I stopped thinking of antitrust cases as a slap on the wrist. I now think of them as a "Congratulations! You Won!" ceremony where the trophy is a verdict to split up.
When the Big Tech antitrust hearings started gaining momentum in the summer of 2020, I was pretty defensive of the companies. I thought Apple, Google, Facebook, and Amazon all growing as large as they did was a sign that our market economy was actually working exactly as intended. All of these companies made the best product or offered the best service in their respective sector, and even if they were probably monopolies, that was okay because it was only because the best product won out. Simple as that.
It was at some point shortly after those first hearings that I heard a quote that changed my entire outlook on antitrust.
"It doesn't matter if the company earned their monopoly. It's still a monopoly."
Boom. That was it. The entire framework for how I had been thinking about these antitrust cases was demolished. Because it's true.
Amazon revolutionized e-commerce. Steve Jobs famously coined the "It just works" slogan for Apple, but in many ways I think it applies more accurately to Amazon. You search for a product, you click "Buy," and it shows up at your doorstep two days later. Done deal. The ability for Amazon to take two of its biggest vulnerabilities — its hefty server requirements and its delivery network — and bring them in-house to be refined, mastered, and then sold back as a product is nothing short of miraculous. As a result, Amazon controls about 37% of the US e-commerce market, which doesn't sound like a lot, but when the next biggest competitor is Walmart with just over 6%, it's a lot. That's great that they earned that big of a slice. But when they start using that slice to unfairly promote their own private-label products and squeeze the margins of small businesses forced to sell on the platform, then that becomes a problem. Amazon should be broken up from AWS altogether, and more restrictions on how Amazon can play in its own marketplace need to be implemented.
Apple single-handedly launched the app economy. Some of the most recognizable startups of the last decade — Uber, Snapchat, Venmo, Waze, and many others — were built solely off the back of this landmark decision by Apple to not only allow third-party apps onto the iPhone, but to create a clean, regulated marketplace for distributing and promoting these apps with the App Store. As payment for this innovation and the ongoing maintenance of the platform, they take a 15-30% cut of all in-app purchases, which has significantly added to Apple's bottom line over the last 14 years. They created something really innovative, and they earned that revenue. But there comes a point where the profits transition from feeling congratulatory to feeling predatory, and even if I don't know exactly where that line is, 14 years feels like it's passed it. App-based businesses deserve to innovate and profit off the iPhone platform without paying a minimum 15% tax to Apple with every dollar earned. I think it's time regulators mandate Apple run its App Store at a ~5% profit margin. Cover your costs, make a few extra bucks for your effort, and then get out of the way.
Google pioneered the entire search industry. They've become synonymous with the service they offer and by most accounts offer the best experience in search. And as a result of this innovation, they control about 90% of the search market. That's great that they earned that big of a slice. But they don't necessarily deserve to keep it. Because even if they earned their share by creating the best product, their outsized share is blocking out other companies from making even better products, and their outsized influence in the online ad market is allowing them to unfairly call the shots for the entire online ad marketplace. They should be more heavily regulated.
Once again: it doesn't matter if you earned your monopoly by offering the best product. It's still a monopoly and should be treated like one.
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