Why breaking up the Big Tech a bad idea
financialexpress.com
financialexpress.com
Possible alternative to Breaking up: 'Open up' everything! Like what India's UPI did to payments.
Some fav quotes from the news:
> "The last line of the Rajan paper is worth keeping mind: “it is dangerous to apply twentieth century economic intuitions to twenty first century economic problems”. Antitrust is a 20th century institution."
> "India cut into the monopoly powers of Mastercard and Visa by creating a government-funded open-architecture UPI payments system."
> "India cut into the monopoly powers of Mastercard and Visa by creating a government-funded open-architecture UPI payments system."
Maybe I'm missing something, but aren't those two statements in significant conflict?
If "antitrust is a 20th century institution" and "it is dangerous to apply twentieth century economic intuitions to twenty first century economic problems," why then is it good to damage the monopolists by "India cut into the monopoly powers of Mastercard and Visa by creating a government-funded open-architecture UPI payments system"?
That may well be true. However, the well understood meaning of "anti-trust" is anti-competitive/monopolistic behavior.
My quibble wasn't with using tools (whether regulatory or market-based) to deal with anti-competitive/monopolistic practices, it was with the completely unrelated and gratuitous quote:
“it is dangerous to apply twentieth century economic intuitions to twenty first century economic problems”. Antitrust is a 20th century institution."
Which is both incorrect and irrelevant to the next statement:
"India cut into the monopoly powers of Mastercard and Visa by creating a government-funded open-architecture UPI payments system."
What's more, the implication that I got from those statements was that Anti-trust issues were no longer relevant in the 21st century. Which is ridiculous on its face. Perhaps I misunderstood.
Believe it or not, back in those dank, dark ages we call the 20th century, measures to address anti-competitive/monopolistic behavior were not limited to just breaking up companies. In fact, that was pretty unusual.
Instead, lawsuits, fines and regulatory intervention were the mechanisms overwhelmingly used.
I'd note that such tools are used less today, despite the growing consolidation of market power in a variety of industries. More's the pity.