On using antitrust to break up big tech


October 1, 2020 2:13PM

Any day now, the Department of Justice and numerous state attorneys general—potentially to include Tennessee’s—are expected to launch antitrust litigation against “big tech” firms. Such a move against these giants has been lauded by trustbusting liberals who loathe capitalism, as well as conservatives who feel like the Facebooks of the world censor their viewpoints. While the latter concerns may hold some validity, this is not the proper remedy.

There are several problems with using antitrust laws to “break up” or further regulate big tech companies. First, the claims of monopolies are flat out false. Take this recent article by tech expert Alec Stapp as proof. (I’ll be on a panel about this topic with Alec on Tuesday. He’ll most certainly be more knowledgeable than me about monopolies.)

As the article shows, the perception that Google, for example, has utter domination over digital advertising fails to hold water. In fact, the company accounts for less than 30% of the digital advertising market, much less the overall advertising market. And Facebook and Amazon have even less market share.

Which brings me to my second point. When it comes to antitrust, what is a market anyway? Even using the narrow definition of “digital advertising” does not make any company a monopoly. Take into account that digital advertising companies compete with all other types of advertising—print, billboards, etc.—and their market share plummets even further.

This is similar to the claims made by trustbusters in the television space. Dish Network and DIRECTV certainly compete against one another as satellite providers, thus the impetus for the government’s refusal to let them merge. But of course, they also compete with AT&T, Comcast, and Charter, even Netflix, Hulu, and Amazon Prime. When it comes to television access, choices abound. No one has anything resembling a monopoly. 

As Stapp sums it up, “A good rule of thumb in antitrust is that the more adjectives someone tries to use to define a market, the less likely it has any relation to economic reality.”

The final problem I have with using antitrust laws to go after large tech firms is that it will actually harm consumers and small businesses. Many small businesses rely on digital advertising to sell their products, especially in a pandemic world where stay at home orders have become mainstream and garage startups pop up daily. (Special shout out to Rock N Rollz, a cinnamon roll pop up that I recently learned about online and purchased online but consumed too many of in real life.)

Bring down Google or Facebook, and these small businesses’ ability to get their product in front of eyeballs will plummet. Make it harder for them to sell on Amazon and revenue will dry up. All of this harms the consumers who would benefit from those businesses’ services or goods.

I’m not saying there aren’t legitimate concerns about how some of these companies operate and the impact this has on our society. I even deleted Twitter from my phone because I think it is the most destructive invention since mankind started walking upright. These and companies like them also shouldn’t get to feed at the trough of taxpayer handouts that give them a leg-up over their competitors. But government—from the feds to attorneys general—should not weaponize antitrust laws to put big tech in their place.