Structural vs. Behavioral Remedies in Big Tech Sectors

In this short article, we evaluate the role of structural and behavioral remedies in big tech sectors. First, we highlight the prominence of structural solutions in recent policy debates, discussing both their limitations and their potential role in light of the economic and technological features of digital markets. Then, we emphasize the importance of more behavioral solutions and the role that they may play out in future policy developments. In particular, we highlight the importance of instruments such as portability measures that can reduce entry barriers created by network externalities, as well as the role of other behavioral remedies that can exploit the reduced scarcity constraints of digital bottlenecks such as ranked-display of results on a platform.

By Francesco Ducci, Michael Trebilcock¹

I. INTRODUCTION

As the preoccupation about the state of digital industries intensifies across various areas of public policy – ranging from privacy, data protection, labor regulation, electoral integrity, and market power – the “break up big tech” slogan has gained growing centrality in competition policy and related debates concerned with the excessive levels of concentration and dominance of large digital platforms. In the U.S., for example, Elizabeth Warren has argued that tech firms like Facebook, Google, and Amazon have accumulated too much power over the economy and democracy, and should be broken up.² Chris Hughes,