Breaking up Big Tech: Scissor Line Suggestions for Smart Cuts

Abstract

Calls for the breakup of Big Tech, especially where behavioral remedies are cumbersome to enforce effectively, are becoming louder on both sides of the Atlantic. If there are going to be structural remedies against network companies, we propose they better be ‘smart cuts’: targeted interventions to insulate core platform functions with minimal damage to positive network effects. One major concern with dominant platforms is information bias: intentional distortion of information presented to a user to steer them away from the best matches to their query and towards content that benefits the platform instead. It can be addressed by separating a hybrid platform’s recommender system from its peripheral services with commercial tentacles in the real economy. This realigns incentives to provide users with unbiased information, and invites competition on and between intermediaries. We offer scissor line suggestions for the gatekeepers Alphabet, Amazon, and Apple. Smart cuts have a conceptual basis; they go beyond unwinding recent acquisitions and open up ecosystem structures to competition, they allow for targeted flanking access regulation, and alleviate competition law enforcement.

Keywords: Big Tech, platforms, breakups, information bias, self-preferencing, misinformation

JEL Classification: D21, K21, L51, L86