Economist Cristina Caffarra, a leader in competition and antitrust, warns that ever-expanding tech giants raise concerns about the extent of their power.

By Lynn Parramore, Institute for New Economic Thinking

Since the 1970s, economists buying into the Chicago School of Antitrust have waved off the dangers of lax antitrust policies, professing that “the market” would sort out issues of competition and punish companies that abuse size and power. The Chicagoans’ narrow focus on direct consumer costs as the sole measure of harm didn’t consider the impact of consolidation on small businesses, start-ups, workers, or, for that matter, democratic norms. Nor did it raise red flags for tech platforms that were touted as “free” for users (while monetizing our attention and personal data).

Google HQ in Mountain View, CA

A growing number of critics argue that these basic assumptions are both wrong and outdated, as evidenced by the fact that in many industries, particularly technology, companies have been growing to gargantuan proportions and, as anybody who owns a smartphone is painfully aware, they seem free to gobble competitors, hinder innovation, and serve up crappy, overpriced products.

These conglomerations of money and power not only end up widening the inequality gap, but they also threaten democracy itself, as University of Utah antitrust expert Mark Glick and other experts have attested. That’s why tech-focused antitrust voices are sounding the alarm as companies like Google, Amazon, Apple, and Meta expand at a breakneck pace, encroaching into every possible area of our lives, from our cars to our refrigerators to our dreams.

European antitrust and competition expert Cristina Caffarra has been a top advisor and expert before the European Commission and in courts and agencies across Europe, as well as a guide in antitrust efforts in the United States. Her experience includes landmark cases on the economics of platforms and the digital economy for and against Microsoft, Amazon, Apple, Google, Meta, and more. She spoke to the Institute for New Economic Thinking about what she sees as the most pressing areas of antitrust, why regulation and legal actions have largely failed so far, and why, from her perspective, too many economists have been part of the problem rather than the solution.

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