Led by Jason Furman, a Harvard University economist who previously chaired President Obama’s Council of Economic Advisers, the panel doesn’t tackle big tech’s effects on privacy, democracy and free speech. Instead, it sticks to the key economic test: Do digital markets naturally “tip” to monopolists, who must therefore be broken up or regulated like utilities, as Sen. Elizabeth Warren (D., Mass.) proposed last week.
According to the Wall Street Journal they conclude no: Treating them as utilities would take monopoly as a foregone conclusion. Instead, the Furman report recommends giving “every chance for competition to succeed in digital markets, tackling the factors that lead to winner-takes-most outcomes and to that position becoming entrenched.”
The authors recommend antitrust authorities, when evaluating digital mergers, assign more weight to future, not just current, consumer welfare. Presently, U.K. regulators decide such cases based on a “balance of probabilities,” meaning a merger must be more than 50% likely to substantially lessen competition to be blocked. Instead, the report recommends a “balance of harms” test: a small probability (say, 20%) that the target could one day be a significant innovator and competitor to the acquirer would be enough to block the takeover.