The Pro-competitive Value of Closed Platforms & Walled Gardens: Some Thoughts In Response to Tim Wu

Amanda Reeves, Daniel Wall, Mar 30, 2011

There has been a great deal of recent discussion, both inside and outside of antitrust circles, on the merits of “open” as opposed to “closed” business structures. Much of this discussion focuses on key technology markets, in which competition among products and systems that exhibit relative degrees of “openness” is commonplace and longstanding. An increasingly vocal group of openness advocates has begun to suggest that openness is an antitrust issue in its own right, and that antitrust regulators should adopt “openness” as a kind of social norm for the interaction of players in technology markets.

 

Timothy Wu’s arrival at the Federal Trade Commission (“FTC”) presents a good opportunity to discuss these issues, as he has been an outspoken critic of closed systems and what he perceives to be the failure of antitrust institutions to adequately police “information monopolists.” In his recent book The Master Switch, Wu argues that antitrust law has failed to protect consumers’ interests when it comes to regulating competition in the computing and internet spheres. Underlying his critique is his explicit and forcefully stated preference for open business models (his favorite example being Google) and his deep suspicion for closed systems (his favorite current example being Apple). Wu also argues that antitrust regulators should give greater weight to effects such as whether a particular merger or practice is likely to broaden public acce

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