You are here

Tech Antitrust Hearing as Political Theater

Large, innovative tech companies have been invaluable during the COVID-19 crisis, helping to ease the burden of millions of Americans and businesses under quarantine. But that won’t stop the House Antitrust Subcommittee from dragging the CEOs of Apple, Amazon, Facebook, and Google before it today. The investigation on Capitol Hill, and those by the Department of Justice (DOJ), the Federal Trade Commission (FTC), and most state attorneys general into all of these companies will have a difficult time meeting the U.S. standard for antitrust: consumer harm.

Take accusations against Google, for instance. The firm has long come under fire for favoring its own products in search results, an accusation the company denies. But, so what if it did decide to promote YouTube or Google Maps through search? Setting its algorithm to produce the results it wants is the company’s prerogative, since its search engine is its private property. Google is responsible for being profitable to its shareholders—to the benefit of everyone using its products free of charge—not running a search engine charity for its competitors.

And if Google did put self-promotion ahead of consumer satisfaction, users would likely trot off to another search engine, such as Bing or DuckDuckGo. Google has every incentive to provide the best search results to its users, lest fewer eyeballs spend time “googling.” Over the years, Google had numerous search competitors (Yahoo, Hummingbird) and surpassed them by providing consumers with regular Improvements, like spam control, enhanced security, and local results. Consumers searching for free and Google continuing to innovate. That doesn’t look like a monopolized marketplace.

Antitrust concerns around Google’s extremely successful online advertising businesses may also come up at the hearing. This line of investigation highlights one of the classic problems with antitrust regulation: relevant market fallacy. In reality, the advertising market is vast, spanning across numerous media, making it highly competitive. Print newspapers, television, radio, and bus benches all compete with online advertising. But antitrust regulators will choose to zoom in on a much narrower view. If you tighten the lens enough, you can get the numbers to show a million little specific monopolies in any sector of the economy.

Even putting that aside, a 2019 study of the online advertising industry showed Amazon nipping at Google’s heels. The paper surveyed 155 digital publishers and found that the average publisher (website) used six supply-side platforms (software used to sell advertising in an automated way) and that the average advertiser used nearly four demand-side platforms (how marketers buy ad impressions from exchanges). Google is a big player in those markets, but obviously not the only game in town if there is an average of three other competitors in every transaction. Those numbers don’t suggest Google is a monopolist.

The specifics of antitrust arguments against the other big tech firms are equally unconvincing. So why the push to regulate or even break up “big tech?” All the typical answers apply here. Members of Congress and state attorneys general think they can make political gains. Regulators at the DOJ and the FTC see career gains in bringing a high-profile antitrust case with their name attached. And, of course, there are always plenty of business competitors to urge them all on in the political persecution of market leaders.

But the U.S. standard for antitrust law is consumer harm. Politicians and regulators would be wise to put the interest of consumers first. A fragile economy and a lingering health crisis are especially bad times to put personal ambition ahead of economic resiliency and citizen’s interests. Surely, politicians can find a better use of their time than harassing the companies that have helped so many Americans make 2020 a little more bearable.