WASHINGTON—Prior to a much-anticipated hearing Wednesday in the U.S. House Judiciary Committee’s Subcommittee on Antitrust, at which the chief executives of Amazon, Apple, Facebook, and Google parent company Alphabet were scheduled to testify on competition in the digital marketplace, ITIF President Robert D. Atkinson issued the following statement:
Today’s hearing demonstrates just how serious some politicians on both sides of the aisle are about using antitrust policy to hammer the nation’s top Internet companies for a wide range of alleged offenses, including things that have nothing to do with antitrust policy—from privacy to political speech.
It’s important to step back and remember that these companies create enormous value for hundreds of millions of users and small businesses, and that the United States does not lack adequate antitrust policy to address any legitimate concerns if they abuse their market power. Congress shouldn’t twist antitrust law to launch an ill-defined broadside on Internet platforms as a class.
Although lawmakers may focus on certain business practices they don’t like, few of these practices cause clear harm to consumers. For instance, Congress has been concerned that these large Internet platforms are buying other companies just to eliminate competition, but, in many cases, they buy companies in order to add new technology and capabilities to their existing offerings, giving consumers additional features. Congress also complains that Amazon, Apple, Google, and Facebook compete against third-party providers on their own platforms, yet this almost always results in lower prices and more choices for consumers.
Monopolists traditionally try to boost profits by reducing supply. These companies aggressively innovate in an effort to attract and retain users with new and better products and services at low cost. This is exactly how markets should act. To punish these companies for their success would be to risk killing the proverbial geese that lay the U.S. economy’s golden eggs, which would only empower China and other foreign competitors while limiting a powerful business model for other industries in the future.
For more information on this topic, see ITIF’s Monopoly Myths Series, including: