There are growing calls from the administration, Congress, and some presidential candidates to either break up big tech companies or subject them to more careful scrutiny out of concern they may be violating competition laws. Some of this is egged on by advocates who would like to jettison the long-standing consumer welfare standard for antitrust policy, which holds that regulators should stay out of the way unless there is clear evidence a player’s actions are raising prices or curbing innovation. The view among many is that leading technology companies are too powerful and have too much market share in their respective markets; that this is diminishing competition, reducing privacy, and threatening democracy, among other problems; and that the best solution is to be much more vigorous in applying antitrust remedies, including structural remedies such as breaking up existing companies.
But even among those who defend the consumer welfare standard, there are differing views of the how antitrust regulators should respond to large technology companies. Some argue for enhancing antitrust enforcement when it comes to big tech companies with significant market share, particularly if they engage in anticompetitive conduct, but possibly based on their business structure. Others argue that while continued oversight is warranted, U.S. antitrust authorities have largely been right in their approach so far.
On July 11, 2019, the Information Technology and Innovation Foundation hosted a panel discussion to examine these issues and delve into what, if anything, should be changed in the current antitrust regime.
ITIF President Robert Atkinson began the conversation by discussing the many reasons market power in tech industries is pro-innovation and pro-consumer. He also noted that breaking up U.S. big tech would open the field for China’s big tech, because China is not breaking up their big tech companies.
Then Thibault Schrepel, Faculty Affiliate for the Berkman Center at Harvard University, discussed the unknown economic effects of breaking up big tech companies. He stressed that the calls to break up big tech are more focused on political strategy and rhetoric rather than economic strategy. Over the last 30 years, there was broader consensus around antitrust. This consensus has since ended, and now antitrust is used to address political goals.
Then Seth Bloom, President and Founder of the Bloom Strategic Counsel, discussed the implications of vague antitrust laws. Vagueness leads antitrust enforcement to follow political winds. Despite this concern, even if there is an antitrust action brought against tech giants, Bloom asserted that a breakup is unlikely. The sense of political bias in tech has given rise to hostility, but Bloom stressed the importance of considering the many political dimensions of this issue. Tech companies have different business models and operate in different markets, so there isn’t a one-size-fits-all approach to antitrust.
Alec Stapp, Research Fellow at the International Center for Law and Economics, echoed similar concerns. He noted that breaking up big tech is an extreme remedy. Problems such as privacy, foreign interference in elections, social media addiction, hate speech and violent content, and control over public debate are not primarily antitrust issues, and policy can address those specific concerns without antitrust.
Jason Oxman, President and Chief Executive Officer of the Information Technology Industry Council, discussed how society has shifted from the questions concerning specific policy issues or markets to a broad-brush indictment of big technology companies. He noted how the use of antirust law to target the nation’s tech leaders is overly broad. He argued that it is critical to identify the voices of competitors that are only focused on their own business plans. He also stressed that technology creates new opportunities and new markets, but organizations will have to modify their business plans to adapt.
Overall, the panelists agreed that antitrust regulators must consider the economic and political implications of breaking up big tech giants.