Big Tech and Antitrust: A Discussion With Randal Picker

Episode Summary

Executive Summary: The episode examines whether big tech’s market power, data advantages, privacy concerns, and merger activity justify tougher antitrust or broader regulation. Randy Picker argues the firms’ success is real and mostly U.S.-based, but antitrust should stay focused on competition and fault-based harms, while broader utility-style regulation may be needed for structural issues like data access and network effects.

Main Topics: Why big tech made antitrust politically salient (Priority: 5/5): Picker explains that antitrust has moved from a specialized field into mainstream politics because platforms are embedded in daily life, unlike older cases such as IBM. Market power, privacy, and the limits of antitrust (Priority: 5/5): The discussion probes whether privacy harms and data collection belong in antitrust; Picker says antitrust can consider non-price harms like ads and data transfers, but privacy is not automatically an antitrust issue. Data as advantage versus antitrust harm (Priority: 5/5): Picker distinguishes between data-driven advantages that may reflect scale, scope, and learning-by-doing, and those that actually distort competition or create natural-monopoly-like conditions. Historical record of antitrust against AT&T and IBM (Priority: 4/5): Picker reviews major historical cases to show that antitrust interventions were slow, complex, and mixed in their effects, sometimes shaping technological development but not always clearly improving competition. Consumer welfare standard and the 'hipster' critique (Priority: 5/5): He defends economics as central to antitrust while questioning whether judges should enforce broad social policy goals; he argues that major shifts should come from Congress if society wants them. Merger policy and platform acquisitions (Priority: 4/5): The conversation explores whether deals like Facebook-Instagram and Facebook-WhatsApp should have been blocked because they involved potential rather than direct competitors in dynamic platform markets. Regulatory alternatives: open access, portability, and data sharing (Priority: 5/5): Picker assesses UK-style proposals for common-carrier-like regulation, data mobility, and access to privately held data, expressing skepticism about individual portability and concerns about implementing data-sharing regimes.

Key Arguments: Big tech’s political prominence stems from the fact that people interact with these firms daily, unlike older antitrust targets such as IBM. A business can have market power without charging a cash price; antitrust can also examine ads, data extraction, and degraded product quality. Data advantages may be legitimate economies of scale/scope or learning-by-doing rather than antitrust problems. Some digital platforms may resemble natural monopolies, suggesting regulation may be more appropriate than traditional antitrust. The historical AT&T and IBM cases show antitrust can shape markets, but effects are mixed and difficult to isolate from technological trends. The consumer welfare standard still works if it means using economics to assess competition, but broader social policy should be left to democratic institutions like Congress. Platform mergers in dynamic markets may create or preserve network effects even when firms are not direct rivals in a static market definition. Individual data portability is not very useful for social platforms; coordinated portability is more relevant but difficult to implement. Forcing data sharing raises major implementation and privacy concerns, making utility-style remedies hard to run in practice. Chinese firms and geopolitics complicate U.S. antitrust debates, but trade policy and market access issues may matter more than antitrust doctrine.

Data Points: Date of podcast: July 16, 2019 - Opening introduction to the episode AT&T antitrust lawsuit: Filed in 1949 - Picker recounts the government’s case against AT&T AT&T final judgment: 1956 - Outcome that required patent licensing and restricted entry into computers IBM antitrust case: 1969 - Government’s major case against IBM after earlier efforts in 1932 and the 1950s IBM System/360 release: 1964 - Cited as a major innovation preceding the antitrust suit IBM suit duration: 13 years - Picker notes the lengthy litigation before dismissal in 1982 EU Intel investigation: 17 years - Used as an example of how antitrust proceedings can lag technological change Facebook user scale: 2 billion - Picker references Facebook’s ability to scale initiatives like cryptocurrency to a massive user base Energy Policy Act: 1992 - Cited as an example of utility-style interconnection regulation Telecommunications Act: 1996 - Used as another example of interconnection and access regulation

Pivotal Quotes: "antitrust, that's a problem you want to have" — Randy Picker: On whether U.S. market power in big tech indicates failure or success "These are wonders. Look at what I get from Google for free, as it were." — Randy Picker: On the consumer experience of digital platforms and why public criticism is complicated "the consumer welfare standard means sort of using economics and antitrust. And if that's what it means, then I go, yeah, it triumphed" — Randy Picker: On whether the consumer welfare standard should be abandoned

Implications: Listeners should expect antitrust debates to broaden, but also to become more technically and politically contested. Picker suggests competition law alone may not solve platform problems; targeted regulation may be needed, though it will be hard to design and enforce.