What The Democratic House Judiciary Committee Report Will Choose To Ignore: A Compendium
Ahead of today’s release of the Democratic House Judiciary Committee Digital Markets Report, there’s a lot of anti-tech rhetoric swirling. In addition to reading the report, it’s equally as important to keep in mind the evidence and testimony the report will likely ignore. To help sift through what’s evidence-backed and what’s not, Springboard compiled all the must-read statements on competition in tech today.
Hear from business leaders, small business owners, antitrust experts, members of Congress, and more—all in one spot. Though these statements come from a diverse array of stakeholders, the resounding message is clear: competition is robust in the tech sector today. Happy reading!
From Small Business Owners & Advocates…
Nancy Vargas, CEO, DH2 Limo Is Worried About Government Overreach Hurting Small Businesses: “It seems that every day another elected official is focusing on the power and monopoly of technology companies and digital platforms. As a small-business owner who relies on digital platforms and their small-business tools, this has me extremely worried that the government may act against those companies without truly understanding how it will affect small businesses.”
Laura Rey Iannarelli, Owner Of Rey Insurance Agency Reminds Of The Benefits Of Digital Tools Amidst COVID-19: “Given advancements in the accessibility and affordability of these online platforms, small business owners can plan for the unexpected and unknown by taking advantage of these tools. At my own company, the Rey Insurance Agency, the COVID-19 crisis – and the sudden shift in what we consider normal – was entirely unexpected, but it was evident that we could not simply cease to be there for our customers. As New York’s physical storefronts closed, those connected with digital platforms transitioned online quickly; for others, it was easy to get started, building a quick website, emailing customers, and even running an online advertisement or two.”
Morgan Reed, Executive Director Of The App Association Characterizes Today’s App Economy As “Thriving”: “The app economy in America is thriving, growing up from virtually nonexistent in 2007 to $1.3 trillion today. It has created 5.7 million jobs globally. We heard earlier about 1.5 million here in the U.S. and is revolutionizing traditional industry verticals, making everything from agriculture to health care better and smarter.”
David Chavern, President & CEO Of The News Media Alliance Highlights The Benefits Afforded To News Organizations By Digital Platforms: “Absolutely, I mean these are amazing wonderful distribution platforms that by the way have allowed us to grow our digital audience larger than it’s ever been or in terms of any audience. And they need good content to engage their users and we need access to those users.”
Carl Szabo, Vice President & General Counsel Of NetChoice Argues That Tech Platforms Bridge The Gap Between Consumers And Small Businesses: “With the advent of the internet, we’ve removed the high startup costs that are often seen in traditional markets. The next big innovation is readily buildable and distributable further advancing the natural erosion of the first mover advantage. For Americans and America’s small businesses, bigger is better. What we see here are two-sided markets. You have consumers on one side and small businesses on the other. These platforms are operating as the bridge between the two. The connection is providing a much needed lifeline to America’s Main Street businesses. And the bigger the platform, the better it is for these small businesses because it gives greater access to more potential customers. It drives down prices for advertising and, with micro targeted ads, American businesses can be sure that every dollar they spend on advertising actually leads to sales, something you didn’t have in traditional media.”
Jake Ward, President Of The Connected Commerce Council Highlights The Mutually Beneficial Relationship Between Large Tech Companies And Small Businesses: “When considering the role of large tech companies in the market, it is essential Members of Congress think about small businesses’ deep connection to these companies. This market is interconnected and big companies power growing companies to compete and win.”
— “It is indisputable that large digital platforms, services, and marketplaces provide small businesses with affordable, scalable, and secure business solutions. They have opened up new markets and allowed small businesses to compete globally and in ways that were unimaginable a few decades ago. What is not understood is that these solutions are affordable, scalable, and secure because of the platforms’ relative size. Big is not always bad and in this instance, big is essential. It is the size and scale of platforms and marketplaces that enable them to invest in new tools and provide the price flexibility that gives small businesses a pathway to viability, growth, and success.”
From Policymakers & Government Officials…
Rep. Doug Collins (GA-09) Reminds That Big Is Not Bad: “Secondly, big is not necessarily bad. Companies that offer new innovations, better solutions and more consumer benefits at lower prices often become big to the benefit of society. Shockingly.”
Rep. Sensenbrenner (WI-05) Notes That Big Is Not Bad—And Breaking Up “Big Tech” Could Be Harmful: “First, just because a business is big doesn’t mean that it is bad. Antitrust lost focus on the conduct of companies and whether that conduct is anti competitive. They do not exist to punish businesses just because they’re big. Likewise, the antitrust laws do not exist to punish success. On the contrary, they exist to foster it. Most innovative, successful and competitive companies often become very big not through anticompetitive conduct or violations of antitrust laws but simply by providing a better service or product than the other companies in the marketplace. Second is the written statements offered by some of our witnesses attest. Big online platforms can present small companies in many sections with a better way to reach them best the most customers. Breaking up big businesses simply because they’re large would end up hurting lots of small businesses throughout the country. Third, breaking up big platforms won’t necessarily solve a problem associated with those platforms. For example, the privacy issues that are prominent in today’s discussions on what’s going on wrong online. But breaking up the big platforms into smaller ones might actually compound the problems of protecting privacy.”
