I believe we can all agree that competition is good for the American economy. The more companies compete over customers, market share, and profits, the better the consumer is as they have greater choice and usually lower prices as marketers target their purchases.
Regulation of our markets and our business community is important. While there are some that prefer buyer beware, trust system, or self regulation, I believe that there is a need to have someone looking out for the consumer’s best interest because of the complexity of our economy and the level of asymmetric information that exists.
That does not mean that every regulation is a good regulation. Or that our economic markets should be crippled by a thick stew of bureaucratic nonsense that harms consumer outcomes, creates negative market outcomes, and anchors our economy. We have yet to find that delicate balance between sufficient regulation and consumers being responsible for their choices.
An issue I have with regulation at times is when the will of the people is set aside because a bureaucrat has a predetermined opinion of how bad a company is or how bad an industry operates and acts on their dogma rather than what the consumer wants. There is a difference between bad business behaviors or anticompetitive behavior and consumers simply flocking to the same individual product.
We want companies to compete directly with each other. Not companies prodding the federal and state governments to compete for them. That does save them time and money from actually creating a product or service that people actually want and are willing to pay for. Again as we just learned from this past election, the people want their voices heard and are not interested in what the powers that be think they should want.
In the case of Google, the Department of Justice is seeking to split Chrome from Google because of their dominance of the search market and now the browser market. They seem to be punished for being good at what they do. Are they actually stifling competition? Google is no saint in the marketplace, but are they creating partnerships that actually deliver the best interests of the consumer experience?
I get the concerns over partnership deals between the big tech companies that seem to block out competitive offerings that could potentially meet the consumer demand. Like having Google be the default search on Apple leads questions of whether the people really want Google or just are accustomed to having Google as their default search engine.
My argument is “are there really any products that are competitive against Google” that are really being harmed? In the browser space, internet explorer used to be the dominant option because it was default on Windows. But eventually its features were not really enough to satisfy customers. There is Firefox and now Microsoft Edge, with the latter being the replacement for explorer.
Windows computers do not come with Chrome installed. You have to install it onto your laptop. So if people are going out and installing the product that is not default, then they must really want it and those features. Or otherwise the users could download Firefox or use the native Edge browser that comes with the device.
Users have a wide range of choice for search engines. But Google is the easiest one to really use. There is still Yahoo, where you can be inundated with Yahoo articles. There is Bing where you can see a completely different background, but it is not a bad option. There are a host of other options as well.
Again Google is no saint, and maybe there should not be as many exclusive deals. But I have no problem with a company aligning with another company that helps deliver the best user experience for their device. Should we start breaking up restaurants because we do not like the farms or suppliers they have exclusive rights with?
The issue may go beyond just the affiliations. There are many people who do not like the control that Google enjoys. There is a level of power that comes with being that good at what they do. They know so much about consumers because they can see what and how we search. They see what we click on and what we scroll past.
Tech companies like Facebook, Google, Apple, and others know us sometimes better than we may know ourselves and there are people who are either privacy advocates or simply weirdos who do not like any big brother type holding any sort of power over them.
I am not sure that breaking up companies should be the path for the federal government because it does not really create long term competition. Some reference the breakup of the Bell Telephone company, while ignoring that they came back together decades later. The difference was that Bell had the ability to completely block out competition.
In the tech space, the ability to compete with a better product, a better service, and more reliability is still there and we see markets continually get disrupted by new providers each year without big brother telling who can operate. The market has done an effective job of essentially allowing consumers to choose alternatives.
Apple dominated the smartphone market when they released their eye phone. That market became more competitive when Android phones took a large chunk of that market away. A Google product by the way that led to greater competition.
There is some reasonable room for regulators to protect society from these companies from getting obscenely large without breaking them up like a gorilla is an antique shop. Maybe scrutinize their merger and acquisition activity and maybe relax patent enforcements when the market saturation is not ideal, allowing competitors to enter the market.
That would force these companies to innovate faster and actually compete. That would be a more reasonable approach than breaking up companies to appease their friends in Europe who probably want their large conglomerates to have a better ability to buy American companies.