Academic journal article The Cato Journal

Two Systems of Belief about Monopoly: The Press vs. Antitrust

Academic journal article The Cato Journal

Two Systems of Belief about Monopoly: The Press vs. Antitrust

Article excerpt

The emergence of large corporate organizations in digital markets has attracted substantial press coverage. Much of that coverage describes these organizations in derogatory terms like "big tech," "behemoths," "gatekeepers," "giants," "goldilocks," and "titans." The press also makes extensive use of the concept of "monopoly," which raises the question of whether the press representation of monopoly is in line with the socio-legal baseline enshrined in antitrust laws. To test that hypothesis, this article features a longitudinal study looking at press coverage of monopolies over a 150-year period.

Our inquiry points out three biases. First, press coverage of monopolies is usually negative and distorts the meaning of monopoly found in the antitrust literature. Second, data show that press coverage of the emergence of monopolies is more widespread than stories of their disappearance. Third, the coverage of monopolies is often clustered around "hot topics."

This article proceeds as follows. We begin with a discussion of the basic hypothesis that motivates our study--namely, a possible discrepancy between the representation of monopoly in the mass media and the antitrust meaning of the term. Next, we review the literature related to the biases generally encountered in mass media and discuss potential antitrust and regulatory applications. We then analyze the use of "monopoly" in the press by looking at 150 years of press coverage. Finally, we sketch out some policy implications of our findings.

Parallel Narratives of Monopoly

We posit that there are two conflicting narratives about monopoly: the first is conveyed by the mass media, while the second is enshrined in the antitrust laws. The mass media coverage of digital economy markets often uses "monopoly" as a buzzword to convey a biased vision of monopoly. In contrast, antitrust laws in the United States and European Union (EU) tend to make a more dispassionate use of the term. There is no underlying assumption that monopolies should, by their very nature, be sanctioned. Instead, antitrust laws reflect a compromise whereby monopoly is treated as a mostly unobjectionable market fact, in which legal consequences are triggered when certain additional (actors are present. On the basis of this observation, we formulate the hypothesis that the mass media conveys a normative representation of monopoly that deviates from the positive interpretation prevailing in the social-legal order.

The Monopoly Buzzword

The start of the 21st century has played center stage to the swift rise of the digital economy and a raft of global corporations. Unsurprisingly, the success of these firms in the marketplace has caught the interest of the press and the public alike.

A random search of the mass media coverage of digital economy firms denotes an observable tendency to discuss them in monopoly terms. If we restrict our inquiry to The Economist, Wall Street Journal, New York Times, Washington Post, and Guardian, from June 7, 2012, to June 7, 2017, we find numerous articles that use the terms "monopoly," "digital," and "technology." Several recurring features can be observed.

First, large digital economy firms have been labeled as "monopolies" by the press. Amazon (Streitfield and Scott 2015), Apple (Tsukayama 2013), Facebook (Taplin 2016), Google (Business Leader 2015), Uber (Wadhwa 2014), and Yahoo (Leaders 2016c) are all said to enjoy, or to have enjoyed, a monopoly. Microsoft is the most frequently mentioned "monopoly," although this term is often linked to past antitrust findings. In one article in the Guardian, all the above firms (and others) are brought under the umbrella category "digital monopolies" (Pasquale 2015).

Second, the monopoly label is sometimes literal, sometimes metaphorical. A nontrivial amount of mass media coverage we have surveyed discusses digital economy firms with terms like "giant" (Leaders 2012a; Garside 2014), "titans" (Carr 2014), "behemoth" (Carr 2014), "empire" (Neil 2015; Leaders 2016a), "colossus" (Leaders 2012b), and "walled gardens" (Leaders 2012b). …

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