Best Web Regulator: The Market or the Federal Trade Commission?

In an insightful column in the Washington Post today, Vivek Wadhwa, director of research at Duke University's Center for Entrepreneurship and Research Commercialization, tells the FTC to back off on trying to regulate Google, Twitter, and anything else on the Web. Just a taste to encourage you all to read the whole column:

The Federal Trade Commission (FTC) is investigating whether Google is using its dominance in Web search to give its own services an unfair advantage. The FTC is alsolooking into whether Twitter is abusing its position to lock out competitors. But government intervention here is misguided. These investigations, and whatever results from them, won't level the playing field. They will only stifle innovation and yank lawyers out of unemployment lines.

The technology sector moves so quickly that when a company becomes obsessed with defending and abusing its dominant market position, countervailing forces cause it to get left behind. Consider: The FTC spent years investigating IBM and Microsoft's anti-competitive practices, yet it wasn't government that saved the day; their monopolies became irrelevant because both companies could not keep pace with rapid changes in technology — changes the rest of the industry embraced. The personal-computer revolution did IBM in; Microsoft's Waterloo was the Internet. This — not punishment from Uncle Sam — is the real threat to Google and Twitter if they behave as IBM and Microsoft did in their heydays. …

Government has no place in this technology jungle. It shouldn't be trying to tell Silicon Valley how to develop its products or how to make money.

Unfortunately, Wadhwa's faith in markets is not completely untrammeled; he ends by urging the folks at the FTC to protect unwary investors by perhaps regulating the sale of internet company stocks. Given human nature, "bubbles" are probably unavoidable and they do correct by themselves. 

Whole worthwhile column here.