ATHENS - Modern societies have had to deal with exorbitant market power for more than a century. However, is there something novel about Big Tech’s power? Are Google, Amazon, and Meta inherently different from Standard Oil in the 1920s, IBM in the 1970s, or Walmart more recently? If not, then perhaps it might be possible to regulate Big Tech by means of legislation harking back to the United States’ 1890 Sherman Antitrust Act. Lina Khan, the chairperson of the US Federal Trade Commission, is valiantly trying to do just that.
Such efforts are well-intentioned, but likely doomed to fail. Big Tech is so profoundly different from other industries that it cannot be regulated like any of the trusts, cartels, or conglomerates that society has hitherto encountered.
Economist Adam Smith’s portrait of capitalism as a market town where family-run butcheries, bakeries, and breweries promote the public interest through open-ended, morally grounded competition bears no resemblance to modern economies. Virtually every industry - from railways, energy, and telecommunications to soap powder, cars, and pharma - is a cartel of gargantuan conglomerates whose stranglehold is only occasionally loosened when politicians muster the will to enact and enforce antitrust legislation - even at times using it to break them up. One would think that the same could be done to Big Tech, but so far that has not happened. What makes the tech industry so unique?
Antitrust regulation was originally designed to prevent price gouging by megafirms that restricted supply until the price hit a level maximizing their monopolyThe content herein is subject to copyright by Project Syndicate. All rights reserved. The content of the services is owned or licensed to The Yuan. The copying or storing of any content for anything other than personal use is expressly prohibited without prior written permission from The Yuan, or the copyright holder identified in the copyright notice contained in the content.