Should Big Tech Be Broken Up?

Overview Representatives of the Lincoln Network, the Information Technology and Innovation Foundation, the Mercatus Center and Public Knowledge joined Jamie Susskind, the Consumer Technology Association’s vice president of policy and regulatory affairs, on the CES 2020 stage to talk about calls to break up big tech companies.

Technology companies have created unprecedented opportunity for people around the globe. From smart home innovations allowing senior citizens to more comfortably age in place to autonomous vehicles that will enable mobility for individuals with disabilities, we are seeing evidence of tech for good in communities around the world.

Yet, at the same time, many of these companies are now facing unprecedented scrutiny of their size and market power.

As noted by Zach Graves, head of policy at the Lincoln Network, “This is not just a matter for Democrats or Republicans — both Tucker Carlson and [senator and presidential candidate] Elizabeth Warren have called for breaking up big tech.”

In 2019, federal officials at the Federal Trade Commission and the Department of Justice launched antitrust inquiries into Google, Apple, Facebook and Amazon. Additionally, state attorneys general in nearly every state initiated their own probes into Google and Facebook.

What Are the Concerns About Big Tech Companies?

During “Should Big Tech Be Broken Up” at CES 2020, panelists laid out some of the complaints about big tech companies. First, they focused on competition issues, discussing whether the companies’ size and market position could encourage anticompetitive behavior.  

According to Charlotte Slaiman, senior policy counsel at Public Knowledge, “Experts in the U.S., in the EU and Australia — more and more countries — are saying that today’s dominant digital platforms occupy a unique place in the marketplace.”

She observed that not only are “dominant digital platforms very difficult to compete against,” but they also have “a lot of levers by which they can control how companies use the platform and whether companies can really successfully thrive when they are relying on [them].”

Panelists also highlighted other concerns that have been raised by policymakers as of late. Graves, for example, pointed to discussions about consumer privacy, particularly in light of recent, high-profile data breaches.

Additionally, Graves said, “You have [some] people worried about getting marginalized and pushed out of the public square, so there’s really a lot of concern about speech-related issues.”

Are These Concerns Overblown?

Panelists were largely skeptical about calls to break up big tech companies. Rob Atkinson, president of the Innovation Technology and Innovation Foundation, aid that “the simple fact that big tech companies are big is not a problem in and of itself — in fact, it’s a benefit.”

Atkinson went on to point out that several such companies, including Alphabet, Amazon, Microsoft, Apple and Facebook, are among the top 15 companies in the world when it comes to spending on research and development.

As Atkinson explained, “The size that these companies have enable them to make big investments in the future — big investments in R&D. And if we try to break them up, we’re going to lose that.”

Atkinson also pointed out that “the evidence of big technology companies as helping consumers is overwhelmingly large,” a sentiment echoed by Graves and Jennifer Huddleston, a Research Fellow at the Mercatus Center.

According to Graves, “What seems to be absent from [the] conversation is any agreement about what the underlying grievances are with big tech. … They provide tremendous value to consumers that [they] are very happy with.”  

Huddleston agreed that it’s difficult to pinpoint how consumers are being harmed, particularly when viewed through the lens of antitrust law, which is used by policymakers to assess marketplace competition.

She said, “It’s important to also remember the benefits of innovation and to think about much how our lives have changed for the better, even if we do have these concerns.”

Slaiman, on the other hand, asserted that large tech platforms assert their market dominance in a variety of ways, including by acting as a bottleneck to small companies that need to access the platform.

Slaiman said, “Self-regulation is not going to be sufficient here. We really are going to need government action.”

A Path Forward for Policymakers?

During the conversation, panelists debated how policymakers should grapple with these concerns. Is there an appropriate regulatory mechanism to look at the conduct of big tech companies?

Slaiman argued that digital platforms “occupy [a] unique space and require their own competition laws,” as well as “a regulator that is focused on dominant digital platforms.” She encouraged that regulator to look at issues such as interoperability, discrimination and mergers, recommending that when “digital platforms want to have a merger, there should be a sector-specific merger review for that merger, in addition to antitrust.”

Other panelists generally agreed that policymakers should not jump the gun when it comes to using antitrust law to address grievances against big tech companies.  

According to Huddleston, “[Antitrust] should be used as a tool when there’s anticompetitive behavior that harms consumers. And the fact that we have such a hard time pinpointing how are consumers being really harmed, raises that question of is antitrust the appropriate tool here?”

She also observed that antitrust could result in years of court reviews of business decisions. “What happens to other companies that may be watching this,” Huddleston asked, “and trying to decide what risks, what innovations to pursue as well?”

Atkinson similarly urged regulators to consider whether there are “things that these companies are doing in terms of actual behavior and actual conduct that is problematic and hurting competition.”

He suggested policymakers look for more tailored solutions to address specific concerns that arise. For example, Atkinson said, “If we think there’s a problem with privacy, then a national privacy bill is the answer. … If we think there’s a problem with speech, then oversight of that.”

Atkinson said regulators need to understand, however, that “those aren’t competition policy issues, and putting them into the competition box … will really muddy the water.”

Graves had a similar reaction, noting, “antitrust is one of many sledgehammer-style policy solutions that people have tried to get at addressing their grievances with big tech. And I think they aren’t necessarily aligned with competition concerns, versus privacy concerns, things that should be addressed in ways other than antitrust.”

Final Takeaways

Panelists discussed where they think the debate goes from here.

Slaiman reiterated her concerns about the market position of digital platforms.

“Even if antitrust violations may not have occurred, we really need to fix this market and come up with new laws and rules that can promote competition,” she said.

Graves urged caution when thinking about breaking up tech companies.

“Maybe there’s legitimate grievances here,” he said. “But is that proportionate to talk about breaking up these companies? Not at all. On the tradeoffs, particularly with respect to American innovation … there’s significant loss if you try to take that approach.”

Huddleston and Atkinson expressed similar views. “We have to recognize there are going to be tradeoffs and harms to innovation that occur from [breaking up these companies],” Atkinson said.

“Oftentimes, innovation in and of itself has been our best competition policy in America,” Huddleston observed. “A decade ago, if we were talking about if big tech should be broken up, we’d be talking about the MySpace natural monopoly or how Yahoo won the search wars.”

Watch the full panel discussion of “Should Big Tech Be Broken Up?” from CES 2020.