As the debate reminds us, large companies enjoy power as lobbyists. When they are monopolists, the incentive to lobby increases because the gains from because the gains from convenient new rules and laws accrue solely to them. Monopolies are no friend of a healthy democracy.
They are, alas, often the friend of government bureaucracies. This is not just a case of corruption but also about what is convenient and comprehensible to a politician or civil servant. If they want something done about climate change, they have a chat with the oil companies. Obesity is a problem to be discussed with the likes of McDonald’s. If anything on the internet makes a politician feel sad, from alleged copyright infringement to “the right to be forgotten”, there is now a one-stop shop to sort it all out: Google.
I hadn’t really thought of this point – that monopolies are easier for a government to deal with. Or at least, they were until the internet came around. Now, with an increased focus on interoperability, APIs, working with smaller vendors, etc., at least the tech-savvy parts of government are starting to realize that a panoply of partners is in fact the easier thing to manage. Again, because Internet.
No policy can guarantee innovation, financial stability, sharper focus on social problems, healthier democracies, higher quality and lower prices. But assertive competition policy would improve our odds, whether through helping consumers to make empowered choices, splitting up large corporations or blocking megamergers. Such structural approaches are more effective than looking over the shoulders of giant corporations and nagging them; they should be a trusted tool of government rather than a last resort.
So much this. Our regulated things – banks, car dealerships, whatever – are crappy because the regulations are crappy on purpose.