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

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Not the only way to search

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

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  1. Is there nothing Team Red/Team Blue WON’T regulate?

      1. Tony should be here any minute now.

        1. Maybe if I stare into the mirror and say his name three times…

          1. I think your more likely to get this

            1. Hmm… he’s running late. Must be tied up at the local county office trying to get a marriage license.

  2. But who will regulate the regulators?

    1. The regulated regulate the regulators via elections. Unfortunately the regulated are just as incompetent as the regulators, if not more so. Also, the regulated are greedy and spiteful.

  3. What bothers me most about the people who want the FTC or other bodies to intervene is their complete lack of historical perspective.

    Google, for all its sins, allows me to find and access information orders of magnitude faster and cheaper than I could 20 years ago, not to mention giving me access to far more information from sources I would not even have known existed.

    Likewise, Amazon gives me a ‘bookstore’ with a much larger inventory than any bookstore I have ever visited (including Foyle’s on Charing Cross Road, London) and can deliver books to me much faster than any order service that existed before Amazon.

    These companies did not gain market dominance because of some special privilege. The gained it by giving me what I want quickly, cheaply and conveniently.

    1. “Google, for all its sins, allows me to find and access information orders of magnitude faster and cheaper than I could 20 5 years ago”

    2. No, no regulators gave it to you. Al Gore invented the Internet. Thomas Jefferson invented books. And so on.

      1. The objective of Congress for the last 40 years has been to offload responsibility for decisions to regulators and/or the military so that they cannot be held accountable for any unpopular decisions.

        Of course, that doesn’t prevent them from taking responsibility for popular ones.

        1. Yeppers. And the courts have signed off on just about every single unconstitutional delegation of power.

    3. So you’re saying it’s your fault that bookstores are going out of business?

      1. What will we do without Borders? Our brains will starve!

        1. Yeah, but it is so much easier to find pr0n.

          1. Borders should’ve started providing free porn-viewing rooms when the writing was on the wall. Then they’d be the top bookseller in America.

  4. Unemployment went up to 9.2% in June.

    Bye bye, Obama.

    1. You do know that the election is 15 months away right?

      1. Unfortunately.

    2. The recent jobs report shows why we can’t cut spending. Deficit spending creates jobs. Jobs are good.

      Vote Obama 2012!

  5. If politicians don’t threaten to regulate an industry, then how can they expect the major industry players to floor their campaign coffers with an abundance of protection money… err… contributions?

    1. floor = flood.

      1. floor=flood…Point came across

        We live in an amazing wonder world. Why these douchebags can’t lay off and “let it ride” baffles the mind (incidentally I typod ming there and caught it…would work either way though). The internet, modern medicin, astro physics, and myriad other areas of our lives are showing phenominal progress. Telecom (my current home) has seen 10GigE prices drop from 25,000 a month to 1900 a month in the last two years. Can you imagine what would happen if the gubmint got the hell out of the way?

  6. 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 thing that concerns me is the huge number of otherwise bright, technically savvy people who literally don’t get this. They are functionally immune to this line of reasoning.

    The number of acne-riddle slashdot users that are agitating for FCC control of the internet because it will “save it” is enough to bring you to tears.

    1. It’s because they don’t want evil comcast throttling their anime torrents.

      I wish I was joking, but this is pretty much the entire reason behind the “net neutrality” movement.

      1. Unfortunately it’s not the entire reason behind the net neutrality movement.

        The useful idiots want to double skype their twitter torrents without interference from bandwidth-miserly carriers.

        The people who are actually pulling the levers of net neutrality are a shadowy group of media totalitarians who have expressed that their goal is government control of all media.

        The fact that the second group doesn’t even give the first group pause before demanding the FCC harness all of our packets makes me weep for my country.

        1. Not to mention that the first group was collectively shitting their pants when the second group was incrementally grabbing more power with the Bush-era wiretapping fiasco. Rebranding “government control of the internet” as “net neutrality” has to be one of the most brilliant political moves of the decade.

          And yeah, cognitive dissonance has replaced baseball as the national pastime.

          1. I have net neutrality proponents amongst my friends. No matter how many times I argue with them that NN is just cover for gov’t oversight and control, their response is always the same:

            But.. But… COMCAST! EEEVVVUUULL CORPORASHUNS!

  7. “These investigations… will only .. yank lawyers out of unemployment lines.”

    See…jobs are being created or saved after all!

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