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Mr. October or Mr. Whiff? Chairman Cicilline Strikes Out on Long-Awaited Antitrust Report

It was Game Seven in the World Series of Antitrust, and all eyes were on Rep. David Cicilline as he strolled up to the plate. Fourteen months of interviews, millions of documents reviewed, and multiple hearings had Silicon Valley and regulators around the world holding their collective breath. But instead of coming up big in the clutch, “Casey at the Bat” Cicilline swung mightily . . . and whiffed. 

Last week’s House Judiciary Committee report on Big Tech failed on so many levels. It failed to reveal any way that America’s leading technology companies are harming consumers. It failed to recognize how digital platforms and services help small businesses survive the pandemic. And it failed to gain bipartisan consensus on a national economic issue too important for partisan bickering. The report revealed only the Chairman’s misunderstanding of the modern economy and a laundry list of misfit legislative proposals that have no place in America’s free-market system.

 Had the Chairman and committee staff honestly analyzed the digital economy, they would appreciate that Google, Facebook, Amazon, and Apple’s respective market shares do not approach the market power of AT&T’s 1960s monopoly or Microsoft’s 1980s monopoly. More importantly, they would appreciate that the size and market share of America’s leading digital companies do not harm consumers, it enables them to provide goods and services to consumers and small businesses for free, or at very affordable prices. 

But a lack of  facts are not the only problem with this report – there are so many Bucknerian errors that the Report makes the 1962 Mets look like the 2018 Red Sox. 

Strike 1: The Report ignores millions of American small businesses that rely on digital tools, platforms, and marketplaces to survive during the pandemic. It is silent on the trillion-dollar question: “what would happen to Main Street small businesses if Rep. Cicilline’s proposals are adopted?” The likely outcome of breaking up “Big Tech”  will be increased costs, less innovation, and less useful tools and services for entrepreneurs. Applying depression-era policies like Glass-Steagall (a provision meant to protect depositors from banks’ risky investments) for the internet or regulating technology companies like public utilities is like expecting a fastball and swinging too soon and six inches above the curve. 

Strike 2: The Report shows no concern for American leadership in this sector and proposes policies that will cede our global influence and market share to China. The crony capitalist system that the Chinese government uses to advance businesses friendly to the Communist Party has already given countless Chinese companies a competitive advantage over their U.S. counterparts. Further tipping the competitive scales will only benefit China’s tech sector to the detriment of American industry leaders.  

Foul Ball: The Report fails to demonstrate actual antitrust violations in the technology sector and does nothing more than punish economic success and innovation. At the beginning of this year, few people had heard of Zoom. Today, seven months into a global pandemic that has completely changed how we do business and made video conferencing the single most important digital tool, Zoom is ubiquitous with video-conferencing. Not Google Meets, not Microsoft Teams, Zoom. 

Twenty years ago, some viewed AOL as a monopoly because it controlled 90 percent of the instant messaging software. In 2007, Victor Keegan decried MySpace’s market dominance in the Guardian, claiming that MySpace’s “massive user base will help maintain its dominance.” Clearly, those companies have held onto their market dominance with an iron grip and have used it to harm millions of American consumers (does anyone even still use those services?).   

 Strike 3: The Report isn’t bipartisan. Republicans in the House and Senate balked at a “Glass-Steagall” like separation of these companies’ activities, nor will they stomach a “CFPB” like agency to regulate tech’s every move. With both parties setting their sites on Big Tech, albeit for different political reasons, this should have been a “gimme.” This was a “meatball” right down the middle, but instead of crushing it, the Chairman missed by a mile.  

 After ignoring the vast majority of small business owners and attacking American innovation and market share abroad, it’s clear Congressman Cicilline is no “Mr. October,” and it isn’t even clear if he is ready for “the show.” 

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