WTAS: Experts At Stigler Center Conference Make Clear That Current Antitrust Law Is Equipped To Deal With A Vibrant Tech Sector
This week, the University of Chicago’s Stigler Center hosted its annual Antitrust and Competition Conference featuring top economists, lawyers, and thinkers focusing on competition and public policy. Over the course of two days, a few key themes emerged:
—Current antitrust laws are equipped to deal with a changing economy and protect against politically driven excesses;
—Antitrust law should not be viewed as a one-size-fits-all solution to a diverse array of economic challenges;
—Leading tech services face vigorous competition from both each other and new entrants, domestically and globally; and
—Tech platforms deliver enormous value to consumers.
Read more below.
Current antitrust laws are equipped to deal with a changing economy and protect against politically-driven excesses.
Alanna Rutherford, Visa: Antitrust is a pro-capitalist, pro-competitive tool and does not need to be overseen by a new regulatory body. “Competition law is designed to promote capitalism in a way that doesn’t interfere with the social contract. It’s always been a pro-competitive tool, it’s always been a pro-capitalist tool, and it just goes to show you that democracy and capitalism go hand in hand. And somehow in our discussions, when we’re talking about antitrust these days, we use competition law or talks about competition law to rewrite social policy, which is not really what it was meant to achieve. And my concern when you say you can create a new regulatory body or you can do it through the existing — every time you create a new commission, a new scope, what happens is they now have to justify their existence. You get exercises of power that don’t necessarily lead to good results. It inhibits business and it creates what I think is bad policy.”
Randal Picker, University of Chicago Law School: Priceless competition isn’t new; it’s the way radio and television markets have operated for some time. “This is not a new situation for us. We have seen this kind of priceless competition in the past. This is what radio markets looked like originally. It’s what television markets looked like in the 1950s. You were not charged a cash price in those situations. Competition was literally a click away.”
Antitrust law should not be viewed as a one-size-fits-all solution to a diverse array of economic challenges;
Alanna Rutherford, Visa: Antitrust is not the only tool, or even the best tool in many cases, to address issues like those brought up in Facebook co-founder Chris Hughes’ editorial. “When you look at Chris Hughes’ editorial, for example, against Facebook, it was about a lot of things but I don’t think it was about antitrust at all. I think there are ways to implement what’s going on there without using antitrust as a tool. I’m not saying there are no antitrust issues in the digital platform arena. What I’m saying is that, when we’re talking about rewriting the laws and when we’re talking about the need to protect the social contract and consumers, it is not the only tool or even the best tool in many cases to regulate digital platforms, and we have to start thinking — I understand this room is largely economists and antitrust thinkers, but we have to start thinking more broadly.”
Dennis Carlton, University of Chicago Booth School of Business: These are hard problems, and regulators should be wary of simple solutions. “The fact is that the collection of characteristics in the digital economy are such that it makes either regulation or antitrust—competition policy—really challenging to implement. Doesn’t mean you shouldn’t do anything; it means these are hard problems, and simple solutions—be very wary of. Breaking up the companies sounds simple, not gonna work out I don’t think. Appointing a regulator without well-defined and thought-through responsibilities, that too won’t work. So I think you just gotta be careful.”
Leading tech services face vigorous competition from both each other and new entrants, domestically and globally.
Tyler Cowen, George Mason University: There is an enormous amount of competition in social networking and communication. “Sometimes you hear well Facebook doesn’t face much competition. But let me just tell you some different ways I can do social networking. I can go on Snap. I can go on FortNite, it’s kind of a super gaming system, it’s attracted tens of millions of users in but a few months. I can use email. I can text people on my cell phone. I can use Pinterest. I can use Twitter. What I do personally, is I use my blog for social networking. Believe it or not, you can still blog. At times I’ve knocked on the door of my neighbor. That didn’t work out well, but it’s there, for those of you who want it. And there are multiple other messaging services, you know, Slack is one of many. Apple, Gmail chat, which everyone says is terrible, I’ve talked over Gmail chat, I mean it’s not that bad, that is a market when you want to connect with other people, there are many, many ways to do it. Yes, there’s always a way to define the market narrowly where it looks like it’s not very competitive. But the actual choices out there compared to fifteen, twenty years ago, my goodness, it’s a stupendous increase in competition and diversity.”
Hal Varian, Google: Leading tech services compete against each other “intensely” in dozens of categories. Leading tech services “compete in advertising platforms, artificial intelligence, browsers, cloud services, e-books, email, and messaging, games, on and on and on. And that competition can be very intense.”
Tech platforms deliver enormous value to consumers and businesses.
Tyler Cowen, George Mason University: Facebook and Google allow small- and mid-sized businesses to reach customers like never before. “Let me start with a bit more on the monopoly issue. If you look at Facebook or Google, they enable small- and mid-sized businesses to advertise like never before. Businesses that could not afford TV or radio advertising, now have a place to go, to target ads in an economical way. So those two companies are two of the most significant anti-monopoly institutions in the whole American economy.”
Hal Varian, Google: The tech sector benefits consumers, workers, and the entire economy. “So tech, what does it deliver? High wages, low prices, rapid technological development, innovation, and quality. So, it’s an industry that I think we have to look at very carefully if we’re thinking of changing the basic ground rules.”