A reminder that markets are more dynamic than trustbusters know
The Federal Trade Commission is asking a federal judge for more time to pull together and refile its antitrust case against Facebook. The FTC was offered a second chance when a district court tossed its original suit that claimed Facebook monopolized social media.
Maybe they will get something right this time. But likely not. As has long been the case with trustbusters, they are fighting the last war, having failed to realize, or admit, that a fast-moving market economy will not wait for their court cases to resolve.
A brief refresher on this dynamism comes courtesy of Reason’s Liz Wolfe:
The great antitrust push of the 2020s rests on the strange assumption that this sort of creative destruction won’t happen, despite the fact that the historical record indicates the opposite.
Woolworth fell, unseated by the world’s new suburban Walmarts and Targets. PanAm’s routes were taken over by Delta. Nobody gives a shit about AOL anymore. Physical DVD rental at Blockbuster was destroyed first by Netflix’s DVD-by-mail operation, then by streaming. Today, Netflix is challenged by Hulu, Amazon Prime Video, HBO Max, and Disney+. Vine didn’t have a particularly successful run with millennials, but TikTok has succeeded with Gen Z. Eastman Kodak was crippled by the rise of digital cameras before being obliterated by the advent of the technologically advanced cameras found in iPhones. Companies that were once hard to topple have cratered in the face of fierce competition.
When people have assumed the existing top players will dominate forever, they’ve been repeatedly proven wrong. This was true in the 20th century, and it’s true in the 21st.
The populists riding herd in the left and right don’t (or can’t) understand this. Markets change, sometimes abruptly, and very often before the ink is dry on those shiny antitrust briefs.