Facebook, Google, Amazon, and Apple faced antitrust scrutiny in a House Judiciary Committee hearing this week on the “impact of market power of online platforms on innovation and entrepreneurship.” The Democratic-led committee opened an antitrust probe in June. More recently, Republicans took a swing at the controversial White House social media summit, and will be holding additional hearings this month. For the past year, bipartisan enmity has led to perpetual committee hearings on issues relating to technology.
Meanwhile, other companies such as Yelp are meeting with lawmakers hoping to gain their favor.
It was an ironic spectacle to see these four companies sit next to one another defending themselves against accusations that they have no competitors. On the most basic level, the companies are competing for user attention. Time spent browsing Facebook is time that cannot be spent tweeting, watching YouTube videos, or shopping online.
Outside of the hearing room, new companies and innovative business models present plenty of competition. For example, just last week, The Atlantic reported, “TikTok stars are preparing to take over the internet.” Last year, TikTok was the third most-installed app — trailing only WhatsApp and Facebook Messenger — and the company spent $1 billion on advertising alone. (RELATED: Harmeet Dhillon: Trump Delivers The Google-Facebook Reckoning That Obama Refused)
More strikingly, Amazon only captures 5 percent of the retail sales market. It is not without effort that the retail giant retains its customers. Surveys reveal that 84 percent of customers say it is somewhat or very important that the company they buy from is innovative. A testament to both competition and data-driven marketing, another study revealed that 48 percent of consumers have left a website and made a purchase from a competitor because of a poorly personalized experience.
And while Google is accused of having a very high percentage of search traffic, their real market is selling advertisements. In that market, they are far from a monopoly, and they are losing ground to competitors. Moreover, Google competes with Apple to develop the best smartphones, tablets, smart devices and software such as apps and operating systems. Others such as Microsoft, Samsung, IBM, and smaller companies also compete in one or more of these robust markets.
In the last five years alone, there has been an explosion of new technologies available to consumers: we now have smart home devices, virtual reality, autonomous vehicles, thousands of new apps, and virtual currencies — just to name a few. New products are constantly being introduced to the market. Barriers to entry are lower for entrepreneurs and small businesses while venture capital (V.C.) investments continue to increase. In 2018, V.C. investment in the United States hit a record high of $132.1 billion. These companies will eventually grow to compete with “Big Tech” if we allow them. (RELATED: Here’s A Proposal To Hurt Big Tech When It Censors Conservative Users)
The U.S. technology sector is one of the most dynamic industries of the past century. This is in no small part enabled by a light-touch regulatory regime. Despite the evidence to the contrary, critics seem to think we are living in the “Standard Oil” days. In the early 20th century, President Roosevelt’s trust-busting made people look to Washington to regulate business, particularly those they don’t like. In the twenty-first century, “Big Tech” is the “Big Target.”
Until recently, most antitrust (and privacy) actions on tech companies have been overseas. The European Commission (E.C.) is a huge regulatory body that has been active in penalizing companies for their alleged dominance of European Union markets, especially in high tech. In the past two years alone, the E.C. has fined Google nearly $8 billion for anti-competitive practices.
That Europe does not have a Google or Facebook is not an accident of history. Technological innovation — and the jobs and revenue that come with it — tend to migrate to more favorable regulatory environments. If the antitrust zeal crosses the Atlantic, the threat of penalties will deter would-be entrepreneurs and small business owners while stifling emerging technologies.
In 1999, modern-day trustbusters believed that the company that makes the internet browser controls the internet. Twenty years and approximately three dozen web browsers later, no single company controls the internet, and a vibrant, competitive online ecosystem has transformed our daily lives. In the end, good products win. And when good products win, so do consumers.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.