A new House Judiciary Committee report on competition in the technology industry starts from the premise that everything Amazon, Apple, Facebook, and Google do is unscrupulous, and then works its way backward with anecdotes, distortions of long-accepted business practices, and sometimes unattributed numbers. But the biggest threat the report poses is its recommendation to rewrite U.S. antitrust law and abandon the consumer-welfare standard. A change that abandons the primacy of consumer welfare threatens to harm consumers instead.
A traditional case against these tech giants is hard to prove: Innovation is the norm, costs are falling if not already at zero, and Americans have benefited from these firm’s products — especially during the COVID pandemic. It’s hard to imagine being quarantined at home or trying to keep a business afloat without the services of Amazon’s online shopping, Facebook’s facilitation of communicating curbside pick-up options, Google’s maps for home deliveries, and Apple’s devices to enable it all. Consumer welfare abounds.
That’s due in large part to intense competition. Google has Amazon nipping at its advertising revenue heels. Amazon is watching Walmart, the nation’s largest retailer, roll out a same-day home-delivery service. Apple competes with Google’s Android operating system and Google’s app store, Google Play. Facebook competes with Google and Amazon for online advertising dollars and against other social-media platforms, like Twitter, Google’s YouTube, TikTok (for now), Pinterest, and Snapchat for eyeballs.
By conventional metrics, the tech industry has been an unqualified boon to the U.S. Hence the report’s advocacy for rewriting U.S. antitrust law to expand its regulatory reach, irrespective of consumer welfare.
The lack of evident market failure in the tech sector makes the proposed remedies even more absurd. The report’s suggested restrictions on mergers and acquisitions would take away an incentive for entrepreneurs to start new businesses, because plenty of brilliant innovators would like to cash out at some point. This is piled on top of current financial regulations that already make IPOs increasingly costly and difficult. Broadly, the report recommends growing regulatory power and increasing bureaucratic funding. Heavily regulated industries are ipso facto less innovative, so more regulation is the last thing the sputtering U.S. economy needs right now.
Read the full article at National Review.