Many ex post rationalisations of antitrust have been proposed: efficiency, freedom and fairness.
Here is an additional one based on transfers.
Governments expend resources to make individuals wealthier.
This is achieved through a variety of welfare programs, subsidies and tax measures.
A firm with monopoly power can undermine such payments by appropriating them.
Hence, societies would need antitrust laws to preserve the effectiveness of public transfers.
Some policy implications?
- Where individuals do not enjoy transfers, there is no place for antitrust;
- Where individuals enjoy transfers, there should be antitrust protection.
Applied to tech, there would be no State aid case against Apple.
I have now completed my relocation to the US.
For the next 6 months, I will be a Visiting Scholar at Stanford University’s Hoover Institution.
The game plan is: think, write, think and write again.
Topic on my mind for this first day of work: should I have a chapter on tech giants and patent policy?
If you are around, and interested to meet, please contact me.
Last week, this Kylie Jenner tweet inflicted a USD $1.3 billion share loss on Snapchat.
A reminder that some of the tech giants have feet of clay.
Content-mediating platforms may be particularly at risk here.
On some content-dependent mediums, the platform may become impersonated by certain icons.
Any of that icon’s act of bad behavior – Kevin Spacey? – or unsupportive statement – K Jenner – can potentially precipitate the platform closer to the bottom.
Again proof that platforms must carefully control content if they want to survive.
So as to avoid manure throwing in future conversations on this blog, I feel important to disclose that I have shunned funding from any of the big tech companies (and those who complain in proceedings against them).
I additionally want to disclose that I will not disqualify arguments on the ground that they come from someone who has touched money from the private sector, a law firm, an economic consultancy or Government.
I am interested in ideas, not in witch hunts.
As long as funding is disclosed, all is fine.
We must take change by the hand or rest assuredly, change will take us by the throat.
I really love this Winston Churchill quote.
But I cannot find a proper reference.
And I heard several variant of it.
Anyone with a clue?
Is the hot question I discussed in a presentation at the University of South Australia last week.
The PowerPoint is available here:
Should we break up tech giants – Nicolas Petit 15 02 18
The Economist (Jan 20, 2018, Silicon Valley, we have a problem) has the beginning of an answer to my question.
It suggests that tech firms “keep alive businesses that they might otherwise scale back” – as Google has done with its social offering Google+ – as a “way to look less monopolistic“.
It’s a way for a tech giant to show that others are under attack, and that no rival is too well resourced and entrenched to take on.
For now, I’ll call that the “mirror effect“.
The argument does not go as far as to explain why firms introduce me2 services though.