Don't Break-up Tech Giants Based On Populist Grandstanding

Antitrust exaggerated backlash against Big Tech is an attack on principles of free markets

"The nail that sticks out gets hammered down." That Japanese proverb - typically used to teach conformity - seems to be the approach advocated by U.S. Senator and Democratic presidential hopeful Elizabeth Warren in her recent call to "break up our biggest tech companies," including Google, Amazon, and Facebook.

There is little question that the Internet has been the foundation for a number of tremendously successful companies. Consumer demand for innovative products and services has allowed these "tech giants" to realize rapid growth and also market preeminence.

There's been a recent populist backlash against the power of these data monopolies, concern over harmful online content or behavior, cybercrime, and political misinformation. But the approach advocated by Sen. Warren and others to break up large tech companies is flawed because it overstates the consequences of being "big," politicizes the role of competition regulators and ultimately will hinder innovation and harm consumers.

Internationally, too, there is a growing call for government action to curb the strength of the tech giants. Most advanced economies are studying the adequacy of competition law over concerns about increasing market concentration in digital network sectors.

In the United States, the Federal Trade Commission has begun public hearings to examine the need for new antitrust approaches. The FTC recently launched a task force to monitor technology markets designed to investigate potential anti-competitive conduct in the digital sector.

The United Kingdom is also examining the role of competition in the digital economy, including two recent reports, first by an expert panel entitled "Unlocking digital competition" which recommended, among other things, a code of conduct for tech firms to include mandating interoperability and the second report by the House of Lords Committee on Communications recommending a public interest test for data mergers.

The European Commission began its study of competition in tech markets by releasing an expert report calling for stricter antitrust enforcement.

In Canada, there have calls for the modernization of Canada's competition laws by the Senior Deputy Governor of the Bank of Canada, Carolyn Wilkins, and by the Commons Committee on Access to Information, Privacy and Ethics report following last year's Facebook/Cambridge Analytica scandal. In...

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