Carl Shapiro: “Regulating Big Tech: Factual Foundations and Policy Goals”

By: Carl Shapiro (Network Law Review)

The Network Law Review is delighted to present this month’s guest article by Carl Shapiro, Professor at Berkeley Haas and Berkeley Department of Economics.

Over the past several years, we have witnessed a vigorous push to regulate the Big Tech companies, especially Amazon, Apple, Facebook and Google. In the European Union, the Digital Markets Act, a bold new regulatory regime, will soon come into force, overseen and enforced by the European Commission. In the U.K, the Competition and Markets Authority is moving ahead to regulate Big Tech in anticipation of receiving greater powers to do so. My focus here is specifically on regulations designed to promote competition and control the market power of the Big Tech companies. These are the two stated goals of the Digital Markets Act, under the banners of “contestability” and “fairness.”

In the United States, the leaders of the Federal Trade Commission and the Antitrust Division of the Department of Justice have made clear that they are on a mission to rein in Big Tech, and a number of bills have been introduced in Congress to regulate Big Tech and promote competition.

As the 118^th Congress considers whether and how to regulate Big Tech, it seems prudent to pause and recall the traditional questions one asks relating to government regulation of business:

• What specific harms do the proposed regulations address?
• What is the evidence demonstrating that such harms are substantial?
• Will the proposed regulatory provisions be effective in addressing those harms?
• Will the proposed regulatory provisions themselves cause some other harms?
• What agency will promulgate and enforce these regulations?
• What resources will be needed to make the regulatory regime effective?

Watching the halting efforts in the United States to regulate Big Tech over the past several years, I have not seen Congress asking these questions or following the evidence to answer them. I am especially concerned that Congress is focused on harm to competitors, not harm to competition…

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