Sen. Elizabeth Warren, D-Mass., insists that “competition is dying” in the tech industry because of giant corporations like Google, Amazon, and Apple.
But to entrepreneur Christopher Searles, they don’t pose a threat to companies like his. In fact, quite the opposite, he tells The Daily Signal.
“As a tech entrepreneur and small business owner, I don’t see any of these companies as holding me back. Rather, they enable me to do things that I would never have been able to do 20 years ago,” Searles said in a phone interview. “We need to spend our resources encouraging and promoting innovation so the next Google, Amazon, Apple, or Facebook can come along to change the game entirely, not just try to grab a seat at the table.”
Searles started his first software company focused on developing streaming video applications, Promollis, in 2003 as a junior at Rensselaer Polytechnic Institute in New York, then sold it in 2007 before starting the Long Island-based Searles Media, a technology consulting firm advising small businesses.
Warren spoke at a New America event last month about the need for greater regulation in numerous industries—particularly in the technology industry. She singled out the nation’s leading computer maker, retailer, and search engine, observing that “competition is dying.”
“Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival. But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out competition,” Warren said during her remarks on Capitol Hill.
In 2013, the Federal Trade Commission investigated alleged abuses by Google, but determined there was insufficient evidence of “search bias.” However, the European Union is continuing its inquiry into whether Google has violated antitrust laws.
“Strong executive leadership could revive antitrust enforcement in this country and begin, once again, to fight back against dominant market power and overwhelming political power,” Warren suggested.
Searles said he feels differently, noting how quickly small companies can become big in the tech industry.
“Today’s markets change far too frequently to assume that Google’s dominance in search or Amazon’s stronghold on e-commerce will mean anything 10 years from now,” Searles said. “We’ve watched the pace at which technology has both created and destroyed entire markets over the past 20 years, and focusing on an individual organization’s share of a current market is a fruitless endeavor.”
Amazon and Apple did not respond to phone and email inquiries from The Daily Signal. Google spokesman Riva Litman told The Daily Signal the company did not have a comment on Warren’s proposals.
Warren’s push could harm consumers, James Gattuso, a senior research fellow for economic policy studies at The Heritage Foundation, told The Daily Signal.
Gattuso, who previously worked at the Federal Communications Commission, said opposition to big tech firms today echoes the government’s antitrust case against Microsoft Corp. in the late 1990s, and case against IBM in the 1970s.
“I haven’t noticed IBM being an unbeatable monopoly,” Gattuso said.
Warren talked about how “thousands of authors claimed that Amazon uses its position as the dominant bookseller to steer consumers to books published by Amazon to the detriment of other publishers.”
But Gattuso said this is not a concern for consumers, but for other companies.
“The question is, should books be more expensive or less expensive? Authors and publishers believe they should be more expensive. That’s typically not what consumers think,” Gattuso said. “The conventional view of antitrust laws is that it keeps a company from jacking up prices and squeezing consumers. Amazon is squeezing the publishers and companies and charging consumers less.”
Jeffrey Eisenach, a visiting scholar at the American Enterprise Institute who wrote a book about the Microsoft Corp. case, said he believes the company did violate some antitrust laws.
However, Eisenach said he doesn’t think those violations apply to the companies Warren talked about. Eisenach explained that antitrust laws are designed to prevent harm to consumers, not one company hurting a competing company in what is essentially market competition.
“There is vigorous competition and the benefits to the consumer are huge,” says Jeffrey Eisenach.
“Google does restaurant reviews and restaurant review sites don’t like the impact Google is having,” Eisenach told The Daily Signal in a phone interview. “The Federal Trade Commission, during the [President Barack] Obama administration, looked at this and determined it was not harming consumers.”
Aiming antitrust laws at any company for being large will only destroy incentives to grow and innovate, Eisenach said.
“This is largely ideologically driven, that all big companies are bad,” Eisenach said. “One giant company is competing with another giant company. Facebook is competing with Twitter, which is competing with LinkedIn, which is competing with Skype, which is competing with WhatsApp. There is vigorous competition and the benefits to the consumer are huge.”
If Google tried to charge for searches, people would use another search engine, said Adam Broetje, chief executive of Odd Dog Media, a digital marketing firm in Seattle that works with small businesses.
“If Amazon began charging excessively for two-day Prime shipping, consumers would simply purchase directly from the manufacturers or smaller online retailers,” Broetje continued in an email. “If Apple raised prices on their iPads, iPhones, or tried to charge more for music on iTunes, people would switch to a Surface tablet, Android phones, and get their music from Spotify.”
For its part, Spotify spokesman Jonathan Prince told Recode the company agreed with Warren. Spotify is a service that allows users to stream music.
“Apple has long used its control of iOS to squash competition in music, driving up the prices of its competitors, inappropriately forbidding us from telling our customers about lower prices, and giving itself unfair advantages across its platform through everything from the lock screen to Siri,” Prince told the tech website. “You know there’s something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn’t share any of that with the music industry. They want to have their cake and eat everyone else’s too.”
Nevertheless, Broetje argues the big companies create more opportunities for the little ones.
“All three of these companies have invested billions in building infrastructure that we rely on every day to make our lives simpler, more efficient and more affordable,” he said. “The reality is that the internet and today’s technology simply enables too many alternatives for these companies to be able to price gouge customers using monopolistic style tactics.”
