Years ago, I used to favor a lax FTC (Federal Trade Commission) regarding antitrust issues. I’m in favor of property rights and if Microsoft wanted to bundle it’s lousy Internet Explorer with Windows, why would I care? It was easy to download a different browser and make that new one the default. My general view was to let the market sort out these issues.

While I criticized many of the economic policies of the Biden White House, I never took issue with their more aggressive enforcement of antitrust regulations. Despite winning high early marks from many companies happy with the pro-business policies of the new Trump Administration, some of these same companies have been surprised that the more aggressive Democratic policies have been left in place at the FTC. The Trump Administration is changing much in the government, but appears to be favoring the Biden policies at the FTC.

The reason I’m no longer critical of the more aggressive antitrust enforcement regardless of party is my views on these issues has evolved. In my opinion, the biggest problems are coming from the technology platforms. For years, conservatives have made claims that Google biases its search results to favor Democratic politicians and liberal causes. There was a story from 2017 that the Russians used around $150k of ad spending on Facebook to secure the election for President Trump.

My response at the time was that if you could buy the Presidency with $150k of Facebook ads, the $FB stock was criminally undervalued. Still, there have been legitimate claims that these social media platforms enforce the bounds of what they consider to be acceptable speech. Even worse, there is compelling evidence that government officials have pressured these platforms to police speech in ways that would violate the First Amendment if the government were to do this directly. Finding ways around the Constitution may be borderline legal, but it’s not good practice.

Conservatives understandably worry about Google’s control over YouTube and Facebook’s control of Instagram. Liberals understandably worry that Elon Musk could potentially own both X and the US assets of TikTok. No matter your political leanings, both sides agree that concentration of the means of communication are a danger to the free flow of information and ideas. No one wants their ideas suppressed. (And they should stop trying to suppress the ideas of the other side.)

As I’ve started to see a level of danger in the concentration of the means of communication, my views on antitrust have shifted. This is why I wasn’t critical of the aggressive Biden enforcement and why I don’t expect to be critical of a Trump FTC following Democratic policies in these matters. From my point of view, this is an area where conservatives and liberals share similar concerns.

I would draw an exception at Japanese ownership of US steel production. I understand the concern that production of steel is a national security issue. However, I don’t think we’re going to war with the Japanese in the foreseeable future. More importantly, if a Japanese company bought US steel assets and later decided to undermine the US, what could they realistically do? They can’t just pick up the property, plant, and equipment and move it to Japan. Those assets will remain in the US and the labor in those plants will be done by US workers.

One place where I’d be more aggressive is in the Chinese acquisition of large amounts of farmland particularly near military bases. Relations with China aren’t good right now and the Chinese have been clear they want to become the global hegemon. The US has made clear we want to stop this. Giving up control of our food production to a potentially hostile foreign nation is a national security issue. And the Chinese tendency to prefer land near military bases is concerning. This is a place for aggressive enforcement.

 

As always, IR@DeepKnowledgeInvesting.com if you have questions or comments.

 

 

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