Before anyone had heard of COVID-19, Big Tech companies had secured unassailable power in their core markets, and they were leveraging that dominance into new areas.
Amazon was moving into entertainment, Apple had claimed wearables, Facebook was even eyeing currency itself. They had long passed the stage where their greatest profits came from innovation, and were instead focused on monetizing their dominance. Their market power allowed them to starve new entrants of capital, keep competitors off their platforms, and use their profits to turn entire industries (e.g., streaming movies) into loss-leader features that differentiated and protected the lucrative core businesses (e.g., next-day delivery of toilet paper).
Then the pandemic shut down retail shopping, closed in-person entertainment, and moved nearly all of our interactions onto screens—and Big Tech grew even stronger. The rise to dominance of Big Tech has produced staggering share price gains in the short term, but it also suppresses innovation and harms long-term economic growth.
That is why the biggest economic boost that the Biden-Harris administration can deliver won’t be stimulus or bailouts, it will be committing funding and political support for serious antitrust enforcement. I’ve been calling for the antitrust breakup of Big Tech for years, but the last few months of 2020 give me hope that this is going to happen. In that period, we witnessed a surge of legislative and legal actions that respond to the problems of concentrated capital generally and the dangers of Big Tech specifically. If we maintain this momentum, we stand a chance of not only restoring competition and innovation to our markets, but also of beginning the more fundamental repair process our nation needs.