It’s so fash­ion­able to love to hate Big Tech

Pittsburgh Post-Gazette - - Business - Ge­orge F. Will is a colum­nist for The Wash­ing­ton Post.

Amer­ica has more dif­fuse anger than there are suit­able ob­jects at which to di­rect it, so some mem­bers of Congress are de­mo­niz­ing large tech com­pa­nies. This, while pan­demic-con­fined Amer­i­cans are or­der­ing even more stuff from Ama­zon and Googling even more than usual.

When in July a House com­mit­tee in­ter­ro­gated the Ama­zon, Ap­ple, Face­book and Google CEOs, the im­por­tant ques­tion was whether any or all of these com­pa­nies, with their com­bined mar­ket value of al­most $ 5 tril­lion, are mo­nop­o­lies mer­it­ing an­titrust en­force­ment. Some his­tory and data are per­ti­nent.

Alec Stapp, di­rec­tor of tech­nol­ogy pol­icy at the Pro­gres­sive Pol­icy In­sti­tute, notes that Jus­tice Depart­ment guide­lines say a com­pany mo­nop­o­lizes a mar­ket when it has main­tained “for a sig­nif­i­cant pe­riod” and is un­likely to lose “in the near fu­ture” a mar­ket share “in ex­cess of twothirds.” Ama­zon’s share of the U. S. e- com­merce mar­ket ( broadly de­fined to in­clude third- party sales on Ama­zon Mar­ket­place) is 38%. Ap­ple has 58% of the U. S. smart­phone op­er­at­ing sys­tem mar­ket.

An­other Jus­tice guide­line says an­titrust en­force­ment must be against monopoly power that, in­ter alia, harms con­sumers by mak­ing prices higher than they would be in a com­pet­i­tive mar­ket. Mr. Stapp says that in the past decade the price of dig­i­tal ad­ver­tis­ing has de­clined more than 40% ( while the price of print ad­ver­tis­ing has in­creased 5%), and the price of books has fallen more than 40% since Ama­zon, which be­gan in 1994 as an on­line book­seller, went pub­lic in 1997.

Warn­ing against “monopoly fa­tal­ism,” the Cato In­sti­tute’s Ryan Bourne says: Time was, the A& P gro­cery chain was the en­trenched “Ama­zon of its day,” with al­most 15,000 stores by 1935. Seen one re­cently? Be­tween 1976 and 1978, the gov­ern­ment wor­ried that IBM might have a monopoly on the “of­fice type­writer in­dus­try.” A Novem­ber 2007 Forbes cover story asked, “One Bil­lion Cus­tomers — Can Any­one Catch the Cell Phone King?” Ap­ple? No, Nokia. But Ap­ple’s iPhone had ar­rived in June 2007. Bourne says Ko­dak’s do­mes­tic po­si­tion in pho­tog­ra­phy once “was even more dom­i­nant than Ap­ple’s po­si­tion in the mo­bile ven­dor mar­ket to­day.” “Who Will Break iTunes’ Monopoly?” asked a 2010 Bri­tish head­line.

Fifty years ago, Xerox’s al­most 100% of the pho­to­copier mar­ket aroused an­titrust com­plaints. Twenty- five years ago, the browser for about 90% of in­ter­net users was the Netscape Nav­i­ga­tor. In 1997, the year Google was founded, Ya­hoo dom­i­nated the search en­gine mar­ket. Twenty years ago, AOL had an es­ti­mated 90% of the in­stant mes­sag­ing mar­ket.

Econ­o­mist Ver­non Smith, a No­bel lau­re­ate, told Cafe Hayek: “Ev­ery­thing they say about Ama­zon was be­ing said about IBM in the 1970s- 80s. No one could dis­lodge them from the monopoly power of their op­er­at­ing sys­tem; all their clients were locked in. Then came Mi­crosoft ...”

In 1978, when Gen­eral Mo­tors had 46% of the do­mes­tic auto mar­ket, John Ken­neth Gal­braith, Har­vard econ­o­mist and pro­gres­sive sa­vant, said that other man­u­fac­tur­ers would not chal­lenge GM: “Ev­ery­one knows that the sur­vivor of such a con­test would not be the ag­gres­sor but Gen­eral Mo­tors.” In 2019, post- bank­ruptcy GM’s mar­ket share was un­der 17%.

Con­cern­ing Face­book, why worry about a com­pany that, how­ever large, pro­vides ser­vices that, how­ever pop­u­lar, are — un­like, say, food, trans­porta­tion or en­ergy — en­tirely op­tional. Face­book en­tered the hu­man story in 2004. How much can it mat­ter? Ad­ver­tis­ers on Face­book, which has 23% of the U. S. dig­i­tal ad­ver­tis­ing mar­ket, have al­ter­na­tive ways to reach cus­tomers — e. g., Google, which has 29%, an ex­am­ple of com­pe­ti­tion be­tween sup­posed mo­nop­o­lies.

Pro­gres­sives might for­mu­late an an­titrust the­ory to jus­tify reg­u­lat­ing or dis­mem­ber­ing big tech­nol­ogy com­pa­nies. Al­though Mr. Stapp of PPI is ad­mirably em­pir­i­cal, other pro­gres­sives want to sever an­titrust from a fo­cus on con­sumer wel­fare in or­der to ad­vance pro­gres­sivism’s peren­nial goal of sub­ject­ing an ev­er­larger por­tion of so­ci­ety to gov­ern­ment’s di­rec­tion.

Congress, how­ever, should look for vil­lains else­where than among the tech giants. Re­cent sur­veys showed that 91% and 90% of Amer­i­cans have fa­vor­able opin­ions of Ama­zon and Google, re­spec­tively, and those com­pa­nies ranked sec­ond and third in pub­lic ad­mi­ra­tion ( be­hind the mil­i­tary) on a list of 20 in­sti­tu­tions. The least ad­mired? Congress.

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