Published February 2018
On this episode of the in_beta podcast, Global Partners Digital’s Charles Bradley asks Public Knowledge President Gene Kimmelman the question, “should the tech giants of Silicon Valley be broken up?” You can read the full transcript of the podcast here, but here are some highlights: Big tech platforms are growing, and we’re seeing signs of dominance — Google in search, Facebook in social, Amazon in product delivery. When it comes to antitrust analyses, the big tech companies need to be scrutinized carefully. What about them is causing a harm? What is that harm? How does it relate to the fundamental economics of what those companies are doing, and what the tech platforms are doing? Is it the natural outgrowth of the economic forces, or is it some nefarious behavior? Once we’ve defined a harm that we want to address, like protection of personal data for our own privacy or protection against domination and controlling viewpoints or controlling markets, we can then decide what tool will truly address this harm. We want to make sure we are solving the problem in a sustainable way. For example, if we broke Google into three search companies, what would happen? Would you see new innovations from one versus the other? Would one be competing against the other? Would you have a problem with an oil company buying one of them, or would you have a problem with a major bank buying one of them, or with Walmart buying one of them? Would you be comfortable if Apple bought a third of Google search or a telecom company bought a third of Google search? There are many possibilities. We need to make sure the remedy we chose will really accomplish our goal. Sometimes the breakup tool is not the correct tool if it runs counter to the underlying economics of what drove dominance. When we see something that we find problematic and illogical for consumers — like why isn’t a company interconnecting certain services or why can’t consumers use the same device on different kinds of services — discussions often turn immediately to antitrust. In reality, a lot of the problems may be better addressed by other policy tools, like opening up APIs, interconnecting to differing platforms, making equipment operable across multiple platforms, or not allowing totally closed-down networks. These may be better policy initiatives that can truly address specific problems, as opposed to some generic antitrust “just break up companies.” It is essential to consider the fundamental underlying economics that are pushing a market a certain way. Someone who is just focusing on antitrust and thinking it will solve all the problems might miss the best policy solution for supporting democracy, equity, and competition. There is a wide-ranging regulatory set of tools that can preserve our goals for consumers, innovation, choice, and freedom of expression. We are continuing to explore this salient issue and will update this page as our work progresses. Here is a list of continued reading on the topic, which we will continue to update: Charles Duhigg, The Case Against Google, The New York Times Magazine How to tame the tech titans, The Economist Caroline Holland, Taking on Big Tech Through Merger Enforcement Lina M. Khan, The Supreme Court Case That Could Give Tech Giants More Power, The New York Times Jonathan B. Baker and Fiona Scott Morton, Platform MFNs and Antitrust Enforcement, Yale Law Journal Terrell McSweeny, American Consumers Need a Champion, The Hill Herbert Hovenkamp and Fiona Scott Morton, Horizontal Shareholding and Antitrust Enforcement Eduardo Porter, Big Profits Drove a Stock Boom. Did the Economy Pay a Price?, The New York Times Steven C. Salop, Invigorating Vertical Merger Enforcement, Yale Law Journal Carl Shapiro, Antitrust in a Time of Populism Herbert Hovenkamp and Carl Shapiro, Horizontal Mergers, Market Structure, and Burdens of Proof, Yale Law Journal A. Douglas Melamed and Carl Shapiro, Antitrust and Effective FRAND Commitments George Soros, Only the EU Can Break Facebook and Google’s Dominance, The Guardian George Soros, Remarks Delivered at the World Economic Forum C. Scott Hemphill and Philip J. Weiser, Bringing Reality to the Law of Predation, Yale Law Journal If Then podcast episode, “Welcome to the Swamp,” featuring Gene Kimmelman Unlocking Antitrust Enforcement collection, Yale Law Journal Antitrust Alone Won’t Save Us From the “Curse of Bigness”, Gene Kimmelman and Charlotte Slaiman Public Knowledge’s Decoding Antitrust Law: A Primer for Advocates, Charlotte Slaiman CSPAN’s The Communicators With Carl Szabo and Gene Kimmelman