WTAS: Any Tech Sector Regulation Should Be Based On The Facts
With increased chatter in recent weeks from critics saying that now is the time for more radical regulation of the tech sector, including breaking up leading tech services and abandoning the consumer welfare standard, it’s important to keep in mind the actual facts of the tech sector and how any new regulations would impact competition.
When considering the perspective of experts and policymakers, a few key points stand out:
1. Leading tech services are subject to many federal and state laws, which are enforced by federal and state regulators across the country.
2. Smart regulation addresses a specific problem without causing collateral damage. Tech critics who propose radical regulation, like breaking up leading tech services, can’t identify any harm to consumers, the problem they’re trying to solve, or even how a “break up” would practically work. They’re merely concerned with “big-ness.”
3. Smart regulation should be well-considered, and aimed at gaps in the law, not reactively based on critics’ unsubstantiated attacks.
More information is below.
Leading Tech Services Are Subject To Many Federal And State Laws, Which Are Enforced By Federal And State Regulators Across The Country
Acting General Counsel For The Federal Trade Commission Alden Abbott: Current Antitrust Law Is Sufficient To Protect Competition Without Harming Companies. “The premise that antitrust needs to be applied far more aggressively—and perhaps amended—to discipline ‘new economy’ giants is misplaced. Instead, existing U.S. antitrust doctrine, which emphasizes consumer welfare, is perfectly capable of rooting out any anticompetitive abuses without imposing unwarranted harm on companies. The latter point is important, because, as we will see, the new economy giants bestow truly ‘huge’ economic benefits on American society, so excessive and misguided antitrust intervention threatens serious harm to the public good.” (Alden Abbott, “Antitrust And The Winner-Take-All Economy,” Heritage Foundation, 1/23/18)
Sidley Austin Attorneys Alan Raul, Frances Faircloth, And Vivek Mohan Note State Governments Already Have Robust Regulations Aimed At The Tech Sector. “In addition to the concurrent authority that state attorneys general share for enforcement of certain federal privacy laws, state legislatures have been especially active on privacy issues that states view worthy of targeted legislation. In the areas of online privacy and data security alone, state legislatures have passed laws covering a broad array of privacy-related issues, cyberstalking, data disposal, privacy policies, security breach notification, employer access to employee social media accounts, unsolicited commercial communications and electronic solicitation of children, to name but a few.” (Alan Raul, Frances Faircloth, And Vivek Mohan, “The Privacy, Data Protection And Cybersecurity Law Review – Edition 4: United States,” The Law Reviews, 12/5/17)
The Point Of Regulation Is To Solve Specific Problems, Rather Than To Attack The Size Of A Company As An Inherent Problem
Carl Shapiro, Former Deputy Assistant Attorney General For Economics At The Department Of Justice’s Antitrust Division, Says We Should Avoid A “Big Is Bad” Mentality And Truly Have The Interests Of Consumers In Mind. “I believe this approach is sound and has widespread support among industrial organization economists. So I say: let these inquiries proceed when suspicious conduct can be identified. But in doing so, let us avoid a ‘big is bad’ mentality and let us truly have the interests of consumers in mind. We learned long ago that proper antitrust enforcement is about protecting consumers, and protecting the competitive process, not about protecting competitors. We must not forget that guiding principle. Indeed, that principle is especially important in markets subject to large economies of scale, whether those scale economies are based on traditional production economies or based on network effects, which are often important in the tech sector.” (Carl Shapiro, “Antitrust In A Time Of Populism,” Haas School Of Business, 10/24/17)
Consumer Protection Advocate And Public Knowledge President Gene Kimmelman Says It’s Necessary To Examine The “Underlying Economics” Behind Tech Sector Challenges, Rather Than Simply Calling For Antitrust Action. And invariably we’re talking about areas where we want consumers to have more choices. We don’t want platforms to dictate our expression, our choices, our ability to speak, our ability to receive information and engage in commercial activities. But if size is the problem, but breaking them up could lead to some other combination that could be a similar problem, you have to look at it and say, is the better way to deal with this to prevent discrimination in that function? Should we prevent a Google favoring itself in search as opposed to saying it shouldn’t be allowed to have this much search? So these are just different policy tools that align with different goals that we would have and I would say fundamentally need to align with the underlying economics. (Global Partners Digital, “Should The Tech Giants Of Silicon Valley Be Broken Up?” In_Beta Podcast: Episode 8, 1/18/18)
Smart Regulation May Be A Good Idea, But Should Be Well-Considered And Targeted, Not Reflexively Based On Larger Issues
University Of Pennsylvania Law Professor Herbert Hovenkamp: Breaking Up Leading Tech Services Could Eliminate Cost Advantages And Raise Prices For Consumers. “Breaking up these companies may have unintended consequences. ‘The reason these companies… have low prices is because of their size,’ he explained. ‘If you break them up, you may be eliminating most of those cost advantages.’ That would lead to higher, not lower, prices.” (Howard Gold, MarketWatch, 4/3/18)
Kimmelman Says Calls For Antitrust Action Against The Tech Sector Ignore Potentially Better Policy Solutions. “I feel that many of the tech discussions turn immediately to antitrust when in reality a lot of the problems may be better addressed by other policy tools like opening up APIs, interconnection to differing platforms, making equipment operable across multiple platforms, not allowing totally closed down networks. These may be better policy initiatives that can truly address specific problems as opposed to some generic antitrust ‘just break up companies.'”(Global Partners Digital, “Should The Tech Giants Of Silicon Valley Be Broken Up?” In_Beta Podcast: Episode 8, 1/18/18)