Antitrust law originated in the U.S. as a tool of economic democracy to tackle the threat of a private company controlling the most critical U.S. industry—oil.
Today, it is said that data is the new oil, and Google, Amazon, Facebook, and Apple (collectively Big Tech) is the new antitrust threat to the U.S. economic democracy.
I believe there are some myths to shatter.
Big is not necessarily bad, and the present economic democracy propaganda against Big Tech is not the solution to increase competition in fast-moving technological markets. Big Tech ingenuity and technological progress are crucial to achieve antitrust goals of competition and economic democracy.
Markets Without Any Monopolies—A Pipe Dream?
Antitrust enforcers seem to have a long dream of creating markets without monopolies, but it might be helpful to ask if these markets would have ever existed without large corporations in the first place. Alexander Graham Bell, AT&T’s founder, often credited as the inventor of the first practical telephone, got patents for his invention and a legal monopoly to offer telephone services.
AT&T’s ingenuity led to the creation of the transistor—which is still the building block of any digital device—to the laser, Unix operating system, and the most important computer languages. Multiple Nobel Prizes have been awarded for technologies developed at AT&T’s Bell Labs. Again, big is not necessarily bad.
Today, it is impossible to list all the lawsuits, government investigations, and political pressures that Big Tech corporations are facing. Initially, U.S. antitrust enforcers were accused of being too lax compared to EU antitrust enforcers in managing Big Tech’s power. It did not take too much for U.S. antitrust enforcers to respond to those critics by emulating a more severe European approach with Big Tech.
Innovation, however, may not be a hallmark of EU corporations—most technological disruption occurred thanks to U.S. companies. Google, Apple, and AT&T are only three symbolic examples, which bear the question of whether the “laxer” U.S. antitrust enforcement action has been, in part, responsible for this progress in technology.
Big Tech does not need to be idolized. And blaming Big Tech for everything we do not understand about technological markets does not seem the method to make these markets more competitive.
The role of antitrust is not to ensure that everybody wins in markets. In every game there are losers, rather it’s who wins the competition plays fairly. Now more than ever competition is in the creation of new technologies; and much of our everyday life relies heavily on Big Tech’s ingenuity.
Maybe, antitrust enforcers should better understand Big Tech’s technologies, such as artificial intelligence (AI) algorithms, that led these corporations to becoming a critical component of our economy, and exploit such technologies in their enforcement action.
Using AI to Detect Anticompetitive Practices
Today, most markets rely on AI algorithms, which enable companies to detect consumers’ preference faster and offer more applicable products through past data. Government could use the same AI to predict the ever-faster evolution of markets and what technologies are more likely to take off.
At least, government’s adoption of emerging technologies would help deepen its understanding in the same technologies that now rely on data, and the markets it wants to oversee. The truth is that government could not think of moving fast enough in its enforcement action without these adequate resources and tools.
Professor Ashwin Ittoo and I built the first AI antitrust application to test the potential of AI in enforcing antitrust principles. Our experiment shows how much potential there is for AI to assist antitrust agencies in detecting anticompetitive practices faster looking at past cases (data).
In addition to AI, technological progress is offering other compelling tools that can reduce Big Tech power and ensure economic democracy in this new technological environment. Blockchain is a technology that creates decentralized platforms in competition with Big Tech centralized platforms.
The peculiarity of blockchain is that the majority of participants in the network take decisions in the platform, rather than a central entity/authority. It is said the network reaches the consensus and this consensus mechanism is also called “democracy in action.” Blockchain has the potential to ensure economic democracy in digital platforms better than any government intervention.
Big Tech can represent an opportunity rather than a threat for antitrust agencies. Government needs to stay ahead of tech to be effective in fast-moving technological markets—unlocking the potential of big tech ingenuity and technological progress seems to be the antitrust solution that the tech economy really needs.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
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Giovanna Massarotto is a CTIC academic fellow at the University of Pennsylvania Carey Law School.