Jackson Loze ’24
While Big Tech firms like Amazon, Apple, Facebook, and Google have brought significant technological advances and convenience, their anti-competitive business practices have increasingly become a cause of concern. A 2020 Consumer Reports survey of Americans’ views on Big Tech concluded that, “roughly three quarters (75%) of Americans think that platform power, in a variety of forms, presents a major or moderate problem.” To address the reality that Big Tech has grown too big, further enforcement of antitrust legislation will be vital for the protection of competition and consumer interests in America.
Enacted as a response to Rockefeller’s Standard Oil in the 1890s, the Sherman Antitrust Act prohibits monopolization or attempts at monopolizing any aspect of interstate trade or commerce, making the act a felony. In a world where tech titans have complete control of their industries, additional antitrust enforcement could help reshape the way Big Tech companies operate by restricting two critical anti-competitive practices: acquisitions and patent hoarding.
The first benefit antitrust enforcement would bring is the end of anti-competitive mergers and acquisitions. Acquisitions are when one company buys another company to grow. By buying out their competition, acquisitions enable Big Tech to destroy smaller companies before they become a threat. For example, in 2013, Google acquired Boston Dynamics and eight other companies, shutting them down and causing their top researchers to leave. This is not an isolated incident; Tim Wu of The New York Times found that nearly half of Facebook’s acquisitions have resulted in the acquired company being shut down.
Killer acquisitions have uniquely hampered innovation into artificial intelligence. Ryan Kottenstette of Cape Analytics notes that over the past five years, 90% of all AI startups have been bought out by Tech Giants. Rather than bringing their products to market, Big Tech shelves the AI tech while moving researchers elsewhere. For example, computer scientists who used to work on predicting natural disasters were repurposed to improve Facebook’s facial recognition. Luckily, there is hope, as Salley Hubbard of CNN finds that many of these deals are in violation of current antitrust statutes made to prevent anti-competitive behavior.
Stronger antitrust enforcement would also force Big Tech to stop hoarding patents. Today, Google alone has more than 52,000 patents. Luckily, Bob Dayen of The Intercept explains that antitrust enforcement on companies like Google would force them to make all of these patents available for public use. The enforcement of antitrust regulations against AT&T in 1956 freed up nearly 8,000 patents, causing a significant increase in innovation. This laid the foundation for Silicon Valley and the internet, leading to the birth of a plethora of tech companies. Enforcing antitrust regulations against Google would force them to give up patents, creating another innovation boom. For these two reasons, more robust antitrust enforcement will boost innovation at all levels of industry, increasing long-term consumer welfare and revitalizing innovation.
Boosting US innovation is vital for continued economic growth; Anne Marie of the Harvard Business Review quantifies that returns on research and development have dropped 65% over the past 30 years. She further explains that, because innovation drives productivity in our economy, the US economic growth rate will soon decline to 0%. Stricter antitrust enforcement could offer a much needed jumpstart to the economy; Niels Peterson of theMax Planck Institute finds that just 3 years of antitrust enforcement increases the GDP per capita by 2%.
Increased US technological innovation would also help the developing world. Joseph Castro of NBC explains that AI offers the unprecedented opportunity to eradicate hunger and global poverty by giving governments precise information about poverty concentration, allowing for highly efficient poverty alleviation efforts. Unfortunately, if no action is taken to stop Big Tech’s hoarding of talent and patents, Ryan Kottenstette of Cape Analytics finds that anti-competitive actions by Tech Giants will reduce the impact AI could have on the global economy and society at large by 95%.