A media columnist for the NY Times has suggested in a recent column that it is better that the essential technology platforms are operated by only five large companies — Google (Alphabet), Facebook, Amazon, Microsoft, and Apple. (See NY Times, Nov. 1, 2017, “The Upside of Being Ruled by the Five Tech Giants”). Each of these companies arguably has monopoly power in certain key markets, and in various others they face effectual competition only from one another.
The basic precepts of microeconomics and antitrust advise us that this circumstance is inimical to the public good over the
long run. I therefore disagree with the estimable columnnist’s dubious conclusion. Over time, oligarchs tend to collude tacitly in order to increase their respective profits. Even when they do not collude tacitly, each sets its prices and offerings in anticipation of how the others will respond — which invariably results in higher prices and less responsive service (i.e., less expensive service). This is microeconomics 101.
We need antitrust to break up the high-tech oligarchy. We live in a new Gilded Age, for which antitrust is sorely needed. The sooner, the better.