National Economic Council's Tim Wu on President Biden's 'New Direction' on Antitrust

National Economic Councilmember Tim Wu said the Biden administration has adopted a different perspective on how to promote innovation — while previous White Houses might’ve said “trust the giants,” this one believes “small is beautiful.” Wu, Special Assistant to the President for Technology and Competition Policy, pushed back on what he termed the “monopoly innovation” theory that he says has dominated antitrust thinking for several decades. According to that view, he said, the high prices a monopoly can charge encourages it to innovate and develop new technologies. But monopolies’ track record of innovation isn’t great, Wu said, citing AT&T’s efforts to kill off radio and satellite technologies that competed with its analog phone system. “A monopolist has less inherent reason to want to change how things are. It may not want to innovate in ways that challenge its main revenue and profit streams,” Wu said. The Biden administration is instead focusing on what Wu termed “competitive innovation,” which uses antitrust action to ensure the big firms don’t buy out potential rivals or unfairly undercut competitors. “Putting pressure on the giants creates room for more innovation,” he said.