Eakinomics: Don’t Let the
Techlash Alter Antitrust Principles
Guest authored by Jennifer
Huddleston, AAF's Director of Technology and Innovation Policy
The House Judiciary Committee will hold a hearing Wednesday with
the CEOs of four of America’s most successful tech companies as part of its
ongoing investigation into competition and digital marketplaces.
This hearing comes as the COVID-19 pandemic has given many of us a new
appreciation for the benefits of technology. Whether it is the
ability to work remotely, stay connected to friends or family while physically
distant, or quickly order the supplies we need delivered, the ability to
socially distance was more tolerable thanks to innovative technology. This
upcoming hearing is best understood as part of a broader “techlash” rather
than clear evidence of anti-competitive behavior.
Technology remains an incredibly competitive and dynamic market. Not only do
companies such as Google, Apple, Facebook, and Amazon often compete against one
another for consumers or advertisers; the market itself is evolving in new and
often unpredictable ways. After all, less than two decades ago, similar claims
about monopoly market dominance were levied against then-giants America Online,
Yahoo, and MySpace. In other words, dominance today doesn't mean dominance
tomorrow; successful companies must continually reinvest and innovate to
meet consumer demands. According to the annual Boston Consulting Group survey
of the Most Innovative Companies, more than half
of the most innovative companies were headquartered in the United States,
including four of the top five. Such innovation shows the continuing response
to competition and how American companies must continuously improve to maintain
leadership and competitiveness in the global marketplace.
Nevertheless, critics often claim that “Big Tech” has too much power or is
inherently bad. The result could be a dangerous step away from the objective
consumer welfare standard and a return to previous eras of antitrust
enforcement. As I discussed in my recent Insight, “What is the Future of Antitrust and Calls to Break Up
Big Tech?,” shifting away from the consumer welfare standard to
address non-competition related concerns “would allow for rapid swings in the
use of competition law, creating uncertainty for innovators and potentially
depriving consumers of beneficial mergers or expansions.” The consumer welfare
standard remains up to the task when it comes to examining dynamic and
innovative markets, and antitrust enforcement should remain focused on
competition policy. When it comes to other policy concerns about technology
such as online speech, misinformation, or data privacy, these are better
addressed with targeted and carefully considered policies rather than used as
an excuse to intervene broadly in a competitive market. Not to
mention, the remedies available through antitrust enforcement would not solve
these policy problems and in some cases could even make them worse.
The hearing is likely to be more of an airing of grievances from certain
policymakers regarding their frustrations with the choices of technology. But
coupled with the ongoing investigations and the overall political climate in
which they are occurring, this hearing should raise concerns about a
shift from the current principled and objective approach to antitrust to one
that is far more subject to political preferences. Instead of focusing on
problems with technology and questioning the merits of
success, policymakers should consider the many benefits that this
incredibly dynamic and competitive market has had on our lives and
how to continue ensuring those benefits reach us.
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