Rep. Pramila Jayapal (WA-07) Notes That We Have Access To Remarkable Innovation Thanks To The Digital World: “But digital technology is amazing, and I’m continually astounded by the proliferation of information that feels like it’s at our fingertips. I’ve watched my child grow up immersed in the digital world. They know no other world and they have access to a breadth of information that I think could never have been imagined several decades ago.”
Rep. Ken Buck (CO-04) Points Out That Tech Companies Produce “Enormous Value For Consumers”: “First, innovation and competition in the tech center have produced enormous value for consumers. We should not forget about those benefits as we consider the current state of competition in the tech center.”
Rep. Doug Collins (GA-09) Says That Proposals To Overhaul Current Antitrust Laws Should Be Approached With Caution: “Proposals to construct broad new regulatory regimes should be viewed with caution. Experience shows that regulatory solutions often miss the mark, solve problems less efficiently than free markets and can create new opportunities for anti-competitive companies to suppress competition through rent-seeking.”
Makan Delrahim, Assistant Attorney General Of The Department Of Justice Antitrust Division Advises Against A Merger Moratorium: “I think there’s a lot that can be done short of a merger moratorium, I think by doing that, we might risk actually harming consumers because there could be more at or there could be mergers and transactions that could be pro-competitive, that is not to say that if that they’re gaining more market share in the same define market…”
Rep. Ken Buck (CO-04) Argues That New Antitrust Proposals Must Encourage Competition: “Second, any legislative proposals that emerge from our inquiry should be consistent with maintaining a free and competitive marketplace. Proposals to construct broad new regulatory regimes must be viewed with caution. Experience has shown that burdensome regulations often miss the mark. Regulations often come too late to resolve anything and this approach is often less efficient than the free market. Regulators are often not nimble enough to keep pace with a dynamic marketplace so that the regulatory regime has the effect of entrenching incumbents rather than encouraging competition. Third, big is not necessarily bad. Antitrust laws do not exist to punish success, but to promote competition. Congress should help foster an atmosphere where ideas flourish and startups can innovate fairly, fairly compete, grow and succeed.”
From Antitrust Experts And Scholars…
Maureen Ohlhausen, Commissioner Of The Federal Trade Commission, Stresses The Need To Focus On Consumer Welfare: “Given the clear consumer benefits of technology-driven innovation however, I’m concerned about reducing the focus on consumer welfare. But believing that consumer welfare is the appropriate goal does not mean being passive or embracing the view that antitrust cannot improve its tools to detect anti-competitive behavior.”
Maureen Ohlhausen, Commissioner Of The Federal Trade Commission, Reminds Of The Need For Antitrust Law To Focus Squarely On Issues Of Competition: “Antitrust law is not designed for, nor intended to, correct a ‘problem’ in the market wholly divorced from the competitive process. In other words, concerns over fairness, consumer privacy, or the protection of small business should be addressed by regulatory actions or consumer protection laws, not antitrust. Using antitrust law to address non-competition factors, which may reduce competition or conflict with each other, reduces certainty and increases the risk of antitrust being used for industrial policy or political purposes.”
Roslyn Layton, Visiting Scholar At The American Enterprise Institute, Warns Against Heavy-Handed Regulation That Strengthens Large Competitors And Inhibits New Firms: “If we’re concerned about competition, we should stop adopting rules that unwittingly strengthen the largest players. In the end, I’m optimistic because the market we’re talking about today is maybe a third of our national economy, the other 70 percent of our economy is where our opportunities are. That is where the data revolution has not come, that is where we have the opportunities to grow, where we can transform lagging industries in health and transportation. So the important part is if we want these kind of new companies to emerge, we have to and we want to replace the status quo, we have to make sure that we don’t kill it in the cradle by regulation that stops the innovator at the gate.”
Roslyn Layton, Visiting Scholar At The American Enterprise Institute, Argues That Data Has Less Value Than We Think: “I think we’re overrating the value of data overall because, as a person who worked in the analytics industry, I had interfaced with, you know, 2,000 companies that they actually—after time, the data degrades. And if you are an innovator, it’s less interesting for you to get a platform’s data. If you’re going to innovate, you want to do something new and different. So data portability is kind of the answer to heal all ills, I think, is overrated.”
Bret Swanson, Visiting Fellow At The American Enterprise Institute, Reminds That Change Is Constant In Tech, Especially Surrounding The “Dominant Companies Of An Era”: “The dominant companies of an era always look invincible at the time. Sometimes these companies remain dominant — as Thompson points out, America’s three early-20th century auto industry leaders are still the big three today. But the list of seemingly obvious monopolies that later went bankrupt is also long (and humorous). And the possibilities for future competition in the tech industry are underestimated. Bell’s law suggests a new wave of distributed computing may be just around the corner.”
