Big Tech Not Primed for Breakup, AEI Panelists Say

It isn’t clear whether large platform companies pose a distinct enough threat to merit antitrust action, but more regulation could be an option, said panelists during an American Enterprise Institute discussion Monday. “Some intervention is needed,” said University of Chicago economist Luigi Zingales. The concentration of advertising platforms is probably harmful for the economy, but a government-driven solution “isn’t the right approach,” he said. To evaluate whether there's market dominance, “you need to know whether a person can easily switch between services, and is there a cost to switching,” and in today’s tech market, consumers mostly have options, Zingales said. “What’s happening in Silicon Valley is fantastic,” agreed AEI Director-Economic Policy Studies Michael Strain. “The only thing that matters in antitrust analysis is consumer welfare, whether consumers are benefiting.” Companies like Yahoo and RIM (now BlackBerry) that once were powerhouses no longer pose the same concerns, and have been overtaken by today's platform giants, he said. “It’s foolish to think that it’s impossible the iPhone won’t be replaced by another device in 10 years. And I don’t believe Google has perfected the way to organize the internet,” Strain said. “The barrier to entry is pretty small,” said Ryan Hagemann, Niskanen Center director-technology policy, making the case that a new entrant could challenge established players given the speed of tech innovation. "History is full of giants that eventually die," said Zingales.