The new monopolies: reining in big tech

By Sandra Jones, Chicago Booth

Chicago Booth’s Stigler Center presents suggestions on how to rein in digital platforms based on yearlong multidisciplinary research

Digital platforms such as Google and Facebook have grown exponentially, swallowed rivals, and revolutionized the world of media, demonstrating increasing potential to harm consumers, even as they provide convenient and valued services.

On the campaign trail, many candidates are demanding new rules, but which ones are justified? To address this question, the George J. Stigler Center for the Study of the Economy and the State at the University of Chicago Booth School of Business spearheaded a yearlong multidisciplinary research effort and now is presenting the final results.

The Stigler Committee on Digital Platforms Final Report and Policy Brief, released today, identifies the trouble with America’s largest technology companies in four areas—market structure, consumer privacy and data protection, media, and political systems. It then delivers policy recommendations to rein in Big Tech, including creating a new Digital Authority.

“We want to reduce the harmful effects of digital platforms without reducing the enormous benefits they bring,” says Luigi Zingales, faculty director of the Stigler Center and a finance professor at Chicago Booth. “Taken together, the recommendations are aimed at maintaining the benefits of digital platforms while promoting competition, protecting consumers and defending democracies.”

The policy brief and the accompanying 330-page report are the result of 12 months of research and debate among more than 30 scholars and policymakers convened by the Stigler Center at its annual antitrust and competition conference in Chicago.

The recommendations come at a time when the U.S. government is increasing its own scrutiny of digital platforms. State attorney generals from across the country announced last week a sweeping investigation into the market power of big technology companies including Google and Facebook. The Justice Department said in July that it would start an antitrust review into Google and Apple, while the Federal Trade Commission fined Facebook a record $5 billion as part of a settlement related to violating consumers’ privacy rights.

The Stigler report cites “the lack of meaningful competition in many key digital markets” and adds that “the concentration of economic, media, data and persuasion, and political power is incredibly dangerous for our democracies.”

A significant problem with scholarship around policymaking in many areas, but particularly around digital platforms, is the influence or even the perceived influence of corporate money and donations on think tanks, NGOs, and even universities, Zingales said. To preserve not only the independence but also the appearance of independence of the analysis, the center recruited scholars and experts who had not worked for, consulted with or acted as expert witness for or against Google or Facebook within the previous two years.

The policy recommendations from the Stigler Committee on Digital Platforms build on the solutions formed by four subcommittees, each writing a separate report on its findings. The four subcommittee reports are Market Structure and Antitrust, Privacy and Data Protection, Media and Politics.

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