Setting The Record Straight: Big Telecoms’ Attack On Leading Tech Services Is Self-Serving
Looking to capitalize on recent news coverage trends, several representatives of large telecommunications companies are dredging up debunked and outdated arguments against leading tech services in an effort to insulate their own industry from competition.
It’s clear why big telecoms companies harbor disdain for leading tech services – the over-the-top (OTT) model of content distribution better fits the needs of today’s consumers, and threatens telecoms companies’ half-century monopoly on media circulation.
Like other critics proposed antitrust arguments, the industry’s proposed solution – “platform neutrality” – misses the mark. As net neutrality advocate Marvin Ammori writes, “These platforms have very little in common with one another in terms of their market dynamics and characteristics. Devising ex ante rules for a grab bag of ‘platforms’ doesn’t make sense.”
More information is below.
“Platform Neutrality” Is A Frivolous Idea And Phrase Concocted By Big Telecoms Companies To Safeguard Their Own Interests
Net Neutrality Advocate Marvin Ammori Argues That Lumping A Myriad Of Services Together In The Name Of Platform Neutrality “Doesn’t Make Sense.” “The biggest problem with platform neutrality is that these platforms have very little in common with one another in terms of their market dynamics and characteristics. Devising ex ante rules for a grab bag of ‘platforms’ doesn’t make sense. Plus, the remedies proposed are very diverse, so platform neutrality is less a concept than a slogan.” (Marvin Ammori, “Failed Analogies: Net Neutrality Versus ‘Search’ And ‘Platform’ Neutrality,” SSRN, 3/30/16)
Project DisCo’s Ryan Heath: The Idea Of Platform Neutrality Is Being Rendered “Irrelevant” By Digital Innovation. “For Kallas, the invention of debates around ‘platform neutrality’ is ‘protectionism in disguise.’ She’s not wrong. The French and German governments have failed to make an adequate case about why certain digital companies need special regulation; they simply resort to alluring phrases and words like ‘neutrality.’ This tactic dresses up the favours they’d like to do for Europe’s non-existent search engine champion, but it doesn’t change the market reality. Digital innovations are continuing to integrate into the economy, meaning the idea of ‘platform neutrality’ is quickly moving from the category of ‘flimsy’ to ‘irrelevant.'” (Ryan Heath, “The Wrong Suspect: A Debate About Platform Neutrality Finds Little Evidence Of Consumer Harm,” Project DisCo, 3/16/15)
Executive Director Of The International Center For Law And Economics Geoffrey Manne: Platform And Search Neutrality Doctrines Threaten “To Chill Innovation And Efficiency-Enhancing Conduct.” “The set of claims that are adduced under the rubric of ‘search neutrality’ or the ‘essential facilities doctrine’ against Internet search engines in general and, as a practical matter, Google in particular, are deeply problematic. They risk encouraging courts and other decision makers to find antitrust violations where none actually exist, threatening to chill innovation and efficiency-enhancing conduct. In part for this reason, the essential facilities doctrine has been relegated by most antitrust experts to the dustbin of history.” (Geoffrey Manne, “The Problem Of Search Engines As Essential Facilities: An Economic & Legal Assessment,” SSRN, 1/25/11)
The Purpose Of Antitrust Law Is To Protect Consumers, Not Make Life Easier For Competitors
Acting FTC General Counsel Alden Abbott: “The Goal Of Antitrust Law Is To Maximize Consumer Welfare.” “For roughly 40 years now the federal courts, including the Supreme Court, have stressed that the goal of antitrust law is to maximize consumer welfare, meaning that efficient business practices that benefit consumers should not be condemned, though they may harm less-efficient rivals. Unless and until new judges are appointed, and current antitrust precedents are thrown out, antitrust prosecutions against entities based merely on their size—without regard to consumer welfare, efficiency, and harm to the competitive process—simply will not fly.” (Alden Abbott, “Antitrust And The Winner-Take-All Economy,” Heritage Foundation, 1/23/18)
Scholars J. Gregory Sidak And Robert Bork Say That Only Google’s Competitors Are Seeking To Use Antitrust Law To Protect Their Own Market Positions. “Given the serious factual, logical, and economic flaws in the antitrust complaints about Google’s practices, one can reasonably conclude only that Google’s competitors are seeking to use antitrust law to protect their own market positions. However, punishing Google for being a successful competitor would stifle innovation and dynamic competition. A ‘successful prosecution’ of Google for its search practices would necessitate regulation of search algorithms and product improvements, which would retard the current pace of innovation in Internet search that has created enormous gains in consumer welfare. The choice left for Google and all search providers would be either to innovate—and subsequently be subject to antitrust scrutiny once the innovation has achieved widespread adoption—or to avoid antitrust scrutiny by not innovating. Such use of antitrust law undermines its unequivocal purpose—to protect consumers.” (Robert H. Bork And J. Gregory Sidak, “What Does The Chicago School Teach About Internet Search And The Antitrust Treatment Of Google,” Journal Of Competition Law And Economics, 4/12)