For politicians, going after “Big Tech” appears to be the new norm. Lawmakers on both sides of the aisle have expressed grievances with content moderation. Republicans have claimed it excessive while Democrats have claimed it inadequate . From Section 230 to antitrust, there appears to be a growing movement to take some punitive action towards these technology companies. Senator Amy Klobuchar (D-MN), the Chairman of the Senate Judiciary Committee which has broad authority over antitrust issues, has come out in support of “aggressive” antitrust enforcement. It is imperative that Congress exercise restraint and avoid politicizing a tool that can have major impacts for taxpayers and for the economy as a whole.
First, it must be said that antitrust is critical to a robust and competitive economy. Consumers are served well by the avoidance of monopoly power which can lead to price fixing and other negative consequences. However, the goal of antitrust should focus on the consumer welfare standard and not delve into subjective reasoning to break up large companies simply for being “big.” While some on the political right have joined their liberal counterparts in Congress by calling for punitive measures to be taken against large technology companies, they may quickly find themselves witnessing antitrust enforcement untethered from quantitative measurements. This could soon lead to enforcement actions that take aim at other industries that the controlling party has deemed as harmful.
The criteria of consumer welfare, which has been the standard for the last 40 years, is the light-touch approach that ensures we don’t punish successful companies for being large as long as consumers benefit. Moving away from this agreed upon standard could stifle innovation and come at the detriment of consumers. In Congress, moving away from a consumer welfare standard also opens the door for more politicized actions taken against companies that attract the ire of Washington.
The calls to break up Facebook, Google, and other major technology companies, especially during a pandemic that has shuttered Americans inside their homes and forced companies into the digital space, are not only badly timed but also fail to show demonstrable harm to consumers’ welfare. While certain reforms around privacy and liability are being discussed, taking the largest and most destructive tool at the government’s disposal to break up “Big Tech” would mark a sharp change from precedent and open the door for more aggressive intervention by big government.
Conservatives should exercise caution and not allow their concerns about “Big Tech” to lead them down a path that would overregulate a booming sector of the economy. Not only would this impact consumers in the immediate, it could snowball into overzealous antitrust enforcement for other large companies. As President Biden and Democrats have made addressing climate change a major focus of their agenda, it is entirely possible for Congress to call for antitrust enforcement for large energy oil and gas companies that do not harm the consumer, but are viewed unfavorably by the party in charge of antitrust enforcement.
The light-touch approach to antitrust enforcement has served taxpayers well and allowed for a rapid increase in innovation. Abandoning the consumer welfare standard for short-term political gain is the wrong approach and creates uncertainty for growing businesses. While NTU supports the goal of promoting a competitive marketplace for consumers, having the government choose winners and losers would only serve to suppress innovation and harm consumers. Antitrust should remain an independent and evidence-driven process.