Congress made a lousy case for breaking up Big Tech
Are Amazon, Apple, Facebook, and Google engaging in anticompetitive practices?
The long-awaited tech antitrust report that the US Congress released on October 6 presents a remarkably flimsy case for action against the nation’s most innovative and competitive companies.
The report’s main recommendations would do very little to solve real social problems caused by technology, like misinformation and election interference, because these problems aren’t related to competition. And by narrowing its focus to the technology sector, the House Antitrust Subcommittee missed an opportunity to look at parts of the economy—hospitals, insurance providers, food producers—where consolidation and competition are genuine concerns.
In the 451-page report (pdf), more than a year in the making, legislators attempted to answer a seemingly straightforward question: Are Amazon, Apple, Facebook, and Google engaging in anticompetitive practices that government agencies aren’t able to punish under current laws? And if so, what changes should Congress make?
While the report describes a few genuine cases of unfair conduct by the platforms, many of the “problems” it identifies are merely complaints from companies that have been outcompeted. But harming competitors to benefit consumers (by lowering prices, for example) is the very nature of competition.
Most important, the report does not contradict these key facts about the US tech industry: prices are falling, productivity is rising, new competitors are flourishing, employment is outperforming other sectors, and most Americans really like these companies.
Disappointingly, the much-ballyhooed document is riddled with factual errors. For example, it claims that “a decade into the future, 30% of the world’s gross economic output may lie with [Amazon, Apple, Facebook, and Google] and just a handful of others.” But the source for that statistic, a study by McKinsey, actually said that by 2025 (not 2030), revenues from all digital commerce (not just by the Big Four and a few others) might reach 30% of global revenues.
To put in perspective how misleading the report’s original claim was, consider that the combined annual revenue last year of Amazon, Apple, Facebook, and Google represented only about half a percent of global economic output. Such a blatant error is conceivable only in a piece of work that first assumed its conclusion (“Big Tech is taking over the world”) and worked backward from there. There are dozens of other examples like this.