Why The Government Should Leave Amazon, Google, Facebook, and Apple Alone

by | Oct 13, 2020 | Antitrust & Monopolies

Antitrust legislation is an example of the government’s improper use of political power.

Big Tech has too much power that must be curbed, concluded a recent report by the U.S. House of Representatives panel. It recommends changing antitrust laws to strengthen them and their enforcement. If the Congress approves the panel’s recommendations (which is still a big ‘if’), Big Tech—Amazon, Google, Facebook, and Apple—could end up being broken up, according to Bloomberg News.

The House report accuses these giants of the digital economy for being monopolies that abuse their “market power” by acquiring smaller competitors and by preventing new ones from entering their markets, thereby increasing their own market share and gaining an unfair competitive advantage.  Amazon, Google, Facebook, and Apple have simply grown too big and therefore must be controlled through more stringent antitrust laws.

But is “too big” bad? Should we fear monopolies?

The answer to both questions is ‘no’ (with the important condition that companies do not grow or achieve a monopoly status through government pull). The argument that companies can grow “too big” and monopolies are bad is based on a confusion. As Ayn Rand observed, the confusion stems from packaging together two types of power: market, or economic power, and political power.

Amazon, Google, Facebook, Apple, and other successful companies that have gained a relatively large market share (none of the Big Tech qualify as a monopoly) have economic power. They have gained it by offering value to their customers—products and services—that the customers pay for (or use for free) voluntarily. Such voluntary trade of values has allowed Big Tech to create wealth for their shareholders, who also invest voluntarily in the companies’ stock.

Customers, shareholders, suppliers, or any other trading partners are not coerced to interact with these companies. All trading partners are free to switch to competitors’ products, or start their own companies that offer better values than the Big Tech firms.

Political power, on the other hand, is coercive. Only the government can hold coercive power, which is properly used only in retaliation against those who attempt to physically coerce or defraud others. The government can, and must, apprehend and incarcerate criminals, defend citizens against foreign invaders and terrorists, and enforce contracts. It must do this to protect the freedom of its citizens, including corporations, to live and trade as they see it, as long they do it on a voluntary basis.

Any other than retaliatory use of political power is immoral. When the government initiates coercion against its citizens, it violates their individual rights—which it should protect instead. Individual rights are the principle that defines and makes possible our freedom to live and achieve our values, whether production and trade, or other requirements of human life.

The antitrust legislation is an example of the government’s improper use of political power. Antitrust dictates to companies what they can and cannot produce, with whom they can trade, how much to charge for their products and services, and which markets they are allowed to enter. Any attempt to strengthen the antitrust legislation is immoral, as it aims to hamper the production and trade of material values that benefit our lives. To act morally, the government must abolish antitrust—and resume its proper role as the protector of individual rights.

I recognize that Big Tech has significant influence over people, and I don’t agree with all the actions of its members. Despite the tremendous value of many of the services of Google (rapid searches for information, Google Maps, Gmail, YouTube, etc.), Google also tilts its search algorithms to screen out or deprioritize particular political views or information about them. Facebook that has been more tolerant of a variety of views on its platform, has also succumbed at times to removing posts that challenge culturally dominant views. Despite significantly benefiting its customers in many ways, Amazon has stopped selling books it deems politically incorrect (recently removing Margaret Mitchell’s Gone with The Wind).

But as long as the Big Tech firms trade on a voluntary basis and don’t resort to physical coercion or fraud, their moral right to produce and trade as they see fit must be defended. If we don’t like the way they operate or are worried about their influence, we are free to not buy or use their products and services. We are also free to recognize their faults, such as biased search results, and act accordingly: treat such results with suspicion and do additional research.

Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada. How to Be Profitable and Moral” is her first solo-authored book. Visit her website at profitableandmoral.com.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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