Addictive Technology and Its Implications for Antitrust Enforcement

56 Pages Posted: 22 Mar 2021 Last revised: 24 Mar 2022

See all articles by Niels J. Rosenquist

Niels J. Rosenquist

Harvard University - Massachusetts General Hospital

Fiona M. Scott Morton

Yale School of Management; National Bureau of Economic Research (NBER)

Samuel Weinstein

Yeshiva University - Benjamin N. Cardozo School of Law

Date Written: February 22, 2021

Abstract

The advent of mobile devices and digital media platforms in the past decade represents the biggest shock to cognition in human history. Robust medical evidence is emerging that digital media platforms are addictive and, when used in excess, harmful to users’ mental health. Other types of addictive products, like tobacco and prescription drugs, are heavily regulated to protect consumers. Currently, there is no regulatory structure protecting digital media users from these harms. Antitrust enforcement and regulation that lowers entry barriers could help consumers of social media by increasing competition. Economic theory tells us that more choice in digital media will increase the likelihood that some firms will vie to offer higher-quality and safer platforms. For this reason, evaluating harm to innovation (especially safety innovation) and product variety may be particularly important in social media merger and conduct cases. Another critical element to antitrust enforcement in this space is a correct accounting of social media’s addictive qualities. Standard antitrust analysis seeks to prohibit conduct that harms consumer welfare. Economists have taught the antitrust bar that the output of a product or service is a reliable proxy for consumer welfare. However, output and welfare do not have this relationship when a product is addictive. Indeed, in social media markets, increased output is often harmful. We argue that antitrust analysis must reject the output proxy and return to a focus on consumer welfare itself in cases involving addictive social media platforms. In particular, courts should reject defenses that rely only on gross output measures without evidence that any alleged increases in output actually benefit consumers.

Keywords: antitrust, competition, internet, regulation, social media, addiction, law and economics, law and psychology, behavioral economics

JEL Classification: K21, K23, L41, L51, O38

Suggested Citation

Rosenquist, Niels J. and Scott Morton, Fiona M. and Weinstein, Samuel, Addictive Technology and Its Implications for Antitrust Enforcement (February 22, 2021). 100 North Carolina Law Review 431 (2022), Cardozo Legal Studies Research Paper No. 674, Available at SSRN: https://ssrn.com/abstract=3787822 or http://dx.doi.org/10.2139/ssrn.3787822

Niels J. Rosenquist

Harvard University - Massachusetts General Hospital

55 Fruit Street Boston
Boston, MA 02114
United States

Fiona M. Scott Morton

Yale School of Management ( email )

New Haven, CT 06520
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Samuel Weinstein (Contact Author)

Yeshiva University - Benjamin N. Cardozo School of Law ( email )

55 Fifth Ave.
New York, NY 10003
United States

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