How Federal “Antitrust” Enforcement Would Actually Hurt Consumers
A smartphone today costs you about $208 on average. The same smartphone in 1991 would have cost you the equivalent of $6,485 in today’s money.
Tech companies have made smartphones, computers, online shopping, and many other innovations readily available to everyone. But their success and growth has also brought accusations that they are operating like monopolies.
Politicians and bureacrats are pushing for antitrust enforcement actions to restrict technology companies–in particular, Amazon. They argue that these companies have too much market power.
Certainly, Amazon is big–because a lot of people choose to shop there. But is it too big? There’s a way to find out by studying whether a company can manipulate prices or otherwise harm consumers.
New research from distinguished economist Dr. Art Laffer finds that tech companies,while obviously large, are not monopolies by objective standards. Moreover, the report finds that proposed antitrust legislation in Congress is full of crony capitalism.
Key findings of the report are:
Competition in the digital economy is lowering prices for consumers. For one example, digital ad time and space that cost $100 in 2009 would cost $71 in 2022–despite overall inflation in our economy.
The antitrust proposals are full of handouts to special interests. For example, Sen. Amy Klobuchar’s American Innovation and Choice Act would shelter Target, which is based in her home state, from its requirements for years.
Antitrust enforcement would hamper innovation and potential efficiencies in the digital marketplace.
Third-party retail businesses on Amazon are actually growing faster than Amazon’s retail business.
Dr. Laffer is known for creating the “Laffer Curve,” which influenced tax policy in the Reagan Administration and formed the intellectual basis for major federal tax cuts that grew the economy. He is one of the most highly regarded economists in the world.