Top 10 From 2020: The Best Of Competition And Tech Commentary
From defense against a misguided antitrust attack to continued innovation for consumers and businesses amid the unprecedented economic and health crisis, 2020 marks a year to remember for the technology industry. Through challenges and changes, many experts and organizations shared their wisdom on the topic of competition and technology. We’ve compiled ten of our favorite analyses, reports, and research — here are Springboard’s Top 10 commentary of 2020:
1. Advertising: Geoffrey Manne, Samuel Bowman, and Eric Fruits wrote that competition and innovation in the digital advertising market drive down prices, benefiting advertisers, website and app publishers, and consumers. “The rising spending in the face of falling prices indicates the number of ads bought and sold increased by approximately 27% a year. Since 2000, advertising spending has been falling as a share of GDP, with online advertising growing as a share of that. The combination of increasing quantity, decreasing cost, and increasing total revenues are consistent with a growing and increasingly competitive market.”
2. Myth-Busters: Alec Stapp, Director at Progressive Policy Institute, presented a list of 10 myths about Big Tech and antitrust in response to a proliferation of misguided proposals to enhance government interference in the tech sector, largely based on a hollow presumption that big is bad. This article is a must-read, showing how innovative tech services are successful at creating “some of the best products in the market and are more efficient at delivering what consumers want than their competitors.”
3. We ❤️ Tech: Technology sector harbors some of the most loved brands in 2020. According to Morning Consult, five technology brands, including Google, Amazon, Amazon Prime, Netflix, and YouTube, are among the top 10 Most Loved brands in 2020, based on performance across four metrics: favorability, trust, community impact, and net promoter score.
4. Consumer Welfare Standard: Elyse Dorsey, Counsel at the DOJ’s Antitrust Division, published a paper refuting the neo-Brandeisians’ misguided attempts to abandon the consumer welfare standard. “The consumer welfare standard focuses on understanding how firms compete—and it is robust enough to contemplate the numerous margins along which they might do so. Cases today routinely consider how the conduct at issue affected prices, output, quality, services, innovation, and more.”
5. Pro-Competition, Not Pro-Competitors: John M. Yun, Director at the Global Antitrust Institute, published a paper arguing that the ultimate arbiter of anticompetitive theory of harm is the impact on consumers and should not be overshadowed by a laser focus on competitors. “Some caution must be exercised in overly focusing on the notion that rivals are harmed from a certain business practice—as the claim that harm to rivals, in of itself, constitutes harm to the competitive process is one that was long ago—and properly—discarded by antitrust jurisprudence. Firms in a free market do not possess a ‘right’ to make sales at prices they might wish to charge. It is not overstating things to say that policies favoring competitors over competition turn antitrust policy on its head, and impede, rather than protect, the competitive process.”
6. Misguided Breakup: Aurelien Portuese, Director at the Information Technology and Innovation Foundation, warns that the wholesale breakup of tech companies could unintentionally harm consumers. “Breakups may eventually yield much greater costs to consumers and to overall innovation than the expected rivals’ benefits to be generated with short-lived spinoff companies. For sure, breakups of these companies may always generate massive media coverage, popular support—especially when announced two weeks before a historical presidential election. Political tactics force decisions to be rushed out with little gains for consumers or democracy but with great self-inflicted pains imposed on innovation and the quality of regulatory decision-making processes.”
7. Small Business And The Digital Safety Net: The Connected Commerce Council published a research report showcasing the resilience of small and medium-sized businesses (SMBs) supported by a digital safety net during the catastrophic COVID-19 pandemic:
— 72% of SMBs increased their use of digital tools during COVID-19, which increased revenue projections by 4X.
— SMBs in some industries like retail showed relatively high digital preparedness during COVID-19.
— States with a high share of digital utilization showed stronger overall SMB revenue.
8. Search Defaults: Jay Ezrielev of the Competition Policy International released a paper highlighting how the process to secure search defaults leads to more competition and more pro-consumer search innovation. “The efficient allocation of a resource is one that generates the greatest value from its use. For the choice of a default search engine, this value reflects the value to consumers of having their preferred search engine set as default, as well as the value to search engines from gaining additional scale, which the search engines can use to improve their products and services.”
9. Multichannel Retail: Benedict Evans highlighted how multichannel shopping has penetrated the retail market in 2020, boosting competition:
— A large amount of digital adoption in the retail market drove online sales volumes forward by 35% in Q2 and Q3 of 2020.
— Roughly half of online sales now come from physical retailers’ online stores, proving that consumers and businesses adopted new shopping habits and strategies in 2020.
10. Innovation Leadership: Jan Rybnicek, Senior Fellow at the Global Antitrust Institute, released a paper on how the U.S. fosters a healthy culture and regulatory environment for innovators and entrepreneurs to compete. “Across a wide range of metrics, the United States is better at helping entrepreneurs develop the most innovative global companies through access to venture capital funding and by protecting competition that encourages even the most successful firms to continue to innovate in order to stay ahead of rivals that wish to overtake them.”