June 6, 2017


To get a sense of Silicon Valley’s stupefying power writ large, just glance at a list of the world’s top 10 most valuable companies. In the first quarter of 2017, Apple, Alphabet (Google’s parent company), Microsoft, and Amazon inhabited the top four spots; Facebook sat just a few rungs below, at number eight and has already climbed up to number five. Companies that were near the top of the heap just a few years ago—big pharma, big box chains like Walmart, the “big four” Chinese banks, oil conglomerates, household names like Nestle or General Electric—are glaringly absent from the mix. The world’s most valuable resource is now data, and Silicon Valley has cornered the market on amassing personal information.

This new world order is one of many reasons why antitrust officials are questioning their methods, even if they’re a bit slow to do so. (Even in the EU, as recently as last fall, Margrethe Vestager, the antitrust czar, was still calling Facebook’s terms of service “a gray area” between privacy and competition.)

If competition policy were working, “we wouldn’t have record wealth inequality,” law professor Maurice Stucke says. “We wouldn’t have market power and monopoly profits.” Stucke should know. He’s a former trial attorney for the US Department of Justice’s antitrust division and has published research on algorithmic collusion, big data, and digital cartels.

American antitrust statutes like the Sherman Act are broadly worded and largely centered around competition; they don’t explicitly instruct regulators to account for political realities like income inequality or the effect on wealth creation for small businesses. But the number of new companies started has reached a 40-year low, and profits for some US companies are abnormally high compared to GDP. The cracks in the antitrust establishment are starting to show, said Stucke, and experts are wondering if “the emperor maybe has no clothes.”

If Google isn’t an antitrust worry, what is? What could be?

Stuckey, by the way, is coauthor (with Oxford’s Ariel Ezrachi) of Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy, and Big Data and Competition Policy.

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