WTAS: Experts Agree, Breaking Up Tech Is Bad For Consumers And Business
Since Facebook co-founder Chris Hughes’ op-ed in the New York Times, a chorus of experts have made it clear that breaking up tech companies is an extreme response that is bad for consumers and businesses alike. These experts counter Hughes with three key points:
—Tech companies face a highly competitive marketplace that is changing rapidly;
—Antitrust laws are not intended to punish successful companies for simply being big; and
—Elected officials have expressed caution about breaking up tech companies.
Tech companies face a highly competitive marketplace that is changing rapidly
—CNBC’s Matt Rosoff argues that social networks are competing with many communications services. “I would argue that ‘social network’ is an invented marketing term that was used to brand a set of new internet-based communications platforms that emerged in the wake of the dot-com bust. Those platforms didn’t serve any particular new need or function, they simply offered an easier and more fun way to communicate via the web. If you want to break up Facebook, call it what it is — a communications service. There are many of those.” (Matt Rosoff, “Facebook Is Not A Monopoly, And Breaking It Up Would Defy Logic And Set A Bad Precedent,” CNBC, 5/9/19)
—Mike Masnick, founder of Techdirt, points out that there are “lots of players” on the internet and that it’s easy for new competitors to enter the market. “It’s not a monopoly in the sense of Standard Oil or AT&T (the latter of which had a literal monopoly in that there were no other phone companies). On the internet, there are lots of other players. And while it’s true that Facebook has bought up a few competitors, there remain many more. And it’s quite easy for many more to pop up as well. Indeed, the continual beating that Facebook has received over the past few years seems to be inspiring a bunch of new competitors seeking to provide better solutions.” (Mike Masnick, “Facebook Co-Founder Chris Hughes Calls For Facebook’s Breakup…But Seems Confused About All The Details.” Techdirt, 5/9/19)
—Chris Kelly, former Facebook executive and Netscape counsel, highlights that Facebook has competitors in telecommunications, messaging, and advertising — and the company is not the “number one player” in any of them. “People talk about social networking, but that’s not a defined antitrust market we’re talking about telecommunications services, messaging services, online advertising. Facebook isn’t the number one player in any of those markets, so it’s hard to imagine a court ever thinking anything seriously about an antitrust argument about breaking it up.” (“Chris Kelly On The Calls To Break Up Facebook,” CNBC, 5/13/19)
Antitrust laws are not intended to punish successful companies for simply being big
—Steven Davidoff Solomon, Professor of Law at the University of California Berkeley, highlights that antitrust law is intended to eliminate monopolies and that “being big is not a violation of antitrust rules.” “The legal issues may also be complicated and challenging, he said. Antitrust laws are meant to prevent or eliminate monopolistic behavior in business. But ‘being big is not a violation of antitrust rules.'” (Benjamin Pimentel, “Facebook’s Co-founder Made A Passionate Plea To Break Up The Social Network, But Legal Experts Say The Idea May Be Dead On Arrival,“ Business Insider, 5/10/19)
—Inc.’s Minda Zetlin highlights that economists and policymakers believe free markets are more efficient than governments. “But as Hughes himself notes, since the 1970s, economists and policymakers have been pushing the notion that free markets are more efficient than governments and should be left to their own devices.” (Minda Zetlin, “Facebook Co-Founder Chris Hughes’ Call For The Government To Break Up Facebook Is Just Silly,” Inc., 5/14/19)
Elected officials have expressed caution about breaking up tech companies.
—Senator Cory Booker (D-NJ) thinks enforcing antitrust laws is preferable to choosing companies to break up based on personal beliefs. “I’m telling you right now, we do not need a president that is going to use their own personal beliefs and tell you which companies we should break up. We need a president that’s going to enforce antitrust laws in this country, and I will be that person.” (“This Week,” ABC News, 5/12/19)
—Representative Ro Khanna (D-CA) is skeptical of breaking up tech because it would leave Chinese competitors as the only remaining large tech companies. “Look, what we don’t want is the only big tech companies to be Chinese — Alibaba, Baidu and Tencent — but what we do want is thoughtful regulation and thoughtful inquiries by the antitrust division and the FTC and make sure that these companies aren’t gobbling up new competitors, make sure that they’re not privileging their own products.” (Harper Neidig, “Co-Founder’s Call To Break Up Facebook Energizes Its Critics,” The Hill, 5/11/19)