The Surprising Consequences of Antitrust Actions Against Big Tech

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These findings suggest that, although antitrust intervention may increase innovation, it doesn't automatically create meaningful competition and the consumer paradise that regulators imagine.

In late 2022, a years-long fight between Google and the European Union ended with the EU General Court upholding the decision that Google’s Android platform had given an unfair advantage to its own search engine and browser apps. Antitrust authorities in India reached a. A complaint against Microsoft by the workplace communications app Slack accused Microsoft of promoting and entrenching its own app, Teams, on the Microsoft Office platform in order to keep businesses from trying Slack.

In a great stroke of luck for future researchers like us, it turned out that Microsoft had rather popular in-house complementor offerings in two of these markets but little presence in the other three, and the company’s 2001 settlement with the government meaningfully weakened its position in the two markets it previously dominated.

But those patents didn’t lead to successful products. Commercialization did not increase in the treated markets, What’s more, we found that most everyone’s profits declined — especially those of complementors with low market shares, who, in theory, should have been the beneficiaries of the antitrust action. Despite being the most innovative of the bunch, they failed to thrive.

 

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