Can We At Least Make Sure Antitrust Isn't Deliberately Designed To Make Everyone Worse Off?

from the a-small-request dept

For decades here on Techdirt I've argued that competition is the biggest driver of innovation, and so I'm very interested in policies designed to drive more competition. Historically this has been antitrust policy, but over the past decade or so it feels like antitrust policy has become less and less about competition, and more and more about punishing companies that politicians dislike. We can debate whether or not consumer welfare is the right standard for antitrust -- I think there are people on both sides of that debate who make valid points -- but I have significant concerns about any antitrust policy that seems deliberately designed to make consumers worse off.

That's why I'm really perplexed by the push recently to push through the “American Innovation and Choice Online Act” from Amy Klobuchar which, for the most part, doesn't seem to be about increasing competition, innovation, or choice. It seems almost entirely punitive in not just punishing the very small number of companies it targets, but rather everyone who uses those platforms.

There's not much I agree with Michael Bloomberg about, but I think his recent opinion piece on the AICOA bill is exactly correct.

At the heart of the bill is an effort to prevent big tech companies from using a widespread business practice called self-preferencing, which is generally good for both consumers and competition. Think of it this way: An ice-cream parlor makes its own flavors and sells other companies’ flavors, too. Its storefront window carries a large sign advertising its homemade wares. In smaller letters, the sign mentions that Haagen-Dazs and Breyers are available, too. Should Congress force the ice-cream store owners to advertise Haagen-Dazs and Breyers as prominently as their own products?

That’s essentially what this bill would force a handful of the largest tech companies to do. For instance, Google users searching the name of a local business now get, in their search results, the option of clicking a Google-built map. But under the bill’s requirements, the search results would likely have to exclude the Google map. Similarly, Amazon would likely be prevented from promoting its less-expensive generic goods against the biggest brand names.

Lots of businesses offer configurations of products and services in ways that are attractive to customers, often for both price and convenience. Doing this can allow companies to enter — and potentially disrupt — new markets, to the great advantage of customers.

Yet the bill views such standard business conduct as harmful. It would require covered companies — essentially Amazon, Apple, Google, Facebook and TikTok — to prove that any new instance of preferencing would “maintain or enhance the core functionality” of their business. Failure to comply could lead to fines of up to 15% of a company’s total U.S. revenue over the offending period.

Now, I think there's a very legitimate argument that if a dominant company is using its dominant position to preference something in a manner that harms competition and the end user experience, then that can be problematic, and existing antitrust law can take care of that. But this bill seems to assume that any effort to offer your own services is somehow de facto against the law.

And whether or not that harms these companies is besides the point: it will absolutely harm the users and customers of these companies, and why should that be enabled by US competition policy? The goal seems to be "if we force these companies to be worse, maybe it will drive people to competitors," which is a really bizarre way of pushing competition. We should drive competition by encouraging great innovation, not limiting how companies can innovate.

Even if you don't think that the "consumer welfare" standard makes sense for antitrust, I hope most people can at least agree that any such policy should never deliberately be making consumers worse off.

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Filed Under: amy klobuchar, antitrust, competition, consumer welfare, innovation, michael bloomberg


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  • icon
    n00bdragon (profile), 2 Feb 2022 @ 12:27pm

    Government regulation picks winners and losers and does so in an unfair way to benefit the buddies and donors of congress critters? That's unpossible!

    link to this | view in chronology ]

  • identicon
    Pixelation, 2 Feb 2022 @ 12:29pm

    "...more and more about punishing companies that politicians dislike." And the punishment is often a slap on the wrist that make little to no difference. It does make some lawyers rich, so it has that going for it.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Feb 2022 @ 4:11pm

      Re:

      It's all in the side effects and unintended (or unconsidered) consequences.

      link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 2 Feb 2022 @ 1:22pm

    This just confirms that Congress has no idea what the hell a free market is or competition.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Feb 2022 @ 2:25pm

      Re: AntiTrust Epiphany

      +1

      But most Americans have also been vigorously brainwashed to believe Federal Antitrust interventions are the only thing keeping big private companies from pillaging the American people.

      AntiTrust economic theory has always been total nonsense, and starkly unconstitutional.

      I'm deeply surprised at the very sudden truthful realization here that government AntiTrust policy:
      "has become less and less about competition, and more and more about punishing companies that politicians dislike"

      The overall Community here has always stromgly endorsed AntiTrust and opposed anybody pointing out the huge problems with such government interventions into voluntary free markets.

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Feb 2022 @ 3:29pm

        Re: Re: AntiTrust Epiphany

        Other countries manage to regulate industry without the problems of the U.S, maybe because they have avoided political patronage as a means of appointing regulators.

        link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Feb 2022 @ 4:58pm

        Re: Re: AntiTrust Epiphany

        What voluntary free market?

        link to this | view in chronology ]

        • identicon
          Anonymous Coward, 2 Feb 2022 @ 6:11pm

          Re: Re: Re: AntiTrust Epiphany

          ...same as a free market.

          but leftists don't know what a free market is -- so the voluntary adjective is just a hint to help them understand basic economics

          link to this | view in chronology ]

          • icon
            Scary Devil Monastery (profile), 3 Feb 2022 @ 12:28am

            Re: Re: Re: Re: AntiTrust Epiphany

            "but leftists don't know what a free market is"

            You realize that "Das Kapital", written by a certain Karl Marx, is still considered recommended and required reading in fiscal science education worldwide - including in the US?

            Leftists tend to know more about what a free market is and how it works than right-wingers. That's why so many actual economists become leftists after studying economy. They don't like the end game they're seeing.

            link to this | view in chronology ]

      • icon
        Scary Devil Monastery (profile), 3 Feb 2022 @ 12:23am

        Re: Re: AntiTrust Epiphany

        "The overall Community here has always stromgly endorsed AntiTrust and opposed anybody pointing out the huge problems with such government interventions into voluntary free markets."

