Anti-competitive practices reveal that big tech companies no longer have any qualms about using their dominant position to oust competitors, preventing innovative firms from entering the market and thus consolidating their hegemony at the expense of the rest of society.
A vicious circle is clearly at work, whereby their huge cash reserves highlighted in the first section of this paper increase in proportion to these barriers to competition, while also facilitating them.
This alarming picture hints at the antitrust authorities’ chronic inability to act in a sector whose business models evade their usual analytical framework. Tougher, adjusted competition policy is needed to restore the conditions of an environment that is conducive to innovation in the tech industry. In addition to such changes, the administrative authorities’ resources and powers must be strengthened, as they are too often bamboozled by increasingly technical and complex anti-competitive practices. Finally, proactive policies such as measures on interoperability and opening-up of industrial property rights would be useful additions to the antitrust strategy, which is most of the time reactive.
There is a fine line between rewarding past innovators and supporting future innovators. However, it is clear that the laxity shown by the antitrust authorities and the passive approach taken by regulators in terms of devising standards and interoperability frameworks is jeopardizing promising new companies’ prospects. Hence, swift action is required to stop past champions from preventing the emergence of future champions.
The first section of this paper is entitled Big Tech Dominance (1): The new financial tycoons. A French version of this study is also available on the website of the Foundation for Political Innovation.
This paper was written by Paul-Adrien Hyppolite, Corps des Mines engineer and graduate of the École normale supérieure. He has been a visiting scholar at Harvard University and has worked for a financial advisory firm, an investment fund, and a private European aerospace company, and Antoine Michon, Corps des Mines engineer and graduate of the École Polytechnique. He has worked for a financial data platform, a company specializing in urban mobility solutions, and a data software company.