Surf’s Up With Springboard: Beach Reads On Competition In Tech
At home or away, as you soak up the summer sun, Springboard has you covered with a little beach reading on the debate over competition in the tech sector.
Check out the articles below.
Northwestern University’s Mark McCareins in an interview with Kellogg Insight’s Glenn Jeffers: “Simply because a firm becomes large and has innovated better than its competition does not in and of itself lead to the conclusion that an antitrust violation has occurred.”
“Antitrust regulation has historically been aimed at ensuring that consumers, not particular businesses, are not harmed by a lack of competition. And because search engines, social media platforms, app stores, and online marketplaces offer many valuable services to consumers for free, this complicates any arguments that consumers are being harmed, even if other businesses and industries are experiencing disruption. ‘Simply because a firm becomes large and has innovated better than its competition does not in and of itself lead to the conclusion that an antitrust violation has occurred,’ McCareins says.”
The Cato Institute’s Ryan Bourne in an interview with AEI’s Jim Pethokoukis: Firms that were viewed as “unassailable” monopolies “didn’t get blown away by similar competitors competing with them on price,” but “by new forms of competition that one couldn’t even have imagined.”
“People thought they were unassailable monopolies for the exact same reasons as people now think the tech firms are fundamentally different. If you take that as given, the way Schumpeter really adds value is that he recognized that antitrust policy — to the extent that it does work — often misses a very important margin of competition, which is this competition from the fundamentally new product or new innovation delivered in such a way that marks a decisive quality or cost break from previous industrial output. Traditionally, if you look through some of those firms that we believed were unassailable monopolies, they didn’t get blown away by similar competitors competing with them on price. They got blown away by new forms of competition that one couldn’t even have imagined.”
Tech analyst Tim Bajarin in Forbes: For regulators to stifle tech services’ ability to drive innovation with “technologies that will power the U.S. economy for decades” “would be a mistake.”
“While I agreed that these companies may need oversight and see their power monitored and even restrained when it makes sense, clipping their wings in a way that stifles their ability to innovate and help the US keep ahead in areas like AI, 5G, IOT, self-driving vehicles, etc. would be a mistake. These technologies will power the US economy for decades and tech needs to be free to drive this economic engine without heavy-handed government regulation.”