good morning.
It’s a record Nvidia didn’t want to set. In the biggest one-day loss of market cap ever, shares fell 9.5% to close at $108 yesterday, wiping $280 billion off its market cap. The chipmaker is just coming off a year-long high, but one of the standout factors yesterday was a subpoena from the U.S. Department of Justice investigating whether Nvidia violated antitrust laws. (The other is investor concerns about a slowing economy.) DOJ officials want to know if the AI chipmaker is making it hard for buyers to switch or shop around.
Nvidia is not alone, as antitrust authorities are also investigating other tech companies. In fact, there have been few times in history when so many companies have been subject to antitrust investigations for monopolistic, arrogant, collusive, or other anticompetitive behavior. Federal Trade Commission (FTC) Chair Lina Khan and her colleagues at the Department of Justice are targeting companies for suspected anticompetitive behavior in a variety of industries, from airlines, pharmaceuticals, and groceries to financial services, fast food, and energy. And, of course, big tech companies.
This is not intended to be a partisan position. Antitrust laws are designed to give corporations a run for our hearts and our wallets. America’s three core federal antitrust laws were enacted more than a century ago, but the way they are enforced varies widely for a variety of reasons. President Joe Biden’s Executive Order on Competition, signed in July 2021, asserts that “monopoly products” and “economic consolidation” are major impediments to “fair, open, and competitive markets.” And Khan’s antitrust push has been far-reaching and has drawn criticism from nonpartisan observers.
For example, let’s move away from tech and look to the world of fashion. The FTC filed suit to block the merger of Tapestry and Capri, arguing that by combining brands like Coach and Versace into the same company, Tapestry would “gain a dominant share of the ‘affordable luxury’ handbag market.” When I met with Tapestry CEO Joan Crevoiserat this summer, she pointed out that her industry doesn’t lend itself to monopolies. Antitrust lawsuits that don’t stand up in court can still be very damaging, as momentum is lost and people have to build it up again.
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Diane Brady
diane.brady@fortune.com
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This CEO Daily was curated by Joey Abrams.
