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NEWSFLASH: Misguided Anti-Tech Bills “Threaten Incentives For Competition And Innovation”

In a recent paper, legal professor and economist Erik Hovenkamp found that recent anti-tech proposals “would threaten incentives for competition and innovation.” Here are the highlights:

Self-preferencing is “ubiquitous, and not only in concentrated markets.” “To begin, it is worth noting that mild self-preferencing is in fact ubiquitous, and not only in concentrated markets. Whenever a firm offers two complementary goods or services, it will have an incentive to encourage customers of one to consider using the other as well. A grocery store might give the most visible shelf space to its own private label goods. A cable network might use the most desirable advertising slots to run ads for its own programming. And a hotel brochure might list the hotel’s own restaurant above those of local competitors.” 

The bill is untethered to anticompetitive conduct. “The core problem is that the proposals simply do not make a serious effort to limit antitrust scrutiny to cases involving anticompetitive conduct. Indeed, in many instances they do not impose any affirmative obligation on the plaintiff to prove anticompetitive effects. This is exacerbated by the fact that the violations articulated by the proposals are generally vague and broad in scope.”

The bill’s “uncertain scope” would “threaten incentives for competition and innovation.” “The high costs of antitrust litigation—and the uncertain scope of antitrust liability under the proposed reforms—would threaten incentives for competition and innovation. They may discourage platforms from introducing desirable new products based on the fear that competing sellers could then sue for any perceived slight. Indeed, no matter what an integrated platform does, there will almost always be some rival who can claim to be a victim of unequal treatment.”

AntitrustChoice and CompetitionConsumer WelfareinnovationSelf-Preferencing

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Hostility to innovation and technology diminishes the incredible Internet-enabled opportunities that leading tech services provide: empowering consumers, driving prices down and increasing choice, and providing platforms to help entrepreneurs grow their businesses. It has given us a golden era of entertainment, knowledge, and everything from fashion startups, to booming mom and pop stores, to the latest app.

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