Misguided Antitrust Legislation Against Big Tech Will Only Harm Consumers

There is few evidence to suggest that Big Tech is a threat to economic growth, much less democracy.

The Department of Justice (DOJ) has added its voice to those asking for antitrust enforcement against "Big Tech" businesses like as Google, Meta, and Amazon. Acting Assistant Attorney General Peter S. Hyun indicated support for a House antitrust bill and its Senate companion in a letter to senior members of the Senate Committee on the Judiciary, citing worries about Big Tech's threat to democracy. Nevertheless, this threat is far from established, and even if it were, it is unclear how antitrust enforcement would make Big Tech more democratic.

The bills would put a slew of requirements on the world's largest web platforms, including Amazon and Google. Amazon and Google would be forbidden from "self preferencing" their items on their own platforms under the legislation mentioned by the DOJ unless they can demonstrate that such self preferencing is a core functionality or is important for security and privacy. As a result, consumer-friendly services and products would suffer a chilling effect. According to the DOJ, such reforms would help lessen Big Tech's threat to democracy.

What are the threats to democracy identified by the DOJ? According to Hyun's letter, Big Tech threatens to undermine America's economic development and prosperity, endangering democracy in the process. This assertion is debatable.

The DOJ letter offers a bleak picture of the current state of affairs, with a small number of big West Coast firms limiting competition and expanding their market share, jeopardizing the country's economic prosperity. Fortunately, the current state of affairs is far from as bad as the DOJ believes.

Numerous Big Tech businesses have dominated popular perceptions of disputes about internet commerce and speech. Google has joined the ranks of brands such as Xerox, Velcro, and Taser as a verb. Although the verb "to Facebook" has not yet entered the vernacular, Facebook remains the world's most popular social networking platform. Google, Facebook, and a slew of other Big Tech giants have come under fire for their acquisitions of smaller companies. Perhaps the most noteworthy instances are Facebook's acquisitions of WhatsApp and Instagram, as well as Google's acquisition of YouTube.

Rather than demonstrating monopolistic corporations consolidating their market dominance, these acquisitions demonstrate the breadth of markets in which Big Tech firms compete. Facebook, Google, Amazon, and Microsoft all make these acquisitions in order to compete. These companies compete fiercely in marketplaces for instant messaging apps, live streaming services, e-commerce platforms, video conferencing, and smart speakers, among others. Although offered as proof of monopolies arbitrarily selecting market winners and losers, the current state of affairs is one of healthy competition and innovation, and there is scant evidence that Big Tech mergers hurt consumer welfare, the antitrust enforcement standard.

Users gravitate toward Big Tech businesses not because they are the only options, but because they enjoy the products offered by Big Tech. Google, Facebook, and Amazon are not the only companies that provide online search engines, social media platforms, and ecommerce. These companies' acquisitions of smaller businesses have not resulted in anti-competitive pricing or product quality reductions.

Despite this, the DOJ's letter asserts that if Big Tech is left to its own ways, democracy would suffer. This is consistent with the concerns expressed by the "neo Brandeisian" movement, which is called after Supreme Court Justice Louis Brandeis. According to Brandeis and his disciples, firms with the size and power of those in the Big Tech club endanger democracy by controlling critical civic institutions.

However, history demonstrates that market dominance does not imply long-term economic monopoly power, let alone political authority. Indeed, if Google and Meta were the dominating actors in American politics, it is unlikely that politicians would have introduced the antitrust laws Hyun mentions. Today's neo Brandeisians are concerned about market concentration and are unwilling to argue that market dominance is earned by the provision of high-quality products. They are unconcerned about the concentration of power created by an emboldened DOJ and Federal Trade Commission aiming to break up or eliminate enterprises that provide popular goods and services.

Across the political spectrum, legislators and activists have raised worry about Big Tech's impact on democracy, notably on political speech and information access. There are also concerns about what Harvard professor Shoshana Zuboff refers to as "surveillance capitalism," an imprecise term that broadly refers to the business structures and practices used by Google, Facebook, and other Big Tech businesses to collect data about their customers and make money.

True, the leading social media platforms can be used to spread propaganda, disinformation, and radical political content. However, how antitrust enforcement might lessen the dangers connected with this content is unknown. Indeed, separating Instagram, WhatsApp, and Facebook would very certainly impede effective content moderation, given the fixed costs associated with investing in systems for screening out bad information.

For those pursuing antitrust enforcement, so-called "surveillance capitalism" creates significant concerns. Numerous large technology companies are popular as a result of the amount of data they collect about its users. While some may find Amazon's recommended purchases, YouTube's suggested films, and other tailored advertisements disconcerting, such issues are better addressed through privacy laws than through antitrust action.

There is few evidence to suggest that Big Tech is a threat to economic growth, much less democracy. Those motivated by such concerns should refrain from proposing laws that, if implemented, would harm some of America's most famous and successful businesses, as well as their customers.

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