PublishedOctober 25, 2010

TPI Antitrust Event Offers Company Side Of Debate

The Technology Policy Institute reviewed major past antitrust cases before looking to the future and the potential for regulators to jump in on issues like cloud computing. Panelists at the Friday event, organized by the conservative think tank, discussed antitrust law and enforcement in the high-tech sector.

The first panel focused on how antitrust enforcement action in recent decades against IBM, AT&T, Microsoft, and Intel has impacted those companies.  In evaluating these cases, presenters noted that in each case, the ultimate source of change in the competitive landscape had little to do with antitrust litigation, but was spurred on by innovation and new technologies.  They assert that in prior technology cases, government was unable to see how technology would develop over time, and because this lack of foresight continues to exist, antitrust remedies in the tech sector should not be intrusive.

In looking at data on Intel, its competitors, and consumers since the outset of the investigation of the chipmaker, a presenter concluded that despite the illegal rebates that Intel offered, the fine and order to stop it is not helping consumers yet. He also suggested antitrust enforcement in the technology sector impedes innovation  — without achieving its primary goal of protecting consumers.

But Joseph Farrell, director of the bureau of economics at the Federal Trade Commission took issue with those asserting that antitrust is incompatible with the techn industry. He said that where there is a lack of evidence on the impact enforcement will have on innovation, the appropriate action is for government to enforce the law — and protect customers and competition.

CCIA agrees with Farrell. After nearly 40 years of monitoring and weighing in on antitrust policy in the high tech sector, CCIA understands the problem of misusing the tool. But we have long believed it is necessary to have antitrust cops on the beat so that entrenched big companies do not try to snuff out the next big innovation or disruptive technology — simply to protect their own business model.

Because the tech sector depends heavily on interoperability for its products and apps to work, there is more opportunity than in most industries for bad behavior that squelches innovation. Too little antitrust enforcement is as dangerous as too much for the high tech industry.

The second panel focused on new and emerging markets and technologies and the potential impact of antitrust enforcement and regulation.  Panelists examined issues such as net neutrality, vertical integration in technology firms, and cloud computing and argued that government regulation wouldn’t help and would instead lead to evasion of the new regulations.

Panelists said antitrust law does not need to be amended or updated for the high-tech industry – and that authorities charged with protecting consumers should be cautious about intervening as that could harm some businesses.

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