Suppose a monopolist achieved its market dominance by creating and inventing better products, offering superior service, and always being one step ahead of would-be competitors. Is that bad?
More than a generation ago Judge Robert Bork said the standard should not be whether a so-called monopolist (or should I now say oligopolist) harms a would be competitor or competitors, but does the alleged mega-giant culprit harm “consumer welfare” or enhance it?
Companies like Google and Facebook — indeed what about all the websites that provide news and commentary — make their money from ad revenue. So, the more they provide “for free,” the more participation they have among users, and the more they charge the advertisers.
But things are more dynamic than you may realize. Almost every day brings new announcements about what supermarkets or Walmart or Target are doing for deliveries, or which firm is entering (or exiting) the restaurant delivery business. Uber and Lyft are in flux. Facebook and Google are both going into the cryptocurrency business. Google will compete against Apple with its own smartphone.
A bunch of candidates for president want to “break-up” tech giants, or regulate them, or both. How many of these candidates created or ran a business… of any size? How many understand technology, hardware, software, or related subsets?
In the United States of America, we started with newspapers that were political diatribes. We graduated toward diversity of ownership and ideas in newspapers. We added radio, television, cable, satellite, Internet. Along with social media, readers and listeners and viewers can find all sort of news and views. Why do we want to inhibit free speech on social media? We don’t have significant censorship on other media? And why entrust politicians and bureaucrats to do this?
My views are well known. Companies like FB need to regain their credibility by being straightforward and transparent. And FB needs to regulate itself. It can harness the social media for good. But it can’t do it alone, within its boardroom, its clubhouse. It needs to engage independent fiduciaries. Otherwise, the government will step in, and that will be bad for everyone.