Max Gulker on how antitrust actions stifle startups

The internet boom two decades ago demonstrated the special importance of startups in high-tech industries. Because the vast majority of startups fail, motivating their creation in the first place requires an especially large pot of gold at the end of the rainbow.

The only statistic you need to know is that among successful startups, 16 times more are bought by larger firms than issue their own IPO. Getting bought is the realistic light at the end of the tunnel for the quintessential computer geek toiling away in their garage. Major antitrust decisions with a chilling effect on big firms buying smaller ones in the tech space calls that path into question.

The FTC’s current course would effectively erect new barriers to entry in countless markets for technology. Such barriers are harmful in any industry; in high tech, they risk destroying the evolutionary process of startups that is a crucial source of growth in 21st-century advanced economies.

~ Max Gulker, "The FTC's Strategy Against Facebook is Bad Economics," American Institute for Economic Research, August 2, 2019