Op-eds and Articles

Litan for the Hill, “Talk of breaking up ‘Big Tech’ is misguided, premature”

By / 10.25.2018

How fast the tables have turned. Only a few years ago, the major technology platform companies — Alphabet (Google), Amazon, Apple and Facebook — were widely admired.

Now, they are in the dock, accused of limiting competition; chilling startups and the innovation they bring; widening income and wealth inequality; threatening our privacy; enabling foreign actors to poison our elections; and engaging in political bias.

Some urge the government to break up the tech platforms. Others want to regulate them as public utilities. In my new e-book, “Scalpel, Not an Axe,” recently published by the Progressive Policy Institute (PPI), I effectively say, “Hold on.”

The antitrust laws, as long interpreted by the courts, do not punish companies for successes achieved through innovation and luck, or from benefiting from economies of scale and networks that become more valuable with more users.

There is no credible evidence that any of the tech platforms has engaged in unlawful monopolization that warrants their breakup, such as AT&T’s refusal to interconnect long-distance rivals with its local phone companies (which led to its breakup in the 1980s) or Microsoft’s restrictive practices that entrenched the dominance of its Window’s operating system (which was not punished by breakup).

U.S. proponents of breaking up Google are closely watching the European Commission’s anti-Google actions and are urging U.S. regulators to take a similarly aggressive line. Despite its regulatory zeal, however, the EU is not calling for breaking up Google.

Instead, Google changed its algorithm to ensure it wasn’t favoring its price comparison engine over others. And even if American courts were to rule against Google’s tying of it apps to its Android mobile operating system, they could simply order the company to stop.

Do these big companies freeze out startups, creating what The Economist has called a “kill zone” around their markets?

Continue reading at The Hill.