What Lisa Khan’s US antitrust will do against Big Tech
Lina Khan seen by Alberto Artoni, AcomeA SGR's US Equity portfolio manager
Lina Khan is just 32 years old, was born in London to Pakistani parents and is an Associate Professor at Columbia Law School. Joe Biden wanted her to lead the "Federal Trade Commission" , the US government agency for antitrust and consumer protection.
Many had not heard of her before she was appointed to lead the FTC, but among the most attentive economists and jurists her article "Amazon's Antitrust Paradox" published in 2017 certainly did not go unnoticed. In that article, Khan, then still a student at Yale, proposed a revolutionary idea, in stark contrast to the antitrust policies implemented in the United States in recent decades.
In a nutshell, the principle according to which the main objective of antitrust policies is to favor the lowest possible price for goods and services is overcome in the light of the competitive dynamics of the contemporary economy. Although the article in question is focused on the Amazon case, it is easy to understand how this new way of conceiving the antitrust function could have a significant impact on other big tech companies as well; we recall how Khan herself collaborated in the commission of inquiry precisely in this area.
Khan's appointment coincides with a growing consumer focus on privacy and the use of personal data by the "digital advertising" industry. The spread of the Internet has ensured quality services often at very low or even zero cost. But, also thanks to a growing interest in the press and media, the famous phrase "when you are not paying for a product, the product is you" is no longer just a joke for insiders, but also reflects the increasingly widespread awareness. between policymakers and regulators. Finally, we point out how the initiatives of the G7 on the tax front, although still in the definition phase, would have a potentially more marked impact precisely on the large technology groups, which today make extensive use of various tax optimization practices.
It is currently difficult to hypothesize if and how a renewed FTC will be able to give life to a new course, overcoming the historical approach focused on minimizing the price for consumers. A similar level of uncertainty also remains with regard to any new regulations to protect privacy and / or to combat tax optimization. However, we can see that the high concentration level of the S&P index does not reflect particularly serious concerns to date. The top 5 stocks known as Big Tech represent about 20% of the entire list. Only in the distant 2000, shortly before what was later defined as the bursting of the "dot-com" bubble, did the American market reach a similar level of concentration. History teaches that complacency and lack of critical vision can be paid dearly on the markets.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/lina-khan-antitrust-usa-profilo/ on Sun, 27 Jun 2021 06:30:04 +0000.