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Big Tech and the Digital Economy: The Moligopoly Scenario
This book asks a simple are the tech giants monopolies? In the current environment of suspicion towards the major technology companies as a result of concerns about their power and influence, it has become commonplace to talk of Google, Facebook, Amazon, Apple, Microsoft, or Netflix as the modern day version of the 19th century trusts. In turn, the tech giants are vilified for a whole range of monopoly harms towards consumers, workers and even the democratic process. In the US and the EU, antitrust, and regulatory reform is on the way.
Using economics, business and management science as well legal reasoning, this book offers a new perspective on big tech. It builds a theory of "moligopoly". The theory advances that the tech giants, or at least some of them, coexist both as monopolies and oligopoly firms that compete against each other in an environment of substantial uncertainty and economic dynamism.
With this, the book assesses ongoing antitrust and regulatory policy efforts. It demonstrates that it is counterproductive to pursue policies that introduce more rivalry in moligopoly markets subject to technological discontinuities. And that non-economic harms like privacy violations, fake news, or hate speech are difficult issues that belong to the realm of regulation, not antimonopoly remediation.
Using economics, business and management science as well legal reasoning, this book offers a new perspective on big tech. It builds a theory of "moligopoly". The theory advances that the tech giants, or at least some of them, coexist both as monopolies and oligopoly firms that compete against each other in an environment of substantial uncertainty and economic dynamism.
With this, the book assesses ongoing antitrust and regulatory policy efforts. It demonstrates that it is counterproductive to pursue policies that introduce more rivalry in moligopoly markets subject to technological discontinuities. And that non-economic harms like privacy violations, fake news, or hate speech are difficult issues that belong to the realm of regulation, not antimonopoly remediation.
- GenresEconomics
320 pages, Hardcover
Published December 8, 2020
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Displaying 1 of 1 review
February 7, 2021
Amidst an intense and unsurprisingly lengthy duel between consumer welfarists ("competition should not protect competitors, but the process itself") and structuralists ("big = evil") comes Professor Petit with a very ambitious attempt to actually look into the abyss of economic functioning of what we know as the "Big Tech", i.e. Google, Facebook, Microsoft, Amazon, Apple, and Netflix.
The book (really) begins with a simple question - how is it, that we all "know" that Big Tech is nothing but a bunch of monopolist organisations, and yet if we look at their objectivised self-perception (their SEC and other filings) and their behaviour, it all seems to suggest that they not only do not perceive themselves as monopolists, but they do not behave like ones (at least in classical "neoclassical/neokeynesian" economics).
The book then explains concepts such as the tipping/tipped market, monopoly, network effects, two-sided markets, etc., so as to provide the reader with basic conceptual setup necessary to understand the main point. Moreover, the book very interestingly and concisely described the business model of each of the giants and basic characteristics of the structural design of these fast growing innovation-based conglomerates...
...and while this is the place where I should probably describe and perhaps criticize the concept of moligopoly, I will not do so and merely hint that under the conditions of immense uncertainty, these companies tend to invest heavily into R&D and compete for the markets instead of competing on the markets, also depending on whether the market in question is already tipped or not. In the very end, the obligatory implications for competition law practice are suggested.
However, policy implications were not the most intriguing part of the book. What I enjoyed immensely, on the other hand, was actually the theory behind it which is apparently based on a large amount of interesting literature and research (good point no 1) and provides a quite interesting synthesis of many interesting observations that go beyond the traditional understanding of how these companies actually function (good point no 2).
All in all, a very good book offering a fresh view on Big Tech, well worthy of second perusal. Also, secret tip, there is a very nice colloquium on the book at the Chillin Competition blog. Enjoy.
The book (really) begins with a simple question - how is it, that we all "know" that Big Tech is nothing but a bunch of monopolist organisations, and yet if we look at their objectivised self-perception (their SEC and other filings) and their behaviour, it all seems to suggest that they not only do not perceive themselves as monopolists, but they do not behave like ones (at least in classical "neoclassical/neokeynesian" economics).
The book then explains concepts such as the tipping/tipped market, monopoly, network effects, two-sided markets, etc., so as to provide the reader with basic conceptual setup necessary to understand the main point. Moreover, the book very interestingly and concisely described the business model of each of the giants and basic characteristics of the structural design of these fast growing innovation-based conglomerates...
...and while this is the place where I should probably describe and perhaps criticize the concept of moligopoly, I will not do so and merely hint that under the conditions of immense uncertainty, these companies tend to invest heavily into R&D and compete for the markets instead of competing on the markets, also depending on whether the market in question is already tipped or not. In the very end, the obligatory implications for competition law practice are suggested.
However, policy implications were not the most intriguing part of the book. What I enjoyed immensely, on the other hand, was actually the theory behind it which is apparently based on a large amount of interesting literature and research (good point no 1) and provides a quite interesting synthesis of many interesting observations that go beyond the traditional understanding of how these companies actually function (good point no 2).
All in all, a very good book offering a fresh view on Big Tech, well worthy of second perusal. Also, secret tip, there is a very nice colloquium on the book at the Chillin Competition blog. Enjoy.
Displaying 1 of 1 review