![]() Thanks to the DMA, Europe will gain vast new powers to police large “gatekeeper” firms like Amazon and Apple, so preventing anti-competitive behaviour before it happens. They are stretching competition rules to the limit in a bid to bring large companies to heel, often for ideological reasons. In America a new generation of gung-ho trustbusters is now in charge, with no time for the hands-off model once preferred there. But now she is being goaded to do ever more to rein in the titans. A lot of what she has done to hem in big tech-for example all but banning acquisitions of potential future rivals by large incumbents-still looks sensible. Ms Vestager’s record in keeping competition vibrant in old-world industries is creditable. Mass sackings and sagging share prices are a sign of deflated hype following a pandemic-driven boom, not thriving competition. The power of AI to disrupt monopolies may prove illusory, she says. “It may be over time that digital monopolies are toppled,” she says, “but time is not something you have if you want the full potential of innovation to be unlocked.” There is plenty of market power to be abused in the years it takes for a better search engine or social-media platform to come along. But she still sees life in her old stringent approach. The Dane has noticed tech’s recent travails. Admirably for a regulator, she is open to those wondering if the assumptions behind the approach that has made her a star among trustbusters may be obsolete. This is what America’s hands-off school of antitrust said would happen-and Europe’s assumed could not.Ĭharlemagne put this case to Ms Vestager in her Brussels office recently. The lure of capturing vast profit pools spurred innovation, to the benefit of consumers. It was not regulatory action that spurred rivals: both Bing and TikTok have relied on ingenuity more than a helping hand from the state. ![]() Is big tech’s weakening grip on consumers a sign that Europe’s approach is working? On the contrary. The share prices of the biggest firms have sagged, because investors who used to imagine boundless monopoly profits tomorrow now assume competition will grind down margins. Across Silicon Valley, tech firms are now laying off workers. Supposed future monopolists like Uber and Netflix have flagged. Microsoft’s Bing, long a distant also-ran, is the latest sensation. Advances in artificial intelligence ( AI) are powering a new generation of rivals. For the first time in two decades of dominance, Google is facing a challenge to the search engine that underpins its profits. Teens have decamped to TikTok, a zippy short-video app from China. Facebook is now struggling to keep current users engaged, let alone to attract young ones. But recent developments suggest that tech is far more up-for-grabs than Ms Vestager supposed. Only by forcing tech incumbents to open up-for example by forcing Google to hand over data to potential rivals to help them train their offerings-could the playing field be somewhat levelled. Google fine-tuned its services using troves of data, including years of its users’ search and browsing histories. Once you have told Facebook who all your friends are, moving to a rival network is all but impossible, even if the site offers a terrible experience. Ms Vestager’s regulatory method is premised on the idea that consumer tech markets tend to winner-takes-all outcomes: firms that gain an early advantage go on to secure an unassailable perch. That should prompt fresh thinking on how to regulate online champions. At least when it comes to big tech-antitrust’s thorniest problem-things have not panned out as Europe thought they would. For even as its regulatory reasoning has remained the same, the corporate environment it is applying it to has changed. ![]() Nonetheless it should now ask itself if its strong-arm approach is still the right one. Europe might be flattered by such imitation.
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