Senators Debate Function of Antitrust Law, Tech Industry Concentration
Antitrust law isn't a “Swiss Army knife,” capable of solving a host of social ills like privacy concerns, Senate Antitrust Subcommittee Chairman Mike Lee, R-Utah, said Tuesday during a hearing on monopolies. But ranking member Amy Klobuchar, D-Minn., said the increase in ownership concentration, particularly with tech, is leading to stagnating wages and other consumer harms.
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With a slate of pro-industry judges ushered in by this administration, doing nothing will lead to another gilded age, Klobuchar said. She said Congress should show humility in how it approaches these markets because it will have significant impacts on the economy.
Sen. Josh Hawley, R-Mo., who sympathized with Democratic viewpoints during the hearing, told reporters afterward he’s eager to see if the FTC’s new tech competition task force (see 1902280077) acts: “Everybody, I think, said that there needs to be enforcement of the laws that we have on the books and maybe tougher enforcement. I think that’s the right perspective.” Congress needs to think about options for dealing with market concentration across industries in general and tech in particular, he said.
Tech has gotten a free pass on antitrust, said Sen. Richard Blumenthal, D-Conn. Facebook's acquiring Instagram and Google DoubleClick should never have been allowed, he said.
Witnesses suggested antitrust laws guided by the consumer welfare are working as intended. Increased market concentration doesn’t equal less competition, said George Mason University law professor Joshua Wright, a past FTC member. High performance can drive market share, which isn't a bad thing, he said. Antitrust law shouldn't be used to limit efficient firms, said Stanford Law School professor Douglas Melamed. Courts are putting too much emphasis on false positives, which means it’s time to recalibrate antitrust laws, he said.
University of California-Berkeley professor Robert Reich echoed Klobuchar, saying increased concentration led to higher consumer prices, less innovation and less productivity. Consumers are harmed if the incentive to innovate is lessened, he said. Firms are insulated from new competition, which is going to increase prices for consumers, said Northeastern University economist John Kwoka.
Corporate profits are increasing, but the portion going to wages is stagnating, Reich said. This means less bargaining power for workers, he said. Reich called big data a major barrier to entry.