On Balance, We’re All Better Off With Big Tech and Big Telecom During a Crisis

Thanks to the novel Coronavirus, the U.S. economy has come to an unprecedented halt and the country’s death toll stands at more than 20,000. Amid the suffering, a few bright spots in commerce have emerged, much to the benefit of American consumers. So, naturally, the federal government continues to devote its time and energy to threatening those same industries.

The telecommunications and technology industry’s ability to increase communications and entertainment has allowed countless people to work and amuse themselves and their families from the safety of their homes. E-commerce alternatives have helped many small businesses stay afloat. And mobile capabilities provide deliveries that are safer than in-store visits. Perhaps our mobile phones will even bring forthcoming innovations in tracking the virus and preventing its spread.

The public sector response to all of these silver linings is depressing for those of us who value the market’s effective ways of solving problems and fear the well-intentioned, but often unsuccessful meddling of government regulation. The Department of Justice recently doubled down on its antitrust investigation into Google’s proposed purchase of exercise tracking device company, Fitbit. In an effort to craft new case law out of thin air, the Attorney General has hinted at using privacy and data concerns as the equivalent of consumer harm, which is traditionally understood to include only higher prices and less output.

My colleague, Patrick Hedger, has written here about distorting private investment in broadband with yet more government subsidy spending. Amazon has been criticized for worker conditions, for allowing price gouging, and, perhaps most remarkably after years of criticism for its size, scope and success, denounced for being not successful enough. An announcement from Google and Apple about teaming up to offer alerts to users when they come into contact with someone who has tested positive for COVID-19 has sent privacy advocates into a state of apoplectic policy shock. Maybe with good reason, but maybe not.

These are unprecedented circumstances and some of the controversial situations mentioned above are similarly unique. With the exceptional strain of a public health emergency, we find ourselves at the economic frontier of new procedures, new services, and extraordinary conditions for commerce. The costs and benefits of these developments deserve scrutiny (Lord knows we’ll debate much of them on the pages of this blog), but these questions are better answered in a diffused way by consumers in the marketplace. Whenever possible, top-down government dictates should be avoided. That won’t always be doable in these strange times, but it’s a true north to keep in mind.