February 21, 2020

What Elizabeth Warren Doesn't Get About Big Tech

“Sen. Elizabeth Warren, D-Mass., has set out an extreme agenda to break up big tech. She is calling for legislation that would require large tech platforms to be designated as “platform utilities” and broken apart from any participation on that platform. She also vows that her administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.

Warren’s policies are misguided and premature. Undeniably, the big tech platforms have resulted in innovations enabling the launch of new products and services resulting in many benefits to consumers. That is due to the nature of a free market economy which provides incentives of firms to innovate and grow. When the rewards of that innovation are removed, and firms are restricted in growth, the economy can suffer through less innovation and aggressive competition.

Warren suggests a radical restructuring of these key markets. We know from decades of deregulation of other industries that when the government tries to impose a structure on the market, consumers tend to lose from less competition and innovation. Moreover, such a restructured market may lead to even greater regulation.”

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