Week 8 on the Tech Antitrust Paradox

Last week, many of you raised a diverse set of technologies that might disrupt including VR, 3D printing, gene drives, drone swarms and meatless meat.  The question, of course, is not just how technology can disrupt, but whether firms and institutions can act to facilitate or impede that disruption.

For example, this week’s Economist raises the question of whether big technology firms are a ‘friend or foe of competition’.  Apart from a litany of (often contradictory) complaints about the problems of tech giants, they acknowledge the growing potential for malign effects on competition.  They offer four possible solutions: (i) Break them up; (ii) Regulate them as utilities; (iii) Rely on ‘people power’ or customer unions; and (iv) encourage competition through mandatory licensing and other IP sharing.

At the same time, there are also arguments for Big Tech acting as a disruptive force that can benefits markets and consumers.  Much of the discussion in our last lecture of TP1 focuses on competition within the conventional bounds of a given industry (e.g., large firms seeking to gain advantage over smaller rivals and enhance their market power).  But there also exists the potential for non-traditional firms to enter these sectors.  The irony (or paradox in the Economist’s view) is that even as tech firms become more entrenched in their domains and difficult to dislodge in platform markets they also provide competition and innovation in other markets as diverse as automobiles, drug-distribution, cable television and operating systems.

So that leaves us with a final set of questions for the term:

Do the benefits from tech firms fostering competition in other markets outweigh the threats from the dominance of such large actors in key tech sectors?

Do we need a more radical approach or incremental change to competition policy in a world dominated by large tech firms?

Is the main driver of future disruption found in the tech firms or the technologies themselves or some combination?

Are the main sources of competition and future challenges to incumbents found from within an industry or from without?

Returning to this week’s theme, to what extent can firms use regulatory competition to gain an advantage?

As always, try to find good examples in your country or sector of interest.

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