Moss Says U.S. Needs a Digital Market Regulator to Curb Big Tech’s Power
In The Well News’ November 5, 2022 article “Moss Says U.S. Needs a Digital Market Regulator to Curb Big Tech’s Power,” focuses on AAI President Diana Moss’ views on competition and the market dominance of the big tech firms.
From the article:
If the U.S. intends to reel in the power of Big Tech, it should create a digital market regulator that captures all market participants and provides adequate oversight, according to Diana Moss, president of the American Antitrust Institute, and Charlotte Slaiman, competition policy director at Public Knowledge.
Both antitrust experts agreed there is a problem with the market dominance of the Big Tech firms, speaking to The Well News on phone interviews, but differed on whether the antitrust bills in Congress are the solution.
This digital market regulator would be able to deal with many issues which are better handled by a sector regulator than antitrust law, Moss said.
Nevertheless, any “regulation of Big Tech should meet the same standards we want for any actors” by putting consumers first and ensuring they are not harmed and still promoting competition, wrote Bret Jacobson, digital strategist and CEO of Red Edge, a digital advocacy company, in an email to TWN.
This is what antitrust bills like the ACCESS Act and the recently introduced Senate version of the American Innovation and Choice Online Act aim to do, Slaiman pointed out. The latter bill, Slaiman explained, hones in on the largest and most powerful platforms — primarily Amazon, Apple, Facebook, Google and Microsoft — that have “gatekeeper power” over other companies competing on their platforms. This non-discrimination bill would prevent the dominant firms from self-preferencing their products over that of their competitors.
Legislation is needed, Slaiman said, as the gatekeeper power has allowed these companies to be “in charge of the playing field where potential competitors are growing up.” It is part of the “broader movement” to address “the problems of the power of Big Tech,” which includes the executive order on competition, the continuance of antitrust cases and Federal Trade Commission investigations into anticompetitive conduct and rulemaking. These “different tools need to be working together.”
Having a digital market regulator should not be an “either-or” proposition to the “pro-competition tools” provided through the antitrust bills introduced in Congress, Slaiman said.
“Antitrust should be aggressively enforced” as much in the digital tech sector as others, Moss agreed, but it should be left to “do what it’s good at doing” without adding another layer of responsibility that would be better addressed by a “regulatory regime that throws the umbrella over the entire industry.”
“Using the regulatory approach is much better than using the antitrust process as a form of quasi-regulation,” Moss said.
Antitrust could fail to identify the true economic anomalies and features of the unique business models of these online platforms that are the primary source of market power. Absent a sector-specific regulatory regime, for example, the legislative approach could exclude companies who need to be under greater oversight and possible restrictions.
Legislation, Jacobson added, does not “reflect the immutable reality that markets move fast.”
This legislative approach, “has not been adequately informed by basic economic, business, and institutional characteristics” of the online platforms’s business models, Moss said.
“And you can’t get really good policy reform in place unless you understand what these ecosystems do, how they’re built, how they operate…[and] their economic anomalies and market failures.”
Antitrust is a “slower process” that may not be as responsive to the pace of digital expansion. So it should be bolstered and clarified to strengthen and increase the resources given to the antitrust agencies “through more generalized legislation.”
Digital ecosystems can also display information asymmetries, where users engage in ways that do not accurately “reflect the real value [the consumer] place on [their] privacy.”
“[Users] give out more information than they would give out based on their true preferences,” Moss charged, even when they chose to opt out. “That’s because the ecosystems know more about them than the users know about how their data is being used.”
The legislation also does not truly take into account the economies of scale in data – the firms’ cost advantages from mere size and amount of data collected – particularly when it comes to their “unique business models” based on cloud infrastructure.
The bigger the cloud infrastructure, “the lower the costs to process data [and] harness the value of user data going through [it].”
Finally, the digital ecosystems use algorithmic recommendations to steer users through their systems, which get smarter through machine learning and artificial intelligence which can be structured in a way to self-preference their own products.
The way to deal with the market power of these unique digital business ecosystems is through “a sector regulatory regime that applies to the whole sector” that would ensure oversight and compliance regardless of the size of the firm.
“We would prefer to see antitrust reform legislation that targets fundamental issues and competitive problems across all sectors, because they are everywhere,” Moss said. “Strong antitrust enforcement in the digital sector should work hand-in-hand to rein in the market power of the digital ecosystem model.”