Sunday, October 21, 2018

Should we break up the tech giants? Not if you ask the economists who take money from them

From FastCompany, October 19:

This week’s FTC hearings on the growing power of companies like Amazon, Facebook, and Google only included economists who have taken money, directly and indirectly, from giant corporations that have a stake in the debate.
Amid growing concern over the power of such behemoths as Amazon, Google, Facebook, and other tech giants, in recent months there’s been a bipartisan push for better enforcement of antitrust rules–with even President Trump saying in August that their size and influence could constitute a “very antitrust situation.” The Federal Trade Commission (FTC) has launched its most wide-ranging study of corporate concentration in America in more than 20 years with a series of hearings being held around the country. Chairman Joseph Simons, a practical enforcement-minded leader, launched the hearings by expressing concern over the growing problem of monopoly, which is now found in nearly every sector of the economy. “I approach all of these issues with a very open mind,” said Simons, “very much willing to be influenced by what I see and hear.”
But there’s a problem. The FTC organized these hearings so that Simons and the public would be hearing from many economists who have taken money, directly or indirectly, from giant corporations.
For example, on Monday, the FTC convened a panel titled “The Current Economic Understanding of Multi-Sided Platforms” to look specifically at the most dynamic and dangerous set of concentrated economic actors, the big tech platforms. Every single one of the economists who testified had financial ties to giant corporations.

One example is David Evans, the chairman of the Global Economics Group. Evans scoffed at the danger of platform monopolies. He indicated that the question of “whether Facebook and Google and Amazon are monopolies, it’s all interesting, it’s great to read in the New York Times,” but it’s “not all that relevant” to the practice of antitrust. (FF to 45:30 in the below video) His firm has taken money directly from Microsoft, Visa, the large investment bank SIFMA, and the Chinese giant tech giant Tencent.

Another example is Howard Shelanski, a partner at Davis Polk. Shelanski is more enforcement-minded, but he expressed caution, testifying that we don’t know enough for antitrust enforcers to understand whether powerful technology companies hold unassailable market positions. Shelanski pointed to his own children, saying that they’ve stopped using Facebook because it’s uncool. (FF to 35:00). As it turns out, his law firm’s clients include Facebook, as well as Comcast, and Chinese search giant Baidu.

I just realized I don't scoff enough I should do more scoffing.