Setting The Record Straight: Politicizing Antitrust Harms The People
Yesterday’s American Economic Liberties Project event calling for the wholesale breakup of America’s tech companies failed to acknowledge the damage such action would have on American consumers and small businesses. Innovation by technology companies has unleashed incredible benefits across the economy. Don’t let political agendas muddy these facts:
1. Consumers love technology companies for convenience, innovation, and choice.
Technology companies are some of the most loved brands. According to Morning Consult, five technology companies, Google, Amazon, Netflix, Amazon Prime, and YouTube top the Most Loved Brands in 2020, based on performance across four metrics: favorability, trust, community impact, and net promoter score.
Americans view multiple tech companies as “serving the most needs of Americans” during the pandemic. According to the Axios Harris Poll 100, five technology firms, Amazon, Zoom, Hulu, DoorDash, and Google, are among the top 10 of the 2020 Velocity list. Maintaining the momentum will require “services to be flexible and agile to fit the ever changing shape of consumers’ needs in the new normal.”
2. Today’s technology sector is competitive and dynamic across the advertising, retail, and search spaces.
Advertising technology companies compete and innovate to benefit consumers, advertisers, and publishers. Bitton, Dolmans, Mostyn, and Pearl, experts at Competition Policy International: “Advertisers have reaped enormous benefits from more effective technologies to target the desired audience, which in return enabled them to achieve much greater return on ad spend. Publishers have benefited from new and better ways to optimize monetization of their content and services. Both publishers and advertisers engage in multi-homing (i.e. use of more than one ad tech provider for the same function), facilitating comparisons and switching. This, in turn, has benefited consumers by funding highly innovative, free-of-charge technologies and online content and more personalized and relevant ads.”
A wide array of online sales channels enable businesses of any size to better reach consumers with products and services.
- A survey of 350 small and medium-sized businesses by International Data Corp. highlights that “81% of the firms selling on Amazon use more than one digital sales channel, and 90% consider Amazon an online sales channel, technology partner or business enabler.”
- eMarketer data shows that more than half (56%) of merchants on Amazon also sell on eBay, nearly half (47%) sell also on a personal website, and over one-third (35%) sell additionally on Walmart’s site. It is noteworthy that nearly a quarter also depend on brick-and-mortar stores for sales.
Search engines face increasing competition from vertical search providers, with shoppers benefiting from more search options. According to an August 2020 survey from ChannelAdvisor, less than 25% of Americans start product searches on search engines, instead preferring specialized providers and websites when planning to make a digital purchase.
3. Free access to technology services empowers small and local businesses to succeed.
Leading tech services have “opened up new markets and allowed small businesses to compete globally.” Jake Ward, President of Connected Commerce Council: “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.”
Many small businesses and entrepreneurs have realized growth potential via countless innovations in the technology sector, including artificial intelligence, inventory management software, customer interaction management platform, and essential small business tech tools like cloud-based file sharing and third-party online retail software. Philip Dawson, Managing Director at Lily Arkwright, a jewelry retailer: “We truly believe that investing in technology can bring about a meaningful and positive customer experience.”
Dismissing the important roles technology firms play in supporting small businesses is to weaken the digital safety net at the worst possible time. Connected Commerce Council: “In a pandemic, access to these tools forms a Digital Safety Net and is often the difference between staying in business and bankruptcy. By attacking Amazon, Facebook, Google and Apple, the Cicilline Report is aimed directly at the Digital Safety Net.”
4. Political weaponization of antitrust will produce less democratic, more partisan outcomes.
Politicization of antitrust laws injects further uncertainty and partisanship into antitrust enforcement. Joe Kennedy, Senior Fellow at the Information Technology and Innovation Foundation (ITIF): “A number of experts argue for stronger enforcement, especially against mergers. But even they agree that consumer welfare, broadly defined, should remain the focus of debate. In contrast, the neo-Brandeisian attack against bigness in all its forms would launch the government on an ill-defined mission to shape markets to its liking. The result would be a greater shift in antitrust enforcement whenever a new administration assumes power. This would invite more uncertainty and greater partisanship at a time when the nation clearly needs less of each.”
Abandoning the consumer welfare standard would lead to rising politicization of antitrust enforcement, thus taking power away from consumers.Dorsey, Manne, Rybnicek, Stout, and Wright, Regulatory Transparency Project: “The populist movement’s effort to shift the economic constraints on modern antitrust jurisprudence to more open-ended enforcement would expose antitrust law to increased politicization. If enforcers can call upon a large list of political justifications for their enforcement decisions, they will be able to pursue cases that best fit within a political agenda—which will necessarily change over time as political administrations change—rather than being forced consistently to focus upon the limited practices that are most injurious to consumers.”