Breaking Big Tech Bad

A Senate antitrust bill would harm consumers and U.S. innovation

WSJ editorial. Excerpts:

"The bill empowers the Federal Trade Commission and Justice Department to restrict business practices of “covered platforms.” The bill initially would capture Amazon, Alphabet (Google), Apple, Meta (Facebook), Microsoft, Tencent ( WeChat ) and ByteDance (TikTok), though it could eventually sweep in others, including Twitter and Walmart.

These platforms would be barred from giving “preference” to their own products or services. Regulators will have broad discretion to decide what that means. Is Amazon giving preference to its own distribution service by providing free two-day shipping for its Prime members? Is Apple favoring its Safari browser by pre-installing it on iPhones?

Tech companies would have to re-engineer their platforms to avoid complaints from regulators and rivals. As a result, Amazon Prime subscribers might also not be allowed to stream Amazon original movies and TV shows for free or get free-two day shipping. A host of services that benefit consumers could disappear based on bureaucratic whim.

Google’s favoritism for its own products in search has understandably rankled smaller rivals. But there’s nothing that stops users from going directly to sites like Yelp or Expedia, which can also sue Google for abusing its search dominance to restrict competition.

The bill would also effectively require platforms to make their products inter-operable with competitors. This would be technically difficult, and in some cases impossible, and could make products less functional. This would reduce cyber security as the U.S. is coming under increasing attack from hackers, including state actors. Ensuring platforms are inter-operable could make it easier for cyber thieves to pilfer user data. Apple might have to allow rival app stores and apps on iPhones no matter if they provide subpar security protection.

The bill says its mandates don’t apply if they would lead to “significant cyber-security risk” but the onus would be on platforms to prove that their features are necessary to protect security or privacy, or “maintain or substantially enhance the core functionality” of their platforms. In short, the platforms would be guilty of anti-competitive conduct unless they prove their innocence."