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Antitrust Alone Won’t Fix the Innovation Problem

For all the attention on antitrust enforcement against the biggest US technology companies, the more important issue for the economy concerns the direction of technological change. Ensuring that innovation benefits the many will require a more comprehensive policy approach.

CAMBRIDGE – The US Department of Justice’s lawsuit against Google may be the first salvo in a forthcoming barrage of antitrust actions directed at Big Tech. Curbing these companies’ power is one of those rare issues that receives bipartisan support on Capitol Hill.

Though the Google lawsuit focuses narrowly on “anticompetitive and exclusionary practices in the search and search advertising markets,” a lengthy report released recently by the US House Antitrust Subcommittee lists several other issues on policymakers’ radar. In addition to Google’s dominant role in digital advertising and its alleged practice of steering users to search results beneficial to itself, US lawmakers are eyeing Facebook’s overwhelming control of social media, Amazon’s mounting command of retail markets, and potential privacy violations by all the major platforms.

But Big Tech’s most pernicious effects on economic growth and consumer welfare may stem less from “anticompetitive and exclusionary practices” than from its role in directing technological change more broadly.