Debates over breaking up big tech companies filled the latter half of 2019, and those discussions continued in a session at CES 2020 on Thursday. The session, aptly titled “Should Big Tech be Broken Up?” explored the positive and negative impacts big tech has on both consumers and the economy.
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After posing the very question that titled the session, moderator Jamie Susskind, vice president of policy and regulatory affairs at the Consumer Technology Association (CTA), received a mix of answers; however, the majority of answers leaned one way.
Why big tech should not be broken up
All four panelists regularly referenced the ongoing antitrust investigation into Amazon, Apple, Facebook, and Google. First announced in June 2019, the probe examines these companies on the basis of privacy breaches, possible anti-competitive behavior, and data misuse.
While these investigations are important, the answer to the problem should not be to break up big tech, according to panelist Robert Atkinson, president of information technology at the Innovation Foundation.
“Antitrust doctrine historically has focused on two things. One is conduct and the other is structure. And we should be focusing on conduct,” Atkinson said. “The FTC, DOJ, and other authorities should be looking very religiously at the behavior, and the conduct of big technology companies to make sure they don’t use their market power in ways that are anti competitive.
“But the simple fact that big technology companies are big is not a problem in and of itself, in fact, it’s a benefit,” he said.
Atkinson cited the amount of spending big tech companies have done on research and development (R&D) as one benefit. “If you look at the top 15 companies in the world in terms of spending on research and development, No.1 and No. 2 are Alphabet and Amazon; No. 5 and No. 6 are Apple and Microsoft; [No.] 13 is Facebook,” Atkinson said.
“The size that these companies have enabled them to make big investments in the future and big investments in R&D. If we try to break that up, we’re going to lose that,” he said.
Atkinson also explained that the industries these large firms are in lend themselves to a bigger size. For example, nobody wants to join and navigate five Facebook-like communities; that’s why we have one large Facebook, Atkinson said.
Large-sized companies are also crucial for innovation, according to Atkison. “Even if we could magically waive a breakup wand, we have to recognize they are going to be trade offs, and there will be harms to innovation that occur from that,” he said.
“It’s become very trendy to hate on big tech companies,” said panelist Zach Graves, head of policy at the Lincoln Network. “This is not just a matter for Democrats or Republicans, both Tucker Carlson and Elizabeth Warren have called for breaking up big tech, but what seems to be absent from that conversation is any agreement on what the underlying grievances are with big tech.”
Why big tech needs to go
Panelist Charlotte Slaiman, senior policy counsel at Public Knowledge, was able to communicate some grievances.
“I am very concerned about the power of big tech, which I define as dominant digital platforms, which are very difficult to compete against,” Slaiman said.
Because of these huge businesses, small organizations don’t really stand a chance in seeing success. Network effects are a large reason these companies are so powerful, and antitrust is not suited to completely handle the problem, Slaiman said.
“We really need to fix this market and come up with some new laws and rules that can promote competition here,” she said.
Panelist Jennifer Huddleston, research fellow at the Mercatus Center, offered a counterpoint to the competition angle, explaining that competition still exists.
“Oftentimes innovation has in and of itself in our best competition policy in America,” Huddleston said.
“A decade ago, when we were talking about if big tech should be broken up, we were talking about the MySpace natural monopoly, or Yahoo won the search wars. So yes, there is this question of ‘is it easier to stick with the incumbent?’ Huddleston said. “But we’ve seen time and time again that while things look like untoppable giants, something new and innovative comes about and completely revolutionizes the industry; that market may not have been what we thought it was to begin with.”
While this debate will carry on outside of CES 2020, only time will tell where big tech giants will stand in the future.
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