Benedict Evans Reminds Of The Fast Overturn Of Dominant Companies In Tech: “With each cycle in tech, companies find ways to build a moat and make a monopoly. Then people look at the moat and think it’s invulnerable. They’re generally right. IBM still dominates mainframes and Microsoft still dominates PC operating systems and productivity software. But… It’s not that someone works out how to cross the moat. It’s that the castle becomes irrelevant. IBM didn’t lose mainframes and Microsoft didn’t lose PC operating systems. Instead, those stopped being ways to dominate tech. PCs made IBM just another big tech company. Mobile and the web made Microsoft just another big tech company. This will happen to Google or Amazon as well. Unless you think tech progress is over and there’ll be no more cycles … It is deeply counter‐intuitive to say ‘something we cannot predict is certain to happen.’ But this is nonetheless what’s happened to overturn pretty much every tech monopoly so far.”
Joe Kennedy, Senior Fellow At The Information Technology And Innovation Foundation, Outlines The Benefits That Large Tech Platforms Afford Small Businesses: “These platforms often offer a variety of other services, such as handling the payments, shipping, handling returns — thus saving the small business from having to do that itself. Gig platforms match small businessmen and women with potential customers that are interested in their services, thus allowing them to build a clientele without spending more money on print advertising, radio, or mail inserts.”
Thomas Hazlett, Professor Of Economics At Clemson University, Argues That Americans Are Enjoying A “Golden Age” In Digital Retail Choice: “Now, thanks to platforms offering ‘long tail’ selections encompassing truly massive inventories, eCommerce platforms, and Google (or other) search engines to identify bargains, Americans have achieved something of a Golden Age in retail choice.”
James C. Cooper, Joshua D. Wright, & John M. Yun Of The Antonin Scalia Law School At George Mason University Applaud The Role Of The Consumer Welfare Standard In Promoting Competition: “The consumer welfare standard has been widely lauded for bringing coherence and credibility to antitrust law, providing a framework for consistent, economically sound decision-making, and giving consumers the benefit of lower prices, increased output, higher product quality, and more innovation. By focusing on a single objective measure, the consumer welfare standard disciplines modern antitrust law. Antitrust enforcers and courts under a consumer welfare standard are forced to support their actions with sound economic evidence. This helps to deter arbitrary or politically motivated enforcement actions that would chill aggressive, but beneficial, competitive conduct. Most importantly, the standard helps consumers, which is to say, all Americans.”
— “Yet, observing a dominant platform taking actions that disadvantage a rival does not answer the core question in any antitrust inquiry: does the conduct at issue, in this case self-preferencing, harm consumers rather than just rivals. This necessarily follows given that harm to rivals is consistent with both vigorous, procompetitive behavior and anticompetitive conduct. Thus, policies that overly favor competitors over competition is contrary to the antitrust laws and to overall economic efficiency.”
Geoffrey A. Manne Of The International Center For Law & Economics Warns That Overbearing Antitrust Regulation Could Harm Consumer Welfare: “Without sufficient evidence, proposals to ban large technology companies from acquiring nascent or potential competitors could do much more harm than good, resulting in significantly lower levels of innovation and consumer welfare, including deterring start-up activity. In addition to halting welfare-enhancing integrations and potentially leaving many small companies to fail in the long run, regulatory intervention that reduces the likelihood of reaching a profitable exit could reduce the incentive for venture capitalists to invest in startups and may inhibit new business formation.”
Thomas Lambert Of The University Of Missouri School Of Law Calls Attention To The Consequences Of Banning Procompetitive Conduct: “If a legal standard mistakenly allows conduct that is, on net, anticompetitive, consumers will face higher prices and/or reduced quality, and a deadweight loss will occur. But if the standard wrongly forbids conduct that is, on balance, procompetitive, market output will be lower than it otherwise would be and, again, consumers will suffer.”
Daniel Sokol Of The University Of Florida Levin College Of Law Applauds The Consumer Welfare Standard: “Consumer welfare works as the method of analysis for antitrust law. Despite critiques that caricature consumer welfare as trapped in a simplistic early-1970s framework of ‘Chicago School’ economics, consumer welfare is flexible to changes in economic thinking. Simply put, it is flexible because it meets the evolving needs of consumers.”
Daniel Sokol Of The University Of Florida Levin College Of Law Notes That The Existing Antitrust Rules Are Adequate For Consumer Protection: “Antitrust requires predictable and effective rules that protect consumers and promote innovation and risk taking. The current institutional design of antitrust and the development of antitrust case law promotes such an approach. This institutional design has been long-standing across both Republican and Democratic administrations. Antitrust can and will adjust to particular facts and business realities when there is anti-competitive harm. However, antitrust must balance intervention with non-intervention when the facts and case law do not merit such an approach.