US Should Rethink Competition Policies, ITIF Told
The U.S. should rethink antitrust policies, experts said at an Information Technology and Innovation Foundation webinar Thursday. China is giving its companies an advantage, said Berkeley Research Group Chairman David Teece. St. Mary’s University London Senior Lecturer in Law Aurelien Portuese recommended antitrust enforcers shift to qualitative analysis to account for big tech’s free-services model.
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China isn’t serious about antitrust policy, said Teece. It’s serious only about building the economic strength of Chinese companies, he argued. U.S. officials shouldn’t be so “stupid” and "naive" to think antitrust policy is anything more than a tool China uses to give itself an advantage, he said. The country's embassy in Washington didn't comment.
With zero-price markets, certain things can’t be quantified such as efficiency gains and prices in antitrust review, said Portuese. He said there’s a big-is-bad approach against tech companies, and there’s a big-is-good argument against foreign competitors like China.
ITIF President Robert Atkinson labeled the two camps as “concentrationists” and “deconcentrationists.” The latter think the best approach to China is to deconcentrate and have fewer mergers and potentially break up major tech companies, Atkinson said. Concentrationists like ITIF believe market power drives innovation. Unless companies can get to scale and earn higher than normal profits, they won’t invest enough in R&D, he said. He conceded the criticism is that too much concentration gives incumbents no incentive to innovate.
Atkinson categorized FTC Commissioner Rohit Chopra and European Commissioner-Competition Margrethe Vestager as deconcentrationists. He cited a quote from Chopra opposing the argument that if the FTC scrutinizes dominant buys, it will weaken western competitiveness. Chopra believes that the enemy of growth and innovation is weak antitrust enforcement, Atkinson said. Chopra's office didn't comment.
Portuese noted Vestager’s push to shift the burden of proof for big tech, forcing companies to prove their acquisitions are innocuous. Sens. Elizabeth Warren, D-Mass., and Amy Klobuchar, D-Minn., have taken similar stances. Portuese noted Vestager plans to publish a white paper in June about incorporating China’s threat to competition policy.
There’s a major problem where officials have to rethink antitrust from top to bottom, said Teece, noting the focus on big tech. There needs to be a “complete redo,” and agencies like the FTC and DOJ have shown little interest to do so, he said, citing squabbles between enforcers (see 1909300062).
Portuese discussed academic calls for the repeal of the consumer welfare standard. FTC Chairman Joe Simons said in November (see 2001060039) the agency is examining the standard. There’s a case to be made that the standard is part of the problem if it’s the sole determiner during reviews, said Teece. He argued for a “halfway house” to focus on the long-term view of consumer welfare.
Tech, industrial and competition policy are related, said Teece. If enforcers keep making decisions in silos, they will continue to destroy competition, he said. Current policy is excessively static and short term, he said: Policy should account for innovation stimulating competition.