Regulators, Experts At CES 2020: More Facts And Less Politics
While CES is known for showcasing the newest innovations in consumer technology, this year’s edition also featured some stark warnings from antitrust experts on the dangers of ignoring the facts in debates on competition and tech. In particular, experts argued that:
— Antitrust enforcement should be grounded in evidence, not politics.
—Leading tech firms are under enormous competitive pressure, as a result of both disruptive innovation and competition from abroad.
— Consumers benefit greatly from tech services and do not see regulation of tech companies as a priority.
Antitrust enforcement should be grounded in evidence, not politics.
FTC Commissioner Christine Wilson argued breaking up successful firms solely because of their size and success is not a sound basis for antitrust enforcement. “I want to be clear. What I said is proposals from Senator Warren and others that say ‘let’s go out and break up large successful companies, because they are large and successful’ is not an approach that I would embrace. I believe that if we are going to take action it needs to be on the basis of an antitrust investigation, and identification of potential harms, and then a trial, and then a remedy that matches the harms that have been identified.”
Zach Graves, Head of Policy at Lincoln Networks, pointed out that forced divestiture is punitive rather than productive. “I don’t really see it as addressing fundamental problems, I don’t see it as thoughtful policy. I see it as something punitive, something that people want to punish the tech industry for different sets of perceived wrongs, rather than something that will optimize our innovation policy ecosystem in the right direction.”
Leading tech firms are under enormous competitive pressure, as a result of both disruptive innovation and competition from abroad.
Incumbents’ positions are threatened by the ever-present force of technological innovation, said Mercatus Center’s Jennifer Huddleston: “Not only, as Zach said, do these issues take a significant amount of time, but also that innovation has in and of itself been the best kind of competition policy in America. So a decade ago if we were talking about ‘should big tech be broken up?’ we would be talking about the MySpace natural monopoly.”
Huddleston continued: “And so yes there is this kind of question of ‘is it easier to stick with the incumbent?’ But we’ve seen time and time again that [with] things that look like untoppleable giants, something new and innovative we never could have imagined comes about and completely revolutionizes the industry. And that the market may not have been what we thought it was at the beginning.”
Chinese tech companies are taking advantage of scale, a fact that we should consider in the American tech debate, according to ITIF President Rob Atkinson: “We have to be really, really careful with antitrust. Because, I look at competition in the world and it’s not just competition in the US, it’s competition with China. And you have got big, big players in China that have an enormous amount of scale. Their governments aren’t just saying ‘oh we should worry about antitrust.’ They’re doing forced mergers in China. They’re forcing competitors to come together to get global scale.
Consumers benefit greatly from tech services and do not see regulation of tech companies as a priority.
Graves argued that the tech policy debate highlights a “schism” between the “pundit class” and everyday consumers. “I think your average person is a lot less worried about this issue on the sort of hierarchy of all of the [priorities] – you know jobs, how’s the economy doing, foreign policy – this is pretty low on the list. So it’s interesting to see how popular it is as a matter of where the policy conversation is, but I see it as a lot more noise than actual substance.”
Huddleston pointed out that antitrust law should only be used when competitors engage in behaviors that cause consumer harm. “It should be used as a tool when there is anticompetitive behavior that harms consumers.The fact that we have such a hard time pinpointing ‘how are consumers being harmed’ really raises that question of ‘is antitrust the appropriate tool here?’ Again because you have several choices, including the choice of not engaging in social media at all, or using a different service, or doing things the analogue way in some cases. This is a constantly changing market and to say that there’s only one choice – it’s rarely the case when you step back and think about it.”