Thread by @TomValletti

What I think when I think about BIG TECH tech - after the #SIEPRSummit.

Bottom line: “We have a BIG problem – especially with Google and Facebook – wake up and DON'T say it’s not about antitrust. Unprecedented phenomena require new thinking.” Let me elaborate in this THREAD
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The economics. Markets with formidable network externalities, entry barriers, endogenous sunk costs, business models with ‘free’ goods, consumer behavioural biases and inertia (defaults are kings) -> endemic market failures. 1st fundamental theorem of welfare economics FAILS
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The size of the problem. Take whole US population, add total EU population. Multiply by a factor 3: you get size of customer base of FB or of G. Dimension is staggering. (BASTA with the MySpace counterexample! They’ve been dominant for over a decade – wait another 10 years?).
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Mergers. G has been buying one company per month, every month, for the past 18 years: en.wikipedia.org/wiki/List_of_m…. Last EU investigation was G acquisition of DoubleClick 12 years ago (approved). Let me not start on FB... Assertion there is “Over enforcement”? Laughable
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What about conduct? You hear “Concerns do not relate to *competition*, but inequality, democracy, consumer protection”. Of course there are “other” concerns. But let’s not PRETEND lack of competition is a minor side issue. Consumer protection and privacy ARE competition issues
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Comment 1. “In the US we don’t break up firms”. (a) Who’s talking always of breaking up? Microsoft was not broken up, but there was intervention that was on point and worked. (b) So let’s do perfectly nothing instead because in the US we like monopolies?
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Comment 2.”In Antitrust we apply principles across the whole economy:we have the tools and a rich case law.” Antitrust is not the Bible.We need to understand unprecedented phenomena not looking just at PRECEDENT.Circular: we did not intervene –so we did not create precedents!
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Economics can help with studying modern theories of harm. Should focus not only on exclusion but on EXPLOITATION. G and F have ability to extract certain bargains: that’s the core with data.

Not sure I made many friends in Silicon Valley. Back to Brussels.
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