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This is my field. I read the article some years ago and looked over parts of it again yesterday. I was and remain _extremely unimpressed_. I do not think th

This is my field. I read the article some years ago and looked over parts of it again yesterday. I was and remain _extremely unimpressed_. I do not think the article had much of any influence on the thinking of economists on the issues it covers. I have never heard it discussed or mentioned in an economics seminar, nor is it taught. There are economists in industrial organization who think big tech firms need a different regulatory approach. This is fair. But this opinion is not generally informed by khan’s arguments. In my opinion, you can make the case for regulating tech firms most easily for Facebook (which acquired competitors WhatsApp and Instagram and probably shouldn’t have been allowed to). The big tech firms have also done things occasionally which are clearly anticompetitive. Google and Facebook had a (recently revealed) secret anticompetitive agreement about bidding on ads, for example. That was a clear antitrust violation. Likely Google’s payment to Apple to remain the default search engine on iOS is at least questionable. I say all of this to illustrate that I’m not a skeptic about regulating tech firms vis antitrust law. However, the firm where I think this is hardest is Amazon. I don’t see them as being too large or too dominant. As of 2019 Walmart did about 3 times as much retail business as Amazon, iirc. Amazon faces competition from Walmart, Target, and any firm who sells a product online. The cost of going to a competitor’s website is zero. If consumers are repeatedly buying from Amazon instead, that’s a sign that Amazon is doing something right. The claim is made here frequently that AWS is a monopoly. That is very hard to square with the existence of serious competitors like Microsoft and Google. To respond to one more of your points: if you achieve a near monopoly by offering lower prices we economists would say that is good! Quantities are high and prices are low. You are a better option than your competitors. Khan seems to think that this is somehow bad for consumers, perhaps bc “eventually” Amazon will raise prices. (This is not remotely plausible.) If you want a vastly, VASTLY better take on modern antitrust which includes good discussion of tech firms and dominant platforms, read “the antitrust paradigm” by jonathan baker.

akiselev 5y ago
> The big tech firms have also done things occasionally which are clearly anticompetitive. Google and Facebook had a (recently revealed) secret anticompetitive agreement about bidding on ads, for example. That was a clear antitrust violation. Likely Google’s payment to Apple to remain the default search engine on iOS is at least questionable. Why occasionally? The vast majority of their products at the very least seem like textbook cases of predatory pricing to this layman. Throw in all the other anticompetitive stuff and big tech starts to look like the Uber/Airbnb of the rule of law.
- huitzitziltzin 5y ago
  They occasionally do anticompetitive things IMO bc that’s what I’m aware of. There may be (likely are) other anticompetitive things that they do which I am not aware of bc they have not been discovered yet. “The vast majority” of their products seems like a stretch. But setting that aside, many economists (including me) are skeptical of a “predatory pricing” argument. The idea that a firm would actually lose money for years to get rid of competitors in order to then raise prices later makes us skeptical. (At the very very least it would be extremely expensive - and then as soon as you raise prices and act like a monopolist you attract the attention of regulators!) Separate from the question of whether a firm would actually do it, if a firm were doing it, would it be bad for consumers during that time? Suppose Amazon is currently engaged in predatory pricing and is selling everything at a loss, below cost, but will in the future drive all of its competitors out of business and then raise prices... (note: I don’t think this is a plausible theory of Amazon’s behavior at all.) Why shouldn’t the regulator just take its time regulating? If everyone in the market is getting goods below cost, that seems like a win for consumers. If and when Amazon decides to act like a monopolist and raise prices later... regulate them! But if they want to lose money selling cheap stuff now, this seems like a win for consumers now so... let them! Predatory pricing arguments are not that well received in most of the economics profession, in part for these reasons.

akiselev 5y ago

> The big tech firms have also done things occasionally which are clearly anticompetitive. Google and Facebook had a (recently revealed) secret anticompetitive agreement about bidding on ads, for example. That was a clear antitrust violation. Likely Google’s payment to Apple to remain the default search engine on iOS is at least questionable. Why occasionally? The vast majority of their products at the very least seem like textbook cases of predatory pricing to this layman. Throw in all the other anticompetitive stuff and big tech starts to look like the Uber/Airbnb of the rule of law.

huitzitziltzin 5y ago
They occasionally do anticompetitive things IMO bc that’s what I’m aware of. There may be (likely are) other anticompetitive things that they do which I am not aware of bc they have not been discovered yet. “The vast majority” of their products seems like a stretch. But setting that aside, many economists (including me) are skeptical of a “predatory pricing” argument. The idea that a firm would actually lose money for years to get rid of competitors in order to then raise prices later makes us skeptical. (At the very very least it would be extremely expensive - and then as soon as you raise prices and act like a monopolist you attract the attention of regulators!) Separate from the question of whether a firm would actually do it, if a firm were doing it, would it be bad for consumers during that time? Suppose Amazon is currently engaged in predatory pricing and is selling everything at a loss, below cost, but will in the future drive all of its competitors out of business and then raise prices... (note: I don’t think this is a plausible theory of Amazon’s behavior at all.) Why shouldn’t the regulator just take its time regulating? If everyone in the market is getting goods below cost, that seems like a win for consumers. If and when Amazon decides to act like a monopolist and raise prices later... regulate them! But if they want to lose money selling cheap stuff now, this seems like a win for consumers now so... let them! Predatory pricing arguments are not that well received in most of the economics profession, in part for these reasons.