The 21st century has seen the rise of technology companies that dominate their industry and our society like few corporate entities in America ever have. The combined market capitalization of Apple, Google, Facebook, and Amazon is $3.02 trillion, which is a 12% share of the S&P 500 and larger than the GDP of France.
Several 2020 presidential candidates have been vocal about their desire to take on big tech companies — particularly as it relates to their impact on competition — but there isn’t much agreement as to how.
In a paper The New Center released today, “Taking on Big Tech: Promoting Competition,” we suggest a few ideas that leaders from both parties should be able to rally around to ensure the growing influence of Google, Amazon, and other large firms doesn’t harm the innovation and competition so essential to our thriving technology sector.
Reevaluating the effectiveness of the consumer welfare standard
Since the 1980s, American antitrust action has largely adhered to the ‘consumer welfare standard’, a theory discouraging intervention against monopolistic practices so long as consumers are getting low prices. This approach has enabled some large tech companies to use anticompetitive business practices like vertical integration and predatory pricing to gain unfair advantages over their rivals. Its status as the prevalent theory of antitrust enforcement should be reconsidered.
Updating the antitrust code for the twenty first century
The major U.S. laws governing competition are over one hundred years old, and aren’t updated for the new market structures of e-commerce. We need new laws that address competition issues in the 21st century economy.
Increasing the enforcement capabilities of the Federal Trade Commission
The Federal Trade Commission currently takes over five years to issue a new trade rule under its cumbersome procedural guidelines that date to the 1970’s. Congress should grant the FTC full rulemaking authority under the Administrative Procedure Act, so the commission can actually outlaw bad practices in competition, rather than slowly prosecuting after the fact on a case-by-case basis.
Proceeding with caution in changing intermediary liability laws
Congress is taking an interest in whether big tech companies are using Section 230 of the 1996 Communications Decency Act to avoid accountability for the content on their platforms. However, they must be careful; the wrong changes to intermediary liability law could unfairly impact smaller platforms without the resources to handle increased legal exposure for the content on their sites.
The full “Take on Big Tech: Promoting Competition” paper is available for download here.