If Breaking Up Is the Answer, Then What Is the Question?

Aviv Nevo discusses the implications of antitrust enforcement of big tech companies.

In many policy circles, big tech companies are viewed as having too much power. However, consumers continue to use the services of these companies. Consumers’ continued support could be an indication that the products and services offered by big tech have benefited consumers and are superior to alternatives, or they could be an indication that consumers are locked in to choices and effectively denied alternative options and the benefits of healthy competition.

Critics of big tech have proposed solving the problem by making big tech smaller. However, any attempt at breaking up big tech will likely face legal headwinds. In this article, Aviv Nevo of the University of Pennsylvania argues that, given these difficulties, we should ask if breaking up companies is solving the real issues policy makers are concerned about. While it is hoped that breaking up big tech will lead to more competition and that competition will solve these issues, neither of these is guaranteed.

This article was originally published by Competition Policy International in October 2021.

The views expressed herein do not necessarily represent the views of Cornerstone Research.