In Wednesday’s antitrust hearing with the CEOs of Amazon, Apple, Facebook, and Google, questions from liberal members of Congress laid the groundwork for expanding the scope of U.S. antitrust law. Questions from the conservative members highlighted concerns about political bias in content moderation. Notably lacking from the political theater was the current U.S. standard for antitrust: consumer harm.
Consumer harms that would trigger antitrust action include reduced output, unusually high prices, or sluggish innovation. But all four of the companies featured Wednesday offer many services to users for free, innovate rapidly, and compete vigorously, often with each other. None of the tech giants in the hot seat meet the legal standard for monopoly market share in their respective strong suits (Amazon: 38 percent of U.S. e-commerce, Apple: 58 percent of U.S. smartphone operating systems, Google: 30 percent of digital ads, and Facebook: 23 percent of digital ads). The facts of the tech industry do not a traditional antirust case make.
But the agenda from the left is to expand and shift the focus of U.S. antitrust law to be more in line with the European Union’s antitrust laws. This explains Wednesday’s focus from Democrats on alleged harms to competitors, not consumers.
The questioning by committee chairman David Cicilline (D., R.I.) of Mark Zuckerburg about Facebook’s acquisition of Instagram implied that the world’s biggest social-media platform had gobbled up a small challenger to suppress competition. But when the U.S. antitrust standard of consumer harm is applied, the question becomes, so what if it did? Facebook’s superior resources and expertise took Instagram from a modest and glitchy app to one with a billion users as of 2018. Facebook’s know-how constantly improved the Instagram user experience, attended to technical compatibility issues, and innovated despite concerns it might alienate its incumbent users with the changes. Facebook took a risky bet on Instagram, Instagram’s owners were compensated to the tune of $1 billion, and more users than ever use and presumably enjoy an improved experience. Whatever Facebook’s motive was in acquiring Instagram, it’s clear that the consumer has not been harmed. The bottom line is that a billion consumers have benefited from Facebook’s purchase of Instagram.
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