As the debate on major technology and antitrust has intensified over the past year, there is now certainty.
On the one hand there are those who believe that companies like Amazon, Apple, Facebook and Google are monopolies that dominate certain markets, such as search, social media, e-commerce and application stores. They believe that mergers between companies like Facebook and Instagram have reduced competition. And they are sure that the antitrust laws are calcified, unable to adapt to new technologies. As stated in a recent report by Parliament’s Judiciary Committee, companies that once went bankrupt have evolved into the kind of monopolies we last saw in the days of the oil barons and railway warehouses.
On the other side of the debate are those who are convinced that competition is flourishing in the technology industry, where innovation makes it possible to produce large products at ever lower prices and where companies like TikTok and Snap are starting to challenge incumbents. They are convinced that the mergers have benefited consumers. And they think we don’t need to revise the antitrust doctrine because it’s flexible enough to evolve with technology.
In this debate, I have defended my own beliefs. When I worked on Facebook, I never felt that we could afford to be complacent. We face real competitive threats. If I would appear at a meeting and announce that Facebook is not competing with Google, Apple or TikTok, I would be laughed at. And I could see that Facebook was investing in the development of new features for the acquisitions of Instagram and WhatsApp and the improvement of the security, safety and infrastructure of both products. Therefore, it is difficult for me to reconcile my experience in the technology sector with the antitrust arguments that are now being put forward.
But if the November elections have taught us anything, it is that our assumptions are often wrong. Polls that predict a blue wave that never came true, predictions that seemed certain before the election now seem unconvincing after the election.
This uncertainty is staggering, but I think it could lead to a victory for cartel politics. If Republicans retain their majority in the Senate after Georgia’s run-off elections in January, many on the left will be disappointed that the division of government will make the comprehensive antitrust reform less likely, while many on the right will withdraw in the face of excessive regulatory intrusion by the Biden administration. But the mixed election results could force us to take a more conscious path that could lead to more effective policies.
Despite the strong rhetoric of the antitrust debate, there’s still a lot we don’t know. A good example is TikTok. While many have argued that technological products should provide more privacy, better content and more humane decision making instead of standard algorithms, TikTok has become a strong competitor, despite the fact that it uses standard public exchange, is full of obscene content and relies almost exclusively on algorithmic recommendations. The emergence of TikTok suggests that prejudices about technology products may not match user preferences.
So how can we develop an antitrust policy agenda that takes this uncertainty into account?
Tackling knowledge gaps
One way to move forward is to focus on learning. If policymakers are realistic about what they don’t know, they should pursue an antitrust agenda aimed at filling these gaps and investigating which policies work and why. Advocating this kind of regulatory curiosity is not a call to inaction. Curiosity requires an active government where politicians implement an aggressive programme to learn quickly and effectively.
First, policy makers should facilitate the sharing of data between platforms and researchers studying the dynamics of competition in the technology sector. The current system does not work. Academics regularly criticise platforms that restrict access to data, while platforms take great risks when sharing data, even with academics.
To facilitate data sharing, policymakers should enact legislation that provides a safe harbor for companies that share data in accordance with best practices on privacy protection. In addition, platforms should disclose data that help to assess the effectiveness of existing antitrust law, such as B. regular reporting on the results of mergers, e.g.
Senator Amy Klobuchar
(D., Minn.) proposed.
Twitter CEO Jack Dorsey testified remotely during a Senate hearing in September.
greg nash/epa/pole/block/hatch stock
Secondly, policy makers should start experimenting. Other governments have used the regulatory sandboxes to test new policy frameworks that support future product and policy development. Other industries, from sports to medicine, have also used experiments to develop better products and interventions. Sport has benefited from experiments with new rules in developmental competitions, and medicine uses clinical trials to gather information on effectiveness and risks.
In the area of antitrust law, experience can help us better understand the impact of policies on competitiveness. An example is the transferability of data, i.e. the possibility to transfer data from one department to another. Portability is supported by industry and a bipartite group of legislators, including the representative of the President of the United States.
(R., Colo.) and Sen.
(D., Va.) However, the impact of transferability on competitiveness remains uncertain. While greater portability could make it easier for existing platforms to switch to smaller ones, it could instead anchor larger platforms by giving them access to user data when competing companies start, and it could endanger privacy when individuals move data to less secure services. With so many unknowns, a regulatory sandpit on portability will enable us to know which measures work best.
Finally, a curious antitrust program could use lawsuits to fill gaps in our understanding. We usually associate disputes with security rather than curiosity: The government will sue if it thinks it can win. For fear of prosecution, the Ministry of Justice brought only one monopoly case between 2011 and 2019. Consequently, technical antitrust jurisprudence is still largely based on the Microsoft case, which was decided when software was distributed on CD-ROMs and dial-up modems were widely available.
The Center for Democracy and Technology recently told me that the modernization of antitrust laws could force government institutions to bring more cases to court even though victory is not guaranteed. In October, the Ministry of Justice filed a lawsuit against Google, and last week the Federal Trade Commission and state attorneys general filed a lawsuit against Facebook – this trend seems to be changing.
Share your ideas
What do you think should be done about the regulation of large technology companies? Share your experience below.
This change can be an important part of the regulatory curiosity about anti-corruption, as rigorous litigation on both sides, intensive economic analysis and judicial oversight can help us all gather information that will determine our understanding of the technology sector, whichever side is the winner. Which products compete with each other? How do you measure quality? Is the price in the app store fair? What is the difference between purchases that benefit the user and purchases that limit the choice?
Of course, litigation has considerable drawbacks. It is an inefficient, costly and slow learning process for which each party has to devote enormous resources over several years. For many technology companies, the shift from product development to process support will have a significant impact on the pace of innovation. In addition, the members of the jury may not have sufficient technical knowledge to assess complex products, such as B for example. Advertising technology or improvements to the post-dimensional advertising infrastructure.
These fears are real and the costs are tangible. However, it may be useful to wear it if we want to better understand the competitiveness of the technology sector and the adequacy of current antitrust legislation.
After an election that challenges certainties, we need to adopt an antitrust policy agenda based on curiosity. We still have a lot to learn.
Key dates in 2020
– 11. February: The Federal Trade Commission (FTC) requires large technology companies to provide details of their acquisitions of new businesses over the past decade to determine whether these transactions have harmed competition.
– 20. October: The Ministry of Justice has initiated antitrust proceedings against Google, accusing it of using anti-competitive tactics to maintain a monopoly on its search engine and related advertising activities.
– 29. October: Technology giants such as Amazon, Facebook and Google report strong quarterly sales and profits as the pandemic boosts demand.
– 10. November: The EU accuses Amazon of violating competition law. The company claims that it uses non-public data it collects from third party suppliers to compete unfairly with them.
– 9. December: The FTC and 46 states sued Facebook and accused the company of buying and freezing small startups to stifle competition. The Federal Court seeks to nullify the takeovers of Instagram and WhatsApp by Facebook.
Government and technology leaders want to rewrite the law that governs the Internet. The WSJ explains what section 230 is, how it has shaped the modern Internet and what legislators and technology leaders want to change. Photographic illustration: Carlos Waters/WSJ
Dr. Perot is director of Duke University’s Center for Science and Technology Policy and assistant professor at Duke University’s Sanford School of Public Policy. He used to be Director of Public Policy at Facebook. You can contact him via [email protected].
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