President Joe Biden wants to have your online cake and eat it too. His 2023 State of the Union address included numerous announcements of controls on industries and types of citizens. Each deserves to be critiqued, because a government-run economy becomes a failed economy. But I will limit my comments here to his plans for online platforms.

Biden’s plan is to “prevent big online platforms from giving their own products an unfair advantage.” Unfairness is an easy target, but who is he really talking about and what does he mean by “unfair”?

Let’s begin with who Biden is attacking. Any list of the top retail e-commerce platforms in the US would include Alibaba, Amazon, eBay, Etsy, Target, and Walmart. These are all big companies, but Amazon is the Democrats’ favorite punching bag. If we add mobile platforms, Apple and Alphabet enter the picture because they are the largest providers of mobile operating systems and app stores. Democrats like going after them too. So my guess is that the president is targeting Alphabet, Amazon, and Apple—at least for now.

What does he mean by “unfair advantage”? Unfortunately, “unfair” can be spun to mean just about anything. For example, Amazon is accused of unfair practices against rivals in the the District of Columbia, European Union, the UK, and possibly the US. Yet selling on Amazon appears to make third parties more successful than they would be without Amazon. And Amazon’s private label appears to be a small part of its overall sales, at least relative to private labels of other retail sellers.

For example, the headline of a 2021 Reuters report on Amazon in India claimed Amazon had “copied products and rigged search results to promote its own brands.” That sounds unfair! But the details in the report tell a different story.

Rather than stealing product designs, the investigation found only that Amazon studied data from its own website, which it apparently had the right to use, to learn about consumers and create products that “equaled or exceeded the quality of competing brands but were 10% to 15% cheaper.” Studying consumers and then offering them better deals is how competition is supposed to work! And about that “rigged” search? Reuters seemed to have no idea what search free of rigging would look like, so the accusation is baseless. I wrote more on the report here.

A Wall Street Journal investigation published a year earlier made similar claims. And as with Reuters, the substance of the that report failed to live up to its claims. As I concluded in my review of the article, the journalists seemed to uncover rogue employees and holes in management control rather than illegal conduct.

What about Apple and Alphabet? In his 2021 executive order on competition, Biden stated that “dominant Internet platforms use their power to exclude market entrants [and] to extract monopoly profits.” He then directed the Department of Commerce to study and collect opinions on Apple’s and Alphabet’s “mobile application ecosystem(s).”

Unsurprisingly, the department’s report echoed the president’s already-held belief that “the current ecosystem is not a level playing field, which is harmful to developers and consumers.” How did it support that conclusion? Sadly, all the department had done was collect stakeholder comments and opinions of other governmental entities, and then chose to agree with those that agreed with the president’s already-held beliefs. No rigorous study was conducted.

My own empirical studies of these platforms find that they are beneficial to other businesses and consumers. My 2021 study with Tejaswi Channagiri Ajit found that thousands of businesses rely on Apple and Alphabet and uncovered no evidence that the platforms exert market power. Indeed, businesses act as if the two are in strong competition with each other.

My 2023 study on app stores with Jakub Tęcza and Peter Wang indicates that third-party app developers expand and innovate in response to competition from Apple. Only on the Android platform does the introduction of the app store’s own app lead to competitor losses. But the rivals respond by staying on the platform rather than exiting for greener pastures, which implies that the losses are simple competition and not suppression from Alphabet.

Members of the Biden administration will have their cake and eat it too if their attacks on Alphabet, Amazon, and Apple are successful. But consumers, investors, and employees will pay for it.

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