        Because in the rest of the OECD antitrust action isn't a problem. When regulations are imposed equally across the board the market adapts wonderfully. The US alone is so unused to restricting market monopolization and cartellization that whenever they try to actually enforce basic market rules it all turns into a race to see who can produce the biggest pork barrel.

        This is literally an Only In America problem.

        "...most Americans have also been vigorously brainwashed to believe Federal Antitrust interventions are the only thing keeping big private companies from pillaging the American people."

        It really is. Average americans today are worse off than their parents and grandparents. Not because of foreign interference. Not because the economy is busted - it's steadily been rising.
        It's just that because the government since the days of Reagan hasn't bothered enforcing the rules conditions have been worsening to the current point, where 1 in 10 citizens of the wealthiest nation in the history of mankind are on emergency food stamps and 40% of households can't cope with an unexpected measly $400 expense.

        If your intent was to pull some extreme-wing libertarian bullshit here then I'm afraid to say most attendees aren't the audience you're looking for, because they're neither blind nor stupid.

        link to this | view in chronology ]

      • icon
        nasch (profile), 4 Feb 2022 @ 8:41am

        Re: Re: AntiTrust Epiphany

        starkly unconstitutional.

        How do you figure?

        link to this | view in chronology ]

    • icon
      Scary Devil Monastery (profile), 3 Feb 2022 @ 12:26am

      Re:

      "This just confirms that Congress has no idea what the hell a free market is or competition."

      I posit a different viewpoint. Congress knows damn well what a free market isand are writing legislation opposing such a market because they're trying to appease the vested interests who both fund their campaign and stand to make a killing from biased legislation.

      link to this | view in chronology ]

  • identicon
    Greg Nolan, 2 Feb 2022 @ 2:18pm

    Even if it went through it will be sued

    Look first of all shareholders of Amazon and Google and Apple investments will be hurt by these bills. Congress cannot tell a private corporation how to run its business especially if it hurts ordinary shareholders. Once it hits the pro business Supreme Court the bill will be considered illegal and thrown out especially with the USMCA investor dispute clause and yes some of these anti trust laws are investor dispute so I do not believe this bill will last long even if passed

    The EARN IT may get through yes, but that had to do with child porn which is illegal this antitrust bill has to do with Congress telling private corporations how to run there business. Tucker Carlson and Rachel Maddow think they can tell a private corporation how to run there business and hurt shareholders. Not going to happen. If this bill gets through I am not worried as shareholders, hedge funds and big tech will sue it right out of existence. Got that Grassley and Klobucher

    link to this | view in chronology ]

    • icon
      James Burkhardt (profile), 3 Feb 2022 @ 8:02am

      Re: Even if it went through it will be sued

      Congress cannot tell a private corporation how to run its business especially if it hurts ordinary shareholders.

      I assume you haven't heard of the following things:

      Laws

      I mean, what are laws but dictates about how individuals and businesses comport themselves, with the threat of civil or criminal legal action if they fail to comply?

      Like I was going to go over how you must have missed Minimum Wage, OHSA, Laws requiring food be stored and served safely and the regulations which serve to define safe, FLSA, FMLA, income taxes, employment taxes, business licensing, banking regulations, all dictates about how a business can be run that impacts shareholders. All of these laws impact profits, and therefore shareholders, in one way or another. The entire point of the law is to force individuals and businesses to act in a way they may not have chosen if the law was not in place.

      But rather than post the doctoral thesis on why that one sentence is soooo bad, ill just point out that CSAM being illegal at all is telling a private corporation how to run its business. There are vintage magazines that were legally sold at the time containing what today is defined as CSAM. That these magazines could not be bought or sold is telling a business how to run itself. CSAM is abhorrent. But your standard is very loose, leaving every reader confused about when the government can intervene and tell a business how to operate. Seemingly, the standard is "ill know it when I see it", a standard that always falls apart once the guys with ideas you don't like start using it against you.

      link to this | view in chronology ]

  • identicon
    Glenn, 2 Feb 2022 @ 2:53pm

    Hey, great idea! This law should be applied to politics. I can see it now: Republicans promoting Democratic ideals (or even democratic ideals).

    link to this | view in chronology ]

  • icon
    ECA (profile), 2 Feb 2022 @ 5:42pm

    If they would enforce the rules we HAD,

    Before they started dumping all of them.
    If they would monitor the stock market and MAKE it work the way its Supposed to.

    This is like hte greedy dog.
    He can never get his fill, until he is Bloated, and still wondering if he can get more.
    You have to Control him or Starve him. Take your pick.

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Feb 2022 @ 1:20pm

    Misguided analogy

    An ice cream parlor can never monopolize consumer access to all other ice creams, and use that monopoly to push substandard products. Online, this is what happens.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Feb 2022 @ 2:30pm

      Re: Misguided analogy

      How is Amazon for instance, a monopoly while Ebay, Banggood, Ali Express, to name a few, exist.

      link to this | view in chronology ]

      • icon
        ECA (profile), 3 Feb 2022 @ 3:43pm

        Re: Re: Misguided analogy

        And he dont notice that allot of stuff is fronted By amazon, not Sold by amazon.
        Walmart does the same thing. They dont sell the product, they Front for the companies that sell the product.

        link to this | view in chronology ]

      • identicon
        Anonymous Coward, 23 Feb 2022 @ 1:27pm

        Re: Re: Misguided analogy

        Because of market share, which gives it the ability to control prices and exclude competitors.

        link to this | view in chronology ]


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