In a digital world where technology leaps forward with each passing second, the Biden administration’s approach to regulating this dynamic industry is mired in the past. This outdated stance not only overlooks a critical fact that competition across the industry is vibrant, but more importantly, that this fierce competition has empowered American consumers more than ever.
The Biden regulatory approach seems to be: break what works, control what’s left, and ignore how real Americans live. Think about how real Americans shop. Today we have hundreds of choices when it comes to tech products, retail, entertainment, and much more. Both physical and online stores compete for our dollars. In social media and online entertainment, dozens of providers compete for our attention. For online search, we look for restaurants, flights, events, news and more via dozens of different businesses.
But the Biden administration doesn’t see this incredible choice. Instead it is determined to attack successful companies, which will ultimately result in less incentive for innovation, creation, and for startups and new businesses to break into the industry.
A prime example is the coming of AI. In merely a year, startups like YouChat and Hugging Face have upended traditional methods of search, information gathering, and creation, proving that game-changing competition can indeed originate from a small start.
But Biden’s Federal Trade Commission (FTC) and the Department of Justice (DOJ) are blind, willfully or negligently, to today’s competitive market dynamics.
The antitrust lawsuits against Amazon and Google encapsulate this attitude. Take the case against Amazon, where the FTC seems to be operating under the delusion that online shopping is a monolith dominated by just a single entity. This couldn’t be further from the truth.
In the real world, we don’t just open one tab; we have dozens, if not hundreds, open at any given time, comparing prices, seeking deals and exploring options from many online stores. Amazon is just one of these tabs.
In the digital age, retail is omnipresent. Many retailers today have an online presence, creating a vast web of competition. Moreover, online retailers, including Amazon, face stiff competition from physical stores. When we walk into a store and walk out with a product, Amazon’s speed of delivery suddenly seems less miraculous.
The FTC is stuck in the past because it sees its primary job as defending particular competitors—not American consumers or their needs and preferences. The FTC thinks that because an online retailer is competing with smaller, brick-and-mortar businesses, the competition is inherently “unfair.” But these exact digital tools, first invented by those online retailers, have given the mom-and-pops on mainstreet the ability to compete on a global scale with companies exponentially larger than them creating similar products. The FTC is stuck in the past and self-imposing an obsolete playbook on all of us.
The DOJ’s antitrust suit against Google misses the mark on how people search and gather information today. The term itself, “search,” has evolved beyond the confines of a traditional web engine.
When Americans plan a trip, we start their journey on sites like Expedia or Kayak, bypassing Google altogether. Shopping inquiries often begin directly on the websites of retailers like Target or Walmart. For DIY solutions or repair advice, platforms like Reddit or YouTube are the go-to, not Google. Social media is also a quickly growing avenue for internet search. Reality and facts show that Google’s so-called “dominance” in search is being continuously eroded by competitors innovating.
Of course, this isn’t just a problem in the United States. Last year, the United Kingdom’s competition authority forced Meta to sell Giphy, claiming competition concerns. This was at the same time the company’s stock was in freefall, not a common issue faced by “dominant” companies. Again, the UK regulator was motivated less by protecting consumers and more by litigating a decade-old grudge.
If you’re seeing a regulatory pattern, you’re right. The Biden administration’s playbook is all about attacking America’s technology industry with an outdated understanding of innovation and creative destruction. Once upon a time, it required incredible resources to compete with a large corporation. To compete with Ford, you needed factories, workers, supply chains, and more. To compete with telephone companies you needed phone lines, proprietary devices, licensing from the government and more. But to compete with any of America’s tech businesses, all we really need is innovation and perspiration.
This new era of competition is about ideas and execution, and it’s because of technology and the internet. It’s a world where a startup can become a household name within months, not decades.
The government’s role should be to foster this innovation, not stifle it with outdated views of industry dynamics. By understanding the true nature of competition in the tech world, the government can better align its actions with the realities of the 21st century to benefit consumers and businesses alike.
The anti-consumer posture of the Biden administration is misguided. It risks hampering the very innovation and competition regulators claim they want to protect, ultimately doing a disservice to American consumers and the spirit of enterprise that drives our economy forward.
Image created using ChatGPT’s DALL-E.