SOURCE: Investors Business Daily
URL:
http://www.investors.com/politics/editorials/are-democrats-about-to-declare-war-on-silicon-valley/
Sen. Elizabeth Warren, the voice of today's Democratic Party, has decided that Apple, Google and Amazon are monopolists that must be brought to heel by the trust-busters in federal government. Silicon Valley might want to rethink its politics.
In a speech on Wednesday calling for stronger antitrust enforcement, Warren complained that "competition is dying" in America. As evidence, she cited the consolidation of the banking, insurance and airline industries, internet providers ... even Big Beef and Big Chicken.
Then she launched into an attack on the three tech giants, claiming that they are using their "large platforms" to "snuff out competition," "harm rivals," and block "new entrants ... that want their chance to change the world again."
Notice the one tech giant Warren didn't mention: Microsoft. For those with short memories, the Warrens of the world were making the exact same argument against Microsoft 20 years ago. They said Microsoft was illegally using its "platform" -- in that case, Windows -- to snuff out competition, and unless Microsoft was broken up the market would never be truly competitive.
Well, the government failed to break Microsoft up -- although it did keep it tangled up in antitrust courts for years. But even Warren doesn't see the company as a threat any more. The tech industry is a prime example of why heavy-handed antitrust isn't needed.
Warren's specific examples of "harm" done by Apple, Amazon and Google make no sense either. She complains that Google is hampering rivals to its "Google Plus user review feature." Has she never heard of Yelp?
She says Apple is making it hard for rivals to offer competitors to Apple Music. But Apple Music has half as many subscribers as Spotify. And Apple's iOS only commands 31% of the smartphone market, while Google's Android holds almost 68%.
The rest of Warren's speech is equally ill-informed. She says the chicken industry is too consolidated, but fails to note that chicken prices have climbed more slowly than inflation over the past two decades.
She says internet companies are ripping consumers off, but internet prices have climbed just 1% in the past 10 years.
And what about all the concentration in the airline industry? Turns out air fares have fallen 10% since 2013, according to the government's Consumer Price Index.
Warren can't even keep her complaints straight. She says competition is vital because it will "reduce prices and increase the quality of goods and services." Then moments later she blasts Wal-Mart for bringing competition and lower prices to towns across America.
Even if competition in America were dying, the last thing anyone should want is the government to get more involved.
It was Dodd-Frank and the mountain of regulations it unleashed that are largely responsible for the demise of competitive community banks. ObamaCare has been driving the recent spate of mergers both in the insurance and hospital industries. The Federal Communications Commission has a long and checkered past of blocking or inhibiting new entrants and disruptive technologies. Federal farm programs benefit giant agribusinesses. On and on the list goes.
The problem isn't just that Warren has precious little knowledge or understanding of how the free market works. It's that from her perch in the Senate she yields a lot of power over it. Worse, there are thousands upon thousands of people just like her in positions of power throughout the federal government.
If you want more free market competition, there's a simple solution. Get government out of the way.
