Tech
DOJ Rosen Announces Possible Action If Big Technology Proves Threat Of Innovation
Deputy Attorney General Jeffrey Rosen said Tuesday that shaking up or dismantling a major online platform is on the table if the department concludes that they have harmed innovation in ways anticompetitive.
Rosen spoke at a Free State Foundation policy conference in Washington Tuesday, March 10, where he cited DOJ lawsuits against Microsoft and AT&T as examples of measures that some say have opened the way to innovation.
The Justice Department is currently examining market-leading platforms – such as Facebook and Google – that Rosen has called ministerial priority.
Rosen said that one of the reasons the DOJ focused on market-leading platforms was that innovation was, and has long been, at the center of antitrust legislation when the evaluation of anti-competitive behavior.
This means that when a merger or acquisition is likely to reduce competition for innovation below what would have happened without the merger, there is a problem.
"When thinking more broadly about innovation and competition, it may be useful to look back at some of the tech companies that have dominated the past," he said. "For example, IBM dominated the hardware era and Microsoft dominated the software era. As with the evolution of the Bell system and the telecommunications industry, competition also played a role. in all of these transitions. The Department of Justice brought antitrust enforcement actions against IBM in 1969 and Microsoft in 1998. A lawsuit was ultimately dismissed (IBM) and one ultimately prevailed. coincided with the end of a technological era and the next beginning. I just want to say that the Antitrust Division and all of us, at DOJ, who are responsible for enforcing antitrust laws, are very aware of this story and pay close attention to the role of antitrust legislation in technological innovation. "
Related: Groups Praise The Impact Of Big Technologies On Small Businesses
He said protection of innovation was not a new goal of antitrust law, but that the rise of Big Tech had recently brought it to the fore. "Despite the wonders produced by the World Wide Web, some say that innovation in the United States has actually declined over the past two decades, and that the tech giants who produced some of these wonders are in party to blame spectrum, there are calls for government to act quickly and boldly to help ensure that there is room for another wave of innovation that can improve life people. "
While he was talking about what "some say" and "suggest: and what others" asked ", he left the clear impression that what these people said and called carried weight, Particularly with regard to the intervention of the courts to preserve the disruptive innovation, which he said had been the case in the lawsuit to break the combination of Bells and Microsoft of hardware and software.
"Obviously, one of the most disruptive innovations … was the development of the telephone in the United States at the turn of the 20th century … As a dominant company with vast resources and the technological expertise of Bell Labs, the former AT&T Bell System has made a number of important innovations in the telecommunications field and beyond, "he said. "But with its cemented dominance, the old Bell system was sometimes resistant to change, in part due to monopoly incentives and protective regulation, and some argued that the Innovation was less than it could have been. The government's antitrust case against AT&T was filed in 1974, and it was suggested that competition and the ensuing innovation would not have flourished in this way without the transfer of local AT&T trade which resulted from its long distance network and manufacturing activities around 1984. "
Rosen has presented this to date and to the current Big Tech review by Justice.
"One of the questions that is inevitably present in our antitrust review is whether innovation has declined, as some say, due to the monopoly positions held by some of the tech platform giants. ; today, "he said. "As the seventh circuit wrote in a monopolization case only two weeks ago," the harms that generally arise from a competitive market moving to full control by a monopolist include … reduced innovation ".
He said that a monopolist in place, any monopolist in place, has "every motivation" to thwart innovative outsiders. "
Justice notably examines whether Big Tech succeeded in buying competitors before the size of these purchases triggered automatic antitrust examinations and if the current antitrust law lacks its capacity to identify and respond to efforts to "buy". monopoly. It is difficult to assess what competing firms would have provided if they had not been bought.
"Many articles have been written on the so-called" destruction zones "of the tech giants, that is, the strategy of buying novice challengers to eliminate them as a competitive threat", did he declare. "Others argue that there is no incentive to innovate when a dominant company can simply replicate any new idea itself and, with existing network effects, reap the reward Still others argue that the strict business practices of well-established companies have prevented innovators from gaining ground. "
Rosen said he had no answers to the questions he asked – the GM is still studying the market, he said, so he couldn't talk even if he was already drawing conclusions.
He said he doesn't have a timetable for when the DOJ will be done with its deep dive into Big Tech.
To read the full Rosen speech, go here.
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