Using Antitrust to Restrain Big Tech Companies Raises Big Risks, Cato Says

There's often a political urge to try to use antitrust authority to tackle social and economic ills, but the market "is the most effective regulator," wrote International Center for Law and Economics Executive Director Geoffrey Manne and Nebraska College of Law assistant professor Gus Hurwitz in a Cato Institute paper Tuesday. They said activist antitrust proponents' calls for either restraining big tech firms or mandating more smaller firms goes against decades' worth of experience and learning. They said it would mean dumping "the crown jewel of modern antitrust law -- the consumer welfare standard" and returning to days when inefficient firms were protected from competition. The structure-conduct-performance and the Justice Louis Brandeis views of antitrust favor smaller firms, but years of economic research showed large firms are often good routes for maximized consumer welfare. "It's not unusual for efficient, competitive markets to comprise only a few big, innovative firms," they said. Thus modern antitrust law is "fundamentally agnostic" about a company's size or the extent of market concentration, they said.