What is the real meaning of breaking up Big Tech?


Last fall, the Federal Trade Commission and the attorneys general of 48 states File a lawsuit against Facebook, Accusing it of illegally maintaining a monopoly on the social network space “through several years of anti-competitive behavior.”Soon after, the U.S. Department of Justice and the attorneys general of 11 states File a lawsuit against Google, Accusing it of illegally monopolizing the search and search advertising market.Apple is currently Civil trial with game developer Epic Games, Which is challenging Apple’s control of its App Store on the grounds of antitrust.

Last summer, the U.S. House of Representatives Judiciary Committee concluded a 19-month investigation into alleged anti-competitive activities of technology giants.The result of 450 page report Describe these companies as “the last monopoly we saw in the era of oil tycoons and railroad tycoons,” and recommend that the government take action against them.

Of course, it is easy to dismiss any news from Washington or Brussels as a political gesture, but in this case, it would be a mistake.President Joe Biden named some of the tech giant’s sharpest and most outspoken critics—including Columbia University professor Tim Wu, who is the author of the book Huge curse, And Lina Khan, who served as a special adviser during the Judiciary Commission’s investigation, played an important role in its government. Europe is enacting stricter regulations to try to limit the power of large technology companies. Antitrust action, at least in the technology industry, has become the rarest thing: a bipartisan issue in Congress.

Arguably more importantly, we are in the midst of a fundamental shift in knowledge discussions-which makes it easier to chase large technology companies. In many respects, we seem to have returned to most of the 20th century to determine the United States’ antitrust vision for large company policy. This vision is more skeptical of the merits of scale and more willing to actively prevent companies from exercising monopoly power.

The main antitrust laws in the United States were enacted at the turn of the 20th century. Sherman Antitrust Act of 1890 with Clayton Act of 1914 Stay on the book today. They are written in broad, far-reaching (and ill-defined) language, and are aimed at monopolists who engage in what they call “trade restrictions.” They are largely motivated by the desire to contain the giant trusts that dominate the US industrial economy through a series of mergers and acquisitions.

The typical example is Standard oilAn empire was established and it basically controlled the US oil business. But antitrust laws are not only used to prevent mergers. It is also used to deter many practices that are considered anti-competitive, including some that now seem commonplace, such as aggressive discounting or linking the purchase of one product with the purchase of another.

In fact, these four companies have very different businesses. They raise very different antitrust issues and will adopt very different antitrust solutions.

All this changed with the arrival of the Reagan administration in the 1980s. Regulators and courts no longer worry about the impact of large companies on competitors or suppliers, but begin to focus almost exclusively on the so-called “consumer welfare.” If the merger or company’s actions may prove to result in higher prices, then it makes sense to intervene. If not, antitrust regulators usually adopt a non-interference attitude. This is why Facebook’s acquisition of Instagram and WhatsApp, Amazon’s acquisition of Zappos, and Google’s acquisition of DoubleClick, YouTube, Waze and ITA have all successfully passed the regulatory approval process.

But not anymore. In the past four or five years, scholars, politicians, and public advocates have begun to promote new ideas about what antitrust policies should be, believing that we need to get rid of the narrow focus on consumer welfare-which usually means attention in practice Price-Consider the broader harm that a company may bring from exercising market power: damage to suppliers, workers, competitors, customer choices, and even the entire political system. Not surprisingly, they did so out of direct consideration of the Big Four.

But what exactly will the power to control large technology companies look like? Short answer: It depends a lot on the company you want to pursue.

the goal

Although antitrust advocates often confuse Apple, Amazon, Google, and Facebook to create an unforgettable image of the four giant “gatekeepers” jointly controlling the digital economy, in fact, the four companies’ businesses are completely different. Very different antitrust issues and very different antitrust solutions will apply.

Take Apple as an example. It is the most valuable company in the world, valued at more than $2 trillion at the time of writing. It is also the most profitable company in the world. However, when it comes to antitrust and large technology companies, Apple often seems to think about it after the fact. In Wu’s book, Apple hardly appeared, and in Senator Amy Klobuchar’s new book, AntitrustThis is a resounding call for the re-enactment and implementation of anti-monopoly policies, and Apple’s discussion seems more sketchy than the core of her thesis.

This may be due in large part to the fact that Apple has become a behemoth, mainly on its own-although it has made a large number of acquisitions, its recent growth is mainly due to the launch of the three most successful and profitable technologies in history product. , And continue to persuade customers to continuously upgrade to the next generation of products. Even in this new world, it is not illegal to achieve great success by making the well-known better mousetrap.

To be sure, Apple has antitrust issues, the core of which is to require all developers who develop applications for the iPhone and iPad to sell their products through the App Store, and Apple charges 30% of the fee. Therefore, Apple may eventually have to let developers sell products directly to consumers, or even allow independent app stores. Even so, it can still charge a license fee from any application that it wants to use on the iPhone. Most users are likely to continue to use the App Store, even if only out of habit and convenience.

Therefore, from the overall perspective, Apple does not seem to have to worry about increasing antitrust pressure.

Amazon’s situation is more complicated. It also has the fact of organic growth. Although it has a certain share in acquisitions, its growth is mainly driven by its own strength, which is mainly due to its unremitting desire to sell more products, huge investment in infrastructure, and willingness to spend a lot of money. The drive to win and retain customers. Paradoxically, its biggest antitrust problem stems from something it created itself: the Amazon market.

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