EFF: When It Comes to Antitrust, It’s All Connected

When It Comes to Antitrust, It’s All Connected

A knife was stuck in antitrust in the 1980s and it bled out for the next 40 years. By the 1990s, the orthodox view of antitrust went like this: horizontal monopolies are bad, but vertical monopolies are efficient. In other words, it was bad for consumers when one company was the single source for a good or service, but if a company wanted to own every step in the chain, that was fine. Good, even.

Congress is concerned with Big Tech and has a number of bills aimed at keeping those companies in check. But just focusing on Google, Apple, Facebook, Amazon, and Microsoft won’t fix the problem we find ourselves in. Monopoly is at the heart of today’s business model. For everything.

In tech startups, companies run in the red for years, seeking to flood the zone, undercut the prices of their competitors, and buy up newcomers, until they are the last ones standing. For years, one of Uber's main goals was the destruction of Lyft. A series of leaks and PR disasters kept Uber from succeeding, but it is not the only company pursuing this tactic. Think about how many food delivery apps there used to be. And now think about how many have been bought up and merged with each other.

For internet service providers (ISPs), being a local monopoly is the goal. When Frontier went bankrupt, the public filings revealed that the ISP saw its monopoly territory as a bankable asset. That’s because, as internet access becomes a necessity for everyday life, a monopoly can guarantee a profit. They can also gouge us on prices, deliver worse service for more money, and avoid upgrading their services since there is no better option for consumers to choose.

In the world of books, movies, music, and television there are vanishingly few suppliers. Just the other week, publisher Hachette bought Workman Publishing. The fewer publishers there are, the more power they have to force libraries and schools into terrible contracts regarding e-books, giving second-class access to a public good. Disney continues to buy up properties and studios. After buying 21st Century Fox, Disney had 38% of the U.S. box office share in 2019. That means that over a third of the movie market reflected a single company’s point of view.

The larger these companies get, the harder it is for anyone to compete with them. The internet promised to open up opportunities, and businesses’ defensive move was to grow too big to compete with.

That’s the horizontal view. The vertical view is equally distressing. If you want an audiobook, Amazon has locked in exclusive deals for many of the most desired titles. If you want to watch movies or TV digitally, you are likely watching it on a subscription streaming service owned by the same company that made the content. And in the case of Comcast and AT&T, you could be getting it all on a subpar, capped internet service that you pay too much for and is, again, owned by the same company that owns the streaming service and the content.

The chain is too long and the links too big. In order to actually, permanently fix the problem being caused by a lack of competition in technology, we need laws that apply to all of these facets, not simply the social media services.

We’ve already seen the new administration change law to consider harms to ordinary people beyond just paying higher prices. Now let’s see it move beyond Facebook, Google, Apple, and Amazon, to include major ISPs and other abusive monopolists, and companies that wield monopoly power over narrower but important facets of the internet economy.


Published August 27, 2021 at 12:27AM
Read more on eff.org

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