Center for Democracy and Technology, says he has concerns about how the data will be collected and used by the companies involved in the initiative, what consumers will be told about their data privacy, and what limits there will be on how the data can be used and shared.
Taking Up the Mantle: While we wait to see what kind of effect flattery will have on the administration’s FTC and DOJ investigations, it appears that state officials are taking up the antitrust mantle. According to The Nation:
The good news is that state leaders around the country are rising to meet the moment. Lawmakers and law enforcers from Rhode Island to Minnesota to Arizona are taking action to protect a public increasingly bullied, ripped off, and scammed by a cabal of predatory corporations. They are penning and often passing new laws aimed at checking corporate power and its harms—high prices, shuttered stores, lost jobs—and are dragging monopolists to court for their villainy.
The article goes on to discuss efforts across states, including Minnesota State Attorney General Keith Ellison’s efforts, which have resulted in numerous antitrust bills crafted by his team making their way through state government.
At an event hosted by the Institute for Local Self-Reliance and the State Innovation Exchange, Ellison said:
“I think antitrust really has the answers to a lot of the economic questions that are bothering people. Why are wages stagnant? Why do we have disappearing pharmacies around our state? Why are grocery prices up, why are rental prices up? I think there’s one overriding answer, and that’s the consolidation of markets.”
Water, water everywhere, and Meta’s taking all of it: A recent New York Times investigation details the firsthand effects of a massive data center Meta is constructing in Georgia. Straining local water supplies to the point of their wells running dry, residents like Jeff Morris are understandable outrage. Deeply affected by the water deficit, he believes the issue lies with increased sediment caused by Meta’s construction. To make matters worse, “water rates are set to increase 33 percent, more than the typical 2 percent annual increases,” in the next few years, according to a local mayor. Meta’s response to the situation is both telling and unsurprising:
When Ms. Morris said she was afraid to cook with the tap water because of the sediment, the Meta employee suggested that she try boiling the water before using it. The company has denied that its employee said that.
No doubt, this is just one anecdote underscoring how Big Tech’s insatiable appetite for resources can leave communities high and dry.
Trillion-Dollar Spotlight: Rounding out July, while Microsoft just became the world’s second $4 trillion dollar company (behind NVIDIA), that’s not stopping the tech giant from receiving well-deserved scrutiny. The article attributes the growth to the tech giant’s cloud computing business, which we’ve discussed previously with regard to the (ongoing?) FTC probe:
From restrictive cloud computing bundling to its multibillion-dollar investment in OpenAI, Microsoft has taken advantage of its dominance in desktop computing. Businesses hit by higher prices, exit fees, and barriers to switching platforms deserve accountability.
And we’re not the only ones watching: Brazil just opened an investigation into Microsoft, while the UK’s Competition and Markets Authority called for a probe into both Microsoft and Amazon’s dominance in the cloud computing market. Enjoy that four trillion while it lasts. 😎
Until next month! In the meantime, follow us on X and BlueSky for the latest on Big Tech, AI, and antitrust. ⚖️